Environment Committee on Nov. 25th, 2020

[David Adams]

I do.

[The Chair, Liberal, Francis Scarpaleggia]

Okay, great. Thank you.

[David Adams]

Thank you very much, Mr. Chair, and honourable members—

[The Chair, Liberal, Francis Scarpaleggia]

Excuse me, it's a bit weak.

Would that be at our end?

Could you bring the microphone a little closer?

[David Adams]

Sure.

[The Chair, Liberal, Francis Scarpaleggia]

Perfect. That's great.

[David Adams]

Thank you very much, Mr. Chair and honourable members, for the opportunity to appear in front of you today.

I apologize for the technical difficulties getting connected to the meeting, but I do appreciate the opportunity to be here.

I want to start off by saying that Global Automakers of Canada represents 15 international automakers and their Canadian operations in the country here, which represent 20-odd models.

Our affiliates and their members employ more than 77,000 Canadians in vehicle manufacturing, sales, distribution, parts, service, finance and head office operations. In 2019, the member companies with the GAC sold 1,146,000 vehicles, which represent about 60% of the auto market and over 60% of Canada's 3,300 new vehicle dealerships.

Our members are committed to the decarbonization of the products they are producing. However, it is clear the goal of decarbonization of the light-duty transportation sector cannot be achieved by focusing on new vehicle sales alone, which represent approximately 8% of all vehicles on the road. It is also clear that we will not achieve our GHG reduction goals for the overall light-duty fleet by focusing on driving the update of ZEV technology alone, as opposed to focusing on the real goal, which is GHG emission reductions in the transportation sector.

Currently in Canada there are about 168,000 zero-emission vehicles on the road out of a total light-duty vehicle population of approximately 23.5 million vehicles. This equates to ZEVs comprising less than 1% of all light-duty vehicles currently on the road.

That said, as others who have appeared before you have noted, hundreds of billions of dollars have been invested in zero-emission vehicle technology globally by automakers. While COVID-19 has in some cases delayed the introduction of models, it has by no means deterred automakers from the pursuit of the development and introduction of ZEVs. In fact, and importantly, I think, for those who have suggested that there are supply issues, GAC members alone will have more than 125 BEV and ZEV models brought to the market between 2021 and 2025.

In this regard, it's important to understand and underscore that the only real difference between the perspectives of governments, ENGOs and the automotive industry with respect to zero-emission vehicles is the issue of timing. We share the same goal.

The automotive industry is going through an unprecedented transition, the likes of which it has not experienced for more than 100 in its more than 100-year history. That transition is moving quickly, but it will time. It takes three to five years to bring a new vehicle model to market and roughly $1 billion to $2 billion. Auto companies must continue to earn profits on their current vehicle mixes to support the development of these vehicles.

Additionally, new suppliers and supply chain partners must be developed and cultivated to secure long-term contracts for batteries and other components that are completely new for the production of ZEVS.

As noted, the industry is changing, but it does take time, and the change is also responsive to demand and supply and will likely lag demand for the immediate further. However, we must underscore in no uncertain terms that short-term regulatory intervention in the form of ZEV mandates is out of step with the medium and longer-term time horizon of this industry transition.

We have a series of recommendations in our submission, but I think it's more important to hear questions from committee members.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you, Mr. Adams.

We'll continue with Madame Pauzé, please, for six minutes.

[Monique Pauzé, Bloc, Repentigny, QC]

Thanks very much.

My first question is for Daniel Breton from Electric Mobility Canada.

I've always viewed the environment and health as connected, and you make that connection too. You say that the more polluting vehicles there are on the roads, the higher health costs will be.

Could you go back to that statement and give us a few more details? I must say you're addressing my biggest concerns here.

[Daniel Breton]

The study published in 2019 on atmospheric pollution states that it has an impact of $114 billion a year. That's a recent study, from barely a year ago. It suggests that large quantities of atmospheric pollution comes from transportation and that road transportation—light, medium and heavy vehicles, buses and so on—make a significant contribution to that pollution.

Antipollution systems have become increasingly efficient in recent years, reducing total atmospheric pollution per vehicle. However, we now see that progress has stagnated and atmospheric pollutants such as carbon monoxide have even increased. Physicians and Health Canada therefore expect that more deaths will be caused by transportation-related atmospheric pollution.

You can see from the documents I sent you that the longer people live near sources of pollution, such as major roadways, the greater the risk they will suffer from health issues such as cardiovascular and pulmonary problems and cancers. In 80% of cases, the problems are cardiovascular. While climate change is a global problem, atmospheric pollution is both a global and a local problem. A person living near a source of atmospheric pollution may suffer extremely harmful effects. In the book I published two years ago, I quote Dr. François Reeves discussing the appeal of electric vehicles as a way to reduce atmospheric pollution.

[Monique Pauzé, Bloc, Repentigny, QC]

Mr. Breton, you say that atmospheric pollution is on the rise again and that it's due to transportation. Is that correct?

[Daniel Breton]

Yes.

[Monique Pauzé, Bloc, Repentigny, QC]

I see. So it really is due to transportation.

My next question is for Mr. Wudrick from the Canadian Taxpayers Federation.

You said at the outset that government incentives were not a good thing. I don't share that view at all. Electric vehicle numbers rose in British Columbia and Quebec after provincial and federal incentives were offered. In addition, electric vehicle sales in Ontario fell 55% in the first quarter of 2019, relative to 2018, after Doug Ford cut financial incentives. Here's another example. In Georgia, in the United States, electric vehicle sales dropped 80% after financial incentives were eliminated. As you'll understand, that's not a question but rather a comment intended to show you how much I disagree with your statement.

That being said, many measures are possible. In the United States, for example, the federal incentive takes into account purchasers' incomes, and an incentive is offered in the form of a non-refundable income tax credit.

Furthermore, it's been said that these incentives concern luxury vehicles, but the prices of RAM, Dodge and Ford F-150 light trucks, which are big sellers, range from $43,000 to $74,500. However, those trucks are big polluters and, as noted earlier, have a harmful impact on people's health.

Getting back to measures, would you be in favour of a regulatory no-cost measure for taxpayers that would have the effect of putting more zero-emission vehicles on the market?

[The Chair, Liberal, Francis Scarpaleggia]

Mr. Wudrick.

[Aaron Wudrick]

Thank you for the question.

I want to be clear: I don't doubt that there are some individuals who purchased the vehicle only because of the subsidy. It's important to measure what is the impact of that subsidy, and the question I'm asking is, how many more people are buying them as a result of the subsidy as compared with the people who would have purchased the vehicle anyway?

Again, remember that we are talking about vehicles that are fairly expensive. I think the whole reason we are even talking about a subsidy is that these vehicles are above the price point of the average Canadian. I don't believe that I would be in position to buy a $55,000 vehicle with or without a—

[Monique Pauzé, Bloc, Repentigny, QC]

Pardon me for interrupting you, Mr. Wudrick, but I'd like you to answer the question I asked you.

Would you be in favour of a regulatory no-cost measure for taxpayers that would have the effect of putting more zero-emission vehicles on the market?

[Aaron Wudrick]

We take no position on that. We are not an environmental group. We are focusing on the subsidy, so if it's something that does not have an impact on the taxpayer, then we are completely ambivalent.

[Monique Pauzé, Bloc, Repentigny, QC]

Here's another question.

According to the International Institute for Sustainable Development, the fossil fuel sector receives a lot of money. The financing granted for the Trans Mountain system now amounts to $12 billion. Don't you think these excessive amounts of public money would be better spent on investments that would benefit Canadian taxpayers and improve public health?

[The Chair, Liberal, Francis Scarpaleggia]

Be brief, please, Mr. Wudrick.

[Aaron Wudrick]

Yes, Madame. We're on the record as opposing the nationalization of Trans Mountain.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

We'll go now to Mr. Bachrach for six minutes.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair. It's good to be here with the committee. Thank you for allowing me to sub in for Laurel Collins, my colleague.

Thank you to the witnesses for your testimony. It's been very interesting.

Mr. Breton, you mentioned that you live in a rural area and you drive an electric vehicle. I also live in rural northern British Columbia and drive a Chevy Bolt through the winter. It's working out really well for my family and me, so thanks for sharing your story.

I have a bunch of questions, but maybe I'll start with Mr. Breton. I have a question about Canada being left behind in the manufacturing of zero-emission vehicles. Obviously, this is a growing market and our auto sector could use the jobs now more than ever. What does it say about the industrial strategy that we need as a country if we're going to capitalize on this opportunity?

[Daniel Breton]

This is very important because, believe it or not, I've been talking about a Canadian EV industry strategy since 2006. As I said, as time goes by we're going to switch more and more towards EV for light-duty to heavy-duty vehicles.

More and more studies are coming out. One from ICCT came out a few months ago saying that if Canada doesn't have a strategy, doesn't have a plan for an industry, whether it's for light-duty or heavy-duty vehicles, we might end up having no automotive sector 15 to 20 years from now.

We've been in decline for many years and now, since we have so many assets in Canada.... We have strong OEMs based in Ontario. We have minerals. We have metals. We have scientists from Nova Scotia to B.C. who can do the job. We have people in Quebec building cars, trucks and buses. We have people in Manitoba.... We are presently working on an EV industry strategy with other stakeholders so that we can see all of the progress that we can make, because we want to fight climate change, we want to fight high pollution, and we also want to create jobs in the meantime. For us to have a Canadian EV industry strategy makes total sense.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Breton.

Perhaps I'll move on to Mr. Wudrick. I was quite intrigued by your last comment that if it doesn't have an impact on taxpayers, we're “completely ambivalent”. Well, taxpayers are also citizens, and all of the polling and surveys show that citizens in Canada are very concerned about the climate crisis and that they want action. Of course, a lot of climate pollution comes from light-duty vehicles, and the policies we're talking about today are meant to drive down that pollution.

Broadly, is that a policy objective that you support?

[Aaron Wudrick]

We're not a group that's trying to get involved in every issue. That's the reason we focus on the taxpayer angle. I have no beef with electric vehicles, ZEVs. If they can make good products and people want to buy them, I've no objection to that. The reason for the critique of the specific policy was whether or not it is achieving the objective that the policy is set out to do. I'm simply questioning whether or not there's evidence that the subsidies leading to the uptake are the cause of the uptake rather than a windfall to people who are going to buy them anyway.