Environment Committee on Oct. 4th, 2022

[The Chair, Liberal, Francis Scarpaleggia]

Go ahead. You have five minutes.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Dr. McPherson, I read a report by RBC on the path to net zero. It's a $2-trillion path. One thing they outline is the key need to double electricity output. That is just going to be generation, but then, of course, there's going to be transmission, which will often involve going across provincial boundaries, as you have talked about today.

It is a massive undertaking to double the electricity capacity of the country. I think it requires federal leadership to do that. Have you seen any evidence of federal leadership in doubling the electricity capacity and also in dealing with the transmission of that capacity across the country?

[Dr. Madeleine McPherson]

I completely agree. I think it's a huge undertaking. That twofold number is coming out of a lot of different studies, including our own work. It could actually be more than that. I think there's a huge opportunity for federal leadership, especially when it comes to those interprovincial lines.

As for federal leadership so far, I guess there was the funding of the energy modelling hub, but I think we can see a lot more leadership, especially when it comes to those interprovincial ties. Some of our work looking at that has said it's sort of a threefold to fivefold increase in interprovincial transmission lines. A lot of negotiation has to happen to make that work. I think there's a role for the federal government in doing that.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

I'll cede my time now to Mr. Carrie.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much, Mr. Seeback.

I want to go a little more with the auto industry.

When you're looking at the mining and the supply chains, as my colleague said, here in Canada we have the rare earth minerals. We have the capability in this country to take it out of the ground, turn it into a battery or press it and turn it into a piece of steel. All those value-added jobs can be kept here if we have the right policies. Last week, we were hearing about companies leaving. We want to keep them here.

There are 31 critical minerals that have been recognized as important for building these batteries. With the automotive industry building electric cars now, do you know of any Canadian mines where they're sourcing critical minerals today to supply those batteries in North American plants? Are they sourcing it from Canada yet?

[Brian Kingston]

I'm aware that nickel is being sourced from Canada. In terms of the rest of the minerals on that list, I think most of those are still to come.

[Colin Carrie, Conservative, Oshawa, ON]

I think cobalt is, too.

[Brian Kingston]

That's right. There's cobalt.

[Colin Carrie, Conservative, Oshawa, ON]

Out of the 31 essential critical minerals, we're sourcing about two of them. I think there are some new ideas for mines, but they need to go through the environmental assessment, and they need to get up and running. Do you have any idea how many years it takes to get a mine up and running, especially a mine for a critical mineral like lithium, in which toxic chemicals can be released? Do you have any idea how long that's going to take in Canada?

[Brian Kingston]

My understanding is that it's about eight to 10 years for the regulatory approval process.

[Colin Carrie, Conservative, Oshawa, ON]

We have two minerals that are getting sourced, and maybe one in another 10 or 12 years.

I'm also interested in R and D. In Oshawa, we used to have the engineering centre. We did a lot of R and D. We as a government invested in the automotive centre of excellence.

With respect to incentives for electrification, how does Canada compare to our largest trading partner and to Mexico in terms of the competitive piece of it? For a company to do the R and D here, are there equal incentives here in Canada or are we still lagging behind?

[Brian Kingston]

In the auto industry, we tend to see that when you have a major investment in an actual assembly facility or an engine facility, then research and development comes along with that. A good example is that of the recent Stellantis and LG Energy investment in a battery plant. With that, you're going to see a research facility attached, with a number of jobs, usually very highly skilled jobs, associated with it. We've been making the case that you need to attract that anchor investment for the EV assembly and the battery plant, and then the R and D will come with it.

Right now, given some of the provisions in the IRA, I think it has become more challenging, but I think if we focus on those anchor facilities, we'll see the R and D come along with those.

[Colin Carrie, Conservative, Oshawa, ON]

I agree with you that we have to have the bricks and mortar here, but we don't have any R and D announcements yet.

With the IRA, I could see that as a subsidy of sorts. Could that be challenged with the WTO? Should the government be looking into that as a competitive advantage for the United States because of a government policy? Should we be challenging that under the WTO?

[The Chair, Liberal, Francis Scarpaleggia]

Could we have a yes-or-no answer? We're out of time.

[Brian Kingston]

The answer is no, given the integration of our industry.

[The Chair, Liberal, Francis Scarpaleggia]

We'll go to Ms. Taylor Roy.

Go ahead, please.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you very much, Mr. Chair.

Thank you to our witnesses for being here today.

It's been a very interesting conversation. I think one thing that has become clear is the complexity of modelling what our energy needs are going to be, in particular for charging stations.

I have a constituent who is currently working in a company, Purus Power, that is involved in kinetic energy. Vehicles will be recharging themselves as they drive. As you commented, Mr. Kingston, the technology is changing so rapidly that I'm almost glad we haven't built out all these stations, which may not be able to serve us in the future.

Ms. McPherson, given that this is such a multi-variable analysis and that our attempts to forecast into the future and our assumptions are constantly changing with the quick pace of development in clean tech, do you think we can really accurately forecast right now what we're going to need in the future for charging stations?

[Dr. Madeleine McPherson]

That's a great question.

I think there are two parts to that question. On the one hand, I think we have to be doing everything we can as quickly as we can because these timelines are really tight. When we're doing our modelling, what's really interesting is that there are some pathways that are quite robust, meaning that as we change our assumptions or different ways in which the future could pan out, our results are quite robust against those.

Then there are other pathways that are less robust, meaning that if we tweak an input assumption one way or another, we get an entirely different pathway or entirely different analysis.

I think that version of sensitivity analysis is really important. Again, this comes back to the modelling work—getting more into the technical weeds here—of developing machine learning models that really help us explore which of those pathways and which of those decisions are robust and which of those decisions are less robust.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

It's very complex.

The other thing I was wondering about was the comparison between the numbers that Canada is using and those that Europe is using—for example, the 10 versus 43 number for charging stations. How would at-home charging stations—and the fact that many Canadians have their own house and many people, like me, have two charging stations in their garage right now—and even the technology that's going to allow us to put energy back into the grid from cars off-peak all factor into those numbers? Do you believe that, given the additional percentage of private homes, Canada needs to have the same number as Europe?

[Dr. Madeleine McPherson]

There are a couple of things. The first thing is that it really depends. Talking about robustness, one thing that changes the answer to a lot of these questions is when and where the charging is happening. If everybody comes home at six o'clock and plugs their electric vehicle into a neighbourhood with a distribution system that has not been upgraded, it doesn't work. However, if we have smart charging and different people are charging at different times of the day—taking advantage of high-wind periods of the day, for example—it's a totally different story. To what extent are we going to have rates and policies that incentivize people to charge during optimal times of the day? That's part of it.

To the earlier part of the conversation, these distribution systems vary across the country in how much additional capacity they have on them. Unfortunately, that's data—and Brian was alluding to this as well—that's really hard for us to get our hands on, at least from a research perspective. It's a bit trickier to know what's going on in those distribution systems. It also depends on the policies for when and where people are charging.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you.

Do I have any time left?

[The Chair, Liberal, Francis Scarpaleggia]

You have 45 seconds.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

The other thing I was going to ask about was regulation and government incentives, because we were talking about de-risking investments in clean tech and looking at that. I know there's a lot of talk saying that governments shouldn't have regulations and all we need is to put money into the industry and everything will be fine.

However, when it comes to de-risking investments and regulations that require long-term contracts—for example, for some of our alternative power producers—how helpful do you think that would be in requiring that utilities purchase power from some of these alternative sources and have those long-term contracts?

[Dr. Madeleine McPherson]

I think de-risking those investments is really important, especially for wind. It's fairly competitive, but uncertainty in what regulations are going to look like can put a damper on things.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you so much. What a fascinating discussion.

We really appreciate the panel's participation.

We'll take a small break and connect with the second panel.