Madam Chair, members of the committee, thank you for the opportunity to appear.
My name is Adam Auer. I'm the president and CEO of the Cement Association of Canada. Our six members operate 14 cement plants across five provinces, supporting more than 62,000 direct and indirect jobs, and contributing $5.1 billion to Canadian wages and salaries in 2024 alone.
Canada's cement industry has been clear and transparent since we began this journey over a decade ago. We support well-designed industrial carbon pricing. Despite the current economic headwinds facing our industry and the country, our position has not changed. We continue to believe that industrial carbon pricing, when thoughtfully designed and implemented, can attract investment, support competitiveness and accelerate the cement and concrete industry's decarbonization.
Cement manufacturing accounts for approximately 7% to 8% of global CO2 emissions and about 1.5% of Canada's. Decarbonizing our sector matters, and our member companies take that responsibility seriously. Cement is also among the most trade-exposed sectors in the economy. If industrial carbon pricing is done wrong, it will shift Canadian cement production to lower-cost, higher-carbon jurisdictions, which threatens Canadian jobs, communities and our businesses, as well as our climate emissions reduction goals. This means we need carbon pricing to do the job it was intended to do: drive investment toward cutting emissions and support the transition to an economy that values increasingly lower-carbon goods and services.
There's a global reconciliation of cement manufacturing capacity under way right now. Aging plants will be modernized or closed, and new investment will flow to the jurisdictions that present the strongest business case. A predictable, well-calibrated industrial carbon pricing policy is a central component of that business case.
Fundamentally, decarbonization is modernization and productivity improvement by another name. Fuel switching, clinker substitution, thermal heat recovery—these investments make plants more efficient, more competitive and less emissions-intensive all at once, but these projects sit at the margin of investability. The engineering confirms that the projects are viable, but the business case is lacking. Payback periods are long, and demand-side signals for new products are not yet strong enough to close that gap.
Carbon pricing is a bridge, a necessary component of closing that gap to make these projects investable today rather than in a decade from now. In a global reconciliation, in which capital decisions are being made now, timing is the difference between Canada winning or losing that investment.
Our support for industrial carbon pricing does not mean that the current system is working. It is not. Our members operate under five different provincial pricing regimes, each with their own rules and regulations. For example, in British Columbia, stringency is so high that we've lost market share to imports. In Alberta, TIER credits trade far below the regulated price, undermining the investment signal that should be driving carbon capture and other decarbonization projects. This fragmentation is an interprovincial trade barrier that undermines the very investor confidence the system is meant to build. It must be addressed through greater market integration and, ultimately, a harmonized national market capable of linking with international systems like the Western Climate Initiative and the European Union's emissions trading system.
Canada's cement industry is not here to ask you to weaken industrial carbon pricing. We're here to ask you to fix it so that it works as intended. The moment calls for it, and that opportunity is grounded in national interest. Cement and concrete are as strategic to Canada's economy as energy. There is no housing, no infrastructure, no defence project, no renewable energy installation and no trade corridor that does not depend on a secure domestic supply of cement. Maintaining a competitive, modern and increasingly clean supply is not simply good industrial policy; it's a matter of economic sovereignty.
If we get the policy conditions right, we can ensure that investment drives demand for lower-carbon concrete and accelerates the modernization of the plants that produce it, aligning Canada's economic and infrastructure agenda with its climate objectives at the same time.
Thank you. I welcome your questions.