Finance Committee on June 11th, 2026

[Carla Vicente]

Thank you for your question.

In Varennes, approximately 50% of the components used in transformers are manufactured in Canada or even in Quebec. We are therefore very committed to continuing to improve this figure and increase it. That's why, despite all the investments we're making globally, we believe it's important to represent Canada well and to continue investing in Canada, which is what we intend to do.

As for our supply chain, however, we also believe it's important to support our suppliers and perhaps create forums for them, since they don't all have the same financial resources, for example, or the same opportunities.

We therefore believe it's important to create opportunities for our suppliers to access certain existing programs, or, potentially, to create opportunities for them to submit claims or requests to either the federal or provincial governments.

So, we support them in this regard. In fact, I had the privilege of attending an event last year organized by Sous-traitance industrielle Québec, during which we had the opportunity to encourage suppliers to take these initiatives and also to come see us, because we are there to support them as well. Of course, I need my supply chain to succeed and optimize my own investments.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

Thank you very much.

Indeed, it's extremely important, because we're going to have major investments, not only in electrification, but also in defence and the automotive industry, for example. There are significant changes coming. It has to benefit the entire chain.

So this ability to have discussion forums allows SMEs to participate as well. The big questions we hear all the time from SMEs who say they want to be involved are: Who can they call? Where should they go? How can they do this? The government has a role to play, but I think it's very important that the major sources of business also participate. Your model works well, and we'll certainly draw inspiration from it.

Another challenge you mentioned that's also extremely important is the workforce; its availability, first of all, and then, of course, training.

Could you tell us how you handle that? I still remember when I visited your plant in Varennes and got a glimpse of the workers there. Let's just say there were people from multiple generations, multiple age groups. I assume, then, that you also have continuing education programs.

[Carla Vicente]

Yes.

The reality is as you just said, of course. Not only is the population aging, but there's also the fact that, in our industry, we are all competing to attract the same talent, the same expertise, whether it's my clients, my competitors or others.

For us, it was important to start exploring ways to address this issue and identify potential solutions. We began seeking to diversify our workforce and determine where to get it. We're looking for talent that may be younger. We're collaborating with several universities and even high schools, for instance, where we can establish a presence. We can give them a glimpse of what Hitachi Energy Canada does and the industry we're in, to spark interest in a younger demographic and develop that talent.

We also want to recruit people from other industries. It's a matter of figuring out how we can bring them into our industry and diversify our workforce. Their learning curve may be a little longer because they're not in the energy industry, but we need to start thinking outside the box, because, as I said earlier, we all depend on the same resources. So we need to start considering that diversification, and it's working well.

For example, at our Varennes plant, which you may remember, we discussed precisely this training that we were doing to recruit people from elsewhere, from other industries, and bring them into our industry and train them. That's what we're doing as well. We've set up various training centres. We have a training centre in Varennes as well as in Stoney Creek, Ontario.

In fact, we're laying the groundwork for the future for our internal resources. I think it's important to raise one point: Any program that can support this kind of workforce diversification is important.

[The Chair, Liberal, Karina Gould]

Thank you, Ms. Vicente. You're out of time.

Yes, Mr. Leitão, your time is already up.

[Carla Vicente]

Thank you.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Leitão.

Mr. Garon, you have the floor for seven minutes.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you, Madam Chair.

Once again, I would like to extend my greetings to the witnesses, who are taking the time to be with us today.

I'll begin with Mr. Gignac. He and I interacted in the past when we were in other phases of our careers. We've crossed paths on several occasions. I'd like to extend my very special greetings to him.

Mr. Gignac, when we look at Canadian stock indexes, we know that the energy sector is heavily represented. That's putting it nicely, because it's actually the oil sector. We have a banking sector that makes huge loans to oil companies. For example, we know that at RBC, it's huge. We know it's grown over the years.

Do you think the Canadian banking sector is too exposed to the non-renewable natural resources and oil sector? It would be appreciated if you could provide some comparisons to illustrate the extent to which this is the case, if at all.

[Renaud Gignac]

Good afternoon, Mr. Garon. Thank you for the question.

When we look at the exposure of major Canadian banks compared to international banks, Canadian banks are much more exposed when it comes to loans to the industry, and they also hold industry assets in their asset management portfolios.

The oil sector in particular is very volatile right now, as is the gas sector. Since the conflict in Iran began in February, these companies have been raking in record profits. We're talking about three times their normal net profits. If the price per barrel were to remain at the current level, which is around $100, throughout the year, Canadian oil and gas companies could see record profits of $90 billion, but—

[Jean-Denis Garon, Bloc, Mirabel, QC]

I would like to add a comment, if I may.

You touched on the issue of risk. From what I've observed, the resource sector is a very risky sector. There are the oil sands in Alberta. Obviously, new deposits are very expensive to develop. There is some uncertainty surrounding that.

I've noticed that the government has just subsidized the entire risky portion. They're subsidizing the Trans Mountain pipeline. It's possible that more public money will be invested in a new pipeline.

When it comes to large-scale carbon capture, every expert I've consulted has told me that this technology cannot be deployed on a large scale, at least not for the foreseeable future.

When we look at the entire risky portion, the federal government is using taxpayer money in the form of tax expenditures or subsidies to support it. Doesn't this actually encourage banks and other financial institutions to walk away with the windfall, while taxpayers end up bearing the brunt of the risk?

[Renaud Gignac]

That's right. What's also important to note is that the demand for oil in China has fallen by 9% since the crisis in Iran.

We met at an economics department. In other energy crises, demand was inelastic, so taxes could be raised without causing any real reduction in demand. However, what we're seeing with this crisis is that demand for oil is becoming increasingly elastic because there are technologies available to replace it.

It's unclear whether the demand that fell following the crisis in Iran will rebound. There is therefore a real risk for investors, including pension funds that have investments in these sectors, in this highly volatile context.

[Jean-Denis Garon, Bloc, Mirabel, QC]

A few years ago, I heard some colleagues—I won't say which party; anyway, no one knows who the Conservative Party is here anymore—say that there was no point in making efforts toward transition in Canada, since China wasn't doing its part. China continues to build coal-fired power plants, but we realize that China is experiencing tremendous economic growth. It's a developing country.

So, you're saying that the structure of demand in China is changing. That's because it has a lot of new facilities, and it seems to me that new energy in China is proportionally even more renewable than what we're doing here in Canada.

Could you tell us about this argument that others aren't doing their part and that we should therefore abandon our transition efforts?

[Renaud Gignac]

Absolutely.

In fact, China is where the most investment is for the technologies of tomorrow, namely, solar, batteries, electric vehicles and heavy-duty electric vehicles as well.

There's an opportunity to capture a portion of our companies' exceptional profits, perhaps not all of them, but just a fraction, to support the sectors of tomorrow here. Indeed, if we stay in the same niche and continue to strengthen high-emission sectors, it's quite possible, as we can see in the demand projections, that we'll be lagging behind in a few years compared to other countries that are taking the lead in low-emission technologies.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Recently, another witness came to speak with us about the taxation of oil companies' windfall profits. It's a very interesting aspect. There are also issues of provincial and federal jurisdiction, because although corporate income tax is also a federal matter, this portion specifically comes from resource revenues in a particular sector. There are complications associated with this, but regarding the source of these profits, we in the Bloc Québécois have always maintained that we must stop subsidizing oil companies, stop subsidizing their technologies, stop giving them tax credits, stop paying for their pipelines, and so on.

Don't you think that, in a way, the starting point should also be to say that it is not the Canadian government's role to subsidize oil companies and make some of their projects profitable for the private sector when they would not be otherwise? Doesn't that also have a role to play?

[Renaud Gignac]

There is no doubt that if public funds are committed to fossil fuel-related infrastructure projects, that poses a risk to Canada. These are very high-risk projects. If there are no private developers for these projects, we have to wonder why taxpayers should ultimately fork out—

[Jean-Denis Garon, Bloc, Mirabel, QC]

The Conservatives will tell you that it's the federal government's fault, because it is pushing back investors. What do you say about that?

[Renaud Gignac]

I think we need to look at market conditions. If there were a market for that infrastructure, I think investors would be there.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you very much, Mr. Gignac.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Garon.

On behalf of the committee, I would like to thank the witnesses.

The committee is adjourned.