Industry and Technology Committee on Oct. 27th, 2025

[Dominique O'Rourke, Liberal, Guelph, ON]

Thank you.

I'm curious to know what else you think the federal government should be doing in terms of encouraging those types of investments—and thank you to your members who really have been leading here—in order to stabilize the footprint in Canada.

Also, Mr. Kingston and perhaps Mr. Williams, even if the federal government brought in a number of these other measures, what do you think should be in place to ensure that your members uphold their commitments?

[Brian Kingston]

First, in terms of ensuring that we have a compelling case here and continue to attract investment, the critical minerals supply chain—I know Mr. Adams mentioned it—should be in place. Despite the challenges in the EV sector right now, this is the future, and China controls 80% of the battery supply chain. They also control 90% of rare earth minerals.

I just came from Saguenay, where they have the ability to process gallium. We have minerals that you cannot get anywhere else in the world. If we accelerate our efforts to identify those key minerals and build out the processing capacity, not only would that be good for the auto supply chain, but it would also give Canada leverage in these broader discussions with the United States.

With respect to covenants in these agreements, the companies have lived up to their covenants in the agreements. As I noted at the outset about Stellantis, of the $8 billion it has committed to Canada, $7 billion has been put into effect. These are massive investments that have been made, such as a third shift in Windsor, and NextStar's battery plant, the first large-scale battery plant fully in operation with 1,000 new jobs. These investments are happening, but companies have to adjust to the current trade environment.

[Huw Williams]

I would just say, from the dealer perspective, we put out the competitiveness framework, to give credit where credit is due. We called for the pause of the EV mandate and then a full reset. I think you've heard my case on that.

The banks in this country have been lobbying to have the right to lease vehicles, which they've been prohibited from since the beginning of time. There's a specific prohibition in the Bank Act. The discussions with finance are in a good place, I think, and we expect an announcement in the budget, hopefully soon.

We have been clear on the removal of the luxury tax as well as the harmonization of standards with those that we have a free trade agreement with. That's not going to happen overnight, but it helps to expand the marketplace. I know that not every manufacturer is on the same page with respect to that. One of the things we called for was the iZEV repayment and that happened, too, 100%.

In terms of interprovincial trade barriers, the PPSA, which is personal property securitization that's done in each province, is a mess at the moment. It's not correct. You have little anomalies that make a big difference for customer affordability. In the Atlantic provinces, for instance, if the customer's name is Jean but his driver's licence or his legal name is John and there's a mismatch, the car company or the dealer who has the loan on that, in case of a bankruptcy, loses their place to secure that credit. Again, it's an anti-competitive thing that we have to correct.

[Dominique O'Rourke, Liberal, Guelph, ON]

Thank you.

[The Chair, Liberal, Ben Carr]

Thank you very much.

Colleagues, we're going to suspend for about five minutes to give everyone an opportunity to stretch their legs. We will then return for about 45 or 50 minutes to resume our line of questioning.

We will now suspend.

[The Chair, Liberal, Ben Carr]

I hope everybody had a moment to stretch their legs. We're going to get back into our line of questioning.

For members, because it's a continuation of the same round, instead of going to the six minutes, five and then five, it's going to be five, five, two and half, five, five. In other words, it's just a slight reduction for each party.

Having said that, Mr. Falk, I have you as the first on my list for the Conservative Party. There will be five minutes for you, sir.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Mr. Chair.

Thank you, witnesses, for your testimony this morning. It's been very enlightening.

Earlier we heard Mrs. O'Rourke say that the only promise broken here has been by Stellantis. Can any of you respond to the promise that was made by Mark Carney that there would be a trade deal by July 21?

[Huw Williams]

I'm sure nobody else wants to handle this question, which I'm happy to.

Again, I have to say the same thing privately as I do publicly. I think we're dealing with a very mercurial trade partner. I think the Prime Minister has done a lot of things right, and I've said that on CTV News. I have given credit to Premier Ford at times, who has taken a slightly different strategy. We are dealing with a very different organization.

I'll also say this. When we were in Washington in the second or third week of July, senior senators who are very close to President Trump—whom I won't name to avoid causing disruptions—told us in private meetings that we would have a deal just after Labour Day. They are as surprised in Congress as we are. There have been a number of sliding scales. There have been a number of anticipated deals on 232 tariffs that have not materialized.

I will just say that, from the standpoint of an industry who are plugged in in the States and active in the States, it is a roller coaster ride.

[Ted Falk, Conservative, Provencher, MB]

We also know that $60 billion of Canadian investment has left Canada for other places, primarily the United States.

On Mr. Carney's last visit to the President, he promised to bring back a deal as well. Instead, he promised the Americans half a trillion dollars of investment.

What does your industry think about that?

[Huw Williams]

I'm not sure if the others want to jump in here.

There are a few dynamics that we're worried about. A number of our dealers represent Ford, GM and Stellantis, and these are Canadian companies as much as they are American companies. They worry about the knock-on effect of being seen as too American. That's definitely a concern.

Again, we're concerned about getting a long-term deal. Yes, we need short-term certainty, but the big prize out here is to make sure we have a CUSMA deal. That's what we're really concerned about.

[Ted Falk, Conservative, Provencher, MB]

You have all commented on the fact that you need certainty. Certainly, I can appreciate that. You can't make million dollar decisions without that certainty. That's something that you've been lacking here. With only a pause on the EV market, that doesn't give you certainty. I understand that. You have all articulated that the EV mandate has to go.

I think, Mr. Kingston, you said the EV market is near collapse. Do you have the stats for Canada for what percentage of new vehicles were EVs?

[Brian Kingston]

Yes, we've seen seven months of decline in EV sales, which is unprecedented. There's no sign of recovery. We're currently through August sitting at 8.8% of all new vehicles sold are zero-emission vehicles. The 2026 mandated target is 20%, and that rises up to 60%.

Just to be clear, the manufacturers are fully invested in EVs and have introduced more models than ever. We're sitting at 150 models in market, but if a consumer doesn't want the vehicle and they are choosing another technology, it doesn't matter how many models you have available. You need the organic consumer demand. That's what we're missing at the moment.

[Ted Falk, Conservative, Provencher, MB]

Yes, Mr. Williams.

[Huw Williams]

I know we have the member from Oakville here. I think one of the cases I would make is if you look at the recent registrations, in Oakville you're just about 15%, 4.7%. Oakville is a great community. A lot of consumers are choosing as their second vehicle to have an EV. They might for larger trips to hockey tournaments have a pickup truck or something that fits the marketplace. In Thunder Bay, I think we're at 2.1%, and 3% in Greater Sudbury.

We can't have one mandate for the entire country. I think there's a recognition that we need certainty on the mandate. I take your point. Getting rid of the mandate will help investment.

[Ted Falk, Conservative, Provencher, MB]

Stellantis was building an EV charger, which was a complete flop. They have made a corporate decision to move back to gasoline powered, which is what the market is demanding. Is that accurate?

[Brian Kingston]

They're still building electric chargers. They're bringing a gas-powered version, as well, and they have, of course, the battery plant in Windsor.

[The Chair, Liberal, Ben Carr]

Thank you, Mr. Falk.

Mr. Bardeesy, you have five minutes. The floor is yours.

[Karim Bardeesy, Liberal, Taiaiako'n—Parkdale—High Park, ON]

Thank you very much, Mr. Chair.

I want to start with a question for Mr. Adams.

I know that some of this predates your arrival in the chair that you occupy, but can you share a bit about what attracted some of your members, two of your members in particular, to set up manufacturing and assembly operations in Canada?

[David Adams]

In my understanding, it was a collection of different measures. There was concern about the Japanese coming into the market at the time. There were different measures that were put in place to try to limit the penetration of the Canadian market by the Japanese. The same held true in the United States.

As a result of those measures, the Japanese were convinced to build production in Canada. Honda was the first manufacturer to set up production here in 1984, I believe, followed by Toyota in 1986. Over the course of time, as I mentioned in my opening remarks, they've become, at this point anyway, the two largest vehicle manufacturers in Canada.

[Karim Bardeesy, Liberal, Taiaiako'n—Parkdale—High Park, ON]

To what extent is having a skilled workforce important for those member companies?

[David Adams]

Having a skilled workforce is very important. When those companies came here, they also brought along with them some of their parts suppliers, dedicated parts suppliers, that went on to also serve other components of the automotive industry and some of Mr. Kingston's members as well.

Having a skilled workforce has been demonstrated in the awards that my team members have received for quality, build quality. We had gold, silver and platinum awards from J.D. Power, for instance, and other organizations recognized globally the quality of those plants. I think it becomes a consideration when these companies are looking at where are they going to put their next investment. Having the certainty that we've all talked about is important, but having these other, maybe more peripheral aspects are very important as well.

[Karim Bardeesy, Liberal, Taiaiako'n—Parkdale—High Park, ON]

I have a question for any of the panellists.

It's not just federal policy, but there's also provincial policy that's had a change recently with two provinces changing their incentive programs.

To what extent do you think provincial policy choices also explain this slight decline in electric vehicle sales?

[David Adams]

I would go back to even before. As you will recall, perhaps—I think you were in the Ontario government at the time, Mr. Bardeesy—Ontario had a $14,000 incentive. We saw EV sales really bottom out substantially once that incentive went away.

We look at the current situation we're in. We have a zero-emission vehicle mandate, but it's also predicated on having the zero-emission vehicle program, the iZEV program, in place, incentives to assist consumers to purchase these vehicles and on having a robust buildout of the charging infrastructure. Right now, we need 40,000 pieces of charging infrastructure installed every year to meet the government's own estimates, and we're nowhere near that. Those two things are faltering while we still have the requirements of the zero-emission vehicle mandate.

[Karim Bardeesy, Liberal, Taiaiako'n—Parkdale—High Park, ON]

The one aspect of charging infrastructure is that it's more a national presence. It's more of a national footprint for the sector.

Would it be fair to say that the growth of EVs over the longer period has a positive economic spillover in broader parts of Canada?

[David Adams]

I think, from my perspective anyway, that long-term development of the EV sector holds out that promise as opposed to just being an Ontario proposition. Certainly we've seen, just from some of the investments that already have been made and proposed investments, that Quebec played a big factor in that. We have minerals out in the midwest and also in B.C., so there is the opportunity to have a more comprehensive automotive sector in Canada as we develop those critical minerals.