Industry and Technology Committee on March 12th, 2026

[Tim Reuss]

The EV demand last year was also heavily influenced by the announcements of the government at different points in time on whether EV incentives were to come back or not. That led, in the beginning of the year, to some consumers holding off on their purchases. If they knew or had read an announcement that some money may be coming back from the federal government, they held back.

I have to go one year further back, to the end of 2024, and especially to the last quarter, when the demand in Quebec was very high because everybody understood that come January, the Quebec-specific EV incentives were going to decrease substantially. Therefore, there was a pull forward demand in 2024 that then led to lower numbers in 2025.

What we have seen so far this year—coming back to a member's earlier question—since the announcement of the auto strategy is a positive effect on the marketplace for EVs. To be very clear, our members are not against EVs. EVs are and will continue to be a vibrant part of the market. It's just that they're not the only solution, and the demand is not there to reach the numbers the government foresaw at the time.

[Ted Falk, Conservative, Provencher, MB]

You represent dealerships. Do your dealerships comment at all on the resale value of used EVs?

[Tim Reuss]

Yes. We're now starting to see EVs come back into the marketplace after the first cycle. This is an interesting aspect, as well, because the main part of the value of a used EV is the health of the battery. Will the battery last, yes or no?

Initially, there were some issues with dealers being able to diagnose correctly the health of a battery that is an off-brand. If you're a dealer of brand A, but you're receiving a trade of brand B, are you able to assess that? There are different tools, different architectures and things of that nature. Those were the initial issues we were dealing with technically to properly assess the value of a used EV. Those things are slowly being worked out and worked through.

We estimate that in North America, we're going to have somewhere close to roughly 30,000 EVs coming back on a monthly basis very soon. They're starting to go through the regular paces of auction houses and things like that. That's going to become part of normal life, as with other used vehicles.

[Ted Falk, Conservative, Provencher, MB]

Are they seeing a significant difference in used valuations between a comparable EV and a petrol-powered automobile of the same vintage?

[Tim Reuss]

That is very difficult to assess. Because you don't have the same vehicle with either internal combustion or EV drivetrains, that's very difficult or almost impossible to assess.

[Ted Falk, Conservative, Provencher, MB]

What do your dealerships think about the Chinese EVs?

[Tim Reuss]

We have started engagement, mainly with the government and the brands that are thinking about how that should work in Canada, to make sure that the brands potentially coming to Canada understand that they will work with dealers in a franchise system and that they will adhere to our Canadian business practices, so some of the things they might be doing in other parts of the world will not fly in Canada.

What contractual frameworks look like in Canada and things of that nature.... They must become members of our mediation and arbitration process that we have with dealers in Canada and become part of the industry associations in Canada and part of CAMVAP, which is the consumer protection system we have in Canada, so that they play by our rules in Canada.

[The Chair, Liberal, Ben Carr]

Thanks very much.

Colleagues, I'll note that because of the technical difficulties and a pretty packed agenda today, we may be looking at a reduced amount of time in our third round.

Mr. Bains, the floor is yours for five minutes.

[Parm Bains, Liberal, Richmond East—Steveston, BC]

Thank you, Mr. Chair.

Thank you to our witnesses for joining us today.

I'll go first to Monsieur Breton. You wanted to finish some comments from a question from the other side, so if you would like to, you can take some time to do that.

[Daniel Breton]

The market is evolving around the world. The issue with saying we should align with the U.S. is that the U.S. is basically eliminating all of the regulations, whether they're on GHG emissions, EVs or fuel consumption. This means that if we were to align with the North American framework, as we have done in the past, we would roll back 50 years, back to 1975. This would be a major problem for Canadians as a public health issue, a technology issue and a science issue.

I don't think we want to go in that direction. We're not the 51st state. We are a separate country, so we have to have our own sets of rules and regulations, and Canadians agree with that.

[Parm Bains, Liberal, Richmond East—Steveston, BC]

Thank you, and we will never be a 51st state.

Let's fast-forward; let's not look back 50 years. I want to talk a little bit about semiconductors. Can you reflect on the significance of semiconductors and how EVs in Canada should account for vulnerabilities in the global semiconductor supply chain?

[Daniel Breton]

We basically realized during COVID that we had let too many of our industries go to Asia, mainly China, when it came to semiconductors and battery technology. We have to rebuild the supply chain in Canada, and that's what the federal government is trying to accomplish right now.

It's not an easy task, because we've gotten used to getting these made in China. The computers are made in China. The batteries made are in China. The supply chain has been transferred to Asia for decades. To rebuild this is not an easy task, but I think that, if we don't do that, we won't have a manufacturing industry anymore in Canada. To me, this is key to the future of automotive—but also beyond automotive—manufacturing in the country.

[Parm Bains, Liberal, Richmond East—Steveston, BC]

Thank you for that.

Richmond, British Columbia is home to the largest auto mall in Canada, so I'll go to the Auto Dealers Association for the next question.

In a recent news release published by Clean Energy Canada, you indicate that distributed energy resources like EVs and heat pumps could reduce 10% of peak electricity demand in B.C. Can you elaborate on how we can make this a reality for British Columbians?

Whoever has the answer, please answer.

[Rachel Doran]

We recently released a study suggesting that distributed energy resources could reduce B.C.'s peak demand. Effectively, we've been talking a lot about electric vehicles as a draw on the grid. Maybe what we're not talking about as much is what's going to happen in tandem, which is that those EVs hold batteries that can charge at different times of the day.

We're building out our electricity grid right now in this very old-fashioned way to meet the biggest demand at the highest hours of the day. Because we can use those electric vehicles eventually to feed power back into the grid, that's going to really allow us to control demand to times of the day when there is a lot of electricity to spare. It will pair very well with an increase in renewables on grids to be able to use resources like EVs.

We have a ways to go in Canada to develop the right regulatory framework to get there, but this is a potential study that really shows how much it's going to be able to save grids and the cost of electricity build-out in the long run.

[Daniel Breton]

Very quickly, one more thing that people seem to forget is that we've been working on hardware when it comes to cars for decades, if not over a century. More and more, cars include software, semiconductors and microprocessors.

I don't know if you know about this, but hundreds of people are working for Rivian, the car manufacturer in B.C. They're developing software, and they're working in conjunction with Volkswagen in Ontario, because more and more, when you look at a car, it's almost a computer on wheels, whether it's a gas or electric car. This is something that we are really strong at and in automation as well. Most people don't know about this, but when it comes to automation, Canada is one of the leaders in the world.

[Parm Bains, Liberal, Richmond East—Steveston, BC]

I'll go to Ms. Doran.

You mentioned in your introductory comments that Canada and Germany just signed an MOU. Can you elaborate on how the MOU relates to the new auto strategy of the Prime Minister and what this means for the future?

[The Chair, Liberal, Ben Carr]

We're over time. I'm going to give you 20 seconds to answer that.

[Rachel Doran]

We're enthusiastic about Canada's bridging relationships with new markets. We can't keep out the countries that are producing EVs. We need to build our supply chains to integrate them. With selective competitiveness, the future growth of our industry is going to be better, and our critical minerals and other resources will be anchored into those global leaders as well.

[The Chair, Liberal, Ben Carr]

That was well done. Thank you.

Mr. Ste‑Marie, you have the floor for two minutes.

Ms. Dancho will then have two and a half minutes, followed by two and a half minutes for Mr. Ma. That will end our first round of questions.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

That's great. Thank you very much.

I have a question for the retailers and for Mr. Breton about the recognition of European safety standards to open the door to new EV models.

Could you comment on that? You have one minute each.

[Tim Reuss]

From our perspective, it is something that Canada can do in addition to trying to keep a continuous alignment with the U.S..

Vehicles that have been deemed safe enough and environmentally okay to be driven in the European Union, Japan and Korea are more than okay to be driven on Canadian roads. The example I always give is, if you can drive a car at 200 kilometres an hour on a German autobahn, why wouldn't it be safe to be driven on a Canadian highway? This is the approach we're taking, but again, this is something that can be done in addition. It's not for the core of the market; it's for a small addition to the market.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you.

Mr. Breton, you have the floor.

[Daniel Breton]

Actually, to add to what Mr. Reuss was saying, I spoke with a German government official in December about people saying that European vehicles were not as safe, and I was told that the German government was quite insulted to hear that.

I would like to add that there is one part of the equation that has not been considered by the current government, and that is critical minerals. We have a critical minerals strategy, but we've completely forgotten about battery recycling.

Lithion Technologies was dismantled and bought by an American company, and Li-Cycle went bankrupt, which means that, for the time being, electric vehicle batteries are being transferred to the United States.

By transferring electric vehicle batteries to the United States, we're potentially shifting a billion dollars in critical minerals to the United States by 2030, 2031 and 2032, because that wasn't taken into account in the critical minerals strategy.

I think the Canadian government and elected officials must definitely consider the critical minerals aspect of batteries because they are of significant economic, ecological and geostrategic importance.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you very much.

[The Chair, Liberal, Ben Carr]

Thank you, Mr. Ste-Marie.

Madam Dancho, go ahead for two and a half minutes, please.