Industry and Technology Committee on April 16th, 2026

[Neil Bisson]

It's difficult to say. If there were a situation in which the Chinese government was looking for specific information.... Let's say that Canada is trying to continue to advance in the field of artificial intelligence. There are individuals who have access to these vehicles and use these vehicles on a regular basis. There's the potential that any information, once it is connected to the system, whether it's through a phone or anything else, could then be sent to the People's Republic of China and used by the People's Republic of China to advance its own interests.

[Ted Falk, Conservative, Provencher, MB]

That could be either from an intelligence-gathering perspective or from a disruption perspective, where they actually send something to us to disrupt our systems.

[Neil Bisson]

The potential is there that any connected system integrated into our energy ecosystem could be used to disrupt.

[Ted Falk, Conservative, Provencher, MB]

Thank you.

Mr. Chair, I'm good.

[The Chair, Liberal, Ben Carr]

Okay, that's excellent. You gave us a bit of time back.

Mr. Bains, the floor is yours for five minutes. Feel free to follow the path set by Mr. Falk, as we are running a bit over time and have some other things to do.

The floor is yours for what I will say is up to five minutes.

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

Thank you, Mr. Chair.

Thank you to our witnesses for joining us today.

My first question is for Mr. Kabbara.

I'll reference a report on your website. It's titled “Exporting the Future Economy”. It states that “exports in clean energy supply chains grew 21% faster than all other exports over the last five years” and that they're growing faster with partners outside of the U.S. In other words, they're already diversifying our economy, and with the targeted industrial strategy, they could help Canada unlock $600 billion in annual export opportunity by 2035.

You spoke quite a bit about this in your answers. Which exports are these specifically, and to which non-U.S. partners?

[Moe Kabbara]

Specifically in that report—I don't have that data in front of me—one of the areas that came up was transformers or grid equipment increasing a bit upwards of 200% since 2024. A lot of it was going to European and Asian markets.

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

The report's conclusion indicates, “Canada must concentrate this strategy on specific supply chain segments where it can achieve scale and capture high value-add”. Which areas can you share and maybe even make some recommendations on?

[Moe Kabbara]

This is why I've been talking about the battery value chain; there's a lot of value-add there. This is where we're seeing growth in the global markets and global demand. Canada has a real opportunity there.

We're also seeing growth in the transformer stuff that we're talking about. We can look at one company, Hammond Power in Ontario, which increased its exports significantly. That was mostly driven by AI demands.

The trend we're seeing with electrification more broadly globally is converging on increasing demand for things like grid equipment, but also for electric vehicles. At this point, it's happening because when we think about the future, we're thinking about AI, about digital. We're thinking about a very precise amount of energy that is being delivered in milliseconds. This is where we're able to capture a lot of value, whether it's in critical minerals, the EV supply chain, grid equipment or mass timber, which is an upgraded forest product for construction.

Those are some of the areas we have in our report. I know we don't have a lot of time here.

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

Thank you.

I'll give some time back. I know we're waiting for the second panel. I'm happy to oblige.

[The Chair, Liberal, Ben Carr]

Thank you very much, Mr. Bains.

What an unbelievable show of unity across partisan lines. Everybody gave a bit of time back to the committee.

I want to thank our three witnesses for joining us today and contributing meaningfully to the study we're undertaking on electric vehicles and the implications that come with the decisions and direction the government will be taking in that regard. We appreciate your availing yourselves to us.

Colleagues, we're going to suspend very quickly and come back in a couple of minutes, because we need some extra time at the end of committee to deal with some business.

[The Chair, Liberal, Ben Carr]

Colleagues, I'm going to enter the second hour of testimony.

Joining us virtually, from Accelerate: Canada's ZEV Supply Chain Alliance, is Andrew McKinnon, interim chief executive officer. Joining us here in the room, as an individual, is Sebastian Fischmeister, professor.

We are going to have five minutes for each witness to provide testimony, after which we will have an opportunity to hear from members.

Mr. McKinnon, I'm going to turn the floor over to you to begin. You'll have five minutes for your opening remarks.

[Andrew McKinnon, Interim Chief Executive Officer, Accelerate: Canada's ZEV Supply Chain Alliance]

Good afternoon. Thank you to the committee for the invitation to appear and speak on this important study.

Accelerate is an industrial alliance of key actors in Canada's emerging zero-emission vehicle supply chain. Our network of partners and collaborators includes critical minerals miners, battery producers, battery materials producers, vehicle parts makers, vehicle manufacturers, researchers and labour interests.

Since 2021, we have been working to support more Canadian content in EVs built here in North America and sold around the world. By developing and supporting the EV industry, Canada can achieve multiple outcomes at once. Expanding the EV supply chain means more jobs in mining, materials production, manufacturing and research from coast to coast. More materials production, driven by EV and battery production demand, can support our defence industries. Having more EVs on our roads means better air quality and lower GHG emissions.

All together, a strong EV supply chain will provide the finished products, battery precursors and critical materials that our trading partners need. Achieving these outcomes requires a balanced and holistic approach that supports the supply of materials, supports the development of the EV market and supports our traditional automotive industries.

Last year, Accelerate undertook a new research project on how Canadians view the emerging EV industry. What we learned was that Canadians in all regions support the development of EV supply chain industries, including mining, battery materials, components, and final manufacturing. For them, this industry represents a significant opportunity for new jobs.

Our research shows that a majority of Canadians believe that investing in the EV supply chain should be at least a moderate investment priority for the government; that almost three in 10 Canadians become more supportive of critical mineral mining and processing after being told these are part of the EV supply chain, including a small proportion who are initially opposed to these industries but who become more supportive when they are linked to EVs; and, finally, that Canadians who own or know someone who owns an EV have stronger support for the development of the EV supply chain here. This research shows that more EVs on our roads will increase public support for the critical minerals mining and processing industries, which are important not only for EV production but also for defence, clean technology and trade development objectives.

Today, it is widely recognized in Canada and by our allies that concentrated global supply chains for critical materials, including battery materials, represent a significant economic and security risk. For some of the key material inputs that go into making an EV battery or motor, greater than 90% of the world's supply is produced in China. This means that even though Canada has the raw materials needed and the final manufacturing prowess, we are missing critical segments of the overall supply chain.

We believe that the current government's approach of a limited allowance of Chinese EVs into the Canadian market must be paired with continued and effective supports for Canada's own EV industry. These would include deploying a national IP strategy for Canada's critical materials producers that would fast-track patent processing for technologies deemed critical to the national interest, including those related to battery materials and battery materials production, and ensuring that future deals to secure foreign direct investment in the production of batteries or EVs include provisions that require investors to work with Canadian critical materials providers to eventually achieve specific levels of Canadian material content.

Finally, we would like to see assurances that future agreements on joint ventures in Canada for the production of batteries or EVs include safeguards to support IP protection—we know there are some of these in the new automotive strategy—as well as requirements for Canadian materials supply at Canadian prices and provisions to facilitate technology transfer to Canadian firms. Any deal must increase Canada's strategic independence and economic resilience.

In conclusion, just as the automotive industry in the past 100 years has been linked to Canada's economic, defence and industrial capacity, so too can the EV and battery production industries support these objectives for the next 100 years.

Thank you very much.

[The Chair, Liberal, Ben Carr]

Thank you very much, Mr. McKinnon.

I apologize, Mr. Hinton. Your camera wasn't on at the time I was doing introductions, so I didn't see you there.

Appearing with us today, as an individual, is James Hinton, an intellectual property lawyer.

Mr. Hinton, I am going to turn the floor over to you, if you're ready, to provide your introductory remarks. You'll have up to five minutes.

[James Hinton, Intellectual Property Lawyer, As an Individual]

Thank you.

Honourable Chair, vice-chairs and members of the committee, thank you for inviting me to speak. Your work is of tremendous importance to Canada.

I'm the CEO of and an intellectual property lawyer with Own Innovation, and I have experience as a mechanical engineer in the automotive industry. I work with high-growth Canadian technology companies as they commercialize and scale globally.

Canada's billion-dollar electric vehicle strategy has failed. It's not because of EV technology effectiveness, it's not because of demand and it's not because of U.S. tariffs or global trade challenges. It is because Canada is not even in the game. Canada has done, and continues to do, everything wrong.

We fund EV research and development but do not retain it. For example, Dalhousie University is home to global battery research excellence, with millions in public funding, but foreign firms like Tesla are the ones that end up owning the technology.

We fund manufacturing. With $57 billion in EV funding, we subsidize cheap labour for foreign firms that reap the economic upside. Now many of those firms have closed shop with no jobs, leaving us holding the bag. These deals were doomed to fail from the start, because we had no ownership stake. It was all branch plants for foreign firms.

We fund the adoption of EVs, but without Canadian firms in a meaningful position in the value chain, those subsidies flow out of the country. Adopting someone else's technology is not economically productive. Financially subsidizing the adoption of someone else's technology is disaster.

We do new trade deals with China where it gives us high value-add electric vehicles that drive data-driven economics, and in exchange, Canada provides low value-add canola, lobsters, crabs and peas. The Chinese get to commercialize their IP and capture Canadian-generated data, while Canada trades on low value-add raw materials. Because of this, we are making ourselves poorer, more dependent and less secure.

EVs are about three things: intellectual property, data and sovereignty. Today, EV and automotive factories rely predominantly on automation and robotics backed by intellectual property, not workers. Just 7% of a car's value goes to labour, with the benefits going to the owners of the IP embedded in the technology, not to those who buy or install it.

The Chinese, Americans and other global players own EV technology, so they will benefit from the global shift towards EVs, and Canada will absolutely not benefit because it doesn't own significant EV intellectual property. We own just 1% of global EV patents, while the Chinese own 51%.

If Canada has a strategic advantage in EVs, it may be critical minerals. However, while Canada may physically have critical minerals, Canada does not own the technology required to extract those minerals or transform them into batteries. Canada owns less than 0.7% of global mining patents.

EVs are all about data—vehicles not to get you from point A to point B but rather vehicles to get your data into the hands of automotive companies. This is an economic problem. The data has significant economic value, and we lose that. This is also a security risk: Foreign governments can access that data and use it to undermine our national security and sovereignty.

My recommendations follow directly from the problems we've created for ourselves.

First, stop subsidies like the manufacturing subsidies for foreign firms—Canada can be better than simply a cheap labour provider—and stop the adoption subsidies. Unless we have Canadian companies as substantial and meaningful parts of the EV value chain, adoption subsidies will continue to be a massive wealth transfer out of the country.

Second, instill upstream research constraints to ensure that Canadians benefit—no more deals where Canada funds the research and foreign firms get the IP. Canadian firms need to stop selling Canada out.

Third, create a patent fund that generates and retains IP in Canadian firms and expands freedom to operate for Canadian firms across the EV value chain: critical minerals, manufacturing, AI, autonomous vehicles and cybersecurity.

Fourth, like other jurisdictions, Canada must establish a sovereign cloud with ambitious data governance so that Canadian EV data remains exclusively under Canadian legal control and is held out of reach of foreign control for economic and national security.

Finally, grow Canadian firms in the EV value chain instead of driving adoption of non-Canadian technology. Canada needs to incentivize and create a domestic automotive industry with Canadian-owned technology at its core.

Canada's automotive industry is on its deathbed. The only path to success is for Canada to stop subsidizing labour and adoption and to incentivize Canadian companies owning value-add technology and driving its commercialization. Canada's current EV path is one of economic ruin.

Thank you.

[The Chair, Liberal, Ben Carr]

Thank you very much, Mr. Hinton.

Mr. Fischmeister, you have five minutes, sir. The floor is yours.

[Sebastian Fischmeister, Professor, As an Individual]

Thank you very much to the committee for giving me the opportunity to speak.

I'm a professor in the department of electrical and computer engineering at the University of Waterloo. I've been working for about 26 years in the area of safety and security of cyber-physical systems across different sectors.

I've also spun off multiple companies out of R and D at the university. The notable one that might be of interest to this committee is Palitronica, which provides supply chain cybersecurity solutions and cyber-assurance to detect defects, oversights, fraud and cybersecurity issues in the supply chain.

I want to bring up and raise awareness of a particular problem that prior witnesses have not really mentioned yet, which is around potential systematic compromises of systems, like vehicles, through the supply chain.

Supply chain attacks, as they are typically known, are classified under Mitre ATT&CK and allow the attacker to insert vulnerabilities before systems are delivered and deployed. This enables coordinated, large-scale exploitation of these exploited systems at a time of the adversary's choosing. In the context of vehicles and charging infrastructure, this could mean maliciously inserted and embedded circuits in battery management systems or compromised charging systems to destabilize the grid, for example, at a point of their choosing.

Public literature already documents real-world examples of hardware tampering and supply chain compromises across a number of industries. There are examples from public literature: USB devices rigged with explosives sent to journalists in Ecuador and bypass electronics in commercial off-the-shelf switches that allow you to load arbitrary firmware onto these systems. You can go on the Internet right now and buy cables and keyboards that look like regular keyboards but actually have hardware implants in them that allow you to steal data from phones and computers.

A viable response to this risk is the zero-trust supply chain model, in which no component is implicitly trusted regardless of its origin. Every part is verified, measured and continuously assessed. We already do this today. When you go to the airport, regardless of who you are, your bags are scanned with an X-ray scanner. No matter where you're from, no matter how often you've flown, your bags are being scanned; past behaviour does not eliminate present risk.

The technology to implement these zero-trust systems is already present and is deployed today by leading companies in high-assurance sectors, such as aerospace and defence. Unfortunately, Canada is lagging behind in adoption, and that leaves Canadians exposed to supply chain risks in a particular area, like, for example, in automotive.

The urgency of supply chain assurance techniques is only increasing. Today, AI solutions allow for the rapid generation of software, and hardware will follow. What this means is that in the near future, malicious actors will be able to generate counterfeit or malicious automotive components by pressing a button. Put simply, as right now you can go into ChatGPT solutions and say, “Give me an answer or a summary of this”, you will be able to clone hardware and will be able to add and create malicious circuits. When that happens, supply chains built on trust and good feelings will fail. Only supply chains using zero-trust principles will remain secure.

A fundamental question is whether we choose to lead or wait until the news catches up with us. Naturally, I advocate for Canada to adopt zero-trust principles for supply chains in automotive and other areas before security incidents force us to do so.

Thank you very much.

[The Chair, Liberal, Ben Carr]

Thank you very much, Mr. Fischmeister.

Colleagues, we're going to enter our first round of questions.

Mr. Guglielmin, the floor is yours for six minutes.

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

Thank you, Chair.

Thank you to the witnesses for your opening testimony.

Mr. Hinton, you have said that Canada's auto industry is essentially in peril because of the breakdown of the free trade agreement with the United States. How dependent on a free trade agreement with the U.S. would you say the auto industry is?

[James Hinton]

In the automotive sector, all of the parts go back and forth across the border a number of times. With the heightened tariffs, our market is destroyed. Our huge, major buyer—the Americans—is basically pulling the rug out from under us not only through their EV approach but also through the trade part. They're going for the jugular, so to speak.

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

Earlier this week, I was at the Quebec Metals Service Center Institute. A lot of the steel mills were there. A lot of the value-adding manufacturing base in Canada was present. Everyone echoed the same tune about the tariffs. It's alarming. They're almost reaching a crisis point.

In your view, should restoring free trade with the United States be one of the government's primary priorities when it comes to the auto sector right now?

[James Hinton]

We really need free trade. Even in the last USMCA negotiations, there was no free trade even mentioned. A lot of non-tariff barriers, like intellectual property data and controls around sovereignty, are going to be the next things the Americans will advance. They will not only push for no free trade but also advance their economic position through intangible assets, data, sovereignty and intellectual property, as we saw them do in the last round.

They're coming for us even more aggressively in these rounds, and I've been working on a number of initiatives to advance this.

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

The Canadian government has decided to open our market to Chinese EVs. Do you think that decision helps or hurts our relationship with the United States? Do you feel there's any risk that it gives Washington a legitimate argument that Canada is becoming a conduit for Chinese electric vehicles that potentially pose security risks here and elsewhere?

[James Hinton]

There's a fine-line acknowledgement. When I worked as an engineer in the industry almost 20 years ago now, we would send parts and manufacturing over to China. Now we're at best going to be working for Chinese factories in Canada. This is not the ambition I have for Canada. That's not the ambition we see.

The Americans are going to see us as even weaker partners. They thought we were weak before and wanted to take advantage of us. Now we're working our way to the lowest, most unproductive part of the value chain, and the Chinese are benefiting. The Americans are trying to make sure we're not the next Mexico, but we might very well be.

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

You've described Canada as having been put into a race to the bottom on cheap labour by global automakers. We've heard evidence about what that competition looks like in practice in comparable allied markets. We know that BYD, China's largest EV manufacturer, has been credibly accused of seven-day work weeks at its factory in Hungary, with no rest days, shifts of up to 14 hours and wage payments deliberately delayed for months.

Does the government's decision to open our market to vehicles built on that model not accelerate the very race to the bottom that you were speaking about?