Industry and Technology Committee on April 16th, 2026

[James Hinton]

Yes. Our race to the bottom is part of that $57-billion subsidy program for manufacturing, with $5 million per worker. That's what it takes to compete with Mexico, China and the other examples you're pointing out.

We have to continue to pay for this, but it's based on economics that no longer exist. There are no spillovers. We're in an era that has negative spillovers when you introduce branch plants into these economies.

The jobs that are purportedly supposed to go to this aren't there. When they are, they're in difficult conditions. It's all about automated technology. Nobody touches the cathodes and anodes of battery technologies anymore. It's all about the technology that runs these things. Thinking that this is some big job boom is delusional. That's from a bygone era of more than 30, 40 or 50 years ago.

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

You're of the view, then, that a lot of the subsidies being directed at the EV market are actually being captured by companies owned by foreign governments.

[James Hinton]

Absolutely. We don't have any of the firms. All the subsidies have gone to foreign firms and their branch plants here. They get the economic value of that, and Canada doesn't get it. We don't get the tax revenue on it, or all the IP and data value they get. The Chinese get the data. They can commercialize that data. We don't get any of that.

We're not getting all the value, but we're paying for everything. We're paying for the creation. We're paying for the manufacturing. We're paying for the use, but we're not capturing any of the value. Where is the value captured? It's not here.

We have some great Canadian technology companies. They're small and medium-sized enterprises. They're going up against the giants that are out there. They have to compete against them with a billion dollars' worth of their own Canadian taxpayer funding.

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

Professor Fischmeister, I have a couple of seconds left and a quick question for you. You've said connected safety-critical systems are no longer enough for these systems to be safe. They must also be secure. Do you think that with EVs, cybersecurity has been treated as a public safety issue up until this point?

[Sebastian Fischmeister]

I absolutely agree with the statement. Hackers are everywhere.

Today, building a safe system is not good enough anymore. You need to build a safe and secure system, because the safety side protects and makes sure that something in the system itself does not harm road participants. The security side also captures that no external person can force, for example, a safe system to get into a state whereby it can endanger and harm road participants.

In the automotive domain, there are particular areas where companies have been working actively around security and trying to make systems more secure. You've already heard testimony about the famous example from 2015 with the Jeep Cherokee, when, via remote control, you could get access to it and, for example, disable the brakes. Since then, there have been a number of advances in the academic world, and also in the academic and industry world together.

One fundamental challenge around implementing comprehensive security measures in vehicles is the cost. To give you an example, if you add a single dollar—

[The Chair, Liberal, Ben Carr]

Professor, I apologize for interrupting, but we're now a minute and 10 seconds over the allocated time for Mr. Guglielmin. There may be an opportunity for you to continue that in further questioning.

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

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

Thank you, Mr. Chair.

Thank you to our witnesses.

Off the top, I'm going to have to dispute some of the things Mr. Hinton has brought to the panel. We're trying to move up the supply chain, not down. This is simply a return.

When we're talking about Chinese EVs, they're 3% of the total. That's lower than the total number of imported Kias that come here. We already see the value of Toyota and Honda, with Toyota building cars right here in Canada. I think the alarmist view is a bit over the top. There are 125,000 direct jobs and 500,000 indirect jobs.

I'll go to Mr. McKinnon with my questions.

We heard a lot from the previous panel. We know what's taking place in the auto sector with respect to the tariffs. Mr. Hinton talked about how there's no inkling of free trade between the U.S. and Canada. I think that's also false.

Moving forward, in a recent report, Statistics Canada said, “Wholesale sales (excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain) rose 2.0% to $86.8 billion in February. Sales increased in five of the seven subsectors”, with the motor vehicles and motor vehicle parts and accessories subsector up 6.1%. How can Canada's auto sector capitalize on these gains?

[Andrew McKinnon]

Our perspective is that support for the entire EV supply chain, from mining to materials production, is the best way for Canada to capitalize on a shift to electric transport and on the need in global markets for our critical materials. We're very happy to see some of the investments in the last year, and in particular in the past several months, related to the critical minerals sovereign fund and deploying new financial measures and new techniques to ensure demand for Canadian materials and support for Canadian critical materials producers and providers.

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

The Prime Minister has been clear that Canada needs to strengthen trade and industrial partnerships with reliable allies. Canada recently deepened its strategic partnership with the Republic of Korea by signing a memorandum of understanding to strengthen Canada-Korea industrial collaboration for future mobility, building on other MOUs that Canada has signed with global automakers to promote further co-operation.

Is this the kind of partnership you think Canada needs to develop to remain competitive in the future?

[Andrew McKinnon]

Yes, exactly. We believe these sorts of partnerships with our allies in the domain of advanced technologies like EVs will create predictable markets for the metals and materials that we can build here in Canada and that are being built and produced with Canadian IP, and it will support the development of industry and jobs from coast to coast.

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

What if we don't? Could you speak to what happens if we don't make these co-operative deals? We heard from the previous panel that other allied nations are working forward in this way. If we get left behind, what happens?

[Andrew McKinnon]

As we heard from the previous panel, Canada has the natural endowment of minerals and materials. We have the expertise. We don't believe we need to be doing everything here to make an EV. We need to be able to work with our partners in Europe and in the United States. We need to find a way forward with the upcoming renegotiation or renewal of the agreement with the United States.

We need to find ways to add value to the rocks coming out of the ground here and turn them into the advanced technologies of the future. We need to act on that opportunity now, or we will continue to extract materials and have that value added elsewhere.

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

I'll continue along that same pathway.

Previous witnesses offered different perspectives on whether Canada should maintain automotive regulatory harmony with the U.S.A., which is looking to roll back the clock on things like emissions standards or keep pace with the EU and other global partners. What's your view on that?

[Andrew McKinnon]

My view on that is we need a predictable pathway to EV adoption that will signal to the supportive EV industries, like charging infrastructure and materials providers, where the market is going and help support future investment and predictability in this industry.

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

Dr. Fischmeister, you've talked a lot about sovereign sustainability in the context of electronics for vehicles and critical systems. We heard in previous testimony that QNX software, which has already been sold to different Chinese EV manufacturers, would be a great system to use for sovereign cybersecurity protection made and built in Canada. How can we turn our approach to focus more on the software of these connected vehicles, given that many of these cars are really computers on wheels, as we've heard from many people?

That question is for Dr. Fischmeister.

[The Chair, Liberal, Ben Carr]

Mr. Bains, we're out of time, but Professor, I'm going to offer you 30 seconds to respond to that.

[Sebastian Fischmeister]

My opinion is that we should try, of course, to have a strong local economy around particular values that are brought to the automotive side. However, we will not be able to do everything onshore, so we should be able to look worldwide for the best partners and the best deals, but still have checks and incoming inspections, as you would have with a zero-trust principle, on parts that come into Canadian systems to ensure that they are authentic, clean and not compromised.

[The Chair, Liberal, Ben Carr]

Thank you very much.

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

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

Thank you, Mr. Chair.

I'd like to thank the three witnesses for being here. I appreciate them sharing their knowledge with us. We're learning a lot.

My questions will be for Mr. McKinnon, from Accelerate: Canada's ZEV Supply Chain Alliance.

My first question isn't on electric vehicle policies; it's on the latest order that U.S. President Donald Trump signed in early April. This order has changed the way tariffs are calculated for steel and aluminum within products. Before, tariffs applied to 50% of the value of the steel or aluminum. Now, the U.S. President has said that this would be reduced to 25% of the product's overall value.

Over the past few days, we have been receiving many calls from small and medium-sized businesses, as well as large businesses. The Fédération des chambres de commerce du Québec has just published a brief to alert us to this.

Are you aware of this order? Have members of your alliance approached you about it already?

[Andrew McKinnon]

No, no one in our alliance has raised this question with us. I would say that policy unpredictability in the U.S. is more reason for us as an organization to support measures to increase materials production here in Canada and support a wider and holistic view of materials and battery production supply chains here in Canada so that we have a foothold in these mineral supply chains.

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

Okay.

This problem is growing every day. That's why we're working on it.

I would like to address another matter: the issue of security. We have discussed that here a lot. I'd like to hear your opinion.

Until now, there have been no security standards for critical infrastructure. However, two weeks ago, the House of Commons passed the cybersecurity bill, Bill C‑8, which enables the government to impose security standards for that kind of infrastructure.

Should we use this leverage to ensure that we properly protect the deployment and development of critical electrification infrastructure, as Professor Fischmeister recommends, and especially to avoid missing the boat when it comes to the electrification of transportation?

[Andrew McKinnon]

I'm very appreciative of the other witnesses' testimony today on security risks in critical technology supply chains. In our view, it is imperative that new deals made to invest in critical materials and mineral supply chains in Canada consider security implications.

We are pleased to see, under the new automotive strategy, new considerations to protect IP for critical technologies in these partnerships. We are very pleased to see an enhanced view of the CSIS mandate under the Foreign Interference and Security of Information Act to look at strategic IP for companies and these supply chains.

As we talk about a holistic EV industry, we need to talk about the holistic development of clean technologies. We need to partner with other nations that are leading in these technologies. We need to bring our technology and our IP to global markets, and we need to do it in a way that protects business interests here and effectively transfers technology, information and capacity to build these things here as well.

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

You said that it's important to have critical and strategic minerals at the beginning of the supply chain.

Another witness told us that we do have them, but we don't have the technology to extract them.

What do you have to say to that kind of argument?

[Andrew McKinnon]

I would suggest that a number of companies in Canada are leading in innovation on critical materials production and processing. For example, a company we work very closely with is Nano One Materials, which has production in Candiac, Quebec. It is one of the only companies anywhere in the world, other than China, that can make LFP cathode materials in a way that we've seen only in China up to this point.

If we want to talk about rare earth elements, the Saskatchewan Research Council is doing some interesting work in that regard. We have innovators in this space, and we have a very strong opportunity, if we think of automotive and EV supply chains in the most expansive view, to develop these innovative technologies and support these companies, as we have seen. I'm very pleased to see the supports that have been in place there.

Let's not let up. Let's keep going.

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

Thank you very much.

My time is running out. I would ask you to answer my question in 30 seconds, if possible.

In your opening remarks, you pointed out that certain segments of the Canadian economy's supply chain are missing.

Could you give us a little more detail on that?