Industry and Technology Committee on May 4th, 2026

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

Thank you very much.

[The Chair, Liberal, Ben Carr]

Thank you, Mr. Ste-Marie.

Colleagues, because we're tracking quite significantly over time, I'm going to afford Madame Dancho five minutes. Mr. Ntumba and Madame O'Rourke are going to have two and a half minutes each.

I'm going to allow you a final, brief question, Monsieur Ste-Marie.

Five minutes isn't enough time for you, Mr. Ste-Marie, but I can give you another 30 seconds, then we'll conclude.

The floor is yours, Madame Dancho, for five minutes.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

Thank you.

Thank you very much to the witnesses for being here. I appreciate the testimony.

Some of my questions are for Mr. Kingston.

I want to talk a bit about the potential long-term impacts of allowing more Chinese EVs into Canada. I think about how 35 years ago, we blew open the North American market to cheap goods from China. Now anything you turn over in this room is probably made in China. I'm concerned that 30 years from now, there may not be any North American auto manufacturers if we start letting Chinese EVs in, because we really can't compete with how cheaply they can make their cars.

Do you have any thoughts on this? Am I off the mark? Are you concerned about this?

[Brian Kingston]

Yes, I'm deeply concerned. China subsidizes their industry massively. The estimate is about $230 billion U.S., which eclipses anything that we've seen in North America. Of course, they have depressed wages. There's no organized labour or unions at Chinese auto plants, so they're paying, on average, two dollars U.S. an hour. At a Canadian plant, Unifor-unionized, it's $45 an hour.

They have massive overcapacity. They have enough capacity in China to satisfy domestic demand two or three times over. What they're doing now is trying to dump this excess product into markets around the world that are naive enough to open up and accept said product.

We know where this goes. You just have to look at markets that have opened to China. China is a coercive trade partner. Once the door is open, they will seek additional market access until your industry is eliminated, and then you become totally dependent on them for said product. That is the road we're going down with this agreement.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

I think that really sums up a lot of the concerns we've heard from a lot of other witnesses.

You can add in the security implications of some of this. We know that all new vehicles today are quite electric. They have a lot of electronic systems. They're almost like smart phones on wheels, whether they're EVs or not. My understanding is that all of the auto companies have a lot of the data we have, like GPS. We sync our phones with them.

You represent major North American auto manufacturers. From what you know of what your companies have data-wise, are you comfortable with China having access to that data on a big scale in Canada?

[Brian Kingston]

Absolutely not. The cyber-risks have been well documented. Other countries that have allowed Chinese EVs into the market—Israel, Poland and the U.K.—have now put bans in place on the operation of these vehicles around government facilities and military facilities. Even China has put bans on American-owned Teslas driving in China. If China is doing that, it must be because they believe there is a cyber-risk. The idea that we could allow these vehicles to drive on our roads without any sort of conditions or guardrails around what is done with the data and where it goes is deeply concerning.

Just to be clear on this point, the government committed in 2024 to putting in place rules with respect to connected vehicle hardware and software, to align with the United States. That has not happened and this agreement has already been struck.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

Mr. Kovrig, would you mind answering the same question? Do you have concerns similar to Mr. Kingston's?

[Michael Kovrig]

Yes, absolutely. Chinese EVs are connected, state-linked data platforms. A modern Chinese EV is a rolling computer with cameras, microphones and so on. All modern autonomous vehicles or EVs can do that, but China's 2017 National Intelligence Law compels any Chinese firm, including from overseas operations, to share data with Beijing on demand. There's no judicial review and no challenge mechanism.

The U.S. Department of Homeland Security has been blunt. PRC firms have limited to no recourse. That's why the U.S. bureau of industry and security calls connected vehicles an “undue and unacceptable risk” and why the Five Eyes have already restricted Huawei, TikTok, Hikvision and DJI on the same logic. Connected vehicles are next on that list.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

When you were answering some questions from my colleague Mr. Guglielmin earlier, you were going to talk about the impact that Chinese EVs have had on the U.K. I just want to give you an opportunity to finish your thought on that.

[Michael Kovrig]

Sure. Essentially, the U.K. is not a particularly effective model for Canada, because it has opened its market entirely. The result has been that Chinese vehicles have made rapid gains in that market. The U.K. is in a critically different position. It doesn't try to have the same scale of domestic auto industry.

From a connected vehicle perspective, it's an illustrative model that Canada wants to be careful with. The problem is similar to the Huawei problem. A lot of these countries initially let in Huawei to build critical infrastructure and network backbones because it was cheap, only to later discover that from a security perspective, this created problems. It allowed a potentially hostile, great power to not only commit espionage but also potentially shut down major aspects of the grid or allow them to degrade. European countries, including the U.K., are now having to apply security concerns after electric vehicles have already been let in, and that's likely to, if anything, impose even greater costs and restrictions.

This notion of opening trade and then assessing the security risks is ultimately going to be penny-wise and pound foolish, and it will end up costing more, both in dollars and in security.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

Mr. Kovrig, it's an honour to have you here. We really appreciate your testimony based on your very real experience, which we all acknowledge. Thank you for being here.

[Michael Kovrig]

Thank you.

[The Chair, Liberal, Ben Carr]

Thanks very much, Madame Dancho.

Mr. Ntumba, you have the floor for two and a half minutes.

[Bienvenu-Olivier Ntumba, Liberal, Mont-Saint-Bruno—L’Acadie, QC]

Thank you, Mr. Chair.

Mr. Turner, in 2026, your firm has focused on modernizing and expanding Canada's electricity and energy grids. You said that demand for electricity is set to rise by between 62% and 112% by 2050.

With electric vehicles becoming increasingly popular, what advice would you give the Canadian government, which has a significant battery supply chain?

How should it prepare for that?

[Jeff Turner]

The low growth of EVs is significant. We work with utilities across the country to grapple with this and understand how quickly it's going to materialize. Fortunately, it's happening gradually. Not everybody will replace their vehicle overnight.

On top of that, as I mentioned, it's a fundamentally flexible load on the grid. Most people only drive about 50 kilometres a day. Their battery can hold about 400 to 500 kilometres of range. There's a lot of flexibility in terms of when car charging can happen, and it can be done in such a way that there's a lot of benefit to the grid.

Given that context and the overall opportunity here in terms of the EV supply chain, it's a really important piece of the puzzle to build out opportunities for vehicle grid integration. We can serve the dual purpose of supplying Canadians with clean, affordable transportation modes and reinforcing the grid with flexible storage assets that can help accommodate the varying supply and demand of electricity.

[Bienvenu-Olivier Ntumba, Liberal, Mont-Saint-Bruno—L’Acadie, QC]

Ms. Sinasac, in your introduction, you said Canada doesn't have an internationally coordinated forum.

Can you expand on that?

[Cherith Sinasac]

Yes. Right now, we don't have dedicated resources. We need dedicated resources in the federal government to convene industry. We need utilities, regulators, provincial stakeholders, manufacturers, automakers and everyone else to come together. What we really need to look at are three pillars, which need to happen in parallel. We need to harmonize the technical frameworks, make business cases and structure a pilot through evidence gathering. All three pillars will require funding and national coordination to unlock this opportunity.

Related to the last question you asked, we just released a new study here at Electro-Federation Canada. It's about building Canada's electricity system. It's a supply chain and policy road map.

How much we need to expand the grid is directly correlated to how successful we are in modernizing the grid. This includes smart-grid technology such as vehicle-to-grid. If we modernize the grid to be more efficient and to utilize and extract more value from the current system we have, we'll need to build less of that grid. This is why it's such urgent work. As EVs come online, we need to ensure that we are modernizing the grid. The more modernized our grid, the less we need to build and the less money we need to spend.

Right now, the biggest problem is that we can't deploy these technologies at the speed we need to. That's what needs to be done by convening industry at a federal level.

[The Chair, Liberal, Ben Carr]

Thank you, Mr. Ntumba.

Madame O'Rourke, the floor is yours for two and a half minutes.

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

Thank you, Mr. Chair.

Mr. Kovrig, thank you very much for a number of your recommendations. I think all Canadians are appreciative and thankful that you're here with us today.

I will direct my questions to Mr. Kingston, because I chair the Liberal auto caucus and I'm all about auto manufacturing.

You said that the JVs are knock-down kits that bring in Chinese labour. The minister was really clear that we could set the conditions in Canada for domestic labour, security and standards, so it was curious to hear you say that.

Wouldn't the limit of 49,000 vehicles prohibit dumping? It would bring us back to thresholds from 2023. In 2023, did you have the same concerns?

Because I have a follow-up question for you, could you answer this first one really quickly?

[Brian Kingston]

With respect to the permissions the minister laid out, my point was that that's not how China operates. If you say that you have to have a local supply chain and use local unionized labour, the response from a Chinese OEM is, “Thanks, but no thanks”, and BYD has already said that. The point is that it is fantasy that this is even going to happen, because if you want to actually protect the Canadian industry and put in real rules, those rules are not compatible with the Chinese economic model.

With respect to dumping, there is a limit of 49,000, but as I said in my last response, China is a coercive trade partner. The moment it wants more access, it will restrict our exports of canola. It will come up with other reasons to leverage more access to the market. This is the Chinese trade playbook. You can see it in sector after sector in different countries. It is 49,000 now, but the door is open.

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

We can cross that bridge when we get to it, while we strengthen our domestic manufacturing.

I am thrilled to see that GM is the number one EV seller in Canada this year. That is great news. We are really excited to see developments at Ford very shortly. We all want to see a strong Canadian manufacturing presence for auto.

Can you help me understand what the joint ventures and partnerships look like for your member companies? We understand that global automakers have a number of joint ventures, many of them with Chinese companies. What do they look like for the big three?

[Brian Kingston]

The way China works that if you want to access the Chinese market, you have to strike a JV in China. We have seen this practice in many sectors: aerospace, rail and of course automotive. All of the companies that have sales and operations in China and have built out networks there have had to do so through a JV network, so virtually every global OEM has a joint venture in China.

What happens is they do these JVs, China learns from the company that is invested there and then, of course, it turns around and exports some of its product around the world. That is the structure of the Chinese market. You have to have a JV to be in there.

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

The last one is about your concern around some of the—

[The Chair, Liberal, Ben Carr]

I am sorry, Madame O'Rourke. I was looking at the calendar and lost track of time, and you almost snuck one past me.

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

All right. I always sneak one in.