Industry and Technology Committee on May 25th, 2026

[Mark Schaan]

I'm the associate deputy minister of the department, but I'm also the director of investments for the Investment Canada Act. I have a dual mandate.

On the one hand, it's really important to increase Canada's ability to diversify into other markets. We are at the point where our businesses really need to get foreign investment and access to markets. On the other hand, Canada's sovereignty, intellectual property and corporate-related aspects really need to be protected. In my opinion, there really needs to be a balance between the two.

That said, we are very comfortable blocking investments that are truly harmful to the Canadian economy and, at the same time, having a more open approach to ensure that Canadian businesses have access to the capital they need to grow in the global market.

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

Thank you for all your answers.

[The Chair, Liberal, Ben Carr]

Thank you, Mr. Ste‑Marie.

Colleagues, what we're going to do is go to Ms. Borrelli for five minutes and Ms. Begum for five minutes, and then that will conclude our lines of questioning. We have a bit of committee business to do once we allow our colleagues to go.

With that, Ms. Borrelli, the floor is yours for five minutes.

[Kathy Borrelli, Conservative, Windsor—Tecumseh—Lakeshore, ON]

Thank you, Chair.

Ms. Huot, witnesses who previously came to the committee during our study on the advanced manufacturing and metallurgical sectors said many SMEs are facing excessive pressure due to the new section 232 tariffs of April 6. They said specifically that loans will not help them, since they are already operating at a loss with the burden of these new tariffs.

The minister came out during that study—actually, on the last day of that study—and made the announcement of the various loans that would be available to these companies suffering from these tariff pressures. Why did the industry department decide to provide debt-driven support versus direct assistance for manufacturers and SMEs?

[Mark Schaan]

I'll start, simply because, as the associate deputy, I have the policy responsibilities, as opposed to the CFO, who would be responsible for the accounting. I think it's important to recognize that it's a diversified approach that's been taken by the government with respect to the changing nature of section 232 tariffs. While some of those supports are in fact loans, many of them are actually repayable or nonrepayable contributions, depending on the mechanism that's in place.

[Kathy Borrelli, Conservative, Windsor—Tecumseh—Lakeshore, ON]

Excuse me. I fully understand the different offers that were made and the $1 billion through the BDC and the $500 million through FedDev. What I'm asking is, why were loans offered when testimony was already given that loans wouldn't help them and they needed tariff relief?

[Mark Schaan]

Again, I'll just note that, including through mechanisms like the regional development agencies, the approach is actually often a mixture of both repayable and nonrepayable contributions, depending on the public benefits that are created by the project at play. It's important to look at it as a balanced approach that uses a distinct variety of instruments, recognizing the needs of industry.

[Kathy Borrelli, Conservative, Windsor—Tecumseh—Lakeshore, ON]

Okay. Thank you very much. Some of these larger companies are able to hire consultants and lawyers to apply for the loans, because it's very complicated to apply for these loans. Small and some medium SMEs cannot. They cannot spare the staff to do that. Really, they're very insistent that the tariff relief is what they need. They cannot repay the loans. They're not operating at a profit. Thank you very much.

I'm going to share the rest of my time with MP Dancho.

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

Thank you, Mr. Chair.

Thank you for being here. I did want to ask about the impact assessment, the impact analysis, that your department has done or perhaps has had done regarding the import of the 49,000 Chinese EVs. Could you provide that analysis?

[Mark Schaan]

Thank you, Mr. Chair, and thank you also to the member, who happens to be my parents' MP. I appreciate that. I would just note, on the question of the analysis, that, as the minister noted, the amount of 49,000 is a small increase from the 43,000 imports that were part of the previous process. We did look at the overall makeup of the imports of vehicles and, obviously, assessed it alongside those previous numbers.

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

I see. So you updated your analysis from what you did before they were banned. Is that correct?

[Mark Schaan]

I think we took stock of the fact that prior to the ban there were already 43,000 vehicles coming into the country.

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

You did an analysis of the impact on North American manufactured automobiles. I suppose my question is this: Is that part of the analysis?

[Mark Schaan]

Our industry sector, which has a dedicated division related to the automotive and transportation industries, has a constantly evolving analysis of the overall state of the industry. It has very close connections with the industry and the manufacturers here. It's not a singular analysis; it's a continued relationship with the industry to make sure that we know how it's playing out and what exactly the requirements are.

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

Could you provide some of that analysis to the committee?

[Mark Schaan]

I'd be happy to go back and see what might be possible to share with respect to our overall assessment of the auto sector of Canada.

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

This analysis was done prior to the agreement with China. Is that correct?

[Mark Schaan]

As I note, we have a dedicated sector that has a full unit that works continually with the auto sector. It's not a single point in time. It's a fundamental part of our job as the industry department to make sure that we have a very strong and robust analysis and understanding of the auto sector.

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

What is the name of that part of your department?

[Mark Schaan]

It's the industry sector, and it's the automotive and transportation industries branch within it.

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

Thank you very much. I appreciate that.

[The Chair, Liberal, Ben Carr]

Thank you very much.

Ms. Begum, the floor is yours for five minutes.

[Doly Begum, Liberal, Scarborough Southwest, ON]

Thank you very much, Chair.

I appreciate you all for being here today. I want to continue on this line of questioning for the auto sector. Recently, in March, EVs made up about 12.2% of the total auto sales in Canada. We know what's happening and the struggle that we face, especially in the face of tariffs. Why is it important to ensure that the auto sector has a strong and diverse auto export capacity?

[Mark Schaan]

As someone who has worked in the department for a long time, I can say that our commitment to the auto sector and its unique economic benefits is long-standing. One of the reasons for that support has been the diversified nature of the economic benefits it produces.

When you look at the overall supply chain and the continuous number of small firms that continue to support overall inputs, and you then add in, as per the question from one of your colleagues, some of the new inputs that are going into vehicles, it's simply a very significant force multiplier of economic benefits, jobs and stable production that allows for Canadians to have access to both product but also jobs capacity and overall economic well-being.

Our support for the auto sector is premised on this notion that we need to make sure that we have the capacity to maximize those jobs and that production, and then find the markets where it is best suited and continue to assess the emerging markets that potentially are in some of these areas of comparative advantage.

[Doly Begum, Liberal, Scarborough Southwest, ON]

Thank you very much.

I know I have limited time, so I want to ask about something that's dear to my heart regarding some of the work I did in my previous position as a provincial member. It's something I'm really excited our government is working on: all Canadians having access to broadband Internet by 2030. I know a lot of folks, especially in rural and primarily indigenous communities, really struggle with that. It hinders their ability to do almost everything, and to excel, flourish and prosper within their communities.

How does Innovation, Science and Economic Development Canada assess the likelihood of achieving that connectivity goal by 2030, particularly in rural and indigenous communities?