Industry Committee on May 25th, 2020

[The Chair, Liberal, Sherry Romanado]

Good afternoon, everyone. I call this meeting to order.

Welcome to meeting number 18 of the House of Commons Standing Committee on Industry, Science and Technology. Pursuant to the order of reference of Saturday, April 11, the committee is meeting for the purpose of receiving evidence concerning matters related to the government's response to the COVID-19 pandemic. Today's meeting is taking place by video conference, and the proceedings will be made available via the House of Commons website.

I would like to remind members and witnesses to please wait before speaking until I recognize you by name. When you are ready to speak, please unmute your microphone and then return to mute when you are finished. When speaking, please speak slowly and clearly so that the translators can do their work. As is my normal practice, I will hold up a yellow card when you have 30 seconds left in your intervention, and I will hold up a red card for when the time for your intervention has expired.

I would like to now welcome our witnesses. From the Council of Canadian Innovators, we have Mr. Jim Balsillie, chair. From General Motors of Canada Limited, we have Mr. David Paterson, vice-president, corporate and environmental affairs. From rom Magna International, we have Mr. Donald Walker, chief executive officer. From Supply Chain Canada, we have Christian Alan Buhagiar, president and chief executive officer; Simona Zar, director, industry affairs and public policy; and Mike Owens, former vice-president, logistics, Nestle Canada. From the Western Canadian Shippers' Coalition, we have David Montpetit, president and chief executive officer.

Each witness will present for five minutes, followed by a round of questions. With that, we will begin with Mr. Balsillie.

You have five minutes. The floor is yours.

[Jim Balsillie, Chair, Council of Canadian Innovators]

Thank you, Madam Chair and committee members, for the opportunity to present today.

I'm the chair of the Council of Canadian Innovators, a national business association composed of over 120 chief executives from Canada's fastest-growing technology companies.

In March and April our council advocated for supporting high-growth technology firms that are negatively affected by the crisis. We first asked the federal government to create the Canada emergency wage subsidy for our members, and then to extend it from 10% to 75% of payroll costs. We also successfully advocated for the strategic use of programs such as IRAP, SR and ED, SIF, and RDAs because the 30% decline test did not fit for certain types of high-tech companies. These programs are essential to preserve the employer-employee relationship.

It is critical that our innovators are not just surviving but working overtime during this downturn, because their companies will drive Canada's future prosperity in the changed economy that will emerge from this pandemic. We are grateful for the support measures to date and the efforts of your committee and the dedicated civil servants across the government, but we need help focusing the government's path forward on these additional priorities:

One, create an “innovation corps” that mobilizes thousands of our brightest co-op students who had their Silicon Valley job offers rescinded. CCI has created a tech talent radar portal to help connect thousands of recent graduates with Canadian innovators. The government can use this opportunity to reverse the costs of our enormous brain drain.

Two, implement the overdue IP collective to optimize the value of taxpayer investments into R and D, and help generate and protect new intangible assets created with the recent stimulus funding.

Three, create a national data strategy for our health care sector and other strategic sectors, including agriculture, smart cities, energy and mining.

Four, fast-track the adoption of national standards and regulations for digital identification, data sharing and cybersecurity to match the shifts to online service delivery and remote work.

Five, update the Investment Canada Act to prevent leakage of strategic IP at Canadian universities and research institutions, and data in strategic sectors, including health care, smart cities and agriculture.

Six, address both supply chain and value chain resilience, and maximize economic growth by reinventing procurement approaches that strengthen Canada's innovation ecosystem. Value chains are where Canadian innovative companies compete.

Seven, use domestic fintech firms to help distribute government stimulus loans just as the U.S., U.K. and Australia have done, and resume consultations on open banking so that Canadian fintech firms can play a meaningful role in modernizing our closed banking structure.

Canada's response to this economic crisis must be different from that to the great recession. Twelve years ago, our recovery was driven by high-priced Alberta oil, buttressed by voracious Asian demand. Today, oil prices have collapsed because of a supply and demand imbalance, with part of the demand reduction structurally permanent.

The foundation of economic renewal needs to be built through innovative Canadian companies commercializing their ideas to scale, and expanding their freedom to operate into global value chains for the knowledge-based and data-driven economies. Canada needs to diversify its products, not just its markets.

Using a traditional shovel-ready physical infrastructure lens, whether for roads, bridges or hockey rinks, to stimulate demand and drive productivity has no traction in the 21st century global economy where IP and data are the most valuable economic and national security assets. What Canada needs instead is a digital policy infrastructure that facilitates productivity, prosperity and security via global value chains.

Canada's policy-makers need to jettison the outdated and corrosive neoliberal orthodoxies that left us vulnerable. Policies rooted in 19th and 20th century economic thinking applied to the 21st century knowledge and data-driven economy have resulted in a 25-year slide in our national productivity, record household, corporate and government debt and, according to the IMF, a decade of reduced GDP per capita, while the United States' GDP per capita soared by 35%.

Crises always clarify priorities. The COVID-19 crisis generates an ironic opportunity for Canada, because it induces structural changes normally spread over years into a few months. By harnessing their proven ambition and ingenuity, Canadian innovators can help the Canadian government build an innovative, sustainable, inclusive and resilient national economy, but only if our governments put the wind at their backs and strategically use smart policy measures.

Thank you.

[The Chair, Liberal, Sherry Romanado]

Perfect timing.

With that, we will now move to Mr. Paterson at General Motors.

You have five minutes.

[David Paterson, Vice-President, Corporate and Environmental Affairs, General Motors of Canada Limited]

Thank you very much, and on behalf of General Motors, I want to say thank you to the committee for the leadership that all of you have displayed during this health crisis.

Times of emergency are when we truly demonstrate Canadian bravery, resilience and our unique spirit of partnership. We did that in the world wars and we're doing it again. We'll get through this together, and I believe we ultimately, like my friend Jim just said, have opportunities to make Canada a stronger and more competitive economy if we learn from this time and take action to prepare for the changing competitive world that lies ahead.

I'd like to make three key points and then look forward to discussion later.

First, everything we do today has to start with safety. I've provided the committee with a link to General Motors Canada's playbook for safe resumption of our automotive operations, which started two weeks ago for auto plants here in Canada. Our approach is guided by Health Canada, the WHO, our medical staff and learnings from our successful safe resumption of General Motors operations in Asia. Some of you will have attended our webinars. We've shared our protocols and procedures widely as we prepared our employees, unions and communities to have a safe return to work. I'm pleased to report that General Motors has not had a single case of COVID-19 spreading in the workplace in any of our global operations.

Second, COVID-19 is an emergency like no other, with economic as well as health implications. This is especially true for the auto sector. In March the fully integrated North American sector saw its factories grind to a halt. In April in Canada vehicle sales were down 75%. This creates extraordinary challenges in a complex industry like automotive as we endeavour to sustain our businesses and then kick-start the manufacturing engine of our economy at a time when our revenues have collapsed. We believe the auto sector will be one of the key leaders of economic recovery in North America, and it will rapidly innovate towards electric, autonomous and other technologies as we go forward, but we know that this is going to require some extraordinary effort and partnership.

We're deeply appreciative of the bold initiatives of our governments across Canada to support people and our businesses, but we know that we're only partway there. Canada's auto sector has united behind a few core recommendations. The first is our call to ensure liquidity, particularly by reinstating the Canada secured credit facility to support auto finance companies, suppliers and dealers so that they can stay alive and support our employees and the customers who finance or lease vehicles across Canada.

Canada's auto sector is also united in calling for a Canadian vehicle scrappage incentive for consumers who turn in a 12-year or older higher-emitting vehicle to be scrapped. The permanent retirement of these older vehicles would generate a significant reduction in greenhouse gases and other emissions from the on-road fleet, while also improving road safety. We believe the right scrappage incentive program can help spark and sustain the recovery of auto sales in Canada, which is essential if we're going to keep auto factories, suppliers and their employees working.

I'll end where I started—with leadership. I'm proud to be part of a sector that stepped up without hesitation to quickly retool, manufacture, donate and deliver medical devices and the protective equipment needed by our front-line heroes and by all Canadians as we get back to work. There are numerous examples including thousands of auto dealers in communities across Canada who made the difference when a car was essential to get food, medical advice or help to a neighbour.

At GM Canada, together with the Government of Canada, we've announced that we have converted parts of the Oshawa auto plant to make millions of face masks for Canadians and will do that with no profit. I never imagined that we would become a licensed medical manufacturer, but we are now and we're proud to be able to help.

There is more that we all can and must do as the auto sector reboots and then continues to transform in exciting new ways. We will succeed and there will be opportunities for Canada to do so too. I look forward to discussing that with you.

[The Chair, Liberal, Sherry Romanado]

Thank you very much, Mr. Paterson.

Our next witness is Mr. Walker from Magna International.

You have five minutes.

[Donald J. Walker, Chief Executive Officer, Magna International Inc.]

Thank you.

Hello, everybody.

I sent a letter but I'm not going to read it all. I just want to hit the high points.

My name is Don Walker. I am the chief executive officer of Magna. I first started in 1994, so Magna, most of our management team and I went through the 2008-09 downturn, and we've taken a lot of the lessons learned from that.

We employ about 20,000 people in Canada out of our 160,000 people worldwide who operate in 27 countries.

When this first started, we almost immediately implemented our own travel bans, stopping people from coming in from China, which helped a lot. We've also asked people to quarantine.

We've been working on PPE. We've donated over 500,000 KN95 masks to Ontario, and we helped them source another million. That is coming out of China, and I think we can get more. We've also been involved in producing face shields, masks, ventilators, gowns, etc.

I won't repeat everything Dave just said because it's probably very similar. From a health and safety standpoint, which is our primary concern here, the automotive industry has worked really well together across North America and has taken lessons learned from operations and everybody, including ourselves. In China, they're back up and running. Europe has been back up and running. We've been sharing best practices there, so we have a very extensive playbook, probably very similar to that of General Motors because it was developed with everybody doing the same thing, which I think is critical to make sure we get the industry restarted safely and stay going.

We have had fewer than 150 employees test positive out of our 160,000. None of those, we believe, came from a spread in the workplace, but we contact trace in every case.

As an example of a large corporation, this had a $1.- billion sales impact for us in the first quarter. It will be much bigger in the second quarter. In the first quarter it cost us over a quarter of a billion dollars, so it's a big strain.

We've been taking advantage of various government programs around the world. Some of them are a little difficult to follow, getting the details right, but we have been tracking that globally and we've been trying to support our employees.

I'll make this quick because Dave already said a couple of these things. We need to get the auto industry back up and running and stay running. If we shut it down again, we probably will not re-emerge for months and we'll have unbelievable damage to the supply base and the liquidity will dry up, so it has to stay running.

That means we need to get the dealerships open and hopefully people will start buying vehicles, which ultimately supports the industry. Dave mentioned the scrappage program, which would be very good to incentivize people to buy new vehicles and get the worst movers off the roads.

There has also been a suggestion for a tax holiday for potentially the HST or the GST on new car purchases for, say, a six-month period. I think we need to be aligning ourselves with the U.S. on everything we do, whether it's regulations or going back to work because it's a very interconnected industry.

As for what's going to be the new normal, we've had thousands of people working from home. We also look at how this industry will be hit by delivery of products and services now that everybody is ordering online. We can maybe get into this in the Qs and As. I think the government has responded well in a very difficult situation, trying to figure out what to do. I'm sure as we look back we'll have a lot of lessons learned.

I think we need to get off government programs as soon as is practicable because we need to incentivize people to go back to work unless they're compromised. I am very concerned about what's going to happen with the government deficits, debt, interest rates, trade policy, etc., and I'll be getting into some of that in the Qs and As.

Getting us all back to work is going to be very interesting. I think Canada needs to be focused on how to maintain ourselves as a healthy country fiscally going forward.

Thanks.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Our next round of speakers are from Supply Chain Canada. You have five minutes.

[Christian Buhagiar, President and Chief Executive Officer, Supply Chain Canada]

Thank you, Madam Chair.

Thank you to the members of this committee for inviting me to appear before you.

Founded in 1919, Supply Chain Canada is a non-partisan not-for-profit corporation that acts as the voice of the supply chain community in Canada.

I would like to start my remarks by expressing my sincere thanks to the hundreds of thousands of supply chain professionals who have been working tirelessly to keep Canada moving across every sector in every industry from to coast to coast to coast. I would respectfully ask that the committee also recognize the tremendous work of our Canadian supply chain professionals.

In the interests of time, I'll focus my remarks on the lessons that are being learned as we move through the crisis.

Today's supply chains are global and interlinked and vulnerable to a range of risks with less margin of error for absorbing delays and disruptions. They are enormously efficient, which is meant to lower costs, but they are often more efficient than they are effective. Many are too linear and transactional and challenged with a long latency. Most supply chains are often slow to sense and adapt to market and consumer demand changes. Supply is primarily determined by historical sales order data and not by actual consumption and market data.

During this crisis, latency has caused the dichotomy of shortages in some products and excess in others. Future agile and resilient supply chains must reduce latency times and strengthen their ability to predict consumer demands due to market changes. Doing so will require more visibility throughout the entire value chain. Visibility will require more data and analytics, all of which will require a digitization strategy of the end-to-end value chains. We believe that there is a role for the federal government in supporting this transition to digitization.

Supply chain agility and resilience will also mean increasing geographic diversification. We have seen through the crisis that excessive dependency on single countries or regions is a risk. We have also seen that long supply chains over vast geographic distances are a risk. There is little doubt that more regional and local supply chains will be at least a short-term result of the crisis, particularly for critical items. Whether onshoring becomes a broader longer-term strategy is yet to be determined.

Resiliency in supply chains also requires the safety of their supply chain workforce. Safety and resiliency are inseparable. It is in the interest of companies to protect their workers, and we believe that companies can be left to determine how to meet guidelines.

Guidelines need to come from government more quickly than they have to date. Guidelines must be clear and consistent across the country. We believe the federal government has an important role to play in establishing consistent guidelines and in leading national emergency management. During the crisis, province-by-province guidelines have created a patchwork and sometimes conflicting approach for companies that have to operate supply chains nationally and internationally.

Interprovincial trade restrictions must also be examined to ensure that in an emergency we can quickly and easily shift production and distribution from one region to another. We encourage the federal government to provide the national leadership needed to revisit all interprovincial trade regulations that in the face of an emergency may hinder agility.

There is much discussion now about the need to have larger inventories, particularly with respect to critical items. There is no doubt that inventory and stockpiles will need to be examined based on the challenges we have seen during the crisis. This examination should include a future-state framework for critical asset supply chain including sourcing, procuring and pandemic stockpile management with a system for total visibility for all stakeholders, federal and provincial.

We strongly encourage this to be overseen by a chief supply chain officer leading the function strategically and building the digitization solution and end-to-end tradeoffs to ensure success. However, we also believe that more important than inventory and stockpile management is to have what we call strategic capacity, the ability to understand and anticipate quickly what we need and what we can make in Canada, and to be able to turn on that corporate capacity quickly and effectively.

This is an opportunity that we believe will strengthen and protect Canada and that likely calls for a public-private partnership. We encourage the federal government to lead such a national strategy together with industry. In the longer term, it is clear that supply chains will need to change.

How we train supply chain professionals will also need to change. Investing in re-skilling our supply chain workforce will increase our ability to manage resilient supply chains. Canada should aim to become a world leader, and we would encourage the federal government to invest in the training.

Thank you very much, Madam Chair. We are happy to take your questions.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Our next witness is David Montpetit.

You have five minutes.

[David Montpetit, President and Chief Executive Officer, Western Canadian Shippers' Coalition]

Good morning, Madam Chair and honourable members of Parliament.

On behalf of Western Canadian Shippers’ Coalition, I would like to thank you for the invitation to participate in this session. My name is David Montpetit, and I am the president and CEO.

WCSC is a cross-commodity organization focused on the safe, efficient and competitive movement of goods while optimizing the transportation sector, which will ultimately benefit the Canadian economy. Our organization represents companies based in western Canada that collectively ship billions of dollars' worth of product annually to domestic and international customers and provide tens of thousands of direct and indirect jobs across Canada, including in many small communities where they are key employers.

Let me start by thanking the government for its efforts to minimize the impact of the COVID-19 pandemic on Canadians. This includes both bureaucratic and ministerial personnel at Natural Resources Canada and Transport Canada for being available and responsive to WCSC members through regular conference call meetings, and other MPs with the sitting government and the official opposition who have made themselves available to discuss our concerns. I also extend my appreciation to all shippers and supply chain partners for continuing to do their utmost to safely operate and deliver goods and services during this stressful, unpredictable period.

COVID-19 is only one of the challenges impacting Canada’s supply chain. There has been pressure on our national trade corridors for several years, which is why WCSC participated in the Canada Transportation Act review initiated by Transport Canada in 2014, provided recommendations in response to Bill C-49 and continues to represent members on follow-up initiatives related to the Transportation Modernization Act.

COVID-19 struck at a time when shippers were still recovering from recent disruptions to the supply chain, including: first, service issues resulting from the CN rail strike in November 2019 and the usual winter weather conditions; second, a slow order issued by Transport Canada in response to the February 6 train derailment in Saskatchewan; and, third, illegal blockades on rail lines across Canada that also began on February 6 and continued through March.

The impacts of the measures taken by industries and government in response to COVID-19 include scheduling issues, shipping delays and container shortages; increased transportation costs for trucking and vessels; labour capacity issues such as a workforce that is diminished or stretched to meet decreasing and increasing demand; a drop in imports and exports to Asia and Europe; and reduced demand for products, for example in the energy sector.

The rail blockades and the COVID-19 pandemic have not only demonstrated the importance of Canada's supply chain to average Canadians for basic necessities, they have also exposed its vulnerability.

As Canada emerges from the pressures of COVID-19, our key concern is the recovery plan, the ability of the supply chain to have adequate resources in place to ramp back up when businesses start to return to more normal operations. WCSC members will continue to collaborate with Transport Canada and NRCan regarding to this.

We have some recommendations, the first of which is that a comprehensive review is necessary to determine precisely what Canada’s major trade corridors will require in terms of maximizing the performance of our roads, rails and ports. This includes determining current and future capacity, first and last mile efficiencies, and bottlenecks in congested areas such as the Vancouver Lower Mainland and northern Alberta.

Second, we need a more robust data collection and analysis. The rail transportation system must become more transparent. In Bill C-49, government put in place transitional performance and service metrics reporting. Those metrics lack relevant context, in particular in relation to railway capacity. That has made the transitional provisions largely ineffective in promoting transparency and accountability.

Data that is aggregated and averaged over an entire country does not give a forest products mill in northern Alberta nor a mine in B.C. any actionable information. Shippers have taken a much more assertive role in developing their own internal, regional-specific railway performance metrics and require a benchmark from government to measure against.

We are extremely concerned about the damage to customer confidence in the reliability of Canada as a supplier of goods and resources resulting from the ongoing challenges in the supply chain. We will continue to work with government and other shipper organizations to seek solutions related to COVID-19, including, as I mentioned, the strategic recovery plan, a comprehensive supply chain review, and more robust data and metrics.

Thanks so much.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

We'll now move to our first round of questions.

Before we begin, I will remind witnesses that if you are using a microphone, such as an iPhone microphone, please bring it closer to your mouth when you're speaking so that our translators can do their work. Thank you so much.

With that, we will begin our first round of questions with MP Carrie for six minutes.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you, Madam Chair.

I want to thank the witnesses for being here today. I think we have some of the best minds in the world in this virtual room, and I would like to call on you again.

For those of you who know me, I'd like to say a special thanks to David Paterson and Don Walker. We worked together—I thought your CAPC report was excellent work back in the day—to come up with the Conservative auto action plan, which was a sector strategy. What I'd like to say is that for the time, when that was there, that plan was a strategy that we could all see and move forward on. I think overall it was successful.

Today is different. One thing I notice with COVID is that Canadians, I think, are starting to realize the importance of having manufacturing and our supply chain but also essential goods, and whether it's for health care or for security, if we can't make it all in Canada, of having partners we can trust around the world to make sure we can get the products we need during times of crisis.

I want to talk to you about what the future plan looks like. We saw what the CAPC report said years ago, but now it's a different world. It's changing so quickly. In terms of the World Bank's ease of doing business, in 2015, when we left, I think Canada ranked 14th in the world. We're now down to 23rd, which is, by the way, closer to Russia at 28th, than our two largest trading partners. I believe the U.K. is eighth and and the United States is sixth.

Moving forward post-COVID, what do we have to do for the plan? The government didn't have the plan before COVID, but we need something very aggressively post-COVID. What does that new plan for supply chains look like? Perhaps Mr. Balsillie and Mr. Montpetit could also address the questions about supply chains and what this new plan looks like.

[Donald J. Walker]

Do you want me to start?

[Colin Carrie, Conservative, Oshawa, ON]

You can start, Don.

Dave, we've done work in the past. Perhaps you could let us know your thoughts on what a plan moving forward needs to look like. We have to act soon.

[Donald J. Walker]

CAPC is the Canadian Automotive Partnership Council. I've been the chair since it started about 14 years ago. I think there has been a lot of good work done.

I personally think that when we get through the pandemic, for the most part things will go back to relatively normal. There may be situations where people get used to working from home. They might have a different protocol for safety over the next six, 12 or maybe 18 months.

Probably a bigger impact on what's happening with the auto industry in Canada is the new USMCA. I was quite pleased that the federal government, Ontario, Quebec and the industry all worked together quite well. I think Chrystia Freeland did a really good job consulting with the industry. A lot of good people were working together on this, on what we need to do to make sure we're competitive and we have access to the U.S. market and Mexico. I look at that as being a pretty big trading bloc that can compete against places like China and should be on a level playing field with Europe.

I don't think much will change with the supply base in the automotive industry. For those people who aren't familiar with it, the auto industry is, I believe, the most technologically advanced industry in the world, without even a close second. It uses electronics and autonomous drive vehicles. Having a manufacturing base and an engineering base in North America I think will help raise the standard of living for everybody.

So I don't think that much changes. I do think we need to look at the new normal from a government perspective going forward, with the debt and everything else that's happened. Will that put a burden in taxes on companies? At Magna we're a proud Canadian company, but we have to go where we can make a profit. Hopefully, we can get everything in fiscal order. It will be similar in other places around the world. It will be very interesting to see what happens from a competitive standpoint.

[Colin Carrie, Conservative, Oshawa, ON]

I think you're right in that regard, Don. Maybe we could have somebody comment on the importance.... You mentioned the new CUSMA. I like to say it that way instead of USMCA. The amount of data you have to collect.... I know the Americans are moving forward with their 5G network. There have been complaints in the industry about uncertainty regarding where Canada is going to go. I mentioned the importance of our security system and whether we use Huawei because of the integration with the American market.

Maybe Christian or Mr. Balsillie could mention how important it is that the Canadian 5G network be in line with the North American and our allies in the 5G to make sure we can collect this data that is going to be so important and utilize it among our friends.

[Jim Balsillie]

Would you like me to jump in on this one?

[Colin Carrie, Conservative, Oshawa, ON]

Please, yes. I always like a Waterloo grad.

[Jim Balsillie]

The important thing is that we have a security alliance with the Five Eyes. I think when it comes to the Huawei situation, the most important thing is to listen to our experts and what they're doing. This is not a place for people without deep subject matter expertise in this. I would listen to our experts, and I think they have uniformly cautioned us that you give capability to turn against us because they have that. With USMCA, or CUSMA,you have to remember there are approximately two million words in that agreement, but the two words that are not in the agreement are "free trade". This agreement has nothing to do with free trade.

[The Chair, Liberal, Sherry Romanado]

Unfortunately, Mr. Balsillie, that's all the time we have for that round of questions.

The next six-minute round goes to MP Ehsassi.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you, Madam Chair.

Allow me to also thank the panellists, who are very insightful. I'm very grateful they all agreed to appear before our committee.

Mr. Paterson, you did touch on the Oshawa plant. I know you have ambitious plans. You've been working very hard to retool the facility GM has in Oshawa to produce masks. Among the things GM has done is order equipment that arrived approximately a month ago. You have been in close contact and are collaborating with Unifor. You've also had experts come in from GM in the United States who have expertise in producing masks.

Could you kindly give us an update on when we're going to see the production of masks at the Oshawa plant?

[David Paterson]

I expect we're going to see full production of masks this week. Things are moving along really well. I'm so proud of the capability of my company in the United States, first of all, to design the machinery to make masks in the first place, to go into our supply chain. One of the key things for us in getting domestic production here in Canada is to source material that we need for masks. We're really good at making cars, but this is a whole new area. We need to be safe. We need to be working with officials to make sure the things we're producing are going to be appropriate.

It's very interesting that in Canada there's a lot of discussion about N95 masks. They are masks that give you a complete face covering. They're really important in certain medical uses. We use them in our paint plants. They probably make up about 5% of the need, and are very important for those health care workers.

I've seen estimates. We are going to need three billion face coverings in Canada. We're going to be making about 10 million of them, but we're going to need a lot more from different sourcing areas. There are other great companies in the automotive sector, like Woodbridge and others, that are also transforming their operations to be able to make masks quicky.

We have some cleanroom space in the Oshawa plant. I thought, let's use it. We worked hard. We got ourselves lined up quickly. We had excellent support from all across the government: Health Canada, Public Services and Procurement Canada and the like. We're going to do this with no profit. We're doing it entirely at cost, and offering our facilities, our expertise, to be able to do it and to do it quickly. We have hired approximately 60 people. We're bringing them back to work in the plant to do this production. They've been trained. We're ready to go.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you.

Did I hear you say the capacity will be 10 million masks a year? Is that correct?

[David Paterson]

Yes, that's approximately where we're at right now. We're always going to continue looking at what else we can do.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you very much for that update.

Mr. Balsillie, in your comments you were talking about changes to the Investment Canada Act, ICA. However, as you know, approximately a month ago the government announced that there would be enhanced scrutiny under the Investment Canada Act, and that, of course, is for investments that relate to public health, but also for the supply of critical goods and services. “Critical goods and services” has not been defined, and that allows regulators an elastic definition and a very broad one. Was that a step in the right direction, in your opinion?