Industry Committee on April 27th, 2021

[Brian Masse, NDP, Windsor West, ON]

That's exciting news. “It's the platinum age of auto” is what I'm saying, because if you look over where I'm from, Detroit, Michigan, is just outside of that. There's unbelievable reinvestment in the electrification and the process, and the aftermarket sometimes gets forgotten about, but I think it's important.

[The Chair, Liberal, Sherry Romanado]

Thank you very much, MP Masse.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

[The Chair, Liberal, Sherry Romanado]

We'll now go to MP Baldinelli.

You have the floor for five minutes.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Madam Chair.

Thank you to the witnesses for being with us today.

I want to build on the comments of one of my colleagues earlier. My question will probably be for Ms. Franc, building on the responses of Ms. Lloyd. These are two organizations with similar issues: how we support the small and medium-sized enterprises and the non-profits.

Ms. Franc, you talked about your 743 organizations' holding 17,000 events throughout the year and the importance to communities and so on.

You also mentioned your four-point plan with regard to some of the things that can be done for a green recovery and the supporting of that. I know that in previous conversations that we've had, you've always raised the issue of how difficult it is from the small fairs and events and being [Technical difficulty—Editor] larger events and how the criteria sometimes don't apply.

Have you had an the opportunity to sit down with government and discuss those four criteria? Can you explain a little of, sometimes, those difficult criteria you face with agriculture, and sometimes it's heritage, and the difficulties that you have in getting out your message on the needs of your sector?

[Christina Franc]

First of all, in terms of the four-point plan towards sustainability—and because of COVID in particular—over the past year, our priority has been more immediate support for the industry and looking into the next part of your question, actually: that we don't fit into one federal department. That's always been our challenge.

Our institutions are non-profit, volunteer-run, but they, historically, have been founded on agriculture, 4-H shows and animal competitions. They've grown to be pillars of tourism, community economic development and Canadian heritage, so we touch all of those departments in different ways. Because of that, we haven't found a home. Everyone keeps on batting us from one department to another, and that's been one of our biggest challenges in terms of getting support and ownership.

It's the same thing even in the context of sustainability and green initiatives. I would be fearful, depending on where the initiatives go, that they wouldn't be accessible to us because we're not categorized in the right department.

We'll definitely be taking this four-point plan forward in our conversations and hoping that we are included in whatever proposals come out.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you for that.

It kind of touched on some of the aspects that Ms. Lloyd also mentioned about the small and medium-sized enterprises, some of the programs that are more tailored for larger industries and the concerns about trying to get those to smaller businesses, which are just as important. You talk about your 743 organizations and the number of small and medium-sized enterprises that they will then build with and bring on to help support those events.

I'll go to Ms. Lloyd now.

I was interested in your comments and the notion of the lack of critical knowledge that is housed in these small and medium-sized enterprises. Are there any specific recommendations that you have for the federal government in terms of some of its funding support that can be provided to small and medium-sized enterprises, be it a tax credit, for example, to assist them so that they can start developing those plans?

[Priyanka Lloyd]

Absolutely.

Tax credits would help. Incentive programs like I talked about before would help, too, to reduce some of the upfront capital costs. Even the funding that's available to support [Technical difficulty—Editor] development skills within the organizations.

One of the things that we hear, especially with COVID, is that the support that we provide through our green economy hubs is incredibly valuable, in having that sort of touchstone and the availability of that knowledge, externally, to draw on. The ability to afford membership fees, even now in the COVID context, is quite difficult. Any kinds of incentives that actually allow those businesses to pay to access the kinds of supports—one example of which is what we provide—that actually help them figure out what to do would be really useful.

In funding envelopes, traditionally what's been there is that projects are funded looking at dollars per tonne reduced—what the return is that's going to be there. That metric doesn't really apply for a small business because you're not going to get the same sort of dollars per tonne reduced as a large organization would. However, in those projects, if part of what can be funded is actually eligible costs, that could be to go towards energy auditors or organizations that can help them understand what their footprint is and what to do next. That could really go a long way to fill that gap.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you.

Thank you, Madam Chair.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

We will now go to MP Jowhari. You have the floor for five minutes.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Madam Chair; and to all the witnesses, thank you for your testimonies here today.

I'm going to continue with Ms. Lloyd.

I understand that your group has recently launched a pilot project called SME net-zero pathways. Can you give us an update on this project? Where are you and what types of small businesses are you focusing on?

I have about 4,500 small businesses in my riding of Richmond Hill, which is part of York region. I have an array of different sectors, and I'm very much interested in getting to know about this pilot project and how I can help small businesses achieve that net-zero goal.

If you can expand on that, I would really appreciate it.

[Priyanka Lloyd]

Absolutely.

The federal government has set goals to be net zero by 2050 and there's a lot of talk about this. The pathways of how we're going to get there are still largely unknown. A level down, the role that SMEs are going to play or how they are going to be impacted is also still being discovered.

The project we're doing right now is a pilot with 10 manufacturers from across Ontario. They're being supported with a technical study. The Delphi Group is the consulting partner. They're doing a technical study to understand the operations of each business and to try to figure out, based on their operations, what kinds of projects they can implement and how far that is going to get us towards net zero.

They're asking what things are in their control, [Technical difficulty--Editor] available that they could implement, and what's the business case for doing that? Then what are some of the broader changes that would need to happen from a policy perspective that could make a significant change to get us the rest of the way there, including technologies, known or unknown, that might need to come out in the next little while?

We're just in the process of finishing these technical studies. We're hosting a round table in June. The policy-makers, the federal, provincial and municipal levels, will be invited to share the findings and hear directly from the SME manufacturers. If any of you folks are interested in attending, I would be happy to give you an invitation.

The goal there would be to understand the barriers and supports that SMEs face in transitioning to net zero.

The Pembina Institute is also doing a broad-scale policy scan. Their initial findings have been that there are very few policies directly targeted at enabling SMEs to make this transition.

The goal of this type of work is that over this next year we'll be releasing a report and doing a communications campaign to be able to take this project and scale that up, to be able to go into manufacturing networks and tell manufacturers, here's what a road map looks like; here are the things you can do; and by the way, here's the benefit to you to taking this on.

This type of project can be replicated across different sectors. It's possible because of capacity-building, network-based initiatives like ours, which is what we're recommending we need to invest more in.

We're happy to look at how to get more businesses locally involved.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you. I appreciate that.

I have a couple of minutes now and I would like to go to Mr. O'Callaghan.

In your team's most recent publication, Are We Building Back Better? Evidence from 2020 and Pathways to Inclusive Green Recovery Spending, you stated that investment in green energy can deliver high economic multipliers, have high potential to crowd in private investment and are an important step on the road to economy-wide decarbonization.

Can you elaborate on that?

[Brian O'Callaghan]

Sure. I'll take each point as they come.

On the short-run and long-run economic multipliers, the benefits of clean energy investment are that they can be quite job heavy in the short-term. In being job-heavy, as long as you're employing domestically skilled labour, you're able to keep a lot of that spending within the borders. In that way, not very much capital flows outside.

Additionally, if you have source materials locally available, such as the steel for your turbines or the solar cells in your panels, again that investment can be kept domestic. The opportunity to crowd in private investment is quite pertinent in the Canadian context because you're a little more developed along the clean energy curve than some other countries, similar to here in the U.K. A very small amount of investment can incentivize quite a big amount of private investment. There are just small hurdles left in making renewables competitive compared to other alternatives at the shoulder points in the day in terms of energy supply. They're already competitive during the middle of the day.

I'm seeing a red flag. I might have to stop there.

Sorry, Sherry.

[The Chair, Liberal, Sherry Romanado]

Thank you so much.

We've just finished the second round, and I know we're a little over time, but I wanted to allow each party to have one more slot. We'll go until 1:30 p.m., which will allow each party to have their time.

It is now Mr. Généreux's turn for five minutes.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Breton, you shared quite a few numbers in your opening statement, but one, in particular, jumped out at me: the $200 billion in revenue between 2021 and 2030.

What exactly does that figure refer to?

[Daniel Breton]

It refers to the manufacturing and sales of service vehicles, the deployment of charging infrastructure, and the manufacturing of trucks, buses and school buses.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you.

From 2005 to 2015, Canada could not manage to reduce its greenhouse gas emissions, and now, the government hopes to cut them by approximately 40% by 2030, at least, potentially.

Is that realistic?

You said that cutting our emissions by 39% in nine years was feasible, but how if we couldn't do it in 15 years?

[Daniel Breton]

It's feasible if the government invests in Canadian electric mobility businesses and in renewable energy. I'm no longer in government, but I would say a whole slew of measures could be implemented to support that.

I think it is feasible. Other countries have even more ambitious targets than Canada does. There's no denying the facts: environmentally speaking, we are running out of time. We have to reduce our greenhouse gas emissions.

By the way, I want to applaud the Conservative Party on its climate plan, which includes support for electric mobility through a zero-emission vehicle mandate and greater investment in electric vehicles.

I want to underscore something Ms. Lloyd talked about because I think it's extremely important. Small and medium-sized businesses need support for electric mobility too. They have a hard time obtaining funding.

Government support tends to go to the multinationals, which don't need the help as much as small and medium-sized businesses do. The exact same thing is happening in electric mobility. Take Taiga Motors, for example. Three former McGill University students founded the company but they weren't able to find funding in Canada. They turned to the U.S. stock exchange and were able to access half a billion dollars. I think that's one of the areas the Canadian government really needs to focus on.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you.

Ms. Lloyd, I'm a business owner. My company has 30 employees, and we provide printing, graphic design and communications services. We endeavour to reduce our environmental footprint and we were actually recognized by RECYC-QUÉBEC in 2002 or 2003—I can't remember which year exactly—for being the first company to recycle 95% of its inputs. We were ahead of the curve back then.

All small and medium-sized businesses combined could obviously do a lot for the environment. What upfront barriers do they run into when trying to reduce their environmental footprint? Are the barriers purely economic or financial?

[Priyanka Lloyd]

Thank you.

The upfront financial cost is a significant barrier, but what we're seeing is that it is time. They don't often have dedicated people in-house who focus on sustainability. These aren't skills they initially had or were taught to do.

The second thing is that, in terms of what can actually be done, it's really hard to sort through all of the information about what is good to do, what the right projects are, what makes sense for a particular business, what actions can be taken, what makes sense to do now versus in the future, and how this will change based on a specific business. They ask, “As my business is growing, how do I continue to build in the right way so that I can continue my growth, but also reduce emissions?” How do they make sense of all of the programs that exist when they don't last long enough for businesses to know what's here and what's gone? Finding a way to support intermediaries and bring that information together in a way that makes sense for that business—with the bandwidth they have—is really important and it is something that's been missing.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Madam Chair.

Thank you to the witnesses.

[The Chair, Liberal, Sherry Romanado]

Thank you.

We will now go to MP Lambropoulos. You have the floor for five minutes.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Thank you, Madam Chair.

I'd like to thank all of the witnesses who have given us all of this information today. It's a really interesting panel and a great discussion.

One of my first questions is for Ms. Powell and Mr. Baker. You spoke about not only building back greener, but also building back more equitably and making sure that everybody gets to benefit from the economy going forward. You did talk about different ways the federal government can help us do this, by making sure that when writing up contracts, these things are part of the contract and making sure this is accounted for. You also mentioned that it's a huge ecosystem. There are contractors and subcontractors who don't necessarily have contracts with the federal government, but who are a little bit, but not directly, in contact with us. What types of ways do you think the federal government can influence this—I guess not necessarily with regard to direct contracts—to make sure that everybody's included in the economy going forward?

[Kumsa Baker]

I think that in terms of building out community benefit policies, it's making sure, at the very least, that there is reporting going back to the general contractors from the subcontractors on how they are performing in relation to those equity targets. We do understand that a large portion of the work does happen with subcontractors, so one of the things that we've been trying to do is more education with subcontractors, and making sure that information is very clear and is presented. That's a lot of work that's taken on by a community.

As TCBN, as part of all the current projects that we're involved in, like the Eglinton Crosstown LRT with Metrolinx, we do have an active working group that meets quarterly, so we make sure that these general contractors who are at the table as part of these working groups are regularly reporting back to their subcontractors, presenting information about the targets they need to meet, and working collaboratively to be able to achieve that.

I don't think it can be left to one specific sector. I think it's important to have all parties at the table who are regularly meeting to monitor and to make sure that those goals are being achieved. We support that collaborative approach, and it does take investment, so organizations like Toronto Community Benefits Network that are doing this work definitely need that type of support, and we have seen additional increases through the budget recently to help support with this workforce development planning to make sure that we're reaching those objectives.