Industry Committee on May 6th, 2021

[The Chair, Liberal, Sherry Romanado]

Your time is up, Mr. Généreux.

Ms. Brouillette, would it be possible to send the link to the document to the clerk? He'll forward it to the members of the committee.

Thank you.

We'll now go to MP Jaczek.

You have the floor for five minutes.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

Thank you so much, Madam Chair.

Thank you to the witnesses. Many of you have suggested some excellent recommendations on the way forward in terms of economic recovery, especially those of you who have addressed climate change.

I'd like to ask Mr. Cairo of Advanced Building Innovation Company a bit more about his recommendations.

We've received your speaking notes, Mr. Cairo. You specifically have some areas that you're interested in. One of them was increased R and D support. Has your company been able to access any source of support from government? How have you done what you've done, which is considerable, to date? What are your recommendations around R and D funding?

[Frank Cairo]

Thank you very much for the question.

It may come as a surprise, but my personal point of view, which is based on both academic interest and also the entrepreneurial spirit of our organization and my own background in business, is that business needs to remain in a competitive environment and forced to fend for itself.

I think that innovation in the future with respect to climate and the many things that are tied to a sustainable future are all things that can happen in a competitive marketplace without the need of much government intervention.

To specifically address your question about research and development, one of the best ways to deal with research and development investment is to allow for some tax relief and credit for those types of investments. I'm not talking about having government cut cheques to stimulate research and development. I'm talking about allowing for business to be incentivized to invest in tomorrow's technologies and also in immediate solutions to some of the biggest problems that we face by having those investments free from over-taxation.

There are many examples of that in particular that I can get into. For our own business, for example, we have not accessed any government funding. We have applied for, in the one example, some research and development tax credits associated with some big investments we made. The offset of those investments won't even come close to the amount of investment that we put in, but I think that's right. I don't think it's the government's job to invest everywhere.

I think responsible business, when they're looking at an emerging new economy and consumer demand, can shift gears and not always be rear-view looking. I think responsible businesses of the future will always be trying to reinvent themselves as consumers and demand shifts. In some cases it's towards sustainability and in other cases it's away from sustainability, ironically enough.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

Thank you. I really appreciate your point of view.

You also refer to planning and building approval process reforms that are more on the provincial and municipal level.

I know that part of your work is on modular advanced manufacturing type of processes. Have you had some difficulty in terms of getting approvals for projects? I know the city of Markham, as an example— it's the area I represent—is extremely interested in this type of construction.

What do you see there as being necessary?

[Frank Cairo]

It's a wonderful question. I really appreciate your asking it.

It would take me weeks to sort of get through it, but I would say that planned-use planning, particularly in Ontario, has not kept pace with the required flexibility that's going to be needed for a zillion cities of the future. I have a whole host of ideas on how to reform that, but what I can say is that I don't believe that more regulations in building codes is a solution. We have some very specific examples of more energy-efficient and green technologies that are actually precluded because of antiquated views on building codes and very prescriptive regimes around what energy-efficient solutions look like.

My view on this is that, as consumers are demanding more energy-efficient products, the industries that produce those products will adapt and provide consumers with what they're looking for. The role of government isn't to say, “It's these five things that must happen in order to be energy efficient.” I think that industry can do a great job of pushing the envelope on energy efficiency. We've actually reduced the carbon footprint of our product line by 30%, way above and beyond the building code. Many of the things that we do wouldn't exist if we didn't always challenge what that existing building code prescribes.

I really appreciate the question, and I think it's a very important issue that you raise.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

Thank you.

[The Chair, Liberal, Sherry Romanado]

Thank you so much.

We'll now turn to Monsieur Lemire.

Mr. Lemire, you have two and a half minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Madam Chair.

My questions are for Mr. Charette and Mr. Grenier from the Canadian Union of Postal Workers.

Can you tell us about your service diversification project, which you mentioned briefly?

Could you also share your assessment of the Liberal Greening Government Strategy, which came out of the last budget that was tabled?

[Hugo Charette]

In terms of service diversification, we are increasingly offering services at post offices, including postal banking and Service Canada. We really want to reinvent the post office.

With respect to the Liberals Greening Government Strategy, they use the word “encourage” when they talk about Crown corporations. That's where we see a lack of leadership. What does “encourage” mean? Are they fully funding the energy transition, or is it a little pat on the back with a postcard that says, “You can do it”?

We want to make the case today that this strategy lacks teeth. Crown corporations must be included in the stimulus package, and clear and specific language is needed to do so. That's really what we want. That's really the symbol and the signal that needs to be sent.

When Mr. McTeague says to wait and move incrementally, I'm a little taken aback. You heard from Mr. Breton, from Electric Mobility Canada. He painted an interesting picture of the situation. He said that the electrification of transportation should not be seen as an expense, but as an investment. He emphasized that we should not miss the boat, that Europe and Asia were positioning themselves and that this was also the case for our partners, the Americans.

Let's move towards electrification of transportation, but in order to do so, let's use our largest Crown corporation. Installing nine charging stations does not send a strong message to industry about where we need to go.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

You're absolutely right.

You mentioned a Queen's University study on the charging station network and the importance of investing in a secondary network. You said that the Canada Post offices could be used. You also talked about optimizing charging stations, which could be used 24-hours a day.

What is the status of this pilot project? Can you tell us a bit about it? My understanding is that an American firm is being used.

[Hugo Charette]

ChargePoint will install the nine charging stations that make up the employer's proposed pilot project.

The Queen's University study allowed us to see all the potential that was out there. We are talking about the post-COVID-19 recovery, the green recovery, but we also have to talk about tourism recovery, which can be a vector. We have the infrastructure. So we can install charging stations and accelerate the transition.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you very much.

[The Chair, Liberal, Sherry Romanado]

Thank you.

We'll now turn to MP Masse.

You have two and a half minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

I'm going to ask Climate Action Network Canada a quick question, and then hopefully Mr. Allan will have a brief answer as well.

I started with Mr. McTeague, and we heard about Line 5 because it connects to the manufacturing that takes place in my constituency, which is the battery-operated hybrid vehicle, the Pacifica, which was actually turned away by Canada Post, not by the Canadian Union of Postal Workers here, to buy vehicles in Turkey. I think that's important because we need that to be able to continue productions in a shift. Then we hear about the opportunity from Canada Post, which is actually procurement.

Climate Action Network, I've been hearing non-stop since being here—and I don't want to be too partisan—from Liberal and Conservative governments over and over that they can't do government procurement. However, I see this as an incredible opportunity, whether it's in my riding or somewhere in Oshawa or along the line here in our own country, to do this type of electric procurement because it will lower consumer prices.

What are your thoughts about procurement in general in terms of government contracts similar to what the U.S. and Europe do?

[Caroline Brouillette]

Thank you for the question.

Certainly, given the government's purchasing power in procurement, this is an excellent opportunity to create a ripple effect on the economy by contributing to this transformation.

Moreover, it will be important, when this change related to procurement occurs, not to forget the issue of just transition, which my colleague Ms. Latour mentioned earlier. We must support the workers in the sectors that will be affected. We know that they are already affected, not only because of climate change, but also because of automation. For our part, we expect that there will be some movement on the issue of just transition legislation.

[Brian Masse, NDP, Windsor West, ON]

We can keep those workers working in my constituency and elsewhere instead of buying vehicles from Turkey, which is absurd.

Mr. Allan, I'm sorry. I will give you whatever time I have left.

[Travis Allan]

Thank you. It's such an important question.

In provinces like Quebec and British Columbia which have really worked to start electrifying their provincial and municipal fleets, it's a very significant opportunity for Canadian businesses on both the charging side and now on the vehicle side as we get more Canadian EVs. I couldn't agree more with the opportunity.

There are also some interesting trade issues that we need to work out and look at with buy America.

I will leave it there.

[The Chair, Liberal, Sherry Romanado]

Thank you so much.

We will now go to MP Poilievre.

You have the floor for five minutes.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Cairo, thank you for being here today. We're very proud to have a local business and a champion of innovation and technology testifying before this august committee.

What you are doing is making housing more affordable with your technology. As I see it, that's an opportunity to provide home ownership to people who would otherwise be stuck renting for the rest of their lives.

Could you talk a bit about how your technology will enable working-class people to aspire to and achieve the dream of home ownership?

[Frank Cairo]

Thank you for the question, Mr. Poilievre.

It's actually a very important part of our philosophical underpinning that we address affordability in housing stock. It's becoming an extreme issue not only in Ottawa, but across the country. Manufacturing practices do have a whole host of solutions that are available to address the issue.

The biggest factor that's creating an affordability issue, obviously, is the cost of underlying land and the lack of land supply for urban home inventory. After that, building costs have skyrocketed. The cost to assemble homes in the traditional fashion has really skyrocketed.

[Pierre Poilievre, Conservative, Carleton, ON]

Can I ask for clarification? You say that land costs and land scarcity is a problem. We live in one of the most abundant countries in the world when it comes to land. We have among the lowest population densities of any nation on planet Earth.

How is it possible that we have a shortage of land?

[Frank Cairo]

Municipalities in Ontario, but also with the previous government in Ontario, made some pretty drastic manoeuvres to intensify growth within existing urban areas instead of allowing for responsible and sustainable growth to continue outside of existing urban areas. That has led to, in part, threats to existing neighbourhoods that are dealing with mid-rise and high-rise buildings in their backyards, which they are very adamantly opposed to. However, some of that mixed use is important.

That being said, we have taken such an extreme intensification approach to growth that the cost of a new home has dramatically increased. The demand, especially from new Canadians, is for a backyard and what Canada has to offer by way of a lifestyle change. Forcing them into towers has been difficult. As demand has skyrocketed relative to the little supply coming on, that new home inventory has dramatically changed in price.

[Pierre Poilievre, Conservative, Carleton, ON]

Basically, working-class people and immigrants want and should have the opportunity to earn a good wage and put that money towards a good home, but municipal and provincial governments prevent them from doing so by restricting their access to land, even though Canada has more space where there's no one than we have where there's anyone. Even though if you spread Canadians out evenly we would have more than a football field for every single Canadian, somehow we have a land shortage. That is a government failure, not a market failure.

That's the supply side. On the demand side, you are telling me that the costs of raw materials are rising. I have seen that these prices have gone up corresponding to the Bank of Canada printing unprecedented amounts of money. We have seen lumber prices go up 400%. Commodity prices are up 50%. That obviously gets baked into a house price.

Are you seeing the same inflationary pressures over the last year since the central bank started printing cash?

[Frank Cairo]

Your referred-to increase statistics are actually very much correct. It is a very severe issue in the cost of a new home.

[Pierre Poilievre, Conservative, Carleton, ON]

This is an inflation tax that hurts working-class people because their wages don't go as far. Of course, it's very good news for extremely wealthy people whose assets become far more valuable. Thus, the rich get richer and the poor get poorer.

Tell me how a company like yours can counter that unjust effect by making housing more affordable and by unleashing the power of the free enterprise system to give people the opportunity to own a home?