Industry Committee on May 11th, 2021

[Dr. Laure Waridel]

Ms. Robert, would you like to say what you were not able to say earlier and comment on that?

[Émilie Robert]

To reduce the need to move people and goods, it is important to revisit the structure of societies and land use planning. We must implement four-day work weeks; facilitate teleworking through proper Internet access; manage land use to facilitate active modes of transportation and public transit, which is a must; promote local shopping; optimize the transportation of goods, and so on.

Reducing energy consumption and electrifying industrial processes are part of the whole circular economy. There is more: we need to reduce the ecological footprint during the entire life cycle, at all stages of providing a service or producing a good, from the extraction of raw materials, to the end of the product's useful life.

Therefore, it is important to incorporate the used material as a resource in the production cycle, instead of extracting raw materials, and to also embrace eco-design, by applying the five Rs, that is to say, reduce, repair, reuse, remanufacture and recycle, using renewable energy.

In the agri-food sector, we must seriously reduce the ecological footprint of our food, while improving our health. We must rethink our eating habits. This means reducing meat production and consumption, reducing waste, and investing in natural infrastructure.

We must not forget that the experts tell us that we must preserve biodiversity. This helps prevent the development of anthroponotic disease, such as COVID-19. Researchers have shown a correlation between the loss of biodiversity and the appearance of these diseases. We must not forget that we are part of the ecosystems that we are ruining in the name of economic growth and that, by destroying them, we destroy ourselves.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Our next round of questions goes to MP Masse.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

Mr. Lyman, what's your evaluation with regard to the investment in the auto sector in Canada versus the United States? I'm curious as to your perspective of where things are right now and, if there are missed opportunities, where we can take advantage of them.

[Robert Lyman]

To tell you the truth, I don't follow general investment trends with respect to the automobile industry. What I have followed to some extent, of course, is the investment in electric vehicles.

Recently, of course, there's been major funding of the Ford plant near Oshawa. I think it's $170 million to increase the funding there, and there's no doubt that there is a major movement, both within Canada and the United States, to increase the investment in and capacity to produce electric vehicles. Beyond that, I'm sorry. I don't have details.

[Brian Masse, NDP, Windsor West, ON]

No, that's fair enough. Thank you for that. There also was an investment into Michigan. A sincere answer is appreciated.

I have another question with regard to transit. It's one of the things that we see in a city like Windsor, where we're trying to move our transit numbers up. It's an auto city.

Are there any suggestions for what we can do public relations-wise to move things along? It's one of the things that seems to be missing from the recipe of trying to get more people on transit. It's not just like transit or car. It should be a multi-thing. We even put bike racks on, and so forth. I'm just trying to figure out how to push this issue further.

[Dr. Josipa Gordana Petrunic]

Thank you very much, Mr. Masse.

If there's time, I'm happy to answer the auto question separately.

On the transit side, I'll say there are three things: jobs, operational savings and market position. In terms of jobs, one of the ways to position the municipal and larger level in terms of adopting these technologies is the fact that we've already identified at CUTRIC that there are over 264,000 jobs in Canada to be retained in the zero-emission transit landscape and another 30,000 to 98,000 to be created, so it's a good jobs story for Canadians to push forward.

On the ridership side in terms of getting people into transit, we have to price roadway. There's no other way around it. You're going to have to price roadway to drive the marketplace, and that is a fair dialogue to start having.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

We will now go to MP Lewis.

Welcome to INDU. You have the floor for five minutes.

[Chris Lewis, Conservative, Essex, ON]

Thank you very much, Madam Chair. It's an honour to be here.

Thank you very much to all of the witnesses for appearing today. There has been some fantastic testimony.

My first question will go to Mr. Sobot.

Thank you very much for your business. I understand through the CAAM committee I'm on that you produce pipe that is resistant, to some extent, to earthquakes. It's pretty special, and I think that's fantastic.

I also understand, sir, that 70 associations have sent a letter to U.S. Trade Representative complaining that Canada may be breaching NAFTA by doing so. How did the industry get an exemption last time, and what opportunities could be leveraged now?

[Veso Sobot]

That's interesting. Thank you for the question.

Last time, the government was very aggressive in selling their story in the United States. Essentially, they found out who the proponent was of buy America inside the American Recovery and Reinvestment Act. They found out that the proponent had access to the Canadian market unfettered, but the proponent was most worried about China.

The government had great discussions with them, and our bureaucrats did a fantastic job. They were able to secure a letter signed by the proponent that says they were fully supportive of the Canadian exemption. That letter was given to the Prime Minister, and the Prime Minister passed that on to President Obama. That was very instrumental in getting a Canadian exemption to buy America. There are always opportunities that can be leveraged when negotiating with the Americans.

Certainly green infrastructure is one right now. The Americans are very concerned as well about our nuclear waste that's up at the Bruce Power plant. They have indicated that they would be very willing to dispose of that in Michigan. We should and could use that as leverage in order to exact a Canadian exemption of buy America. That's something they want. We want something. There's no reason we can't come to some sort of an agreement. There are many other examples like that.

Mr. Lewis, you asked about our innovation. We make a pipe that is earthquake-resistant. It's called Bionax SR, and it's made in Saint-Laurent, Quebec. It's sold all up and down the west coast of the United States and Canada. That's another example of Canadian innovation fixing an American problem. I really believe that's what we should promote with the Americans. We should be working as a trading bloc, not working against each other.

[Chris Lewis, Conservative, Essex, ON]

Thank you, Mr. Sobot.

Through you, Madam Chair, to Mr. Lyman, I'm really fortunate. I am the Conservative auto caucus chair. I heard what you said to Mr. Masse with regard to not driving into auto, but you did speak a lot about EVs, electric vehicles. I will tell you that I had a conversation yesterday with the Global Automakers of Canada, and they are on track for 2030 for 121 electric vehicles.

However, in the meantime, they said that we still need pipelines. We need them desperately. I'm wondering, sir, with regard to Line 5, not losing jobs and keeping the economy going today, what the short-term impacts of having Line 5 shut down would do to our economy as we still strive towards zero-emission vehicles.

[Robert Lyman]

The shutdown of Line 5 would remove something in the order of 60% of the refined product supply for Ontario and, therefore, significantly increase prices. Hopefully there are ways in which some products, like gasoline and aviation fuels, etc., can be brought into the province by rail or by truck, but that will definitely be more expensive.

The ultimate answer to a permanent shutdown of Line 5 is the construction of an additional pipeline into the area. That would clearly take years to achieve, given the difficulties that other pipelines in Canada are having with permitting processes today, so it would probably increase prices considerably.

One of the things that's always been typical of transportation fuels is how energy inelastic they are. They are relatively unresponsive to significant increases in prices.

[Chris Lewis, Conservative, Essex, ON]

Thank you, Madam Chair.

Thank you, Mr. Lyman.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

We'll now go to MP Jaczek. You have the floor for five minutes.

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

Thank you very much, Madam Chair.

Thank you to all the witnesses today. We often speak about diverse views. I think today we've had some views that might almost be described as polar opposites.

My first question is to Mr. Kung.

First of all, I want to congratulate you on your entrepreneurial spirit and your ability to move to where the market is. Have you been able to take advantage, as a small business owner or founder, of any government programs through the pandemic? What has that meant for your business?

[Alexander Kung]

We did apply for one of the grants. That was in December 2020. That did help us innovate a little bit more. In terms of any other government funding, no, we really haven't received much or applied for many of those.

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

We've heard from other witnesses that small and medium-sized enterprises actually have quite a difficult time navigating what the opportunities are. I'm wondering if you have any recommendations, as a small business, for the federal government in terms of the economic recovery going forward.

Could you give us some ideas that could help your type of business?

[Alexander Kung]

Yes, of course. In terms of a business of our size, especially as a new business, a lot of our pain points are getting noticed and making an impact, especially at the scale of what we operate. We would definitely like to see more access to funding.

We would also like to touch a little more on the Canadian companies that we actually partner up with. There are so many wonderful Canadian company owners here right now manufacturing PPE and other green products. A lot of us look for these requests for proposals that the federal and the provincial governments release for bids and tenders.

Unfortunately, a lot of us get overlooked in terms of our competitiveness and the prices that we can offer. A lot of these are awarded to imported products, like imported straws or imported takeout containers. Everything is very hard for us to compete with, especially with the labour and the wage that it costs for us to manufacture even one straw.

For example, an imported straw from China can cost less than half a cent. For us to manufacture just one paper straw on Canadian soil with Canadian labour, it costs us about seven or eight cents. It is very hard for us to compete, although we do target a little bit of the pain points. For straws, we don't just make a regular straw. A pain point is that when people drink out of paper straws, they get soggy and it's disgusting when you get [Technical Difficulty—Editor] in your mouth. We came up with a brand new coating. It is our own trademarked coating. We have paper straws that actually last in your drink for eight to 12 hours. We did target these pain points and come up with new ways to help people move. At the same time, straws are a cheap product, but any green solution is a solution.

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

Thank you very much.

Ms. Petrunic, thank you very much for explaining just what CUTRIC does.

You mentioned some projects in the great Regional Municipality of York, and I was wondering if you could just describe the process that you engaged in—I believe you mentioned Markham and Newmarket—just so that we can fully understand your role in the whole process.

[Dr. Josipa Gordana Petrunic]

Three of our major projects are all focused on standardization and interoperability from a technology standpoint, because the last thing the taxpayer wants at the municipal or provincial level is to be forced to buy stuff that only works with one proprietary solution. That's okay for your Macintosh, but it's not okay when it's a bus.

Our role was really in the electric bus world, the hydrogen bus world and with the autonomous vehicles in Markham and York region and so on. It was to get manufacturers that are competitors together around the table—which is normally impossible to do—and to get them to agree to redesign their systems in Canada to be plug and play with one another so that they communicate with one another, can plug into any kind of charger and have vehicle-to-vehicle communications that are equivalent. It was then to get champion transit agencies to deploy that stuff.

That is our role. We herd the cats. We get the idea together, and then we project manage and engineer it to a solution to retain the jobs here and to show that it can work.

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

Thank you very much.

[The Chair, Liberal, Sherry Romanado]

Thank you so much.

We'll now start our third round of questions. Our first round goes to MP Poilievre.

You have the floor for five minutes. Go ahead, MP Poilievre.

[Pierre Poilievre, Conservative, Carleton, ON]

Thank you very much, Madam Chair.

Thank you, Mr. Sobot, for being here today.

I want to address a few questions. First, in the last five years, has the company for which you work, IPEX, opened any plants?

[Veso Sobot]

We have expanded plants in both Canada and the United States.

Right now, though, we're looking at major expansions in the United States.

[Pierre Poilievre, Conservative, Carleton, ON]

How about in Canada?