Industry Committee on May 13th, 2021

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Madam Chair.

[The Chair, Liberal, Sherry Romanado]

You're very welcome, MP Baldinelli.

We'll now go to MP Erskine-Smith. You have the floor for six minutes.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Thanks very much, Chair.

Mr. Mills, just to clarify, if we're thinking of a recommendation along these lines, the idea would be that we would recommend that Canada presumably work in partnership with the United States to ensure an integrated supply chain in relation to the coming of electric vehicles and batteries for other devices, that as we see the transition towards a cleaner economy, we are integrating our supply chains to that end. That includes mining, as you say, but all the way down the supply chain.

[Mark P. Mills]

I've written many times and advocated both before Canadian organizations and U.S. Congress for a better integration of the Canadian and U.S. energy supply chains.

This is a magnificent continent with incredible resources. We have the capacity to do environmentally sensible mining, extraction and production of everything, whether it's oil and gas or the production of plastics or whether it's in the lithium and cobalt nickel domains. However, we've really lagged in doing this with the essential metals and minerals.

Candidly, Canada has done better than the United States, but lately it has been slipping. I think this is a mistake, given what the world wants to do.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

I spoke to someone recently, and as we look to electrifying more things, it makes sense to you that we would then model out what that electricity demand is likely to be and then ask, how are we going to fulfill that electricity demand with clean sources of energy?

[Mark P. Mills]

Let's use copper as an easy mineral example.

The world's demand for copper under the clean energy plans will go up several hundred percent. The world's current mining capacity and plans for mines are declining over the next two decades. Nobody is planning to expand capacity or spend the money on it yet. Electrification needs more copper. You have something like 400% more copper per car if it's electrically powered versus an internal combustion engine. These have really important implications.

I think the main point I would make is the failure on two counts: sensible integration of physical resource policies and in refining and processing.

On the role of plastics, I want to reinforce that my colleague from Husky is absolutely right. This vilification of plastic is silly. It's hype. It's how you get to the goals, with lightweighting things.

As well, there is a failure to understand the time frames. This is a long process. I hesitate to use the word “silly”, but I will: these silly goals of 10 and 15 years. Energy transitions of the kind we're talking about do not happen, and have never happened, at that velocity globally. They in fact won't happen. I just have to say, in all candour, it's just not possible.

We just have to be more realistic and more sensible, and frankly, we're doing neither.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Mr. Galt, I want to give you the opportunity to build on some of your opening remarks.

When you look at federal commitments, we've seen federal commitments since 2016 towards a cleaner transition. We've seen in December an update to the climate plan, and then further announcements in budget 2021.

How would you articulate exactly what might be missing and where you think this committee ought to make recommendations to the government going forward?

[John Galt]

Okay, but I'm going to start on plastics again, where I can speak more broadly. On plastics, it really comes down to three primary issues. The biggest problem worldwide, which has been solved by Norway and Germany—so I'm using their examples for how it can be done—is to establish and harmonize waste collection systems. What we don't recognize yet is that what we call “waste” today will be resources tomorrow. The steel industry realized it years ago, when they moved from the large mill that used ore to the mini-mill. There's always going to be a balance of the two, and plastics can be infinitely recycled.

I went across the country. We have different recycling standards per province. We have different ones per municipality. I live 15 minutes away on a farm and I have different materials.

Anybody who understands the economics of recycling will tell you that the first and most critical thing is bale quality, and getting the material back is the best. Harmonizing our collection systems and getting enough of the material is key.

The second thing for us is to mandate certain recycling content standards. The industry's supportive of it. We're building technologies that do it every day. Customers using our equipment already have 100% content in many parts of the world. Why is Canada not pushing more recycled content?

I think the third thing is to incentivize investment in recycling. I know of three recycling plants that were planned for Canada but put on hold when the government tabled the toxic designation of plastic. The shareholders couldn't invest tens of millions of dollars in Canada when they were uncertain about whether they would be legislated out of existence.

The three most critical things that would reduce our environmental footprint by about 60% from plastics—which are already the superior material from a carbon perspective—are also the most practical. I've been a strong advocate for them over the last months and years.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Thanks very much.

Those are my questions, Chair.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Mr. Lemire, you now have the floor for six minutes.

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

Thank you, Madam Chair.

It is an honour for me to welcome the new rector of the Université du Québec en Abitibi-Témiscamingue, Mr. Vincent Rousson, whose appointment is welcomed with great enthusiasm in a region like Abitibi-Témiscamingue. Last summer, the Standing Committee on Industry, Science and Technology welcomed his predecessor, Mr. Denis Martel.

Mr. Rousson, during your testimony, you stated that, to financially support universities in the regions is to optimize our chances of achieving a green and sustainable economic recovery.

Are research support funds sufficient for universities? Could improvements be made to allow us to shine more brightly?

[Vincent Rousson]

Thank you very much, Mr. Lemire, for your kind words. I also thank you for the question.

Investing in universities and, in particular, universities in the regions, is indeed a key element, because we are close to natural resources and we have a direct link to communities and businesses.

There is a reason why my university is ranked second in Canada this year in terms of research intensity performance. In recent years, we've often been first, because we can link business and the university to get research grants, which is really important.

It's difficult for very small and medium-sized companies to get funding for the research and development side of things, because it's sometimes complex and companies don't always see the added value. Yet we are able to double, and sometimes triple, the return on every dollar that these companies invest in research and development, in conjunction with universities, which is driving innovation and developing new technologies.

Investing in universities, whether through dedicated research funds or through resources tied to training, which will ensure that their performance is enhanced, will result in more people being trained. In doing so, there will be more people in the industry with the essential skills to take us to the next level. You may say I'm sold on the cause, but investing in universities is, in my opinion, a guarantee of our collective wealth as a society.

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

Without wishing to be chauvinistic, I would like to point out that the city of Rouyn-Noranda, where the main campus of the Université du Québec en Abitibi-Témiscamingue is located, was ranked last week as the second best place in Canada to study at a university, in particular because of its proximity to nature and resources, as has been mentioned.

One thing I would like to mention, by the way, is that UQAT, like the other universities in the Université du Québec network, is not part of the famous U15 list of universities that get a large share of federal funding. They are all independent universities, in the regions, but they work in collaboration. It is important to emphasize the very independent nature of each university and the fact that the federal government needs to think about its strategy for investing in the campuses of these universities rather than in a network.

Ranking second in Canada for its research performance according to Research Infosource, UQAT has been helping the mining, forestry and agricultural industries, among others, to meet the challenges of climate change for 40 years.

Mr. Rousson, can you tell us more about the successes of Abitibi-Témiscamingue and the Université du Québec en Abitibi-Témiscamingue?

[Vincent Rousson]

There are several, but I'll keep it short.

Many of the things that Dr. Mills mentioned are related to our university and industry. It's unusual in this world to get mining companies around the table to invest in environmental protection. In the last few years, six mining companies in the region have invested over $30 million in changing their environmental practices regarding the life cycle of a mine. All of this has revolved around our university and the innovative deployment of our researchers. This is not a common practice in the world, and it is one of the unique things about our university.

With respect to the forest sector and everything related to carbon sequestration and management, it is extremely important to plan well for the life of the forests, to operate them for, by and with the indigenous communities here. That's a hallmark of our university, and that's how we should be doing it.

Finally, I'll talk about the agricultural area. On carbon sequestration, I mentioned that we need to increase our agricultural production capacity by 40%. Organic farming is going to be an extremely important part of that, as it will produce more per hectare than other sectors of the industry using traditional ways of farming.

So it is the work of academics, in conjunction with farmers, industry and forestry companies, that allows us to think about a better future for a greener economy in Canada.

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

I completely agree with you.

As the member of Parliament for Abitibi-Témiscamingue, I can attest to the exemplary partnership that exists between the Université du Québec en Abitibi-Témiscamingue and indigenous peoples. This partnership was born of the desire for mutually beneficial cohabitation of the territories and the desire to meet common challenges relating to collective well-being, more specifically.

In your opinion, what is the scope of this exemplary partnership? How can it contribute to a greener economic recovery?

[Vincent Rousson]

The UQAT motto is to work for, by and with our indigenous partners, whether they are first nations or Inuit. This is the key to success.

In fact, it's a recognition of the equality of their cultures and status. It is important to have a partnership based on respect, since this is how we manage to get our partners in Quebec, Canada and abroad to work with us. In fact, many academics or people from other countries come to see our winning practices with these communities.

In my opinion, a key to the success of the Canadian economy is the integration of indigenous people into that economy and the integration of their vision for the environment.

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

I sincerely thank you for your participation, Mr. Rousson.

[The Chair, Liberal, Sherry Romanado]

Thank you very much, Mr. Lemire.

Our next round goes to MP Masse.

You have the floor for six minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

Thank you to our witnesses. I'm going to ask Mr. Rousson a question, but after he's finished I'd invite any other of our witnesses to chime in as well.

Mr. Rousson, the recent Canada-U.S.-Mexico agreement included labour and environmental measures as practices. It's interesting because originally the first deal didn't have that. In my opinion, it's good that was scrapped and that the Democrats included this change because, coming from my sector, auto, tool and die, mould making and so forth, we've consistently been undermined by labour and environmental subsidization in terms of competition.

This brings us into a first-ever agreement where we have it within the agreement and then there are measurables. Mind you, they're pretty complicated at some points, but they're there at least to start.

I'd like your opinion about our trade, including some type of measurables within the agreement for environmental labour standards.

Once you've completed your answer, Mr. Rousson, I would invite any other guest to give me their reflection on that too.

[Vincent Rousson]

Mr. Masse, thank you for that excellent question.

In fact, the relationship with our U.S. economic partner has been in existence for a long time, and it's important that we keep it going in keeping with an environmental perspective. The new party in power in the United States, the Democratic Party, is bringing a new way of doing business and a new environmental vision, which is greener than the previous administration. Yet they are also looking to centralize, much like the Republican Party did in recent years with the Buy American Act. They are working hard on that.

Workforce planning to help us meet our targets and goals will not be simple. The academic sector is challenged to properly align the training needs of industry and the needs of our communities with the new trade realities that are developing between the three countries, Canada, the United States and Mexico.

I think a key element that could support us in planning for a focused workforce would be the continuing education component. Just because you come out of a university, college or educational institution with a degree doesn't mean you should stop learning. The continuing education offered by educational institutions is important.

In addition, the Government of Canada can adopt measures aimed at businesses to facilitate the transfer of knowledge, and for businesses to enable their employees to access continuing education throughout their life. I think this is a key element that will help us plan well for this workforce element given the Canada-United States-Mexico Agreement.

[Brian Masse, NDP, Windsor West, ON]

Great. Thank you.

Would any other witness like to offer some comments on that?

Mr. Galt, I see your hand up—a tool and die mold-maker. Thank you. I know you're just up the highway from me. Please go ahead.

[John Galt]

Thank you very much.

We look at the challenge of getting the right people and ensuring the skills bridge is there in Canada, because this is critical. The world is moving quickly. The requirement for technology is there, and digitalization is having a role in everything we do.

About five years ago, just to talk about this talent issue and the development of the right kind of talent, and importantly, the transition of talent to the new base of skills, we invested in industrial digitalization—Industry 4.0, as you might know it in Europe. We were honoured in Luxembourg, one of the seats of the European Union for Industry 4.0, as an absolute leader in this field. We have facilities there, also.

What we've recognized is that the nature of the types of jobs Canadians want to seek is changing. After the Second World War, European immigrants worked with their hands. They were tradespeople, so we had lots of tool and die makers. Today there are few people who want to make a career out of that. There are some who do, and they are invaluable, but few people want to be part of that.

Most people want to develop digitally, and so what we recognized is that rather than working the machine tool, people get really inspired by building automation, robotics and algorithms to operate machines intelligently. We're fortunate in Canada to have a lot of universities, which is great for people coming out of university. Nevertheless, we also have a lot of mature people in the workforce who aren't as comfortable with digitalization. One of the biggest efforts we make is what we call the “skills bridge”. What talents do I have today? What talents do I need to accommodate and work within the digital environment?

What's been mentioned here in this idea of assisting Canadians with the education required to make them more relevant inside of a digital environment, to me, is absolutely crucial both for the performance of Canadian businesses and to ensure the employment of Canadians.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Galt. Are there any others?

I'm not sure how much time I have, Madam Chair. I have just a minute.

Then I'll go just go really quickly to Mr. Galt again. I'm just curious about a side issue. Are you having difficulty right now getting any of your salepeople or service people back and forth across the border for contracts that you have? We're having a really difficult time down here. Again, you're not too far from me. I'm just wondering if that's a problem for you as well.

[John Galt]

Absolutely, we are. I mean, 97% of everything we produce has been exported, so our customers are all around the world.