Industry Committee on May 13th, 2021

[The Chair, Liberal, Sherry Romanado]

Good morning, everyone.

I now call this meeting to order. Welcome to meeting number 39 of the House of Commons Standing Committee on Industry, Science and Technology.

Today's meeting is taking place in a hybrid format, pursuant to the House order of January 25. The proceedings will be made available via the House of Commons website. Just so that you are aware, the webcast will always show the person speaking rather than the entire committee.

To the members of INDU, please note I'll take a few minutes at the end of the meeting to go over the schedule for the remainder of the session.

To ensure an orderly meeting, I'd like to outline a few rules to follows.

Members and witnesses may speak in the official language of their choice. Interpretation services are available for this meeting. You have the choice at the bottom of your screen of either the floor, English or French. Please select your preference now. All comments by members and witnesses should be addressed through the chair. Before speaking, please wait until I recognize you by name, and when you are not speaking, please make sure your microphone is on mute. 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 when your time for questions has expired. Please keep your screen and gallery view so that you can see the cards when I hold them up.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on November 5, 2020, the House of Commons Standing Committee on Industry, Science and Technology is meeting today to continue its study on the economic recovery from COVID-19.

I would like to now welcome our witnesses.

Today, we are hearing from Vincent Rousson, rector of the Université du Québec en Abitibi-Témiscamingue, Geneviève Aubry, director of Collectif Territoire, as well as Denis Leclerc, president and chief executive officer of Écotech Québec.

Mr. John Galt, president and chief executive officer of Husky Injection Molding Systems; and Mr. Mark Mills, senior fellow of Manhattan Institute.

Each witness will present for up to five minutes, followed by rounds of questions.

With that, we will start our first round of six minutes each. The first round will go to MP Baldinelli.

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

Isn't the witness going first?

[The Chair, Liberal, Sherry Romanado]

My apologies. I was jumping in there.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

I would ask how their day was going.

[The Chair, Liberal, Sherry Romanado]

Thank you very much, MP Baldinelli.

Mr. Rousson, go ahead for five minutes.

[Vincent Rousson, Rector, Université du Québec en Abitibi-Témiscamingue, As an Individual]

Thank you very much, Madam Chair.

Ladies and gentlemen members of this important committee and of the government, thank you for allowing me to say a few words about the importance of universities to our country's green economic recovery, especially universities outside Canada's major urban centres, such as the Université du Québec en Abitibi-Témiscamingue, or UQAT.

Located in Abitibi-Témiscamingue, where Quebec's wide–open spaces, lakes and forests foster creativity and the emergence of talent, UQAT is a key driver in Canada's economic development. Our university has a presence not only in Abitibi-Témiscamingue, but also in northern Quebec, Nunavik, the Upper Laurentians, Montreal and on the North Shore.

Ever since our young university's inception, we have played and continue to play a leading role in bringing knowledge, applied research and technology transfer to Canadian businesses.

With a large research volume, our university's effectiveness in connecting university research to business needs makes it a key player in Canada. By carrying out and expanding our research activities in our niches of excellence, recognized the world over, we clearly help enhance Canada's international ranking.

Ranked by Research Infosource as the second most successful Canadian university in terms of research performance, UQAT has been helping economic sectors such as mining, forestry and agriculture address the challenges of climate change for nearly 40 years

The various niches of excellence in Canadian universities are without a doubt key elements in a green economic recovery.

I am thinking more particularly about the fields of mining and the environment.

Thanks to our unique approach based on collaboration with industry and government representatives, a team of seasoned researchers and state–of–the–art facilities, UQAT has an international reputation in research and teaching in the fields of mining and the environment.

The research being carried out focuses mainly on the development of environmental solutions linked to the entire life cycle of a mine and allows for changes in practice that are both sustainable and clearly oriented toward protecting the environment and creating jobs. The numerous joint ventures with mining companies and other universities around the world allow UQAT, and Canada, to develop innovative solutions that meet the real needs of the mining sector, governments and society.

I am also thinking of our universities' forestry niches.

Located in the heart of the boreal forest, our university, through its forest research institute, or IRF, is ideally positioned to host research projects with its huge open–air laboratory and an extensive network of partnerships and alliances with the forestry industry in Quebec and elsewhere in Canada, as well as with international partners.

Through our interdisciplinary approach, we help to disseminate knowledge, but also to incorporate new knowledge in cooperation with industry and the multiple users of the land.

We provide answers to forestry–related issues, from silviculture planning to primary, secondary and tertiary wood processing. The approach aims to facilitate forest certification and integrated land management, particularly by partnering with communities. UQAT is an undisputed leader in Quebec, the rest of Canada and the world in the development of new practices for the forest industry.

I am also thinking about our universities' agricultural niches.

Did you know that, by 2050, the world's population will be in the range of 9 billion people? To feed this population, we will need to increase agricultural production by almost 40%. Scientists say that there is enough arable land around the world to support future food needs. However, this arable land is not distributed evenly.

Agricultural development is booming in northwestern Quebec and northeastern Ontario thanks to a good supply of arable land. Quebec and Ontario have carried out several large–scale agriculture projects together, with UQAT playing a key role. Our university's close cooperation with farmers in both provinces helps us develop innovative research programming committed to forward–looking development suited to the current and future climatic conditions.

Canada has a unique opportunity to support universities and the agricultural sector as we move toward a greener, environmentally friendly economy that will meet the food needs of future generations.

The closer relationship between universities and local stakeholders will also guarantee success in this greener economy.

The partnerships established between our university and first nations and Inuit are one such example. A relationship of trust with indigenous peoples is absolutely essential to the partnership related to economic development.

I see that I don't have much time left, so I will close by saying that, thanks to their resources, accessibility, openness and partnerships, universities are for Canada...

I think that my time is up.

Madam Chair, I have three recommendations, if I may.

[The Chair, Liberal, Sherry Romanado]

When questions are addressed to you, you may share your recommendations. I have to interrupt you, as we have several guests today.

[Vincent Rousson]

Very well.

I will share my three recommendations with the committee a little later.

Thank you for your attention.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

I now invite Ms. Aubry to take the floor.

Ms. Aubry, you have the floor for five minutes.

[Geneviève Aubry, Director, Collectif Territoire]

Thank you for having me here today.

I am speaking to you today as the director of Collectif Territoire, a non-profit organization based in Abitibi-Témiscamingue, whose mandate is to unite the geniuses of science, arts and industry to produce benefits for ecosystems and communities.

Since 2018, the collective has been working on a project that is gaining support in the community, the Osisko Lake project. This project aims to rehabilitate and improve Lake Osisko, located in downtown Rouyn-Noranda, in a creative and participatory approach that unites several sectors and the population.

Lake Osisko has been damaged by human and industrial activities over the past decades, and is suffering from a variety of problems, many of which are common to different lakes in the region and across the country. These include contaminated sediments, high phosphorus levels, invasive aquatic plants, emerging contaminants, and more. In order to preserve the biodiversity and vitality of this ecosystem, it is important to find creative and adapted solutions to promote its recovery. It is therefore through the search for solutions that we are setting up a true regional innovation laboratory.

The Osisko Lake project is a research and experimentation ground for engineers, scientists, artists and other inventors, who unite their expertise and talents in the pursuit of this noble and inspiring goal. The project already has more than 40 partners. They include industrial companies, artists, universities, college technology transfer centres, schools, public and parapublic environmental organizations, and more.

Numerous people are uniting around the project because it is a positive, constructive project with multiple and powerful benefits. It is a project in which the partners find benefits. It is also a project with a territorial impact. It was selected by the Future of Good organization as one of the 100 best recovery projects in Canada.

The Osisko Lake project is a technological showcase for industrial and mining companies, mainly, that are very active in our region. Their expertise is recognized worldwide. Through this project, these companies enhance and develop inspiring practices in environmental innovation, rehabilitation of degraded ecosystems and bioremediation, and so on. There are many of them collaborating on this project, and they are proud of it.

Added to this rich contribution is that of the Université du Québec en Abitibi-Témiscamingue, about which Mr. Rousson has just given us an eloquent presentation. Researchers from UQAT are participating in the project by contributing their expertise in biology, mining engineering, ethics and digital creation.

The college centre for technology transfer associated with the Cégep de l'Abitibi-Témiscamingue, the Centre technologique des résidus industriels, or CTRI, is also involved in the project, particularly in bioremediation.

The artists bring creativity, a perspective, beauty and questioning, which give the project its colour.

In addition to having a strong core of local and regional partners, the project has reached out, and it has sparked partnerships elsewhere in the province, the country and the world.

The Standing Committee on Industry, Science and Technology is interested in examining how the Government of Canada, in its stimulus package, can support industries in their transition to greener, more sustainable practices, and support local and regional development and innovation initiatives.

Faced with the magnitude of the environmental, economic and human challenges doubly highlighted by the health and climate crisis, this plan is an opportunity to implement territorial development models in tune with the needs, particular characteristics and strengths of communities.

To support industries in their transition, the Government of Canada must demonstrate its confidence in community-led territorial development and innovation initiatives. You will not be surprised to hear me say that one sure way to support these initiatives is to put in place a territorial innovation support fund. This type of fund is managed by and for regional communities, and it evaluates projects based on their ability to adequately respond, in an innovative way, to community needs.

The most successful projects are often those that emerge from the regions, and whose development is not hindered by the restrictive or exhaustive criteria of certain government programs.

A territorial innovation support fund is a fund based on the evaluation of the impact potential of projects according to the needs and distinctive features of the regions from which they emerge.

An innovation support fund is a fund administered independently, by a selection committee whose legitimacy is widely recognized by people in the area concerned.

It is a fund that provides support to understand and document the impact of projects and mobilize the knowledge gained. It is also a fund that promotes the transfer and scaling of the innovations, knowledge and skills developed, to benefit other communities and regions.

I have long dreamt of such a fund, and I hope that today's forum has allowed me to make you aware that, in Canada's green recovery efforts, it is essential to give the regions a free hand to choose for themselves the projects that have the greatest potential to impact and benefit communities.

[The Chair, Liberal, Sherry Romanado]

Thank you very much, Ms. Aubry.

Mr. Leclerc, you now have the floor for five minutes.

[Denis Leclerc, President and Chief Executive Officer, Écotech Québec]

Good morning, everyone.

Thank you for inviting me to appear before the committee today.

My name is Denis Leclerc and I am the president and CEO of Écotech Québec, which represents the clean technology industry in Quebec. I am currently in the beautiful riding of Saint-Laurent.

I am also the chairman of the board of directors of the Canada Cleantech Alliance, which brings together a multitude of cleantech organizations in Canada.

As you know, the pandemic has shaken a lot of people. It has shaken all societies. It has come on top of other crises that are already very serious, like climate change, which threatens our health and well-being. We need to find an adequate response to both crises.

For more than a year, a consensus has emerged across civil society, the private sector, and government on the need for a green recovery. The scale of spending required to revive the economy does present an unprecedented opportunity to positively transform our societies. That's why stimulus packages will need to make room for projects that will jumpstart our economy and make it more resilient while contributing to a more effective fight against climate change.

In fact, I draw your attention to the fact that the World Bank has mentioned that the most promising recovery projects should have the following three elements: a very short-term benefit for economic recovery and job retention; medium-term benefits for growth; and long-term sustainability and contribution to decarbonization, among other things by better integrating low-carbon technologies and strategies.

We believe that clean technologies and environmental and energy innovations must be at the heart of this recovery. These innovations are essential for sustainable growth and for the well-being of Canadians. They could allow us to do much better with little.

Of course there are several challenges in the sector. These include financing, market access in Canada or internationally, and securing direct and foreign investment.

These are challenges, but it is by encouraging technology deployment that we can collectively seize the opportunities in the current environment and thereby build a greener, more innovative and resilient economy as we emerge from the pandemic.

These innovations will improve business competitiveness and, of course, will also create jobs within innovative companies while addressing Canada's climate, environmental and economic priorities. Together, our efforts will make this recovery a springboard to positively transform our economy to be greener and more prosperous.

I look forward to answering your questions.

Thank you for your attention.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

I now invite Mr. Galt to present for up to five minutes.

[John Galt, President and Chief Executive Officer, Husky Injection Molding Systems Ltd.]

Thank you very much, everyone, for giving me the opportunity to talk at this very important point. I'll have a slightly different approach from the people who preceded me.

I work for Husky, and we ultimately convert raw materials into finished goods. I've spent almost 37 years of my life around the world helping customers make things like medical syringes, IV connectors, bottles, food containers and other things of that nature. The majority of what goes through our products is plastic, although we do process other materials.

When I think about Canada's economic recovery, I start first with the plastics industry. I think that incentivizing investment in Canada's plastics industry is crucial. Responsibly managed plastics have a lower environmental footprint than any of the alternatives. On top of that, fully 73% of all medical consumables used in the world—and that number has been growing—are made out of plastic. The plastics industry employs 370,000 people across the country; it represents $35 billion of GDP; and it is led by small and medium-sized organizations, which, as we know, are at the core of the economy and an essential group when we think about engaging them to build out the business.

The second element for me is the importance of the free economy. What I mean by this is that small business is already very fragile, and the actions over the last year and a half have really put a tremendous toll on a lot of small businesses. Some 99.8% of all Canadian businesses are small and medium-sized. Those entrepreneurs are the key to unlocking prosperity for the country. They have played that role historically, and engaging that group in thinking about how to do is very substantial in importance. That's why, when it comes to plastic, I'm a strong advocate of the circular economy. I've seen it around the world. Just last week, I was in one of the largest recyclers on the west coast. We're involved directly in processing a multitude of materials, and that's the solution for Canada's economy and to grow industry and small business even further.

The third thing, which has already been mentioned, but of course is crucial, is this concept of getting this pandemic behind us and getting Canadians access to the vaccines and the freedom they deserve. Nothing has been more devastating to the economy than the lockdowns and what we've all experienced. I think we realize that we could have done a whole lot better job at managing the pandemic and the vaccines relative to our neighbours in the south, where 60% of those wishing to be vaccinated have already had both doses, and where they're now incentivizing the remaining groups of people, where the economies are opening up, where there's been an unprecedented economic boom. The six customers I visit in the U.S. are all struggling to find enough people to keep up with the incredible demands on their business. Nothing could be more crucial than opening the free economy and getting the vaccines

The last comment I'd like to offer the committee is really about how we go about this issue. I have really been harmed, I guess, emotionally, being a Canadian, by the concept of “essential” and “non-essential” citizens. I don't like that terms. Canada to me has always meant that everyone was created equal, with the right to speak, the right to pursue their purposes. My neighbours who work in businesses that are deemed non-essential, I consider essential Canadians. Any type of recommendation that comes out of this that continues to designate people as “essential” or “non-essential”, in my opinion, is un-Canadian.

Look at some of the impact on those smaller businesses, with people whom I work with, my neighbours. In Toronto, for example, there were 306 days lost since the pandemic started when it comes to restaurants. Gyms has lost299 days. Hair and nail salons have lost 277 days. Small retailers have lost 161 days. Closures have put two million jobs at risk across the country, and almost half a million working moms have lost their job as a result of the pandemic, and as of January, have not gotten those jobs back. We look at the restaurant industry in Canada, and the impact is staggering: 10,000 restaurants have closed, 320,000 jobs have been lost. Six out of 10 of those who have lost jobs in that industry are women; 50% of those businesses are run by new Canadians; and the industry is the number one source of first jobs for young Canadians.

You can see that the impact across all of these segments has been devastating, and being assigned non-essential status doesn't make sense to me. I've asked every level of government where the scientific evidence is to suggest that funnelling every person through a smaller number of larger establishments when each of those establishments has the same hygiene standards is less risky than allowing small business to perform appropriately to maintain their ability to remain open to ensure that their livelihoods are secure, while maintaining the security of people in the process. I haven't gotten any answers yet to that.

That's probably the most significant part, to me. We need to build. We can take the industries and grow them. I think working with small business and greening them is the right solution.

Thank you very much.

[The Chair, Liberal, Sherry Romanado]

Thank you so much.

I will now turn to Mr. Mills.

You have the floor for five minutes.

[Mark P. Mills, Senior Fellow, Manhattan Institute]

Good morning. Thank you for the opportunity to testify before this committee.

I'm a senior fellow at the Manhattan Institute, where I focus on science, technology and energy issues. I am also a faculty fellow at the McCormick School of Engineering at Northwestern University in Chicago. I'm a physics graduate, more than a few years ago, of Queen's University in Kingston, Ontario. For the record, I am also a strategic partner in a venture fund focused on energy tech software.

As this committee knows, the world is now recovering from the ravages of the global COVID-19 pandemic. That recovery inevitably means that as activities return to normal, energy use is rising again. As a baseline, it's relevant to note that over 80% of the world's energy comes from hydrocarbons—that's oil, gas and coal—and internal combustion engines account for 99% of all global transportation miles. Meanwhile, the wind and solar machines, the two sources of energy favoured in many policy proposals, supply less than 3% of global energy. As of now, electric cars supply under 0.5% of global road miles. Given the scale of global economies, changing the status quo presents some of the most daunting economic, environmental and geopolitical challenges our world has ever faced.

Permit me to note three basic realities, each with implications for considering technologies and policies for altering how the world, and Canada, obtains its energy. These are realities that help explain why global carbon dioxide emissions continued to increase prior to the pandemic lockdowns, despite massive investments in non-hydrocarbon energy production in both Europe and North America.

First, it's indisputable, and it's a good thing, that the world will use more wind and solar machines and more electric cars in the future. The reason for that, aside from policies that encourage all three, is anchored in the fact that those technologies are far better now than they were a decade or two ago. Given the magnitude of future global energy needs, more options are always better.

Second, it should be equally obvious that all energy machines are, necessarily, built from materials that must be first extracted from the earth. Replacing hydrocarbons with wind, solar and battery-powered machines constitutes a major shift in both the nature and the quantities of energy materials needed for society. It's a switch from using mainly liquids and gases to using mainly solids. It's a switch that, on average, results in a tenfold increase in the physical quantities of materials mined, extracted and processed per unit of energy service delivered to society.

The third point is that Canada and the United States combined are today, and will be for the foreseeable future, net importers of wind, solar and battery machines, or the key components for making them, as well as for most of the critical energy minerals that are used in the key components. As the International Energy Agency has recently noted, the realities of the scale of that mean that even the most aggressive forecasts for alternative energy sources see the world continuing for many decades to require roughly as much hydrocarbon energy as is used today.

These kinds of realities have implications in the accounting for environmental impacts and for carbon dioxide emissions. They also have economic, geopolitical and even human rights implications. While the United States and Canada in particular are essentially self-sufficient today in net hydrocarbon use, both countries are net importers of alternative energy materials and machines. This means that replacing hydrocarbons, which supply over 80% of North America's energy, with so-called green energy machines would replace a large share of the domestic GDP of both countries with imports.

Given the world as it is, and not as we'd wish it, increasing the use of green energy machines results in a de facto export of carbon dioxide emissions and an increase and a change in the character of environmental impacts. That's because mining and processing of energy minerals, and the fabrication of energy machines, in particular batteries, is inherently energy-intensive. Most of that energy use takes place offshore. Calculating the magnitude of that offshoring is complex.

Some analyses, including that of the International Energy Agency only last week, have looked at the impact of processing battery materials or fabricating battery components in China, where a major share—in fact, the dominant share—of such industries resides. With China's 60% coal-fired grid, this leads to even higher carbon dioxide emissions elsewhere and even greater supply chain environmental impacts .

This points to the need for a realistic supply chain analysis, something largely lacking in the accounting of Canada and the United States, and it means that we should also look at expanding our respective domestic mining and mineral processing industries—something that China has been focused on, by the way, for years.

Thank you very much.

[The Chair, Liberal, Sherry Romanado]

That was perfect timing.

With that, we will now start our round of questions. I will go to MP Baldinelli, who has the floor for six minutes.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Madam Chair.

Thank you to all of the witnesses for joining us today and for your testimony.

I'm going to begin with Mr. Mills and his presentation. Throughout these hearings, we've heard from other witnesses that Canada stands well positioned in terms of its natural resources to help move toward this green recovery. Your comment was that it's going to take some time because, as you mentioned, all nations are making this transition, and there is that sheer volume and the requirements that will be needed for resources and inputs.

That report you just mentioned, “The Role of Critical Minerals in Clean Energy Transitions”, just released by the International Energy Agency, talks about the global energy transition that will accelerate the demand for key minerals such as lithium, graphite, nickel and rare earth metals. That should explode, rising by 4,200%, 2,500%, 1,900% and 700% respectively by 2040.

How do we get to our targets in time? All nations are pledging to the Paris Agreement, but to your point that the cost of getting that input is going to continue, are those figures attainable?

[Mark P. Mills]

I think the short answer is no; the figures are not attainable. This is what the IEA report makes clear, and there are really two separate but closely related issues: the implications of that magnitude of new mineral demand, environmentally and geopolitically; but also separately, whether it can be done.

The IEA, in very cautious language, made it clear that none of the world's miners—Canada, Australia, China, Bolivia, Chile—are planning or have invested in the magnitude of new mining and mine refining necessary to meet those goals. What they point out is the obvious, and Canadians and Americans know this. The average time globally from finding a new viable ore body to opening a mine is 16 years. Canada, to my last examination, is one of the better nations in environmentally expediting that, but it's about 10 years, so these goals will require, as you recounted from the IEA report, percentage increases in the production of these materials in the hundreds to thousands within 10 years, yet it will take more than 10 years to even open mines to begin to supply these materials.

There is a profound disconnect between what's possible and these aspirations. I think this is a tragic mistake, because it not only has enormous implications for the environment, but also, if countries count on those minerals being available to produce these machines and resources, and they are not, then we will either not have the supply or we'll be stuck with accelerating the production of oil, gas and coal on short notice. That, ironically, is possible, but it will cause enormous price spikes that are damaging to all of the world's economies, and it won't reduce carbon dioxide emissions. This is the truly critical disconnect between aspirations and reality that the IEA has pointed out.

Again, that is cautious. They are not an advocate of oil and gas, as you know. They are, in fact, an advocate of the so-called sustainable development initiative.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Mr. Mills.

Quickly, in the time I have available, I want to go back to our first witness, Mr. Rousson. He mentioned that he had three recommendations he'd like to present.

Mr. Rousson, could you make those recommendations?

[Vincent Rousson]

Thank you, Mr. Baldinelli.

First of all, we need to increase funding so that we can attract, train, and retain talent in this country, that is, the brains, the students that we train.

Second, we need to invest in the research tools and infrastructure of Canadian universities.

Third, in connection with all of this morning's testimonies, we must support initiatives to add value and transfer research to industries to allow for better support. This is very important. This goes back to what Mr. Galt, Mr. Leclerc, Ms. Aubry and Mr. Mills mentioned. The government should invest to support universities in technology transfer to industries to encourage innovation and the green economy.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you.

Madam Chair, how much time do I have?

[The Chair, Liberal, Sherry Romanado]

You have one minute and 12 seconds.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

I'll go now, quickly, to Mr. Galt and his presentation.

The federal government has committed $1 billion over five years to attract private sector investment in clean tech projects.

The question is, as we've heard from other witnesses, how do we ensure that kind of money gets down to your point, to the small and medium-sized enterprises, which have more difficulties accessing those types of funds that are available from the federal government?

[John Galt]

That's a great question. I don't know that I have a perfect answer. The point, however, is that it is exactly what we need to do.

First of all, we have to begin with the dialogue. How do I green my business? Do we agree on the same goals at the end, to lessen the impact on the economy? Can we turn that entrepreneurially into an opportunity to hire, to engage and to build a larger industry? Those are the things at the core of it that people need.

What they don't need are the concepts of regulations.

One I'm facing right now is the whole push back on plastics. I've been around the world for the last 10 years supplying customers with technology to support the circular economy. Plastic melts at 280 degrees, aluminum at 660 degrees, and glass at 1600 degrees. If we talk energy, plastic has the lowest environmental footprint if it's collected and reused.

What I myself, and all small businesses, find at times is not having the opportunity to engage.

I'm sorry. The time is up.