Industry Committee on May 8th, 2024

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

First, I want to say to everyone listening that Mr. Simard has been a great advocate of this idea. I want to say that publicly.

I've discussed your idea with my colleagues in the Quebec government. The idea is known, but I don't think the consensus needed to move it forward is there yet. However, I know you've championed the idea, and I want everyone to be aware of that.

I'm listening to you, because I know you're an experienced man. You know the aluminum business. I've discussed it with my colleagues, but you'll understand that as a federal government, for this to move forward, we need to reach a consensus with the players in this field, including the Quebec government, which is obviously important.

[Mario Simard, Bloc, Jonquière, QC]

Thank you for your candour.

Earlier, Mr. Martel spoke about the timetable for the deployment of ELYSIS technology. Mr. Pécresse came to testify to the committee to tell us what we already knew.

When we look at Rio Tinto's annual reports, we see that the deployment of ELYSIS technology cannot take place, according to them, before 2030. We see that the retrofit won't happen at current plants using AP60 technology either. Forgive me for using the English word, it's a wink to Mr. Drouin.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

I don't use that word.

[Mario Simard, Bloc, Jonquière, QC]

The upgrade won't happen. People who had previously worked in this sector were telling me that the federal government could previously rely on an organization of independent scientists capable of doing this type of study.

Are there currently independent specialists in the federal government who can monitor the progress of ELYSIS technology?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

We have specialists within the federal government, of course. I'm thinking in particular of those who work at the National Research Council Canada.

We're talking about a disruptive technology, a brand-new technology. You'll agree with me, Mr. Simard, that when you change a process after 100 years, there are certain steps to follow. Right now, we've moved from laboratories to tanks.

And yet, the federal government has allied itself with the biggest industry players in the world. I've visited representatives of this industry with the people who invented the technology, or at least put it into practice. In the field of research, there are many elements of innovation and development.

I also spoke with Mr. Pécresse and Rio Tinto's big boss, Mr. Jakob Stausholm. You don't have to take my word for it. Just look at the press releases issued by Apple or BMW. According to these industry players, as soon as BMW became a customer, the point of no return was reached.

The question at the moment is about production capacity, whether we're capable of producing more. When I'm asked this question, I always say that I'm the salesman, the one who acts for our workers. I go abroad and talk about it all the time. People tell me, however, that they need to be given time to produce the aluminum, because I sell more than they produce.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Champagne. We appreciate it.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Simard.

Mr. Masse, you have the floor.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Thank you for being here, Mr. Minister.

First of all, I really appreciate your recognition of workers. It's important that you do that. You've done that not just here at this committee; I've also seen you do that in public statements and so forth. Coming from a union environment myself, where the workers negotiate the work and are sitting down at the table.... We can support through public policy, but the skill set is there.

I really appreciate that. Some people like to take victory laps when things happen, and we should be focused on that and being attractive to the United States as well, fighting back on our auto jobs. I give you credit: We're on offence on auto for the first time in the 20-plus years I've been here. I appreciate that, because usually we're having to come and mop up a spill over something else. I do appreciate that.

I want to ask, though, about one thing I'm concerned about in the recent announcement. It's not the announcement itself, but we might have workers who can't afford the vehicles they're making. It's similar to the people working in the grocery stores who can't afford certain things that are on the shelves they are stocking.

The United States has incentives for electric vehicles at $7,500 U.S., which translates to probably $30,000 Canadian. No, I'm kidding. It's not $30,000 Canadian. It's probably about $10,000. So we have ours at $5,000. On top of that, they have a used incentive for $4,000. They're going to be very assertively getting the vehicles into the market.

It seems that we always have money for the companies and the corporations, but we don't have in the province of Ontario any subsidy in terms of an incentive for electric vehicle purchasing. Ontario has abandoned that policy. Ironically, the minivan made in Windsor can get upwards of $15,000 to $20,000 bought in the U.S., depending on where you buy it, whereas in Canada you can get only $5,000. I've called for some reciprocity. We've talked about reciprocity in the auto sector, from bumpers to everything else. Do you have any thoughts on that? I've asked for this government to look at some sort of reciprocity for Canadian consumers.

Lastly, just to summarize, with the U.S. having a $4,000 incentive to buy used, we could actually have a business, a cottage industry business, of shipping electric vehicles that are used out of Canada into the United States, lowering our target margins that we're trying to reach, because they'll be able to get incentives on the vehicles that are in the used market. Used vehicles are traded back and forth along the border on a regular basis. They will have a $4,000 U.S. incentive, which is probably about $6,000 Canadian. We could actually be losing some of our threshold target markets.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Well, I want to say thank you, Mr. Masse, because when we talk about workers, we're on the same line; I think you and I have been acknowledging that. What makes Canada competitive today is that we have the best workers in the world. You're right—in every speech I give and in every announcement, I always thank them, because at the end of the day, it starts with them. As you know, if you don't have the talent.... It's the same thing with the aluminum and the same thing with cars.

I remember the first meeting I had with the chairman of Honda in Tokyo two years ago. I think I had a piece of paper that said that the Alliston plant was the best on this planet. I said, “Trust our people; they're the best.” Then, obviously, two years later, he said, “I heard you being patient. That was patience well invested.”

To your point, I think we started with incentives for electric cars. I just want to put in perspective that when I became Minister of Industry, you will recall that one of the first briefings I received was, basically, about preparing for the end of the auto sector in Canada and how we might follow suit with the U.K. and Australia. I must say that thanks to what we did together as a nation, we turned that around. I was looking, and I think since 2020—I just saw the data—we have had $46 billion of investment.

You're right—you come from Windsor, and you've been fighting all your life for the workers. Do you remember when we used to be at the table and we were hoping to get something? Now, as you know, there is Volkswagen, with the first gigafactory outside of Germany. There's the largest investment in Honda's history. There are Ford, GM and Stellantis.

To your point, we started with incentives for the cars, and I'm happy to study those. If the committee wants to study other measures, we can do that. The other thing we're doing is trying to reduce the cost of the batteries, because at the end of the day batteries represent about 40% of the cost of an electric vehicle. By regrouping the supply chain in Canada, we're hoping to be able to decrease the cost and make greener batteries, so that the cars will be more affordable, because affordability is an issue.

[Brian Masse, NDP, Windsor West, ON]

I appreciate all that, and I agree, actually. I still want a national auto policy. We're not there yet, but there's more policy than ever before, and we're not doing Hail Mary rescue plans.

Again, though with respect to consumers, what do we do? I can't wait for a study in this committee. You raised Bill C-27, and that's going to take a long time in this committee. In the meantime, I'm not sure the government grasps the seriousness of our EV charging ports' being deficient and incompatible. As well, incentives to U.S. consumers are outperforming those to Canadian consumers. These are big margins—$5,000 Canadian versus $7,500 U.S. With $4,000 for used batteries, do you not think there should be at least a department or that the government should have some type of a plan there? If you look at other nations, even in Europe, we're way behind. There's money for companies but not for consumers.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

I would say that we started with money for consumers, and I think we've been part of the equation, to your point. I think we will always be there for consumers. For companies, I think, it is a great thing, because I think people, rather than just buying them, would like to manufacture them. As you say, this is a game-changer for our nation, because we used to get some of it, and now we are kind of the centre.

I hear you, Mr. Masse. I think we're on the same side on that. I'd say we would be happy to look at that if the committee wants to do a study after Bill C-27, because I still need your help to make sure we will protect people's data and have a framework on AI.

[Brian Masse, NDP, Windsor West, ON]

It will be before that, probably.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

I hope not, sir.

[Brian Masse, NDP, Windsor West, ON]

Well...

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

A lot of people are expecting that.

[Brian Masse, NDP, Windsor West, ON]

I don't want to get into a big debate on that or whatever, but I hope you will consider splitting the bill so we can get some of it done and through the House, but that's another thing.

In the time I have, I want to ask something quickly. There's a budget cut taking place. I don't expect you to have all the knowledge on this, and it's okay if you need assistance from your staff, but the Federal Economic Development Agency for Southern Ontario is losing 47% of its budget. That's in the estimates. It's going down by 47%. A lot of them are getting cut as well.

I'm just wondering where that is going to fall from, in terms of programs and services and so forth, because 47% is huge.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Mr. Chair, I thought we were on Rio Tinto. Now that we have the question, we will be able to answer, perhaps, in the second hour, if that's okay with you, Mr. Masse, so the officials can dig into that in the meantime.

[The Chair, Liberal, Joël Lightbound]

I think that's a great idea, Mr. Minister.

You're out of time, Mr. Masse, so that will give time for the officials to look for the answer.

Colleagues, I will remind you that the first hour was meant to be on Rio Tinto and the second on the main estimates. I've been very liberal in my interpretation so far.

[Brian Masse, NDP, Windsor West, ON]

He opened it up with his statement.

[The Chair, Liberal, Joël Lightbound]

Let's try to stick to the topic as much as possible.

[Brian Masse, NDP, Windsor West, ON]

Okay.

[The Chair, Liberal, Joël Lightbound]

Mr. Martel, you have the floor for five minutes.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Thank you, Mr. Chair.

Minister, as we know, public investment to deploy ELYSIS technology will benefit large producers.

Will they also benefit Canada's small and medium-sized enterprises, or SMEs?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

I would say yes, but that it benefits a large portion of your constituents first and foremost. These investments are designed to keep jobs here, for generations to come.

Shawinigan had a sad history when it lost the Rio Tinto Alcan plant. I've always said that if I had to choose between being a Polaroid company or an Apple company, I'd choose Apple. And that's what we're doing right now.

On our side, there have been disinvestments. For my part, I'm not necessarily looking at investments in companies. When you choose a new technology, you're projecting yourself into the future. We're investing in the people where you live and where we live, rather than in companies. Indeed, beyond companies, there are individuals, families and an entire community.

As far as SMEs are concerned, they will certainly benefit from these investments. If I remember the figures published by Rio Tinto correctly, this company disburses several hundred million dollars a year in the greater Saguenay—Lac‑Saint‑Jean region, just to keep the plants running.

Projecting ourselves into the future ensures the sustainability of investments. For my part, I think the people back home are the winners. Those who are watching us today must be happy.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

As you know, Minister, the demand for Canadian aluminum is very high. We are hearing, however, that the aluminum is expensive and that it should cost even more in the future.

What will happen if China and other countries, whose costs are much lower than ours, flood our market?

I'd like to know how you view that possibility. How are we going to deal with it?