Industry Committee on May 8th, 2024

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

That's a very good question, Mr. Martel.

We already produce the cleanest aluminum in the world. However, from what I understand, the best way to ensure the prosperity of families in Saguenay—Lac‑Saint‑Jean and all those involved in this industry would be to adopt these new technologies. The idea would be to continue to operate with what we have today, but while investing in the future.

As I mentioned, I had a situation where a plant that had not invested over the years had to close its doors after 100 years. For the people back home, it was a tragedy. I told myself that it should never happen again.

In Saguenay—Lac‑Saint‑Jean, we have AP60 technology and we will have our cells. The ongoing technological transition will be important. In a BMW advertisement, which you have probably seen, the manufacturer says that it will use our aluminum to build those vehicles in the United States.

We believe that this is an important show of confidence in what we are doing and in our workers.

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

Can you assure us that our SMEs will be able to access the MnAl6 compound? Will our SMEs that handle processing be able to buy it? Since the demand is high, they are often the last to be able to get it.

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

SMEs will certainly contribute to the project. As for questions related to the sale of that product, you should probably put them to Rio Tinto's CEO. I don't have access to their order book.

The idea behind all that is certainly to make this situation benefit the region, but above all to create long-term jobs. As I was saying, it's a matter of looking to the future and saying that we'll still be here in 100 years because we'll have the greenest aluminum in the world.

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

Minister, you know, however, that primary aluminum production consumes a great deal of energy. Aluminum is now one of the critical minerals. It's critical to our consumption, and it will continue to be critical going forward. For us to produce aluminum using ELYSIS technology here at home, we'll have to use a lot more energy.

What's your take on the situation? You mentioned Northvolt earlier. You know that this is going to become a major challenge.

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

Rio Tinto is certainly unique in the world in that it has rights to a river. You know as well as I do that these rights can be described as historic. I think they date back to the time of Mr. Duplessis. The goal was to have our own dams to generate energy. You don't need to hear my testimony to understand Quebec's energy challenges. We are both of a generation that, in a way, believed that the hydro capacity was infinite. We are now waking up and realizing that it is limited and that choices have to be made.

Mr. Sabia, the CEO of Hydro-Québec, recently told us about significant investments in energy transmission, distribution and production. It is clear that we will have to invest in order to maintain our activities.

As I said today, workers are among the most important factors in ensuring competitiveness for Quebec, but so is renewable energy. Everyone who wants to reduce their carbon emissions comes to us. That is the case for Northvolt. The same is true for titanium production. People want to produce somewhere, and Quebec is the greenest province in North America. So we have a strong ability to attract.

There are discussions with the Government of Quebec to determine how we could provide support. The vote we included in the federal budget will help Hydro-Québec, a Crown corporation, to carry out projects that will lead to production.

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

In order to make the best possible decisions, how do you keep abreast of the geopolitical situation, in real time, with regard to the aluminum sector?

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

I am in direct contact with the head of Rio Tinto. We meet two to five times a year, if not six times. He's probably one of the people who texts me the most, and vice versa. So we have this special relationship that enables us to be in symbiotic mode concerning what will happen in the market, and concerning ways for me to help our workers and position Canada well.

According to what the head of Rio Tinto himself said, the company is doubling or tripling its investment in Canada. I think that is a major show of confidence in the people back home and in what the workers in Saguenay—Lac‑Saint‑Jean are doing.

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

Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you very much.

Mr. Van Bynen, you now have the floor.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

Thank you, Mr. Chair.

Minister, I know that we're only talking about investments in the millions of dollars, but dating that back to May 2018, I believe there's about $80 million from the federal government, matched by the province and also by Rio Tinto. At that time, it was quite a substantial investment. Why did the government choose to invest in ELYSIS?

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

Thank you, Mr. Van Bynen. It's great to see you. I hope the translation works fine.

Why? Because that was the technology of the future. I would say that when you're looking at what they're doing, it is, like I was saying, probably the biggest transformation in the industry in a century. As we did in AI, as we did in quantum, the place for Canada is to be at the leading edge of these new technologies, so that we can ensure prosperity for the next few generations. We knew that everyone was trying to decarbonize aluminum, steel and the production of semiconductors.

What we have achieved in that is creating an ecosystem in Canada that is conducive to investments. That's why you've seen that Bloomberg now ranks Canada first in the world, ahead of China, for the battery ecosystem, and also that Canada ranked third in the world in 2023 for direct investment. The first was the United States, the second was Brazil and the third was Canada. The fact that we've decided to be the green supplier of choice to the world has attracted record levels of investment.

The good news, Mr. Van Bynen, is that I have even more projects to announce, so Canadians listening tonight should be rejoicing, because there is more to come. Canada is attractive; we have the best workers, and we're going to push to make sure that we are the jurisdiction of choice in the 21st century.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

It's great to hear that the strategy is bringing forward the investments that we're seeing today, but my curiosity is around how the government assessed the feasibility of the project going forward as they were making that investment analysis.

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

I want to give credit to the deputy minister and our fine civil service. You know, we have some of the best people to do the due diligence. As you know, when you invest public funds, you have to go through a very rigorous due diligence process.

There are a couple of things that give us faith in the technology. There's the fact that we have two of the largest aluminum producers in the world, Rio Tinto and Alcoa, and that you have customers like Apple, which was part of the original program that was announced. The fact is that when we met the scientists behind that, they said that this is where the puck is going, and we're Canadians, so we like to go where the puck is going. When you put all that together with the fact that the company is investing significant amounts of money, that gave us the confidence—in addition to the due diligence that we did—that this was the way to go and the best way to protect jobs for generations to come.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

I know that projects like this evolve over time, and we've seen some changes in the timelines. Has ELYSIS informed the government of the current timelines for deploying this new technology and scaling up?

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

That's a very good question.

I know the committee had the privilege of getting the CEO of Rio Tinto Aluminum, Mr. Pécresse, here. When you move from the lab to the shop floor and you start scaling the production, obviously, I think, when you see these kinds of investments, which are transformational, the schedule sometimes moves a bit depending on how quickly you can scale, but I have all the confidence that they will be producing on track as soon as possible, and you need to make sure, as you go through the different steps.... There's kind of a critical path to achieve what you want to achieve, and you need to make sure they're on that path. They have some of the best experts in the world. Like I said, you have two champions, the two largest—well, among the two largest—companies in the world, working together on that.

I think we have the best people to do that. I'm very confident. The exact timeline, as Monsieur Pécresse said, is very difficult, because you have new technology. This is a breakthrough after a century. This is not a small thing to achieve, but I know the destination is that we're going to be the first and the largest producer of green aluminum. I think we should all be proud of that.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

It's great to see the sponsorship and the depth of the investors that have built the confidence. Is the government at all concerned about the delays this far, or do you feel like it's moving along as quickly as is reasonable?

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

I think you've said it. I have confidence. I think it's moving as quickly as possible. All the feedback I received from the companies, from the workers I met, indicates that, so I have faith. You know, they already have customers signed up—some of the biggest ones, like BMW. They have Apple. They have all the incentives in the world to deliver.

Like I said, they even told me: “Minister, you keep talking about us around the world. Give us the time to produce, because you're selling more than we can produce now.” I think it's a great place to be, and we'll continue to support that, because I believe in the workers, and I believe in our being in a leading position.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Van Bynen. Your time is up.

Mr. Simard, you have the floor for two and a half minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you.

Minister, I'm going to leave here with less weight on my shoulders. Based on what you said, the federal government will soon be involved in the ELYSlS project. If that happens and you are visiting my region, I will gladly offer you a beer from a microbrewery in Saguenay—Lac‑Saint‑Jean. Thank you for confirming the government's participation, which will please many people back home.

That said, the ELYSIS technology means that anodes are replaced much less frequently. That means fewer jobs. People and study committees have looked at this in Saguenay—Lac‑Saint‑Jean. They all came to the conclusion that the best solution for us was to ensure that those anodes are made and processed in Quebec. We understand that we can no longer produce aluminum as we used to and that we will not be able to maintain the number of jobs that were needed at the time.

With regard to the Canadian government's participation in the ELYSIS project, has any thought been given to making it conditional that the main components be made in Quebec, when possible, of course?

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

I want to go back to your comment about jobs. I still feel the trauma caused by a plant that had been in our community for 100 years and had to close because it had become outdated. Choices were made.

I always say that it's better to be a company like Apple than a company like Polaroid when you want to maintain jobs. If we want to maintain jobs and create more, we have to make sure that we are on the cutting edge of technology.

I often tell people that the technological transformation is real. By analogy, I would say that it's the same thing in the automotive sector, which is moving from combustion vehicles to electric vehicles. There are transition periods, and it is preferable to prepare for them. I think that's the best way to look at it.

[Mario Simard, Bloc, Jonquière, QC]

I completely agree with you, and that can be planned. During these transformations, we must all be winners. If there is public participation in a business project, I don't think it is unreasonable to ask that, in return, the company—in this case, Rio Tinto—ensure that the components that will be used will be manufactured in Quebec.

Is that part of your consideration?

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

That's always part of the consideration when major investments are made. It's the same thing in the automotive sector. It's always a matter of ensuring that commitments are made to promote regional economic development. I would be pleased to hear your opinion on that.

On that point, I think Rio Tinto is a good player. More than $500 million a year is invested in the community to promote the region's economy and buying local. Of course, the company has to consider various factors in order to build these plants, but the desire to support the local community is definitely there.

[Mario Simard, Bloc, Jonquière, QC]

Thank you very much.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Simard.

Mr. Masse, you have the floor.