Industry Committee on Oct. 3rd, 2024

[Jean-Denis Garon, Bloc, Mirabel, QC]

I didn't expect you to be familiar with the details, but it's something witnesses told the committee, so I know the information must be somewhere. That's why I'm asking.

I would've brought it up during a meeting about Bill C‑27, which we want to examine diligently and intelligently, but we won't get that chance in the next two weeks. That's why I took advantage of your being here today. Runa Angus and other members of your team may have information.

[Francis Bilodeau]

As I understand it, an answer was provided about that. I will follow up to make sure that it is sent to the committee.

[The Chair, Liberal, Joël Lightbound]

Thank you very much.

Your time is up, Mr. Garon.

We now go to Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

To the witnesses, thank you.

I want to come back around to EV incentives, because I don't really think I got a fulsome response from the minister with regard to where government policy is going with regard to the $5,000 incentive that we have. To be specific, we have $5,000 that you can pull from a fund. When will the fund run out of money, or when will the fund cease to exist? What is being done to address that?

Again, I mentioned that Ontario had a $5,000 incentive that it got rid of. The United States has an incentive for those vehicles of $7,500 U.S.—which probably translates to about $30,000 Canadian....

I'm just joking, but the reality is that the incentive program is there.

Finally, can we not define the incentive program for Canadian-built vehicles alone? We saw some of the Chinese vehicles accessing these grants. What can you update this committee on?

[Francis Bilodeau]

First, I would note that the incentive program is within the purview of Transport Canada. I'd be happy to follow up with them. To the best of my knowledge, there is not an end date, per se, to the program.

Among others, Benoit, our DG, is responsible for the auto sector. I can ask Benoit if he has anything to add.

[Brian Masse, NDP, Windsor West, ON]

Perhaps I could quickly interject here. I understand that it is under Transport, but in Industry we've worked hard to be similar to the United States—bumper to bumper, so to speak—in policy and so forth. That's where the interest comes. I do not expect you to know all the details, but obviously it is important with regard to Industry Canada's supporting the creation of EV batteries and then Transport Canada's having an incentive to purchase. Even though they're different departments, obviously the results are united.

[Francis Bilodeau]

Yes. I absolutely understand the point that is being made. We are, obviously, very aware of the credit. As I said, to the best of my knowledge there is no end date to that credit. The role of the department has primarily been to make significant investments in building up the manufacturing and capacity around EVs and batteries in Canada. Your point is well taken.

[Brian Masse, NDP, Windsor West, ON]

I'll switch topics, if I can, to the status of the grocery store chain code of conduct. This committee did a study back in 2021. I don't expect you to have that knowledge right in front of you, but we did do a study. What happened was that the CEOs from the three major stores magically ended pandemic pay all on the same day. That was a blight on the workers, for sure, who worked during the pandemic and were still working. They had their hero pay cut the very same day from the CEOs.

I'm wondering where this code of conduct is at this particular point in time. How much more runway do they have, if it's not in full swing, and why not move to a mandatory one?

[Francis Bilodeau]

The code of conduct is in place. It is one of several measures that we are actually taking on groceries. Those have included reforms to the Competition Act so that the Competition Bureau has more power to act in this space. It's also included support for consumer advocacy groups.

The code is in place. We're advancing and making progress, but we are also happy to provide any additional information by follow-up.

[Brian Masse, NDP, Windsor West, ON]

How will that be measured in terms of results for Canadians? I guess that's what I'm interested in.

I had a bill called the right to repair, which ended up becoming a voluntary agreement instead of legislation. The problem with the bill is that it requires continual advocacy, but also, there are at least structures in place to enable the industry and so forth to deal with practical problems. What is being done to measure results on this voluntary code?

[Francis Bilodeau]

I think, in this space, it is about monitoring the behaviour and monitoring the actions to ensure that there's an alignment with the code that is being actively done by the department.

[Brian Masse, NDP, Windsor West, ON]

Then there is no capability of requirements. Basically, we have another set of binoculars, and we watch prices. Is that really what we do? How does that get reported back to the public, and what power does the minister have to actually go to them and tell them...?

These are the same people who fixed the price of bread. I mean, this is pretty serious stuff. That's a basic staple of human existence, and they fixed the price. Is there nothing the minister can do but just basically say, “You're cheating Canadians again”?

[Francis Bilodeau]

I think if there are any concerns about collusion, about price fixing, those are matters that would be directly under the purview of the competition commissioner. There would be an expectation of the commissioner, and the commissioner would act in that space. The powers of the commissioner have been enhanced to allow for greater capacity to act, including through things like market studies, so the actions to which you are pointing, for example, if there were to be price fixing or others, would be directly undertaken and reviewed by the competition commissioner.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Masse. That's all your time.

Now it's Mr. Généreux's turn.

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

Thank you, Mr. Chair.

Thank you to the witnesses for being here.

Mr. Bilodeau, we know from Telesat's own figures, that it has about $150 million in business annually.

Can you tell me whether the Government of Canada does business with Telesat to obtain services or consulting advice?

If it does, how much does the government pay annually, or how much did it pay last year? The company reported $150 million worth of business in 2023.

[Francis Bilodeau]

The department isn't a direct client of Telesat. I'd have to check on that as far as other departments go.

I believe we have the information, so we can get back to you with it.

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

I would very much appreciate that, Mr. Bilodeau.

Can you also tell us whether Telesat is a supplier of the Government of Canada? I imagine it is.

Another thing I'd like to know is whether the company works as a consultant as well. If so, how much of the $150 million in business Telesat reported last year is for consultation work?

In a September 23 Journal de Montréal article, Francis Gosselin reported that Telesat expected to launch 198 satellites instead of the planned 200.

When the Lightspeed satellite project is complete, do you think it will be profitable?

I ask because, as a business owner, I've applied for government funding before, whether through the economic development agency or other partners. I had to provide a business plan. Obviously, I had to show that my proposal was viable and that I'd be able to repay the money I was borrowing.

The department gave out loans. The minister clearly explained to us earlier that he was borrowing at an interest rate of 2% and lending at a rate of 10%.

Does it say in the business plan Telesat gave you when the company will be profitable? We don't quite know when the 198 satellites in question will be in operation. I imagine it's going to take a few years.

At what point will the company be profitable enough to start repaying the interest and loans to the government?

[Francis Bilodeau]

I can speak directly to when the project is expected to move from development to production.

My understanding is that a period of four to five years has been allocated for development, followed by a launch period.

I am going to get back to you on that, because I'd like to confirm I'm giving you the right numbers.

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

All right.

Let's say we take the first portion and split it in two. I'm talking about the amount that was invested five years ago, starting in 2019, when close to a billion dollars, or $800 million, in loans were given out. There were shares on top of that.

I've been to Telesat, and I met some of the executives or people in charge of government relations.

The purpose of the loan agreements signed at that time was to bring Internet connectivity to people in northern communities, especially first nations, using satellites already in orbit. I imagine the portion of the investment that was made in the past five years, between 2019 and 2024, was, at a minimum, for technology development. If I'm not mistaken, production should have already started.

Let's forget about the first portion of the investment, because it's focused on development. Let's talk about production. A plant is expected to manufacture two satellites per day.

The company submitted a business plan to you before you decided to give out $2 billion in loans. Obviously, it was agreed that the money would eventually be repaid, since the minister said earlier that the government was making money on the deal.

According to the business plan you were given, when do you think you will start to make money on the deal?

[Francis Bilodeau]

Perhaps I was not clear enough earlier. Allow me to clarify.

Regarding Telesat, $85 million was invested through the Strategic Innovation Fund, or SIF. An amount of $600 million was not paid out, but that amount was committed in anticipation of capacity being purchased. The terms of the initial loan date back to 2021. The loan was replaced in 2024, and it now has new terms. The initial amount was not paid out. Repayment of the loan from 2024 will begin in five years.

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

Okay.

If I understand correctly, there was a loan of close to a billion dollars five years ago, but that amount was not lent in the end.

[Francis Bilodeau]

The amount that was committed in 2021 was never paid out.

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

So that amount was never paid out.

When you lend money but don't pay it out, no interest is earned, is that correct?

[Francis Bilodeau]

Exactly. No money has been paid out.

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

Okay. So no money was paid out and none was earned.

From my understanding—