Industry Committee on Oct. 3rd, 2024

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

I have a point of order.

The Liberal member doesn't speak for me, so he doesn't get to apologize for anything for me.

[The Chair, Liberal, Joël Lightbound]

That's not a point of order. That's a comment. However, I'll say that I appreciate that you actually asked to speak and didn't interrupt while another member or participant was speaking. I'll take that as a positive.

MP Gaheer, you have the floor.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

Thank you, Mr. Chair.

Minister, I want to ask about the global auto market. We know that this market is rapidly changing towards electrification, and we know that the federal government is positioning Canada to be a leader in that space.

Ontario, the province that I'm from, has traditionally accounted for 90% to 95% of the Canadian automotive market, the manufacturing GDP. However, we know that every corner of this country has something to offer the Canadian EV ecosystem. Thinking particularly of your home province of Quebec, in this instance, can you highlight how the federal government is attracting EV-related investments to Quebec?

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

I'm very pleased that you're asking the question, because Canada is really.... When I started as Minister of Industry, a number of commentators would say that this was the beginning of the end of the auto sector, because we're living in a world where we have a shift, a generation shift. We've been doing cars in the same way for 100 years, and now we're planning for the next 100 years.

There are two ways to look at that. We could have looked down, or we could have rolled up our sleeves. What we did is roll up our sleeves, and we've been able to attract, you know, generational investment, even investment in Mr. Perkins' province. You know, in Nova Scotia, Michelin has been making record investments. Your point is that now the auto sector is spread across Canada. Michelin and Nova Scotia are now also part of the larger automotive industry.

In Quebec, what we have achieved is that we have made Quebec enter into the automotive industry. We landed some of the largest investments from Ford and GM. What they're doing—which is called cathode active material—is going to serve not only the plants in Canada but also the plants in the United States, so we're putting Quebec at the centre of this new value chain that we have in North America.

We also got Northvolt to decide to invest, and Northvolt's vision is to make the greenest battery in the world. Obviously, it chose a jurisdiction that has a lot of renewable energy, close to 100%.

I would say that Canadians should be proud. The workers who are watching and our friends at Unifor and others, if you look at what we've achieved, look at that. You know, the largest gigafactory of Volkswagen outside of Germany is going to be in Canada. The largest investment in Honda's history—75 years of history—is in Canada; it's $19 billion of capital expenditure. This is a watershed moment for Canada. You're looking at companies like Stellantis, and we're going to be there next week. Stellantis has mostly completed its plant in Windsor. Windsor is never going to look the same, and Mr. Masse can testify to that. You know, it's not only an industry but also the rebirth of a city. It's giving hope. It's about opportunities, about possibilities. It's about Canada winning in the 21st century.

Think about that. Bloomberg,—not me but Bloomberg—said that Canada is leading, ahead of China, in the battery ecosystem for the next 30 years. I think that, as Canadians, we should celebrate. That's why I was saying to Mr. Perkins and others to celebrate Canada. Let's talk about possibilities. We are winning on the world stage. Five years ago, no one was talking about Canada in the electric vehicle world. Now if you go to Seoul or Tokyo, you'll hear them talking about Bécancour, Windsor, St. Thomas and Kingston. Honestly, I think that what we have achieved is seizing generational opportunities. Those who are winning are families. Those who are winning are workers. Those who are winning are rural communities, which will see a brighter future.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

That's amazing. I've actually spoken to some of those families in Windsor. It's really been a revitalization of that entire city. When we look at some of the world-class investment in the EV sphere that the government has been able to attract, as you mentioned, in St. Thomas or Windsor or Brampton or Nepean, we begin to understand why Bloomberg has recently cited Canada as the premier global destination for attracting FDI in the EV space.

Can you talk about what are, in your opinion, the competitive advantages Canada has that make it so attractive as an investment market?

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

It's people. It's all about people. I remember one of my first discussions with one of the CEOs in the automotive industry. Obviously, as a lawyer, I already had the answer to my question—it would serve a lot of people well if they followed that—but I asked him, “What plants are the most productive in the world?” Obviously, Canadian plants are the most productive. Our people, our workers, are the best in the world.

It starts with talent. When you have talent, everything is possible. That's why, in every announcement I do with the Prime Minister, the first thing I always do is thank the workers for their excellence, for their expertise and for their dedication. Only when you have a talented workforce can you attract generational investments. It's something to build a plant. It's something to bring the technology. What makes it special is the people.

Therefore, I think the biggest advantage, as I said, is the talent we have. It's the strength of the ecosystem we have. It's the critical minerals and I would say the proximity to resources, assembly lines and markets. It's the renewable energy we have and its access to market. I would say that, in a world fraught with challenges, stability, predictability and the rule of law are in high demand and in short supply. Therefore, when you have investors who are deciding where to put their money, just look at where they have decided to put it. They've put it in Canada. For them, the world is their oyster. They could put these investments anywhere they want. They chose Canada.

Again, I think Canadians should rejoice that in the economy of the 21st century, whether it's steel, whether it's aluminum, whether it's automotive, whether it's life sciences or whether it's energy, we're attracting a record level of investment. We should be proud as Canadians that we're leading in the 21st century.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

Great. Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you, Minister.

Mr. Garon, you have the floor for six minutes.

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

Thank you, Mr. Chair.

Good morning, Minister. Welcome to the committee.

I will try not to interrupt you too much, but I can't guarantee it.

On August 13, the U.S. Department of Commerce announced a substantial increase in countervailing duties on wood. I'm going to reveal my Saguenay roots by telling you that I grew up in northern Quebec. I am therefore extremely aware of what is happening in the forest industry.

The crisis in this industry has been going on for decades. Twenty per cent of the wood exported by Canada comes from Quebec. Almost 50% of the amounts that are currently being disputed and withheld in the United States stem from Quebec exports. Quebec's forestry regime was rejigged a few years ago, precisely to avoid this sort of problem following statutory tariff reviews.

The Americans, who, I have to say, are acting in bad faith here, have time and litigation on their side.

Even if we ultimately win, businesses affected by this crisis will find themselves in a precarious situation and will struggle to invest and increase their productivity because of the lengthy litigation proceedings. You know that, being a lawyer.

Jobs in the regions are at stake. Solutions exist, however. Obviously, we can negotiate free trade agreements. I know you want to protect supply management and put pressure on senators. That approach can be used to fight countervailing duties as well. However, in the short term, what you and your department can do is develop an emergency aid program to help these businesses deal with costs in a timely manner.

I'll ask you my usual question: when will an announcement be made?

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

Thank you for your question, Mr. Garon.

You raise a very important issue that has been around for a long time.

You know that I come from Mauricie, more specifically Shawinigan—you might know another politician who hails from there, too. It is the centre of the pulp and paper industry, which, along with the forestry sector, are the beating heart as well as the major economic drivers of the community where I live. It's the same going up to La Tuque and further north.

The softwood lumber dispute has been going on for decades. Along with Ms. Ng, we are looking at ways to present an assistance program to our American partners and various producers—to answer your question specifically. We're looking at innovation. We're looking at how we could use fibre in various applications. We are using the Finnish model as inspiration.

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

I'm going to interrupt you there, if I may.

These businesses need help quickly to be able to deal with tariffs that are causing difficulties right now. Cheques are sent out to help out the auto and satellite sectors. However, for many other sectors, such as the softwood lumber industry, the government seems less quick to help a company survive and grow.

Are you prepared to swiftly implement an assistance program for the businesses that are having to pay these unfair tariffs right now?

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

Mr. Garon, as I was saying, we have always been there for people in the forestry industry—you know that. I talk to them regularly.

What I was describing to you is not only the current situation but also what we are looking at, in terms of innovation, with a number of manufacturers and people in the sector. I was going to say that we're looking at Finland and Sweden, because we need to push the forest industry towards using resources in new ways.

When I was young, there was a wood pile next door. We chopped up a lot of it, and the resource was transformed—

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

Minister, I'm going to move on to another topic, with all due respect to the wood pile next door.

These businesses obviously need an assistance program, but, as I understand it, it's not being considered.

I'd like to talk to you about Bill C‑27, Minister. You've spoken publicly on this one, so I think we can broach the topic.

You said that this was an important bill that was being blocked by the opposition parties. The committee reached out to you about this. The bill is very clumsy, but it is still an important bill. It has three parts. It's not an omnibus bill, but it has a lot of components.

Even though the government is a minority one, it would be possible to get the ball rolling again by resolving an issue that is contentious here, namely the creation of a tribunal that three opposition parties do not want. You could split the bill in two and replace the tribunal with another solution.

We hear that work is being done. You have spoken publicly on a proposed solution to replace the tribunal. What leadership are you personally taking on this issue?

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

First, I would like to come back to the wood pile, Mr. Chair. It was to say to Mr. Garon how much I care about the industry—

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

Mr. Chair, we're no longer talking about wood—

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

I'm getting there, Mr. Garon. I can't speak any faster. You asked me not to speak too quickly in order to facilitate the interpreters' work.

In closing, I can tell you that I've been tracking the industry for a long time.

I took the liberty of talking about Bill C‑27, and I will continue to do so. You'll hear me do it again this afternoon. I'm going to talk about the work of the best researchers in the world, like Dr. Yoshua Benjio, because I think it's a cry from the heart. Commissioner Vestager even said that Bill C‑27 was an interesting and necessary framework. Canada is showing leadership at the international level.

I will now answer your specific question about the tribunal, Mr. Garon. I know you're eager to hear my answer.

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

We're always eager to hear your answers, Minister.

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

You're going to get one.

It's true that we are examining that. I heard what the opposition parties were calling for loud and clear. The fact remains, however, that in Canada's national interest and beyond the demands of the parties, we have to regulate AI. I'm saying it, the experts are saying it and the industry is asking for it.

I'm proposing that we find a way forward together. I know you're a man of reason, and I know you care about this issue, as is the case with Quebec, but in the interest of the AI ecosystem in Quebec, listen to Quebeckers who are telling you that Canada needs a regulatory framework.

We are happy to work with the Bloc Québécois.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Minister and Mr. Garon.

We now go to Mr. Masse for six minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair, and thank you for being here, Mr. Minister.

I fortunately have to stay here for the moment. I have a couple of obligations to take care of.

Real quick, on Bill C-27, you were prancing about the Montreal area, blaming the committee for holding the bill up. We've had to issue a letter to you. I hope you've seen the letter with regard to the concerns expressed.

Do you have anything to report back to us with regard to your position on the tribunal?

I thought that we actually worked fairly well together as a committee to come up with a plan to at least see if we can get over the hurdle of the tribunal.

My question, quite frankly, is, do you regret your public relations strategy of, basically, blaming the committee here for the bill and the problem right now?

Second of all, are you still open to splitting the bill, so we can get the issues related to the one section of the bill through? We may not get the second part, on artificial intelligence, through.

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

Let me be clear that I do not regret the comments I made, because you should have seen the frustration of Canadians who wanted to see an AI bill. This was part of the science community, experts in the country, and industry. We need to have an AI bill for Canada. My voice was mild compared with what people were telling me we needed in this country.

That being said, Mr. Masse, I'd be very happy and open to looking with you to find a way. I know that in a minority Parliament, it's the art of the possible that we need to reach. I'm glad that you're willing to work with us. As I said, this is not about political parties. This is about Canadians wanting something. It's about experts. I'm not sure if you need to listen to many more people than the father of AI, Yoshua Bengio, who says we need regulation. We want to move from fear to opportunity. In order to do that, we need to build trust and we need to have regulations. I think this is well established across the world. We want to be a leader in responsible AI.

I heard you on the tribunal, and I know your position. I take it to heart, because I trust you and I value your opinion. With my officials, we're looking at ways that could accommodate you and the comments that we received from the Bloc. I appreciate the work you're doing.

[Brian Masse, NDP, Windsor West, ON]

Okay. Well, again, if we're going to get past this, hopefully there'll be at least some observance of what the committee is actually doing. We are hearing different things as well.

I want to switch topics to EVs really quickly. We're winding down our EV incentive for consumers in this country. Doug Ford cancelled the EV incentive from the Province of Ontario. If you have a Windsor-built minivan, it'll get support from the British Columbian government. It won't get it from the Ontario government, where it's built. In the United States, they have significantly more incentives for EVs.

What's your plan to deal with this in terms of lowering costs for consumers with regard to the EV incentive? That's one thing that has been uniting the industry, the workers and so forth. What's your plan to deal with that?

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

I appreciate the comment, Mr. Masse. I'm glad that Windsor will now see a rebirth like never before with the Stellantis investment and that we have given hope back to a community, to thousands of workers. Windsor will be the centre of the rebirth of the automotive sector. I'm pleased to see what we've done with Stellantis.

Now, to your question, obviously it's good to work on the industrial side to make sure that we build these electric vehicles in Canada, but we need to work on adoption. I think that's what your point is. We need to make sure that we have adoption. We've seen what's going on in the United States. We've been working with provinces. I would agree with you that governments—that's governments with an “s”—still need to work to make sure we have greater adoption. We have the opportunity of a lifetime to be front and centre of the automotive industry in the 21st century.

I'm glad to say, Mr. Masse, that a lot of that will be in Windsor. I know you had that at heart with the unions to work with us to make that a reality. The fact that Stellantis will probably be the first plant that will be fully built should make us rejoice. This is a tangible outcome of our outreach to them, and investments, but it also means opportunities and possibilities for workers for generations to come.

[Brian Masse, NDP, Windsor West, ON]

Specifically, though, is it not a little humiliating in the sense that the U.S. government right now, the federal and also most state governments, support building an EV vehicle in Windsor more than your current government and other provincial governments? The incentives don't line up. They're quite significantly smaller, and you're sunsetting those investments.

Specifically, is your government out of providing an incentive for the purchasing of EV vehicles in Windsor and other domestic players?

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

I would say, Mr. Masse—I know members are interested—I think we have made historic investments in the automotive industry. I think very few people would disagree with that. What we had to do at the time was to make sure that we had a level playing field with the United States and make strategic and targeted investments to make sure we landed these big investments. You will remember, Mr. Masse, that you and I were talking about whether these investments would ever come to Canada. Now we have landed north of $40 billion of investment, a fair amount in Windsor.

As I said, the federal incentive program is still in place. We have been there with the manufacturers to make sure that Canada gets its fair share. You will remember that when I started, Mr. Masse—you've been following that industry for a long time—there were commentators who were wondering if that was the end of the industry. Now people are talking about the rebirth of the industry for 100 years. What we have achieved together is quite remarkable. That's the strength of Canadians, of workers, of our sheer will to do great things together. I hope Windsor will inspire the nation on what we can do together.