Industry Committee on Oct. 3rd, 2024

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Chair.

I'll start with the mines to mobility strategy. There's a lot of interest in Canadian critical mining exploration and production, with even the U.S. Department of Defense in the Pentagon investing in some exploration companies. We hear quite a bit about battery manufacturing companies. We hear about electrical vehicle manufacturing companies. However, one key thing in the chain that is not highlighted or discussed more is the mineral processing, which is, in my view, the most critical of the entire mines to mobility strategy. China today controls 70% to 90% of the mineral processing.

Are there projects you can highlight in this strategy that you have specifically for that segment of the value chain?

[Francis Bilodeau]

Yes. Absolutely. The department, primarily through the SIF, is making significant and important investments in critical minerals. Those include, for example, E3 Lithium, who received $27 million to demonstrate the viability of the extraction of lithium from Alberta; Rio Tinto, $220 million for critical minerals projects in Sorel-Tracy; and then, to your point on refinement, $37 million for battery-grade nickel sulfate and processing nickel pellets and rounds in Vale in Bécancour.

It is a very focused—

[Chandra Arya, Liberal, Nepean, ON]

I'm sorry. You're giving a lot of numbers. Are all the numbers you're mentioning related to mineral processing only?

[Francis Bilodeau]

The Vale investments would be around processing.

[Chandra Arya, Liberal, Nepean, ON]

Okay. If you could please provide that information later in writing, I would really appreciate it.

International free trade, as we know, has blown up. It is dead now. We are talking about nearshoring, friendshoring and the emphasis on self-reliance. When we talk about self-reliance in the North American context, we talk about Canada, the U.S. and Mexico.

Do you think we have to come up with a comprehensive industrial policy that addresses self-reliance needs in the changed globalized trade environment?

[Francis Bilodeau]

I think there has been significant action and investments around industrial policies, around areas that are deemed of strategic importance. One potential example is around semiconductors, where there has been a realignment of the global supply chains and where there have been investments by the Government of Canada to shore up our capacity. The minister highlighted significant investments in EVs. You've also mentioned critical minerals, so there have been concerted actions by the government in areas that are deemed both promising and important for the future, important for our supply chains—

[Chandra Arya, Liberal, Nepean, ON]

I understand that. I'm sorry to interrupt, but I have limited time. I was actually talking about a comprehensive industrial policy. Anyway, let's move on.

With regard to Telesat, providing Internet services and other communication things to northern parts of Canada is important, not just for helping the indigenous communities get access to Internet and broadband, but also from a defence point of view. There are two things. Can you highlight the importance of the investment we are making in Telesat from the northern defence point of view, especially with climate change opening up the Northwest Passage? It has been very critical to Canada for what we call ISR—intelligence, surveillance and recognizance—in the north. How can this investment help in that regard?

[Francis Bilodeau]

Obviously, there is significant global interest in investments in low-earth orbits. The investments in Telesat specifically will help connect the north. Prepurchasing and pre-connecting or making commitments of up to $600 million to connect through Telesat is intended to connect the north. Building up the technology will be an investment in strategic capabilities, and that's augmented, as I mentioned earlier, through significant investments—actually probably the most significant investments by the Canadian government in connectivity—through the $2-billion UBF program, through which it is intended that 98% of Canadians will be connected by 2026 and 100% of Canadians by 2030.

[Chandra Arya, Liberal, Nepean, ON]

Okay. There was mention of the guardrails when it comes to financing Telesat—legitimate questions, I should say. However, at the same time, how are you ensuring that the company will continue to be majority Canadian-owned? Why is it that after getting the financing and after developing technology, it gets sold out to foreign entities?

[Francis Bilodeau]

There are strong provisions within all our agreements, including with Telesat, that would preclude the transfer or selling of a company to other nations or the transfer of that technology, and those would include repayment provisions.

[Chandra Arya, Liberal, Nepean, ON]

Okay.

Quickly, with the limited time available.... With regard to the steel and aluminum sectors, all the companies in the steel and aluminum industries are foreign-owned, and there has been no increase in installed capacity within the steel industry or the aluminum industry except for a small smelter. There has been no increase in installed capacity for the last 20 years. However, we continue to protect the steel industry from competition, and there are no more Canadian-owned companies. Where, then, is the growth coming from? If you look at the number of workers working in the steel and aluminum sectors, it has actually come down during the last 20 years. Where is the growth going to come from whereby we can use Canadian natural resources, Canadian talent and Canadian technology to grow?

[Francis Bilodeau]

Thank you, sir. I think that's an excellent question.

I think part of the government's suite of programs has intended to focus in on areas where we see the highest potential for growth, in addition to general support programs. The government has made significant investments, for example, through the clusters in areas like next-generation manufacturing and the protein industry. The minister highlighted a significant number of investments through programs like the SIF in places like EVs.

In addition, through things like the national shipbuilding procurement strategy, we're also making significant investments, and the government is making significant investments in building up capacity and jobs around shipbuilding. There have been a number of investments intended to grow sectors that are strategic or viewed as strategic for Canada by the government, and to grow our economy through those.

[The Chair, Liberal, Joël Lightbound]

Thank you.

Mr. Garon, you may go ahead for six minutes.

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

Thank you, Mr. Chair.

Thank you to the witnesses for being here.

Mr. Bilodeau, we were told that, in recent months, Innovation, Science and Economic Development Canada had taken away certain bands of the radio frequency spectrum from small Internet service providers, specifically in the Mauricie region, where the minister is from. With those bands, small businesses were able to provide Internet service to people in rural areas.

We were also told that those radio frequency bands were awarded to larger telecom companies as part of the auction process. As a result, small Internet service providers, more or less the only ones providing Internet service in rural areas like the Mauricie region, could be forced to stop serving those areas.

The member for Berthier—Maskinongé brought the matter to my attention.

Were you told about this, Mr. Bilodeau? How can the department decide to redistribute a portion of the radio frequency spectrum through auction?

Also, is regional Internet coverage at risk, in your view?

[Francis Bilodeau]

I would say that the government's policy thus far has been to award spectrum licences through auction. Generally speaking, some are set aside for smaller providers to allow for competition.

I'm not aware of the specific issue you're talking about. Overall, our goal is to award spectrum licences in a balanced way in order to bring down costs and maximize coverage. We also want to encourage companies to build infrastructure.

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

I could send you the details of one specific case privately, so you have more information. It's up to you to follow up.

[Francis Bilodeau]

Feel free.

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

All right.

I'd like to talk about the aerospace sector. In my riding of Mirabel, an important company, L3Harris, provides maintenance services for military aircraft.

Obviously, I know that what I'm going to ask you falls under the Department of National Defence, but I know that the Department of Industry has positions on certain issues internally. For instance, an issue came up in the past relating to titanium, which fell under Global Affairs Canada.

L3Harris has an opportunity to grow significantly and become an even larger player in the aircraft maintenance sector in North America and the aerospace cluster. For that to happen, though, the Government of Canada has to submit an application, through the Department of National Defence, so that Canada can get a regional maintenance centre. It would maintain Canada's F‑35s, which are coming, and those of the U.S.

Has the department followed up on that, and does it have a position on the matter?

Does the government intend to submit the application so we don't miss out on the opportunity? We're being told that time is running out.

[Francis Bilodeau]

We are very aware of that opportunity.

When it comes to military procurement, our department works very closely with Public Services and Procurement Canada and the Department of National Defence to ensure that opportunities are available to Canadian industry.

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

Can we expect a happy ending for Mirabel?

[Francis Bilodeau]

I think it could be a great opportunity for Canada's industry. I'll leave it at that.

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

I understand.

I'd like to talk a bit about Bill C‑27. It was put on hold for two weeks so we could have a few meetings and conversations.

I've said many times, both publicly and privately, that the talks have stalled over the new tribunal. I reread the transcripts of the meetings that were held. Department officials came before the committee and said that the new tribunal was needed. One of the reasons they gave was that the Privacy Commissioner lost 70% of the cases that were heard by the Federal Court.

However, we learned things, somewhat informally, about the cases in question. The information the committee heard, which undermined the commissioner's credibility, was based on seven cases. In the four cases that the commissioner lost, the court's decisions had to do with jurisdiction, not merit.

Can you comment on that? Can you give us more information on the assertion that the commissioner isn't very successful in cases that go before the Federal Court, in other words, that the commissioner is not doing a good job?

Can you tell us exactly what calculations the department did to arrive at that assertion?

I'm having trouble understanding how come department officials, and sometimes the minister, indirectly, seem to want to undermine the credibility of an organization seen as important.

[Francis Bilodeau]

I can assure you that the department has the utmost respect for the important role of the commissioner.

With respect to the role of the tribunal, it endeavours to strike a balance. The tribunal model has been adopted in situations involving other commissioners, including the commissioner of competition.

Thank you for raising the matter.

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

Can you give us the details of your internal calculations, if you have them, regarding the assertion that the commissioner loses 70% of cases?

[Francis Bilodeau]

I'm not aware of that information.