Evidence of meeting #151 for Industry, Science and Technology in the 44th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was bank.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Jeremy Wilmot  President and Chief Executive Officer, Interac Corp.

Chrystia Freeland Liberal University—Rosedale, ON

No, absolutely not.

The debt-to-GDP ratio is the guarantee, which shows that our public finances are sustainable.

I really want to emphasize the fact that Canada's public finances are sustainable, and I'm not the only one saying it. We're also hearing it on international financial markets.

5 p.m.

Conservative

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

Ms. Freeland, what will happen when public finances are no longer sustainable?

5 p.m.

Liberal

Chrystia Freeland Liberal University—Rosedale, ON

The Parliamentary Budget Officer confirmed last summer that Canada's public finances were sustainable. That's a good thing.

5 p.m.

Conservative

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

Mr. Champagne, Northvolt, Lion Electric and Taiga Motors are all experiencing difficulties. The battery industry is therefore struggling, to say the least.

How do you see the future of this sector in the coming months and years?

Lion Electric is basically on the brink of bankruptcy. Do you plan to step in?

5 p.m.

Liberal

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

Mr. Généreux, I invite you to be visionary. I know you're a man of vision, because I know you. After a hundred years, we're witnessing a technological change. Vehicles have been made the same way for 100 years, and now we have to project ourselves into the next 100 years, so it's normal to have to adapt in the short term to consumer habits, new technologies and supply chains.

When Henry Ford launched his first model car, it wasn't smooth sailing. You're a numbers guy, so you'll be interested to know that Tesla has become profitable after 17 years of operation. I would note that this company had received subsidies from the U.S. government. It wasn't smooth sailing either.

Mr. Généreux, you should be proud of what we've managed to do together. We brought Quebec into the auto industry. We've positioned Quebec as a player in this industry. When I go to Tokyo or Seoul, people talk to me about Quebec. It's a great achievement.

Some players can, of course, experience temporary slowdowns. However, you forgot to mention the joint venture between General Motors and POSCO Future M, whose work on the production plant is progressing very well. You forgot EcoProBM, whose shipyard in Bécancour is doing very well. You forgot Volta, whose project in Granby, a place you know well, represents an investment of $1 billion. You forget to see investments like those made by Honda, which amount to $15 billion in Canada. It's true that there has been some slowdown for some industry players, but there has also been a lot of progress.

I want to emphasize that we've been able to seize generational opportunities, and we've done so by being very disciplined when it comes to finances. As I've said many times, we haven't disbursed any federal money to the Northvolt project.

You should be proud to have a government that's there to protect your interests, while ensuring that Quebec will be part of the future of the transportation electrification ecosystem.

5 p.m.

Liberal

Chrystia Freeland Liberal University—Rosedale, ON

Yes, we're proud.

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Liberal

The Chair Liberal Joël Lightbound

Thank you very much, Mr. Minister.

Mr. Généreux, don't hesitate to show your pride in the government. I gave you an extra two minutes, because it was a very nice exchange.

Mr. Badawey, the floor is yours.

5 p.m.

Liberal

Vance Badawey Liberal Niagara Centre, ON

Thank you, Mr. Chair.

Ministers, thank you for being here today.

You're probably anticipating what I'm going to be speaking about: the importance of supply chains. They are the backbone of our economy. Supply chains connect our industries. They connect our communities. They connect countries. I want to speak about the fact that you can't manipulate supply chains. They are what they are. Production and sales happen in certain parts of Canada, but they also cross borders. With that comes the need for them to be very seamless and to flow with fluidity. Therefore, as Minister Freeland mentioned earlier, there is a need for capacity building within those supply chains. We've seen, in recent years, global challenges—the COVID-19 pandemic, geopolitical tensions and climate change—that have exposed vulnerabilities within our supply chains.

Question one is with respect to their importance and how you see us moving forward to create more supply chain resiliency, efficiency and sustainability, in order to create economic growth and community impact amid these global challenges.

The second question is very relevant to supply chains, as well. It's on the importance of our national and bilateral relationships—especially with the U.S.—and, with that, the mechanisms you see moving forward so we can look at integrating our economies and sharing capacity building, infrastructure investments and capital investments. How can we create more global competitiveness together than apart and have resiliency to the disruptions I mentioned earlier, such as the pandemic? Lastly, affordability is also very important to us. In the States, it's important to them, as well.

Are there opportunities not only to add capacity and invest but also to utilize other strategies with other countries, such as those in the EU? For example, there is the carbon border adjustment mechanism. What do you see, and how do you see us moving forward, with all of that said?

I'll start off with you, Minister Champagne.

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

I'll take the first part of the question.

You're spot-on, Mr. Badawey, as always. Obviously, you represent a region, Niagara, that is very intertwined in terms of supply chains.

I would say you're spot-on because, after COVID, what we've seen is that global supply chains have become more regional, and there's more emphasis on resiliency than pure efficiency. The world has been transformed—Minister Freeland was saying that—and we were both witnessing that over a period of a decade. We've seen the supply chains and the global trading order really shifting in a way, not only with conflicts and tensions you see in many parts of the world, but certainly also in terms of the resiliency that people want to see.

In my role as co-chair of the Canada-U.S. engagement, I can tell you how significant everything you just said was when we started engaging with our U.S. colleagues. The first thing we always talk about with our American friends is security—security of the borders, security of the Arctic, security of the north. The second thing was supply chain resiliency, because that is everything today. I remember a CEO telling me what they liked about Canada. If things go bad, they'll truck the stuff across the border. If it goes really bad, they'll go and pick it up themselves with their pickup truck, because the proximity is what makes a huge difference in that. The third aspect we were talking about with our U.S. friends was a growth agenda.

I'll give you three examples, and then I'll turn it over to Minister Freeland.

For folks who are watching at home, I'll just tell you about the integrated nature of our supply chain with the Americans. Probably your colleagues have not realized that 80% of all the semiconductors that are manufactured in the United States are packaged and tested in Bromont, Quebec. That is the Albany-Bromont corridor we talk about. This is so significant. You don't need to take it from me—although I know you're a friend and you would take it from me. However, it's even better when you have the President of the United States, when he came to speak to the House of Commons, make the point that the United States and Canada.... I don't remember the words verbatim, but the concept was that the United States and Canada need to work together for the U.S. and North America to be resilient in semiconductors.

I'll give you another example, where we invested with Rio Tinto on titanium. We're going to be making titanium powder with the titanium that is produced now in Sorel, Quebec. With titanium powder, you can do 3D printing and replace parts of jets on aircraft carriers. That is so significant for the economic security and national security of North America that I would tell you that our American friends have noticed that. In key critical minerals as well, as you know, there's only one cobalt refinery that is serving markets in both Canada and the United States.

My point is to say this. I want everyone at home to know about the work you've been doing, and about your focus in your role to make sure that we improve the connectivity between our two countries. When it comes to critical minerals, when I talk to CEOs, it's about proximity to resources, market and assembly lines. There are critical minerals elsewhere in the world, but I can tell you that global companies want to sell in the United States and Canada. They want to have that proximity. The work that you've been doing on the Great Lakes and championing that as the chair of that committee, which is with both the United States and Canada, is making a huge difference. You've been a great asset for us in strengthening that relationship with the United States.

I'll turn to Minister Freeland.

Chrystia Freeland Liberal University—Rosedale, ON

I am in very strong agreement with your question, Mr. Badawey, and with François-Philippe's response. I really do want to thank you for being quite prescient. You have been working on and talking about supply chains, and you have been building those human relationships, as one MP with elected representatives on the other side of the border, for a long time. I do want to say, and I hope your constituents are listening, that I'm very grateful to you for that work. I think those relationships, those explanations, those conversations you have been having will serve us very well now. I do think your point about how we need supply chains that are resilient is more important today than ever. That is a huge competitive advantage for Canada right now.

The Chair Liberal Joël Lightbound

You're out of time, Mr. Badawey.

MP Patzer, the floor is yours for five minutes, please.

Jeremy Patzer Conservative Cypress Hills—Grasslands, SK

Thank you very much, Mr. Chair.

Thank you, Ministers, for being here today.

Minister Freeland, just really quickly, can you tell me what the national debt is, please?

Chrystia Freeland Liberal University—Rosedale, ON

I feel that the MPs at this committee have a lost vocation as members of the finance committee.

Let me just say to you and to all of your colleagues that, notwithstanding the Conservative filibuster, I'm very glad that we'll have a chance to present the fall economic statement on Monday, and we will fully disclose all of the relevant figures.

I do want to emphasize—because people have been calling it into question—that Canada's public finances remain sustainable and remain the best in the G7.

5:10 p.m.

Conservative

Jeremy Patzer Conservative Cypress Hills—Grasslands, SK

Okay. You said that your fiscal guardrail was a $40-billion deficit. Your department has leaked out that it's $60 billion. It would be quite convenient, if you leaked out $60 billion and slid in at about $50 billion, to say that they were wrong. However, that is still blowing past the guardrail that you said was in place.

I don't know why you can't just simply say no to the deficit potentially being $60 billion for this particular fiscal year. Why is that?

Chrystia Freeland Liberal University—Rosedale, ON

I am not going to comment on hypotheticals, and I am not going to comment on leaks.

What I can say very clearly is that Canada's public finances are sustainable, as the Parliamentary Budget Officer reported in the summer. Canada's debt-to-GDP ratio, which is the crucial metric, is the lowest in the G7, and our debt-to-GDP ratio is on a declining track. That is the key measure of sustainable public finances. It is a great strength of Canada's, and it's really important for us all to be clear about that.

5:10 p.m.

Conservative

Jeremy Patzer Conservative Cypress Hills—Grasslands, SK

Earlier in your remarks—I think it was in response to another question—you said that we had a 1.5% GDP swing that could be allowed when it came to a hit to our economy. Are you aware that your government has just implemented a policy that will directly blow a 1% GDP reduction into the economy?

Chrystia Freeland Liberal University—Rosedale, ON

I'd like to be clear, Mr. Patzer. I was quoting the Parliamentary Budget Officer, who concluded in his independent study of the public finances that not only—

5:10 p.m.

Conservative

Jeremy Patzer Conservative Cypress Hills—Grasslands, SK

Sure, but—

Chrystia Freeland Liberal University—Rosedale, ON

No, that's important. For the record, I want to be very clear. That was not—

5:10 p.m.

Conservative

Jeremy Patzer Conservative Cypress Hills—Grasslands, SK

Are you saying that you don't agree with the Parliamentary Budget Officer?

Chrystia Freeland Liberal University—Rosedale, ON

No, but I want to be clear that I was quoting his analysis. It is important, given some of the partisan assertions being made, to bring that objective analysis to bear in order to really make it clear to Canadians and to international capital markets that our public finances are clearly sustainable. That's why I quoted that analysis of his.

5:10 p.m.

Conservative

Jeremy Patzer Conservative Cypress Hills—Grasslands, SK

Okay. Are you, then, comfortable with a 1.3% loss in government revenue?

Chrystia Freeland Liberal University—Rosedale, ON

Again, that is exactly the partisan twisting and falsehood that I'm being very clear to counter. This was—

5:10 p.m.

Conservative

Jeremy Patzer Conservative Cypress Hills—Grasslands, SK

It was The Conference Board of Canada that said that. It was Deloitte that said that, not me.

Chrystia Freeland Liberal University—Rosedale, ON

No, this was an analysis by the Parliamentary Budget Officer. Again, given the hypotheticals and the assertions being made, it's important to be clear to Canadians and to capital markets that our public finances are sustainable. That's what I'm insisting on right now.