Thank you.
Thank you to the chair and members for having me to this committee again.
I'm very happy to be preceded by my former professor at the University of Toronto, where one of my first lessons in international relations was the Taiwan Strait crisis. That was the first real foray into the U.S.-China balance of power dynamic. Here we are, almost 30 years later. We're here because of the dominance of that interplay on Canadian industrial and foreign policy and, more acutely, on our critical minerals strategy.
I think you invited me here because the world is electrifying. In the transportation world, I represent $35 billion a year in shipments, with 100,000 people employed. Another 86,000 people are employed by Canadian parts and systems suppliers in the U.S. and Mexico. That's central to this electrification and this dance between the major jurisdictions of the world and automotive manufacturers, who are all in the race to get to a zero-emissions future.
If we're going to continue to be a major auto player in Canada—and right now we are the world's 10th-biggest producer of automobiles, even though we do not have a Canadian automaker—we need to do two things. We need to be able to transition the companies that supply the current automakers through that $35-billion-a-year shipment to the new zero-emission vehicle component supply chains. Thirty per cent of what is assembled in Canadian plants are traditional powertrains, internal combustion engines and transmissions. We need to bet on those local companies making the transition to making motors and e-gears and batteries.
On the battery end of it, we need to extract, process and convert critical minerals into deployable components locally. Before this role and on this journey, between the first time I saw Professor Wark and this time, I taught international business at Humber College, practised it in Canada as the country head of the biggest European renewable energy developer, worked very closely with the minister of economic development and international trade provincially during a global financial crisis and was a key industry player in the two biggest trade negotiations in which Canada has taken part in the last five to 10 years, the TPP and CUSMA.
In all of these, China has been the biggest market disrupter, the elephant in the room and the factor that we've needed to balance against opportunities we pursue as part of the U.S. sphere.
We're here because of the Neo Lithium deal and the question of a national security review. I'll leave the principles of national security review to experts there, and I'll layer in our view on it from a components point of view.
The potential deployable assets are in a mine in Argentina. It's lithium carbonate, versus the preferred lithium hydroxide. While we're not in production yet in Canada for cells that could go into batteries that are deployed into electric vehicles and we're not making those electric vehicles yet, there is a real capacity coming online, we think between 18 and 36 months, especially in the province of Quebec.
Critical mineral strategies in automotive means local, local, local. We need extraction. We need processing. We need cell manufacture, and then we need battery assembly, because we all signed on in this country to the new CUSMA, and in that CUSMA, in the rules of origin, there is a regional value content equation that must be met for EV components and for batteries. All of them are underpinned by local, local, local. None of that lithium or other critical materials can come from outside North America and qualify for tariff-free export through the region.
Canada's auto industry and its supplier industry do not benefit from sourcing lithium from outside North America, and there is no profitable advantage to incurring the cost of importation. These are the highest-cost components of the vehicle, both in terms of processing and assembly, and they are also the biggest and most difficult products to move from their point of production to the final point of assembly.
Furthermore, businesses rely on forecastable, stable regulatory behaviour. Some in our business saw the potential for the blocking of this deal as blocking the sale of foreign assets.