Industry Committee on Jan. 27th, 2022

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

Thank you for your question.

Canada is well positioned to be a leader because we have all the ingredients needed for production. For example, we have lithium, which is used in the production of batteries. As I mentioned, Quebec has several mines. One of them is the Nemaska Lithium mine, whose refinery will be completed soon, in two or three years. Canada is also a major producer of class 1 nickel, which is essential for battery production. There is also cobalt in Ontario. As I told my colleagues, the only cobalt refinery in North America is in Cobalt, Ontario. In my opinion, this contributes to the fact that Canada is in a position to be a world champion in critical minerals for the battery industry. In Canada, there are also manganese and graphite mines. In Quebec, there are graphite reserves.

With different stakeholders, I am trying to develop a strategy that would go from the mine to the recycling plan.

As we're seeing more and more, the big clients, the European and North American manufacturers, want more diversity in the supply chain. They want supply chains that are closer to them. Canada has the ability to produce responsibly. In terms of the environment, that translates into security of supply, traceability and the fact that Canada is a reliable partner.

My colleagues and I are building an entire ecosystem to produce batteries in Canada. Our strategy ranges from mining to recycling. In fact, over the next few months—at least, I hope so—we'll be making some great announcements that will make our vision a reality: that Canada can be one of the great battery producers in North America.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you.

Why would North American and European electric vehicle manufacturers prefer Canada?

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

I would say that [Technical difficulty—Editor] is proximity. More and more, we're seeing that the big manufacturers want refineries and mines to be close to markets and manufacturing centres like Windsor and Detroit [Technical difficulty—Editor].

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

I have a point of order, Mr. Chair.

[The Chair, Liberal, Joël Lightbound]

Yes, Mr. Généreux.

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

We cannot hear some parts of the minister's answers. I don't know if it's a connection problem or if his microphone is poorly placed, but, unfortunately, we don't always hear his answers.

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

I apologize, Mr. Généreux. I am not on the Internet, and my computer is wired.

If you wish, I can repeat what I said.

[The Chair, Liberal, Joël Lightbound]

Minister, I will check with the clerk to see if your microphone is properly positioned.

Mr. Généreux, the minister will resume speaking. If this happens again, please let me know. I have stopped the clock.

I'm told that there was a small problem with the Internet connection for a brief moment.

You may proceed, Minister.

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

Thank you, Mr. Généreux. If my connection is the problem, I apologize. However, as I told you, we did everything we could to have a good connection.

As I was telling you, it doesn't make much sense to mine minerals in Africa, refine them in Asia and produce batteries using coal.

So I think consumers, clients, banks and investors will want not just electric vehicles, but “green” vehicles. I think Quebec and Canada are well positioned to play a key role in the whole battery industry in North America.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you.

I am very happy with your answers because, yesterday, during their testimony, Mr. Volpe and Mr. Tsafos stressed the importance of local production for [inaudible]. They also talked about the fact that the whole value chain must be considered. So I am very happy to hear you emphasize those aspects this evening.

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

That's nice of you to say. We will do it together and with our American and European partners. I am in contact with the executives of mining companies, of chemical transformation companies, of companies that could assemble batteries and, of course, with manufacturers. I think this was mentioned in Mr. Volpe's testimony.

That is why, in the beginning, I really distinguished between lithium carbonate and lithium hydroxide, as manufacturers in Europe, in North America and in Japan want to obtain lithium hydroxide. Lithium carbonate is intended for the Asian market. This works out well because we have lithium hydroxide in Quebec and in Canada. That is why I was talking about the company Nemaska Lithium, for instance, which will be one of the key links of this lithium supply chain in North America.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, minister and Ms. Lapointe.

Mr. Lemire now has the floor for two and a half minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Mr. Chair.

Minister, in your mandate letter, you are asked to implement a Canadian critical minerals strategy, from exploration to the protection of clean technologies.

Is Canada preparing a national strategy or an Americas strategy related to a plan developed jointly with the United States?

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

Mr. Lemire, I can reassure you regarding a national strategy. As I said earlier, I maintain regular contact with the United States Secretary of Commerce. I have been told that this is the first time in history a Canadian minister of industry and a U.S. secretary of commerce have agreed to meet on a quarterly basis. Of course, our discussions pertain to the battery ecosystem, the semiconductor ecosystem and everything we have needed to deal with the pandemic.

Mr. Lemire, I am currently building, with our European and North American partners, more resilient supply chains to plan out the next 20 or 30 years. Our American colleagues definitely view Canada as part of the solution. That is why we will continue these discussions with our partners. We have our own strategy, but we will obviously continue to coordinate.

For instance, the battery market and the automotive market are North American markets. We want to build this market in collaboration with a number of Quebec businesses, including Nemaska Lithium and other Quebec industries. That way, we will be able to play [technical difficulties] key elements to have a local battery ecosystem.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

I participated in your colleague Minister Ng's mission to Washington on this issue. I can tell you that the context surrounding the Build Back Better Act still makes us nervous about the situation and about the Americans' real will to collaborate.

That said, the value and the money are essentially in the final and commercial product, such as the purchase of electric vehicles. In the plan you developed jointly with the United States, what is the positioning of the value chain of lithium mines, especially those in Abitibi‑Témiscamingue? Can processing be ensured close to the resource?

There was the example of the town of Cobalt, which is located in the riding between [technical difficulties]. It's not enough to mine minerals; we must be able to develop our regions and occupy our land.

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

I completely agree with you. Nemaska Lithium is a good example, as the mine is located in northern Quebec, and the refining takes place in Bécancour. You will see that we are building an ecosystem.

Projects will be implemented. I cannot tell you everything this evening, but what I can tell you, Mr. Lemire, is that we will soon have projects to announce. We want to build the entire ecosystem to do as much of the process as possible locally, of course. We don't want to settle for mining the minerals, as you say. We want to refine them and assemble batteries here in Canada to become an important partner in the North American battery industry.

[The Chair, Liberal, Joël Lightbound]

Thank you, minister.

Mr. Masse now has the floor for two and a half minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Minister, one of the things [Technical difficulty—Editor] is just getting its clock cleaned when it comes to auto investment. I mean, there has been some investment. We heard, again, the $6-billion figure, but just the other day General Motors announced another battery facility in Michigan and also another plant expansion, which eclipse the entire investment in Canada over the last number of years. I've been pushing for a national auto strategy. Do you not think it's time for a national auto strategy? We are losing our percentage of OEMs. We no longer even have Canadian CEOs based in Canada.

What assurances can you give, outside of this particular situation, if it wasn't valuable enough for the auto sector, that we actually aren't going to have rip-and-ship or become a branch plant for just parts assembly from the United States?

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

Listen, I want Canada to be a leading supplier of sustainable and responsible battery materials, because I know that this will anchor our auto sector in Canada. As you know, the OEMs are focusing on proximity, on sustainability, and I think that's one of the big competitive advantages of Canada.

I can assure you that I'm in touch with the CEOs. We're trying to build a full ecosystem, from mines to recycling, which is a fairly complex ecosystem to put together. It implies that you have the mining company; you have what we call the CAM manufacturers, of cathode active materials; you have the battery assembly plant; and you have the OEM. I can tell you that I speak to the CEOs of these companies if not daily, then weekly, to make sure we land that. I appreciate that it's very competitive. That's why I hope we'll be able to announce that and work together. I know—

[Brian Masse, NDP, Windsor West, ON]

I'm sorry to cut you off. I only have a....

Why not go back to CAPC? It isn't functioning like it used to. There are some very good people there. There are some good ideas. This government even paid Ray Tanguay to develop a plan and bring a Canadian national auto strategy where we actually benchmark our plant development, our jobs and our investments, and rate ourselves on that.

Why not bring that back to CAPC and tell them to develop for you a Canadian national auto strategy?

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

Well, I'm always happy to see...and as I said, we're going to have a national critical minerals strategy. We are in touch with the auto manufacturers, the parts manufacturers, and we've been working a lot to make sure we can land that. Time is of the essence.

You'll appreciate, Mr. Masse, that I work every day to make sure we land that. Decisions made now will have impacts for generations to come. That's why I'm so keen to land the battery ecosystem, because that's anchoring our auto sector in Canada. I'm like you; I want more mandates. I think if we work together, we're going to land some of them.

[The Chair, Liberal, Joël Lightbound]

Thank you, minister.

I know that you have to leave at 6:30 p.m., and I believe we have time for one last question and answer period.

Mr. Généreux has five minutes.

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

Good evening, minister. Thank you for joining us.

I will try to be brief and would also ask you to give brief answers, if possible. I will give you an opportunity to be even more transparent than you were earlier with my colleague.

Unless I am mistaken, you were appointed minister on October 26. The transaction was announced on October 12, or that is at least when a potential transaction was announced. When were you informed of that transaction?

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

Mr. Généreux, I am happy to see you.

As you know, I am legally prohibited from discussing the details of the transaction.

That said, I can tell you that, under the new guidelines I issued in March, the transaction was subject not only to a national security review, but also to a process in which we undertake an additional review to ensure that the transaction would not impact Canada's national security.

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

Will the Canadian Minister of Innovation, Science and Industry have the last say, just as the Minister of International Trade, Export Promotion, Small Business and Economic Development will have the last say when it comes to transactions taking place in her department?