Industry Committee on Jan. 27th, 2022

[Brian Masse, NDP, Windsor West, ON]

I think, though, that perhaps—and this is where I look at the broader picture on this particular issue—we should have further discussion about those things.

Back in 2015, when your government took office, it did say that it wanted more foreign investments. It did say it would be more transparent in these types of reviews. What's different today from what was in 2015? We understand some of the limitations that can take place, but there was a recognition. I myself have gone through everything from Noranda being taken over by Falconbridge, and Inco. There's a whole series. I could go on and on. What's different now in terms of, specifically, what's publicly available for your decision-making process?

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

Well, there's the very fact that we're here today. As I said, I'm trying to be as open, transparent and candid as possible with you. I think that tonight, because we have a lot of public information, I'm able to discuss the case.

As you know, it's been pretty rare, since the ICA has been in place in Canada, to have a focus on one particular transaction. What I'd offer to the members of the committee is to task the department, to instruct them to release to you the annual report so that you can look at it. We can release it in the next few days. You'll see that we provide as much information as we can under the act.

I'm sure you understand, because you've been in Parliament for a long time, that on the one hand we receive confidential information from the companies, and on the other hand we need to protect national security.

I'm happy to answer any questions and to be as candid as I can under the act.

[Brian Masse, NDP, Windsor West, ON]

I guess this is where the larger struggle is. I don't see the change. I don't see the change from what was promised politically.

Just in moving to these specific minerals, was there an evaluation done at all with regard to...? Even if they're not used in electric vehicles, which I know I focused on, what other types of markets for these were done as part of the evaluation? We've heard from some in the auto sector saying that they're not as important. Others have contested that. What other types of products were looked at for this review?

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

When you look at lithium carbonate, and this is probably a resource for the Asian market, you see that this is really for glaze and for sealers. We're about to build a big battery ecosystem here in Canada. What is preferred by the manufacturers—whether it's the OEMs, whether it's the battery manufacturers, or whether it's the cathode active materials manufacturers—is lithium hydroxide. There are many reasons for that. It's more sustainable and long-lasting, with less recharge.

I can say that carbonate is more for the Asian market. Hydroxide is really what is needed and wanted in North America, Japan and Europe. That was one of the considerations that were part of it, and I think that's what you heard from other experts yesterday.

[The Chair, Liberal, Joël Lightbound]

Thank you, Minister and Mr. Masse.

It is Mr. Kram's turn now, and he has five minutes at his disposal.

[Michael Kram, Conservative, Regina—Wascana, SK]

Thank you, Mr. Chair.

Welcome to the committee, Minister Champagne.

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

Thank you, sir. I don't see you.

[Michael Kram, Conservative, Regina—Wascana, SK]

I'm in the committee room, Minister.

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

Okay, I see you now. It's good to see you. I'm sorry, sir; I was looking at the screen.

[Michael Kram, Conservative, Regina—Wascana, SK]

That's quite all right.

I'll start with an easy question. The United States is Canada's closest neighbour and ally. Would you agree?

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

Indeed. You may have seen that I've even agreed with the Secretary of Commerce to meet on a quarterly basis. I'm very well aware of that. That's what we're pursuing with the commerce department, to align our supply chains.

[Michael Kram, Conservative, Regina—Wascana, SK]

Yes, I understand you were in Washington on November 3 to meet with the Secretary of Commerce. The press release your government sent out after that meeting said that you and the secretary agreed to “reinforce existing cooperation under the U.S.-Canada Critical Minerals Action Plan”.

Minister, is your government still committed to the U.S.-Canada critical minerals action plan?

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

Very much. Absolutely.

[Michael Kram, Conservative, Regina—Wascana, SK]

Okay. Very good.

It was reported in the media on December 10 that this government would not subject the sale of Neo Lithium to a national security review. So I have to ask, what message does it send to our American partners and allies when you say one thing in Washington one month, and then you turn around and do the opposite in Ottawa the next month?

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

I would disagree with you completely. Neo Lithium was subject to a full national security review in Canada. Not only was it subject to a national security review; it was subject to enhanced security, based on the guidelines I issued last March.

If you'd allow me a few seconds, I just want members to really appreciate that under the act there are not two national security processes. There's only one. It starts from the moment we become aware of a transaction, whether from public information or notification. The national security review starts on day one. It's at that time that we make our assessment. It's a multistep process.

To say otherwise [Technical difficulty—Editor] is not in line with the act. The power of the minister to investigate starts on day one. What I would say to my American colleague, if asked, is that we absolutely did a full national security review of Neo Lithium.

[Michael Kram, Conservative, Regina—Wascana, SK]

All right.

Minister Champagne, in your opening statement you said that the Investment Canada Act allows, on day one, for security and intelligence agencies to review the transaction, including consultations with Canada's allies. I'm wondering if you could elaborate on what consultations you did with our American allies.

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

I wish I could go into more detail, but what I can say to you and Canadians who are watching tonight is that the process involved all the relevant departments in the Government of Canada but also our national security and intelligence agencies throughout the process.

As you know, I am not at liberty, under the act, to go into the details of a particular transaction, but I can assure you that when we look at supply chains, at a time when we're building a battery ecosystem in Canada, I'm very well aware of the role of lithium, of cobalt, of nickel, of manganese and of graphite. Therefore, you can rest assured that I understand the geopolitical implications of that. That's why we'll never compromise on national security.

[Michael Kram, Conservative, Regina—Wascana, SK]

Minister, in your opening statement you indicated that not all critical minerals are the same, or not all are equally critical, if I can summarize it in that way.

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

That's fair enough.

[Michael Kram, Conservative, Regina—Wascana, SK]

You seemed to indicate that lithium was less important than others, but a report from the White House from June of last year indicated that lithium and graphite are two of the most important materials for electric vehicle batteries.

I wonder, in our consultations with the Americans, if they also indicated that lithium was not so critical a critical element.

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

What I was referring to...and I'm happy that you asked the question. Lithium carbonate is for the Asian market. Lithium hydroxide, which we're about to produce in Canada, by the way, in two to three years.... We have a company called Nemaska Lithium. It expects to produce 10% of the lithium hydroxide needed in the North American market. Actually, we are working very much to...and I'm working with Minister Wilkinson [Technical difficulty—Editor] strategy. We're very much in touch with our American colleagues, because Canada, in my view, could be the supplier of choice.

What you see from the OEMs, the cathode active materials and the others, is that what they want is proximity—proximity of supply, proximity of market, proximity of manufacturing. That's exactly what I'm talking about to our American colleagues: how we can [Technical difficulty—Editor] because Canada has deposits, and we will be a producer of lithium in the not-too-distant future. There's a refinery being built as we speak. We'll be online, as they tell me, within two to three years.

[The Chair, Liberal, Joël Lightbound]

Thank you, Minister. The time is up.

Ms. Lapointe, you have five minutes.

[Viviane LaPointe, Liberal, Sudbury, ON]

Minister, thank you for being here.

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

I'm happy to be here.

[Viviane LaPointe, Liberal, Sudbury, ON]

In my riding of Sudbury, there is a proud history of mining. But more importantly, our future in mining is innovative and dedicated to Canada's clean growth mandate.

Can you please tell us how Canada is well positioned to be a leader in the critical minerals market?