Industry Committee on Feb. 4th, 2022

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

Mr. La Salle, we were told that a plant in Argentina was not appropriate for Canada because the products in question were used in Asia, not in Canada.

But then Mr. Dahn said more or less the opposite, and that there were two different ways of processing lithium.

[Benoit La Salle]

Mr. Dahn is an internationally recognized specialist.

You have to be careful, because with lithium, it's called spodumene if it's hard rock, which is what we have in Canada. Spodumene is transformed into a y-form that can be processed into lithium carbonate or lithium hydroxide.

We in Quebec, at North American Lithium, a company I wanted to buy, have hard rock. We wanted to process it into carbonate because we had high-capacity batteries that were a little less expensive. Hydroxide is used for more specialized batteries.

In South America, the situation is different because lithium is not in rock form, but rather salts. It's chemistry. The reality is that in Quebec today, if we wanted to build a battery plant, we would have to find lithium, graphite, nickel and manganese.

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

We have all of that in Canada.

What's to prevent us from establishing companies to make batteries in Canada?

[Benoit La Salle]

We do in fact have all of that already, but we are not a lithium producer yet. That will probably be the case in Ontario.

What I'm saying is that we can't sell the deposits.

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

I understand, but I think that there's lithium in Abitibi. Am I wrong on that?

[Benoit La Salle]

Yes, but it belongs to the Australians. We sold it.

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

They're going to sell it at home. They're not going to give it to us.

[Benoit La Salle]

Exactly.

It's the same as it was for masks. When we needed masks, we found out that countries around the world were keeping them for themselves.

When we need lithium, graphite and nickel, everybody in the world will be looking for them. The revolution we are experiencing at the moment in the field of electrification resembles what happened with gasoline in 1907 with the Rockefellers and Fords of the day. It's the same paradigm shift.

The point that I am trying to raise is that we need to keep our resources at home and for us, in an integrated manner. For example, the way Saudi Arabia was able to keep its oil in 1910.

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

Thank you, Mr. La Salle.

Mr. Chair, do I have time to ask Mr. Gratton and Mr. Marshall a question?

[The Chair, Liberal, Joël Lightbound]

You have enough time, Mr. Généreux.

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

Mr. Gratton and Mr. Marshall, are we in Canada running late? Is there still room for companies that would like to set up operations to meet future demand?

I am well aware that 2050 may seem a long way off, but I get the impression that we're lagging behind.

Is that the case?

[Pierre Gratton]

I wouldn't say that were lagging behind, but it's important to realize that it is a race. We have advantages that many countries do not in terms of battery production because we have all the minerals required and strong businesses, refineries and foundries. Other countries do not.

However, a strategy is needed and rapid action is required. I believe that Quebec is well ahead of all of Canada's other provinces and territories. Quebec has a strategy and is being very dynamic. I would suggest that the rest of Canada do the same.

I'm optimistic. I think that the federal government is going to take concrete action soon, but that remains to be seen. However, something needs to be done quickly.

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

In passing, I would like to thank Ms. Lilly for her services to Canada.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Généreux and Mr. Gratton.

Mr. Erskine-Smith, you have the floor for five minutes.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Thanks.

I want to stick with the Mining Association of Canada.

I appreciate your sending very concrete and specific recommendations. I took from those recommendations that, in part, the federal government's role is to streamline the approval [Technical difficulty—Editor] an active participant in the course of consultation and ensuring that things proceed. I think you referenced the Impact Assessment Act. One piece around financing.... I understand the need for the federal government to facilitate approvals.

Given the increase in the value of these commodities, to what extent is financing required from the federal government? I know that in particular there's a call for doubling the exploration tax credit. To what extent is that still required?

[Pierre Gratton]

I appreciate that question. It was a platform commitment of your party.

For the reasons that the committee has discussed today, this is a race. Doubling the mineral exploration tax credit for critical minerals would put Canada way out in front of every other country in the world as a target for exploration into those minerals and metals that we need. It would give us a huge advantage.

The METC has been an advantage to Canada for—

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

On that point, the market is going to do this, presumably, because of the profit motivation here, but—

[Pierre Gratton]

Yes, but where would it go—

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

—this would expedite it in a real way. Is that the idea?

[Pierre Gratton]

It would make us more attractive than other places.

You're right. The commodity prices are going to stimulate more exploration into these materials worldwide, but where they go worldwide is an open question. The METC would make sure that Canada—which is always near the top—would remain at the top and would overtake countries like Australia, which competes with us for top spot.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

A number of witnesses have mentioned the operation in Quebec, but there really aren't many active operations across the country, despite the potential here. How many years are we looking at, to bring a mining operation online that would contribute to what we all want?

[Pierre Gratton]

Well, building a new mine takes time.

What our brief focuses on is that we really need to look at every stage of the value chain. We need to have more discoveries. There's been a dearth of base metal exploration in Canada for the last 15 to 20 years. There's been a dearth worldwide. It's not because Canada hasn't been attracting it. Until this battery explosion, they weren't attractive. People were looking for other materials. Now it's starting to pick up, but as a result of that lack of exploration, we don't know where those new mines are. We need to accelerate that. We need more public geoscience, and we need to track more exploration.

Then there's building the project itself, and the regulatory process is time-consuming. I think there's probably a role—

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Just in terms of the timeline.... If we're making recommendations to government around this overarching strategy, which you've indicated we need, the timeline presumably has a lot to bear upon the ultimate strategy.

[Pierre Gratton]

Yes, it definitely does. From discovery to construction, it can take as long as 10 years. It depends on where. It depends on what. It depends on the level of indigenous support for the project. There is a range of factors. Some can be permitted faster than that. It really depends. There's no specific answer to how long a project will take, but it does take—

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

That's fair. It takes a long time, and we need to do everything we can to speed it up.