Thank you very much, Mr. Chair.
ISED's mandate is to improve conditions for economic investment, enhance Canada's innovation performance, increase Canada's share of global trade and ensure a fair, efficient and competitive marketplace. The department has a purview across a wide range of industrial sectors: steel, aluminum, chemicals, plastics, textiles and apparel, critical minerals, clean technologies, automobiles, aerospace, space, marine, digital, AI and quantum. It's quite a wide swath of the economy.
The composition, performance, pressures and opportunities facing these sectors are essential to setting the strategic direction for Canada's economic future. As ISED undertakes its work, there is recognition that, globally, there is an ever-increasing emphasis on industrial policy that sees competitive advantage in the transition to a low-carbon economy, and recycling as an economic advantage and, furthermore, an industrial policy pillar. There is a drive to spur on innovation and develop technologies that create new market value and are considerate of robust supply chains and resiliency.
In this context, ISED is active in areas related to circularity, particularly when it comes to emission reductions and industrial transformation. For the work of this committee, this includes areas such as critical minerals recycling, and innovation and development of the advanced materials necessary for Canada's clean technology and manufacturing industries. For example, with the growing demand for electric vehicles, Canadian companies continue to pursue advantage at the forefront of R and D. This includes considering how best to enable the sustainable recovery of critical minerals from spent electric vehicle batteries.
Across Canada's industrial sectors, companies are actively exploring and implementing disruptive changes to the ways in which they do business as the world transitions to a low-carbon economy. Through existing direct-funding programs, including the strategic innovation fund, the department is supporting projects that exemplify Canada's domestic orientation for industrial transformation towards a greener economy.
For example, with funding delivered through the Canadian critical minerals strategy, the SIF provided $222 million in support of a $737-million project with Rio Tinto Fer et Titane. This project aims to recover scandium from existing waste streams and promotes a circular economy approach, while also growing Canada's critical mineral production capacity for strategic industrial sectors.
SIF and the Canada Infrastructure Bank also provided $820 million in federal investments to ArcelorMittal Dofasco and Algoma Steel to support both producers in transitioning from coal-fired steelmaking to scrap-based electric arc furnace steel production in Sault Ste. Marie and Hamilton, Ontario, respectively.
Greater reliance on circularity, particularly in recycling, reuse and repair, has the potential to alleviate supply chain pressures that are persistent in the postpandemic global context. Both in Canada and around the world, a growing number of companies are looking at different ways to harvest key inputs, including critical minerals like lithium, neodymium, gallium, graphite, aluminum and copper, from post-consumer products. Some companies operating in this space are already processing 100,000 tonnes of recycled materials annually. This includes materials vital for Canada's emerging battery-manufacturing ecosystem, where new business models that promote circularity are just beginning to emerge now.
As the committee explores the topic of circularity and recycling, I would like to mention several market failures that are preventing widespread adoption in the deployment of recycling across industrial sectors.
For example, in many sectors, the cost of recycling—including collection, sorting and processing—is high. It is challenging for companies to grow and scale operations to a point of profitability, particularly when they are competing in the context of international markets. In many manufacturing sectors, it is often significantly cheaper to source new materials from overseas, many of which have a higher carbon intensity. Many recycling processes also require significant volumes of energy or need to be conducted at a scale the infrastructure across the country cannot currently support, such as in the case of plastics.
As well, I will point out that the complexity of the shift to a circular economy, particularly when considering a broad spectrum of products like electronics, metals and plastics, cannot be overstated. There is appreciable diversity within all industrial areas, each of which is facing particular challenges and opportunities that must be understood within their unique sectoral contexts.
With this understanding, ISED continues to support the government in advancing its circularity and climate objectives. The department's breadth of regulatory, legislative, policy, and program tools are available in support of these goals.
As the work of this committee continues, I would encourage you to speak with representatives from a broad range of sectors to understand the unique circumstances of different industries.
Thank you. I look forward to your questions.
