Industry Committee on April 17th, 2023

[The Chair, Liberal, Joël Lightbound]

Good afternoon on this fine Monday.

I call the meeting to order.

Welcome to meeting number 66 of the House of Commons Standing Committee on Industry and Technology.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Monday, November 28, 2022, the committee is meeting to study the development and support of the electronics, metals and plastics recycling industry.

Today's meeting is taking place in a hybrid format, pursuant to the House order of Thursday, June 23, 2022.

We have quite a few witnesses joining us today as we continue our study. With us are Jean Simard, president and chief executive officer of the Aluminium Association of Canada; Christa Seaman, vice-president of the plastics division at the Chemistry Industry Association of Canada; Peter Fuchs, vice-president of corporate affairs for nickel, and Alexis Segal, head of government relations and communications, both from Glencore Canada; and lastly, Maria Kelleher, principal at Kelleher Environmental.

Thank you all for being with us.

Now, without further ado, we will begin the rounds of questions.

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

Mr. Chair, I just want to point out that we also have Marie‑Élise Viger joining us.

[The Chair, Liberal, Joël Lightbound]

My apologies for forgetting you, Ms. Viger. Thank you for joining us.

Thank you for correcting me, Mr. Lemire.

We will start with Mr. Simard, from the Aluminium Association of Canada.

You have five minutes, Mr. Simard.

[Jean Simard, President and Chief Executive Officer, Aluminium Association of Canada]

Thank you, Mr. Chair.

Thank you to the committee members for inviting me to share our experience in the circular economy.

As you know, the aluminum industry has a strong footprint in Canada, with nine aluminum smelters, most of which are in Quebec and British Columbia. The association is a founding member of the Pôle québécois de concertation sur l’économie circulaire, a Quebec centre for consultation on the circular economy. Our members are also involved regionally in a range of activities that support circularity.

My remarks will focus on two aspects of recycling: metal recycling and production by-product recycling.

Post-production metal, in other words, before it gets to the consumer—so after processing—is almost entirely reused in our plants. It has tremendous value, and is much easier to recover and incorporate back into the system. Post-consumer metal has a number of limitations, and I'll talk about that later.

The second line of reasoning has to do with production by-products, so non-metal products. Various by-products are generated, whether it be carbon, spent potlining or scum. The industry is working very hard towards its goal of zero landfill waste for these types of products.

We can now say that more than 80% of by-products are reused, recycled or recovered. The remaining materials pose a problem, one that calls for a regulatory response as much as a technical response. Their properties are less suitable, which means they require pretreatment and mixing. They also generate hazardous materials from a regulatory standpoint.

Now I'll come back to post-consumer metal, which is found in packaging, transport vehicles and buildings. That's what we call aluminum deposits. Consumption generates a variety of objects that can be recovered and reused to produce new aluminum. An aluminum can has a life cycle of about 60 days before a new can is manufactured from the same metal. It's longer for vehicles, between 10 and 12 years. In the case of a building, it takes about 50 to 70 years before the metal can be recovered.

The success or recovery rate varies from one sector to another. In Quebec, cans with a deposit have a recovery rate of 66%. In the transportation sector, the rate is between 80% and 90%. Keep in mind, however, the 10-to-12-year life cycle in the automobile sector. Lastly, in the building sector, the rate is 80%. It's important to understand that half of everything that's recovered is not reused. That's very important to know because it represents a lost resource for society and the economy. There is a lot of work being done in that area.

There's a major challenge in Canada: we don't have a critical mass. That's a structural and systemic issue. Quebec, for instance, has about 1.3 billion consumer cans a year. While that may seem high, it's actually quite low. An empty can amounts to air. For the purposes of a critical mass, the cans need to be crushed, baled and sent to a centre where the metal can be melted down. A wide range of technical complexities also come into play, such as removing the lacquer from the paint. What's more, it all has to be done in a way that's economically sustainable. Our critical mass is so small because of our small population size. As a result, solutions that may seem obvious won't work here because the necessary infrastructure would result in losses year after year.

Consequently, our metal is sent to the U.S., not far from the border, to places like Massena, New York. There it is melted down and reused. At the end of the day, it's not a bad thing because most of the plants in the U.S. run on coal, so this helps them reduce their carbon footprint significantly and thus their greenhouse gas emissions.

Beyond that, we also carry out a lot of research for other production by‑products. We have scientists looking for ways to transform residual materials into products. Rio Tinto, for instance, has nine scientific experts working on marketing and supply.

Transforming residual materials into products is good, but then, they have to serve a purpose. They often need to be repositioned in a new market where they can provide value.

That concludes my remarks. I am available to answer any questions.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Simard.

We now go to Ms. Seaman for five minutes.

[Christa Seaman, Vice President, Plastics Division, Chemistry Industry Association of Canada]

Thank you, Honourable Chair Lightbound and committee members.

Chemistry and plastics are Canada's third-largest manufacturing sector, adding $54 billion and $28 billion respectively to the Canadian economy. Eighty per cent of the sector's annual plastics production is export-oriented, with the majority destined for the United States.

Our industry is committed to a low-carbon circular economy for plastics. End-of-life plastics represent a lost $8-billion-per-year resource, which will grow to $11 billion by 2030. If recovered, this would strengthen our economy and our export potential while keeping plastics out of the environment. Not only does a circular economy ensure we are using our resources efficiently, but it further provides our industry with substantial greenhouse gas reduction opportunities, thus supporting Canada's net-zero goals.

An example is Quebec's success with polystyrene. Companies such as Pyrowave and Polystyvert use advanced recycling technologies to return post-use polystyrene to its molecular origins, making it indistinguishable from virgin plastic, but with a lower greenhouse gas footprint.

A further example is NOVA Chemicals' aspirations of net zero by 2050, 30% polyethylene sales from recycled content by 2030 and a 30% reduction in their scope 1 and 2 absolute CO2 emissions.

I'd be happy to share other examples of Canadian innovation driving the circular economy during the question period that follows my remarks.

You heard in your last committee meeting about the role that extended producer responsibility, or EPR, plays in a circular economy. EPR makes those that bring plastic products and packaging into the market responsible for their end-of-life management. Industry welcomes this responsibility and is working actively with provinces and territories to develop and implement regulations that will set ambitious recovery and recycling rates.

Although many provinces are in the early implementation stages, B.C. has a very successful EPR. Some highlights include that 99.3% of B.C. households in 183 communities had access to recycling services at no cost to taxpayers. Producers now fund the nearly $110-million recycling program. In just four years, while recycling has been stagnant across Canada, plastics recycling in British Columbia has increased from 42% to 55%, with 97% of all recovered plastics being processed within B.C., which creates new business opportunities. In 2021, greenhouse gas emissions for the program declined by 20.7%.

There is an important role for the federal government in creating the conditions for a successful low-carbon circular economy for plastics.

The first is investment in recycling infrastructure and innovation, as was reflected in the 2021 ministerial mandate letters for both Environment and Climate Change Canada and the industry department. Unfortunately, that fund has not materialized yet, but it is needed to accelerate innovation and investment in circularity as well as to deliver on other federal policy objectives.

The second area is creating incentives to incorporate recycled content into products. This can take many forms, but the one notably already under development is the setting of recycled content minimums for certain plastic products, which in turn relies on innovation and access to feedstocks to meet recycled content requirements. This, again, links back to EPR and investment.

The journey to a circular economy for plastics in Canada is well under way. We welcome this committee's assistance in framing the appropriate supporting roles of the federal government on this exciting and challenging journey.

I look forward to your questions.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Madam Seaman.

We'll now turn to Glencore Canada for five minutes.

[Peter Fuchs, Vice-President, Corporate Affairs Nickel, Glencore Canada]

Thank you, Mr. Chair.

Good afternoon, and thank you to the committee for the opportunity for us to share Glencore's perspective on metals recycling in Canada.

My name is Peter Fuchs. I'm the vice-president of corporate affairs for nickel at Glencore. Joining me today are Alexis Segal, the head of corporate affairs for Glencore Canada, and Marie-Elise Viger, environment manager of North American copper assets and the Philippines, who's based in our smelting operation in Rouyn-Noranda, Quebec.

Glencore is one of the world's largest globally diversified natural resource companies. We are a global company, but with a long history and deep commitment here in Canada. Through the scale and diversity of our industrial and marketing businesses, we responsibly supply the commodities that are fundamental to the building blocks of life and are an important pillar in the Canadian critical minerals value chain.

Glencore is one of the world's leading recyclers of electronics and a major recycler of secondary copper, nickel, cobalt, gold, silver, platinum and palladium. Our operations were among the first to discover how to process end-of-life electronics, and we have been one of the leading recyclers of metals ever since.

Our company plays a fundamental role in the circular economy, giving a second life to these commodities. Our approach is underpinned by Glencore's leading technological expertise, a commitment to customer excellence and embedded sustainability across our business.

To give you a little more colour in terms of what we recycle, it varies from electronics to batteries and other metal-bearing materials, including end-of-life automotive parts and jet engines.

Some of the core assets in Glencore's recycling operations are right here in Canada. As I'm from our nickel business, I will take another moment to describe our recycling capabilities at our integrated nickel operations, and then pass you to my colleague Marie-Elise to speak to you about the copper facilities.

Our smelter in Sudbury, Ontario, is a key part of the global Glencore recycling network. For 33 years, the Sudbury smelter has been safely processing end-of-life materials, production scrap and waste streams. Last year, the Sudbury smelter recovered more than 26,000 tonnes of recycled materials, containing 6,200 tonnes of nickel, almost 2,000 tonnes of cobalt and 1,300 tonnes of copper.

I'm also proud to say that we are making major new investments in the region by investing $1.3 billion to build the new all-electric Onaping depth mine underneath our existing Craig mine, which will extend our life-of-mine in the Sudbury area to at least 2035.

Now I'll pass you on to my colleague.

[Marie-Elise Viger, Environment Manager, Copper North America and Philippines, Glencore Canada]

In Rouyn-Noranda, we have the Horne Smelter, the only copper smelter in Canada. This operation is closely connected to the Canadian Copper Refinery, in Montreal. Combined, these two fully integrated facilities process concentrate from more than 15 Canadian mines, as well as recycled material. One of the notable features of the Horne Smelter is its ability to process a wide range of feeds, including precious and critical metals in end-of-life electronics. The Horne Smelter is already the largest electronic waste recycler in North America.

We are also working to enhance the operations of our existing facilities. Glencore plans to invest more than $500 million in a major transformative project at the Horne Smelter to make it a world-leading smelter in terms of operations and emissions. This investment will position the Horne Smelter for the future, ensuring its continued contribution to Canada's climate ambitions and leadership in the critical minerals sector.

[Alexis Segal, Head, Government Relations and Communications, Glencore Canada]

With respect to zinc, we have the CEZinc Refinery, in Salaberry‑de‑Valleyfield, the only zinc refinery in northeastern North America. In Montreal, we have a small plant specializing in lead anode manufacturing and recycling. Lead anodes are essential to zinc electrolytic production. We also have a base metal mine in Timmins, in northern Ontario—the deepest base metal mine in the world. The Kidd mine produces copper and zinc concentrates.

In conclusion, Mr. Chair, our company has a 100‑year-plus history in Canada and a deep commitment to this country. We plan to work closely with the government to ensure that this strategic asset continues to support Canada and its allies' need for critical minerals.

To that end, we welcome the release of the critical minerals strategy, and we were particularly happy to see the emphasis on recycling and the circular economy in the strategy.

One topic we would like to put to the committee is the issue of certainty around the way recyclable and other inputs to our smelters are handled. Our facilities have capacity to process more supply in Canada. However, in order to sustain and grow our recycling business, we need predictability for the handling and classification of our inputs. For example, Environment and Climate Change Canada is studying the way e‑waste is imported into the country. We would suggest to the committee that Canada facilitate the exemption of imports of e‑waste from the United States to support the circular economy in Canada and for our neighbour to the south.

We welcome any questions you have.

Thank you, Mr. Chair.

[The Chair, Liberal, Joël Lightbound]

Thank you very much.

Ms. Kelleher now has the floor for five minutes.

[Maria Kelleher, Principal, Kelleher Environmental]

Thank you.

Good afternoon, everyone, and thank you for inviting me to speak to the committee.

I want to briefly address the findings of two reports my company prepared that are relevant to the committee's work.

First of all, I'd like to say that recycling is a prominent and integral part of the circular economy, but it is a complicated business. It involves many different types of materials, products, producers, users and other stakeholders. Some materials are valuable, particularly metals, and some are not as valuable. Some products are short-lived, like beverage containers, and some are long-lived, like buildings.

There are three broad user groups or sectors in recycling: residential; industrial, commercial and institutional; and construction and demolition. Different management systems or plans are required for each of the materials, products and sectors.

The preliminary circular economy report card we developed was an effort to document how Canada is faring in the circular economy. We pulled together available information on the recycling of a number of materials in Canada, including paper, scrap metals, glass, plastic, food and yard waste, lumber and wood, drywall, auto hulks, tires, batteries, e-waste and selected industrial residuals. We identified that millions of tonnes of materials are already recycled in Canada. However, we noted a number of information gaps and concluded that Canada needs more comprehensive tracking systems to fully identify our circular economy performance.

The electric vehicle battery is the second thing I want to talk about. Electric vehicle battery cells are made from an anode, a cathode and an electrolyte, all of which are made from critical minerals and metals. They contain lithium in the electrolyte and graphite in the anode, with varying amounts of critical minerals, such as nickel, cobalt, manganese and aluminum used in the cathodes.

While the numbers are small today, the numbers of electric vehicle batteries at end of life will grow over the years, and grow rapidly after the year 2030. Many electric vehicle batteries can have a second life after their first life, once they're no longer suitable for a vehicle. They can be put into energy storage and other applications, which can extend their lives. We already have a few small companies in Canada that do this work, and a number in the U.S.

It should be stressed that Canada, the U.S. and Mexico are basically one market for the auto and recycling sector, and any regulatory or financial barriers that restrict the movement of used electric vehicle batteries across borders for reuse and recycling should be addressed.

Environment Canada's XBR allows electric vehicle batteries to cross the Canada-U.S. border without a permit when destined for research and development, remanufacturing or repurposing. However, if you're crossing the border in either direction for recycling, you need Environment and Climate Change Canada and EPA permits. This prevents the needed electric vehicle batteries destined for recycling from flowing freely.

There are a number of issues around Transport Canada's regulations not being fully consistent with U.S. regulations; these cause challenges for recyclers. Also, there's a 7% duty placed on batteries crossing the Canada-U.S. border if they're destined for repurposing, whereas there's a 3% duty on batteries going in the other direction, from Canada to the U.S. We certainly should have a level playing field in this arena.

We're extremely fortunate in Canada to have a world-leading ecosystem in lithium battery recycling to recover the critical minerals needed to make new batteries and turn them into chemicals that are sold back into the battery supply chain.

Canada's market and main trading partner is the U.S., and any barriers to trade between the two countries in terms of these electric vehicle batteries, which are part of the new economy and the transition to an electrified future—a low-carbon future—need to be addressed.

Thank you. I'd be happy to take your questions.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Madam Kelleher.

Now, to start this discussion, I'll turn to MP Vis for six minutes.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Thank you, Mr. Chair.

Thank you to all the witnesses.

Before I begin with my questions, at our last meeting—I believe it was on March 29—I moved a motion that “the committee order the department of Industry to provide a copy of all papers, documents and emails related to the Government of Canada investment in Volkswagen to develop a new battery plant in Canada.” I believe the committee reached some form of consensus, Mr. Chair, that the information would be provided in good faith.

Mr. Chair, can you confirm whether or not we received that information?

[The Chair, Liberal, Joël Lightbound]

We have not received this information as of now.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Okay. Then I'm going to use my time today to move another motion. I move that the committee order the Department of Innovation, Science and Economic Development Canada to provide a copy of the contract signed with Volkswagen Canada, including the total cost for the Government of Canada to develop a new battery plant in Canada in the next 48 hours, before our next meeting.

I'd like to have a vote on that right away.

[The Chair, Liberal, Joël Lightbound]

There is a motion on the floor by Mr. Vis. You've all heard the terms.

I see Mr. Fillmore has his hand up.

[Andy Fillmore, Liberal, Halifax, NS]

Thank you, Mr. Chair.

Could I ask for a suspension while we review the motion and its implications?

[The Chair, Liberal, Joël Lightbound]

I can grant a brief suspension for various MPs to figure out their positions on this. We'll resume in a few minutes. We'll be back very shortly.

Thank you, Mr. Fillmore.

Our apologies are extended to the witnesses. These things happen. The meeting will be suspended briefly.

[The Chair, Liberal, Joël Lightbound]

Colleagues, we can resume the committee meeting.

There's a motion on the floor by Mr. Vis. Everyone has heard the terms of the motion. Are there any further comments before we proceed to a vote? If there are no comments, then we will move to a vote.

I see Mr. Van Bynen.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

I have a point of order, Mr. Chair.

I'm relatively new to this committee, but is it not the practice to circulate these motions so we could see the motions either on our laptops or...so we could have a closer look at them? My shorthand is not good, but I'd like to have a good understanding of what the motion itself says so that I can give it proper deliberation.

[The Chair, Liberal, Joël Lightbound]

Thank you for your intervention. This is usually the practice, but Mr. Vis has the right also to present a motion from the floor. If, however, you have an electronic copy that can be circulated, that would be appreciated. Otherwise, I could ask Mr. Vis to read it again so that we can all see it.

I think I just received it. You probably have, too, Mr. Van Bynen. If you look in your emails, you probably have the written version of the motion.

I recognize MP Gaheer.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

Thank you, Chair.

I'd ask for an amendment to the motion to remove the timeline. I don't think 48 hours is very reasonable. I haven't seen the contract, but I imagine it's not just a one-pager that's been signed with Volkswagen. However long it is, it's probably in one language and it has to be translated to a second language. It has to be verified. There were holidays that came in between our last meeting, so there's only been one meeting since the last one.

I'd ask Mr. Vis, through you, Chair, to remove the timeline.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Gaheer.

In looking at the written version that was circulated—correct me if I'm wrong, Mr. Vis—I see no timeline in that version that was just sent. Is this the proper version, or is it the one you read that we are debating right now?

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

I'll just say, Mr. Chair, that we asked over two weeks ago to receive this information. I moved a motion from this committee floor to receive that information, so with all due respect, Mr. Gaheer, it's like you're trying to rag the puck on me.

We had lots of time. I, in good faith, moved my motion last time to get this information, and Mr. Fillmore promised me that we would have it today, but we didn't receive it. I, as you will note, did not put a timeline in the new motion that was circulated.

The fact of the matter is that there are some big numbers floating around about the amount of money the government put forward or has given to Volkswagen to create a new battery plant. This is the only car company that's been charged, in my understanding, under the Canadian Environmental Protection Act laws on emissions. That was within the last seven years. It was Catherine McKenna, the former environment minister, who used those powers under the Canadian Environmental Protection Act.

Now we're in a position where.... An unprecedented action was taken in the budget and they said that we'll give you these numbers in due time. Well, we're going to have a vote on the budget pretty soon, and I don't know how much money is going to Volkswagen. I've heard “billions” being floated around, and some of the other numbers being proposed by other countries, before this government came forward with great fanfare to announce this seminal investment, yet this government is afraid to give Canadians the number. Why can't we just get the number? What's the big deal?

I would even take this motion off and just ask for two things: the number of jobs and the amount of money.

I'm not asking for anything inappropriate. If the government stands by their investment, they'll give us the numbers. I don't need obfuscation. We need to have transparency. What I'm seeing here from those two comments is a lack of transparency and a fear of committee members to give Canadians an answer that they deserve.

The motion stands as it is, but we need this information, Mr. Chair. I'm not out of order. This is common-sense stuff. Previous governments have been in this situation before, and they provided information. The parliamentary secretary promised me that he would have it here today, and he didn't follow up with an email or anything or say we need a bit more time or we're redacting certain information. Not a peep. It's like you guys didn't even expect this would come today.

This is a straightforward, good-faith motion on something that the Government of Canada should be proud to share with Canadians.