Industry Committee on April 19th, 2023

[The Chair, Liberal, Joël Lightbound]

I call this meeting to order.

Hello everyone.

I welcome you to meeting No. 67 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.

I have the honour of introducing the witnesses joining us today. We welcome Ms. Theresa McClenaghan, executive director and counsel for the Canadian Environmental Law Association; Ms. Dawn Madahbee Leach, chairperson of the National Indigenous Economic Development Board; and Ms. Christina Seidel, executive director of the Recycling Council of Alberta. We also have Mr. Thompson Hickey, general manager of trail operations, and Ms. Amber Johnston‑Billings, vice-president of communities, government affairs and health, safety, environment and community systems; both are from Teck Resources Limited.

Without further ado, we will start with Ms. McClenaghan of the Canadian Environmental Law Association, who will have the floor for five minutes.

However, just before you start, I want to advise witnesses and members that we're expecting a vote at 6:10, so bells will start ringing at 5:40. Unfortunately, we'll probably have to adjourn the meeting a little earlier, but we'll get to that in due time.

Again, thank you to all of our witnesses today for being with us.

Without further ado, Madame McClenaghan, the floor is yours. I'm sorry if I mispronounced your last name. You have my apologies for that.

[Theresa McClenaghan, Executive Director and Counsel, Canadian Environmental Law Association]

My name is Theresa McClenaghan. I will be speaking English this evening.

Thank you very much for inviting the Canadian Environmental Law Association to speak to you as a witness today on this important study on reusing materials and supporting a circular economy.

The Canadian Environmental Law Association is a national NGO and an Ontario legal aid clinic. We were formed in 1970. We assist members of the public in participating in environmental decision-making, and we advocate for better laws to protect against environmental harm.

I have filed a written brief with the clerk of the committee, which I'm sure you'll receive in due course. I want to say, as a preliminary comment, that CELA is a strong supporter of the principles of a circular economy, including the principles of safe material reuse, a reduction in energy utilization and a reduction in discarding materials.

However, there are issues that I'm sure you'll investigate in this committee that I won't be delving into today. We'll probably file a second brief from CELA on issues dealing with, for example, the potential for toxic chemicals and plastics to make their way into reused products.

For today, I want to say that those principles do not apply to used nuclear fuel waste. Nuclear fuel waste is high-level waste under Canada's nuclear fuel safety act. It is the waste that results after uranium fuel has been used. Natural uranium fuel has been used in the CANDU reactors in Canada. It is extremely hazardous after it's been used in the reactor, and it must be kept separated from people and the environment for hundreds of thousands of years, according to the Nuclear Waste Management Organization.

There have, however, been some recent proposals for and even funding toward research in Canada with the idea of “reprocessing” this waste, which means extracting the plutonium from the used fuel waste so that the plutonium can be used as a nuclear power fuel. However, plutonium can be used both as nuclear power fuel and in atomic weapons.

Extracting plutonium from used nuclear waste contradicts Canada's decades-long practice of not allowing the reprocessing of nuclear fuel in Canada. The reason is that it raises concerns about the diversion of that separated plutonium toward atomic weapons use. This is something that is made vastly easier—if you can say that—for bad actors to do once the plutonium has already been separated from the very hazardous used nuclear fuel waste.

That risk exists, regardless of the original intent behind the reprocessing exercise and regardless of how pure or not the extracted plutonium is. That statement has been made by, among others, the U.S. National Academy of Sciences and the United States Department of Energy.

In addition, the reprocessing itself results in other nuclear waste that is even harder to deal with than the current nuclear fuel waste that Canada is already contending with. There's more hazard, and there are additional types of radioactive materials that result. Much of it is in liquid form, and there are no current prospects for the long-term disposal of that reprocessing waste. There are, additionally, examples elsewhere in the world, where reprocessing facilities have resulted in extensive environmental contamination.

The industry advocating the idea of reprocessing nuclear fuel waste has been trying to utilize ideas like waste reduction and recycling to support these proposals, but these completely miss the mark in terms of the nuclear weapons proliferation risks that are raised. Globally recognized non-proliferation experts, such as scientists at Princeton University, have been warning Canada explicitly about the dangers of allowing nuclear fuel reprocessing in Canada.

My organization, CELA, and other civil society colleagues across Canada have been calling on Canada to explicitly ban nuclear fuel reprocessing in Canada as a result of these risks. We recommend to this committee that it make that recommendation as part of its study on a circular economy.

Those are my remarks to start.

Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you very much.

We'll now turn to the Recycling Council of Alberta.

Madame Seidel, the floor is yours.

[Dr. Christina Seidel, Executive Director, Recycling Council of Alberta]

Thank you very much. I'm happy to be here today.

I'm with the Recycling Council of Alberta. We are a grassroots charitable organization. We've been operating in Alberta since 1987, but we work a lot with our colleagues across Canada as well.

Even though we are the Recycling Council of Alberta, our mission now is actually to promote, facilitate and advocate for a circular economy, not just recycling. We've had to make that change, as many organizations have, because we are faced now with the reality that we will never recycle our way out of this issue that we have today. We are recognizing that there is a new paradigm that we are all working within. It's a new paradigm both for the environment and for the economy. It is called the circular economy, and it can make a huge difference in terms of how we can achieve some of the things we want to achieve.

The circular economy really is about redefining a lot of things we've taken for granted. If you look at the circular economy principles, essentially the first step that we so often miss is that we need to redesign systems. We need to “design out” waste and we need to design out pollution so that we don't have that to deal with right from the start. Systems need to be designed right from the beginning to accomplish that.

Then, for the materials that we use within our economy, we need to make sure they operate at the highest order for as long as possible, so that we again, through design, have those materials within the economy for a longer period of time. Then, within all of this circular economy is a much more holistic notion, really, than recycling, in that all of this system within the circular economy really is about trying to regenerate natural systems rather than breaking them down. The ultimate imperative is a healthier environment, and that's certainly one of the things the circular economy tries to achieve.

There are some really interesting business models the circular economy embraces, and they are things you've definitely heard about, like product life extensions. Also, there's “product as a service”, and that is really taking the economy by storm, as well as sharing platforms and things like tool libraries, so that we don't all have to have one of everything but instead can embrace materials and products as a society and share them with each other. This has not only environmental but social benefits as well.

At the recycling council, we launched a program across Canada called the circular cities and regions initiative. We looked at how a circular economy can be developed at the municipal level. We did that because so many things happen at the municipal level. It's a very robust part of our economy. Municipalities have a lot of ability to do a lot of things and create a lot of new policies and really change the climate.

I've had some real success across the country with bringing some of these communities together. We've had communities everywhere, from a few hundred right up to half a million, that have worked within this initiative. They are from all the provinces and at least one territory, and in both languages, so this is something that we're very proud of and want to continue.

I also wanted to mention that within a circular economy, speaking of policy, one of the key policies that's really important is “extended producer responsibility”. This is a policy that has been adopted by virtually every province across the country and now by the territories as well. Essentially, extended producer responsibility puts the responsibility back on the producer of the product and the material. That is a very strong benefit, because they are the ones that are most able to bring that material back into the system through a circular economy.

We really embrace EPR across all the provinces and all materials, but the one thing I will say about EPR is that to this point we have applied EPR only to residential materials when it comes to packaging. We need to broaden that again to make it more holistic, and we need to embrace all sectors, including the commercial sector.

That's just a summary of our beliefs around a circular economy.

Thank you very much. I look forward to questions.

[The Chair, Liberal, Joël Lightbound]

Thank you very much.

I now give the floor to the representatives of Teck Resources Limited.

[Amber Johnston-Billings, Vice-President, Communities, Government Affairs and Health, Safety, Environment and Community Systems, Teck Resources Limited]

Thank you, Mr. Chair and members of the committee, for the opportunity to be here in person today.

My name is Amber Johnston-Billings. I'm a vice-president at Teck Resources covering the communities area and the government and regulatory affairs area.

Teck is a proudly Canadian company. We employ 8,000 people directly in Canada and another 65,000 people indirectly across this nation. There are four head offices—three based in Vancouver, Calgary and Toronto, as well as a satellite office in Santiago, Chile—and last year we contributed $11 billion to Canada's GDP.

Today, for the purposes of the committee, we intend to focus on the Trail smelting and refining complex in southern B.C. Joining me is Thompson Hickey, who is the general manager for that smelting complex. I'll pass this to him now to describe the metals recycling program at Trail.

[Thompson Hickey, General Manager, Trail Operations, Teck Resources Limited]

Thank you, Amber.

Good afternoon.

Trail Operations has been in business for over 125 years and has evolved to become one of the world’s largest metallurgical complexes and refineries. We directly employ 1,500 people and contribute approximately $1 billion to the local GDP. We produce 15 metals products, specialty metals and chemicals, including seven of Canada’s 31 critical minerals.

We are excited to say we recently released a report outlining the extremely low carbon footprint of our special high-grade refined zinc. The low-carbon nature of Trail’s zinc is attributable to our use of clean and renewable power from the local Waneta hydroelectric dam and the primary sourcing of concentrate from our Red Dog mine in Alaska.

In addition to our processing of mined concentrates, we are also proud of our metals recycling program, which started in 1982 with lead battery recycling and has since evolved to other materials. At Trail, each year, we currently recycle about 40,000 tonnes of lead batteries used in cars, telecommunications, medical equipment, etc.; about 5,000 tonnes of cathode ray tube glass from old TVs and monitors; about 500 tonnes of zinc alkaline batteries—these would be your Duracell or Energizer consumer batteries; and about 15,000 tonnes of secondary materials from other industries, from which we recover zinc, lead and germanium.

Over many decades, we have helped keep hundreds of thousands of tonnes of metals in use to support the circular economy and reduce environmental impacts. While recycling currently makes up 5% to 10% of our total raw material supply chain, we are continually looking to develop recycling even further. Today, we are making a modest expansion in our lead battery recycling capacity, testing the recovery of zinc from electric arc furnace dust, and exploring the potential to recycle the lithium-ion batteries used to power electric vehicles.

The Government of Canada set a mandatory target for all new light-duty vehicles to be zero-emissions by 2035. This means Canada needs to build—and find the raw materials for—significantly more electric vehicles over the next 10 years. It also means just as many lithium-ion batteries will eventually need to be recycled.

There are several differences between the lead and lithium-ion batteries used in vehicles that are particularly important when it comes to recycling. Here are a few of these. One, a lead battery is the size of a small toaster oven and can be easily removed and replaced by you and me in our vehicle. In comparison, a lithium-ion battery pack is integral to the vehicle and weighs approximately 500 kilograms. Two, while a lead battery contains four to five elements and each is essentially the same regardless of manufacturer, a lithium-ion battery is made up of many components, including a wide variety of chemicals and elements that differ by manufacturer. Three, most lithium-ion batteries today contain lithium, nickel, cobalt and manganese, which are all listed as Canadian critical minerals.

There is a well-established circular economy around lead batteries. However, a full lithium-ion battery recycling value chain does not currently exist in Canada or anywhere in North America. While a lithium battery circular economy is starting to develop in North America, there are still key questions to be answered regarding effective recycling technologies, evolving battery chemistry, ownership of the battery, and the regulatory framework.

That being said, we see this as a major opportunity not only for Teck but also for Canada in being first movers in this space, despite the significant capital investment required to establish a circular economy for the lithium-ion battery industry.

With that, I will now turn it back over to Amber to conclude our opening remarks.

[Amber Johnston-Billings]

Thanks, Thompson.

We're pleased to see that the federal government is focused on EV battery recycling, and we believe our Trail smelter, with 120 years of innovation, is very well placed to take part in both the recycling sector and the EV battery recycling space.

Thank you. We look forward to your questions.

[The Chair, Liberal, Joël Lightbound]

Thank you very much to all of our witnesses for their testimonies.

I will now turn to Mr. Perkins to start the discussion.

You have six minutes.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Thank you, Mr. Chair, and thank you, witnesses, for appearing.

If the committee will indulge me, the first couple of questions I have are for our Teck witnesses. Ms. Johnston-Billings is perhaps the best person to answer them.

You guys have been in the news a bit in the last couple of weeks. These are interesting times, with the unsolicited bid from Glencore to take over your company. I'm wondering whether you could inform this committee first, if Glencore is successful....

I have a number of questions.

First, what would the likely impact be on jobs and the efforts you make in terms of your mining recycling system?

[Amber Johnston-Billings]

Yes, you will have seen in the news that we're fending off a bid from a foreign company—Glencore—that's been unanimously rejected by our board on two occasions.

I'm not sure if people are familiar with Glencore, but they don't have a great track record for a number of reasons. Last year, they paid 1.7 billion dollars' worth of corruption charges; $1.1 billion of that was in the U.S. They're well known as being corporate raiders. They tend to come in and buy assets, which are usually assets that have been pretty well run in the past and have a lot of goodwill about them. In that process, they tend to deplete the ore in that asset, dump the asset and move on, which leaves them with a terrible track record in terms of human rights abuses, labour strikes and certainly environmental stewardship issues.

This is a company that we absolutely do not want to see take over one of Canada's last remaining critical minerals companies. We are Canada's largest diversified miner. We have spent decades developing assets in Canada. We have 85 indigenous agreements. We honour each of those and we're obviously worried that if the Glencore takeover happened, we wouldn't be able to honour those commitments.

On the second part of your question around the recycling piece, I think it's well known that Glencore doesn't spend a lot of money on innovation and technology. Certainly, pursuing something like EV battery recycling at Trail would require significant partnership with the federal government, with local communities and with other smaller recycling companies that are based in that Teck ecosystem. The likelihood that Glencore would partner with them and put up capital to develop this and retrofit the smelter is very low, in our opinion.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Thank you.

In my business past, I've been involved in a lot of acquisitions. I've been on the acquiring end and on the other end, working for companies that have been acquired. Generally, the acquirer's culture and approach to business takes over when they acquire a company and they have to produce savings.

Has Glencore made projections as to what the savings of this acquisition might be and what the lost jobs for Teck would be?

[Amber Johnston-Billings]

They haven't been explicit on the jobs, but they have been explicit about a head count reduction that would accrue about $300 million of benefit to Glencore shareholders and effectively job loss in Canada.

We think that in the Glencore proposal they put forward to shareholders, they have suggested 4.75 billion dollars' worth of synergies. If you look at the fine print in that, 5,000 of those are likely to be the loss of jobs in Canada at our two head offices, which are in Vancouver and in Toronto. They have a history of reducing workforce at sites as well, so we don't know the proportion that would come from jobs based at our operations, but we are aware that they're very likely to take down and remove the two head offices. There's a big job impact in Canada.

To link it to the critical minerals dialogue, that means you'd lose a lot of talent that needs to stay here to keep developing those critical minerals assets, doing exploration and doing things like recycling.

The other big piece of that is a benefit that they have indicated they would get from paying less tax. Glencore is facing a number of corruption charges for that around the world. That would effectively be moving their tax jurisdiction overseas. For the assets that Teck currently owns, which operate under Canadian values overseas, they would very likely be paying their revenue through to those different offshore entities and then through to the headquarters in Switzerland. Effectively, we think Canada would be losing in the order of between $200 million and $400 million of tax revenue if Glencore were to be successful in its bid.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

I think you said that Glencore is facing $1.4 billion in corruption and bribery fines. There were recent charges and a settlement with them, I guess, in the U.S. on their operations and around corruption and bribery.

Do you know how much that was?

[Amber Johnston-Billings]

I think that was $1.1 billion.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

You or your colleague mentioned the critical minerals that you're mining at Trail. Obviously, this would be one of our last Canadian-owned critical mineral companies that's producing, and it would become foreign-owned. We have only one lithium-producing mine right now, and it's currently owned by the Chinese government. One hundred per cent of what it does goes to China for use in its attempts to green its economy.

What would it mean to lose that for our supply chain of critical minerals and our attempts to green our economy?

[Amber Johnston-Billings]

It probably means a whole range of things, but first of all you would lose control of the Canadian-based critical minerals assets. Then you would lose control of the assets based overseas that currently are owned by Teck and that operate with Canadian values. They're primarily copper resources for the Teck portfolio, as well as zinc resources.

I think the other thing that is concerning from a critical minerals supply chain perspective is that Teck Resources has spent a long time developing very close relationships with South Korea and Japan and engaging in a whole number of friendshoring activities, looking to Europe, as well. That means that if Glencore were to take over, their main customers are based in China, so you would effectively see a loss of control of where the critical minerals that are produced from Canada, Chile and other friendly nations through to other jurisdictions.... We can't say for sure, obviously, but it would be unlikely that Glencore would be as well placed and friendly towards working with the Canadian government on that friendshoring initiative and the protection of critical minerals long term.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Thank you.

Am I done? Okay.

I have more questions, but apparently I'm done.

[The Chair, Liberal, Joël Lightbound]

Yes, unfortunately, Mr. Perkins.

We'll now move to Mr. Fillmore for six minutes.

[Andy Fillmore, Liberal, Halifax, NS]

Thank you very much, Mr. Chair, and thanks to the witnesses for joining us today and sharing their time, experiences and wisdom with us.

Ms. Seidel, I want to start with you. I was very interested in your discussion about extended producer responsibility, and I wonder if you could talk a little more about that and maybe focus on where the best practices are. What other jurisdictions or other countries are doing a good job that Canada could look to, and where could Canada improve?

[Dr. Christina Seidel]

What's interesting is that we have one of the best practices here, and that is British Columbia, which has some of the best EPR programs in the world. They are certainly used as a model. They are being used increasingly as a model now for the U.S. states, and even federally as they are looking at implementing EPR across the United States. They are looking very closely to B.C. as their model.

That being said, as with most things related to waste, we look to Europe for a lot of these things. Europe tends to be very progressive on waste issues, and EPR is no exception. As we are enhancing our EPR systems across the country, we are very much borrowing ideas from the EU, because they tend to be that much more progressive than we are. Again, that being said, we certainly, ourselves, do good work on EPR, especially.... Other than that one point that I brought up for packaging, we are focusing only on residential, and we need to focus on commercial as well.

[Andy Fillmore, Liberal, Halifax, NS]

Okay, thanks for that.

We know that the EU does things very well collectively—for example, the single cellphone charger initiative and so forth—but your Canadian example was limited to British Columbia. Do you feel there is a missing national piece here, that this work should be rolled out equally across all provinces and territories through a national effort?

[Dr. Christina Seidel]

That's one of the challenges we have with EPR and, actually, with a lot of waste policy, because jurisdictionally the provinces have authority over waste.

Recently I'm sure you heard about what's happening with Environment Canada and all the new single-use plastics regulations, for example. Those are being done at the federal level. We haven't done much federally in terms of waste issues because of that jurisdictional challenge, but Environment Canada has a whole new interest, especially in plastics and in zero plastics particularly, so we are starting to see this happen more.

I think this is a very good thing, because we've tried to create more of a national system through CCME as the only real mechanism that we had to try to get provinces all on board to be the same. However, it has been a bit clunky, to be honest. Provinces aren't always as good at working together as they should be. I think the more the federal government can really set the stage, the better. Then we can move forward at a national level as opposed to just waiting for the provinces to all catch up.

[Andy Fillmore, Liberal, Halifax, NS]

Okay, thank you.

You mentioned that to date the efforts in B.C. regarding EPR are limited to household-level consumer goods and don't get into corporate work. Is there a particular barrier, or is it just a matter of not having ramped up there yet?

[Dr. Christina Seidel]

It's actually a complicated answer. The limit to residential materials is for packaging and printed paper. The blue-box materials are the ones that have been limited to the residential sector.

The other materials—for example, if you look at tires or used oil—actually cross the sectors. That's not just residential. It's not just residential because it can only be residential; it's because that is the way it has been done historically. That is not good enough anymore. We need to expand that, because there's way more material that comes out of the commercial sector than out of the residential sector.

I can tell you the big barrier is the waste companies, because they feel that the commercial sector is their area. They control it. They have always controlled it. If we expand EPR to include all the commercial sector, that is going to really enter their turf. Waste companies have been opposed to it from the beginning. It's purely for political reasons that this has not happened. Alberta just introduced EPR regulations last fall. We were really hoping we would be the first ones to bring in the commercial sector, but again, that didn't happen for a number of reasons. It is coming. Quebec is talking about it. B.C. is talking about it. It's just a matter of time, but it can't happen soon enough.