Industry Committee on April 24th, 2023

[The Chair, Liberal, Joël Lightbound]

Good afternoon, everyone. I call this meeting to order.

Welcome to meeting No. 68 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.

I'd like to thank the witnesses who are joining us. I apologize for running late. I note, at the request of Mr. Lemire, that Mr. Masse is to blame for this delay because he requested a division of the motion on Bill C‑27.

Brian, it's your fault if we're late today.

[Some hon. members]

Oh, oh!

[The Chair, Liberal, Joël Lightbound]

I wanted to stress that for the public, and for our witnesses. So yes, the NDP is to blame.

Thank you for your patience and for bearing with us. Even though we have a shorter time, I'm sure it's going to be interesting and appreciated by members.

From the Canadian Steel Producers Association here in Ottawa, we have its President and Chief Executive Officer, Ms. Catherine Cobden. We also have, by video conference, Ms. Amélie Côté, Source Reduction Analyst at Équiterre. Lastly, with us here in Ottawa, we have Kiril Mugerman, President and Chief Executive Officer of Geomega Resources Inc.

Without further ado, I'm giving the floor to Ms. Cobden for five minutes.

Go ahead, Ms. Cobden.

[Catherine Cobden, President and Chief Executive Officer, Canadian Steel Producers Association]

Thank you.

Chair and members, thank you very much for the opportunity to appear here today to share the perspectives of Canadian steel producers on the recyclability of steel and the role that the steel industry plays in supporting a circular economy.

To start, Canada's steel sector supports 123,000 jobs directly and indirectly across the country, and plays a strategically vital role in the North American economy. We are a critical supplier to many key North American sectors, including automotive, energy, construction and various general manufacturing applications.

Canada's steel producers make some of the greenest steel in the world, but we're not standing still. Since announcing the CSPA's 2050 net zero aspirational goal a few years ago, we have seen impressive investments announced at two Canadian steel plants that will result in industry-wide emission reductions of over 45% by 2030.

Canadian steel producers are advanced manufacturers of a 100% recyclable product that can be found all around us, from domestic appliances to vehicles to food cans to bridges to buildings and so much more.

I'd like to cover several key points with you today. First is the recyclability of steel, which I'll get into in a bit more detail; the use of recycled steel by Canadian steelmakers; the role of recycled steel in our decarbonization strategy; and finally, the enabling role that we play in all metals recycling and the circular economy.

Steel is the most recycled product in the world. World Steel estimates that since the turn of the last century, over 25 billion tonnes of steel have been recycled, offsetting 35 billion tonnes of iron and 18 billion tonnes of coal, respectively.

Steel can be recycled infinitely without losing key properties. It is also strong and permanent, and offers significant benefits to a wide range of applications. Through sophisticated metallurgy, all types of recycled steel can be modified and recreated to make new grades of steel meeting the exacting specifications of the marketplace. Finally, steel is magnetic, which is actually an important feature. It makes it very easy to separate this highly valuable material from recycling and waste streams.

Globally, steel recovery rates are very impressive, with about 90% recovery from the automotive and heavy equipment sectors, 85% from construction and 50% from electrical and household appliances. For our part, the Canadian steel industry is a significant user of recycled steel. We presently total our domestic recycled steel consumption at about 6 million tonnes a year. We're recycling significantly.

Our industry's decarbonization journey will involve a range of approaches and projects, but increasing recycled steel use in steelmaking is one of the pathways being undertaken. It's really dependent upon the company's product and market requirements. Approximately every tonne of scrap steel that's used results in a saving of about 1.5 tonnes of CO2 produced.

In Canada, Algoma Steel in Sault Ste. Marie has announced its conversion from its existing primary steelmaking facility to an electric arc process that will utilize almost completely recycled steel. While all production routes in the industry use some recycled steel today in their feedstock, the electric arc project at Algoma will see another major shift toward scrap by this facility. Because they're very large, it will impact our 6 million tonnes by an additional significant amount. Overall, the electrification at Sault Ste. Marie is expected to result in approximately 3 million tonnes of CO2 reductions per year from those operations.

I'd like to spend just a few moments on the role we play in overall metals recycling and the circular economy.

When you visit a steel plant that utilizes a recycling stream—and I hope you all have—it's like witnessing very impressive recycling in action. In the recycled steel we purchase, there are many other metals and materials of value, and because of our scale and our consumption of the scrap steel portion, every effort is made to extract those additional valuable materials for other applications. This really contributes to the preservation of raw materials and this concept of a circular economy.

We also have a lot of innovation and development going on for high-strength steels and other applications that reduce the weight of steel for the same functionality. Again, that's another important contribution to the circular economy.

In closing, steel is essential to our world today and into the future. I've already spoken about our current markets of automobiles, construction, the energy sector and general manufacturing but, indeed, as many economies decarbonize, we'll also see new markets and new solutions. There will be infrastructure that will require more steel, such as renewable energy installations, hydrogen distribution systems, electric vehicles and much more.

Canada's steel producers have the vision to be a green supplier in these important critical supply chains for both current and evolving markets.

Thank you for your attention. I'll be happy to answer any questions at the right time.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Ms. Cobden.

I am now giving the floor to Ms. Côté for five minutes.

[Amélie Côté, Source Reduction Analyst, Équiterre]

Good afternoon to the members of the committee.

My name is Amélie Côté, and I'm a source reduction analyst at Équiterre.

Équiterre is a well-known Quebec-based environmental organization with 126,000 supporters, over 22,000 members and a 30-year history.

Waste management is one of our key priorities in our 2021-25 strategic plan. We're working to reduce waste at the source from a circular economy perspective.

In 2022, the organization published the first Canada-wide study on access to repairs, which I had the pleasure of coordinating and jointly directing. The study was funded by Innovation, Science and Economic Development Canada's Office of Consumer Affairs.

I would like today to draw your attention to two key points.

Firstly, as shown by the name of this committee's study, when we talk about the circular economy, it's often a matter of recycling, and focusing on extending the life of existing products.

Given the shortage of critical and strategic minerals, the key strategies of a circular economy should be given priority. Extending the life of products and components makes for a better use of resources. This applies to metals and plastics that have already been extracted and processed, as well as to existing electronics and electric household appliances.

At the reuse symposium jointly organized by environment Canada in the fall of 2022, several attendees underscored the problems involved in applying government funding to reuse initiatives on broader scale. In fact, most efforts go to recycling.

I would like today to encourage the committee members to include the key circular economy strategies among its recommendations.

The second point I would like to draw to your attention is the importance of promoting access to repairs through public policies that would extend the life of electronics and electric home appliances.

In Équiterre's study on repairing, we learned that fewer than 20% of Canadians repaired their products over the past two years. Furthermore, 63% of those who responded to the Canada-wide survey reported having at least one item break down during that period, within an average of 2.6 years after acquiring it. The reduced service life and repairability of these devices has a significant environmental impact on Canada and an economic impact on Canadians. We can talk more about this if you wish.

Équiterre made recommendations during the consultation on the future of Canada's competition policy. We believe that stronger competition requires the democratization of access to parts, tools and information for independent repairers and for the owners of the products being repaired.

It's also important to have access to better information when making purchases, to assist in making well-informed decisions. Canada could draw inspiration from France's repairability index, which will be replacing its durability index, and provide information about the service life and repairability of products at the time of purchase. A durability index could be introduced across Canada. It would be an important step toward supporting the development of a circular economy in Canada.

Repair cost is the second impediment identified in our study. To address it, a variety of environmental tax measures could be introduced. These could be tax credits, a repair fund based on the French approach, or tax credits for repair work. It would be useful to analyze the potential impact of these measures on decisions about whether or not to repair an appliance, to ensure that they are achieving this objective.

A brief was sent to the committee to allow you to explore these issues in greater depth.

I'd be happy to answer any questions you may have about the issues dealt with in my address.

Thank you for your attention.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Ms. Côté.

Mr. Mugerman, the floor is yours.

[Kiril Mugerman, President and Chief Executive Officer, Geomega Resources Inc.]

Hi, everyone. It's a pleasure to be here today to discuss this super important and critical aspect of the circular economy.

Geomega is a developer of innovative processing technologies. We are focused on extracting metals from existing and new sources of material.

The demand for traditional industrial metals, such as steel, copper and aluminum, is constantly increasing due to new manufacturing and technological developments and, of course, population growth. Traditional recycling of these metals or simple-stream recycling, such as consumer end-of-life products and manufacturing waste recycling, has been developed over the last 100 years and is well established in Canada and worldwide.

On the other hand, the demand for critical and strategic metals is only starting to grow and simple-stream recycling is not yet developed or only starting to be developed worldwide. This is one example where Canada has a significant opportunity to become a global leader in metals recycling using innovative, sustainable technologies. Canada has already started investing in this field and should continue doing so to help its industries develop and establish a significant global presence in the circular economy for critical and strategic metals.

The developments of Geomega are specifically focused in this field, where we are working on building the first rare earth magnet recycling facility outside of Asia right here in Quebec, Canada. The magnets to be recycled will be sourced from end-of-life wind turbines, electric vehicles, MRI machines, manufacturing waste and many more applications from all over the world. They'll be processed into rare earth oxides here in Canada.

Contrary to the recycling of simple streams, for both traditional metals and critical and strategic metals another major metal recycling opportunity for Canada is from complex streams such as industrial and mining waste. These complex streams include bauxite residues from alumina production, electric arc furnace dust from steel recycling, iron ore tailings, copper and nickel tailings, niobium tailings and many more.

Traditionally, many of these complex streams have been sent to long-term storage in waste and tailings facilities. Today, due to the increased demand for both traditional metals and critical and strategic metals and the push for more sustainable environmental practices, these complex streams have more value than ever.

Once processed with the right technology, new metal streams will be developed to increase revenues of companies, tailings facilities will be reduced while freeing up space for other developments and many new high-skilled jobs can be created. Canada has already started investing in this avenue and needs to continue doing so while this field is still in its infancy.

Geomega has an active program of R and D projects focusing on complex streams such as bauxite residues from alumina production and other waste types, where new streams of iron, alumina, rare earth, scandium and other metals can be produced.

I'm here to answer your questions if you would like to learn more about what other opportunities can be exploited or developed while this field is just being born.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Mugerman.

Thanks to all of our witnesses.

We'll go to Mr. Williams to start the discussion for six minutes.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Thank you very much, Mr. Chair.

Thank you to our witnesses for joining today. It's a very important study. We're happy to have you here.

Ms. Côté, I'm going to start with you.

I wish we had you here about a month ago when we were studying the right to repair. I think it's really great to hear your comments on repairing existing electronics and how important that may be to the future of recycling in Canada.

I want to start with maybe some questions around what I think has to be stated as the belief that it's industry's role to produce a product that can be recycled.

Can you maybe give us a little bit of overview of what other countries or jurisdictions are doing to ensure that industry participates in recycling by producing products that can be recycled?

[Amélie Côté]

Thanks, Mr. Williams, for your question.

What we find to be most important is, first, that these objects be produced in order to last longer, before they are reused or recycled. We think there is a responsibility for the industry in that way.

I'll continue in French for the rest of my answer.

First of all, there are several initiatives aimed at ensuring that products marketed should last longer and be more repairable. These include environmental design initiatives and legislative initiatives. One measure that has attracted our attention is a right to repair law adopted in France.

The act includes the durability index introduced in France in 2021, which I alluded to earlier. This index assigns a score out of 10 that provides information about the extent to which a product can be repaired. It will be replaced by a repairability index that provides information about the service life of the product, and whether it can be repaired or upgraded.

For example, for electronics, people will be able to know whether certain components can be replaced to extend the life of the device. That's an important consideration, given the current context. We find that it's a very useful option to consider.

As for device recyclability, consideration should be given at the design stage to allow easy removal of small components so that products would require less frequent replacement. This would have a positive impact on the circular economy.

As I mentioned earlier in my presentation, people often think of recycling when the circular economy is mentioned. However, we believe that it's also important to emphasize reuse. Repair is therefore another option.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Thank you very much.

I think, something that we look at is really that we increase competition, so we have companies that can produce a product that is better for the consumer so that the consumer has a better choice, more choice, and can decide where they put their money. You used a word in your opening, which I think was impôts. Are other countries using taxes instead of allowing free market companies to produce a better product? Have you seen different ways that governments are involved with trying to get products out the door?

[Amélie Côté]

We do in fact believe that competition is an important aspect.

We found that the main barrier to repair is product design. Providing access to repair also means giving access to the parts, tools and other information needed to effect repairs to independent repairers, and the owners themselves, rather than just those associated with the manufacturers. This lack of access is an obstacle to product repairs.

With respect to environmental taxation measures, several European countries, including Sweden, have introduced tax credits and repair tax credits, along with other measures. These are very concrete and could be adopted here.

In France, the repair fund is a discount built into the expanded accountability system for manufacturers. It involves an environmental tax paid when products are purchased. The proceeds are used to build up a fund that reduces repair costs.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Thank you so much. I just want to get one more question in. You're talking about electronics, which is great.

I also wanted to talk about waste at source, so let's look at groceries. Right now, when you go to a grocery store, you get a paper bag a lot of the times, but in that paper bag goes your bread, wrapped in plastic, your jug of milk wrapped in plastic and your sandwich wrapped in plastic.

When we're looking at waste at source, how do we handle food waste? What are other countries doing that we can implement into the circular recycling economy? How do we ensure that, when it comes to food waste, we're also looking at recyclable materials?

[Amélie Côté]

That's really interesting question. We did another study on this specific topic.

To us, there is a big gain to make, if we talk about the whole supply chain.

When people talk about supply, they are thinking of primary packaging, which is directly on the food. There are also possible ways of reducing packaging throughout the production and distribution chain. We believe that's an aspect that could be optimized in the industry.

There could of course be legal requirements as well. In France, for example, stores and retailers with a floor area of more than 400 square metres are required to sell at least 20% of food products in bulk. We believe that a requirement of this kind would introduce real changes in how the industry operates, and reduce the amount of plastic packaging.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Williams and Ms. Côté.

Ms. Lapointe now has the floor for six minutes.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you, Mr. Chair.

My question is for Mr. Mugerman.

The critical minerals strategy is important for electric vehicles, clean energy and information technology. It's clear that the critical minerals required for these products are not unlimited resources. So a circular economy will be important.

What initiatives has Canada introduced specifically for the reuse of critical minerals?

[Kiril Mugerman]

Some initiatives have already been set in motion. I'd say it's only getting under way now. We're seeing some initiatives and investments in companies like Geomega for recycling rare earths, such as those used in the permanent magnets in electric vehicles and wind turbines.

There's also been a lot of investment in lithium recycling companies. That's another very important area to look at. Lithium is essential for batteries, but there's also cobalt. There are numerous cobalt recycling initiatives, but there is more and more investment today in research, because it's considered so important. There are a lot of research and development programs for the recycling of critical and strategic metals. These programs are in universities, research centres and private companies like ours. Those are probably the major changes we've seen recently.

Five or 10 years ago, these initiatives were not happening here. Only in the United States was money on that scale available for research and development into critical and strategic metals. There were virtually no initiatives of that kind here.

You can see the difference today, and I think that over the next five years, these initiatives will have borne fruit.

[Viviane LaPointe, Liberal, Sudbury, ON]

My next question is for Ms. Cobden.

I know you're here in your role with the steel industry, but in the past you have certainly worked with forestry, mining and construction, so I want to ask you the same question as well.

What initiatives has Canada put in place specifically to reuse critical minerals in e-waste?

[Catherine Cobden]

I can't speak to e-waste, but certainly what I can say is that you've made a very good point about research and development. There's been a lot of that, both private sector based and co-funded to support development.

I'm going to keep my steel hat on, if you don't mind. I made a reference to the development of lightweight steel. This is extremely important, again, to preserve the raw materials, the minerals and the critical components in steelmaking. It's this idea of making sure that we find ways to create the same properties that are required in an automobile, for example. There are certain properties that are required for safety and strength, of course, but this is to find new ways to chart new ground to get those same properties but with less material. That's a very real example of R and D doing what it can to support the development of ensuring that we're using as little of this stuff as possible.

[Viviane LaPointe, Liberal, Sudbury, ON]

Can you tell us how important it is that we work with international partners on this? How are we doing in terms of working with our international partners?

[Catherine Cobden]

Do you want me to respond to that?

[Viviane LaPointe, Liberal, Sudbury, ON]

It's for both of you again.

[Kiril Mugerman]

I think it's important, and probably the most important partner would be the U.S. They are our southern border neighbour, and we see a lot of interest from the U.S. to develop together all of those circular economies for critical and strategic metals.

We saw that the Department of Defense in the U.S. opened the door to Canadian companies to apply for the same funding of R and D that is open to U.S. companies. We still have not seen that from the Department of Energy in the U.S., which makes the majority of investments into this type of R and D. Hopefully the Canadian government can find a way to get the Canadian companies in there, because those companies work on exactly the same sources of material. The material that gets collected there can be recycled there or here, and vice versa.

Companies that work together have more flexibility by putting more resources together. If we are able to work only within the Canadian community, we are limited. But if we are able to work with Canadian research centres and American companies, which often have much more cash to invest in those new processes, that opens the door significantly. I think we are seeing that, but we should make more effort on this.

[Viviane LaPointe, Liberal, Sudbury, ON]

Okay.

Go ahead, Ms. Cobden.