Industry Committee on Feb. 11th, 2022

[The Chair, Liberal, Joël Lightbound]

I call this meeting to order.

Welcome to the eighth meeting 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 Wednesday, January 26, 2022, the committee is meeting to study the draft report on critical minerals.

Today's meeting is taking place in a hybrid format, pursuant to the House order of November 25, 2021. Members are attending in person in the room and remotely, using the Zoom application. I encourage everyone present in Ottawa to be aware of the health measures in place and to follow them.

I would like to take a moment to thank the many witnesses who are with us today.

Dr. Charles Burton, Senior Fellow, Centre for Advancing Canada's Interests Abroad, Macdonald-Laurier Institute, and Dr. Karim Zaghib, Professor, Concordia University and Professor of Practice, McGill University, are appearing as individuals. In addition, we have Matthew Fortier, President of Canada's ZEV Supply Chain Alliance, with ZEV meaning zero-emission vehicles; Daniel Breton, President and Chief Executive Officer of Electric Mobility Canada; and Lisa McDonald, Executive Director, and Jeff Killeen, Director, Policy and Programs, both from the Prospectors and Developers Association of Canada.

Thank you all for being here today.

My colleagues, members of Parliament, know the system, but for our witnesses, when I present this yellow card, it means there is one minute left. This red card means time is up.

We first have to hear from the witnesses. We'll begin with Mr. Burton, for five minutes.

[Dr. Charles Burton, Senior Fellow, Centre for Advancing Canada's Interests Abroad, Macdonald-Laurier Institute, As an Individual]

Thank you, Mr. Chair.

Mike MacPherson, the clerk of the committee, has emailed me the five points that comprise the committee's study on critical minerals under Standing Order 108(2).

This afternoon I would like to address points one and three. Point one is how can we best protect Canada's national security by preventing the sale of critical mineral assets to hostile foreign interests? Point three is how can Canada reduce its reliance on and vulnerability to foreign supply chains when it comes to sourcing and processing of critical minerals?

It's pretty clear that the hostile foreign interest, as has been affirmed by several of the people who have given evidence to this committee earlier, is overwhelmingly the People's Republic of China.

I can appreciate the ideal that Canada should be a country agnostic to a national security threat assessment, but the fact is that the People's Republic of China regime is an integrated party-state-military-security-industrial complex unlike any other country in the world today. As China's president, party general secretary, and chairman of the military commission has put it, party, government, military, civilian, academic, east, west, south, north, and centre, the party leads everything.

There are no industrial enterprises in China existing independently from China's party-state. If we impose a distinction between China's state enterprises and ostensibly private enterprises.... For example, Huawei describes itself as a private enterprise. It serves China's strategic interest for us to perceive these enterprises as private, by giving Canada the misimpression that a company like Huawei, for example, as a non-state actor, would not be subject to direction by Chinese military intelligence, as all Chinese enterprises, state or non-state, would be under Chinese law.

China's business enterprises are all state-related. The serving of the overall interests of the Chinese Communist Party at home and China's geostrategic interests abroad takes priority in the business decisions of these business enterprises over maximizing profits to shareholders or whatever.

As earlier witnesses to this study have observed, it's very difficult, well-nigh impossible, to distinguish between commercial and geostrategic factors in Chinese regime acquisitions.

We see evidence of this in Canada. For example, China's acquisition of Nexen, the attempt to purchase Aecon, or Shandong Gold's bid for the Tmac Resources gold mine in Nunavut, all involved bids that are well established to have been well over market value.

Why does China pay more than the market rate for things? It's because these acquisitions would enable the potential for Chinese state agencies to use them for espionage through privileged access to knowledge of Canadian infrastructure and digital databases. These enterprises are heavily subsidized, because they serve both geostrategic and commercial interests.

The Huawei software and hardware is priced well below that of its Scandinavian and South Korean competitors. This makes it attractive to our telecommunications companies, which have a mandate to maximize profit for their shareholders, but Canadian telecommunications companies do not have a defined mandate to protect Canada's national security from a foreign threat.

Insofar as critical minerals go, the same principles apply. China does a lot of these belt and road development projects in resource-rich countries such as Angola, Djibouti, Ethiopia, Kenya and Zambia. The potential for China to attain geostrategic leverage over minerals that are central to high-tech sectors is rightly of very deep concern.

We already have the example, in 2010, of a dispute over Japan's detention of a Chinese fishing trawler captain. To coerce his release, the Chinese government blocked exports to Japan of a critical category of minerals used in products like hybrid cars, wind turbines and guided missiles for a period of two months in 2010. China denied that it had imposed any embargo on Japan, against great evidence to the contrary.

We know only too well, with our experience of hostage diplomacy and the imposition of unjustified tariff barriers on our canola seeds and meat, violating contractual terms for the Chinese import of those Canadian commodities, that China does apply economic coercion, and did so to force our government's hand over an extradition matter.

We cannot rely on China to fulfill its treaty obligations to the WTO. It's important for us to collaborate with our allies to protect foreign supply chains as increasing tensions occur between China and Russia and the western alliance.

Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you very much.

I now give Professor Zaghib the floor.

[Dr. Karim Zaghib, Professor, Concordia University and Professor of Practice, McGill University, As an Individual]

Good afternoon, Mr. Chair, ladies and gentlemen.

My experience with critical minerals and with processing them into active materials for batteries spans more than 36 years. My team and I are responsible for many publications, book chapters and patents in this field, a number of which have had commercial success. For example, lithium salt, iron phosphate, graphite and titanium oxide are used today in many types of battery technology for electronics, energy storage and electric vehicles.

From June 2020 to December 2021, I acted as a strategic advisor for Investissement Québec and the Government of Quebec. Because of my international network and 36 years of experience in the lithium-ion battery field, I was able to open doors around the world for Investissement Québec and Quebec's department of economy, science and innovation to promote opportunities, to achieve greater recognition of Quebec's mining industry—from its mines to its recycling facilities—and to attract to Quebec international players in various industries, including ores, precursors, cathodes, anodes and cells.

The Quebec government is working on several fronts to create a green circular economy for batteries, with a focus on the traceablity of greenhouse gases, GHGs, emissions and on a stable and secure supply chain in Canada.

Developing batteries requires two steps from the mine to the cell. There is the processing of rock into ores at the mine, and then the processing of the ores into the active materials, such as cathodes or anodes.

The first step, which involves opening and operating a mine, takes a number of years, sometimes more than 10. The second step, to produce a known material at industrial scale, takes anywhere from two to three to seven years. For a new material, it can take many years.

In order to reduce the time for the first transformation, mining, I suggest that the federal government creates a committee, including the Minister of Finance, the Minister of Innovation, Science and Industry, the Minister of Natural Resources and the Minister of Environment and Climate Change, with first nations leadership, to facilitate the reduction of time for environmental assessments and the permits required to open mines, in particular for critical minerals. Of course, we should include constant monitoring of environmental impact audits to these projects. This committee should help finance mining projects with multi-billion-dollar budgets, as these projects are very expensive by their nature.

As for the second transformation, I recommend the creation of special federal funding of and programs in critical minerals to support the local transformation of the minerals into active materials for applications. Some critical minerals, such as rare earth elements, should be considered national security elements. For example, we find 16 or 17 rare elements in one iPhone. It is critical for the country and for the local transformation of critical minerals to protect them from foreign interests.

Canada must also invest in bringing back the national industry of microelectronic chips manufactured using local silicon, which is essential for several electronic components in electric vehicles and batteries. Moreover, the programs should include the funding of research and innovation, universities, colleges, research institutes and industry. This would reduce the time of production. Through the technology transfer for local companies, an international company would establish manufacturers in Canada as well, putting Canada at the forefront.

In addition, I suggest that the Government of Canada establish three industry centres for mining and engineering in different regions of the country to design machine prototypes for mineral processing with full technology transfer. The objective is to build a new manufacturing industry in Canada. This strategy would create many jobs and strengthen Canada's industrial independence.

Thank you very much.

[Joël Lightbound, Liberal, Louis-Hébert, QC]

Thank you very much, Professor Zaghib.

I now give the floor to Mr. Fortier, from Canada's ZEV Supply Chain Alliance.

Mr. Fortier, you have the floor.

[Matthew Fortier, President, Accelerate: Canada's ZEV Supply Chain Alliance]

Thank you, Mr. Chair.

Vice-chairs and members of the committee, thank you for inviting me here today.

I am the president of Accelerate, an alliance of companies and organizations that have come together to advance the development of a national zero-emission vehicle supply chain.

Our members are private sector companies and organizations from across Canada’s zero-emission and electric vehicle ecosystem, from mining companies to battery research and development organizations to parts manufacturers, vehicle assemblers, EV battery recyclers and EV charging companies.

The transition to zero-emission transportation is happening quickly—probably more quickly than most of us ever imagined. Paradoxically, this presents both an enormous opportunity and a threat for Canada.

I will first talk about the threat.

A large part of our economy relies on the success of the automotive industry. It accounts for 10% of our manufacturing GDP and is Canada's second largest export industry.

While there have been some announcements of electric vehicle, EV, assembly mandates for southern Ontario, it is not at all clear that the industry's footprint will remain as large as it has been for the past 60 years. Without a comprehensive strategy to attract and retain EV manufacturers, the long-term commitments of manufacturers to Canada will remain uncertain.

Let’s talk about the opportunity. This is an opportunity, not only to retain our auto sector footprint, but to grow it and move further up the global value chain. It’s an opportunity to develop and execute against a comprehensive EV strategy, and to take advantage of Canada’s enviable position to be a leader in the entire electric vehicle production chain.

As members know, we have the critical and rare earth minerals needed to build the next generations of batteries and motors. We have world-class battery and vehicle R and D. We have parts manufacturers that supply global OEMs and, of course, those OEMs have a history with and investment in Canada. By virtue of those investments, we have tens of thousands of skilled men and women who work in this industry and are vested in its success.

The window is open for Canada, but it won’t stay open forever. This committee has already heard a lot about the dominance of China in mineral, battery and EV production. It’s not only China. It’s the EU, Australia, South Korea, Japan, the U.K. and the United States. Every jurisdiction that believes it can benefit from the world’s transition to clean mobility is making a move. They’re developing comprehensive EV and battery supply chain strategies and making significant investments.

Canada has an enormous opportunity, but we can’t simply assume things will work out. While having parts manufacturing and vehicle assembly capacity will remain critical, it can’t be the only part of our auto sector’s future. It certainly doesn’t assure our success. Simply put, what got us here is not what’s going to get us there.

What will? Canada needs an integrated strategy to ensure that our EV supply chain flourishes here. We need our mining sector to be a part of our auto sector. We also need our software, AI and financial services sectors to be a part of our auto sector.

This will attract the world’s interest and investment, but it won’t happen by accident. It needs to be done purposefully and with intent.

The good news is that the federal government has already begun to focus on this opportunity, including through the release of the report entitled “From Mines to Mobility: Seizing Opportunities for Canada in the Global Battery Value Chain”. It has also provided funding for a centre of excellence on critical minerals and encouraged direct foreign investment in battery cell manufacturing. However, it needs to do more.

Critical minerals are a foundational part of this industrial future. The sector requires much more development and investment to ensure Canada’s future EV supply chain success.

Accelerate has already been supporting work in this area. We are collaborating with one of our members, Clean Energy Canada, which is leading our joint battery task force to work in consultation with various industry stakeholders, including parts manufacturers and OEMs, to advance Canada’s domestic battery industry.

Another of our members, the Battery Metals Association of Canada, has initiated a study of the opportunities in our critical minerals and metals sector to feed into an integrated and competitive EV supply chain.

This work will identify ways in which Canada can maximize critical mineral production and foster the production of battery active materials. Reports from these projects are forthcoming and will inform policy-makers on the opportunities in the upstream and midstream segments of Canada’s EV supply chain.

[The Chair, Liberal, Joël Lightbound]

Mr. Fortier's screen has frozen. Let's move on to our next witness while we wait for the problem to be resolved.

I see that you are back, Mr. Fortier. Please excuse me, your screen froze for a moment.

Could you repeat the last 15 to 20 seconds of your remarks?

[Matthew Fortier]

All right.

I think I was talking about some of the work we're doing. We're working with a couple of our members to really develop Canada's battery sector.

For example, with Clean Energy Canada, one of our members, we're leading a joint battery task force that works in consultation with various stakeholders, including OEMs and parts manufacturers, to advance our domestic battery industry. Further upstream, we're working with the Battery Metals Association of Canada and have initiated a study on the opportunities in our critical minerals and metals sector to feed into an integrated EV supply chain.

Reports on these products are forthcoming and they'll inform policy-makers such as yourselves on the opportunities in the upstream and midstream segments of Canada's EV supply chain.

I'll pause there. I look forward to our conversation.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Fortier.

We'll now move to

Daniel Breton, President and Chief Executive Officer of Electric Mobility Canada.

The floor is yours, Mr. Breton.

[Daniel Breton, President and Chief Executive Officer, Electric Mobility Canada]

Thank you, Mr. Chair.

We would like to thank the members of the Standing Committee on Industry and Technology for taking the time to study our recommendations on the sourcing and processing of critical minerals.

Electric Mobility Canada was founded in 2006 and is one of the world's leading organizations in electrifying transportation. Our members include manufacturers of light-, medium- and heavy-duty vehicles, off-road vehicles, suppliers of electricity and charging infrastructure, mining companies, technology companies, research centres, cities, universities, fleet managers, unions, environmental non-governmental organizations, or NGOs, and so on.

In a word, Electric Mobility Canada is the national voice for the electrification of transportation.

One year ago, EMC fully supported the agreement of the Canadian and U.S. governments on the importance of the development of a zero-emission vehicle future and a battery strategy, as agreed to at the first bilateral meeting held virtually between Canadian Prime Minister Justin Trudeau and U.S. President Joe Biden and their senior teams.

As noted in their official statement:

The leaders...agreed to work together to build the necessary supply chains to make Canada and the U.S. global leaders in all aspects of battery development and production. To that end, the leaders agreed to strengthen the Canada-U.S. Critical Minerals Action Plan to target a net-zero industrial transformation, batteries for zero-emissions vehicles, and renewable energy storage.

Although Canada is not yet a critical mineral superpower, the potential is clearly there, with 31 critical minerals identified in Canada, experienced research teams such as Jeff Dahn and Karim Zaghib, and a qualified workforce. According to Natural Resources Canada, rare earth elements are used in many industrial applications, including electronics, energy, aerospace, automotive—for EVs—and defence.

The largest use of rare earths is in permanent magnets that are a component of our cellphones, televisions, computers, automobiles, etc. The second-largest use of rare earths is in petroleum-cracking catalysts. In 2020, 90% of rare earths used for these products were produced and used in China. For strategic reasons, China rationed its exports of rare earths in 2013.

According to a 2020 report from Bloomberg New Energy Finance, China controls 80% of the refining of critical minerals, such as rare earth element materials and other critical minerals, and 77% of the world's battery cell manufacturing capacity. Having control is not necessarily having the mines in one's own country, but having invested in the mines of other countries as well. It has to be said that China has been far-sighted in its long-term investments.

In 2021, Chinese companies produced more than 40% of the world's EV batteries. South Korea produced more than 30% of them, and Japan produced close to 15%, but the situation is evolving rapidly. For example, the European Battery Alliance was launched in October 2017 to create a competitive and sustainable battery cell manufacturing value chain in Europe.

That's why, as identified in our 2030 EV action plan, EMC recommends that the federal government focus its effort on the following.

First, it should attract more investment to accelerate EV manufacturing and related industries in Canada—including assembly, parts, machinery, charging equipment and battery materials extraction and processing—with a Canadian EV economic development and investment attraction strategy.

Second, the government should be accelerating technologies, research, development and manufacturing associated with reducing the cost of vehicle batteries and thus vehicle costs per unit of range, thereby achieving economies of scale in vehicle, battery and charging infrastructure production that will also help to reduce costs for consumers and fleets in Canada.

Third, it should work with the U.S. administration to ensure that any buy America policies reflect the North American automobile market and do not negatively impact Canadian EV businesses and suppliers.

Fourth, it must help Canadian EV battery recycling companies through financial incentives and a regulatory framework that will support innovation.

Fifth, the government should be supporting the Accelerate alliance—my friend Matt and his group, Canada's zero-emission vehicle supply chain alliance—to help key players in the country develop a thriving EV industry.

We need to encourage the development of our own zero-emission vehicle supply chain, from mining to mobility, in order to ensure that Canada is not left behind in the electric vehicle revolution.

For economic, environmental and, as Mr. Burton aptly put it, geostrategic and national security reasons, Canada can and must develop a critical minerals strategy that will ensure enough supply. Canada's electric vehicle industry should not simply be about sending critical minerals overseas, where value-added jobs will be created. We should instead be creating those jobs here. If we do not, we will be missing out on a historic, once-in-a-generation opportunity.

Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Breton.

Lisa Macdonald, of the Prospectors and Developers Association of Canada, you have the floor.

[Jeff Killeen, Director, Policy and Programs, Prospectors and Developers Association of Canada]

I will actually be addressing the committee today.

[The Chair, Liberal, Joël Lightbound]

No worries, Mr. Killeen. The floor is yours.

[Jeff Killeen]

Thank you very much. Good afternoon, Chair and committee members.

I want to first acknowledge that I come to you from the traditional lands of the Huron, the Chippewa, the Haudenosaunee, Wendat and Oneida peoples, the Anishinabe and the Mississaugas of the Credit, and all the indigenous first nations who lived on these lands over the centuries.

My name, as you mentioned, is Jeff Killeen, and I am the policy and program director for the Prospectors and Developers Association of Canada. Thank you for inviting me to appear today on behalf of Canada's mineral exploration industry.

As you know, or I hope you know, PDAC represents thousands of members, both corporations and individuals, that work in mineral exploration and mining in Canada and around the world.

PDAC operates through a committee structure. Industry professionals and stakeholders with real on-the-ground experience in industry collaborate to inform our recommendations and the points of advocacy that we bring to governments.

In recent years, PDAC has engaged with the government in developing the Canadian minerals and metals plan and Canada's critical minerals list, and in efforts to improve the efficiency of targeted programs and incentives that can accelerate critical mineral discoveries within Canadian borders.

We are certainly encouraged to see the Government of Canada recognize our potential to become a supplier of choice for the minerals needed to transition to a low-carbon future, and we support a number of the commitments noted in the Prime Minister's recent mandate letters to cabinet.

We share this committee's enthusiasm towards critical minerals, and I offer recommendations that aim to both spur exploration for critical minerals in Canada and bolster our capabilities to conduct science- and evidence-based processes for infrastructure and development, land management and conservation decision-making.

From previous testimony, I understand this committee has had some questions about the efficacy of the mineral exploration tax credit, or METC, which combines with flow-through shares to incentivize early-stage mineral exploration within Canadian borders.

I can tell you definitively that this mechanism is a foundational reason that Canadian mineral exploration companies and projects attract more capital than any other country. In 2021 alone, flow-through and the METC were the source of more than $1 billion of investment into Canadian projects.

The impact of this economic activity is magnified in rural and remote regions of the country, where our sector typically operates, and places the mineral industry in a unique position to help accelerate economic recovery in parts of Canada where few alternatives exist.

While record-high gold prices and base metal prices trending higher have boosted exploration activity in Canada over the last two to three years, the amount of exploration spending directed towards critical minerals such as cobalt, lithium, graphite or rare earths represents less than 3% of domestic activity in 2021. That's based on NRCan estimates.

For Canada to be successful in efficiently transitioning to a low-carbon future and becoming a supplier of choice for the minerals and metals needed by the world to effect such a change, we must increase our inventory of economic and socially viable critical mineral deposits here in Canada.

That's why PDAC has called for an expansion of the mineral exploration tax credit. This is to help spur grassroots exploration activity in Canada, and we support the call by government to double the METC for critical minerals exploration.

We're certainly keen to offer ways to implement and administer this expansion effectively. Furthermore, we recommend permanent adoption of the METC incentive, rather than letting that incentive expire in 2024, as it is currently set to do. We feel that a permanent adoption is essential in order to provide long-term certainty for investors and a competitive advantage to generating viable critical mineral discoveries here in Canada.

This step is crucial, particularly given the low odds of exploration success. Typically, only one in 10,000 prospects turns into a mine, and, as mentioned, there is a decade or sometimes a multi-decade path that a project will undergo from first discovery to an operating mine.

We also support the government's call for the use of science and evidence-based decision-making. This dovetails directly with our recommendation to increase public geoscience funding and establish a mechanism to assist provinces and territories in undertaking comprehensive mineral assessment models.

This is evidence that's necessary to inform decision-making in future infrastructure development, energy production, conservation, and advancing indigenous reconciliation, both at the regional and national levels.

Enhancing our geoscientific knowledge base will support effective policy development. It will attract stable industry investment and drive long-term exploration and the infrastructure required to fill the upstream gaps that currently exist in Canada's mineral supply chain.

These are the necessary steps to identify future domestic sources of critical minerals, expand our processing capacity to reduce our reliance on foreign sources, and capture more value-added activities within the Canadian economy.

These strategic choices can also ensure that Canada has greater self-determination in our future carbon footprint and our ability to export sustainable practices and minerals to the rest of the world.

Thank you very much for your consideration and time today.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Killeen.

We'll now move to our first round of questions, with MP Tracy Gray.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Chair.

Thank you to all the witnesses for being here today. I'd first like to go to Dr. Burton from Macdonald-Laurier Institute.

You were in the middle of making a comment regarding the Chinese regime's economic coercion. I'm wondering if you could just finish your thoughts on that. Then I have some questions for you.

[Dr. Charles Burton]

My message really is that there is a lot of urgency here. I read the statement by Mr. Putin and Mr. Xi after their bilateral meeting at the Olympics. Clearly, they're getting much closer together and much more interested in creating the lines of what could be an intensified sort of cold war dynamic.

The idea that China could use its control of critical minerals to coerce nations is something that is pretty much a no-brainer. In other words, they're going to do it if they can. This is part of their modus operandi to expand their influence in the world and their overall plan to displace the United States as the dominant global power by 2050, as articulated by Mr. Xi.

Australia, for example, sends a lot, or most, of its lithium production to China for processing. We really have to get together with our allies and try to figure out ways to establish supply chains that will not be running through countries with whom we may have very hostile relations in the future and who may use their control of critical minerals to further their geostrategic purposes.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

On that note, with this debt trap diplomacy, what actions do you think the Canadian government should be taking right now so that we're not stuck in a place when it comes to critical mineral access?

[Dr. Charles Burton]

This is a question that really can't be resolved by Canada alone. Certainly, the Chinese use of its belt and road initiative—which involves facilitating corruption and bribery of autocratic dictators in third world countries that have something in China's interest, particularly mineral resources—is something we want to challenge, to provide alternative streams for development funding to those nations.

Up to now, in the global community, the like-minded nations have been unable to successfully coordinate, largely due to differences among ourselves. The French and the Germans are not happy about coordinating with the Americans in an international alliance to contain China's malign activities. The result is that we haven't seen the allocation of funding or the coordination necessary to try to protect the international rules-based order against China's malign activities, including stuff like hostage diplomacy and unjustified imposition of tariff barriers to try to engage in the economic coercion of nations to comply with China's political agendas in their countries.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

The Canadian government says it's working on a critical minerals strategy. Are you satisfied with the speed at which the strategy is being developed? What is Canada losing out on right now, while we still don't have a strategy?

[Dr. Charles Burton]

I'm definitely very concerned about our lack of effective action on this. I was completely flummoxed when we had an opportunity to stop the Chinese acquisition of a Canadian-controlled mine in Argentina.

A lot of this seems to have to do with persons who were involved in the policy process who may have a conflict of interest because they are the recipients of benefits from a foreign regime. I'd really like to see us follow through with an act like Australia's Foreign Influence Transparency Scheme Act, or a foreign agents registry act, just so that the people who are in this conflict of interest will have to declare it. That could clear up some mysterious decisions by government that seem to favour the Chinese regime and that I believe act against the overall interests of Canada and the international rules-based order.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

I guess to add to that, under the Investment Canada Act, should takeovers of Canadian companies by foreign state-owned enterprises be subject to more stringent review than what is currently undertaken?

[Dr. Charles Burton]

Absolutely. As I said in my presentation, I think that.... When you look at Chinese enterprises, they're all under the control of the Chinese Communist Party. They all have Chinese Communist Party branches at the top of their hierarchical structure, and it's the party secretary who coordinates their activities at the direction of Beijing, if Beijing wants to see that.

We should be going down to zero in terms of assessing the value of these investments if it does involve anything out of China or other state actors.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Based on the regime's previous actions, is there a potential for Canada to be shut off from some of these critical mineral supply chains, in your view?

[Dr. Charles Burton]

I think it's almost certain that China would do that if it wanted to get something from Canada, such as more access to our high tech or a greater capacity for the Chinese state to invest in Canadian mining and other critical infrastructure.