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.