Evidence of meeting #8 for Industry, Science and Technology in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was battery.
A recording is available from Parliament.
2:20 p.m.
Conservative
Ed Fast Conservative Abbotsford, BC
Doctor, I'm sorry. My time is short.
So that I understand, what is the time frame for a mine to be prospected and then start the approval process or come into production? What is that total time frame today, under current regulatory processes?
February 11th, 2022 / 2:25 p.m.
Professor, Concordia University and Professor of Practice, McGill University, As an Individual
From what I know, it's more than five years.
2:25 p.m.
Conservative
Ed Fast Conservative Abbotsford, BC
It's more than five years.
Dr. Burton, as we strive to develop EVs and an EV battery industry in Canada in the short to medium term, we're going to have to secure our lithium from outside of Canada, because we don't yet have a reliable or functioning supply within Canada.
Your testimony indicates that it is critical that Canada work with its allies to protect the security of our critical minerals supply chain. Our largest trading partner is the U.S. We have challenges with buy America. We also collaborate, supposedly, on critical minerals.
What is the state of the collaboration that presently takes place between Canada and the U.S. when it comes to the security of critical minerals?
2:25 p.m.
Senior Fellow, Centre for Advancing Canada's Interests Abroad, Macdonald-Laurier Institute, As an Individual
I don't have expertise in this area, but it seems to me that if you're looking for a reliable partner, the United States is a much better bet than the People's Republic of China.
We have to diversify our sources to the extent that we can. The main thing is that when this committee issues a report, we need to see some vigorous action on the part of government to implement what I anticipate will be the recommendations, judging by the consensus of all the people here.
Maybe after the end of the pandemic, there will be renewed energy in government processes. This clearly requires a terrific amount of attention. There's the change to facilitate getting action on these long delay terms that Dr. Zaghib has mentioned, and investment by the government, as a matter of national priority, to ensure that when push comes to shove, Canada will not find itself in a difficult situation.
2:25 p.m.
Conservative
Ed Fast Conservative Abbotsford, BC
You mentioned earlier the Neo Lithium sale to a Chinese state-owned enterprise. My question to you is, having looked at that transaction and the fact that no enhanced security review was conducted—the minister said that a full security review was conducted, but certainly not the enhanced review that can be triggered—do you believe that the current standard that is set for conducting security reviews is sufficient?
2:25 p.m.
Senior Fellow, Centre for Advancing Canada's Interests Abroad, Macdonald-Laurier Institute, As an Individual
No, I don't. Particularly with China and their highly coordinated process, they can be inclined to make multiple investments that are just under the threshold areas to try to achieve their.... It's like playing a game of go; they eventually surround you and then you're stuck. No, I don't think it's sufficient.
We ought to really be looking at this in a way that is much more responsive to the reality on the ground. My concern is that there are elements within Canada that represent the interests of the People's Republic of China, consciously or unconsciously, which will probably dampen down the enthusiasm of the government for responding to this committee's report.
2:25 p.m.
Conservative
Ed Fast Conservative Abbotsford, BC
I have one last question for Mr. Fortier.
How far away are we from having a full EV ecosystem in Canada?
2:25 p.m.
President, Accelerate: Canada's ZEV Supply Chain Alliance
For a full ecosystem, we talked about the time frames for mining. That's a big part of it.
The great news is that we actually have a lot of that ecosystem. We have manufacturers. We mentioned Lion Electric. We have electric heavy-duty manufacturers and mining manufacturers. We obviously have a mature auto sector here.
The full ecosystem is going to take some time, for sure. That is on the upstream side. It's the mining, refining and processing. The great news is we've heard a lot about this. We have the capacity to do this, but it is going to take some time. That doesn't mean it's not worth doing.
The great news is that people are going to be driving electric vehicles for many years. We don't need to be doing this next year, but that doesn't mean we shouldn't be starting to ramp up capacity towards the end of the decade.
2:25 p.m.
Liberal
The Chair Liberal Joël Lightbound
Thank you, Mr. Fortier and Mr. Fast.
We'll move now to Mr. Erskine-Smith, for five minutes.
2:25 p.m.
Liberal
Nathaniel Erskine-Smith Liberal Beaches—East York, ON
I want to ask Mr. Zaghib and Mr. Killeen questions around the timelines for these development projects.
Mr. Zaghib, you indicated that we need to speed up the timelines. With greater specificity, what does that look like?
2:25 p.m.
Professor, Concordia University and Professor of Practice, McGill University, As an Individual
I believe, if we can make the mine in less than four years, that would make sense. The transformation is about two years for existing materials.
I can give one example. If we mine graphite, it could take less than four years. If we have the raw material—the graphite—it would take one and a half to two years to bring graphite to the market, with the transformation, purification and so on. If you are going to develop new materials with the technology that's here, it usually takes 10 years. Then, if we have the programs supporting EI, we could shorten it to five years.
It could be four years, one and a half to two years, and then less than five years for new materials.
2:30 p.m.
Liberal
Nathaniel Erskine-Smith Liberal Beaches—East York, ON
That's very helpful insofar as the government could well set targets for approvals and moving things forward quickly.
To that point, Mr. Killeen, other than timelines, are there specific recommendations around regulation that could move things quickly?
2:30 p.m.
Director, Policy and Programs, Prospectors and Developers Association of Canada
I'll step back and just talk about the timelines for a moment as well.
In bringing something from exploration to an extracted mine, exploration is certainly onerous. As I talked about earlier, the odds of success are pretty low. It's very capital intensive. Most of the exploration companies that exist today are pre-revenue. They don't have earnings from an operating mine somewhere, so they're reliant on going to capital markets, raising new equity and putting that equity in the ground in hopes of finding something.
The exploration process itself can be very onerous. It could take five to 10 years to actually define an economically viable deposit through typical exploration processes. That's just the time and effort it takes to get through that.
If we were going to start to activate our industry today, take them to a particular place in the country and start doing those exploration activities to bring new production, we might be looking at a decade before we have that inventory we've been speaking about. That is why it's so critical, in our minds, to expand incentives, get those drills turning and do that type of proper groundwork.
2:30 p.m.
Liberal
Nathaniel Erskine-Smith Liberal Beaches—East York, ON
It always seems there are two ways for the government to intervene here to speed things up. One's on the regulatory side. If you can follow up with a brief on specific changes on that, I'd welcome that, because we just don't have the time.
On the dollar and cents side, given the increasing value of critical minerals, I have to say I'm a bit skeptical that expanding tax credits is the best use of public money at the moment in this space. Convince me otherwise.
2:30 p.m.
Director, Policy and Programs, Prospectors and Developers Association of Canada
I appreciate that sentiment. Let me give you a sense of the return on investment for somebody who's looking at this sector, because it's very relevant. We think about the concept of critical minerals and the industries they're going to feed into.
A gold deposit could exist, theoretically, in northern Ontario or the Northwest Territories. You could have a process facility on site. You could produce the material on site. You could fly the revenue-generating material off site. The amount of infrastructure that's required to go into that and the timeline it'll take to develop the infrastructure to bring that product to market is extremely short compared to what we're talking about here with respect to rare earths or things that may not have current processing capacity in Canada.
When we think about where the next dollar of investment is going to go into the ground in terms of Canadian exploration, it's inherently attracted to those things that have a shorter timeline for investor return, like a gold deposit or, potentially, a copper deposit that's in a known area with processing capacity.
That's why we're really focused on this idea of expanding an incentive for a part of the sector where very few funds actually go, and for something that requires a significant amount of exploration effort to start to understand where these production centres and this capacity could be.
2:30 p.m.
Liberal
Nathaniel Erskine-Smith Liberal Beaches—East York, ON
That's a helpful answer.
Mr. Breton, in relation to moving away from the critical minerals mining piece and exploration piece towards the battery supply chain piece, I heard from Mr. Fortier that we want to do everything all at once. It occurs to me that Canada also might take a step back and ask where we can strategically add value in a global supply chain.
Where can Canada add strategic value in a global supply chain?
2:30 p.m.
President and Chief Executive Officer, Electric Mobility Canada
Actually, right now some companies in Canada are already working on battery packs. Some companies want to invest in battery cells right now. We're moving forward in that direction. We have electric vehicles being built right now in Canada. As Brian Masse mentioned, whether it's cars or trucks or school buses or snowmobiles or boats, we don't have to wait for the mines to keep moving forward. However, to have the whole supply chain, the mining part is very important.
We have to think about the fact that when we're talking about critical minerals, if we want to talk to our American friends, we have to say to them that it's not just about the environment; it's also about national security. When we talk national security, the Americans listen. These issues regarding critical minerals also have to do with defence. To me, this has to be part of the conversation as well.
2:35 p.m.
Liberal
The Chair Liberal Joël Lightbound
Thank you very much, Mr. Breton.
Mr. Lemire, you now have the floor for two and a half minutes.
2:35 p.m.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
Thank you, Mr. Chair.
My question is for Dr. Zaghib.
Dr. Zaghib, first of all, I want to thank you for your testimony and for the expertise you are sharing with us.
I remember that you were an advisor to the Quebec minister during the development of his strategy. I would like you to tell me to what extent Quebec has what it takes to create a complete lithium value chain and become a leader in this field.
Do you have any concerns about the federal government?
I would also like to know if the famous centre of excellence that the government has announced could be located near the resource, in a place where there is university expertise. For example, would you be prepared to collaborate on a centre that could be located in Abitibi-Témiscamingue?
2:35 p.m.
Professor, Concordia University and Professor of Practice, McGill University, As an Individual
Quebec is an excellent example of the circular economy, from the mine to the cell to the recycling of the urban mine. There is complementarity. We should work together and develop this complementarity between Quebec, Ontario, and the federal government.
Today, for example, Mr. Breton talked about the specificity of Quebec in terms of trucks and snowmobiles, in particular. The same is true for the specificity of Ford and GM in Ontario. We should work together to establish common intellectual property, a strategy to establish cross-licensing, a strategy to change technology, and so on.
As I said about the centres, in a global way, we should take care of our industry, which was abandoned a long time ago. It should be re-established and developed in a complementary way. The federal government should have no choice but to support the provinces. For example, if a company is brought in that can provide 25% of the funding for a cell, the government should match that. I think this is in the national interest.
We should quickly position ourselves with regard to the manufacture of active materials for the anode or cathode and the cells. This is what is most important for the electrification of transportation.
2:35 p.m.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
Thank you very much, Dr. Zaghib.
Mr. Breton, we are now talking about catching up, but is it too late?
2:35 p.m.
President and Chief Executive Officer, Electric Mobility Canada
It's important to talk about catching up. When I was young, in the 1970s, many Americans made fun of Japanese cars. In the 1980s, people made fun of Korean cars. Today, no one makes fun of Japanese or Korean cars, because they are good vehicles. We can play catch-up in Canada in terms of electric vehicles, whether they are light, medium or heavy vehicles.
We say that we want to make a rapid shift towards the electrification of transportation in order to create jobs, but we also say that we want to make a rapid shift in the fight against climate change. We have set ourselves an objective for 2030, which is to significantly reduce our greenhouse gas emissions. These two intentions must come together.
For our part, we launched the EV 2030 Action Plan precisely to ensure that jobs are created while we fight climate change. We can't do one without doing the other. Otherwise, we will be at a crossroads, which will not be good for the climate or for jobs.
2:35 p.m.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
I hope you are not telling us that people are making fun of the Canadian industry.
Thank you for your answer.
2:35 p.m.
Liberal
The Chair Liberal Joël Lightbound
Thank you, Mr. Lemire.
As Mr. Masse had to leave, I will give you the floor, Mrs. Gray, for five minutes.
2:35 p.m.
Conservative
Tracy Gray Conservative Kelowna—Lake Country, BC
Thank you, Mr. Chair.
My questions right now will be for Mr. Breton at Electric Mobility.
You were before the trade committee last year on our clean-tech study. It's good to see you again.
You're concerned by the dominance of one country that we're seeing right now with critical mineral supply chains. Would you say it's a fair comment that this is a concern of yours?