Industry Committee on Feb. 11th, 2022

[Matthew Fortier]

There may be people who are better placed than me to talk about the trade elements of this, to be honest. Obviously, we have a trade deal with the U.S. that allows for Canadian content in vehicles, but the vehicles are changing.

These trade deals are predicated on technologies that exist when they're signed, so the car of the future, or the automobile or vehicle of the future, is not reflected in trade deals today.

[The Chair, Liberal, Joël Lightbound]

Thank you.

We'll now move to MP Sébastien Lemire for two and a half minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Mr. Chair.

Mr. Fortier, I won't let you catch your breath.

Most car manufacturers have committed to building electric vehicles, or at least vehicles with an electric component. However, the stock markets do not seem to believe that they will be able to deliver on their promise, largely because of problems in the supply chain and dependence on parties such as China or the Congo for essential minerals or other basic inputs. This could threaten the government's plan to move everyone to electric vehicles.

At Accelerate, you are committed to building a Canadian supply chain.

Tell us about the importance of having an autonomous and sufficient domestic market.

[Matthew Fortier]

Thank you.

I think it shows that the world needs more critical minerals and processing capacity, not just in Canada. Canada needs an integrated strategy and supply chain that works in the North American context to bring more vehicles to market. Where Canada can distinguish itself is in the way its minerals are mined. Our mines are among the cleanest in the world and we have one of the cleanest sources of energy to power that extraction.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Is it too late to act?

In concrete terms, what needs to happen for Canada and Quebec to become major players in North American and global supply chains?

[Matthew Fortier]

No, it is not too late at all.

We know that other countries are ahead of the curve, but it is not too late for Canada. We need the provinces and the federal government to work as a team to identify opportunities in the mining, furniture, and manufacturing sectors and make the necessary investments.

It is not too late. It’s going to take a lot of effort and investment, it’s ambitious, but we can do it, as a country. In fact, we have to do it, because we are talking about the industrial future of Canada.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Finally, tell us about the importance of processing and building these cells close to the resource.

Is this problematic, in your opinion?

[Matthew Fortier]

This is very important for us. It is one of the main elements of this project. Exploring and exploiting the mining sector is an advantage for Canada.

Today it was pointed out that Canada's mining sector is very advanced, more so than most countries in the world. So we have to ask ourselves whether we can exploit our natural resources for this project so that Canada can be a leader in the electric vehicle sector.

We can do it, but, as I said, it will require significant investment and a lot of effort.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Fortier.

Before I go to Mr. Masse, Mr. Lemire, could you speak a little more slowly? I thought I was talking fast, but you're talking very fast, and it's difficult for the interpreters. Even for Mr. Fortier's connection, it seems to be too fast. So I would just ask you to slow it down a little bit. Thank you.

Mr. Masse has the floor for two and a half minutes.

Is Mr. Masse with us? I don't see him on the screen. At the beginning of the meeting, he informed me that he was having connection problems.

While we wait for Mr. Masse to come back, we'll go to Mr. Kram for five minutes.

[Michael Kram, Conservative, Regina—Wascana, SK]

Thank you very much, Mr. Chair, and thank you to the witnesses for joining us today.

My questions will mostly be for Jeff Killeen and Lisa McDonald of the Prospectors and Developers Association of Canada.

The mining sector is extremely important to my home province of Saskatchewan. There is broad public support for the mining sector. There is considerably less public support for the government's Bill C-69, brought in a few years ago. The Saskatchewan Mining Association has said that a majority of its members did not support the extra regulatory process brought in by Bill C-69.

I'd be curious to hear how the member organizations of PDAC feel about the additional regulations brought in a few years ago by Bill C-69.

[Jeff Killeen]

In thinking about who our membership predominantly represents, we typically have junior mineral exploration somewhat up to development companies as the primary cohort at PDAC.

The impacts of what has happened over the last number of years, from the development and implementation of the Environmental Assessment Act, are still not fully understood. I don't believe there's been enough of a case history from projects that have gone through that process to understand what impacts it may have on future project development.

The pace of permits for land access and the ability to bring new products to market is certainly a concern that we have. The ability for our members to be able to access prospective lands, conduct work on a consistent basis, and have that clarity for their investors and stakeholders is still a bit of a challenge in parts of Canada, whether that's as a result of federal legislation, provincial legislation, or the interaction of the two. There are a number of different reasons.

It goes back to some of the recommendations we've made. At the heart of our recommendation around public geoscience is trying to increase the support for provinces, municipalities and regions to be able to understand what's underneath them. It's only through that function that like minds can be brought together. The forethought can be put this way: Where are we going to need energy? Where are we going to need to develop roads? Where can we actually have economic development and do it in an engaged and collaborative way?

I really come back to the concept that public geoscience and the funding around that are super important. As I say, with respect to the Environmental Assessment Act, it was well thought out to a degree. We certainly, as an association, worked in collaboration with the Mining Association of Canada to provide feedback through its development.

We'll continue to engage with government as companies go through that process, to understand where the challenges may exist.

[Michael Kram, Conservative, Regina—Wascana, SK]

[Technical difficulty—Editor] assessed only through the robust provincial environmental assessment process in Saskatchewan.

Does PDAC agree with this position for Saskatchewan, and the other provinces as well, that the assessment process should be limited to provincial governments?

[Jeff Killeen]

We understand quite clearly that resources are predominantly within the purview of the provincial governments. It's really up to the provinces to find what they think is appropriate within those regions, whether it's an economic development related to mineral exploration or otherwise.

With respect to issues of broader national concern, we respect the fact that the federal government has purview in those issues. In such a case, where a mineral project may reach that type of importance, there may be voracity around taking those additional steps.

We certainly do, by and large, agree with the idea that the provinces understand their resources quite well and are able to administer the regulations around this industry as well as possible.

[Michael Kram, Conservative, Regina—Wascana, SK]

This has to be quick, because I'm almost out of time.

Three years ago, PDAC made a submission to the Senate committee on energy, the environment and natural resources about Bill C-69, indicating that the numerous costly studies earlier in the process would be a significant burden.

Is that still the position and experience of PDAC?

[Jeff Killeen]

I would say, definitively, that we were focused on a social licence to operate as an industry and as an association, as well as on how we could assist our members in being able to get to that point with their projects in asset development.

When we consider where we are today, in 2022, with respect to generating that social licence to operate, it often means that companies and proponents will have to consider additional steps, and rightfully so, in order to ensure that the ideas and concepts they're hoping to bring to their projects are well understood.

With that in mind, I certainly appreciate where companies today are going above and beyond what is often the regulatory framework and what is required of them in terms of being able to engage with their stakeholders. They are ensuring that the public understands their projects and that their investors understand their intent.

At PDAC, we're thinking more about what companies should do to grasp and maintain that social licence to operate. Often, that angles activities well above the requirements from the regulatory process.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Killeen.

We'll move to Mr. Dong, for five minutes.

[Han Dong, Liberal, Don Valley North, ON]

Thank you very much, Chair.

I don't know if MP Masse has come back yet, but I want to be on record saying that I will convey his message to the government. At the same time, I admire his effort to speak on behalf of his constituency—certainly I took notes—using every opportunity to speak up on behalf of his constituents and local businesses.

With that, I just want to make an observation.

Twenty years ago in China, the traditional combustion engine vehicle industry had just started. They were a very small player. Very quickly they realized that they couldn't play catch-up, so they found a very niche area at the time, we think, to strategically invest in, by purchasing mines and whatnot and looking at the future of electric vehicles and batteries.

That lesson made me realize that playing catch-up is never the best solution. I know it's a necessary thing to do, but we have many industry experts here. I would challenge them to give more advice to the government on where Canada should really invest and focus—it could be a very small but very important part of the supply chain—to make sure our future is secure.

My first question is for Mr. Killeen from PDAC.

Can you confirm that Canada has a large deposit of hard rock lithium? Is that the case?

[Jeff Killeen]

I wouldn't speak to any one single deposit in terms of what its capacity and capability is, but there is most certainly hard rock potential across virtually every province and territory in Canada. I think there are known showings or prospects for lithium of various species all across those regions as well, whether we're looking at northern Quebec, Newfoundland, Ontario or all the way through the territories.

The central point we're trying to convey to this committee is that the potential is vast. Our industry has, by and large, been focused on other things for over a century, if you think of copper and nickel, certainly as components in batteries and electric vehicles and technology. In terms of those peripheral things we've been speaking about, very little attention has been wrought from Canadian industry or from provincial and federal government programs in terms of public geoscience. It is a bit of a nuance, but it's really refocusing strategies we've had in the past in terms of their intensity and in terms of their intent to understand where critical mineral potential lies in Canada.

You'll see our members active all across the country in various forms in terms of exploration for critical minerals, but, as I mentioned at the start, we understand that less than 3% of domestic activity last year went towards things like rare earths, lithium or cobalt. We see a need to incentivize that end of our industry to try to draw more attention.

Back to the question that was asked earlier, apologies about our capacity: there are over 950 companies listed on the venture exchange today that operate in the mineral exploration industry. That represents over 50% of the venture exchange companies that are listed in Canada. When we think of the TSX overall, 35% of all listings are in the mineral industry, so the capacity we have as an industry to be able to ramp up, whether it's exploration or extractive capacity, is truly there in terms of knowledge. It's really adding in some of those little pieces that can help us accelerate the pace that we can take on.

[Han Dong, Liberal, Don Valley North, ON]

That's quite an answer, and I appreciate the additional information you gave us. In comparison to lithium brine mining, would you say that hard rock lithium mining is more environmentally friendly and easier, and therefore perhaps costs less and is more cost-efficient?

[Jeff Killeen]

I wouldn't want to speak to the very specifics of a cost comparison, but I would say there is a huge amount of hard rock potential in Canada. We have a huge amount of experience with respect to hard rock mining. The majority of mining that's conducted in Canada is hard rock, whether that's open pit or underground, and we are seeing new technologies brought to bear. In Ontario, the Borden mine is going to become the first all-electric vehicle underground mine in Canada. Steps are being taken by hard rock miners in Canada today to reduce the footprint, become more efficient and produce fewer emissions.

From that standpoint, yes, there's real potential to ramp up hard rock mining and the potential to bring more lithium products to market. We understand, though, that there's the potential for lithium deposits to be smaller and potentially more distantly located, so we may have to consider how infrastructure and processing capacity can really accelerate and leapfrog where we may reach short ends or gas in the supply chain. Small mines may not work on their own, but banding together as a collective through central processing hubs or infrastructure hubs is what can really help accelerate development in Canada and in the north.

[Han Dong, Liberal, Don Valley North, ON]

In your experience—

[The Chair, Liberal, Joël Lightbound]

I'm sorry, Mr. Dong. That's all the time you have.

We have to move to Mr. Fast now for five minutes.

[Ed Fast, Conservative, Abbotsford, BC]

Thank you very much, Mr. Chair.

I'm going to direct my questions primarily to Dr. Burton and Dr. Zaghib.

Dr. Zaghib, you mentioned the time it takes to get mines into production, and the long approval process. You have to establish processing facilities, etc. I'm curious to know whether there are any operating lithium mines in Canada today.

[Dr. Karim Zaghib]

I believe that there is a project right now called Nemaska Lithium, and there was Canada Lithium. Today, they're at the stage of finalizing the process in order to produce it, which may be in one or two years.

As I mentioned, right now I cannot understand why it's taking a long time. I have worked in mining all my life. This makes no sense. If we want Canada to put up mining establishments, we should reduce the time. We should help. We should, as I said, form an inter-ministerial committee to help make the times shorter.

The process and the technology are mature. It's not difficult. From—