International Trade Committee on May 3rd, 2021

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

Thank you, Madam Chair.

Thank you to all the witnesses for being here today. The first questions I have are for Mr. Breton.

We heard President Biden say last week that any exemptions to buy American would be “strenuously limited”, which could be a real concern for our integrated supply chains. This is some of the strongest wording we've heard, and you actually spoke about this already today and mentioned that there were already some job losses and some businesses potentially moving to the U.S.

Do you have an idea of how many job losses we've had already or what this might mean for future job losses or businesses having to move to the U.S.?

[Daniel Breton]

No, I couldn't tell you that we are losing jobs in electric mobility, because right now we are creating jobs in electric mobility.

The transition is going from fossil fuels to renewable and electric mobility, so this is not something that we are talking about. We're actually looking for qualified people. We are in the middle of a pandemic and right now we are having problems finding enough qualified people, so it's going to be an issue for years to come.

If we want to create Canadian jobs and do the transition from fossil fuels to clean technology, clean transportation, if we end up being in a position where most companies have to move south or open plants down south because of the buy America act, for sure we will lose many jobs that would have been created in Canada. I don't have the numbers yet because it's too early to tell. We don't have all the details, but that's an issue of concern to many of EMC's members.

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

That's great. Thank you for that clarification.

Would you feel that it's important to work with the Biden administration to work on standardizing regulations to strengthen vehicle emission standards? There is no doubt, of course, that our supply chains are integrated, so would that be something that would be important to work on?

[Daniel Breton]

Absolutely, because we think that having different standards.... It's an issue we've seen in other technologies and other industries, that having technologies where the regulation is not integrated is a real problem. Those of you who are old enough remember VHS versus Betamax. We have that issue in electric mobility. We have three or four standards on the way we charge vehicles, so we need to have standardized regulations and standardized codes and standards so that we can accelerate electric mobility across the board from light to heavy-duty vehicles.

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

Thank you.

With clean tech being an emerging industry, there's a chance it may not be fully accounted for in our trade agreements when it comes to regulatory co-operation and non-tariff barriers. Have you faced any regulatory hurdles or non-tariff barriers in exporting your products?

[Daniel Breton]

Are you asking me that question?

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

Yes.

[Daniel Breton]

We have. I could get into more details on that with a document I could send to you, but yes, we have, because we are seeing that.... EVs are a new market, so there's a lot of adjustment to be done, whether it's on the utilities side, the infrastructure side or the regulatory side. That's something we could work on a document about and send to you, if you want, because there are issues with that.

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

Thank you very much. It would be wonderful if you could table that with this committee for us all to see—

[Daniel Breton]

Perfect.

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

—and then it will be part of your testimony. That would be great. Thank you.

I'm wondering if any of the other witnesses here would like to answer that specifically, around having issues with regulatory burdens or non-tariff barriers with exports.

I see Mr. Pochtaruk.

[Martin Pochtaruk]

Yes, as I mentioned before, we have been paying millions of dollars a year, so solar modules are being taxed to be imported into the U.S. This is an extremely urgent matter that we need government to concentrate on.

Thank you.

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

Great. Thank you.

Mr. Gorman, I see your hand up.

[John Gorman]

Conventional nuclear and CANDU technology in most nations have been sort of a proprietary thing. This is a comment on the regulatory side. With the advent of small modular reactors, which involve technology providers from all over the world, there are over 70 different technologies being developed right now. That means that we have to try to streamline regulatory treatments so that we're getting common recognition for the different technologies that are out there and we avoid having every nation reinventing the wheel each time it tries to qualify one of these new technologies.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Gorman.

We go on to Ms. Bendayan for five minutes, please.

[Rachel Bendayan, Liberal, Outremont, QC]

Thank you very much, Madam Chair.

Before beginning to ask questions of our wonderful witnesses here today, I want to clarify something that Mrs. Gray said. She mentioned President Biden's speech to Congress a few days ago, and he was referring to the Buy American Act, which I believe all members of the committee know Canada is largely exempt from. The issue, of course, of buy America is very real, and our government is working very hard to secure exemptions for buy America, but his comments were with respect to something different.

I am going to turn to Mr. Breton first.

Mr. Breton, thank you for joining us today.

Without wanting to spend too much time on it, I want to quickly go back to comments made by another colleague about the strategic innovation fund.

As parliamentary secretary, I am very involved with investments designed to encourage our SMEs. I just want to mention that the fund has contributed almost $750 million for SMEs, including some from Quebec. You already mentioned Lion Electric, of which Quebecers are very proud, of course.

We announced an investment of $50 million to help Lion Electric build a new battery plant.

[Daniel Breton]

Absolutely.

[Rachel Bendayan, Liberal, Outremont, QC]

Do you feel that those investments for companies like Lion Electric will help us to promote Canadian innovation overseas? I am thinking specifically of our innovations in electric transportation, of course.

[Daniel Breton]

You are absolutely right. I feel that the strategic innovation fund is extremely important and worthwhile. We must make sure that not only companies like Lion Electric can take advantage of it, but that small companies can do so too. Sometimes, that's not easy. Some time ago, I remember that, with the AIF, the Automotive Innovation Fund, the companies that could take advantage of it were mostly multinationals, because it needed an upfront investment of $75 million in order to access the money. I feel that some progress has been made with the strategic fund.

However, I feel that things could be made easier for SMEs in innovation, especially young companies. I feel that this is extremely important. Earlier, I was talking about Taiga Motors. In my opinion, they are a perfect example of this kind of company. Three young students from McGill University decided to start building electric snowmobiles. No one believed in them, except maybe two or three people in Canada. Today, those young people are building a factory in Shawinigan.

We have the skills and the expertise in this country. We are talking about Quebec and Ontario, but at Dalhousie University in Nova Scotia, Jeff Dahn is working with Tesla in a research partnership. There are research centres in Canada that deserve to be mentioned. In British Columbia, Ballard Power Systems are conducting research and development into electric vehicles powered by hydrogen. People seem to forget that we are actually a world leader in hydrogen.

I feel that a fund like that, properly matched with worthwhile programs and projects, can improve the electrification of transportation enormously. I'm not talking about vehicles only, but infrastructures as well. The future of electrified transportation depends on smart and innovative infrastructures.

[Rachel Bendayan, Liberal, Outremont, QC]

Thank you, Mr. Breton.

Mr. Sinha, I wanted to give you the opportunity to comment on the CanExport program and your experience with it. You mentioned it in your opening statement. We're certainly always looking to improve, but I would be very interested to hear what your experience was with this program.

[Apoorv Sinha]

Tangibly, I can share one story with you regarding the CanExport program from when we visited France and were looking at some partnerships there. That has been probably one of the more successful engagements we've had with a government program. During that trip back in 2015, if memory serves, we had just begun looking at the potential application of our technology within the construction market. LafargeHolcim, the large conglomerate.... At the time the merger hadn't been finalized with Holcim, but Lafarge in itself was the largest cement company in the world. We had just begun some initial discussions with them on what type of data and information they would need to further evaluate our technology's relevance to their business.

With the CanExport program, we were able to go out there, not just to Paris to meet with some of the corporate team but also to Lyon, where they had their centre of research. It was pretty instrumental in creating a long-term engagement with them. Specifically, the timing worked out pretty well, because they were in the process of launching an internal accelerator program where they wanted to identify a handful of global companies to help with various aspects of their supply chain, which ranged from construction site schedule management to supply chains and how they could more effective with their materials.

We think that—

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Sinha. As you can see, everything is timing here.

We'll go to Mr. Savard Tremblay, for two and a half minutes.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Breton, I would like to pick up the conversation where we left it just now.

You were talking about national security. Unfortunately, that is a complex geopolitical question and we have very little time. You gave the example of the oil that we brought in from the Middle East, but that is largely up to the refineries. How do you position it as a national security issue? Concretely, how can we deal with it in the area of electrification?

[Daniel Breton]

Yes, by turning to renewable energy and greener transportation, we are indeed talking about a major change in our approach to energy and transportation. Let me remind you that 26% of Canada's greenhouse gas emissions come from oil and gas, and 25% come from transportation. Together, that makes up more than half of Canada's greenhouse gas emissions.

I would not be surprised to find that, in two or three years, greenhouse gas emissions from transportation are greater than those from oil and gas. That means, therefore, that we have to speed up the electrification of transportation. The Government of Canada has established targets for the use of electric vehicles.

If we find ourselves in a situation where major components, such as batteries for electric vehicles, are manufactured in places where we have little or no control, it can cause major geopolitical problems.

We have a clear example of that at the moment. There is a world shortage of microchips and that results in shortages of consumer products, like cars and computers. For reasons of national security, therefore, we could consider ways of securing the supply of raw materials that go into electric vehicles and gas-powered vehicles alike, because all vehicles need critical and strategic minerals. The minerals are used in computers, in armaments, in solar panels, and so on.

In the United States, measures like that have already been taken for reasons of national security, in terms of ports and oil facilities. In Canada, we have seen it with a potash company in Saskatchewan, if I'm not mistaken. We must make sure that resources on our territory are not reserved simply for foreign companies to process. The result is that we end up having to import their products at a higher price and have no control over the resource.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you.