International Trade Committee on May 10th, 2021

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

If you want to respond, go ahead.

[Travis Allan]

Perfect. I'll start, as a Quebec business.

We have incredibly strong clean energy, which we're already exporting to the United States. It's a huge strategic advantage. We have very strong metals and minerals that are critical to the battery supply chain, but they're also really important for any manufactured equipment such as charging stations.

We have clean production of things like aluminum and other metals and minerals, which is really helpful if you're looking at the full life cycle of greenhouse gas emissions.

We have very strong talent, both homegrown and also new Canadians who bring their own expertise, and having that open market in a place where people love to come to work is really helpful. We have a software R and D team in Montreal, for example.

Then I would say that some provinces, notably Quebec and B.C., have done a really good job of starting to green their own fleets and looking at procurement as a way of supporting homegrown businesses. We honestly can't do enough of that. It's so helpful.

Maybe I'll stop there in case others have answers.

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

Please do. If other people want to comment based on their expertise, that would certainly be helpful.

[Nicolas Pocard]

I think that, in the electromobility field—

[Hari Suthan Subramaniam]

Just to add to what Travis said, I think one of the biggest competitive advantages we have is that a majority of the provinces have hydroelectricity. I think it's a huge driver for electrification. I know that's not part of the whole federation but the provinces that are blessed with it should be innovators in driving it. This will catapult specific industries to those provinces. I think Quebec has done a great job of that.

[Peter Zebedee]

I would second that comment.

[The Chair, Liberal, Judy Sgro]

Thank you all very much.

We'll go on to Mr. MacGregor for two and a half minutes, please.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you so much, Madam Chair.

Thank you to all of our witnesses for appearing today.

I probably only have room for one question here so I'll go to LNG Canada. I think you very clearly explained LNG's importance in markets like Asia to replace, for example, coal-fired power plants, given that coal, arguably and measurably, is a much dirtier fuel and emits much more greenhouse gas.

What I wanted to know, though, is this: When Canada is out on the market trying to promote its LNG facilities and resources, do importers ever express concerns about methane leakage from our well sites? Is there any concern about whether Canada is doing enough to address this problem? How much does escaped methane contribute to our overall greenhouse gas emissions? How well is Canada doing in addressing this problem vis-à-vis what some of our major competitors, such as Australia and Russia, are doing and so on?

[Peter Zebedee]

Thanks, Mr. MacGregor.

Both the Canadian and the British Columbian governments have introduced regulations regarding methane emissions that put Canada at the forefront of efforts to reduce GHGs from oil and gas production. The B.C. government has a methane emission reduction target of 45% by 2025, relative to 2014 levels, and the Government of Canada has set an equivalent reduction target of between 40% and 45% by 2025, relative to 2012 levels.

I'll give you an example. One of LNG Canada's joint venture partners, Shell, announced a target to maintain methane emissions intensity by below 0.2% of total production by 2025. That's in line with the global standards set out by the oil and gas climate initiative, which has a target of 0.25% and a goal of 0.2% by its members.

I think we now have some tangible proof points in industry. I mentioned the electrification of Shell's Groundbirch plants. I know that among all five of my joint venture partners, the same initiative is being looked at well into the upstream. I would say we have a world-class framework. We have producers in our upstream committed to doing that. I think our performance overall is also leading, relative to other gas-producing nations.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you.

[The Chair, Liberal, Judy Sgro]

We will hear from Mr. Hoback for five minutes, please.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair.

Thank you, witnesses, for being here this morning.

I'll start off with you, Mr. Allan. We talk about buy America. Other than the U.S., are you seeing any countries starting to go down this path of having their own “buy domestic” programs that we should be aware of and that you would like to have market access to?

[Travis Allan]

Thank you for the question.

Our focus right now is really on exporting to the U.S. market, so that's the one I'm most knowledgeable about. However, to echo some of the earlier comments, we are certainly seeing a growing focus on this in other places in Asia and Europe. I think this will be a concern for Canadian exports.

[Randy Hoback, Conservative, Prince Albert, SK]

Mr. Pocard, what would you say?

[Nicolas Pocard]

Yes, I absolutely agree. We are seeing that in China. There's a policy in China on fuel cell technology, really driven towards localization. There are rules in place. The numbers...every year, more and more components need to be produced in China with Chinese technology. Yes, we will be studying that. It is growing and starting to be a barrier for us to export to China.

[Randy Hoback, Conservative, Prince Albert, SK]

Is that something Canada should be raising at the WTO in regard to China?

[Nicolas Pocard]

Absolutely, that's something that can be discussed, to see how we can make those barriers less constraining, both for the Canadian technology sector, which has been investing for a long time in developing that technology, and for China, to achieve its emission reduction goals.

[Randy Hoback, Conservative, Prince Albert, SK]

Mr. Allan, you talked about having a shortage of supply for components that go into the making of your charging stations. Do you see the stimulus happening in the U.S. and other parts of the world making that even a bigger problem? I think that's what you were saying.

Also, what kinds of solutions do you have to ensure that Canadian raw resources actually go to Canadian companies?

[Travis Allan]

The supply chain challenges, certainly during COVID, were real for many components, particularly with respect to semiconductors, which saw a number of global shortages. Our team has been able to manage this issue so far.

I mentioned components and subcomponents. One of the interesting features of buy America is that it can apply at the assembly level or it can apply one or two levels down. Our hope is to be able to continue to use our heavily Canadian supply chain to produce for the U.S. market, but depending on the way it's implemented, it could make a very big difference. It could certainly impact the Canadian supply chain, which would not be great for our economy.

[Randy Hoback, Conservative, Prince Albert, SK]

Mr. Pocard, you use a lot of rare earth elements in your battery construction. Are there things we should be doing to safeguard Canadian resources to make sure that Canadian companies get those resources?

[Nicolas Pocard]

Actually a fuel cell doesn't use a rare earth element. It uses platinum. There is a bit of platinum, but it is recycled at 95%.

[Randy Hoback, Conservative, Prince Albert, SK]

Okay.

How about you, Mr. Allan? What do you think of that solution? When considering cobalt and such items, should we start making sure that we take care of Canadians first? How should we handle this in the international marketplace?

[Travis Allan]

One thing I think we have a huge opportunity for in Canada is building up our domestic mining sector for some of these major resources. If we can do that and really execute on a metals and minerals strategy, not only will we have more production that Canadian companies can use, but we also will be able to export internationally.

I really think building our productive capacity is the number one priority to ensure that we have good safeguards and are not totally dependent upon imports for those metals and minerals.

[Randy Hoback, Conservative, Prince Albert, SK]

When we look at the export market and we look outside.... I'm going to get off the buy America question, because we've studied it in the special committee.

We're trying to make sure that we have Canadian companies exporting outside of Canada with new environmentally friendly products. Where do you see the biggest market opportunities, and where do you see the opportunities lying for Canadian companies that may not have been tapped by other regions?

We touched on the way Germany moved forward on solar technology 15 years ago. What are the new markets that we should be trying to find a Canadian home for?

I'll open this up to all panellists, because I'm sure you all have different perspectives based on the sectors that you work in.

[Hari Suthan Subramaniam]

Maybe I'll start off. It's a great question.

I'd say, from the space we look at—our vantage point—it's data analytics and AI. I know that many folks talk about these, but they interplay pretty much seamlessly in all sectors. Whether you're in forestry or in mining, it becomes very much a robotics and data play, moving down. The proliferation of those segments is a great point for Canada to continue to keep a field advantage on. That's one point.

The second one, I'd say, is that export markets.... Honestly, I think it's the globe in its entirety. One thing I should have probably said is that the government, or we as a nation, seem to have five or six preferred countries that we think we should.... I think that idea should be uncoupled. I think we should let our companies go where the markets are and support them accordingly. There could be technologies that can decarbonize for the entire African continent, and I think their development should be encouraged.

From an Opus One-centric perspective, however, I would say that our biggest markets are Japan and Australia, which is never talked about as a big trading partner for Canada. What the Australians are going through themselves presents a huge market, I believe, for a lot of Canadian clean-tech technologies.

We haven't looked at South Africa. I'd say let's look at some non-traditional countries that Canada has not focused on. That would be my advice.