Evidence of meeting #30 for International Trade in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was lng.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Travis Allan  Vice-President, Public Affairs and General Counsel, AddÉnergie Technologies Inc.
Nicolas Pocard  Vice-President Marketing , Ballard Power Systems Inc.
Clerk of the Committee  Ms. Christine Lafrance
Peter Zebedee  Chief Executive Officer, LNG Canada
Hari Suthan Subramaniam  Chief of Strategic Growth, Opus One Solutions

12:25 p.m.

Liberal

The Chair Liberal Judy Sgro

Thank you very much.

I'm sorry. Your time is up, sir.

Mr. Sheehan, go ahead please.

12:25 p.m.

Liberal

Terry Sheehan Liberal Sault Ste. Marie, ON

I'll stick with Opus One Solutions.

Before I begin, thanks again to all our presenters. We've had some excellent testimony as we've undertaken this work.

During your testimony you mentioned a few things that your company has accessed—the EDC, the BDC, the regional development agency FedDev. I would like to find out what FedDev has done. We heard in testimony before what FedNor had done for a company in being able to unlock what was a $5-million loan from FedNor that basically leveraged about 25 million dollars' worth of investment. There is, then, that one.

The other piece, which I haven't heard about from any of the people testifying today but we've talked a little bit about, is research and development—IP and such. Are there any comments about IRAP or SR and ED credits or anything else related to research and things that Canada is doing well or could be doing better in that field of getting people ready to export?

12:25 p.m.

Chief of Strategic Growth, Opus One Solutions

Hari Suthan Subramaniam

On EDC-BDC, absolutely, we have been beneficiaries of IRAP. Personally and professionally, we're huge proponents of IRAP.

There are two things. I know the current budget seems to have given IRAP far more runway, from going all the way up to $10 million for scale-up companies. That's fantastic. My only thing is that I think cultural changes are probably needed in most of the agencies, with external folks looking at where we are going and how the government keeps in tandem with the pace of commercial growth. I know it's hard for us to talk about government agencies trying to know where the commercial growth is, but that kind of synchronicity would be better served if we could achieve that. IRAP is fantastic. It should continue, and we as a government should double down on it.

In regard to FedDev, we were a recipient of a $2.5-million loan that leveraged about $15 million, so it's probably well spent. It is a loan, which is fantastic, and I think it's one of the few instruments we have been able to go to for really scaling up. Our request to this panel is to allow them the flexibility, if we're doing well and if we're meeting the targets, to help us more, give us an additional loan without having to go through the bureaucracy or the red tape that was mentioned before. Make it easier for us, as long as we meet the metrics, and just like a bank, give us more in terms of a loan at 0%, which allows companies like ours to scale quite aggressively.

12:30 p.m.

Liberal

Terry Sheehan Liberal Sault Ste. Marie, ON

Thank you for that.

For my next question I'm going to start with Travis.

Everyone has talked about the buy America policies that the current president, Biden, is speaking about. “Buy American” is not a new term. I believe it first started in the 1930s in the United States, and periodically in different decades they introduce those ideas.

Travis, you had mentioned, and this is something I've looked at in the past not only as an MP but as a former city councillor, about how we can do more procurement internally within Canada. The research shows that, for a lot of the infrastructure programming, the federal government funds the provinces and territories through the various programming and transfers, and a lot of times it's really a buy Ontario program, a buy Quebec program or a buy B.C. program.

For the record, would you encourage provinces and territories to evoke some policies that would encourage, I'm going to use Ontario since I'm an Ontario MP, a buy Ontario type of process?

12:30 p.m.

Vice-President, Public Affairs and General Counsel, AddÉnergie Technologies Inc.

Travis Allan

Just because of the market size differential, we're so eager to get into the United States and sell, we're so eager to grow internationally, that we get a little concerned about express buy America, buy Canada or buy Ontario programs. We think, frankly, we're globally competitive, so the first thing we'd love to see is making sure that governments are looking at their procurement, making sure they're not keeping out Canadian providers, which has happened a number of times. That's the number one focus.

Number two is looking at ways to educate and make sure that Canadian companies, especially small and medium-sized businesses, know how to work the procurement systems and have people who can help them. We really hope that we can be competitive and we can get the best products from Canada for Canadian governments.

12:30 p.m.

Liberal

Terry Sheehan Liberal Sault Ste. Marie, ON

I agree with that. I'm a big proponent of free trade, the free flow. I'm also co-chair of the all-party steel caucus, and I know how many times a product goes across the border, whatever it's manufacturing. Let's say it's windmills: Iron ore could be coming from the States to a steel mill in Canada to make those windmills, back and forth. I agree 100% and I wanted to get your thoughts on that.

Keeping on that procurement note—

12:30 p.m.

Liberal

The Chair Liberal Judy Sgro

Mr. Sheehan, I'm sorry, but your time is up. I'm not sure if anybody can give you a quick comment.

I don't see that happening, so I'll go on to Mr. Lobb, please.

12:30 p.m.

Conservative

Ben Lobb Conservative Huron—Bruce, ON

Thanks very much, Madam Chair.

The first question is to Mr. Allan. You might not know the answer to this. It's a bit of an aside question.

On social media and different places, you see these charging stations that are hooked up to a diesel generator or a natural gas generator. Do you guys track that? As to your customers who are buying from these stations, what percentage of people are actually hooking into the grid and what percentage of sales are hooking into a diesel generator?

I was on the highway the other day, and at Canadian Tire they had some, I think they were Teslas, set up and it looked to me like they had little diesel generators or gas generators on there.

What do you know about that?

12:30 p.m.

Vice-President, Public Affairs and General Counsel, AddÉnergie Technologies Inc.

Travis Allan

Our stations are designed to be grid connected, so the only situation in which we'd expect them to be off grid would be either in a power failure or if they were used in a remote or off-grid community. For power, quality-wise, grid is best. We haven't heard many reports of that.

The one thing you might have seen, if it wasn't a generator, is that sometimes the fast-charging stations have a big separate piece of infrastructure that actually helps ensure the right voltage and amperage is coming. It could also have been that, or it might have been a temporary situation with the generator.

12:30 p.m.

Conservative

Ben Lobb Conservative Huron—Bruce, ON

Thank you for that answer.

When they see that, I think there are a lot of people who wonder if it's true or not true or what percentage it is.

Is the gentleman from Opus One still online?

I have another related or unrelated question. I hear this from many different people in my constituency, and again you see this online. They say, if we meet the EV standards for vehicles by 2040 or 2050, or whenever, the grid would never handle the demand for electricity. Is that a farce, or is that true? What's the situation we're in on that?

12:35 p.m.

Chief of Strategic Growth, Opus One Solutions

Hari Suthan Subramaniam

That's a great question.

Absolutely, the grid is built. One of the funny things about the electricity sector, and that's why it's ripe for innovation, is that it hasn't really changed much in the last 100 years. The poles and wires that you see going into buildings and going above your homes all have to go through some sort of upgrade, especially where electrons and electricity are moving back and forth. There will be upgrades and there will be costs associated with it.

The question, and I think this may fall outside the purview of the federal government when working with the provinces, is how we ensure that cost effectively the grid is upgraded for the electrification revolution or even the hydrogen revolution that's coming. Ultimately they all need electricity to make hydrogen, and so on and so forth, so I think there does need to be an upgrade on it.

Our company, for example, is one that has technologies that can ensure that the cost is mitigated enough that the residents don't have to bear the cost of a grid upgrade because we're going electrical.

12:35 p.m.

Conservative

Ben Lobb Conservative Huron—Bruce, ON

I have one other question, and I think you touched on a couple of parts, about the growing pains of a new software company or a new technology company in regard to the protection of intellectual property as you expand outside the domestic borders.

For 12 or 13 years I've been talking about this. I used to work for a software company. What were your experiences? What do you think the government can do to further support growing companies that want to export, that face IP lawsuits in the eastern district of Texas and things like that?

12:35 p.m.

Chief of Strategic Growth, Opus One Solutions

Hari Suthan Subramaniam

I don't know if my colleagues would agree, but I think it's the biggest expenditure, because IP is such a tough game. It protects your company in terms of the ability to get money because you have a patent, but the real thing is that it's about enforceability and defensibility of the patent.

What governments can perhaps look at is a rebate of some sort around ensuring that more IP is patented out of Canada to the U.S. Therefore, we file in the U.S., we also file in the EU, and let's say the World Intellectual Property Organization. Some sort of incentive for start-ups, scale-ups, any companies, to ensure that we accelerate IP patents and IP filing would be probably the best help.

It is probably very expensive. I'll defer to AddÉnergie. They probably spend a bundle on that every year.

Looking at that would be one thing.

12:35 p.m.

Conservative

Ben Lobb Conservative Huron—Bruce, ON

I've always thought—

12:35 p.m.

Liberal

The Chair Liberal Judy Sgro

Thank you very much, Mr. Lobb. You have 20 seconds.

For the information of the committee, the bells are ringing. A vote has been called. It's a 30-minute bell.

Do I have the direction from the committee? I would need unanimous support from the committee to continue until approximately 12:45 or 12:47, something like that. Is that acceptable to the committee?

12:35 p.m.

Some hon. members

Yes.

12:35 p.m.

Liberal

The Chair Liberal Judy Sgro

Everybody is good with that. All right, we will continue on.

Mr. Arya, you have five minutes, please.

12:35 p.m.

Liberal

Chandra Arya Liberal Nepean, ON

Thank you, Madam Chair.

Mr. Subramaniam, as a former board member of Invest Ottawa, I agree that companies need a lot of support for scaling up.

Mr. Peter Zebedee, 20 years back I worked in Qatar, obviously not in the LNG industry. I know the importance of LNG and I have seen the growth of the LNG industry. In fact, I was a tiny, minor shareholder of the first LNG project in India. I look forward to your first shipment.

Back then, 20 years ago, I used to wonder why, since we had so much natural gas, we were not setting up LNG plants. I'm glad yours is coming up. I look forward to many more coming up.

Mr. Pocard, in Qatar, 20 years back, I hosted a seminar on futuristic technologies. The two technologies I chose then were, one, nanotechnology in materials; and two, hydrogen fuel cells. I had a Fuel Cells Canada executive come down to Qatar and make a presentation. Since then, even now, hydrogen fuel technology is almost within reach. What I heard then, I'm hearing even now. I know Ballard has gone through ups and downs. It was the most valuable company 21 years back. Still, you are the supplier of 3,400 trucks and buses. It's good, but it is still not there. I still hear the same thing as before: It is just a couple of years away from major transformation.

Anyway, with my limited time, I have questions for Mr. Allan.

I'm glad to know about what you're doing on the charging side and your exports to the U.S. As you may know, our government has invested funds in the recent budget to develop and implement the codes and standards for the retail of zero-emission vehicle charging and fuel stations. Obviously, we are proposing to do this in coordination with other international partners.

With your background in this and with your exports to the United States—and I'm not sure whether you are exporting to Europe also—are you facing constraints because the codes and standards are not the same across the world? Do you foresee any problems that will curtail export from companies like yours?

12:40 p.m.

Vice-President, Public Affairs and General Counsel, AddÉnergie Technologies Inc.

Travis Allan

Thank you.

Yes, codes and standards in the EV charging industry have been critically important since the very early days where people were arguing over what type of connector they would use for the different vehicles. They continue to be a major source of uncertainty and non-tariff barriers in our sector.

The investment you're referring to, where Measurement Canada will be looking at metrology standards, is a really important step that was requested from industry: Electric Mobility Canada and our sector. We want to make sure that when we're dispensing energy we're charging people correctly. We are trying to get consistent metrology standards across all of North America. That lets us sell to a broader audience. It's very important.

12:40 p.m.

Liberal

Chandra Arya Liberal Nepean, ON

Mr. Allan, I have very limited time and I have one more question.

This morning, I was reading in Bloomberg Hyperdrive the specialized articles on electric vehicles. I'm sure you, too, follow that. An article was about the chicken-and-egg problem. Because there are no charging stations, I don't want to buy an electric vehicle.

Which comes first? Because there are not enough electric vehicles in Canada, obviously we don't have so many charging stations. Obviously the first mover is the government sector. We have supported the development of 6,000 charging stations, but that is very low compared to the requirement in a geographically wide country such as ours.

Where do we go? How do we achieve that balance so enough charging infrastructure is there so that people are encouraged to buy electric vehicles?

12:40 p.m.

Vice-President, Public Affairs and General Counsel, AddÉnergie Technologies Inc.

Travis Allan

That's right. Canadians typically will not buy electric vehicles unless two things are in place. One, they have to see charging stations and know that they work, and two, there have to be enough electric vehicles.

Investments by NRCan under ZEVIP and the EVAFIDI program have been critical as a first step to getting Canadians comfortable with the idea of driving electric. I think we need to do substantially more in that area, as well as making sure we have enough makes and models of electric vehicles on the market.

12:40 p.m.

Liberal

The Chair Liberal Judy Sgro

Thank you very much.

We'll move to Mr. Savard-Tremblay for two and a half minutes, please.

12:40 p.m.

Bloc

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

Thank you.

Earlier, the speaking round was about to continue. I believe that Mr. Zebedee was about to respond. Unfortunately, there wasn't any time left. I would like to give him the opportunity now to answer my question. Remember that it concerned Canada's niche of expertise.

My question is as follows: how does Canadian expertise differ from American expertise?

12:40 p.m.

Chief Executive Officer, LNG Canada

Peter Zebedee

For my business in particular, we really need to focus on our structural advantages. Certainly with our main export market out of the west coast for gas being Asia, the geographic advantage is there and it's structural.

However, indeed, as my colleagues mentioned before, our ability to use hydroelectric power and the export and the liquefaction of our LNG is essential and provides us with a competitive advantage.

Thirdly, we have a highly skilled workforce here in Canada, and particularly in western Canada, on building these large energy infrastructure projects. We need to leverage that to our utmost advantage to construct projects that are competitively advantaged economically through the capital cost to construction relative to our competitors, and the U.S. is one of our main competitors for LNG export out of North America.

12:45 p.m.

Bloc

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

Thank you.

Madam Chair, how much time do I have left?