International Trade Committee on May 10th, 2021

[Peter Zebedee]

I can't say that it has hit my radar screen in any significant way. We have a global supply chain. Most of our supply chain is focused on providers here in Canada but indeed reaches out across the world, America being number two, but it hasn't been something that's been flagged to my attention.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Dhaliwal, please.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Thank you, Madam Chair.

I want to thank all the presenters for the leadership their companies have shown when it comes to clean technology and services. My first question will go to Mr. Subramaniam.

Mr. Subramaniam, you mentioned that you are going to expand across Canada. British Columbia has beautiful weather and wonderful people, and more important when it comes to environment technologies, it is a leader in those technologies. We have LNG, Ballard and many more to come.

How might you take advantage of what British Columbia has to offer? Do you see prospects for your company here?

[Hari Suthan Subramaniam]

Thank you, Mr. Dhaliwal.

From a software perspective, we're a people-based business so talent is one of our biggest drivers. If I may speak openly and honestly, Toronto is a lovely city, but its growth in software and talent has ensured—in a good way, I think, for the federation—that we look at the talent pool across the federation. Vancouver is pretty good from a competitiveness perspective but also with respect to the talent pools coming out of universities and coming into the country through immigration.

We're looking at Vancouver but we're also looking at Prince Rupert and Victoria, while also looking at eastern Canada and Alberta as a talent base from a software perspective. Given the pandemic that has driven us to a virtual environment, the beautiful thing about Canadian companies like ours is that we can go to our own nation to find the best talent, irrespective of province or physical location.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Thank you.

My next question goes to Mr. Zebedee of LNG.

Mr. Zebedee, British Columbia is a net exporter of energy and exports the majority of its natural gas to the U.S. You had mentioned that with LNG, we will be open to markets in Asia. Could you please speak about some of those markets? In particular, you mentioned Australia is one of our competitors. How would we be able to take advantage of those emerging economies when it comes to their needs for energy?

Also, could you touch on the environmental impacts that this will have on those markets and locally?

[Peter Zebedee]

I think the growth in the LNG market, as I discussed at the start, is significant. We have a market today that has a demand for about 360 million tonnes a year. By 2040, that's going to increase to 700 million tonnes a year globally, with the majority of that demand coming from Asia. You'll also note that many of my joint venture partners are headquartered in Asia and will be bringing the volumes of Canadian natural gas into their respective global portfolios.

I think the demand is robust. We are structurally advantaged relative to our nearest competitor here in the U.S. In terms of sailing distance, we are geographically advantaged. It's a 10-day sail from Kitimat into Tokyo Bay to deliver gas into Japan, versus 25 days out of the U.S. gulf coast. I think there's a structural advantage. I've talked about the advantages in terms of our GHG emissions.

Fundamentally, it's really important that LNG is displacing these more carbon-intensive sources of energy, such as coal, but it's helping to improve air quality in cities like Beijing and Shanghai. In China alone, over 1.6 million people a year die from health issues due to poor air quality. By helping to displace those higher-emitting sources such as coal, LNG is going to help clean up the skies and clean up the air in Asia.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

You mentioned the private sector investment. When it comes to private sector investment, in budget 2021, the government announced one billion dollars over five years to help draw those private sector investments for Canadian clean technology projects. How do you think the government should work with industry to attract more private investment in the clean-tech sector?

[Peter Zebedee]

I think we should continue to encourage opportunities for innovation for clean Canadian technology. One key consideration would be to spur and drive innovation by leveraging and directing the revenues from the carbon tax back into the sector.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

My next question is for Ballard Power Systems.

Mr. Pocard, you mentioned that this is going to help, particularly the buses and trucks. You have already expanded into China and I see opportunities in countries like India where there are millions of trucks and buses. You said the trade commissioners are helping you.

Are you exploring India? How is the trade commissioner helping you move into that market?

[Nicolas Pocard]

Absolutely, this is something we are starting to look into. It's very early days.

I think the ecosystem is still at its beginning. What I mean by ecosystem is the production of the hydrogen, which is necessary as a fuel. However, we have seen in the past year or 18 months a lot of inquiries coming from India. We are starting discussions with large industrial groups in India, which are considering hydrogen fuel cells as a path to decarbonization.

We need to understand the market requirements better. We need to understand how our technology can be applied in India and we need to get the best partners, which will enable us to access the market and also to scale up. I think it's very important. If we want to serve the Indian market, we need to find a local industrial partner that will help us bring our technology to market.

For that, we'll probably be using the network of the trade commissioners to help us vet and provide some guidelines about some of the companies that are approaching us, but also maybe to find local resources because, at some stage, we'll have to invest in having our own Ballard people there to be able to assess opportunities and engage our partners. This is where the service of the trade commissioners can help us.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Pocard.

We will move on to Monsieur Savard-Tremblay, please.

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

Thank you.

I have a question for Mr. Allan from AddÉnergie Technologies. I want to thank him for being here. I actually want to thank all the witnesses for their presentations today.

My question is quite broad. If anyone wants to expand on Mr. Allan's response, please feel free to do so.

Three years ago, Innovation, Science and Economic Development Canada's clean technology economic strategy table set a goal of making the clean technology sector one of Canada's top five export sectors by 2025. This is the focus of our current study. The clock is ticking. We have about three and a half years to go before the deadline.

Do you think that this ambitious goal is still achievable? Is it still realistic to think that the goal can be achieved by 2025?

Anyone who wishes to respond is welcome to do so.

[Travis Allan]

I'll take a first crack.

It is a really big challenge to compete in these spaces because there is so much focus in Europe, Asia and the United States to be leaders in clean technology. There is a growing consensus that this is where the market is moving, so countries are really putting their best innovation and their best funding programs together and doing everything they can to try to support growth in this sector.

I think we have some really great advantages in Canada. We have an excellent labour force. We have great talent coast to coast. We have made some very early and important investments to support our domestic industry. Supporting the domestic industry is really the first step to building a global exporter because you need a home market to be able to grow your proof points and actually export that overseas.

Again, I think we've done some really important first steps. Everything is going to come down to the next three to five years. The real question is going to be whether we can make sure we have the market access that our companies need. Are we doing everything at home to continue to expand those domestic markets?

I'll pick up on a comment earlier about making sure our procurement is figured out and making sure that our tax structures make sense as companies grow from start-up to scale-up, as Mr. Subramaniam said. These are going to be the real questions. If we can answer them well and if we can deliver, I think we have a real shot, but it's not going to be easy. There is a lot of competition.

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

Is this really feasible if the American market closes even more, or is opening up, obtaining an exemption for Canadian and Quebec green products, a condition for achieving this?

[Travis Allan]

The question of what happens if the United States chooses to keep out competitors is a really good one. I think every time we deploy a station, we are also still getting benefits in our head office, because we run the network out of Quebec City, so all of the software and firmware, the R and D work, is still happening in Canada. Even if we produce part of our product in the United States, we're still getting really important benefits for Canada. Obviously they would be even better if we could manufacture both in Canada and the United States. There are still benefits even if we're not able to get an exemption, but I think we should really try.

Whether we've done everything we can to get an exemption, I think, is still an open question. The real push on buy America started with President Biden announcing some of these big, ambitious investments that he's going to make, so it is a relatively new conversation.

My hope is that we will see enhanced work by the Canadian government and Canadian business working together. In previous trade challenges, I think there's been some really great work done circling the wagons and getting collaborative discussions happening at the CEO level and looking to our industry associations and our American partners. I think there are some real opportunities there if we can get together and work on this.

[Hari Suthan Subramaniam]

I think I'd echo what Travis was saying in terms of seeing the trade commissioners already taking the pulse for us in terms of what we're hearing from our U.S. colleagues and the U.S. market.

At this present time, at least from a software perspective, I think the requirement is very much on national security. To Travis's point, where is it hosted? To date, they have not said, “Is it hosted in Canada? Is it hosted stateside?” and it doesn't seem to be an issue.

We as a company are prepared. As we work with a majority of the tech firms, it's easy to host the data if data becomes a critical issue from a national security perspective, but we don't think from a software.... From the Biden administration, I think there seems to be more focus on hardware and usually building materials, which we saw before in the former administration.

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

Thank you.

Since certain subtleties can't be described in the short amount of time available, I'll ask you to provide a rough summary of the situation. In terms of competition, we know that the Americans also have their own companies in this field and many of them are located in California. Our SMEs operate in a different way and in certain sectors, whereas the American companies operate based on a different expertise.

Can you tell us where we can find Canadian and Quebec expertise as well as American expertise?

[Nicolas Pocard]

I'll use hydrogen as an example. At Ballard Power Systems, we're working on hydrogen fuel cells. I think that Canada's expertise in this area is really unique, even compared to the United States. We have American competitors. However, Canada has always been at the forefront of hydrogen and fuel cell technology development.

We currently have an advantage, but it's under threat. Major investments in innovation and research pose a threat. The United States Department of Energy, the European Union and the Chinese government, in particular, are investing heavily in technology development and intellectual property in their jurisdictions. That's one of our current concerns. In some cases, we've had to relocate some of the research to obtain the research funding needed to develop the technology over the long term.

I think that we must continue to invest in Canadian technology, in Canada, to protect and develop the intellectual property that has made Canada a leader in the hydrogen and fuel cell field. This is critical if we want to maintain that leadership, which is really under threat right now.

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

Thank you for your response.

So, we're talking about—

[The Chair, Liberal, Judy Sgro]

Thank you very much.

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

We'll talk about this later.

[The Chair, Liberal, Judy Sgro]

We'll go on to Ms. Ashton for six minutes please.

Welcome to the committee today.

[Niki Ashton, NDP, Churchill—Keewatinook Aski, MB]

Thank you, Madam Chair.

First of all, I would like to thank all of the witnesses. I certainly appreciate the urgency that many of you have shared to get this right. There's no question that the climate emergency is one of the biggest crises we face. There's so much we need to do to be able to take on that crisis and, in large part, the use of clean technology. Clearly, we've heard—not just today, but every day—the way in which Canada is, frankly, not just not part of the solution in so many ways, but also part of the problem.

For my first question, I want to go to LNG Canada. Certainly there's no question that in order to be able to deal with the climate crisis, we have to be certain that our approach is rooted in respecting indigenous rights and respecting indigenous communities. Many of us were appalled to see the attack on Wet'suwet'en lands and women last year in the face of your proposed development.

Considering that in order to deal with the climate crisis we need to respect indigenous communities, what do you have to say about what took place just a few months ago?

[Peter Zebedee]

Thank you very much, Ms. Ashton.

We want to acknowledge that we actually have the support of elected and hereditary leadership spanning 20 first nations along the entirety of the pipeline route and that of many of the other communities and individuals engaged in the project since its inception.

We look forward to building a project that adds significant benefits for indigenous communities, for British Columbians and for all Canadians. We also, of course, respect people's right to conduct peaceful protests. We think we have a strong argument for LNG as a lower-carbon fuel. That's going to help countries—not only Canada—transition away from coal-based energy. We want to encourage people to learn about LNG and its role in the energy transition.

We see a great deal of support for our project. The more that people understand about LNG, the more support we get. We recognize that we're not going to be able to change everyone's mind here. That's okay. People have the right to disagree, but I think it's telling that every level of government with which we interface has suggested and continues to support the project. This includes first nations and it includes government formed by different political parties, because they indeed see all of the benefits that this project brings.

[Niki Ashton, NDP, Churchill—Keewatinook Aski, MB]

There's no question that government has a critical role to play when it comes to respecting the constitutional rights of indigenous peoples. I would say that many of us are deeply concerned about the way in which Wet'suwet'en voices were not respected. We are currently dealing with the UN Declaration on the Rights of Indigenous Peoples, which is a framework, frankly, for reconciliation. Part of that is free, prior and informed consent. For us, it's very critical that this be followed.

I want to ask some of our other witnesses, as well, about what Canada needs to get right, right now.

Mr. Subramaniam, your presentation touched on the role of innovation and making sure we reach climate targets that will realistically slow global warming. You have worked on smart grid systems, on electrifying transport. What do you think the government could do to prioritize clean exports? Where are there barriers?

What can we be doing to make Canada a climate champion on the international stage?