Evidence of meeting #116 for International Trade in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was labour.
A recording is available from Parliament.
Conservative
Richard Martel Conservative Chicoutimi—Le Fjord, QC
Mr. Volpe, what do you think should be the priority for the money we're going to collect through these tariffs?
President, Automotive Parts Manufacturers' Association
So you're suggesting that the funds raised through the tariffs....
Look, this government, together with its provincial partners, has put its stake on Canada's being at the forefront of the electric transition. So I think where the gap is is how we are going to get those minerals to market, to go into batteries so that we don't need the Chinese end of it. I'd really like to see a national strategy that has the funding required to get past the hump for all the juniors, the recyclers and the major mining companies to be able to get to market quicker in lieu of a customer and a profit.
Conservative
Richard Martel Conservative Chicoutimi—Le Fjord, QC
You mentioned Project Arrow. I would particularly like to hear more about this and about how aluminum is included in the project. Can you tell us more about that?
President, Automotive Parts Manufacturers' Association
Aluminum is very critical in EV's for many direct and indirect reasons. For direct reasons, there are a lot of new innovations in energy storage. Companies are asking, “What if we replace some of the major minerals with aluminum?” Is that a reliable, dense enough source to be able to build batteries that have it as one of their main ingredients? If we do that, Quebec is a winner and Canada is a winner.
On the other end, as the member beside me talked about, EVs and all cars are getting a little bigger. They're getting a little bigger because safety requirements require them to, but they have to get lighter. The best way to get lighter, with structural integrity and without having to reinvent the wheel, is with aluminum. I suspect that the USMCA renegotiations are going to bring the Americans to say—and maybe we should say—that, by the way, we require 70% of core parts to be steel, and we require that steel to be sourced locally. I think that we're going to have that conversation about aluminum, and we should.
Conservative
Liberal
Mona Fortier Liberal Ottawa—Vanier, ON
Thank you, Madam Chair. I will be sharing my time with my colleague Mr. El‑Khoury.
Ms. Kyriazis, as I understand it, Clean Energy Canada interacts with various partners and conducts research, in addition to enlightening certain political leaders and stimulating public engagement. From what I understand, Clean Energy Canada sees the transition to clean energy as a unique opportunity for Canada to build a resilient, growing and, of course, inclusive economy.
Could you talk about how you work with other countries, such as the United States? Could you talk about how this issue might affect our relationship with our largest trading partner? Do you feel that our countries and our trade relationships benefit from the decision that's been made?
Director of Public Affairs, Clean Energy Canada
The very end of the sentence was cut off. The decision that was made is beneficial to....
Could someone help me with the translation on that?
Director of Public Affairs, Clean Energy Canada
I believe you said, “both countries and their workforces”.
At Clean Energy Canada, we've been working on trying to build Canada's EV battery supply chain for a few years now. We have convened stakeholders from across the industry, from mining, from automotive parts, from auto assembly all the way through to battery recycling. We have included academics and representatives from labour as well.
We acknowledge the threat that China posed to the North American auto sector. We acknowledge the huge decades-long head start that China has and how much China dominates global supply chains. We have specifically looked at what sorts of competitive advantages Canada has to offer and how we can complement the U.S.'s approach on initiatives and strengths because we have a different set of strengths. As Mr. Volpe talked about, we are very strong on the upstream portions of the battery supply chain, something that the U.S. doesn't have as much wealth in. The U.S. has a huge market size that we are able to leverage, as well as a lot of dollars to spend.
Certainly, aligning with the U.S. in building out a North American EV supply chain is a top priority for us and is a winning approach for both countries and our workers. However, we definitely have to keep consumers in mind. Something that is going to make or break the success of that future North American industry is that North Americans keep buying EVs. We need to make sure we have a strong and growing market for this growing industry to serve. Figuring out how to build and to sell affordable EVs is going to be the nut that needs to be cracked.
Liberal
Fayçal El-Khoury Liberal Laval—Les Îles, QC
Thank you, Madam Chair.
Mr. Volpe, you recently stated that the Automotive Parts Manufacturers' Association, or APMA, feels defended and motivated, and that it will now focus on defending its market, with the best of Canada's innovation and determination.
Can you tell us more about your enthusiasm for the measures taken by our government?
Also, do you have an opinion to share on other components of the sector's supply chain, such as semiconductors, products related to solar energy or critical minerals?
President, Automotive Parts Manufacturers' Association
That's a good question to give me because, as you may know, I'm very enthusiastic about what Canada's supply chain can do in facilitating this transition, and I work very closely with governments at both levels to land the facilitating investments that get us there.
You can't get a supplier an opportunity unless you get orders from a carmaker. This is a proximity business. You make a car here, you make the parts, especially the big, heavy ones like batteries, and you assemble them within an hour or two hours at the facility. They act as a cluster.
This is the greatest investment run in the history of the Canadian automotive sector, in partnership with two levels of governments from two different parties—three parties if we include the Government in Quebec. I'll refer to Project Arrow when I talk about innovation; companies like Voltaxplore in Quebec that work with companies like Martinrea that are using graphite and graphing to enhance lithium ion batteries for range extension; companies like TM4 out of Quebec that are not part of the Dana enterprise that are working next-generation efficiencies into the best electric motors on the market; and companies like Linamar that have decided to finally work with our fuel-cell capabilities in B.C. with Ballard, a fuel-cell vehicle and an EV with almost identical componentry except either you're hooking up a battery or you're hooking up a fuel cell.
In the Ballard example, we've been leaders for 40 years in this space, out of B.C., and finally we're going to start to see some of those opportunities come up because we have anchor investments that can order volumes.
Linamar is a company started by a toolmaker Frank Hasenfratz, and his daughter has built it into a $10-billion enterprise in a whole bunch of different categories.
What those companies need, what the supplier industry needs and what upstream needs are orders that are local, and it's very important to see not just investments from the five assemblers that are here, but a new one from a sixth one, from Volkswagen.
On semiconductors, I will leave you with this—
President, Automotive Parts Manufacturers' Association
I'll leave you with nothing. I'll come back to you on that one.
Liberal
The Chair Liberal Judy Sgro
See if you can get those final words in there.
Monsieur Savard-Tremblay, you have two and a half minutes.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
Thank you, Madam Chair.
I'll ask Ms. Kyriazis from Clean Energy Canada to answer the following question.
At our first meeting last week, we heard from representatives of Electric Mobility Canada, who were calling for the introduction of tendering, in other words, the possibility of changing the way public sector contracts are awarded, based on environmental criteria. We even know that, according to studies, this would pass the test of international trade law. Currently, trying to negotiate exceptions could be problematic, since the Canada-United States-Mexico Agreement, CUSMA, does not contain a chapter on government procurement, unlike the North American Free Trade Agreement, NAFTA, which did.
Having a call for tenders based on the environment would pass the test and, what's more, it would no doubt allow many of our companies to come out on top, particularly in terms of U.S. government contracts.
Do you think that's a way forward?
Director of Public Affairs, Clean Energy Canada
Green procurement is a huge opportunity and a win-win. I think it's a tool that is unfortunately not being leveraged to its full potential here in Canada. The government promised a comprehensive buy-clean strategy federally a few years ago, and we have seen some promising steps through the greening government strategy, which focuses on preferring lower carbon, often Canadian-made, materials in federal building investments like the low carbon steel, aluminum, cement and wood products, but where the real impact could be seen is leveraging the federal infrastructure dollars that are going to provinces and municipalities for roads, bridges and the massive housing build-out that we're hoping to see in the next decade.
We would like to see similar buy-clean requirements added across all federal infrastructure spending so that we can build a better and bigger market for that low-carbon steel and aluminum, which is often Canadian-made, to help Canadian producers scale up.
When it comes to EVs, we could also be better at leveraging our procurement powers federally and provincially to set more ambitious targets to green government fleets and then meeting those targets, because that's been slower to happen than it should be.
Liberal
The Chair Liberal Judy Sgro
Thank you very much. I'm sorry, but your time is up.
Mr. Cannings, go ahead for two and a half minutes.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
I'm going to turn to Mr. Volpe and hopefully get a couple of questions in.
First, I want to say, as someone who wears a size 8 hat, that we're not all liars and cheats, but I appreciate the story about Barry Bonds.
I'd like to shift to tires. I know this may not be part of your parts manufacturing, but last week, I was talking to people from Kal Tire, a major tire retailer in Canada that is based in the Okanagan Valley. They also make retread tires for trucks, and so they recycle these tires.
Just in the last few years, they have been overwhelmed by cheap products coming from China that are being dumped in the North American market. They can't make a retread tire cheaper than these new tires, and the United States has slapped duties on these tires or stopped them from coming in.
I'm just wondering if we should be expanding our view here to things broader than EVs and the EV supply chain.
President, Automotive Parts Manufacturers' Association
The “V” in EV stands for “vehicle,” and we spend a lot of time talking about the “E” and the rest of the vehicle and tires. Actually, tire technology includes designing the compound and the tread for less resistance for a longer range on EVs.
It's not the first time I've heard that, and yes, we do have tire manufacturers here in Canada. The rubber industry, like the aluminum, steel and lithium industries, is dominated by the Chinese and their opaquely subsidized processes in which they invest in everything except for labour to sell us the cheapest stuff. A lot of times people will buy tires because they need a new tire, but they don't think about the performance and lifespan of it, so they buy the cheap Chinese stuff, and it's a problem.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
You mentioned the Chinese response to these actions by Canada or the United States. Is there a differential response to Canada because we're not a big player like the United States? We saw China come in immediately and threaten our canola industry, but I haven't heard of any actions against the United States.