International Trade Committee on Oct. 21st, 2024

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

You went through potential new critical mineral production. Minister, your government has, for two years, said that it would expedite the process for mining, but I haven't seen any change to that and, according to the Mining Association of Canada, it takes 15 years to go through the approval process.

Are we going to have 15 years of bureaucracy and delay on critical minerals, which means 15 years of parts from China for these plants?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

I know, Mr. Perkins, that you would have read the federal budget very carefully. I know you're a man who likes to study documents carefully. You would have seen that we have even created a group to expedite the permitting.

However, you don't need to take it from me. Take it from the CEO of Rio Tinto. Investing billions of dollars to make sure that we provide scale, when it comes to critical minerals, is the best message we can send. It's a big vote of confidence. By the way, the investment that Rio Tinto proposes to make in Canada is the largest in the history of Rio Tinto since they bought Alcan, which Monsieur Martel will know well because he has a plant in his riding. I used to have one in my riding.

I just met with the CEO of Teck. Just to comfort you, the CEO of Teck said that, when they did their transaction, the cash balance they have on their balance sheet is to go to just the critical minerals.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

I appreciate that, Minister, but it appears that the answer is no, that there's nothing that's really changed in the process.

To go on, Northvolt—a $7-billion EV battery plant in Montreal—delayed construction for a strategic review. For those who don't know what that means in the business world, that means, “We're looking at whether or not to go ahead or to sell it.” That's generally what a strategic review means. Umicore—a $2.7-million component plant in Kingston, Ontario—halted construction. Ford's $1.8-billion EV expansion in Oakville was scrapped to make pickup trucks. Ford lost $1.3 billion in the first quarter of this year on EVs. They estimate they're going to lose $5 billion this year.

Globally, Stellantis, Ford and Volkswagen, in areas where there isn't massive government subsidies, are scaling back their plants. They're scaling back their plants because the sale of EVs dropped dramatically in Europe—by over 50% in Germany. In Canada we're only at 11%. Are you and is your government still going to proceed with these plants when it's clear that people in the market aren't buying EVs and, in Germany alone, there are 100,000 EVs in inventory that can't be sold?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Mr. Perkins, I think you should rejoice. Canada has attracted the single largest investment in Canada's history by one single company, Honda, at $19 billion. Volkswagen has decided that their largest gigafactory outside of Germany will be in Canada. You have seen Stellantis choosing Canada for the EV plant.

For Northvolt, you should be happy, Mr. Perkins. I know you look at the balance sheet. We have not disbursed one dollar of federal money. You should be rejoicing. I hope you're going to put that in your ten percenter to your constituents and say, “Thanks to Minister Champagne and the good work we did, we have structured a deal whereby the federal government has not disbursed one dollar yet on this plant.” Obviously, we want it to work. We want to make sure that we see generational opportunities.

When you have Bloomberg, which ranked Canada first in the world for the battery supply chain, ahead of China.... I'm sure you're going to put that in your ten percenter as well to rejoice for Canadians.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Champagne.

We have Mr. Sidhu, please, for six minutes.

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you, Minister Champagne, for taking the time to be with us here at committee today.

Minister, last week you visited Brampton East, and we went to an automotive plant that employs roughly 300 employees directly tied to the automotive manufacturing sector.

For those who are watching, can you highlight the work that our government is doing—that you've been doing—to attract record-breaking automotive investments and how that will help the plant in my riding to succeed and maybe even to grow?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

I appreciate the question. Thank you again, Mr. Sidhu.

We had a great visit last week when we visited an auto parts manufacturer, because, Madam Chair, for folks who watch at home, it's not just about these big investments. It's the whole supply chain resiliency that we're bringing.

It's quite extraordinary that, when I started as Minister of Industry—my colleagues and the officials would know—we were looking at pretty much the demise of the auto sector in Canada. I took that up front and said, instead of seeing that as a challenge, let's see that as an opportunity.

Thanks to the work we've done.... I mean, who would have said that you would ever have Volkswagen put a plant in Canada? When I started, people said, “Minister, they've never been in Canada. Why would you call them?” I said, “Because if you want new investment you have to call people.” By the way, Volkswagen was a cold call. I'll put that in a book one day, but I'll give you a free chapter today.

It's actually amazing what Canadians have achieved. People see that there are five things that attract investment. First, it's all about talent. Everyone in the world recognizes that we have the best talent in the world. The second thing they realize is that we have a very strong ecosystem, from aerospace, from automotive, from energy and from biomanufacturing. The third thing is around critical minerals, and proximity is everything, Mr. Perkins and colleagues: proximity to resources, markets and assembly lines. The fourth thing is around renewable energy, because you want to decarbonize, as they want to do. The fifth thing is access to markets. Canada is the only G7 country today that has a free trade agreement with all other G7 nations.

When you're talking about and seeing the world as it is today, what I call the four Ds, that's the lens people use: decarbonization, digitization, demography and disruption. In a world like that, Canada stands out as a place where you find stability, predictability and the rule of law. When you have generational investments like.... You mentioned Volkswagen. We can mention Stellantis. We mentioned Honda—I said that before—and this is the largest single investment by a company in Canada's history. This is telling, because this is a big vote of confidence for workers, industry and everything that this country stands for in the 21st century.

I'm very bullish. I think we need to talk about opportunities and possibilities. When you talk to global CEOs.... I was mentioning this to Mr. Perkins. When you have the CEO of Rio Tinto betting billions in Canada, that must tell you something. It's that people see something in this country that will help us make sure we win in the economy of the 21st century.

[Maninder Sidhu, Liberal, Brampton East, ON]

Absolutely.

Minister, we hear from some members of the opposition who say Canada is broken, but we're number three in the world for foreign direct investment, after the U.S. and Brazil. Companies are coming to Canada and investing billions of dollars to support our economy and to support our workers.

Could you speak to some of the advantages that we have in place? For example, there's the $10-a-day child care program and the flexibility in paternity and maternity leave that we've given to parents. We can't match some of the subsidies that other countries may offer, but we have so much more to offer on the table. Can you speak to that?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Yes...and thank you, Mr. Sidhu.

Listen—history will tell. What I can say is that what you've said is true. I think people see something here, and I say it starts with talent. We have brought more women into the workforce and we bring more people. We've been training people to seize these generational opportunities.

You're right to say that Canada really stands out when people are comparing different jurisdictions. First of all, they see a country that has potential market access, like I said, to, for example, the United States and Mexico. They also see a place that has all the critical minerals, not only for the batteries but for the semiconductors. I'll make you a prediction: I think critical minerals are going to be in the 21st century what oil was in the 20th century. This is going to be key to ensuring prosperity, because people see that you need critical minerals to make batteries and semiconductors.

To your point, it's not only in the auto sector. I want to say this because our Conservative colleagues will love this as well. Look at Dow. We have attracted the largest single investment in Dow's history—I think for more than 100 years—in Fort Saskatchewan, Alberta. BHP is the largest mining company in the world. In Jansen, Saskatchewan, in potash, phase one was the largest project in more than 150 years of history or thereabouts, and phase two was the second-largest. You've seen BHP investing $22 billion in Canada.

Those are big investments. You have Dow as one of the biggest investments. You have BHP as one of the biggest investments, and you have Honda, which is also one of the biggest investments.

To your point, it's true: Canada stands out. We have seen record levels of investment. I think our policies are working, because you have international companies that could allocate capital wherever they want, and they've chosen to come here. For me, I think Canada is the strategic partner of the 21st century, and we've seen that time and time again with big investments.

[Maninder Sidhu, Liberal, Brampton East, ON]

Absolutely. In terms of our critical minerals, you've hit the nail on the head. We have every single mineral needed to make an electric vehicle here in Canada. We're the only country in the western hemisphere that has that.

When I was at the Canada Guyana Chamber of Commerce over the weekend, some of these conversations were around that, saying, you know, we're seeing so much here in Canada that we can invest in. As you know, Guyana is growing very fast as well, and businesses from Guyana are looking at Canada and asking how they tap into this market as well. There are plenty of opportunities here in Canada.

Thank you, Minister, for taking the time to be here today.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you.

Next is Mr. Savard-Tremblay for six minutes.

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

Thank you, Madam Chair.

Good afternoon, Minister. Thank you for being here with your faithful companions today.

We've had a number of meetings on this study. We heard from representatives of Electric Mobility Canada, among others, who told us about green calls for tender. They said it was an option to consider. I imagine that's a request you sometimes hear from the industry people you talk to.

If the Americans went that route, it would probably enable us to slip through the cracks of the buy America provisions and buy American acts of this world.

Do you think Ottawa could take this path?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

I don't know the details, but I know Mr. Breton, from Electric Mobility Canada, well because he was with us when we made investments. I'm ready to listen to him.

Again, I'm not very familiar with the specific initiative you're talking about. However, I think any initiative that can encourage the adoption of electric vehicles and even make it possible to go to markets like the United States is worthwhile. It's certainly something to explore.

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

Essentially, the idea would be to base calls for tenders on environmental criteria, for public contracts. Would that be a possibility?

We know that trade agreements are always a bit complicated and that not everything can be done. However, according to some studies, including one from the Université de Sherbrooke, this option would pass the legal test.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

It's quite interesting. As you saw earlier when I talked about the four dimensions that are important to me, decarbonization is at the top.

Of course, adjustments may need to be made. Your Conservative colleagues asked questions about that earlier. When you do the same thing for 100 years and then switch from a combustion engine to an electric motor, there are definitely adjustments to be made in terms of markets, consumer habits and manufacturing. However, I agree with you, Mr. Savard‑Tremblay. I know we're on the same page on that. The goal is clear: Electrification is here to stay. We see it in Europe and we see it at home.

Adjustments will have to be made in the short term. I often remind our Conservative colleagues that it took Tesla 17 years to become profitable. So it's normal for there to be short-term adjustments, at Northvolt or elsewhere. Be that as it may, I think the end goal is clear to everyone.

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

Although our relationship with the Americans is sometimes a bit complex, there is still a desire to establish a kind of North American battery ecosystem. We feel the urgency of breaking our dependence on China, which has almost a monopoly on batteries, despite the initiatives put in place. In his case, we can talk about a virtual monopoly.

As for the Americans, we know that they sometimes give us friendly nudges. Often, it would simply be a matter of adding the word “North” in front of “American” in their statutes. That would be helpful. In the U.S. Inflation Reduction Act, for example, there are tax credits that apply to all of North America, but there are others that apply just to the United States. What is the status of the dialogue on that?

We know that CUSMA, the Canada-United States-Mexico Agreement, will soon be reviewed. What will the government's priorities be for electrification as part of this review?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

First of all, I must say that I like the idea you raised of sort of a buy North American policy. This is something I often mentioned when I was Minister of International Trade, and even when I was Minister of Foreign Affairs. Based on industry logic, in integrated supply chains, it's normal to see things in a continental context.

As co-chair of what we called team Canada in our engagement strategy with the United States, I can tell you that the first element is always security. We're talking about the Arctic and the north.

The second element is supply chain resilience. That's something you're looking at here. After the COVID-19 pandemic, global supply chains became more regional. An American CEO once told me what he liked about Canada: If things are bad, you can truck goods; if things are really bad, you can haul them in the trunk of your car. The proximity of the two countries is therefore an important factor.

The third element is what I call a North American growth plan. We have the advantage of being next door to one of the largest economies in the world. Today, we are more integrated than ever. Just think of the Albany-Bromont corridor for semiconductors. When we started this discussion, I wanted to draw on what happened between Detroit and Windsor for the auto sector. I thought we could do the same thing between Quebec and Albany for semiconductors. So we have this new corridor.

In the biomanufacturing sector, there is Moderna in Laval, and we are connected to Boston.

Just as there is a Detroit-Windsor corridor in the auto sector, there is also a corridor on the western side in the energy sector.

You talked about supply chain resilience. Today, economic security is national security. Based on our discussions with our American neighbours, they clearly understand the importance of Canada in North America as a whole.

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

I know you talk to people in the electrification sector. Many companies are saying that, because of the U.S. Inflation Reduction Act, they're going to have to open a plant in the states if they're going to survive. Not everyone can afford to do that, so we could see companies relocating to the states. Some could be forced to pack up and move to the U.S.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

I've heard the criticisms from the Conservative Party about the mining sector. What we've done, on our end, is bring big contract givers such as Volkswagen, Northvolt, Stellantis, Ford and GM here. For instance, EcoPro BM and GM‑Posco are building facilities in Bécancour. You can start on either side, but I think the idea is that the presence of contract givers benefits the whole ecosystem.

Bombardier comes to mind. Think back to when Quebec's aerospace cluster was developing, Mr. Savard‑Tremblay. Small and medium-sized businesses would have struggled to exist in that ecosystem had there not been Bombardier, followed by Airbus and now Boeing. When you bring the big players here, I believe it helps to build the whole supply chain. Canada's small and medium-sized businesses will be the ones to benefit for generations to come.

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

Twelve seconds is all I have, so I don't have time to ask another question.

That said, thank you for mentioning Bombardier, but it has to be allowed to bid on federal contracts.

[The Chair, Liberal, Judy Sgro]

Mr. Desjarlais, go ahead for six minutes, please.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much, Madam Chair.

Thank you very much, Minister, for being present with us today. My questions will largely focus on critical mineral supply chain resilience here in Canada, but also on trying to build those inroads.

The Prime Minister has historically made mention to first nations people that the most important relationship he has is that with indigenous peoples. What we see and what we hear from indigenous chiefs in nations across the country is that work related to the critical minerals strategy lacked engagement.

Your office has published documentation related to the fact that you intend to engage with indigenous people on a critical minerals indigenous engagement strategy. Where are you at with that strategy and have you consulted anyone yet?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Yes, I would say that I believe that economic empowerment is part of the reconciliation.

I appeared in front of many first nations, most recently with the Premier of the Northwest Territories, where I think there were 50 people in the room from different parts of the territories, making sure they can participate, as you said, Monsieur Desjarlais, very well in this new economic boom, because you know everyone wants to come to Canada.

I must say that we have presented.... I would say to look at Teck, for example, in British Columbia. They've been working with first nation communities. The mining companies that I talk—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

What's the strategy? You've committed to a strategy, and that's what indigenous nations want to know.

In order to get predictability and clarity.... I know, Minister, that you know how important that is to economic prosperity for Canada. For indigenous communities, it's all the same. They need predictability. They need to understand the objectives of the government. They need to know where the goalposts are, just like you've established for Stellantis, for example, and for other companies. The way you've incentivized companies to come to Canada—great. That's something that I want to mention is good work, but it's leaving behind indigenous people. These are their words.

To your statement that you've committed to a critical minerals indigenous engagement strategy, what is the strategy? What's the title of the strategy?