International Trade Committee on May 2nd, 2022

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Ms. Gauthier, can you tell us what the main countries you do business with are?

[Maude Gauthier]

Vietnam and Taiwan are the main countries. We also do business with small countries in that region, such as Myanmar and Cambodia.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

How do you think the government can facilitate exports?

[Maude Gauthier]

Are you talking about importing parts into Canada?

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

That's right.

[Maude Gauthier]

The most important thing would be to do an analysis of the rules in the harmonized tariff code. At present, we run up against a law that was written several decades ago and has not really been updated. That causes us problems, particularly when it comes to SH codes.

For bicycle electrification, which is projecting into the future a bit, we find that the law is not up to date. It hasn't been revised in quite a while.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Thank you, Ms. Gauthier.

Mr. David, I'm pleased to see you again.

You have a promising project for extracting metals that are needed for the development of the battery industry, which the government is making so many promises about.

Mr. David, if your projects come to fruition, would the main market for your metals be Canadian or would there be more opportunities for exporting to Asia?

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

I understand it is difficult to carry out your projects at present.

How do you explain the government investing so much money in the battery industry while we are still unable to get on with exploring natural resources, mining minerals, and manufacturing batteries in Canada?

[J.S. David]

Exploration is feasible, actually. It isn't complicated to find critical and strategic metals like copper and nickel, and it's easy to produce them.

For niobium or lithium, the difficulty lies in the metallurgy: the metal extraction stage and the oxidation stage. That difficulty is also present for several critical and strategic metals. So what we have to do is find an economic recipe for carrying out these processes. I would say that Canada may not be putting enough effort into it, in that regard. It is investing a lot of money overall, and there is assistance for exploration. But where there is almost no assistance is in refining. For the moment, no effort is being made on refining. It's an unoccupied market. I have been asking the Quebec government for assistance on this aspect for 12 years. I think the Canadian government could provide assistance.

A few weeks ago, the government announced assistance for exploration. However, there is no assistance for design and innovation, and that is what battery suppliers need. For that, it's cold hard cash that has to be found on the market.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Thank you, Mr. David.

Ms. Gauthier, you talked about problems associated with the tariffs applied to batteries, which means that your bicycles are not very competitive in comparison with importing a complete electric bicycle.

Have you received any assistance from the trade commissioner service or other government bodies?

[Maude Gauthier]

We haven't received any assistance.

In fact, we have approached the MEQ, Manufacturiers et Exportateurs du Québec, and EDC, Export Development Canada, but they didn't really have the powers that are needed to change things.

We run up against the Canada Border Services Agency. It refers us to the act, which, as I said, has not been updated for some time. So we don't have any assistance, and the current message—

[The Chair, Liberal, Judy Sgro]

I'm sorry. I have to interrupt. I tried to get as much information as I could.

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

[Arif Virani, Liberal, Parkdale—High Park, ON]

Thank you very much, Madam Chair.

There are a number of things I want to cover, but I want to start with Mr. David.

I'm very pleased to hear your testimony, Mr. David. Please forgive our technical problems.

With respect to critical minerals, you mentioned that niobium, in particular, provides longer recharge capacity than existing batteries, and that batteries with that type of critical mineral can have a longer life in colder temperatures.

Have I understood that correctly?

[J.S. David]

That's right.

It's thanks to the progress made by Toshiba; it isn't science fiction. Toshiba already has three types of niobium batteries on the market. That company is taking the market by storm—a market that will probably be very specialized—because of the speed with which the batteries charge.

It's a fast-charging battery that can be used, even if it's -30°C.

As well, its popularity is also attributable to the battery's larger number of cycles. Echion is currently working with Amazon on the robots used in their warehouses; these robots have to be charged quickly and often. They use niobium batteries.

[Arif Virani, Liberal, Parkdale—High Park, ON]

If I could continue with Mr. David, you mentioned some of the investments that we announced in the last few weeks. Even today, the Prime Minister and Minister Champagne announced a venture with Stellantis of $3.6 billion for greater production of zero-emission vehicles here in Canada. That is undoubtedly a good sign for the environment and a good sign for the Canadian economy.

What you were saying to Mr. Martel is that you see that we need to be involved in the end production of the cars and the exploration of the minerals, but also in the refinement of the minerals.

Would you identify whether there are other nations that are leading the charge in investing in the refinement of the minerals? Are there any that you would identify as a best practice? Can you give us some input on that front?

[J.S. David]

First of all, actually, I have people working on that, so they're doing some samples for Toshiba and Aecon, and what we're trying to do is perform and produce the oxide in the greenest way. We've been working on that for the last year and a half, and that's our money. We were not able to get anything from anybody, and that's fine.

I will say that my competitors elsewhere in the States are getting subsidized or some help or a program, so I wish to apply for some of those new programs. I know Mr. Ford has made some announcements. Again, I think we have...and Quebec, Ontario and everybody has put a lot of money in at the beginning and the end, but in the middle, there was nothing. On the refinery side for the smelting and trying to find the best way to do it, there was no money. Again—

[Arif Virani, Liberal, Parkdale—High Park, ON]

Mr. David, can I ask you something very specific? I think there are around 30 critical minerals, and you were talking about two of them. Do all 30 of the critical minerals require the investments in the refinement that you're talking about, or is it only tantalum and niobium that require this refining?

[J.S. David]

Big time. Lithium is a very good example as well. You need to spend a lot of time to find the right recipe because every rock is different. People think it's lithium, so it's easy. You know the recipe, but usually you cannot apply it. You can take, let's say, the main recipe to produce it, but you need to adapt, and every rock is different. That's why it's so complicated to try to find the right recipe and why you need to spend time and money on that.

[Arif Virani, Liberal, Parkdale—High Park, ON]

Thank you.

I would ask some questions of Ms. Chang and Ms. Kwan in my remaining time.

Thank you for your input from the Canadian Labour Congress. The former head of the Canadian Labour Congress is my constituent, Mr. Yussuff, who's now a senator. It's great to have you here. You mentioned your gratitude for the strong environmental, labour, trade and gender, and trade and indigenous rights enforceable chapters in terms of what we put on the table in our approach to negotiating with Indonesia, and that is obviously a springboard off of what we did successfully with CUSMA.

Can you identify any potential areas that you would see as challenges on labour, on the environment, on trade and gender, and on trade and indigenous with respect to the various members of ASEAN? There are a number of nations among the ASEAN group. Do you see any obstacles or hurdles we should be aware of as we embark on that kind of approach with all of the members of the ASEAN group?

It's over to you, Ms. Chang.

[Lily Chang]

Thank you very much.

I'm going to ask our senior researcher, Elizabeth Kwan, to address your question.

Thank you.

[Elizabeth Kwan, Senior Researcher, Canadian Labour Congress]

Thank you very much for your question, Mr. Virani.

Yes, there are some issues. We've had a first round debrief from the government on the negotiations with Indonesia, and the long and short of it is that the template of what we want in comprehensive trade agreements is very much North American or EU-centric, and many of the countries in the Indo-Pacific region do not negotiate strong labour, environment or inclusive trade chapters. That is basically the short answer to the question. It's not just Indonesia. It would be a lot of the other countries as well.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We go now to Mr. Savard-Tremblay for six minutes.

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

Thank you, Madam Chair.

Hello to all my colleagues.

I'd like to thank the witnesses for their testimony, which will be of help to us as things progress on this potential agreement.

My question is for Ms. Kwan and Ms. Chang from the Canadian Labour Congress.

Some experts have said that since the beginning of this crisis, child labour has been increasing in Malaysia and Indonesia, two countries that are part of the Indo-Pacific region.

Is your analysis the same?

If so, what would the consequences be if there were to be a trade agreement?

[Lily Chang]

Certainly a number of the countries in this region are of concern to us. All kinds of workers' rights are not adhered to. Certainly the conventions of the ILO are not respected as well.

I'll turn to Elizabeth, who can probably provide some more details.

[Elizabeth Kwan]

Thank you for your question.

One thing we have to recall is the recent cancellation of PPE from Malaysia that Canada initiated due to severe concerns about the use of forced labour.

There's also child labour involved in many agricultural endeavours, although it's always a to and fro. For instance, there are often discussions about how seed production uses a lot of child labour to produce seeds that actually get commissioned by big seed companies with headquarters in Europe or North America. That's an example.

There are a good number of children who do perform a lot of labour, which would be unacceptable to us in Canada.