International Trade Committee on Feb. 2nd, 2022

[Daniel Breton]

I couldn't tell you whether they're fairly supported. However, I'd like to point out one thing that hasn't been mentioned. According to the figures on battery production, in 2020, most of the large battery factories were located in China. Right now, we're involved in a geopolitical game. It's no longer just a matter of job creation, but also of national security in terms of the energy transition.

We've spoken in other committees about the fact that, in the 20th century, there were geopolitical and economic challenges related to oil. Now we're starting to see geopolitical challenges related to renewable energy and transportation electrification. China is way ahead of North America, Canada and the United States. If we can't create a North American plan to develop a sector to become competitive, we may lose jobs not only in Canada, but also in the United States. We'll end up importing products and we'll lose an extremely important sector of light‑ and heavy‑duty vehicles. There are currently 600 electric buses on the road in Canada, and there are over 600,000 in China. That country has a big head start.

Canada has significant natural resources, skilled workers and an industry that can do the job. We need an integrated vision to compete with those ahead of us, particularly China. Europe is doing the work. Canada and the United States should work together. At the moment, I think that we're shooting ourselves in the foot and that we aren't heading in the right direction to speed up the electrification of transportation.

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

Yet, I'm putting this alongside protectionism. We know that the Prime Minister of Canada and the President of the United States reached an agreement, I believe in February 2021. As part of the agreement, they said that they were aware that 90% of batteries came from Asia and that they wanted an agreement on critical minerals and batteries. Quebec volunteered and said that it wanted to develop this area and show leadership.

I'll ask you a rhetorical question, which I naturally want you to address. It seems that there's an agreement, and that, despite the protectionism, there's still a type of co‑operation in this area.

[Daniel Breton]

I hope that Canada doesn't repeat the mistakes of the past by sending natural resources, the raw material, overseas to China, the United States or elsewhere, rather than using them to create value‑added jobs in Canada.

In my opinion, we would really be foolish if Canada just sent the critical minerals to the United States and the finished products were made in the United States.

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

In the end, this could be summarized as the need for a processing industry, meaning—

[Daniel Breton]

Yes, exactly.

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

In other words, you could even call it a re‑industrialization policy. Right?

[Daniel Breton]

Exactly.

It's a supply chain of zero‑emission vehicles that runs from mines to mobility. We're working on that. Last year, we established the Accelerate alliance. We want to fight climate change and air pollution while creating jobs, not losing jobs in Canada and Quebec. That's what we want.

At this point, we feel that the automotive, truck and bus industry and infrastructure in Canada are in real danger.

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

What do you think of the politics?

I brought up the example of Quebec, which has shown a very strong desire to work on this sector.

Do you feel that there's enough political will in this area?

[Daniel Breton]

Do you mean at the federal level?

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

I'm talking about both the federal government and the provinces. Canada's support for its provinces is also very significant.

[Daniel Breton]

I think that the federal government really wants to move these projects forward. We spoke with the former Canadian ambassador to Washington. We saw him put a stop to this, along with Minister Ng. He said that this couldn't be tolerated and that the situation didn't make sense.

We're supposed to be business partners, not adversaries. In terms of the energy transition, we aren't adversaries. We're supposed to work together to help our region from a geopolitical and economic perspective.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Savard-Tremblay.

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

Okay.

I'll continue with the next round of questions.

[The Chair, Liberal, Judy Sgro]

Mr. Masse, please go ahead.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

Monsieur Breton, can you kind of convey where there could be technology transfer with investment in Canada, especially in battery enhancements? It's not just about the vehicles, but also about what can take place afterwards. Can you provide some information on that?

[Daniel Breton]

I'm not sure I understand the question. Could you repeat it so that I know what you're talking about? I'm sorry.

[Brian Masse, NDP, Windsor West, ON]

I'm just looking for where we go from here. It's not just vehicles; it's also about battery enhancements. Where can they go to other products in manufacturing in Canada if we actually produce them here ourselves versus being dependent on all those things? It's all the stuff that's out there in terms of—

[Daniel Breton]

Obviously, there are critical minerals in many provinces across the country, from Alberta to B.C. to Saskatchewan to Ontario to Quebec. There's expertise in different universities. We go from Dalhousie University's Jeff Dahn research centre to Quebec to Ontario. In hydrogen there's B.C. We tend to forget, when we're talking about electric vehicles, that there are hydrogen vehicles as well.

So there is expertise across the board. When we're talking about electric vehicles, yes, we're talking about batteries, but we're also talking about critical minerals. We're talking about propulsion systems. We're talking about infrastructure. We tend to forget that infrastructure is a key component of electric mobility.

Right now some of our members are saying to me, well, if the build back better plan comes as presented initially, we'll basically have to move our plants from Canada to the U.S., or we'll just open in the U.S. and that's it. Some of them are already doing business both south and north of the border. They're saying, you know, less jobs in Canada, more jobs in the U.S.

That's why all levels of electric mobility are very important for us.

[Brian Masse, NDP, Windsor West, ON]

Yes.

Mr. DiCaro, in regard to our footprint with the United States, where has it gone? We are right now supposedly at 13%, but I don't think our auto manufacturing is that high anymore. That number was based on the previous work we did with regard to support for investment in General Motors and also Ford, and also a series of the Chrysler.... I don't think we're there anymore.

[Angelo DiCaro]

It's right to say that over time, depending on what time frame you're looking at, Canada's share of the North American production footprint has fallen. A lot of that can be explained over time—at least a twenty-year time frame—with rising assembly capacity built in Mexico with new greenfield sites. It's roughly timed with the onset of NAFTA a number of years later.

We have seen declines. They've borne out in employment numbers. We're short about 35,000 assembly and parts jobs from where we were at the turn of the millennium. It's a longer time frame, but it's still significant. It's only been recently that we've been seeing an uptick in some of that and some green shoots with the Oshawa assembly coming back online and new product investments coming to Oakville, Ingersoll and soon to be coming to Windsor. Things like this throw a huge wrench in those plans at the worst possible time you can imagine.

Yes, I would agree with your statement.

[Brian Masse, NDP, Windsor West, ON]

A challenge that we face with this is that even Detroit has had more investment compared with all of Canada over the last number of years. That's just one city versus our entire country.

Mr. Kingston, I'm going to ask you this one question. Where do we go in rebranding and, importantly, making sure that we're not going to be a subsidiary of the United States in assembly?

[Brian Kingston]

First, I just want to underline that Canadian production is the result of.... The percentage of total North American production was about 13% through the period of the decade up to 2019. The last few years aren't really good or representative numbers, because of the semiconductor situation.

We've also seen significant new investment in Canada. Six billion dollars is something to be really proud of. For the record, I'd like to note that we're greatly appreciative of the support of the federal government, ISED and the Ontario government in helping make those investments happen.

That said, on a go-forward basis, we want to maintain our position in North American production and attract as much investment as possible. To do that, I'll go back to my opening remarks. We must have a competitive manufacturing environment. This investment is highly competitive: Companies are competing; jurisdictions are competing around the world to attract it. If we're not constantly aware of where we sit with respect to other jurisdictions in North America, in particular, we won't be able to continue to compete.

We have to look at our regulatory environment and to make sure that we are aligned with the United States. To the points that were raised earlier, the majority of our vehicles go to the U.S. market. If we don't have a regulatory environment that is competitive with and aligned with the U.S., we won't win new investment. That has to be the overarching objective of any auto strategy.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

[Brian Masse, NDP, Windsor West, ON]

We don't even actually—

[The Chair, Liberal, Judy Sgro]

I'm sorry, Mr. Masse, but your time is up.

We're moving on to Mr. Hoback or someone else from the Conservative side.

Is it Mr. Martel? Okay, thank you.

Go ahead, Mr. Martel.