Good afternoon, everyone.
We want to thank the members of the Standing Committee on International Trade for taking the time to study how the United States' build back better plan may affect the electric vehicle, or EV, industry and its related sectors in Canada.
Founded in 2006, Electric Mobility Canada, or EMC, is one of the world's leading organizations in transportation electrification. Our members include mining companies; manufacturers of off‑road vehicles and light‑, medium‑ and heavy‑duty vehicles; electricity and charging infrastructure providers; technology companies; research centres; municipal governments; universities; fleet managers; unions; and environmental non‑governmental organizations, or NGOs.
Electric Mobility Canada is “the” national voice for transportation electrification.
Back in February of 2021, EMC fully supported the Canadian and U.S. governments' agreement—at the first bilateral meeting held virtually with Canadian Prime Minister Justin Trudeau and U.S. President Joe Biden—on the importance of the development of a zero-emission vehicle future and a battery strategy.
As noted in their official statement:
The leaders also agreed to work together to build the necessary supply chains to make Canada and the United States global leaders in all aspects of battery development and production. To that end, the leaders agreed to strengthen the Canada-U.S. Critical Minerals Action Plan to target a net-zero industrial transformation, batteries for zero-emissions vehicles, and renewable energy storage.
Later that year, the U.S. administration presented its build back better plan, with specific provisions on EVs. As soon as the plan was known, EMC was amongst those who alerted the Canadian government on the risk it could present to U.S.-Canada EV relations, to Canadian workers and to the Canadian automotive industry in general.
I will outline a few of the items in this plan that may be cause for concern.
One item is the adding of another $500 rebate to EVs using battery packs in which 50% of components, including cells, are made in the U.S. Since all EVs require battery packs, this means that the U.S. administration wants battery components to be made mainly in the U.S. This could hinder Canada's capacity to attract battery manufacturers to our country and therefore deprive us of a key part of the automotive industry of the future—battery development. Although Canada is not yet a critical minerals superpower, the potential is clearly there, with 31 critical minerals identified in Canada, experienced research teams and our qualified workforce.
Another item is that after the first five years a $7,500 rebate will apply only to U.S.-made electric vehicles, and this rebate will then be in place for another five years. Considering that nine out of 10 vehicles built in Canada are sent to the U.S., this proposal clearly poses a threat to the future of the automotive industry in Canada, since almost all vehicle manufacturers are announcing the end of internal combustion engine production in the next few years.
To demonstrate how fast the world market is adopting EVs, here is some up-to-date information on some manufacturers' plans for EV production. GM is aiming at 100% EV production by 2035. Stellantis/Chrysler is aiming for 100% EV production by 2028. Ford is aiming for 40% EV production by 2030. Nissan is aiming for 50% EV production by 2030. VW is aiming for 50% EV production by 2030. Also, let's not forget newer players like Tesla, Rivian and others, which are already exclusively electric.
Let's not forget the medium- and heavy-duty sectors as well. Companies such as Nova Bus, New Flyer, Lion Electric, Girardin, Taiga, Dana and BYD are now making electric buses, school buses, trucks or snowmobiles in Canada, and there is great potential for job creation. Some of these companies also partner with local suppliers, further contributing to growth by generating thousands of indirect jobs. For example, Lion Electric has approximately 300 Canadian suppliers.
While the focus is on light‑duty electric vehicles, it should be noted that the United States government's proposals in the build back better plan, or Buy American Act, may also affect Canadian manufacturing of electric transit buses, electric school buses, off‑road electric vehicles, electric vehicle charging stations and infrastructure, and research and development. Tens of thousands of current and future jobs in the electric vehicle industry could be transferred to or created in the United States, leaving Canada with crumbs.
The future of mobility is clearly electric, whether we're talking about light‑, medium‑ or heavy‑duty vehicles. The Government of Canada knows it. The industry knows it. The scientists know it. That's why Canada and Canadian industry members must work together to ensure that we have a plan to develop a thriving electric vehicle industry in collaboration with our American ally, such as the plan signed almost exactly one year ago.
Thank you.