International Trade Committee on Nov. 15th, 2022

[The Chair, Liberal, Judy Sgro]

Thank you.

We'll go to Mr. Bachrach for two and a half minutes.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Madam Chair.

Mr. Breton, the Inflation Reduction Act includes a $4,000 tax credit for used zero-emission vehicles. How does that compare to incentives in Canada for used zero-emission vehicles?

[Daniel Breton]

In one of the mandate letters, we are supposed to see a used EV rebate coming up soon. We are advocating for people who don't want to buy or just cannot buy a brand new electric vehicle to be able to have one through an EV rebate for used vehicles.

It's been out there for a couple of years now. We're hoping that at one point, the federal government will come up with a used EV rebate.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Have you had conversations with the federal government about when that incentive is coming for used EVs? I know that right now, used electric vehicles are selling for more than the price of a new electric vehicle because there are such constraints on supply.

What has the federal government told you about when that's coming?

[Daniel Breton]

There's been no word yet regarding when that's coming, but we are expecting the news, I would say, in the 2023 budget.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you.

Mr. Simard, I was interested to hear you mention the ELYSIS project to move toward zero-carbon aluminum production. It's very exciting. That work is supported through various programs, as you mentioned.

Is there anything in the Inflation Reduction Act that incentivizes the rollout of that technology throughout Canada's aluminum sector?

[Jean Simard]

Do you mean to what extent is there something in the IRA that is applicable to what is being done in Canada?

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

My read of the IRA is that it creates a large demand for North American aluminum, but the ELYSIS project is specifically about driving down the carbon content of that aluminum.

Is there anything in the act that is going to expedite or accelerate the rollout of these zero-carbon technologies?

[Jean Simard]

I don't think it will impact in such a fashion what's going on in Canada. There is something in the act—we have to look into it in a more granular fashion—that might shore into the U.S. industrial complex part of the manufacturing required to produce some of the components of that technology.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll move on to Mr. Martel for five minutes.

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

I'll share my speaking time if there are no other questions.

Mr. Breton, what I'm concerned about at the moment is that nothing much is really happening. We've been talking about all this for many years and no progress is being made. We are going around in circles. As the president and chief executive officer of Electric MobilityCanada, I would imagine that you have made representations to the Government of Canada.

In recent years, I'd like to know what kind of support you've requested from the federal government in order to be able to develop a robust electric vehicle industry in Canada.

[Daniel Breton]

I began these discussions with the federal government 18 years ago. That's quite a while. As I was saying earlier, China has really got a head start of many years over the entire planet. It's not just a Canadian problem, but one that also affects Europe, the United States, Japan and Korea, where people were much less interested in electric vehicles. For the past five years now, however, the world has woken up and there's a lot of catching up to do.

Honestly, I think the federal government has been doing a lot over the past two years to speed up the adoption of electric vehicles; measures include rebates on the purchase of light electric vehicles, and here was the announcement this summer of a rebate on the purchase of medium and heavy electric vehicles, and on infrastructure deployment.

Even though his figures don't hold water, Mr. David Adams is right. We obviously need more charging infrastructure. The federal government can't do it alone and that's why the governments of Ontario and Quebec, the Maritime provinces and British Columbia have been doing a lot of work in this area.

As for research and development, don't forget that a 2022 Tesla makes use of two battery technologies: LFP technology, developed at the Hydro-Québec Research Institute, and NMC technology, developed by Jeff Dahn's team at Dalhousie University in Nova Scotia.

One key factor is making sure that there are qualified workers capable of effecting the transition of declining industry sectors to this growing industry sector. Indeed, the transportation electrification sector is the most rapidly developing sector in the world, and that's why there's a lot of work to be done.

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

I will now give the floor to my colleague Mr. Carrie.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you, Monsieur Martel.

I'd like to address a question to Mr. Billedeau.

From a business standpoint, the federal government puts these targets out without any clear pathways. We've been talking about provincial partnerships. Sometimes each province has a different challenge. We've talked about subsidization and that may not be something that all provinces can do equally.

Mr. Billedeau, I was wondering if you could expand on your comment about non-tariff barriers. Could you give the federal government advice—provide it to the committee? The fall economic statement really fell short. Could you comment on how to improve our competitiveness? We can't subsidize more than the United States, but how do we attract better capital? How do we improve our labour options and training for the future labour we need? You talked about lead times for mining and supply chains.

I know that's a lot in two and a half minutes, but if you don't get to it, could you send us some information and advice for the government? We really want to work together to make sure we set a path forward that's clear so we can attract that investment here in this country.

[David Billedeau]

That's a great question.

Starting first with the fall economic statement, the Canadian chamber welcomed measures to increase the supply of skills needed in our workforce to achieve net zero. We also welcomed tax credits for investments in clean technologies and clean hydrogen, as well as the commitment to reducing regulatory obstacles to investment in many major projects.

That being said, we really had hoped to see low-cost growth measures, like a plan to eliminate long-standing barriers to interprovincial trade and to substantially and materially reduce regulatory burdens in several sectors inclusive of the mining sector. The chamber also wanted to see in the fall economic statement—and we're hoping to see this going forward—an integrated plan to get desperately needed food, fuel and fertilizer to global markets.

At a high level, our initial response is that the fall economic statement is indeed a start, but as many of my colleagues on the panel today have said, it looks like we're going to need to wait until budget 2023 to receive a sustainable economic growth plan that covers all of these sectors.

Again, at the core of what the Canadian Chamber of Commerce is looking for are low-cost options to support economic growth, like addressing the interprovincial trade barriers, and also supporting labour growth including skilled labour, and increasing and directing incentives to where they need to be.

Thanks.

[Colin Carrie, Conservative, Oshawa, ON]

Do I have any time or is that it?

[The Chair, Liberal, Judy Sgro]

Your time is up, sir. Thank you very much.

We'll go on to Mr. Virani, please, for five minutes.

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

Thank you, Madam Chair.

I want to return to Monsieur Breton.

We have heard a lot about investments that have been made in the electric vehicle sector, particularly in the last year or so. The number $15 billion has come up. Within that $15 billion, there is an announcement of a planned investment by Umicore of $1.5 billion in a net-zero facility that's dedicated to producing the essential components of EV batteries and creating 1,000 jobs in the construction sector. That dovetails with some of the just transition points that Mr. Strickland is making.

The broad theme I'm getting from all of the witnesses here is that we can't just replicate the old resource-based economy model of Canada. We need to be doing more of this fabrication. This Umicore investment is along the right path.

Can you elaborate on how we get more of that on the fabrication side? What impediments need to be removed or what incentives need to be put in place for the fabrication of the batteries themselves?

[Daniel Breton]

As I mentioned earlier, I think the Inflation Reduction Act is having quite an effect on the possibility for Canada to attract new players to build batteries and battery components in Canada. I think we really have to look into that.

Let's be honest here. Minister Champagne has been doing an amazing job of attracting investment in Canada, whether it's for batteries, vehicles, components or anodes and cathodes, but it is a challenge.

There is one more thing I would like to mention. We have talked about the fact that in working to develop a mining industry that's going towards net zero and decarbonizing the economy, many of the critical minerals do need a lot of time—too much time, as far as we are concerned—to be opened and authorized and to start producing.

We need to have refining done here as well. People don't realize that what's happening in China is that many of the critical minerals do not come from China. They are bought by China and they are being refined in China. We have to develop a refining industry here that will thrive more than what we have seen in the past. My colleague here from the aluminum industry was mentioning that exactly.

We also have to make sure that we work in partnership—and I want to emphasize the word “partnership”—with first nations. We cannot replicate the same mistakes we have made in the past, where we come on their land and say that we're opening this mine here or there and we will see how we compensate them afterwards. To me, this is a critical issue because if we do not address that right from the beginning, it's going to be a major roadblock.

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

Thank you. I think that's a really important point, and that dovetails with this issue about.... Yes, there are regulations and requirements for a mining project, but they're necessary for inclusive growth and growth that doesn't demean or diminish first nations' rights.

Mr. Strickland, I want to turn back to you. At the very start, you talked about Canada's leadership position and what we were doing in terms of net zero and climate action. You said that, in one fell swoop with the IRA, they're leaping in front of us, and we have to keep pace.

I'm going to say to you that we've heard a lot at this committee and generally in Parliament about the carrot-and-stick approach. The carrot is what we're seeing in the United States in terms of active incentives, huge dollar amounts and the fivefold increases that you mentioned. The stick, which I also believe spurs innovation, particularly as we move on a path towards net zero, is things like our price on pollution, the carbon price that has been a hallmark of our government.

I believe it needs to be a twofold approach. I'll confess to you some surprise when people in the Biden administration are saying to us that we need to show more ambition, and then there are parliamentarians, including on the floor of the House of Commons, who say, “Get rid of the carbon price” or “Stop accelerating the carbon price.” I think it needs to be a multi-faceted approach.

Can you comment on that?

[Sean Strickland]

I would agree that it needs to be a multi-faceted approach of the carrot and the stick in terms of providing incentives. There's the Canadian way and there's the U.S. way, and we usually find a way that's somewhere in between.

I'd also like to say, in terms of context, that the discussion we're having today is really important for Canadians. We're talking about the largest transition of the Canadian economy and the industrialized economies of the world since the Industrial Revolution. We need to get this right. The stakes are high. We need to reduce carbon, and we need to save the planet, all before lunch kind of thing.

I think it's important for us to keep in perspective that the world is going to make these changes and put into place these changes to help us get there, to decarbonize our planet, and it's not going to be a straight line. We have to work together and we have to work as partners, but we also have to remember that no amount of incentive is going to work if we can't build these projects in time. That's the real balancing act we need to find. We're not going to get the incentives 100% right, but are we going to get them right enough so that we can build these projects?

I would say that we have to do the best we can but keep our eye on that regulatory framework. I think it's really critical.

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

Thank you.

[The Chair, Liberal, Judy Sgro]

All right, folks. We have completed three rounds. Unless there's a very hot, pressing question that someone would like to ask, I will thank our witnesses very much for all the information.

To our witnesses, thank you again for coming back. I have a feeling we'll probably see you back some time in the new year, so thank you very much.

This meeting is adjourned.