International Trade Committee on Nov. 15th, 2022

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

I'll cede my time back to you, Madam Chair, at the risk of trying to fit in one more question.

[The Chair, Liberal, Judy Sgro]

Okay.

We have Mr. Martel for five minutes, please.

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

Thank you very much, Madam Chair.

Thanks to the witnesses for being here. I'm pleased that they were able to come.

Mr. Simard, in connection with the aluminum industry in Quebec, you said that the U.S. 2022 Inflation Reduction Act was a positive measure for the aluminum market and that its application would create business opportunities. However, in a recent article, you said that our aluminum smelters were already at production capacity.

Since Canada's fedral government always seems to be lagging behind, what's missing to promote the kinds of investment that would make it possible to increase the production capacity of Canadian aluminum smelters?

[Jean Simard]

Thank you for that very good question, Mr. Martel.

I'm going to link it to a question I was asked earlier by one of your colleagues.

Canadian plants underwent a wave of modernization over the past 15 years. The average age of these plants today is 35 years. We are accordingly reaching a decisive turning point at which we need to consider a new wave of investment, meaning that once again, billions of dollars will be required for large plants like aluminum smelters.

It's a paradox for us really. There is growth in market demand and, as I explained at the outset, we are in a very good position in terms of our carbon footprint and our human footprint.

However, when you have billions of dollars to invest, a key question has to be addressed. Should the major investment plan be launched today using current technologies, or is it better to wait in order to be able to do it with zero-carbon technology, which looks to the future and would be used by companies for the next 25, 30 or even 50 years?

We are thinking here about the ELYSIS corporation's technology, which is still at the research and development phase in Saguenay, but which is looming on the horizon as something that can be used on an industrial scale. It's expected that the technology will be ready to go between 2024 and 2026, which is fairly soon.

In terms of investment, you have to ask the same questions you would ask when buying a car, because it's the same situation. Should you buy an electric vehicle today, which would meet needs for the next 25 years, or buy a traditional gasoline vehicle and wait a few years to make sure that when you buy an EV, it will meet future needs? That's where we are today.

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

I remember clearly that you were speaking to me about accelerated depreciation.

[Jean Simard]

Yes.

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

You were speaking to me about a policy for the purchase of low-carbon footprint aluminum, for investment in innovation and research and development for recycled aluminum, and for a more competitive taxation and regulatory environment.

Why have these measures not yet been implemented, even though aluminum is a promising growth sector?

[Jean Simard]

You're right. It's the catalyst that we will need; a restructuring of the fiscal framework to allow for major industrial investment while decreasing associated risk. Automation will have to be used increasingly, along with artificial intelligence and machines that are designed here in Canada and Quebec to meet these needs.

On the other hand, it can't be done within the current fiscal framework. It requires accelerated depreciation of capital expenditures, and developments that would allow for investment in decarbonization, although this needs to be done in connection with the smelting process, because there is still work to be done on that side of things.

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

That sounds good, but how is the federal government responding to these requests?

[Jean Simard]

We write the same thing every year during the pre-budget consultations, but we're still waiting. We do the same for the Quebec government, but it has made certain adjustments. Nevertheless, the most important parameter is accelerated capital cost depreciation, to which we are not entitled as an industrial sector .

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

We ask ourselves what's happening, and we're told that conversations are underway.

[Jean Simard]

Allow me to give you some additional details.

We've been wondering what Canada can do about the United States Inflation Reduction Act of 2022. We'll never be able to hold our own, because we're not big enough and we don't have the same resources.

On the other hand, even though we can't compete, we can rely on our natural comparative assets and advantages. Aluminum is one. We have to be more agile and speed up Canada's reindustrialization. We can't wait 12 years to get projects underway. Regulatory amendments are needed so that we can effect our transformation faster than the United States.

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

So you are requesting regulatory amendments.

[The Chair, Liberal, Judy Sgro]

I'm sorry, Mr. Martel.

Thank you.

Mr. Miao, go ahead.

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you, Madam Chair.

Thank you to all the witnesses for appearing today.

First, I'd like to ask a question of Mr. Strickland.

I want to ask you [Technical difficulty—Editor] apprenticeship program. Can you expand a little on the success of this program? Do you think it could help Canadian companies retain workers and grow their businesses going forward?

[Sean Strickland]

Thank you very much for the question.

It's been alluded to previously by other witnesses that we have a labour availability challenge in Canada in a variety of sectors. One of them is construction. We bring in thousands of apprentices every year to the unionized industry, just to keep pace with retirements. Then, when you overlay that with all of the possibilities of future work, we need some help. We need some help to attract people into the trades.

In the trades, there is a program through ESDC where we are able to incentivize employers to hire apprentices. They are able to receive $5,000 per apprentice and $10,000 if that apprentice is from an equity-deserving group.

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you for that.

I would like to address my next question to Mr. Adams.

This past spring, along with a number of other automotive industry associations in Canada, your organization launched a new initiative, Road to 2035, which is aimed at helping Canadians understand what it takes for Canada to achieve its zero-emission vehicle sales target.

I'm wondering if you can share with the standing committee your thoughts on our government's commitment in the fall economic statement. Can you elaborate on what more you think needs to be done to level the playing field with the United States?

[David Adams]

Thanks very much for the question.

With respect to the Road to 2035, we and the other automotive associations are putting that out to assist not only Canadian consumers, but also Canadian legislators, in terms of what needs to be done to facilitate this change. That has a lot to do with incentives, as I've already mentioned. It also has a lot to do with infrastructure.

With respect to your question in terms of the fall economic statement, the Canada growth fund and the accelerated capital cost reduction are two elements that could potentially assist.

The reality is that we need to see a little bit more detail. We understand that will be forthcoming in the budget. As myself and other speakers have already alluded to, the budget is probably some five months away and every month counts in the space that we're operating in.

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you.

I would like to address the next question to Mr. Breton.

The relationship between the federal and provincial government on EV policy has proven to be challenging at times. Can you expand on how you think the federal and provincial governments can best work together when it comes to any EV policies?

[Daniel Breton]

Thank you for the question.

As we can see, we are looking at what's being done in Quebec and B.C., but also in the Atlantic provinces regarding accelerating EV adoption through rebates and infrastructure deployment. We are seeing that provinces willing to move forward in that direction make a big difference. The federal government cannot do it by itself. We need all the provinces to move in that same direction.

Now, we have the central provinces, from Ontario to Alberta, where there are no rebates. There is starting to be an infrastructure deployment plan in Ontario. In other provinces it's still a challenge, especially when you move outside the urban areas. Let's say you move to rural Manitoba or Saskatchewan, for instance. This is more of a challenge.

We have members across the country who are working with municipal governments, because sometimes provincial governments do not want to move forward in that direction, so we are looking at all levels of government to make sure that we accelerate EV adoption.

I would say that in some provinces that are not too keen on accelerating EV adoption, we're very often working with municipal governments.

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you.

[The Chair, Liberal, Judy Sgro]

You have 30 seconds.

[Wilson Miao, Liberal, Richmond Centre, BC]

A comment I'd like to make is that I am proud to be a British Columbian. B.C. is at the forefront of EV policy, and I hope more provinces will be joining us.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We have Mr. Fast for five minutes.

[Ed Fast, Conservative, Abbotsford, BC]

Thank you very much to all of our witnesses.

My first question is for Mr. Adams.

I just want to get clarity on the state of Canada's clean vehicle environment, not only on the industrial and job creation side—those are important—but also on the consumer side. Did you say that 85% of all Canadian EV production is exported?