Evidence of meeting #39 for International Trade in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was ira.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Elizabeth Kwan  Senior Researcher, Canadian Labour Congress
John Gorman  President and Chief Executive Officer, Canadian Nuclear Association
Mark Zacharias  Executive Director, Clean Energy Canada
John Risley  Director, World Energy GH2

1:05 p.m.


The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)) Liberal Judy Sgro

I call the meeting to order.

This is meeting number 39 of the Standing Committee on International Trade. Today's meeting is taking place in a hybrid format, pursuant to the House order of June 23, 2022. Therefore, members are attending in person in the room and remotely by using the Zoom application.

I'd like to make a few comments for the benefit of witnesses and members. Please wait until I recognize you by name before speaking. When speaking, please speak slowly and clearly. For those participating by video conference, click on the microphone icon to activate your mike. Please mute yourself when you are not speaking.

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All comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. For members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as best we can.

Please also note that during the meeting it is not permitted to take pictures in the room or screenshots on Zoom. In accordance with the committee's routine motion concerning connection tests for witnesses appearing by video conference, I am informing the committee that all witnesses have completed the required connection tests in advance of the meeting and our translators are all on board.

Should any technical challenges arise, please advise me. Please note that we may need to suspend for a few minutes to ensure that all members are able to participate fully.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Tuesday, September 20, the committee is resuming its study of the potential trade impacts of the United States Inflation Reduction Act of 2022 on certain firms and workers in Canada.

We have with us today, from the Canadian Labour Congress, Elizabeth Kwan, senior researcher, by video conference; from the Canadian Nuclear Association, John Gorman, president and chief executive officer; from Clean Energy Canada, Mark Zacharias, executive director, by video conference; and from World Energy GH2, John Risley, director, by video conference.

Welcome to you all. Thank you for sharing some time with the committee members today.

We will start with opening remarks and then proceed with questions from members.

Ms. Kwan, I invite you to make an opening statement of up to five minutes, please.

1:05 p.m.

Elizabeth Kwan Senior Researcher, Canadian Labour Congress

Thank you.

Good afternoon, Madam Chair and members of the committee. I'm grateful for the invitation to speak to you today.

I'm Elizabeth Kwan. I am a senior researcher for the Canadian Labour Congress and the policy lead on trade.

The CLC is Canada's largest central labour body and speaks on issues of national importance for more than three million unionized workers across Canada.

The very substantial funding of the Inflation Reduction Act—$369 billion in energy, security and climate change programs—has reshaped the climate policy world, pressuring Canada to be more ambitious and to accelerate its own climate actions.

Overall, the IRA provides certain opportunities for Canada, including the production of EVs, EV batteries and battery parts, and low-carbon construction materials. The IRA could give Canadian producers a boost as they are, on average, 15% to 74% less CO2-intensive than even U.S. producers. At the same time, the Canadian steel sector, and manufacturing in general, will face challenges due to the 100% U.S. iron and steel requirement for domestic energy projects and the sizable domestically manufactured components requirement.

The IRA can provide other opportunities for Canada to develop upstream activities, such as the mining of critical minerals for EV batteries. Canada is one of the few nations with most of the critical metals and minerals required for EV battery production and the capacity to produce refined battery materials with a low carbon footprint because of our clean electricity grid. However, the timeline to fully develop this potential for Canada is still many years away and may be a challenge in terms of optimizing for the IRA. Therefore, Canada needs to act right now.

Overall, the IRA climate and energy measures aimed to cut greenhouse gas emissions by 40% by 2030, in line with Canada's own target. The IRA could mean even more good Canadian jobs, hopefully many of them being union jobs, which is important in transitioning workers to a low-carbon economy.

On the international front, the IRA has also come to the attention of South Korea and the EU. The EU has listed at least nine points in the IRA that they allege are in breach of international trade rules. The EU and the U.S. have set up a task force to discuss how to address the EU's concerns.

There are also many questions from Canadian stakeholders regarding the interpretation and implementation of parts of the IRA. Perhaps an in-depth study of the impact of the IRA on Canada is worth embarking on. However, make no mistake; the IRA puts America first. It's about protectionism that advances U.S. interests. It offers certainty, a clear path forward for an ambitious industrial strategy that maximizes growth and good jobs and transitions workers into a low-carbon economy.

Canada has to offer this policy certainty as well. Canada needs to put the different commitments and actions from the last federal budget and the fall economic statement into a comprehensive strategic framework that articulates a clear vision. Unions must be at each and every table as equal partners to develop policies and the strategic framework. The Canadian framework should strengthen existing policies, be strategically selective in its priorities and build on strength. The IRA further invests in Americans by providing better pricing for prescription medication and access to health care, for instance.

Canada must build on its existing policy advantages that will support workers and encourage business investments, such as building up our public health care and bringing in universal pharmacare.

The IRA increases important supports for people, aggressively deals with climate change, lifts up workers and creates good-paying union jobs. As such, the Canadian framework, at the very least, must have the same objectives.

Thank you very much for your time. I look forward to your questions.

1:10 p.m.


The Chair Liberal Judy Sgro

Thank you very much, Ms. Kwan.

Mr. Gorman, you have up to five minutes, please.

November 25th, 2022 / 1:10 p.m.

John Gorman President and Chief Executive Officer, Canadian Nuclear Association

Thank you, Madam Chair.

I thank all of you for the opportunity to speak with you today.

I'd like to begin by acknowledging that the land on which we gather is the traditional unceded territory of the Algonquin Anishinabe people.

I'm here to speak on the importance of our country staying competitive globally and with our largest trading partner. If Canada does not align and have parity with the U.S. Inflation Reduction Act, significant opportunities could be lost in terms of new and existing jobs, investment and export potential.

The Canadian nuclear industry is a strategic asset for this country, both domestically and internationally. For over 60 years, Canada has been a global leader in the nuclear sector. We've built our sector on the solid foundation of CANDU technology, which is Canadian technology. Now the refurbishment projects at Darlington and Bruce are the country's largest clean energy infrastructure projects, representing $26 billion worth of investments. These are proceeding both on time and on budget.

These large-scale projects have provided the foundation for a robust and highly skilled supply chain and have opened opportunities for innovations associated with small modular reactors, enabling Canada to be a first mover in SMRs in Ontario, New Brunswick and, eventually, Saskatchewan and Alberta.

Over the course of 2022, the federal government has clearly and repeatedly indicated a strong role for nuclear on our path to net zero. The 2022 budget allocated funding for the further development of SMRs. We've seen numerous nuclear energy projects funded as part of Canada's strategic innovation fund. The Canada Infrastructure Bank announced nearly $1 billion in financing to help SMRs in Ontario.

However, these investments risk being squandered if our industry is unable to remain competitive, particularly in the context of the United States and their Inflation Reduction Act. The IRA represents a massive strategic competitive investment by the United States that, if not addressed here in Canada through its own policy response, will confer significant advantages to American nuclear energy firms, including investment and workforce attraction.

In the FES, the fall economic statement, the government highlighted the strategic importance of complementing and balancing the initiatives implemented in the IRA. The FES was a good start in positioning Canada to address the competitive imbalance imposed by the IRA, but more needs to be done to ensure that Canada does not lose its competitive advantage.

While the FES introduced measures to improve competitiveness, such as the investment tax credit, it's not yet clear how these credits will be applied to the broad spectrum of existing and potential new nuclear facilities in Canada.

However, while we are speaking of the need to remain competitive, ultimately we are committed to working closely with our partners in the United States, who are also looking for parity in the nuclear sector. We must remain cognizant of the fact that the structure of the power systems are predominantly provincially owned here in Canada, while in the U.S. most are privately held. Care must be taken when designing incentives to ensure cross-border competitiveness is maintained in this regard.

Within this context, the Canadian Nuclear Association recommends the following key points for consideration by this committee. They are also essential leading into the federal budget 2023.

Ensure that nuclear energy is included in the Government of Canada's clean taxonomy and the green bond definition.

Ensure that—just like with the IRA—government-owned utilities can equitably access benefits that were announced in the fall economic statement, including the investment tax credits.

Ensure that existing, refurbished and new large nuclear facilities are eligible under the ITCs and other financial instruments.

Equitably include existing, refurbished and new large nuclear facilities, SMRs, and companies engaged in the nuclear value chain in other federal government clean tax policies.

Support the export of Canadian uranium and CANDU technologies to global markets, which have now grown in importance because of increased vulnerability in terms of global energy security.

Lastly, modernize and align—domestically and internationally—regulatory regimes such as the Impact Assessment Act and the Canadian Nuclear Safety Commission to provide clear, predictable processes for the timely deployment of nuclear energy projects and infrastructure.

Over the coming weeks, the CNA, with its members, will conduct additional analysis on the implications of the IRA and the financial and other supports required to enable growth of the nuclear sector. We'll share these insights with the committee.

Thank you. I look forward to any questions.

1:15 p.m.


The Chair Liberal Judy Sgro

Thank you very much, Mr. Gorman.

Mr. Zacharias, you have five minutes, please.

1:15 p.m.

Dr. Mark Zacharias Executive Director, Clean Energy Canada

Good afternoon, Madam Chair and members of the committee.

My name is Mark Zacharias. I'm the executive director at Clean Energy Canada, a climate and clean energy think tank at Simon Fraser University.

I'll be speaking today on how Canada can position itself to maintain high-quality jobs and seize the economic opportunities in the shadow of the U.S. Inflation Reduction Act.

The IRA is a game-changer and requires Canada to act now and rethink our approaches to attracting and retaining jobs and investments.

Prior to the IRA, Clean Energy Canada had done numerous studies to demonstrate the clear economic potential of a transition to a net-zero economy. Our modelling found that between 2020 and 2030 clean-economy jobs in Canada are projected to grow almost 50%. For example, by 2030, Canada's electric vehicle, or EV, battery supply chain could support nearly 250,000 direct and indirect jobs and add $48 billion annually to the Canadian economy.

While the IRA has the potential to impact Canada's economy in many ways, three key opportunities stand out: automobiles, batteries and construction materials. The IRA extends the U.S. $7,500 tax credit for new EVs and introduces a U.S. $4,000 tax credit for used EVs. These tax credits provide a massive opportunity for Canada to supply electric cars, and their parts, to the U.S. market. Prior to the bill, tax credits expired once an automaker reached EV sales of 200,000 vehicles, meaning companies like GM and Tesla haven't been able to benefit from them for years. The new, uncapped tax credit will drive EV sales and leverage Canada's recent efforts to land agreements with Ford, GM, Stellantis, and their unions, to assemble EVs in Canada.

Even more important to Canada are the new rules on batteries. Starting in 2024, to access the EV tax credit, the vehicle must not only be built in North America, but its battery must contain at least 50% mineral content sourced in North America or a U.S. trading partner— meaning not China—and 60% of the battery components by value must be made or assembled in North America. These percentages rise 10% annually until they reach 100% in 2029.

Being one of the few nations with all the critical metals and minerals required for battery production, along with the ability to produce refined battery materials using low-carbon electricity, Canada stands to benefit from the IRA's battery content requirements and will help us eat into China's 79% market share of the global lithium ion battery market.

Finally, in February, President Biden announced the Buy Clean Task Force to use the federal government's purchasing power—the world's largest—to create demand for low-carbon materials, while restricting access to high-carbon imported steel and aluminum. The IRA provides the funding needed to implement this executive order, including more than $5 billion U.S. to purchase low-carbon construction materials for federal buildings, highways, bridges and homes.

Another U.S. $5.8 billion has been allocated to install advanced industrial technology in steel, cement and other industrial facilities.

Canada must be strategic and understand its competitive advantages if we aspire—and we should—to do more than export raw commodities like critical minerals. Canada has the potential to be a clean energy and clean manufacturing superpower, but we cannot and should not simply try to meet the IRA's fiscal incentives one for one. However, by focusing on areas of potential strength, we can compete in a number of these sectors.

To do this we must do the following.

First, work with industry and stakeholders to finalize the design of the investment tax credits put forward in the FES.

Second, recognize the importance of our low-carbon electricity supply. Reliable, cheap and clean electricity is a prerequisite for industrial investment, and completing the forthcoming clean electricity regulations is key.

Third, support our highly skilled labour supply and deliver further training and education aligned with the economy.

Fourth, build out the infrastructure necessary to develop critical minerals and metals as well as to transmit power to the new facilities.

Fifth, continue the decarbonization of our own industries to sell low-carbon goods to the U.S. and other trading partners.

Lastly, complete the forthcoming zero-emissions vehicle mandates to drive domestic EV demand and therefore Canadian production.

Strategic alignment with the U.S., while playing to Canada's strengths, can create a thriving North American market for the next generation of clean technologies and materials and keep us on the pathway to meeting our net-zero 2050 goals.

Thank you. I look forward to your questions.

1:20 p.m.


The Chair Liberal Judy Sgro

Thank you very much.

We'll move on to Mr. Risley for up to five minutes, please.

1:20 p.m.

John Risley Director, World Energy GH2

Thank you very much, Madam Chair and members of the committee, for this invitation to discuss the impact of the U.S. Inflation Reduction Act.

As it has been said, I'm John Risley. I'm the director of World Energy GH2, which is developing Project Nujio’qonik, a $12-billion U.S. investment in Newfoundland and Labrador.

This project will generate energy by way of a three-gigawatt wind farm on the west coast of Newfoundland. Electrolyzers in nearby Stephenville will then convert that electricity to hydrogen and ultimately to ammonia. Both hydrogen and ammonia have been safely generated and shipped globally for decades.

As members of this committee are aware, Canada has signed an MOU with Germany to supply green hydrogen, beginning in 2025. This project is uniquely positioned to fulfill that commitment and so much more, including bringing well-paid jobs to local communities in Newfoundland and Labrador. Ensuring that Canada can successfully transition from conventional to low-carbon energy production and export.

World Energy has signed an MOU with the Qalipu First Nation, as well as all of the other local first nations communities in the area of our project. Chief Brendan Mitchell of the Qalipu has noted that this project will bring local opportunities through green energy training and jobs. The involvement of local communities is crucial. Without it, the project would not be able to advance.

A key question before the committee today is whether or not Canada will be able to compete in the clean energy space, given the strong tax credits for these kinds of projects included in the Inflation and Reduction Act. I'm here today to tell you that Canada is well positioned to compete in the green energy space, but to do so, we need to make decisions quickly and support the expedited rollout of this sector in our country.

The recent fall economic statement provides the beginnings of a response to the IRA. It provides for a tax credit of up to 40% on clean hydrogen production and up to 30% for clean technologies, such as power generation via wind turbines. This is an excellent place to start the discussion. However, projects like ours need certainty on the details of these announcements in order to be able to move forward.

Questions exist. For example, will the tax credit on clean energy generation apply to the cost of the wind turbine itself or include the integral components, such as the concrete foundation upon which the turbine is to be mounted? What about the new road infrastructure required to get the turbines to site?

With regard to the hydrogen investment tax credit, we assume that this would include the cost of electrolyzers, but what about costs associated with energy transmission from the wind turbines to those electrolyzers? What about the specialized storage facilities, steam generation and other water treatment infrastructure? They are all required as part of such a project.

This can be simplified by deciding where the dividing line is between the power generation assets and the hydrogen and ammonia production assets. One side of that line earns the up-to-30% credit and the other earns the up-to-40% credit. All of the capital assets on both sides need to be captured in order for these credits to make Canada competitive in light of the IRA.

The determination of what constitutes a capital asset should be left to either generally accepted accounting principles or international FRS accounting standards. Any project owner submitting an application for the credit would need an audit certificate from a recognized accounting firm, qualifying the assets on both sides of such a line.

The timing of these decisions is critical. Right now, every day that we delay ordering key components, such as turbines and electrolyzers, creates a potentially significant delay in when we will receive such equipment. This is due to the supply chain crunches and high demand being generated by policies such as the IRA.

Canada needs to act quickly and provide certainty around the announcements made in the fall economic statement, while making sure that all of the project assets needed for green hydrogen and green ammonia are captured by the investment tax credits.

This is not crying wolf. I literally, just two hours ago, got off a plane after spending a week in Europe to visit critical equipment suppliers. I can tell you that I had to beg for the attention of these suppliers, who are now focused on a huge number of developing projects in the United States.

Thank you for this opportunity, Madam Chair.

1:25 p.m.


The Chair Liberal Judy Sgro

Thank you very much, Mr. Risley, and thank you for making sure you landed in time to be able to come to the meeting.

Next we have Mr. Martel for six minutes.

Go ahead, please.

1:25 p.m.


Richard Martel Conservative Chicoutimi—Le Fjord, QC

Thank you, Madam Chair.

Thank you to the witnesses for being here.

One thing is certain, and that is that so far, the hearings have told us a lot about how slow the Canadian government has been in dealing with the new American regulations. Even more importantly, they showed us how slow the government has been in responding to requests from the various Canadian sectors to help us become a leader in the energy transition.

Mr. Jean Simard, the president of the Aluminium Association of Canada, spoke to us about the importance of accelerated depreciation to encourage new investment in production infrastructure. He also mentioned a low-carbon footprint aluminum procurement policy, together with investment and innovation in recycled aluminum research and development. He further went on to say that the environment had to be more competitive on both the fiscal and regulatory fronts. These requests have been made for years. However, instead of becoming a pioneer or facilitator for the industry, the Canadian government has always waited for the United States to make the first move. Canada reacts afterwards. I believe this has to stop. We clearly need to move in a new direction.

This week, we heard another presentation that provided striking evidence, from Mr. Masterson, the chief executive officer of the Chemistry Industry Association of Canada. The Canadian chemistry and plastics sector is the third largest manufacturer in Canada with annual shipments worth approximately $90 billion. Eighty per cent of annual production is exported, most of it to the United States.

According to Mr. Masterson, the true value of the incentives provided by the Inflation Reduction Act, the IRA, and Canada's greatest challenge, is the transparency and certainty provided to investors. He also pointed out that we are paying a very high carbon tax which is steadily growing.

Some industries are fortunate to find themselves on the government's white list, and a number of representatives from these industries are here today. These hand-picked companies have access to federal subsidies for taxes, loans and other decarbonization incentives.

The problem, as Mr. Masterson explained it, is that the criteria for getting on the list are not transparent, clear or available to everyone. This means that not just any industry can be included in a business case, which places Canada at a disadvantage.

In the United States, on the other hand, no industry or company is on a blacklist. Everyone is on a whitelist. Everyone can consult the IRA and factor in its very real, very material and very accessible measures when preparing a business case for proposed industrial decarbonization projects.

During its appearance here on November 18, 2022, the Business Council of Canada mentioned that the 2022 fall economic statement lacked important details on investment tax credits for clean hydrogen technology. The Business Council of Canada added that incentives were more interesting and rules clearer in the United States.

Let's take the example of a company carrying out activities in Canada and the United States that wants to invest in reducing their carbon footprint.

Mr. Risley, from the standpoint of Canadian clean technology and clean hydrogen sector companies, how can a shortage of details affect investment decisions?

1:30 p.m.

Director, World Energy GH2

John Risley

Thank you, sir.

Look, we need specifics around what the tax credits apply to because we cannot do financial modelling. Without financial modelling, we can't bring our lender consortiums on side. We're talking about investments of billions of dollars, so obviously we need to be able to demonstrate what the government's policies are here at a very specific level.

I don't want to sound like I'm being overly critical. I am not. Directionally, the fall economic statement is very positive, but without this detail, we are just simply not able to plan. Without the ability to plan, we cannot order equipment, and ordering equipment for our projects of this size requires deposits of hundreds of millions of dollars, so this is very serious business, as you can imagine.

We understand the detail will be provided in the March budget, and we would encourage the government to please consult with industry during this interim period so that we're not surprised in March and we can at least make our views and arguments known as to an appropriate way, if you like, to construct these credits so that they can be a meaningfully competitive response to the IRA.

1:30 p.m.


The Chair Liberal Judy Sgro

I'm sorry, Mr. Martel. Your time is up, right down to one second left. I'm sorry about that.

Mr. Arya, you have six minutes, please.

1:30 p.m.


Chandra Arya Liberal Nepean, ON

Thank you, Madam Chair.

Madam Chair, the industry transformation that is required for the global energy and global green transition is comparable to the Industrial Revolution. With the talk of friend-shoring and onshoring and with the U.S. Inflation Reduction Act combined with the U.S. CHIPS and Science Act, basically the U.S. has laid out its plans for becoming a powerhouse in manufacturing going forward.

I have a question for Ms. Elizabeth Kwan.

Ms. Kwan, you mentioned the problems for the Canadian steel industry. What we've seen in the Inflation Reduction Act and the CHIPS and Science Act, and what the U.S. sees, is that the U.S. is promoting a lot of new manufacturing and new production capacity in their country. Their steel production, like aluminum here, has been stagnant for the last 20 years. Canadian steel production has actually come down from about 17 million tonnes in 2000 to about 12.5 million tonnes last year, in 2021, if I am not wrong, and there has been no increase in installed capacity during the last 20 years.

Ninety-four per cent of the exports of steel are to the U.S. We have signed free trade agreements with the European Union, the Asia-Pacific countries and about 50 or 60 countries around the world, but our steel producers are not exporting beyond the United States, and they're also not increasing the production capacity to make use of the national resources available here to add value and to bring value in relation to the Canadian economy.

If there is a small problem with their exports to the U.S., they come with a huge lobby asking the Government of Canada for funds to protect them, but I don't see their commitment. Maybe it is because almost all of them are foreign owned, with no Canadian ownership, so they may consider Canada as just one of the branch offices for their exports to the United States and for the domestic Canadian market and have no interest in exporting to the European Union or the Asia-Pacific countries. What do you say about that?

1:30 p.m.

Senior Researcher, Canadian Labour Congress

Elizabeth Kwan

Thank you very much for your question.

I would say that the IRA is very interesting in the sense that it's a game-changer. The magnitude and the scope of what it's addressing are, if nothing else, both an opportunity and a bit of a push as well for us to expand a lot of our own manufacturing, including steel, obviously, and including auto.

As you know, most of the trade is with the U.S. Canada does most of its trade with the U.S. and our markets are very integrated, so there is that aspect of it. Hopefully, if we align our standards of production and manufacturing, and labour standards as well, with what's being—

1:35 p.m.


Chandra Arya Liberal Nepean, ON

Thank you. Unfortunately, I have questions for other witnesses.

Mr. Gorman, recently Brookfield Asset Management invested in the U.S. nuclear facility with Westinghouse, although it is more of an in-house transfer of ownership. Do you foresee, in your view, any chance of private sector funds coming into nuclear power generation in Canada?

1:35 p.m.

President and Chief Executive Officer, Canadian Nuclear Association

John Gorman

Thank you very much for the question, MP Arya.

Yes, I do see tremendous opportunity for private investment in the nuclear sector. In particular, we see this opportunity coming up in small modular reactors. Small modular reactors are a different business case from the large reactors, which have often required government backing. Because they're small and manufactured in manufacturing settings and then shipped to site and assembled, it allows the private sector to participate.

Westinghouse is very positive news for Canada in terms of keeping not only their conventional reactor technology but also these new small modular reactors through their eVinci technology. That one signal that we had from Cameco and Brookfield in Westinghouse means we will see more investment coming into the new technologies.

1:35 p.m.


Chandra Arya Liberal Nepean, ON

Thank you.

I have one minute left, and I have a question for Mark Zacharias.

Mr. Zacharias, obviously a lot of people are talking about the potential for Canada to become a powerhouse or global leader in critical minerals or electric vehicle manufacturing. A lot of talk goes on around the minerals side of it. A lot of talk goes on around battery manufacturing and electric vehicle manufacturing. Not many people talk about the manufacturing of anodes and cathodes.

What do you say? What are you hearing about that?

1:35 p.m.

Executive Director, Clean Energy Canada

Dr. Mark Zacharias

It's a really good question.

I would preface my remarks by saying that over the last couple of years, there have been 17 battery announcements in Canada, including some in cathode and anode production, and should those investments come to fruition, there would be about $15.2 billion of new investment in Canada.

To your question, I think the cathode and anode production is starting to come. Right now we do need to align critical minerals and battery material production. Those need to be in place in order to move to the next cell, which is cell assembly and cathode and anode production. The announcement last week with Vale and GM around a nickel sulfide manufacturing plant in Bécancour is a good start.

I think the other reason they will come is that we do have clean power. We have a very clean grid. We have a skilled workforce. We have good workforce training. We have proximity to EV assembly in Canada, particularly as the Big Three have now switched to manufacturing EVs over the next couple of years.

I'd be happy to follow up more.

1:35 p.m.


The Chair Liberal Judy Sgro

Thank you very much, sir. Thank you for that information.

Mr. Ste-Marie, welcome to the committee today.

Please go ahead. You have six minutes.

1:35 p.m.


Gabriel Ste-Marie Bloc Joliette, QC

Thank you, Madam Chair.

It's a pleasure to be with you. I'm pleased to see you and all my colleagues here. I'd like to thank all the employees, and the interpreters in particular, who contribute to the work of this committee.

Greetings also to the four witnesses. I'd like to thank them for being here and for their presentations.

My first question is for all the witnesses. If you wish, you can answer in the order you initially spoke.

I've heard a lot about the requests that all the organizations are making to the Canadian government. My question has more to do with an analysis of the United States Inflation Reduction Act, the IRA. Where would we like to see changes made to the current version of the act? What pressure should the Canadian government put on its American allies?

Ms. Kwan, perhaps you could begin.

1:40 p.m.

Senior Researcher, Canadian Labour Congress

Elizabeth Kwan

I think the pressure that Canada should put on the U.S. government should be to ensure that Canadians have access to the new markets being developed as well as the expansion of those markets. For example, the Build Back Better Act basically excluded or would have been harmful to auto, whereas the Inflation Reduction Act is inclusive. It's a North American sort of continental act.

We need to put pressure to make sure that we have a good synchronization of what the act says and what we have in Canada. We need to synchronize those standards and ensure that labour, for instance, is supported on both sides to actually move forward in the future much more toward a low-carbon economy.

Thank you.

1:40 p.m.


Gabriel Ste-Marie Bloc Joliette, QC

That's very clear. Thank you.

Mr. Gorman, would you like to add anything?

1:40 p.m.

President and Chief Executive Officer, Canadian Nuclear Association

John Gorman

I would agree with Ms. Kwan that what we really need to achieve here is a parity between the U.S. and Canada as we go through this clean energy transition. Ms. Kwan used the word “synchronization”; I think that also applies here in terms of regulatory treatment and other measures that we look at.

In the nuclear sector, our efforts have increasingly been very collaborative with the United States in terms of looking at energy security, and now our climate goals, from a holistic point of view. That makes a lot of sense.

To the first part of your question, very quickly, what we have to amend here really has to do with what other speakers have addressed, which is this idea that we now need to work on the details of the ITC.

1:40 p.m.


Gabriel Ste-Marie Bloc Joliette, QC

Thank you very much.

Is there anything Mr. Zacharias would like to add?

1:40 p.m.

Executive Director, Clean Energy Canada

Dr. Mark Zacharias

I would agree with the remarks of the two preceding speakers.

I would note that the other alternative to pressuring the U.S. to amend the IRA would be to do things a little bit differently and move forward more quickly on the Canadian equivalents.

I'll give you two or three examples. The IRA has an investment tax credit and a production tax credit. Canada does not have many production tax credits. That is something we could add or install in budget 2023. That would be very easy to do. There are direct pay provisions in the IRA that allow upfront financing for proponents to be able to invest their tax refund quickly in the initial capitalization. The IRA has nine different buckets of tax credits. There are many activities in there that don't have Canadian equivalents. We could actually fill the gap.

I could go on, but I'll leave that for another question.