International Trade Committee on Nov. 25th, 2022

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you.

Mr. Risley, I have a minute left if you'd like to get your two cents' worth in.

[John Risley]

Thank you.

I think getting the Americans to try to change what they have already legislated is not a good use of time and energy. Billions of dollars are being invested on the back of that legislation, and the Americans are highly unlikely to tolerate any amendments to what has already gone through the system.

What do we need to do? We don't need amendments. We need clarity and a sense of urgency.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

That's very clear. Thank you.

I'm going to give whatever time I have left to someone else.

[The Chair, Liberal, Judy Sgro]

All right. You had 50 seconds remaining.

Mr. Blaikie, welcome to the committee today.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

I'm glad to be back, Madame Chair. My first question would be for Ms. Kwan.

If we go back to the fall of 2021, there was quite a lot of concern about the tax credit incentives for electric vehicle manufacturing, and particularly the possibility of Canada being frozen out of the industry based on the conditions that were attached to those tax credits.

I was part of an effort to go down and lobby in Washington to ensure that Canada wasn't frozen out of those provisions. Canadian labour played a really important role, particularly some of the international unions that have brother and sister locals in the United States. I think of the United Steelworkers and my own union, the IBEW, and the Teamsters.

I know you talked earlier about the importance of having labour at the table. Could you speak a little to that specific example and also expand a little bit on ensuring that organized labour is at the table for discussions about IRA investments and Canadian equivalents, and about collaboration between Canada and the U.S. in this new economic chapter directed at fighting climate change? If you want to speak a little bit to what labour has to offer when its voice is at the table, I think that would be a fine thing.

[Elizabeth Kwan]

Thank you very much.

I think it was very clear that the Build Back Better Act would have damaged the auto industry, for instance. That's why you were there and we were there, fighting to make some amendments.

However, moving forward with the IRA, what is really interesting is how the act has put forward this connection of creating jobs in a low-carbon economy that incentivizes good jobs being present now and builds out to really good union jobs in the future through its apprenticeship training.

Because they have done some studies to say that the IRA is going to create nine million jobs over 10 years, what we have to do is ensure that the workers on the Canadian side are able to be part of this new development around the increase and expansion of manufacturing, and work towards new good jobs—union jobs, I hope—in the low-carbon economy.

We have all said there are a lot of gaps and a lack of details that are coming up, even with the things that were introduced in the FES. I would suggest that unions have to be very much involved, and involved in two ways. One way is how we can contribute a lot toward the whole discussion around the type of training, as well as how to improve the types of jobs moving forward.

I think it would serve Canada well to have a very strong union presence at the table for new policies for this framework that I spoke about. This is something that would be an advantage not just for Canadians but also in working closely with the Biden administration, which is very pro-worker and pro-unions. I think this is where we can contribute several times over to this whole endeavour as we move forward.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Is it fair to say....? I know that in Canada, unionized manufacturers in the auto sector, for example, tend to have a higher market share than what we see in the United States. It seems to me that there is a role for Canada as the Biden administration tries to encourage good union jobs within an American-only supply chain. It seems to me that Canada has a role to play to help American manufacturers meet that good union job requirement, while non-unionized manufacturers in the United States make choices about whether they want to see unionization in their shops in order to be able to access funding under the IRA.

Do you think there is a role for Canadian producers that already meet many of the specifications of the IRA if we bracket the explicitly nationalist requirements of that investment?

[Elizabeth Kwan]

I think that where there is a strong will, there is strong vision and there are strong actions behind the good union jobs. That's building out into the future with all of the new activities and the low-carbon economy through the IRA.

On the Canadian side, I think that it would help expand the good jobs here, but you're right. It pushed the other side because, quite frankly, the incentives under the IRA are very aggressive. They're aggressive not just on the manufacturing and production side; the aggressiveness is tied to the conditions of labour and the conditions of apprenticeship. There is definitely a symbiotic and reciprocal nature that we can leverage a lot more in the days to come.

I would say, though, that we have to get our house in order first in order to do anything. We need details, we need a strategic plan and we need unions at the table to make sure that Canada is going to be able to work hand in hand with the workers in the United States in this prosperous future.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Blaikie.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you, Ms. Kwan.

[The Chair, Liberal, Judy Sgro]

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

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Madam Chair.

Thank you to all the witnesses for being with us this afternoon.

Over the past several hearings that we've had, a consensus is almost coming from all the witnesses that we need clarity and that we need a sense of urgency in the response to the IRA.

Ms. Kwan, you mentioned yourself that it's a game-changer. It reshapes the climate world. Bob Masterson, the CEO of the Chemistry Industry Association of Canada, just recently said, “The IRA is the most audacious public policy instrument ever introduced to decarbonize a major economy in the world.” He went on to add that the Americans “have unleashed the power of private capital” to decarbonize, while Canada is still stuck in debates over strategies and plans. We have to react and we have to move seriously forward.

Mr. Gorman, I was just reading an article that you prepared for Policy Options in May. You talked about the government and nuclear power again. The article was “Time for Canada to commit to nuclear power”, and you mentioned that “we have a government [in Canada] that is a champion of nuclear one day, yet leaves it as a footnote the next.” I mean, you've see the recent investments by the Canada Infrastructure Bank of $970 million. Certain provisions came out in the federal budget 2022, yet “nuclear was excluded from the clean tax credit policy” in 2020. It was also not included in the accelerated capital cost allowances and then, of course, in the Canada green bond framework.

As we move forward, we need to also take a look at some of your five recommendations. You said how the government can take steps to accommodate that, particularly in Ontario. We have 60% of the grid in Ontario alone provided by nuclear power. I come from the riding of Niagara Falls, which provides 2,200 megawatts of clean hydroelectric power. However, 60%....

Previously, I had the pleasure of working and doing community relations for Bruce Power when it was first established in Kincardine. You see the impact that British Energy had when it moved to Canada, not only in saving the community and the power that it produced but also the supply chains. In my riding alone, you have E.S. Fox, which has thousands of jobs—of workers—not only in the nuclear sector but also now with the Darlington station, as they're going to be working there.

What are the things that we need to do, particularly as we move forward to decarbonize? We're going to need increased power. Sixty percent of the grid in Ontario right now is nuclear. With regard to your point about utilities and large power producers, such as nuclear, how do we get the government to change its examination of that and include it in the green bonds so that we can go forward?

[John Gorman]

That's a very important point. That is around the need for consistency in the government's treatment of any clean technology that it is relying on for a net-zero future. In particular, as you pointed out, there's been a lot of inconsistency around the way that the various departments in the federal government have been treating nuclear.

I think we are encouraged by the progress and the commitments that have been made most recently to view nuclear as a clean energy technology—that's what it is—that is central to our meeting our energy security and climate goals. However, we do continue to see that there's an unlevel playing field here in Canada among clean energy technologies. You have referenced a few. There have been tax credits, accelerated capital cost allowances, and green bonds extended to other clean energy sources that have not been extended to nuclear.

It's absolutely essential that as we acknowledge the technologies that are going to be needed as we strive towards this more energy-secure, more climate-friendly future, we create and incentivize a level playing field for all of these technologies so that they can deliver to their full potential. Therefore, we will continue to press this government to ensure that there is that level playing field so that nuclear can play a large role.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Mr. Gorman. Also—

[The Chair, Liberal, Judy Sgro]

I'm sorry, Mr. Baldinelli. You have 16 seconds left—actually, it's 13 by the time I tell you. I'm sorry about that.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Mr. Gorman, when you talk about government utilities' accessing things such as the green bonds, nobody is talking about the investments that are going to need to be made in terms of the grid and the capacity to handle the increased electrical demands that we have. That is something that needs to be discussed, as well.

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Baldinelli. Mr. Gorman might want to respond to that when he answers someone else's question later on.

Mr. Virani is next, please, for five minutes.

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

Thank you very much, Madam Chair.

I appreciate that the cleanliness of Canada's grid has come up a number of times in the opening comments. My understanding is that our grid is about 85% clean, and as we move to get past coal right around the country to get to a 100% clean grid, that just gives us an even further competitive advantage when we're dealing with things nationally and internationally.

Obviously I'm going to build on where Mr. Baldinelli was, which is that the phase-out of coal in the province of Ontario, the province that he and I share, has been instrumental, as well as the accentuation of nuclear energy in Ontario.

Mr. Gorman, it is good to see you again. I wanted to ask you about the piece in the fall economic statement that talks about nuclear power and, as you mentioned, the investment tax credit being available for small modular reactors. Then there is a later piece that talks about how the eligibility is going to be consulted on with respect to large-scale nuclear power.

Can you comment, given that sort of division you talked about with the public and private components in Canada, about large-scale nuclear reactors and where you see CANDU fitting into the tax credit regime that needs to be happening as fast as possible? What is the role for large-scale CANDU reactors in that sphere?

Over to you, Mr. Gorman.

[John Gorman]

I would say that there is growing recognition here in Canada and around the world that we are going to have to dramatically increase the amount of clean electricity that is being produced so that we can switch fuels in various sectors to decarbonize them. Most knowledgeable folks are saying that it is going to require a doubling, tripling or even quadrupling of the amount of clean electricity generation that we have.

Nuclear is, and has been for decades, a very important source of clean electricity here in Canada. It's increasingly clear that we can take advantage of these small modular reactors to meet many of our needs, but also increasingly clear that we're going to need large nuclear reactors as well.

As we look to working through the details of the investment tax credit, we absolutely need to ensure that the investment tax credits are extended to large nuclear reactors, as they have done in the United States. We have to be cognizant of the fact that here in Canada most of our large clean electricity projects are driven by Crown corporations, Crown utilities that are non-profit organizations. The ITCs need to be expanded to include not only large nuclear reactors, as they have done in the U.S., but also modified to be able to accommodate the non-profit nature of the Crown corporations that are driving this clean energy revolution.

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

Got it. Thank you, Mr. Gorman.

I want to direct my next question to Ms. Kwan and Mr. Zacharias.

You were taken to the Build Back Better discussion when Mr. Blaikie was questioning you. I think the critical feature there is obviously that the advocacy of the Government of Canada and various union groups caused that instrumental change where buy American turned into buy North American. That's obviously created a lot of demand for what we're doing here in Canada and is really helping to support our auto industry and the good unionized jobs that, Ms. Kwan, you mentioned. I share your concern about ensuring that we have those good strong middle-class unionized jobs.

There's an element in the fall economic statement that I want you to comment on. There are things like the sustainable jobs training centre; the new sustainable job stream under the union training innovation program, which is expected to produce 20,000 apprentices of the type that Mr. Zacharias was talking about; and the sustainable job secretariat. Are those the types of initiatives you see as steps in the right direction? What more do we need to be doing to ensure that we're training people in unionized workspaces for the jobs of the future?

Maybe Ms. Kwan and then Mr. Zacharias could respond.

[Elizabeth Kwan]

Thank you very much.

I would also say that what you've listed off are useful programs that were introduced in the FES. I also would say that this is what I prefaced in my remarks. There are bits in budget 2022 and bits in the FES. In the FES, the Government of Canada tried to respond a little bit to the IRA. It needs to come together as some sort of “Canada first” strategy to make sense of what we really want to do with all of it.

I think that the union jobs training thing is very good, of course, but as I said before, what they're trying to do under the IRA is very aggressive. In many ways we're not just competing for business; we're also competing for people, for workers, quite frankly. We need to be able to support workers with more training and make sure that those apprenticeship requirements are as aggressive as what is stated in the IRA, if not more so, so that it doesn't just build the present but also builds the future of all of these low-carbon types of jobs and areas in the low-carbon economy.

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

Mr. Zacharias, just briefly—

[The Chair, Liberal, Judy Sgro]

I'm sorry, Mr. Virani. Your time is up.

Monsieur Ste-Marie, you have two and a half minutes, please.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Madam Chair.

I would have liked all four witnesses to answer my next question, but that will be impossible in only two and a half minutes. I'll go to Ms. Kwan, and if the other witnesses would like, they can send their answers in writing to the clerk, who can then pass them on to all the committee members.

Ms. Kwan, several witnesses we've heard thus far have said they are afraid that the financing measures in the American act would trigger an outflow of investment from Canada to the United States and lead to job losses in the Canadian manufacturing sector.

Do you you share this fear? How can Canada avoid this outflow of investment?