International Trade Committee on Feb. 9th, 2022

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

I call the meeting to order.

Welcome to meeting number five of the House of Commons Standing Committee on International Trade.

Today's meeting is taking place in a hybrid format, pursuant to the House order of November 25, 2021.

The Board of Internal Economy requires that committees adhere to the following health protocols, which are in effect until February 28, 2022.

Anyone with symptoms should participate by Zoom and not attend the meeting in person. Masks must be worn in committee rooms except when members are at their place during parliamentary proceedings; however, it is strongly recommended that members wear a mask even when they are at their place during parliamentary proceedings.

All those inside the committee room should follow best practices of maintaining a physical distance of at least two metres from others, and maintain proper hand hygiene by using the hand sanitizer provided in the committee room and regularly washing their hands well with soap.

As the chair, I will be enforcing these measures.

I'd like to outline a few other rules to follow.

Interpretation services are available. You may speak in the official language of your choice. At the bottom of your screen, you have the choice of floor, English or French. If interpretation is lost, please inform me immediately, and we will have that corrected.

The “raise hand” feature is on the main toolbar, should you wish to speak. When speaking, please speak slowly and clearly, and when you are not speaking, your microphone should be on mute. I remind you that all comments will be addressed to me, as the chair.

The committee clerk and I will maintain a speaking list for all members.

We are continuing a study of the Canada-United States relationship and its impacts on electric vehicles, softwood lumber and other sectors. Pursuant to Standing Order 108(2) and the motion adopted by the committee on Monday, the committee is resuming its study on the Canada-United States relationship and its impact.

With us today by video conference are Karim Zaghib, professor at Concordia University and professor of practice at McGill University; from the Aluminium Association of Canada, Jean Simard, president and chief executive officer; from the Business Council of Canada, Trevor Kennedy, vice-president of trade and international policy; from the Canadian Chamber of Commerce, Mark Agnew, senior vice-president of policy and government relations; from the Canadian Steel Producers Association, Catherine Cobden, president and chief executive officer; and from Global Automakers of Canada, David Adams, president and chief executive officer.

Welcome to all of you, and thank you for taking the time to join us today.

Up to five minutes will be given for opening remarks from each of our witnesses, followed by rounds of questions.

Mr. Zaghib, I now invite you to make an opening statement of up to five minutes.

[Dr. Karim Zaghib, Professor, Concordia University, Professor of Practice, McGill University, As an Individual]

Mr. Chair, members of Parliament, good afternoon.

My career in the field of electric vehicles and my connection with the United States date back 27 years to my time as senior battery researcher at Hydro-Québec's research institute.

The U.S. Department of Energy, or DOE, awarded me a number of research contracts to investigate battery materials. I worked with most of the DOE's national laboratories, including the Lawrence Berkeley National Laboratory, Sandia National Laboratories, Brookhaven National Laboratory and Pacific Northwest National Laboratory.

I also conducted research for the United States Advanced Battery Consortium, or USABC, created by Ford, General Motors and Chrysler.

From June 2020 to December 2021, I served as strategic advisor to Investissement Québec. Thanks to my international contacts and 36 years of experience with lithium-ion batteries, I was able to open doors, especially in the U.S., for Investissement Québec. I did the prospecting and accelerated recognition of Quebec's ecosystem from the mine to recycling to attract international players in the field of precursors, cathodes, anodes and cells.

It is essential that Canada and the United States collaborate extensively on a secure and stable supply chain, from mines to electric vehicles to recycling, in order to become independent from Asian suppliers and to support our local industries.

Canada has the potential to transform our critical minerals locally into active materials for cells, vehicle bodies and electric motors at low costs with zero CO2 emissions, thanks to renewable energy and hydroelectricity.

For the next 20 years, lithium-ion batteries will dominate the market for electric vehicles. Lithium-ion batteries are constituted of copper, graphite, silicon, lithium, cobalt, nickel, manganese, iron and phosphate. All these elements are found, for example, in Ontario, Quebec, New Brunswick, Labrador, British Columbia and Manitoba.

Canada is an attractive supplier of critical minerals for electric vehicle manufacturers in the United States and, most importantly, in Canada. The shift to electric vehicles is a great opportunity to create jobs and to revive the vehicle manufacturing industry in Canada, in particular in Ontario and Quebec.

Canada and the U.S. would benefit from launching a joint electric vehicle initiative that involves and trains human capital to address the labour shortage problem and brings together research institutes, colleges and universities, manufacturers and technologies developed in both countries through mutual licence agreements and technology transfers for the manufacturing sector.

One of the scientific and commercial success stories of the fruitful Canada-United States partnership, concerning electric vehicles and batteries, is lithium iron phosphate batteries, for which Professor John Goodenough was awarded the Nobel Prize in 2019, and which originated from a collaboration between the University of Texas and Hydro-Québec.

Today, LFP is recognized as the safest battery technology, and is notably used by Tesla. China was an early adopter of this technology for electric vehicles and busses, for which CATL and BYD are the largest producers of the cells.

Canada and the U.S. should create a scientific committee on innovation, intellectual property and industrialization to encourage the market penetration of common technologies in electric vehicle and energy storage applications. That way, the two countries could be pioneers in lithium-ion batteries and beyond to reduce the time and cost needed to develop materials for batteries, vehicle bodies and electric motors.

It is vital that the federal government and the provinces provide funding for up to 50% of battery and electric vehicle manufacturing plant proposals by making available turnkey sites, including access to water, electricity and natural gas, in strategic locations that simplify transportation logistics.

Canada must also invest to bring back a national industry of microelectronics. Chip manufacturing is essential for several electronics components in electric vehicles and batteries, such as the battery management system and the battery management unit.

Another aspect of the Canada–U.S. partnership that should be improved is harmonization and standardization of the fast and ultra-fast charging network. One key goal should be developing universal payment systems that require only a credit or debit card, as is the case with gas stations.

I would also suggest that Canada establish a strategic committee on critical minerals for battery and electric vehicle manufacturing, with an emphasis on mineral traceability, greenhouse gas emissions and respect for human rights. With minerals sourced from Canada, this committee could also develop protocols and contribute to cell and battery production technologies with the goal of producing process control machines locally in Canada and the U.S.

The two countries' incentives for purchasing electric vehicles should be harmonized until the cost of lithium-ion battery packs drops below $100 per kilowatt hour, which is parity with the cost of a gas vehicle.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Zaghib.

[Dr. Karim Zaghib]

Thank you.

[The Chair, Liberal, Judy Sgro]

I'm sorry to interrupt.

[Dr. Karim Zaghib]

I've finished.

[The Chair, Liberal, Judy Sgro]

Mr. Simard, you have the floor for five minutes, please.

[Jean Simard, President and Chief Executive Officer, Aluminium Association of Canada]

Thanks to the committee members for inviting the [Technical difficulty—Editor].

As members of the committee well know by now, aluminum is part of the new narrative in world geopolitics. A critical material as listed in Canada, Europe and the U.S., it has been the object of a series of trade confrontations over the last five years, with resulting anti-dumping and countervailing duties, tariffs and TRQs.

While Europe and the U.S. have been at the forefront of these measures, China's state-subsidized growth and dominance of world markets are mostly to blame for this situation, as documented by the OECD. This just shows how our metal is strategic now and for the future.

As the world is moving out of the pandemic and supply chains' resilience and decarbonization are on the agenda, the U.S., like other world powers, is attempting to seize the momentum and redraw its industrial web to the benefit of its workers, communities and markets. As we enter the carbon trade era where CO2 is on everyone's balance sheet reaching for the bottom line, responsibly produced low-CO2 minerals and metals stand to create value for Canada while answering the world's growing demand for responsible sustainability.

With its resource-based economy, Canada stands to gain through trade more than ever. Our industry ships most of its responsibly produced low-CO2 metal to the U.S., representing 70% of their imports in recent years, with multi-billion dollars in yearly exports for Canada, a significant contributor to our trade balance.

The U.S. market is our market, and by far. Canada is their key supplier, and by far. Maintaining the global competitiveness of our industry and its free access to market, especially in the U.S., is therefore fundamental. Our 8,800 workers and nine plants smelt and ship the most responsibly produced low-CO2 metal going into the U.S.

The U.S. is now pivoting toward bilateral managed trade agreements, replacing the past administration's tariff-based approach, as witnessed with the EU and Japan and forthcoming with Great Britain. While dealing with non-market economies and carbon are part of this new narrative, they are still establishing their bearings on the use of climate-based trade instruments. National security, protectionism and managed trade are all reactions to a perceived threat. Canada has never been, is not and never will be such a threat to the U.S.

As mentioned at the beginning, the economic world order has been gradually disrupted by China's dominance in key base industrial sectors. Be it steel, magnesium or aluminum, as well as rare earths, China dominates markets. We are, as an industry, as an economy and as a country, impacted by China's subsidies and non-market behaviour, and the carbon leakage associated with it.

Considering these two priorities for the new administration, we think that Canada must find alignment with the U.S. on dealing with non-market economies and carbon transfer. The global arrangement on sustainable steel and aluminum with Europe is a case in point. It clearly states, “The global arrangement will be open to any interested country that shares our commitment to achieving the goals of restoring market-orientation and reducing trade in carbon intensive steel and aluminium products.”

While Canada has its own trade agreement with the U.S. and the EU, restoring rules-based markets and carbon trade reduction should be on our priorities list, and we should make it clear to all interested parties. Canada must not only act on these issues, but it must also be clearly seen to be doing so. Working with the U.S. and our allies would contribute to more multilateralism, to the benefit of all parties. Canada should also push for a “buy clean” approach in government procurement with the U.S., calling for responsibly produced low-CO2 solutions.

In closing, while we were invited to comment on specific files such as EV and others, we firmly believe that our relationship with our most important trading partner deserves a broader approach at the crossroads of climate change and competitiveness. We need to re-engage on common grounds, aligning on shared values. We must also nurture this relationship at all levels all year round. We saw through the last round of CUSMA negotiations how much we had taken each other for granted during all those years. We saw it—

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Simard.

I'm sorry, but I have to cut you off in order to make sure we are accommodating everyone.

Thank you.

[Jean Simard]

Thank you.

[The Chair, Liberal, Judy Sgro]

Mr. Kennedy, go ahead, please.

[Trevor Kennedy, Vice-President, Trade and International Policy, Business Council of Canada]

Madam Chair and committee members, thank you for the invitation to participate today in your meeting on the Canada-U.S. relationship.

The Business Council of Canada is composed of 170 chief executives and entrepreneurs of Canada's leading enterprises. Our members directly or indirectly support more than six million jobs across the country and hundreds of thousands of small businesses.

Since our establishment more than four decades ago, the Canada-U.S. partnership has always been a top priority for our members. We played a critical role in supporting the development of the first trade agreement in 1987 and its expansion to include Mexico in NAFTA, as well as in our new framework, CUSMA.

Canada is a trading nation. Our prosperity and living standards depend on it. Sixty per cent of our GDP is tied directly to trade. The bulk of this trade is with the United States. As of 2020, it accounted for 73% of Canada's merchandise exports and 53% of our services exports. Two million Canadian jobs are related to exports to the United States.

This relationship is mutually beneficial. Nearly nine million jobs in the United States depend on cross-border trade and investment with Canada, and we are the largest or among the largest export customers for most states. From financial institutions and auto parts manufacturers to energy, aerospace and high-tech industries, our members have deep connections to the U.S., creating jobs and benefiting communities on both sides of the border.

The long-standing Canada-U.S. economic partnership has been tested in recent years and is in jeopardy of further deterioration if we do not take steps to strengthen it. We believe Canada needs a new strategy to do that.

Today I'm going to speak about three ideas that we believe can advance our relationship with the United States.

First, with respect to our relationship with the Biden administration, and as we have heard from Ambassador Cohen, we have a useful tool to enhance bilateral ties with the road map for a renewed U.S.-Canada partnership. This document has considerable breadth, and we have already made progress in certain areas. However, as the federal government thinks about its international and domestic policies going forward, including in the upcoming budget, it should consider what actions we can take to make progress on this road map and to accomplish the objectives our countries share. These include efforts to enhance supply chain resiliency and improve North American competitiveness. There is also considerable scope for collaboration to combat climate change and facilitate energy transition, including by enhancing the cross-border clean electricity grid, expanding production of battery electric vehicles, and stimulating the development of low-carbon opportunities such as critical minerals, carbon capture, hydrogen, and small modular reactors.

Second, Canada is fortunate to have CUSMA—a modern, progressive, and enforceable framework for trade. We cannot take this agreement for granted. We need to ensure that there's continued support for the agreement through implementation and by proactively communicating its benefits and presenting it as a foundation for regional competitiveness. Canada must work closely with our American and Mexican allies to promote this shared priority.

Third, we need a new, permanent team Canada to address the challenges of today and in the future. This team should leverage people-to-people ties, both in Washington and at the state level, to constantly communicate the shared benefits of Canada-U.S. trade and investment, as well as to ensure that government, business, labour, and other stakeholders are working toward shared objectives. This requires being proactive rather than waiting for the next trade irritant to arise. The team must develop a plan to advance Canada's interests and be ready to act quickly in a coordinated fashion.

Canada faces various challenges—some new and some old. While not everything is linked to a shift in trade policy, we should all focus on what we as a country can do to change the direction and prospects of this critical relationship. The Business Council of Canada and its members stand ready to support efforts to build a more stable and prosperous Canada-U.S. relationship and a competitive North America.

Thank you for this opportunity. I look forward to answering questions.

[The Vice-Chair, Conservative, Randy Hoback]

Thank you, Mr. Kennedy.

I think the chair is having some communication problems, so why don't we go on to our next witness?

I think our next witness is Mr. Agnew, senior vice-president of policy and government relations at the Canadian Chamber of Commerce.

[Mark Agnew, Senior Vice-President, Policy and Government Relations, Canadian Chamber of Commerce]

Thank you, Chair, for the introduction.

Honourable members, it's a pleasure to be back at the committee for my first appearance of the 44th Parliament. It's good to see both new and familiar faces.

The Canadian Chamber of Commerce is glad to see that the House of Commons Standing Committee on International Trade has decided to prioritize a Canada-U.S. study. Certainly in any relationship that's this vast, there are going to be complexities and frictions that emerge.

Perhaps I will start off by saying a brief word about three of those challenges.

The first is a concern that we have heard from some members about the implications of the U.S. EV tax credit proposal in the Build Back Better Act. Although as of today the Build Back Better legislation looks comatose, the Canadian Chamber, as a matter of general principle, certainly remains concerned with measures that would reinforce buy American principles and that would disrupt cross-border supply chains and put Canadian-based operations at a potential competitive disadvantage.

I should just note and parenthetically thank the honourable members on this committee who have been active in taking a stand against various buy American measures that have come from Washington, D.C.

The second I'd like to note is, of course, the committee's interest in the softwood lumber issue. For longer than I've been wearing a suit jacket and a tie, this has been a significant trade irritant. Certainly we are disappointed to see the continued application of tariffs on Canadian softwood lumber exports to the United States, and we're hoping to see negotiations start toward a renewed softwood lumber agreement. The imperative from the Canadian Chamber membership was underscored at our last in-person AGM in 2019, where delegates overwhelmingly passed a resolution calling on the government to initiate negotiations toward a new softwood lumber deal.

The third irritant that's worth highlighting is the ongoing discussions around Line 5. Proposals like the one to shut down Line 5, I think, are a perfect illustration of what happens when evidenced-based policy-making goes out the window. Certainly businesses on both sides of the border want to see a greener economy, but energy security does play a crucial role in the decarbonization process, because if we can't have certainty on where our energy and fuel supplies are coming from, it becomes much harder to advance a conversation about decarbonization and the economy, and certainly having more oil moved by trucks and trains is a much less safe mode of transportation.

However, as those who have the vantage point of being able to look at the breadth of the relationship from many sectors, we often find ourselves in the supplicant position, if I can put it that way. As I've said at this committee and in other forums, there is no one in Washington, D.C. who is waking up in the morning looking to do us a favour. It therefore remains critical not to make unforced moves like, for example, the retroactive application of a digital services tax that risks retaliation. Instead, what we need to do is proactively work with the United States on shared challenges and not let initiatives like the road map partnership wither on the vine.

Perhaps I can just say a brief word on three items that I would put forward for the committee's consideration. The first is collaboration on critical minerals and being able to leverage the joint action plan that was launched several years ago, ensuring that we are actually able to have a North American supply chain to support defence, consumer and industrial applications.

The second is strengthening the continental defence industrial base. Economic and national security are inherently linked together and can't be separated. Certainly we need to renew the strategic framework for defence industrial co-operation and also leverage opportunities like NORAD modernization to be able to have a strong industrial development component to help Canadian companies.

The third, of course, is supply chain resiliency, a major topic of discussion in Ottawa, Washington and capitals around the world. The Prime Minister and the President created a supply chain working group on the margins of the North American Leaders' Summit last autumn. Certainly we urge the government to engage industry in those efforts to ensure that real-world progress is being made, and also to renew initiatives like the regulatory co-operation council and have refreshed work plans that reflect our challenges.

Thank you for the invitation. I look forward to the conversation.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Agnew.

We move on to Ms. Cobden for five minutes, please.

[Catherine Cobden, President and Chief Executive Officer, Canadian Steel Producers Association]

Madam Chair and members of the committee, thank you very much for the chance to appear before you again as you undertake this very important study on Canada-U.S. relations.

I'm here today representing Canada's steel industry. My members produce 13 million tonnes of steel, pipe and tube products annually and support 123,000 jobs directly and indirectly across five Canadian provinces from Alberta to Quebec.

Canada's steel sector plays a strategically vital role in the North American economy. We are advanced manufacturers of a 100% recyclable and low-carbon product. We are a critical supplier to many key North American sectors, including the automotive, energy and construction sectors, and various general manufacturing applications. As you well know, we operate in a highly integrated marketplace with the United States.

We are a sector that knows first-hand how critical it is to maintain open access in the trading relationship between Canada and the United States. Access to that market is paramount for our industry; about half of what we produce in a year heads to the United States.

As context for my remarks, let me say that while the last year has been unprecedented in terms of market conditions, it's very [Technical difficulty—Editor]. Currently, as you well know, we are facing simultaneously the impact of supply chain disruption, omicron absenteeism, ongoing global overcapacity challenges and, last but not least, protectionism moves by the United States.

We're committed to working with the United States to expand trade and to strengthen the resiliency of our supply chains with our largest trading partner, but we cannot support measures that jeopardize the long-term global competitiveness of our industry and our industry's customers. Unfortunately, we are seeing a shift away from the spirit of the USMCA via buy America policies and softwood lumber. We have talked about a number of them here already. This trend is highly alarming and we need to take it seriously.

The CSPA in that vein encourages all levels of government to ensure that they are taking a comprehensive and coordinated approach in their dealings with the United States as we move forward. This is an approach where we both stand up for our interests, of course, but also seek to work together to address issues of common concern and mutual opportunity. For example, on the steel side, we share a deep concern for the growing and significant global overcapacity that we are seeing from a range of nations, particularly China, but also ASEAN, Iran, Turkey, etc. Global overcapacity translates to unfairly traded imports in the North American economy.

In this vein, there remains significant opportunity to demonstrate to our largest trading partner that our trade tools are keeping pace with the ever-evolving practices of unfair traders. [Technical difficulty—Editor] there is a widespread and growing problem with the circumvention of trade remedies. As a result, it is critical that we update our trade laws to ensure adequate enforcement. Tools such as anti-circumvention legislation and enhanced import monitoring are required to both protect our domestic market and show the U.S. that we're keeping pace.

Tangible steps can be taken in this regard. We must urgently implement the trade remedy modernization recommendations that were consulted on in the last budget. We hope that the detailed recommendations that we submitted this fall to the government are incorporated in budget 2022. They provide tangible and real-life examples of how we can seek stronger alignment between Canada and the United States and address key gaps in our trade measures that exist today.

Finally, the United States is introducing climate measures in all areas of its trade policy. Canada would do very well to note and engage early on this, as the outcomes could be very significant to the Canadian industry. Of particular note is the recent deal struck on climate between the U.S. and the EU on steel and aluminum. While many of the details of this agreement are yet to be worked out, it is a clear shift by the U.S. to deter trade with higher-carbon-emitting jurisdictions such as China.

Here, we see a potential opportunity for Canada. Given the successful environmental track record of Canadian steel producers and many other production capabilities in Canada, as well as some of the specific examples of our green track record, our goal to be net zero, etc., we believe we should not shy away from engaging with the U.S. and seeking alignment with them on climate trade matters. This may indeed become an imperative in the months and years ahead. I thank—

[The Chair, Liberal, Judy Sgro]

Thank you very much, Ms. Cobden. I'm sorry to interrupt.

[Catherine Cobden]

I was just going to thank you.

[The Chair, Liberal, Judy Sgro]

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

[David Adams, President and Chief Executive Officer, Global Automakers of Canada]

Thank you very much, Madam Chair.

On behalf of the 15 members of the Global Automakers of Canada, I appreciate the opportunity to appear before you today.

Our members include Canada's largest automaker, Toyota, which last year produced more vehicles than Ford, GM and Stellantis combined, and Honda, Canada's second-largest automaker last year, in addition to 13 exclusive Canadian distributors of their brand in our country. Last year, our members represented 62% of all vehicle sales in Canada and 65% of all light-duty vehicle production. Further, our members were responsible for providing 56% of the EVs to consumers who purchased them under the Canadian government's iZEV program.

As other witnesses have already alluded to in their representations before the committee, the protectionist actions currently being pursued on a variety of fronts by the American administration represent an existential threat not only to the softwood lumber and automotive industries, but to the broader Canadian economy.

With respect to our industry, the proposed EV tax credit included under the build back better bill, which is the subject of this committee's investigation, is very problematic. However, I would suggest that the mere threat of this EV tax credit has already had the desired effect from a U.S. public policy perspective by creating an uncertain economic climate that has encouraged more foreign direct investment in the United States, while largely freezing out the consideration of Canada as an investment jurisdiction.

Having been around this industry through the negotiation of the Canada-U.S. FTA, NAFTA and the recent CUSMA, what is clear is that trade agreements only work if the signatory parties support a rules-based international order by upholding the precepts of free and fair trade agreements to which their leaders have attached their signatures. The CUSMA/USMCA trade deal is less than two years old and already in the automotive industry we have two flagrant violations of the provisions of that agreement, which have strained our historically beneficial trading relationship with the U.S.

Where does that leave Canada? The reality is that policy-makers in the United States do not consider Canada and the effect of their decisions on our trading relationship. We are not on their radar screen, and Canada is caught right now in the geopolitical crossfire between the United States and China—and, to a lesser degree, Europe—when it comes to the issue of the new decarbonized automotive industry. The United States has fallen significantly behind those leading jurisdictions when it comes to both electric vehicle production and battery production, and is now in the fight of its life to ensure the key components of EVs and the vehicles themselves are built in America and sold to Americans. In this regard, Canada is collateral damage.

Looking more closely at the EV tax credit, one can observe that one component, the extra $4,500 credit if the vehicle is built in a union plant, is derivative of President Biden's strong union support from the UAW, which he will need to continue to curry favour with through this year's mid-term elections. On this issue, I will say only that many of my members' parent and sister companies produce EVs in non-union facilities in the United States. Not only does this provision discriminate against these companies on the basis of union representation, or the lack thereof, but it will create a significant hurdle for the President to overcome in reaching his own targets of 50% zero-emission vehicle sales by 2030 when only a small subset of the vehicles are eligible for the more robust credit.

On this issue, American legislators frankly see the inequity of the discrimination based on whether or not workers in America are represented by a union; it is far more difficult to get any American legislators to take up the mantle and argue against American taxpayers' money going to incentivize only vehicles built in the United States, aside from the fact that such a stance is offside American international trade obligations.

What should Canada do? Canada should act forcefully to ensure that the negotiated provisions of CUSMA are enforced, and explore all measures to defend itself against this flagrant violation. Canada, in consultation with the automotive industry, should consider all appropriate retaliatory mechanisms should the provisions of the EV tax credit reappear in a new build back better bill.

Canada should not seek a so-called carve-in for Canadian-built EVs, meaning that we should not accord EVs built in the U.S. with the same basic $7,500 incentive, an additional $4,500 if built in a union plant and an additional $500 if the battery is built in Canada. This is poor public policy. Two wrongs do not make a right, and Canada could expect to be challenged at the WTO for taking such a stance. Such an incentive would severely hinder Canada's objective of achieving 50% zero-emission vehicle sales by 2030 and 100% by 2035. It would also set up a significant competitive disadvantage for those not building zero-emission vehicles in North America to meet what we understand will be a mandated emissions target.

Also—

[The Chair, Liberal, Judy Sgro]

Mr. Adams, I'm sorry, but I have to interrupt you.

[David Adams]

I have one more point, if I could make it, Madam Chair.

It's just to reiterate what others have said, that Canada should prioritize the development and continuation of sustained relationships with all levels of the U.S. government, not just in crisis moments.

Thank you, Madam Chair.

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Adams. I know how important all these issues are for everyone.

We'll go on to our members. We have Mr. Lewis, please, for six minutes.

[Chris Lewis, Conservative, Essex, ON]

Thank you, Madam Chair.

Thank you to all the witnesses here this afternoon. Once again, this is fantastic testimony, and I appreciate it.

I have a lot of questions, and I'll probably only get through a few of them, but it's a great start.

My first question, Madam Chair, is through you to Mr. Adams.

Mr. Adams, I don't expect you to speak on behalf of Jennifer Safavian. I met with her a couple of months ago. She's with Autos Drive America. She said that a rebate incentive would only limit consumer choice. What are your thoughts on a U.S. rebate on U.S. EVs? What effect would that have on our auto trades and sales in limiting consumer choice?

[David Adams]

I think what you're asking, honourable member, is what impact it would have if Canada adopted that same type of incentive. If that's the question, then I think, as I said in my comments, that it would limit the opportunity for consumers to purchase vehicles, because a more robust incentive would only apply to a limited number of vehicles that would be built in Canada or the United States. That's at odds with Canada's other objective of getting more zero-emission vehicles on the road, especially under a zero-emission vehicle mandate, which the government is currently considering as well.