International Trade Committee on Feb. 9th, 2022

[Dr. Karim Zaghib]

Take the Quebec government, for example. Quebec has made a $10 billion five-year investment through an initiative.

We need to bring investors and the manufacturing industry back to Canada. Government should also put up 50% of the financing, as the United States, China and other countries are doing.

We need to assist companies that set up here by offering up to 50% financing, which would be shared by the federal government and the provinces. We have to provide them with turnkey sites and find them clients. Clients are very important. We need to ensure that existing companies transform gas-powered cars into electric cars.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

You mentioned the policies we could adopt here, and that's all well and good. It's important for us to do that. However, as you know, the Canadian government and the U.S. president, Joe Biden, have reached an agreement on strategic minerals.

Should we take that further and, for example, implement a more powerful and assertive strategy for batteries? Do you think the Americans trust Canada despite the build back better plan's policies on the sale of electric vehicles?

[Dr. Karim Zaghib]

Earlier I talked about securing the green supply chain. In a way, Canada is the backbone of this effort because all the necessary minerals can be found here. However, those minerals have to be processed. We mustn't sell off our minerals cheaply; we need to do both primary and secondary processing. We can opt for what are called active anode and cathode materials or for cells. We mustn't take raw nickel or iron, for example, and process them.

Job creation is important in Canada. We're becoming an equal partner with the United States. The idea is to join forces and act as a counterweight to Asia. We can't disregard the fact that most battery manufacturing and the electrification of transportation is being done in China, Korea and Japan, not the United States or Canada. Consequently, we have to work together in complementary fashion.

Furthermore, as I explained earlier, we also have to consider the green circular economy when it comes to minerals. We mine them and process them, but you can't forget recycling. We need to strike a balance between urban and natural mining.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you for that clarification.

If my understanding is correct, you're telling us that Canada nevertheless has to step up its efforts to establish a position of strength and to be considered more as a partner by the Americans when we negotiate with them.

[Dr. Karim Zaghib]

Yes, I entirely agree. Canada confirms that it has the critical minerals, human capital, intelligence and technology. Earlier I mentioned iron phosphate, which is used today by Tesla and other companies around the world. That material originated in Quebec, in Canada. We've had the technology for 27 years.

The solid-state battery also originated in Quebec, in Canada. So we have…

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Zaghib.

I'm sorry, Mr. Savard-Tremblay. Your time is up.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you, Madam Chair.

[The Chair, Liberal, Judy Sgro]

We will move on to Mr. Masse, please.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair, and thank you to the witnesses for being here.

This is actually a really good time, for those who aren't aware.... Madam Chair, you've heard this many times before, and Mr. Hoback has as well. I want to thank you for the work on a new border crossing. If I go to my right-hand side here, I can walk for 20 minutes and be in front of a major demonstration that's taking place and shutting down the Ambassador Bridge. If I go the other way for about three minutes, it's the international tunnel between Windsor and Detroit.

What gives me great concern right now is that we do all this work to try to attract investment and so forth, and then we see destructive practices taking place. The Stellantis plant is down again. Not only did we have a shortage of microchips these past couple of years, which has been a significant problem, but the production and the supply chain have also been disrupted.

I'm going to ask Mr. Adams to start, and I would invite any other witnesses to chime in.

Do they have any other ideas, alternatives or suggestions? We're trying to build redundancy...and I want to thank the chair and Mr. Hoback. How many meetings have we had with the United States to get a new border crossing? My first public meeting was in 1998 at Marlborough Public School. How many congressional and Senate rooms were we in to fight back to get it?

What can we do better with regard to providing redundancy in our supply chain or management practices for our border? Even if we fight to get some of this new green technology with EV batteries and so forth, if we're not going to have a solid supply chain.... How can we improve that right now to make things better? Obviously, the current status quo is failing us.

[David Adams]

Thanks very much for that question. I appreciate it.

You hit on one of the key points. I think I've been around as long as or longer than you have, and the Gordie Howe bridge has been the topic of conversation for a while. Once that structure gets completed—we're talking about 2024 or something like that, finally—I think that will provide a level of redundancy.

At the core, we really need all Canadians to operate under the rule of law. I think right now we're seeing too many places across this country where some Canadians are not operating under the rule of law. They're affecting not only businesses, but the lives of individual Canadians. This is very problematic.

From an automotive perspective, what you're also seeing is companies beginning to rethink just-in-time delivery as well, because of the chip shortage you mentioned and because of other supply chain issues that have occurred. I think they're starting to recognize that they need to perhaps bring more components and whatnot closer to the assembly facilities and move away from single-source supplying to a certain extent.

That would be my comment. Thank you for the question.

[Brian Masse, NDP, Windsor West, ON]

Thank you.

I remember the days when I was working in plant three and plant six—they don't call it that anymore—of the Windsor Assembly Plant, where you'd actually have two days' stock behind you, right on place. Those days are gone now.

Would anybody else like to comment on this? I can't read the room for the people at home. I just want to open it up in case those who are online want to mention something.

[Catherine Cobden]

I think it's a really important question, especially when we're dealing with what we're dealing with today in this real-time moment. We do need to look at this.

In addition to border management, both physical and access, I think I would ask you to please keep in mind some of the other types of border measures that we need to take care of. Unfair trade practices into our nation continue at pace. We are seeing unprecedented levels of unfairly traded imports right now. I'm just asking for a broad view of borders—not to deter or detract from the importance of this moment in time.

[Brian Masse, NDP, Windsor West, ON]

That's a good point. You have all kinds of knock-offs and other types of things. We looked at this before at the industry committee, so thank you for that point. It is something that's really...and also changing some of the ways in which CBSA officers can detain different materials and so forth. It's a really good point, so thank you.

Go ahead, Mr. Agnew.

[Mark Agnew]

I would just say that there are a lot of measures, depending on the sector you're talking about. Some are short-term and some are long-term. I can give you two examples of trade-facilitating measures. One [Technical difficulty—Editor] they're looking at new deployments of IT platforms later this year. Industry doesn't think they're ready for prime time. I think not layering on things that will further compound the situation is one thing that the government can tangibly do to help companies that are involved in trade.

Another, for instance, is around export permitting. This is a difficult thing for companies that need to export controlled goods. Again, having the expedited issuing of those permits would certainly help companies that need to plug into global supply chains.

[Brian Masse, NDP, Windsor West, ON]

Thank you.

Madam Chair, if I disappear during the meeting, I mean no disrespect to our guests. I'm dealing with the issue down here. I may not be able to stay for the whole meeting. I apologize for that. If I disappear, I really don't want to disrespect our guests here today. I will go back through the Hansard later.

I just wanted to make sure that was clear.

Thank you very much to our witnesses.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Masse. I wish you good luck. We're all very concerned about the issues at the bridges as well. We'll all be keeping our fingers crossed to get that solved.

Go ahead, Mr. Patzer.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thank you very much, Madam Chair.

I'm going to start with the Canadian Steel Producers. I was just looking through a list of LNG projects that have been cancelled around the world. Of the 11 largest projects, eight were in Canada. I'm just curious to know, for your member companies, how big an impact that has had, seeing that many potential projects cancelled that would be looking to you as Canadian pipe.

[Catherine Cobden]

I can't state enough how challenging things have been in the energy sector. Of course, the steel industry relies on the energy sector as a key customer. We're working in lockstep together to do what we can to green their supply chain for them through our aspects and also what they're up to.

There is no doubt that Canadian steel in these projects—whether it's an LNG project or anything, frankly, a bridge project or what have you—is fundamental to the lifeline of the communities [Technical difficulty—Editor].

So thank you for the question. Yes, I do agree that these things are challenging for us.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

I'm wondering if you could comment on how much more environmentally friendly Canadian steel is over our competitors' steel. I'd like to think specifically about Evraz steel, which is in Regina. Upwards of 90% of their steel is actually recycled.

I'm wondering if you could comment further on how much more environmentally friendly our steel is in Canada.

[Catherine Cobden]

I'm very proud of the track record of the Canadian steel industry. It is great to hear the Evraz story. The Evraz story is replicated across the country.

I will say that third party reports, many of them out of the United States, are pointing to Canadian steel as the greenest in the world. As I mentioned, we're first and second in the world for our two production types. These are detailed third party engineering studies that really determined that the Canadian steel industry is doing a great job of producing some of the greenest steel in the world. We're very proud of that fact.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Last of all, do you have any statistics that you could present to us, either right now or maybe in a submission later to the committee, about how much lower global emissions would be if we used more Canadian steel instead of importing steel?

[Catherine Cobden]

Again, I can get you some more statistics, but honestly, this is a huge opportunity for our country and, frankly, for North America.

Back to the context of Canada-U.S., the North American industry has a lot to be proud of. If we were to strengthen our North American steel relationship and deal with unfair traders, I think we would save an awful lot of CO2.

We can give you some specific numbers of what “an awful lot” means, but definitely it is a big number.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

That's awesome.

Yes, if you could submit those to the committee, I would greatly appreciate that. Thank you.

I'm going to switch my focus over to Mr. Zaghib.

I'm just wondering if you could share your thoughts on where Canada is at for developing critical minerals domestically. I ask because I've heard a lot from industry and others about excessive timelines for approval getting in the way, as well as some upcoming potential tariffs under CUSMA with regionally sourcing lithium for EV batteries. I'm just wondering if you have any comments on that.

[Dr. Karim Zaghib]

I believe you are right. I think the basis of lithium-ion is the lithium. I think we already have lithium in Canada, so we can transform it here. Right now we can make lithium carbonate or lithium hydroxide, and I believe it is made and transformed here in Quebec or in Canada. I do not think there are any issues about CUSMA.

This material becomes critical. I believe it is better if this material is put into cathode active materials and can become a precursor also, like raw materials. In order to sell these kinds of material, maybe we should add value to make with this material electrodes, or cathode materials like iron phosphate or NMC or NCA—nickel cobalt aluminum—with lithium batteries.

This is critical, and I believe right now we can see that lithium is the triangle of South America—Chile, Argentina and Bolivia—which is mainly dominated by the U.S.A. and China. I believe we have six mine sites here in Canada. We should really accelerate and help them develop the materials as soon as possible.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thank you.