International Trade Committee on Feb. 9th, 2022

[Dr. Karim Zaghib]

I believe, as I said, on the minerals, we should have hard negotiations, and this is very important because they depend a lot on our minerals, especially for EV vehicles. It can be for the motors, it can be for the batteries, it can be for bodies. Also, we need to be sure that we are taking them....

Beyond that, I said not only minerals. We have the technology, and we have the human capital, so three of them. I think this is a very interesting strategy, that if we are negotiating with them on this one, we say you cannot get our lithium; you cannot get our nickel or cobalt; you cannot get our patents or technology. IP is very important. The patents are very important. So—

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Zaghib.

We have Mr. Martel for five minutes, please.

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

Good afternoon, everyone.

My questions are for Mr. Zaghib.

Mr. Zaghib, I found your exchange with my Bloc Québécois colleague interesting and would like to hear more from you on the question of phosphate.

There are several advantages to lithium iron phosphate batteries, including their lifespan, efficiency, and light weight.

In view of everything I've seen, why is phosphate not yet considered a critical mineral in Canada?

[Dr. Karim Zaghib]

With respect to iron phosphate, the priority is to have the safest battery. There has recently been talk about lots of safety recalls because of fire risks. We have this technology in Quebec and Canada. Phosphate production should quickly be channeled properly because it's not only used in batteries, but also food safety. There are numerous applications. Quebec and Canada should become producers of both phosphate and iron. Phosphate should not only be on the critical minerals list, but also be considered critical for national security, because it is used for energy and food.

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

In Saguenay—Lac-Saint-Jean, we have a mining company called Arianne Phosphate. It's also very high quality phosphate, and people know it.

Why are we not investing in lithium iron phosphate batteries when we have the resources to do so?

[Dr. Karim Zaghib]

I'll give you an example. A few weeks ago, Elon Musk, the owner of Tesla, decided to use iron phosphate in most of his vehicles.

Even though iron phosphate technology was not invented by China, it has been using it since the 2010 Olympic Games. Iron phosphate is now considered critical for national security in China. We need to develop a strategy, with financial statements and things like that, to enable all the provinces, and not just Quebec, to work together to make iron phosphate the national flagship of the mining sector.

As I was saying, phosphate has many applications. It's not only for batteries, which contain only a small quantity. It can be used for fertilizer, food safety and all kinds of electronic applications. A little earlier, we were talking about electronics. We need to bring back the electronics foundries, because phosphorus can be used for silicon doping.

It has all kinds of potential applications.

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

Mr. Zaghib, in an interview on the 1^st of October, 2020, You mentioned that Quebec was in a good position because of its natural resources. At that time, you were expecting Canada to have several lithium battery production plants within three years. I'm sure you know where I'm going with this.

And yet today, the only plant is expected for 2023. Why has the Canadian government been so slow in building processing facilities?

[Dr. Karim Zaghib]

I spent 36 years of my life working in the field of lithium-ion batteries. As I said earlier, I think that campuses are needed. Land needs to be provided or supplied on a turnkey basis. Support is needed for the rapid installation of plants, as the Chinese, Koreans and Japanese are doing.

My view is that money needs to be invested. The minimum should be 50% to speed things up. A bold strategy is required and the government of Canada, together with the provinces, needs to have the courage to speed up the energy transition in Canada, particularly with respect to batteries.

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

Mr. Zaghib, how do you think we could make Canada's critical minerals and supply chain indispensable to the manufacturing of batteries and electric vehicles, particularly in partnership with the United States?

[Dr. Karim Zaghib]

My view is that the United States needs us.

As I was just saying, we need to talk to the United States. I'm not ungrateful. For 27 years of my career, nearly all of my research projects were funded by the United States Department of Energy. The Americans are receptive, but we need to find the right government intermediaries who want to work with Canada.

We have the technology and we have the ore. They should come here. We're not there simply to supply resources. We need good intermediaries, solid committees with more people, and not just the general public…

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Zaghib.

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

That's very interesting, Mr. Zaghib.

[The Chair, Liberal, Judy Sgro]

We'll now go to Mr. Miao for five minutes.

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you, Madam Chair.

A few of you may have heard from a large range of stakeholders on the Canada-U.S. issue.

I'd like to address this question to you, Mr. Agnew. In your role at the Chamber of Commerce, would you say that the EV industry has the potential of being one of the biggest threats to the Canadian economy?

[Mark Agnew]

I'm sorry. Just to clarify the question, are we talking about the EV tax credits or the electric vehicle industry as a whole?

[Wilson Miao, Liberal, Richmond Centre, BC]

I think as a whole, but also with regard to the EV tax credit.

[Mark Agnew]

Maybe I'll talk about the EV industry as a whole. I think the answer is that there's absolutely tons of potential. I think Mr. Zaghib talked about this in his remarks.

When we talk to our members about the potential opportunities here in Canada, there's a major juxtaposition that we can make to our benefit, particularly against markets such as China. These are markets that are not reliable and stable sources of supply, whereas we have a lot of these products in the ground. I think we need to do a much better job of getting them out of the ground and promoting the Canadian advantage, whether you want to call it a geo-economic advantage or a natural resources advantage.

There's a lot of potential there. I think we can go to our allies—not just the United States, but the G7 and other western industrialized nations—to really promote the strength of our domestic rare earth and critical minerals industry.

[Wilson Miao, Liberal, Richmond Centre, BC]

As you've also mentioned about the EV tax credit, many stakeholders and industries have been quite vocal on it, and some of them are pretty actively engaging with their American partners to voice their concerns. In picturing the impact that this bill could have on U.S. operations, do you think the Chamber of Commerce has any other engagement with its counterparts? What are their responses on that?

[Mark Agnew]

Yes, certainly. On the whole host of buy American issues, we always engage a lot with our colleagues at the United States Chamber of Commerce. The U.S. Chamber of Commerce, I think, is our best business ally in the beltway in Washington, D.C., and certainly the U.S. chamber has traditionally taken a very strong line on any type of buy American measure, because they generally do believe in and support the importance of cross-border trade.

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you, Mr. Agnew.

I'd like to open this question to anyone else on the floor as well.

[David Adams]

I guess your question was whether or not the EV tax credit, as it's currently outlined, is problematic for the Canadian industry.

[Wilson Miao, Liberal, Richmond Centre, BC]

Yes.

[David Adams]

We would say that it is, because, if the intention is for the Canadian industry to produce some of these zero-emission vehicles that the government wants the whole industry to sell—50% by 2030 and 100% by 2035—then yes, we could certainly sell those in Canada, but the reality is that most of the plants in Canada, if not all of them, are currently structured to export 80% or 90% of their production to the United States, so if we're at a $12,500 cost disadvantage in shipping EVs into the United States, it's fundamentally problematic for the Canadian industry.

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you, Mr. Adams, for that answer.

That's all, Madam Chair. Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

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