International Trade Committee on Feb. 9th, 2022

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Madam Chair.

Thank you to all the witnesses for being here. There are so many areas to go into and so little time.

Let's start off with the Canada-U.S. relationship. Maybe I'll start with Mr. Kennedy.

You made some comments about being proactive in the relationship and making sure that we're always there talking about the importance of the relationship and the mutual benefits of trade between Canada and the U.S. Do you want to highlight some of the things this could look like, like parliamentary exchanges, and any other ideas you may have in that regard?

[Trevor Kennedy]

I'd be happy to. I know that some parliamentarians did travel to the United States, I believe in December, which is a good example of what can be done on a multipartisan basis.

There's a great consul general network across the United States that's well plugged into state lawmakers, as well as their senators, congressmen and governors. It's about having a constant drumbeat of officials, labour, business and others speaking to people across the United States about the benefits of the relationship to make sure that, in the future, if there is another build back better program or something similar, there's at least an understanding that there's a Canadian element to that piece of legislation or whatever the decision happens to be.

As we saw with the USMCA negotiations, it's a matter of all hands on deck. America is focused on a lot of things right now, a lot of internal issues but also external, and we really need to do our part to make sure that Canada has at least a bit of attention, given its various focuses.

This is just to say that there's a lot we can do, and this moment is a good example. We are very fortunate to avoid—

[Randy Hoback, Conservative, Prince Albert, SK]

Mr. Kennedy, I only have five minutes. You made the point that I wanted you to make, for sure.

Mr. Agnew, you also talked about the importance of the relationship and what the U.S. Chamber of Commerce.... I've met with the U.S. Chamber of Commerce. Pretty much every time I go down there, I try to meet with them. With the interruptions we're seeing at the border, both at Coutts and in Windsor, we're starting to see backup now. For example, the packing plants at Cargill are saying they have a situation now where they have so much meat in the lockers they can't get it across the border.

What would you say to this government in regard to ending those blockades? What do you say in regard to vaccine passports and mandates, and what would your members say in regard to ending the mandates and seeing resumption of travel across the border?

[Mark Agnew]

I think there are two separate issues that I'll try to quickly touch on.

In terms of the cross-border travel rules, one thing that we've been quite concerned about, for example, is the requirements for the predeparture PCR test for fully vaccinated travellers, as well as the arrival test that people have to do if they are fully vaccinated. I think that is one measure.

With regard to the border blockade piece, we issued a statement yesterday with over 70 industry associations calling for all levels of governments to co-operate on clearing those blockades. When we talk about critical pieces of infrastructure, I think the Ambassador Bridge checks off as many boxes as you could possibly imagine for being important to the Canadian economy.

[Randy Hoback, Conservative, Prince Albert, SK]

Yes, I think we all want to see a peaceful resolution to the end of the demonstrations that are going on there, and we want to see some resolution with regard to travel across the border.

Mr. Agnew, when we talk about the relationship with the U.S. and looking at the U.S. side of things, where do you see potential to grow?

When I was down there in December, when I mentioned rare earths or lithium, their eyes just got big, because they see the future in that, and they hate the fact that they have to go to China to get it. Why aren't we spending more time talking about the things we can do to build the industry together, instead of always coming in when there's a problem?

[Mark Agnew]

I fully agree that we need to be proactive about it. The White House commissioned a bunch of supply chain reviews. The Canadian Chamber participated in the U.S. Department of Defense and Department of Energy ones.

The case that we continue to make is that we can't go there with a supplicant list of things that we want them to do for us. We have to make sure that we're talking about what we're doing and how it aligns with and supports what the United States is also trying to do, because it has to be mutually beneficial for both countries.

[Randy Hoback, Conservative, Prince Albert, SK]

I have one last question for Mr. Adams.

It's a very practical question for me as a parliamentarian. I have one dollar to spend. We want to see this industry thrive and we want to see it grow. Where do I put that dollar? Do I put it into the power companies to get you the plug-in for the electric car? Do I put it in the grid? Do I subsidize the electric car?

One conversation that hasn't happened across North America and needs to happen is how we're actually, practically going to put power in these cars. How are we going to plug them in? I have an older condo here in Ottawa that was built in the seventies. There is no capacity in that condo right now to allow electric vehicles to charge at night.

Where do I spend that dollar?

[David Adams]

It's a very good question. I think if you could find somebody to answer it, you'd be a rich man.

Really, I would divide the dollar up into three pieces. We need part of that dollar to go to infrastructure. That may, in some ways, be a more important piece than the incentive. We need part of that to go to incentives, and we need part of that dollar to go to education.

Those would be the three key pieces.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Adams.

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

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Madam Chair.

It's nice to see the representatives from the steel and aluminum industry here today. We have the best technologies in steel and aluminum, but there's a big “but” here. These industries export only to North American markets from the Canadian basis. The reason is quite clear. They are all foreign-owned and they consider Canada as just a branch. In the last 15 or 20 years, there's hardly been any increase in the installed capacity of steel industry, and maybe a small increase in the aluminum manufacturing capacity.

However, that is not the subject of today's discussion. We can approach it later.

Dr. Karim Zaghib, it's very nice to meet you. I've seen your background.

I have called for establishing a task force to develop and implement a comprehensive strategy for the development of mines, mineral processing, battery technologies, manufacturing batteries and battery cell packing. Obviously, we all know that China has taken the lead and some parts of Europe are also well established. The United States is catching up with a lot of investments. Eight to 10 multibillion-dollar investments in battery manufacturing are being implemented right now in the U.S. In Canada, we are catching up.

Luckily, we do have quite a bit of an advantage, I would say, in terms of minerals. As we know, with our lithium-ion or phosphate, we do have a lot of critical minerals. We have an agreement with the United States to develop this mineral base here. In the last budget, we did invest in the battery mineral centre of excellence. We also have knowledge in our country. As you know, the technology research and development done in the battery technologies at Dalhousie University partly contributed to the development of the batteries for Tesla and its advancement in this field.

Dr. Karim Zaghib, we all talk about developing mines, mineral processing, batteries, etc., but what do you think is happening in terms of the time required to develop these critical mines? Typically in Canada it takes many years for the process to go through. In the normal process, it could take multiple years. Have you seen any changes at the provincial level, whether it is Quebec or Ontario, or at the federal level to hasten the process of approval for development of new mines for these critical minerals?

[Dr. Karim Zaghib]

For example, in Quebec, there would be a task force with the ministers of innovation, finance, environment and energy together to accelerate and reduce the time of the permit and so on. We don't take 10 or 20 years to develop the mine. It's right now.

We saw it recently with Nemaska Lithium. Nemaska Lithium is a great example. It's joined between Investissement Québec, Pallinghurst, Livent and so on. They are going to accelerate and produce lithium in the next two years. We need to have this kind of task force in order to accelerate and help the permitting for environmental permits, construction permits, the land and so on. The mining is very important.

You are right about the technology when you spoke about lithium-ion technology coming from here. When we come to the circular economies—mine, active materials, cathode materials, cells and so on—we need to have a strategy on how to use the time and also—

[Chandra Arya, Liberal, Nepean, ON]

There's still no comprehensive strategy, whether from the federal government talking to the provincial government and the industry bodies related to mines or the technologies with the universities. So there's still a need to form a task force to look into this and implement a strategy.

[Dr. Karim Zaghib]

I believe so—

[The Chair, Liberal, Judy Sgro]

Please give a brief answer, sir.

[Dr. Karim Zaghib]

In Quebec, the strategy is well done, but I think the federal government and the provinces should work together as soon as possible.

[Chandra Arya, Liberal, Nepean, ON]

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll move on to Monsieur Savard-Tremblay for two and a half minutes, please.

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

Thank you, Madam Chair.

My question is for Mr. Kennedy.

On several occasions, you called for a firmer stance towards the United States. You were saying that we need to take an approach that treats it as urgent or a crisis. In short, you said we need to think about these issues every day and even go so far as to threaten retaliation. We know that there have been some threats of retaliation and that there was supposed to be a list of products published and that certain points in the Canada—United States—Mexico agreement should even be challenged.

Do you expect things to become more contentious?

[Trevor Kennedy]

If this is in response to the document that was released late last year, I think in certain circumstances Canada does need to take a strong position, and we saw that in previous instances that affected some of the other industries that are here today. In a moment like now, when Canada has the opportunity to be proactive, we can present more of an opportunity for collaboration. It is always a matter of having a balance between different options and constant engagement and making sure we're ready for anything that comes up.

There are many things the Biden administration and members of Congress have proposed or discussed that we should be concerned about and be prepared for. I think we all have different things we're thinking about, and to the extent that we're ready for that and thinking about how we would respond in the event that things don't go as planned, it would be helpful.

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

What forms of retaliation do you think should be on the table? What kind of response would be appropriate?

Are there any specific measures you would be prepared to advocate in this area?

[Trevor Kennedy]

As I mentioned, through the USMCA, we have an enforceable agreement, which is unique for Canada as well as for Mexico, in the sense that many of the U.S.'s major trade partners can't receive a resolution with the dysfunctional appellate body at the WTO. We're fortunate in that sense to have that as an option available to us. At times, we do need to communicate that when there's harm to the Canadian economy, especially when it violates part of a trade agreement we have, there are consequences for certain sectors in the United States and certain congressional districts, for instance.

I don't think that's how we should start the conversation; that's really the last option at the moment.

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Kennedy.

We go on to Mr. Masse for two and a half minutes, please.

Is Mr. Masse still with us? I don't see him, so I'm going to go on to Mr. Lewis for five minutes, please.

[The Clerk of the Committee, Ms. Dancella Boyi]

Madam Chair, I'm sorry to interrupt.

There was a slight change in the speaking order. Mr. Martel will take the floor next.

[The Chair, Liberal, Judy Sgro]

Mr. Martel, I understand there's been a change in the order.

Mr. Martel is up for five minutes, please.

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

I have another question for Mr. Zaghib.

I would definitely like Canada to be much more independent in certain sectors. How do you feel we could make Canada more independent in the supply of key materials needed for batteries and in the local production of batteries and electric vehicles?