Evidence of meeting #17 for International Trade in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was need.
A recording is available from Parliament.
Liberal
Steeve Lavoie Liberal Beauport—Limoilou, QC
To increase production capacity at the U.S. plant, but not here in Quebec.
Co-President, Garaga
For now, no, because we’re going to relocate 30% of our production to the U.S. once the project is completed.
That’s why it’s crucial for us to recapture production volume in Canada from our U.S. competitors who sell in Canada. That’s critical to protect our production volume and our jobs in Canada.
Liberal
Steeve Lavoie Liberal Beauport—Limoilou, QC
I see.
Earlier, you mentioned that you need help from the government.
If you were to get help and money tomorrow morning, where and how would this money be invested?
Co-President, Garaga
We don’t need money; we need your help. You announced some measures, but we need HS codes to determine where we stand. We need a workforce—
Liberal
Steeve Lavoie Liberal Beauport—Limoilou, QC
Can you describe what you mean by “HS codes” to make it clear to the average person?
Co-President, Garaga
Last week, the government announced 25% tariffs on steel derivative products. There are harmonized system codes on some products, and customs officers ask what these products are. That applies to large categories of products, but we don’t have the details. We need the details to determine which products the codes apply to so we can implement a good strategy that will help us move forward.
With respect to the workforce and temporary foreign workers, it’s difficult to invest without a workforce. It’s really a matter of providing clarity and stability so we know where we stand.
We really assumed that tariffs were here to stay, unfortunately. Perhaps we were pessimistic, but we felt we had to adopt a strategy just like in a new sport. We have to adapt the business to this situation.
Liberal
Steeve Lavoie Liberal Beauport—Limoilou, QC
How would you adapt?
I don’t know if you know this, but I was a banker in my former life and our favourite term was “predictability”. Our goal was to ensure predictability for businesses. When we extended business loans, our priority was to ensure the business could remain sustainable.
These are uncertain times and this is not going to change in the near future. The question is: What tangible steps can be taken now, instead of waiting for things to become predictable again?
Things may never be predictable again. We don’t know. What can be done?
What can businesses do?
How can the government work with you to ensure that despite this unpredictability, we continue to move forward, improve productivity, enhance processes, and open and diversify markets without waiting for predictability?
If there is predictability, well and good, but as we used to say, a banker hopes for the best, but prepares for the worst.
How can businesses prepare for the worst?
Co-President, Garaga
It’s not complicated for us. There are 200 million American garage doors coming into Canada. Let’s impose 50% tariffs as Americans did with us, and we’ll do the rest. That’s all we’re asking for. The HS codes the government announced last week need to be confirmed. My understanding is that the measure will come into effect on December 26.
If we can confirm that garage doors are affected, we will ask all our sales teams to call all customers that purchase from Americans to tell them they will pay 50% effective December 26. We will advise them to buy their doors from us in Canada instead of buying them in the U.S.
That’s the key support we need. There was a suggestion that there are $10 billion in imported derivative products. The government must have the codes.
Liberal
The Chair Liberal Judy Sgro
Thank you very much.
Thank you for the very valuable testimony from all of three of you. We appreciate your time.
We will suspend while our other panel comes to the table.
Thank you.
Liberal
The Chair Liberal Judy Sgro
I call the meeting to order.
We have with us, from Nuvation Energy, Michael Worry, chief executive officer. From the Surrey and White Rock Board of Trade, we have Joslyn Young, chief executive officer.
Welcome to both of you. Thank you for taking the time to appear today.
Mr. Worry, I invite you to make opening remarks of up to five minutes, please.
Michael Worry Chief Executive Officer, Nuvation Energy
Thank you.
Madam Chair and members of the committee, thank you for the opportunity to appear today.
My name is Michael Worry. I'm the CEO, CTO and founder of Nuvation Energy. Founded in 1997, Nuvation designs and sells battery management systems. All of our design and manufacturing are right here in Ontario. These are the control electronics at the heart of modern energy storage systems.
A battery energy storage system uses large batteries to capture electricity and store it for later use. Energy storage assets help meet peak demand and reduce the need for generators to increase power output.
Fundamentally, energy storage is needed for grid reliability and stabilization. It is also required for the growth of artificial intelligence. AI has very high uptime requirements as well as large power fluctuations, so these AI data centres require energy storage, and the grid was not designed to handle that.
Canada's energy storage market is expanding at extraordinary speed. Between 2019 and 2024, national capacity grew by nearly 192%.
I'd like to highlight that last week, the Minister of National Defence, the Minister of Public Safety and the Communications Security Establishment issued a joint advisory warning that foreign adversaries are targeting critical infrastructure across “power, water, health, finance and transportation”.
For those of us building these systems every day, this was not new information. Modern energy systems depend on relatively small and inexpensive control electronics that regulate power, manage batteries, connect to the cloud and interface with the grid. These components, which are the kinds of things that Nuvation makes, are the brains of the system. Today, too many of these originate from suppliers aligned with countries whose behaviour poses serious national security concerns.
Canadian companies in this sector face pressure on two fronts. First, foreign state-backed competitors export control electronics at artificially deflated prices that no Canadian manufacturer can sustainably match. Second, tariff uncertainty means that we increasingly cannot offer the price certainty needed to win U.S. contracts as their integrators look to us as a secure option to protect their infrastructure.
The result is a catch-22: We can't win in the United States because of pricing uncertainty, and we can't win in Canada because ultra-low-cost foreign products win our own procurements, leaving both countries vulnerable to high-risk components.
Even when governments try to select Canadian suppliers, origin loopholes and white labelling allow foreign manufacturers to route their products through Canadian or allied intermediaries. Under CUSMA's point-of-origin standards, final assembly here can legally qualify a product as Canadian-made, even when the most sensitive components come from elsewhere.
It's important to note that not all components carry the same risk. We should focus our emphasis on the high-risk components to match up supply chain realities and protect our energy storage industry. For example, a battery cell is a relatively low-cost commodity. However, control electronics, inverters, firmware and communications hardware are high-risk components because they enable remote access, remote updates and deep visibility into system operations. If compromised, these devices can allow a foreign actor to harvest sensitive operational data, disconnect equipment from the grid or even trigger a lithium battery fire.
The reality is that there are a wide range of examples that I'm happy to give during further questions. Sometimes these are large marquee attacks, and sometimes we're seeing foreign adversaries attack even fairly small examples.
The challenge is about to scale up dramatically. The Prime Minister has announced plans for a national east-west electrical grid, which is awesome, but if such a project proceeds under today's procurement and origin rules, we actually risk embedding those same vulnerabilities across the entire backbone of Canada's future energy system. A national grid could be a generational opportunity or the largest expansion of foreign-controlled access to our infrastructure that Canada has ever seen.
Ontario has already been in great action. Bill 5, Bill 40 and Bill 72 give the province the authority to restrict high-risk foreign suppliers, require economic resilience considerations in procurement and prioritize Canadian products, but most provinces and municipalities lack the resources or expertise to address these risks, so federal leadership is essential.
Our recommendations are the following.
First, enact a mandatory national security review for public procurements involving control electronics, inverters or grid-connected systems to identify and exclude high-risk components from foreign adversaries.
Second, to ensure Canadian industry can still source what they need, distinguish between high-risk components and low-risk components in any policy change on this issue.
Third, improve point-of-origin definitions for critical infrastructure components, whether within CUSMA or otherwise, so that adversarial suppliers cannot hide behind a simple final assembly.
Fourth, audit existing installations of grid-connected control electronics to identify vulnerabilities that are already in place.
Chair and members, Canada's energy transition and the rapid growth of our data centre and AI economy cannot be built on control systems that we cannot trust. Canadian companies cannot scale without being undercut by state-supported imports priced to buy access to infrastructure rather than to compete on innovation.
Last week's advisory made it clear that compromised supply chains are a cybersecurity threat. We must move from telling operators that they should prioritize security to giving them the policy and legal tools to do so.
Thank you, and I look forward to your questions.
Liberal
Joslyn Young Chief Executive Officer, Surrey and White Rock Board of Trade
Thank you, Ms. Chair and members of the committee, for the opportunity to speak with you today.
I'm here to offer the perspective of Surrey and White Rock, one of Canada's fastest-growing and most strategically important economic regions.
Surrey's geographic and economic scale is significant. Our city is large enough to hold Vancouver, Burnaby and New Westminster combined, with substantial land left over. That size translates directly into national economic value. Surrey accounts for roughly 22% of metro Vancouver's industrial land at a time when job-enabling land is scarce across the region.
We also anchor one of North America's most strategically positioned logistics corridors, stretching from the U.S. border to the Fraser River and connecting into rail, road and marine networks that support the Pacific gateway. Our employment concentration in transportation and warehousing is 60% higher than the regional average, underscoring our central role in goods movement. We are culturally diverse and speak over 100 languages, connecting us to economies around the world.
We welcome measures announced in budget 2025 under the One Canadian Economy Act agenda. These commitments will support economic resilience, advance key sectors and help Canadian businesses diversify beyond traditional markets. More than anything, what we need is a stable trade environment in order to reach our collective goals.
A recent policy resolution we authored has already influenced measures like supply chain diversification, the reduction of interprovincial trade barriers and stronger SME supports. However, with 64% of businesses reporting cross-border uncertainty as a major concern, many are adjusting productions, delaying investments or considering relocation. Many of the SMEs in our region do not have the capacity or desire to scale up rapidly. Others wish to expand but are constrained by uncertainty, rising costs and the risks associated with entering new markets.
We have heard directly from local businesses about the profound impact of tariffs, from the small nail salon that can no longer afford to import special packaging they relied on to a large paper product manufacturer with $100 million in sales annually that has acted swiftly to reduce its reliance on U.S. imports by 30%.
CUSMA remains the cornerstone of North American economic stability. Our national resolution highlighted that unpredictable trade actions can undermine competitiveness, cause layoffs and discourage further investment. The upcoming review is, therefore, not just a procedural exercise. It is a chance to reinforce predictability, strengthen integration and ensure that the agreement continues to work for businesses on both sides of the border.
Drawing on what we've heard from SMEs and on the recommendations endorsed nationally through our resolution, several priorities should guide Canada's approach.
These include a stable, tariff-free North American marketplace. Tariffs on key Canadian industries drive up costs and disrupt supply chains. Canada must continue pushing for the removal of unfair tariffs, establish a clear trilateral process to prevent new trade disputes and use proportionate responses that defend Canadian interests without hurting our own industries.
We also need to modernize chapter 16. The list of eligible professional occupations has not been updated since the 1990s and no longer reflects today's workforce. Expanding it to include modern sectors like tech, finance and the creative industries would remove barriers for businesses and strengthen North American labour mobility.
Third and final, we need to stand up for all people. CUSMA currently includes limited protections for women, gender-diverse groups and indigenous peoples, leaving barriers to participation and equitable benefits. While the U.S. has moved backwards in this area, in Canada we know that our diversity is our strength. We recommend that Canada use the review to strengthen protections and ensure meaningful consultation with impacted groups.
As you consider Canada's position heading into the CUSMA review, I encourage you to look beyond macroeconomic indicators and consider the very real human impact of trade instability on the SMEs that form the foundation of our economy. We need businesses of all sizes, of all types and from diverse groups of people to be productive and resilient for our nation to prosper.
Surrey and White Rock stand ready to contribute to a strong and competitive marketplace. With proactive leadership, Canada can protect its economic interests, support its business community and strengthen its position on the global stage.
Thank you for your time. I look forward to your questions.
Liberal
Conservative
Adam Chambers Conservative Simcoe North, ON
Thank you, Madam Chair.
Thank you to our witnesses for appearing today.
Mr. Worry, thank you for some sobering testimony.
You mentioned countries—plural. Can you indicate which countries we should be concerned about? I assume the CCP is one. Are there other countries?
Chief Executive Officer, Nuvation Energy
It's a great question.
Usually, when we talk about foreign adversaries, really we're talking about the CCP.
In the U.S., it's often enumerated as China, Iran and other various countries like Russia, but if we look at what's impacting energy storage, we're really talking about the CCP.
Conservative
Adam Chambers Conservative Simcoe North, ON
Did I hear correctly that you can trigger a lithium-ion battery fire?
Chief Executive Officer, Nuvation Energy
That's correct.
This is the sobering risk that we're talking about here. For example, Nuvation makes battery management systems. The key job of a battery management system is to manage the battery and prevent a lithium battery fire. In the same way that it is designed to prevent a lithium battery fire, that could be manipulated by a bad actor, in order to cause a lithium battery fire.
December 1st, 2025 / 4:45 p.m.
Conservative
Adam Chambers Conservative Simcoe North, ON
An example would be that it would allow it to overheat, or they would take out some of the safety precautions or override them somehow. Is that what you're getting at?
Chief Executive Officer, Nuvation Energy
That's correct.
If it's a battery management system that came from a foreign adversary and they embedded, in advance, an Easter egg to be able to provide false data injection, they could, for example, provide inaccurate data during charging, which would result in the battery overcharging. That would result in a lithium battery thermal runaway.
Fundamentally, the battery management system is there, at the functional safety level, called UL 1973, in order to keep the battery safe. Fundamentally, if your safety system is compromised, then you don't have a system safety at all.
Conservative
Adam Chambers Conservative Simcoe North, ON
Do you have examples of this potentially occurring or how some of these have been manipulated by a foreign adversary?
Chief Executive Officer, Nuvation Energy
Sadly, this is not a theoretical situation. This has become an alarming reality.
As an example, there were a variety of Deye power conversion systems. Deye is a Chinese power conversion system. There was actually a firmware update that was done that resulted in a large number of these systems going off-line. That, in and of itself, was not a state malicious attack, but it demonstrates that inside energy storage, it's highly common that these systems can be remotely accessed.
Many of the systems that Nuvation has in the field can be remotely accessed. For a trusted partner, that is a useful tool, because it is helpful to tune the system, configure it and have it operate well. However, for a bad actor, that supply chain security is a substantive risk. That system can be taken off-line and even cause structural damage.
Conservative
Adam Chambers Conservative Simcoe North, ON
Did you follow the 5G wireless discussion in Canada?
There seem to be some parallels here. Is that correct?
Chief Executive Officer, Nuvation Energy
Yes, so imagine this was Huawei, with a large lithium battery attached.
Conservative
Adam Chambers Conservative Simcoe North, ON
I assume the state of adoption of this technology is increasing as well. Is that correct?