Natural Resources Committee on April 12th, 2021

[Dan Blondal]

As a technology company, we're developing the methods to make the cathode materials. We source it from any number of different areas. We're not using large volumes of it in our laboratories right now. We are not aiming to be a producer. Rather, we are a technology provider. It would be our customer who would then source large volumes of lithium, cobalt, nickel and manganese from various areas.

Primarily, the bulk of the world's lithium is coming out of a central few areas in the world. It's going to be coming out of South America, from Chile and Argentina. There's obviously a lot of lithium coming out of China and Australia as well, and quite possibly Canada, if we can get our lithium production up to the volumes we need. [Technical difficulty—Editor] in terms of where it comes from.

We would prefer to see it coming from Canada. We would prefer to see cathode production happening in Canada. We believe we can make it not only more efficient, but we can also help to drive down some of the costs of converting lithium into a battery-ready material, because our process simplifies the in-between processes.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

As a follow-up to that, what level of coordination and partnership are you having with some of the Canadian EV manufacturers and other companies involved in the supply chain?

[Dan Blondal]

The bulk of our coordination is happening with the large multinational OEMs. We have relationships with the large American, European and Asian OEMs on the automotive side of things.

We also work upstream with the miners. That would include a number of the critical miners around the world. On the metals side, that's what used to be the Canadian company, Inco, which is now Vale, Russian entities like Nornickel, or Australian BHP. That's the metals side of things.

On the lithium side of things, we have a relationship in Chile with the Chilean government, working with its lithium producers.

[The Chair, Liberal, James Maloney]

Thanks, Mr. Blondal. I'm going to have to stop you there.

Mr. Simard, we'll move over to you.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

My colleague Mr. McLean's remarks today give me a little more insight into why Conservatives believe that climate change does not exist. That said, I would just like to point out to him that over the last four years, $24 billion has been allocated to the oil and gas industry, and if transportation electrification ever gets one-twentieth of that money, I will be the happiest man in Quebec.

The next question is for Mr. Cleary.

I thought that your project, here in Saguenay-Lac-Saint-Jean, would be developed around 2019, but it has been pushed back. There is the context of COVID-19, but I would like to know why your project has not been started in Saguenay-Lac-Saint-Jean.

[Sean Cleary]

We've been working on environmental permitting, and that's largely completed. We have a certificate of authorization for both the mine, which is located near Chibougamau, and the metallurgical complex in Saguenay. There are a lot of conditions tied to responsibly developing this project from an environmental perspective. Funding for these projects, which are large, is difficult. Capital is scarce.

As I mentioned in my presentation, the area of critical minerals for the large part, especially niche minerals like vanadium and titanium, which are on the critical minerals list, are not well followed by the capital markets. This has to be financed privately and with public-private partnerships. We've been working with all of the finance team to be able to do that. We hope to complete that later this year, but it's ongoing right now.

[Mario Simard, Bloc, Jonquière, QC]

Thank you.

My next question is for Mr. Breton.

During your presentation, you said that you and various partners would make an announcement by May. Could you tell us more about that?

[Daniel Breton]

We have been working for several months to create a Canada-wide transportation electrification alliance for the industrial supply chain. We see this as a historic opportunity. In 2009, when GM and Chrysler were on the verge of bankruptcy, the U.S. provided aid in exchange for investments in transportation electrification. The same was not done north of the border. In our view, a significant opportunity was missed.

Twelve years have passed since then and it is now 2021. In our view, the opportunity is there again, but there will not be another one. Right now, the electrification market is taking off around the world, including in China, Europe and the United States. A historic opportunity is presenting itself, and that's why we've been working for months to bring together major players, including Propulsion Québec. We will soon be announcing the participation of other players, including workers, auto parts manufacturers and mining companies. We want everyone to sit down at the same table to begin a discussion with the federal government in order to act as effectively and quickly as possible. Indeed, the next few months will be critical.

When comparing electric vehicle subsidies with fossil fuel subsidies, one thing is often overlooked. A Health Canada report released a few weeks ago reveals that the cost of air pollution is $120 billion a year. Yet 31% of black carbon emissions, 33% of carbon monoxide emissions and 40% of nitrogen oxide emissions come from transportation. This means that the electrification of transportation will not only reduce greenhouse gas emissions, but will also reduce health care costs for Canadians. It will save thousands of lives, because air pollution causes 15,300 deaths a year—about eight times the number of deaths caused by traffic accidents. And it will save billions of dollars. So electrification of transportation is desirable for economic reasons, but also for health reasons.

[Mario Simard, Bloc, Jonquière, QC]

Thank you.

If I have some time left, I'd like to ask one more question quickly.

You said that 450,000 to 600,000 direct and indirect jobs would be lost if fossil fuels were eliminated. How can we get those jobs back? You also said that new technologies could generate 560,000 new jobs. Isn't this an opportunity, even for Alberta, to transition to a low-carbon economy?

[Daniel Breton]

This is a historic opportunity for all provinces. Whether it's Alberta or [Technical difficulty] that workers can make the transition. On the one hand, the Unifor union, which is one of our members and represents workers in the oil and gas sector, wants to prevent its members from becoming unemployed. On the other hand, transportation electrification companies are unable to find qualified workers. The federal and provincial governments will need to be willing to provide retraining for existing workers. If not, we risk missing an extremely important historic opportunity. The transition is happening all over the world and it must not exclude workers or entire sections or regions of Canada. Alberta and Saskatchewan are two perfect examples.

The work that my parents used to do no longer exists today because it has been moved to Mexico. If all we do is create jobs outside the country while we decrease greenhouse gas emissions, it is not a win-win situation for our children and grandchildren. We want to fight climate change and air pollution while creating quality jobs across Canada. Transportation electrification can help, including research, extraction, sales, maintenance and infrastructure.

[Mario Simard, Bloc, Jonquière, QC]

Do I have a little more time, Mr. Chair?

[The Chair, Liberal, James Maloney]

Thank you, Mr. Simard. You don't, unfortunately.

We will go to you, Mr. Cannings.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

Thanks to all the witnesses here today.

I'll start by echoing what Monsieur Simard said in that I'm disappointed in the line of questioning that Mr. McLean took. It seems that Conservatives are really desperately trying to find ways that this transition cannot work, when the science is telling us that we must find ways to make it work. It would seem there are challenges, but there are also these immense opportunities for us that we've been talking about.

I'd like to let Mr. Breton continue on that theme by talking about.... You cited statistics on how many, how fast the shift to electric vehicles will be happening. I read a KPMG report that said 70% of Canadians said their next vehicle would be an electric vehicle.

I think this is happening faster than most people think. As you say, as that proceeds, jobs will be lost in the oil sector, but 500,000 jobs could be created in the clean energy sector in mining, assembly, construction.

I was wondering if you could go into more detail on what we need to do to get those workers ready. How much training will be needed? A lot of construction work is probably fairly transferable. In mining, I assume those jobs are transferable, but what kind of training do we need?

[Daniel Breton]

I can answer quickly. First, there will be a fast transition toward electric mobility. We've seen that with personal computers. Thirty years ago hardly anybody had a personal computer. Twenty years ago, who had Internet? Ten years ago, how many people had a smartphone? The switch will be exponential, as we've seen with those technologies.

If we want to be ahead to embrace the switch to cleaner technologies, we have to understand that these 560,000 jobs that we're talking about in clean mobility, clean energy, will be in assembly. We've seen that. There was an announcement last fall from Ford, Chrysler and GM. Workers in these assembly plants will be retooling and will be retrained so they can start assembling electric vehicles. That's one part.

There's also the part in research and development. We have to emphasize research and development on electric mobility, on critical minerals and metals. We have to make sure that people see there's great potential for infrastructure deployment as well. However, there are some issues with infrastructure because you don't need the same infrastructure when you're at home, for instance, than when you are in downtown Montreal, Calgary or Toronto. We will need to do research and development to make sure we can make a clean transition. All that will be part of the job transition.

Plus selling an electric vehicle is not the same as selling a gas vehicle, I can tell you that because I was the first amalgamated trainer in Quebec regarding electric vehicles, so I trained a lot of people. People have to know how to operate the electric vehicles, whether they're light or heavy duty. We will need to do courses for high school, colleges and universities. These are all new jobs. We've been talking to many colleges and universities over the past few months, because they're looking at new programs to help train and educate these people so that we have the future engineers and the future chemists.

[Technical difficulty—Editor] but the federal government and the provinces have to be in tune with that transition. The Trudeau government said they wanted to create more than a million jobs in clean technologies. We have to make sure we are there to help not only the future workers but the present workers.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

I'd like to follow up again on some of these challenges. Mr. McLean mentioned the challenge of where we are going to get the clean energy to fuel these electric vehicles.

Could you comment on some of the ways we can overcome that and the ways we have to overcome that?

[Daniel Breton]

First of all, Canada is better positioned than most countries in the world regarding electricity production, because already 82% of our electricity production comes from non-emitting sources like wind power, hydroelectric and nuclear. That means that already a lot of the job has been done. Also, the Government of Alberta has announced that by 2023 it will close its last coal plants. That means we are already much cleaner than, let's say, the U.S., China, India or Europe for that matter.

For more electricity, there is great potential in wind power, energy efficiency, hydro power and even solar power, not to mention the fact that with what we call vehicle-to-grid and vehicle-to-home, we will make part of the storage of energy come from the vehicles themselves. The electric vehicles will be part of the smart management of energy in the future, meaning that during rush hour, for instance, if we need a lot of electricity, we won't charge the vehicles. We will use the energy from the electric vehicles. When we are outside of peak time or peak power capacity, we will use that capacity to recharge the vehicles, so we will make sure that the electric vehicles are part of the power grid as well.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Cannings.

Now we are moving into our second round of five minutes, starting with Mr. Lloyd.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Thank you, Mr. Chair.

I'll start by pushing back against some of the assertions that it is irresponsible somehow for Conservatives to be asking questions about what our electricity makeup is going to be in the future when there are more electric vehicles. We're looking at the problem two or three steps ahead of us, not at the problem immediately in front of us.

The fact is that for many decades one of Canada's greatest comparative economic advantages has been our cheap electricity. As Mr. Breton noted, 60% is hydroelectricity, 15% is from nuclear and just about 7% is from renewable power sources like wind and solar. My huge concern is that we've seen a new hydroelectric dam being built in British Columbia, which is now at $16 billion—billions—over cost. In Alberta, in my own riding, shutting down coal-fired electrical units cost billions in taxpayer dollars to bail out the companies that were shutting down their coal and transitioning to natural gas. In the province of Ontario we see taxpayers—due to experiments with developing green energy back in the 2000s—now subsidizing electrical rates [Technical difficulty—Editor] per cent.

To my question, Mr. Breton, following up on Mr. McLean's question, when we see that these electric vehicles are going to create a huge pull on the electrical grid and we've already seen that electricity costs are growing faster than inflation, where is the new electricity going to come from to pay for this? Are we going to see electrical rates go through the roof and make electric vehicles less affordable?

[Daniel Breton]

Actually, no. As I said before, because of vehicle-to-grid and vehicle-to-home management, we will be able to save money in the end and even get customers money in their pockets because we will be able to use more smartly the grid that we have right now.

I spoke to a scientist in the U.S. a few months ago, and he said something very interesting, which was let's say that Nikola Tesla or Thomas Edison or Alexander Graham Bell came back to life today. Alexander Graham Bell would be very impressed by the new technologies in the phone, in smartphones. There's the big difference.

When you're looking at grid technology, not much has changed over a hundred years, so we have to be smarter with our grid so that we are more efficient in the way we manage it. Electric vehicles, whether light duty or heavy duty, will not only make the rate be reasonable but also help rates go down for customers because of vehicle-to-grid and vehicle-to-home management.

That's something that people don't know about, very often. It's a new way of thinking about the future of energy. Smart energy management with electric mobility will make a huge difference for its customers.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

I find that very hard to believe, Mr. Breton. If we have 20 million or 30 million Canadians driving electric vehicles, that is going to create the need for huge capacity. I would agree there is always room for more efficiencies on the grid and updating of the grid, but we are going to need new capacity. However, I'll move on to the next question.

[Daniel Breton]

Can I answer that?

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

You can answer maybe after I just finish this next question, but thank you, or you can send it in writing afterwards.

We know that with fossil fuel vehicles there's a diesel excise tax and a gasoline excise tax of 10¢ a litre and 4¢ a litre, and then there are the provincial excise taxes. This is somewhat of a public policy question, but these billions of dollars raised every year go toward building our road infrastructure. We know that electric vehicles need to use roads as much as fossil fuel vehicles do.

Do you have any sort of suggestions as to how the government is going to be able to pay for this road infrastructure in the future when it's losing billions of dollars in fuel excise revenues?

[Daniel Breton]

Thank you for that great question.

Actually, what that shows is that the business model for financing the roads is obsolete. If we want to lower our greenhouse gas emissions, our oil consumption anywhere in the world, we will have to stop relying solely on the gas tax to finance the roads.

We have to have a national discussion on that. It's the same issue in Quebec or Europe or Toronto or the U.S. It is a very important issue, but we can find a solution. As I said earlier, if we save billions of dollars in health costs, this is a way for us to help finance the roads—if you want to look at it that way.

We have to think about a new way to finance the roads. Your question makes total sense.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Mr. Chair, how much time do I have left?

[The Chair, Liberal, James Maloney]

You have about 15 seconds.