Natural Resources Committee on April 12th, 2021

[The Chair, Liberal, James Maloney]

I call the meeting to order.

Welcome back, everybody. I hope you all enjoyed your time in your constituency and were able to get caught up on quite a lot of things—unless you're in Toronto, where you still can't get things like a haircut. Such is the case; we soldier on.

Anyway, it is good to see everybody, at least virtually. This is the 19th meeting of this committee, and it also happens to be our last meeting on this study topic. We have a very interesting panel today, which is going to bring us to a conclusion.

For our guests today and for our members, all of the sound checks and equipment checks have taken place in accordance with the motions we've passed previously at this committee.

To our witnesses, you have translation services available to you on your machine. You're welcome to and encouraged to speak in either official language, and you will be asked questions in French and English. Because we are doing this virtually, it requires a little bit of patience, meaning you should wait until somebody else is finished talking before you start answering a question. Similarly, I will remind our members to wait until witnesses finish speaking before they start their next question.

On that note, why don't we jump in? Each of our witness groups will be given up to five minutes to make a presentation, and at the conclusion of all of the witness presentations, I'll open the floor to questions. I will warn our guests today that we do have a time limit on presentations, which is five minutes, and time limits on questions for each member. It is my job to interrupt from time to time to remind people that they are running out or have run out of time, and I apologize in advance for doing so.

Today we have, from BlackRock Metals, Mr. Sean Cleary; from Electric Mobility Canada, Daniel Breton; from Nano One Materials, Dan Blondal; and from Propulsion Québec, Sarah Houde and Simon Thibault.

Welcome, everybody, and thank you for coming. Why don't we proceed in the order I just ran through?

That means, Mr. Cleary, you have the floor for five minutes, sir.

[Sean Cleary, Chairman and Chief Executive Officer, BlackRock Metals Inc.]

Thank you, Mr. Chairman and committee.

My name is Sean Cleary. I'm chairman and CEO at BlackRock Metals. We're building a $1.3-billion critical minerals project in Quebec. You can visit www.blackrockmetals.com for a summary of the project.

This project consists of a fully integrated mine and metallurgical complex that will be built in the federally controlled industrial deep-sea port located in Saguenay, with access to the St. Lawrence and global markets. We will produce three critical minerals, which are vanadium, titanium and nodular iron. The BlackRock project is fully permitted by all governments and is one of the few projects in Canada that is shovel-ready. We're now working to complete construction financing and start construction next year, with full production in 2024.

BlackRock is a commercial hydrogen user and early adopter. It is uniquely designed to use grey hydrogen and is enabled for the conversion to green hydrogen once it is commercially available. This is not a pilot project. The plant will be an example to the world that Canada can lead the way in zero-emissions mining and metals production. The BlackRock project is where the critical minerals strategy and the hydrogen strategy meet.

We have developed close relations with aboriginal communities, having signed agreements with the Innu nations of Mashteuiatsh, Essipit and Pessamit, the Cree Nation Government and the Oujé-Bougoumou band. These are major accomplishments.

Recently, Dr. Abel Bosum, the grand chief of the Cree, spoke to this committee and specifically indicated that the Cree territory in Quebec is rich in vanadium. The Cree have been our strong supporters. They realize that the economic future of their youth passes through the responsible development of their mining potential and specifically critical minerals, which will offer long-lasting and stable careers to aboriginal youth across Canada.

Almost all vanadium comes from China, Brazil, South Africa and Russia. However, vanadium has not been discussed at length in this committee. Vanadium is a critical mineral. It's on your list. It has been extremely important as a steel alloy and battery metal. Currently, North America has vanadium processing plants, but no primary source of vanadium. Canada has a world-class deposit of vanadium in Quebec, which is the BlackRock project.

Vanadium is a critical ingredient for batteries and steel. There is no steel without vanadium. We believe that a strong steel industry focused on zero emissions is at the core of every great nation. Without vanadium, Canada and our allies in America and Europe cannot have a steel industry. Vanadium doubles the strength of steel, resulting in stronger bridges and buildings and safer cars that use less steel. This is vital for meeting product specs, and it is beneficial for the environment. Life-cycle analysis shows that the vanadium related to the steel rebar from the BlackRock project alone will save over 26 million tonnes of CO2 per year. Also, there is no direct substitute for vanadium.

Vanadium is also a key ingredient in electric flow batteries, which are increasingly being used to store wind and solar electricity and balance the electric grid. In fact, the National Research Council of Canada has had a project investigating vanadium flow batteries to secure Canada's electric grid. Time will show that vanadium is a more important critical mineral than even lithium when it comes to battery production and electricity storage. Vanadium batteries can easily be recycled and the importance of vanadium will grow accordingly over the next decade as utilities look to store green energy safely and economically.

Canada can be a global leader in vanadium since BlackRock can produce over 5% of total global output of vanadium per year for the next 70 years.

There are certain things that we could agree on. First is that we have a critical minerals list, but that won't change anything unless major funding, policy and strategy follow.

Second is that the capital markets are knowledgeable on base and precious metals, but there are no pools of capital available for critical minerals.

Third is that unfair trade practices from foreign regimes that manipulate markets and do not follow market rules, including for vanadium, stifle competition and new entrants.

Fourth is that we need appropriate government engagement and willpower to drive critical minerals forward and secure the steel supply chain.

Fifth is that the BlackRock project is entirely centred around ESG. Government should follow this lead to place the critical minerals industry within such a framework to help attract major capital.

Sixth is that we need the federal government to be openly supportive if we want to be a major player in the critical mineral space. It will be necessary to invest significant capital.

Lastly, we would say that we've been having the same talk about this. Right now, it's really just talk. If we don't do something concrete about it, Canada will be left behind on critical mineral supply.

I thank everybody. That concludes my remarks. Thank you to the members of the committee for having invited me and taking the time to listen.

I look forward to answering any questions.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Cleary, particularly for staying right on time.

Mr. Breton, now we'll go over to you.

[Dan Blondal, Chief Executive Officer, Nano One Materials Corp.]

Thank you. I think you actually have the names mixed up. This is Dan Blondal from Nano One, as opposed to Dan Breton from the other company.

Do you want Nano One to go next?

[The Chair, Liberal, James Maloney]

Actually, no, I was going get Electric Mobility to go next. However, if you're ready to go, that's fine too.

[Dan Blondal]

That's fine.

[The Chair, Liberal, James Maloney]

Go ahead.

[Dan Blondal]

Good morning, everyone.

My name is Dan Blondal. I speak French fairly well, but I'm going to address you in English, because it's much easier for me.

I left Montreal a long time ago,

so English comes easier.

I am the CEO and founder of Nano One Materials. I'm based here in Burnaby, British Columbia.

Nano One is a clean technology company. We're changing how the world makes battery materials. We have developed a battery agnostic platform for the industrial production of cathode materials used inside lithium-ion batteries.

We have 35 employees. We have 100% Canadian-grown expertise in engineering, materials science, business and financing. We have 16 patents now issued and at least another 30 pending in jurisdictions around the world, which include Canada, the U.S., China, Japan, Korea and Taiwan. We are publicly listed on the TSX Venture Exchange. We are well financed, and we are also honoured and privileged to have the ongoing financial support of SDTC and B.C.'s ICE fund.

Our processing technology uses critical mineral inputs such as lithium, nickel, manganese and cobalt to make high-performance cathode materials used in lithium-ion batteries. We differ from other chemical producers because our technology eliminates the need for intermediate products, energy and the associated costs and environmental footprint. It uses one-twentieth of the water and eliminates a significant waste stream.

As I said, this reduces cost, energy, logistics, waste, water and carbon footprint, while enhancing battery durability. Just for reference, it could save up to $1 billion for every one and half to two million electric vehicles that are made.

It all starts with mining, of course, but where does all this go? Who turns those metals into battery materials? Who puts them into cells? Who builds the battery packs that go into cars?

Unless we start making battery materials and battery cells here in North America, we will continue to ship our raw materials to Asia, only to bring them back to Canada for production. Europe is busy playing catch-up, and North America is really still at ground zero in these terms. I believe this presents a tremendous opportunity in North America.

China and the rest of Asia are well established and they did so very early, but this has left them with a fragmented and entrenched domestic supply chain that we believe is vulnerable to disruption. Necessity is also driving Europe, of course, and to a domestic, low-carbon, integrated supply chain, yet all this legacy cathode production and chemical production and supply chains persist with lots of water, waste and carbon footprint issues.

Canada is not beholden to these incumbent ways, because those systems are not yet in place. Herein lies the opportunity to be a better technology and value chain leader.

A process such as Nano One's can help integrate the supply chain in Canada and lead the world away from entrenched and wasteful methods. It can help Canadian miners gain an ESG and premium advantage over foreign producers of sulfate, hydroxide and other intermediary products. It can help car companies with ESG, cost and performance imperatives, but it will require government stimulus, private sector collaboration, implementation and supply chain integration.

We are innovators, but we are also collaborators and we are looking to move mountains. Nano One's relationships span the global battery supply chain, from responsible miners to cathode producers and OEMs. If we can leverage Canada's rich experience in responsible mining, clean energy generation, environmental stewardship, technology leadership and battery innovation, we can establish Canada as the greenest, most technologically advanced and highly integrated battery materials production ecosystem in the world.

Before it's too late and before we are forced to be reactive with me-too solutions, it is a Canada-wide strategic imperative to support the build-out of this very ecosystem.

Clearly, it's a global effort and there are opportunities all around the world, so how can we make Canada the centre of gravity for these efforts?

Thank you very much for the opportunity to speak here today.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Blondal.

Now we will go to Mr. Breton.

[Daniel Breton, President and Chief Executive Officer, Electric Mobility Canada]

Good morning.

We would like to thank the members of the Standing Committee on Natural Resources for taking the time to hear from us on the very important topic of critical and strategic minerals.

My name is Daniel Breton and I am the president and chief executive officer of Electric Mobility Canada, or EMC.

Founded in 2006, Electric Mobility Canada is one of the very first organizations in the world dedicated to electric mobility. EMC's members include infrastructure utilities, electric utilities, mining companies, vehicle manufacturers, charging infrastructure providers, technology companies, research centres, government departments, cities, universities, fleet managers, unions, environmental NGOs and electric vehicle owner groups. As a result, Electric Mobility Canada is the Canadian organization with the most experience and expertise to help advance thinking, regulation and projects in transportation electrification.

According to a 2020 analysis by Electric Mobility Canada, a Canadian transportation electrification strategy modelled on those in British Columbia, Quebec or California could generate at least $200 billion...

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

I have a point of order, Mr. Chair.

I'm sorry to interrupt our witness, but the volume of the interpretation is a little quieter than the witness. We can't really hear the English interpretation. I wanted to see if that could be corrected.

[The Chair, Liberal, James Maloney]

Is anybody else having a problem?

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

I'm having a similar issue.

[The Chair, Liberal, James Maloney]

You are. Okay.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

We'll give it a go. We'll make it work. Don't worry.

I don't want to interrupt the witness again.

Thanks, Chair.

[The Chair, Liberal, James Maloney]

Okay.

Carry on, Mr. Breton.

[Daniel Breton]

A 2020 analysis by Electric Mobility Canada suggests that a Canadian transportation electrification strategy modelled on those in British Columbia, Quebec or California could generate up to $200 billion in revenue between 2021 and 2030, and create tens of thousands of new jobs.

Also, in collaboration with other Canadian industry stakeholders, in May, Electric Mobility Canada will formally announce the launch of a Canadian electric vehicle supply chain initiative to help accelerate Canada's industrial transition in transportation electrification.

In addition, we will soon be releasing a report on the state of play in transportation electrification in Canada, which would include natural resource aspects.

EMC, therefore, recommends that our government adjust its views and emphasis on certain critical minerals, metals and materials, specifically to recognize the importance of securing and maintaining a Canadian and North American energy independence; to shift our focus from fossil fuel-based energy to securing a robust supply of all key metals, minerals and materials needed for our emerging North American battery supply chain; and to develop the industrial policy needed to unlock the critical North American production needed to mine the metals and minerals and to build the batteries, charging stations and electric vehicles needed to transition our economy to a zero-emissions transportation system.

According to the “Electric Vehicle Outlook 2020” from Bloomberg New Energy Finance, EV growth, from passenger cars to light trucks to heavy-duty trucks to electric buses, will be exponential in the years to come. Passenger EV sales jumped from 450,000 in 2015 to 2.1 million in 2019. They are expected to reach 8.5 million in 2025 and 26 million by 2030. New EV sales should grow from 2.7% in 2020 to 28% in 2030, and 58% in 2040.

According to a newly released report by TD Economics, it is estimated that by 2050, up to 450,000 of Canada’s current 600,000 direct and indirect jobs in oil and gas could become casualties of falling demand for fossil fuels as more countries and companies commit to net-zero greenhouse gas emissions.

According to another report called “The Fast Lane: Tracking the Energy Revolution 2019” from Clean Energy Canada, there will be approximately 560,000 clean jobs by 2030, almost 50% clean jobs in transportation. Demand for clean energy and clean transportation jobs will keep growing at a very fast rate. This means that there will be a job transition over the next decades, just like we saw at the beginning of 20th century when transportation went from horse and buggy to automobiles. These new jobs will be in mining, assembly, research and development, design, sales, maintenance, electricity and construction. These high-quality, high-paying jobs will be across the country, from B.C. to Atlantic Canada.

As we can see in the graph that we have in the document we sent you, China is comfortably ahead of other countries in controlling the supply chain of strategic minerals needed for electric vehicles, electronics, gas vehicles, military equipment, etc.

According to Bloomberg New Energy Finance, China presently controls 80% of the refining of these materials and 77% of the world's battery-cell manufacturing capacity. When we add South Korea and Japan, we can see that 96% of the battery production capacity is controlled by Asian companies.

Just like we saw in the 20th century with the world’s dependence on oil coming from the Middle East, the geopolitical implications of the world’s dependence on rare earths and battery capacity from China are at the heart of the discussion for the future of electric mobility from an economic, environmental and geopolitical point of view. That’s why Electric Mobility Canada fully supports the Canadian and U.S. governments' agreement on the importance of the development of a zero-emission vehicle future and a Canada-U.S. battery strategy.

Thank you.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Breton.

Lastly, from Propulsion Québec.... I don't know who is going to start, whether it's Ms. Houde or Mr. Thibault.

Ms. Houde, I see that fingers are pointed at you, so you have the floor.

[Sarah Houde, President and Chief Executive Officer, Propulsion Québec]

Thank you very much.

I am joined by my colleague Simon Thibault, who is our battery expert. As president and chief executive officer of Propulsion Québec, Quebec's electric and intelligent transportation industry cluster, and on behalf of our 220 or so members, I would like to thank you, members of the Standing Committee on Natural Resources, for this invitation to present to you our vision for, on the one hand, positioning Canada as a responsible source of strategic and critical minerals, or SCMs, and, on the other hand, the development of Canada's electric vehicle battery industry.

As you know, Canada is in a unique position globally. Indeed, our country not only has vast SCM resources, especially those in high demand in the context of an energy transition, deployment of clean technologies and a sustainable economic recovery after COVID-19, but it also has recognized expertise in responsible industrial development. I'm thinking of the mining and chemical sectors, for example.

We also have an energy mix that is dominated, in some parts of the country, by low-carbon renewable energy that is available at low cost. We have one of the most demanding environmental regulatory frameworks in the world, a skilled workforce, and most importantly, a stable and predictable geopolitical environment.

These strengths consolidate, in our view, Canada's positioning as a safe, stable and responsible supplier of SCMs and battery components, three terms that must be at the heart of any sustainable Canada-wide strategy for the development of the SCM and battery industries.

If Canada wishes to make the development of these value chains a success, a fourth dimension must be added to these key factors, namely the pan-Canadian approach to this strategy. Indeed—as other major international players active in these same sectors have already demonstrated—there is no regional entity capable, on its own, of bringing together both the natural mining resources, the technical and technological capacities required to develop these resources, as well as the indispensable financial resources to develop these sectors on its territory alone without an interstate synergy.

That is why it is of the utmost importance that the Canadian government play a role in coordinating the actions of each of the provinces and territories through the creation of a broad Canadian alliance dedicated to the development of the SCM and battery industries, building on the strengths and assets of each of these provinces and territories.

In addition, Canada must leverage its historical position as an ally of the United States to work towards the creation of a North American coalition that will enable Canada's SCM and battery industry ecosystem to define itself as a secure, stable and responsible supplier of value-added materials and components, not just a supplier of raw materials that are not processed, for high-growth markets such as electric vehicles and the energy transition.

This same continental positioning not only appears to us to be highly strategic on a North American scale, but it is equally strategic with our European partners. The latter have also decided, in the wake of the recent adoption of the battery directive by the European Commission, to focus on consolidating, on European soil, competitive, green and circular supply chains for battery materials and components for their own electric vehicle and energy storage markets.

Canada today faces an economic opportunity that it cannot and should not ignore. Moreover, this is a unique chance to rebuild our economy on a new and promising foundation for the future by integrating best practices in circular environmental and social responsibility, particularly with respect to the recycling of these batteries and the development of industrial residues; we can also increase transparency, for example, by integrating the traceability of battery supply chains.

To do this, Canada must work to build a Canada-wide alliance to leverage the strengths of each of the provinces and territories, with the goal of defining itself as a global leader in the responsible production of value-added components for western industrial supply chains that are dependent on a secure and stable supply of SCMs. In our view, if we do not, Canada will miss the opportunity to take full advantage of this unprecedented opportunity for our country.

I will turn the floor over to my colleague Simon Thibault for the remaining few minutes.

[Simon Thibault, Director, Regulation and Public Policy, Propulsion Québec]

Thank you, Ms. Houde. Actually, I see that there are a few seconds left.

Very briefly, before we take your questions on the topic, I'll clarify what we mean by “value-added components” in the Canadian context. This includes everything that is a precursor: cathode materials, anode materials, in short all the active components of batteries and cells. These are the priority targets, in our view, for developing vertical integration within the battery and electric vehicle supply chain, which starts with our critical and strategic minerals.

[The Chair, Liberal, James Maloney]

Thank you.

Now we'll begin our first round of questions for six minutes, starting with Mr. McLean.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you, Mr. Chair.

Welcome to all our guests today. I think it's going to be a very informative meeting from what we've seen so far. I really appreciate all the input we're getting.

I'm going to focus my questions this morning on Mr. Breton, please, from Electric Mobility Canada.

Mr. Breton, very quickly, can you tell us the budget of your organization and where you get your revenue from?

[Daniel Breton]

Ninety-five per cent of the budget comes from the members.

[Greg McLean, Conservative, Calgary Centre, AB]

Can you extrapolate on that, please, on the members and which members, as in government members, and how much they're contributing?

[Daniel Breton]

I'd say less than 5%. I would say that most of our members are vehicle manufacturers, utilities, infrastructure providers or research centres, so basically—