Natural Resources Committee on Sept. 18th, 2023

[Frank Des Rosiers]

There is always a preoccupation around the legislation itself but also with the regulatory environment writ large.

Allow me to make three observations. I hope they'll—

[Ted Falk, Conservative, Provencher, MB]

Maybe you could just tell me that, because I have more questions.

[Frank Des Rosiers]

Of course. The preoccupations around timeliness and efficiency have been very clearly captured in budget 2023, and I can assure you that Mr. Wilkinson sees this as very much top of the pile in terms of things he wants to tackle with industry and PTs. This was discussed at the most recent annual meeting of provincial and territorial ministers in Quebec City last month, so it's really a top preoccupation.

There was also $1.2 billion announced to provide funding for regulatory agencies, the Impact Assessment Agency and the Canada Energy Regulator to speed up permitting to make sure those projects get moving. Also, as part of the regional energy and resources tables, on which I understand you've been briefed previously in presentations by Minister Wilkinson, the pace has been picking up in B.C. but also in provinces around the country to launch those, and many provinces did identify the issue of regulatory efficiency as a key preoccupation on which they want to see progress.

There is lots of engagement going on and a shared goal of trying to speed it up.

[Ted Falk, Conservative, Provencher, MB]

Thank you.

Mr. Jovanovic, I just want to ask you a few questions. Recently this government made commitments to both Volkswagen and Stellantis. Can you confirm the amounts of those commitments?

[Miodrag Jovanovic]

I'm sorry, Mr. Chair, but we don't have the people responsible for this at the finance department, so I can't really....

[Patrick Hum]

We'll have to come back to you on that. We can get those numbers. From an ISED perspective, we can share those numbers at a later date.

[Ted Falk, Conservative, Provencher, MB]

I would surely think so. I'm surprised that the finance department wouldn't have those numbers, considering that the media seems to have them. I'm surprised you wouldn't.

[Greg Reade]

Our colleagues who are responsible for those deals are not at the table today.

[Ted Falk, Conservative, Provencher, MB]

Okay. I guess then you probably wouldn't know whether it's being looked at as a PTC or an ITC. Minister Champagne alluded at one point that there wouldn't be any commitment by Canada until there was actual production. I want to confirm what the vehicle for that support would be.

[Greg Reade]

I can comment on that. There's a range of support being provided, from capital support through the strategic innovation fund and bespoke agreements that will act as production subsidies. You're quite right that funding will be paid on the basis of production, in terms of the energy produced for battery units. If there is no production, those parts of the support don't flow out, although the capital would flow out at the front end as per normal practices when they build the facilities.

[Ted Falk, Conservative, Provencher, MB]

The capital would flow out, but it's based on production.

[Greg Reade]

No, it's just that there are different components of support. The facilities are the recipients of strategic innovation fund support, which is traditionally structured on the capital, so building facilities and some of the equipment. I don't know the details, but I can get back to you on that. Separately there was a—

[Ted Falk, Conservative, Provencher, MB]

Can you also confirm whether the Parliamentary Budget Officer is correct that the payback isn't in five years but in 20 years?

[Greg Reade]

I can't confirm that.

[Ted Falk, Conservative, Provencher, MB]

You haven't done the math in your department, or is this for those other people who aren't here?

[Greg Reade]

We've done the math, but you said that the public reporting.... The Parliamentary Budget Officer, I would assume, worked with our colleagues to answer questions.

[Ted Falk, Conservative, Provencher, MB]

Who's right? Nobody knows.

[Nelson Paterson, Director General, Economic Studies and Policy Analysis Division, Economic Policy Branch, Department of Finance]

I could add some colour to that.

There are two approaches that have been used. The calculations were made by ISED for the federal government number, but basically they're just using different methodologies based on similar underlying assumptions about what the projects would be. It depends on what the PBO is choosing to use in their assumptions.

[Ted Falk, Conservative, Provencher, MB]

I think I have one question left.

[The Chair, Liberal, John Aldag]

That's five minutes. It goes quickly.

We're going now to Madame Lapointe, who will have five minutes on her clock.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you, Mr. Chair.

Mr. Des Rosiers, as the member for Sudbury, I know that Canada has a natural advantage when it comes to critical minerals and mining.

To be competitive with the Inflation Reduction Act, what steps are we taking to ensure that critical minerals are refined domestically?

[Frank Des Rosiers]

From the get-go, when Canada announced that goal and the Prime Minister made that commitment and reiterated it in the budget, we made it clear that the ambition was looking at the full suite. It's not just resource extraction, but looking at processing and transmission all the way to batteries and vehicles.

For the strategic plan that was announced, the Canadian critical minerals strategy, $3.8 billion has all of those economic supports present. It's been vetted in the House and approved, and the work is under way to make it happen.

It would be hard to summarize in one minute how the $3.8 billion will be disbursed, but it goes across the entire value chain. Right now, there is a lot of emphasis on international collaboration to try to speed up technologies to extract the resource in a way that is environmentally friendly. We do not want to replicate the approach that has been used in other countries, like China, so that we can minimize the impact on land, air and water. There is a lot of good work happening with the Americans, the Japanese and the Europeans on this right now.

[Viviane LaPointe, Liberal, Sudbury, ON]

I'm pleased with that response. I'm going to take it one step further.

I believe the supply chain and the associated jobs should remain local to the resources' geographical locations, especially when you think about reducing our processing footprint.

What is Canada doing to create a framework for processing the critical minerals necessary for EV batteries to ensure that the value-added benefits are not moved outside of Canada and outside of its mining regions?

[Frank Des Rosiers]

I must say, when we have engagement with foreign investors—we were talking with the Japanese this week and with the Germans last week—they actually see this as a benefit for their investments. The fact that they don't have to ship their feedstock, as is the case right now, across the world back and forth multiple times....

It's truly a crazy set-up that we currently have, and it just cannot be scaled up at the scale that the planet needs it to be in terms of having those hundreds of millions of EVs on the road. The fact that Canada is able to supply those locally—whether it's in a region, in a city or nearby—is one of those key reasons why they made those large investments, whether it's Volkswagen or whether it's Stellantis and others to come.

There is not one solution to make it happen, but bringing together all the key actors in this space—from those doing the raw extraction to the fabricators of anodes, cathodes, batteries and the electric vehicles themselves—to talk and engage. The deal making has been happening very rapidly. Canada has oftentimes been the convener of those groups of domestic and foreign investors to make this happen, but we've had dozens of commitments being made, and many of them have been announced already.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you.

It's important that the departments of natural resources and finance are working together.

My question is for the assistant deputy minister of finance.

I often hear from stakeholders that we need to facilitate the mining of natural resources in Canada. With Canada's critical minerals being a key component of batteries for zero-emission vehicles, how are we increasing funding for critical mineral extraction and how can we ensure that funding is accessible expeditiously?