Natural Resources Committee on Sept. 20th, 2023

[Raphaël Gaudreault]

I'm not too familiar with the bill you're referring to.

What I can say is that producing the purified phosphoric acid that's required for the battery industry is going to produce, at the same time, the phosphoric acid that's required for the fertilizer. That's especially more so with the grade of phosphate we'll be producing at Lac à Paul. We have a concentrate that is of very high quality and will have a high yield of PPA production, but also of regular phosphoric acid. It will be there and available for the traditional fertilizer industry.

[Ted Falk, Conservative, Provencher, MB]

I appreciate that answer.

My point is, again, that the government lays forward these objectives and aspirations, but then doesn't give you the tools to do it. You've already articulated how difficult it is to exploit that resource, to open up this mine and to get it into production. Even though it's one of the requirements, it's not on the critical minerals list like it should be. It's one of the requirements that these battery manufacturers are going to need in order to produce their products.

Thank you very much.

Mr. Mousseau, I'd also like to talk to you. You talked about electrification. Maybe you can help me understand. You said that there's a huge demand for electricity right now, and I think you're right. You talked about increasing and improving our electrical grid. We studied this in this committee several years ago: electricity interties, so that we're compatible across the country. We recognize that there need to be proper interchanges.

I'm curious. Why do utility companies go to the public utility boards, ask for rate increases and then provide incentives to users for using less product? Can you help me understand that?

[Normand Mousseau]

In principle, using less electricity during peak periods helps reduce investment to meet the current demand. That is often how electricity systems are managed: A reduction in consumption is requested, often at specific times.

[Ted Falk, Conservative, Provencher, MB]

If the market's there, why wouldn't they just expand their production capabilities?

[Prof. Normand Mousseau]

It's because of the regulation. I mean, there's a pressure on regulations to—

[Ted Falk, Conservative, Provencher, MB]

Thank you.

[The Chair, Liberal, John Aldag]

That's five minutes.

[Ted Falk, Conservative, Provencher, MB]

Yes. I was watching my clock, Mr. Chair.

[The Chair, Liberal, John Aldag]

What's that? Are you keeping me honest?

[Ted Falk, Conservative, Provencher, MB]

I always watch my clock very carefully.

[The Chair, Liberal, John Aldag]

We'll jump now to Ms. Dabrusin, who will have five minutes on my clock—and hers, if she's keeping time on it as well.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

Thank you.

My first question is for you, Dr. Lashof, because I saw you'd written an article about closing the U.S. emissions gap after the Inflation Reduction Act. I'm interested, because it talks about what the non-federal governments, the subnational governments, also need to be doing if we're going to be decarbonizing our economies and moving toward green economies.

Could you maybe elaborate a little bit on that? What's the role of, in your case, state governments, I would say, but in our case provincial governments?

[Dr. Daniel Lashof]

Thank you for that question and for reading my article.

This is an “all hands on deck” moment. While in the United States in previous administrations there was no leadership from the federal government so all of the action was at the state and local level, we now have the federal government leading, but it really needs to be in partnership with continued action in the states. States are the laboratory of innovation, and that means both technology and policy. We've seen, for example, that California has the authority to adopt vehicle regulations that will require 100% electric or zero-emission vehicles by 2035. Other states are similarly adopting that policy.

We don't yet have that at the federal level, but that action in California is really driving the electric vehicle industry forward. In addition to the incentives in the Inflation Reduction Act, that's one example.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

I guess another question is that, when we're looking at, for example, what the U.S. is doing, the EU is also working toward decarbonizing their economy. When we're looking at that, if Canada as a country does not take action to have a net-zero economy, what impacts would you see for us as far as our trade relationships and our economy are concerned?

[Dr. Daniel Lashof]

I think countries that are taking action and are decarbonizing are increasingly looking at border tax adjustments, as they're called, tariffs that are designed to ensure that their industries are not put at a competitive disadvantage from countries that are not taking action. I would certainly hope that Canada and the United States would be together and taking action maybe jointly, if there are other countries outside of North America that aren't taking action. That would be my expectation.

I think we're seeing that innovation is being driven in places that have a strong policy to deploy technologies as well. That's one reason we see so many innovative start-up companies in the United States across the board, including in carbon removal technology, hydrogen production and a wide variety of technologies.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

Mr. Mousseau, you also talked a bit about the provinces and what we should consider when it comes to the provinces concerning electricity. What do you think we should ensure on the provincial side to ensure that we have a robust electricity system?

[Normand Mousseau]

What we want is for the provinces to work together to facilitate investments. Let's take the example of eastern Canada. We could imagine developing the wind energy sector offshore, in a network that would integrate all the Atlantic provinces, including Quebec, to facilitate deployment and balancing.

The federal government could play a role by funding—for example, through a Crown corporation—links and interconnections among the provinces to facilitate these exchanges. The provinces do not really want to go in that direction and are not very open to exchanges. However, building infrastructure would allow us to fund it, and these interprovincial exchanges would help achieve good progress.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

Do you see another role that the federal government could play to ensure, by working with the provinces, the existence of an electricity grid that works from province to province?

[Normand Mousseau]

If the federal government directly funded, through a Crown corporation, interprovincial links by saying that they would always be there, whether they were used or not, they would quickly be used.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

Thank you.

[The Chair, Liberal, John Aldag]

That's great. Thank you.

Colleagues, we're at the end of the second round. We're not going to have time to go through a full third round, but I could do an abbreviated two and a half per side, if you'd like to do that.

I have one decision point we need to do in camera and two quick information items, so I'm going to suggest we go right into a final round, but of only two and a half minutes each.

With that, we'll go right to Mr. Patzer, who will have two and a half minutes on the clock.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thanks again.

Mr. Gaudreault, just quickly, what are the challenges your project faces with regulatory assessment and approval? How long has it taken to get the approval to do your project?

[Raphaël Gaudreault]

We started the exploration process around 2008, and the first studies were released around 2012. The full regulatory process was only completed in 2018, when the port facilities got their permits.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Okay. What is the potential for Canadian industry to take advantage of phosphate for domestic battery production?

[Raphaël Gaudreault]

Carmakers are trying to build plants. Those plants will need raw materials to make the batteries. We're located close to those plants, so I think we'd be a good player to feed the raw materials required to make those batteries.