Science and Research Committee on April 27th, 2026

[The Chair, Liberal, Salma Zahid]

Welcome to meeting number 34 of the Standing Committee on Science and Research. We are meeting today to resume our study on the implications of the Canada-China preliminary joint arrangement on Canada's electric vehicle sector.

I would like to make a few comments for the benefit of the witnesses and the members. Please wait until I recognize you before speaking. For those on Zoom, at the bottom of your screen, you can select the appropriate channel for interpretation: floor, English or French. I remind you that all comments should be addressed through the chair.

With that, I would like to welcome our witnesses for the first panel. Today we are joined by Professor Julian Karaguesian, visiting lecturer, department of economics, McGill University. We are also joined, by video conference, by Dr. Karim Zaghib, professor, Concordia University, and chief executive officer, Volt-Age. Our third witness for this panel is Dr. Nadja Johnson Bressan, associate dean, school of trades, Niagara College of Applied Arts and Technology.

All the witnesses will have five minutes for their opening remarks, but I understand that Dr. Karim Zaghib will not make any opening remarks.

We will start with Professor Karaguesian.

Please go ahead. You will have five minutes for your opening remarks.

[Julian Karaguesian, Visiting Lecturer, Department of Economics, McGill University, As an Individual]

Thank you, Chair.

Members of the committee, thank you for having me here. This is my second time testifying before a House of Commons committee on this issue. It's really a great honour.

I'm coming here with my experience of more than 25 years with the federal ministry of finance in the international trade and finance branch. I also currently teach at McGill, and I have my own advisory firm. Coming here, I represent no private interests or interests of any kind. I'm affiliated with no party. My interest, after having been invited here, is Canada's prosperity and Canada's sovereignty in the long term.

I'll make five or six points about that in the context of the government's agreement with the People's Republic of China to import, in the first instance, 49,000 electric vehicles for the next three years.

My first point is that this tariff relief agreement for EVs, canola and other foodstuffs, through which we have very substantial tariff relief on both sides, must be seen in the context of a larger trade agreement that's going to benefit both countries. I think this will actually benefit Canada more. China represents more of our trade than Chinese trade represents for Canada. They have a much more diversified export base than we do. That's one point.

The general point here is that tariff relief agreements, trade agreements and strategic partnerships require a quid pro quo and should allow countries to play to their comparative advantage. Our comparative advantage, whether we like it or not, is in energy, agri-food and other related exports.

I would never want to give up on our skilled manufacturing workers. That's my primary concern. You cannot be a rich country without a manufacturing sector, and a significant one, but when our economic model is based in large part on deep trade integration with the United States, we cannot have trade agreements with other countries unless there's a quid pro quo, so we have to accept imports. In this case, they're from China. It's a manufacturing superpower. It has one-third of global manufacturing, so there has to be give-and-take. We cannot only export.

This leads to my second point, which is what we can do with our automotive manufacturing sector, which we've had for more than 100 years. For the 500,000 workers, primarily in Ontario, who depend on this sector for their prosperity—middle-class families that require good incomes from good jobs—what can we do?

I think we have two broad choices, and maybe, with a mix of good policy and luck, we have three choices.

One is to go deeper into North American integration and to a kind of “fortress North America”. We haven't been in a fortress North America, but we've been in free trade agreements, NAFTA and then CUSMA, which came at the request of the Trump administration. Since the turn of the century, when our automobile production peaked at three million vehicles, we've seen the sector in long-term decline. Last year, we produced only 1.2 million vehicles, compared to the three million 25 years ago. In the context of the NAFTA platform, we have seen a migration of over 60% of our automobile production to Mexico and the United States.

We could stay in this platform, where Mexico has emerged as one of the six largest automobile producers in the world. We can try our luck there, or we can go global. We can take a page out of Australia's book. I'm not saying we should do this. I think there's a third way.

Australia ceased, as a result of a very strong currency and as a result of heavy government subsidies, to produce automobiles on a large basis about two to three years before COVID. More than its entire auto manufacturing population has been absorbed into the defence sector, which is growing rapidly in the context of a defence industrial policy aimed at defence sovereignty in Australia. In this new and enlarged defence sector in Australia, the wages and the earnings are higher.

I think there's a third Canadian option, which is to admit or to accept willingly and happily that the United States will always be our largest trading partner, but we can take a page out of Australia's book and have a mix of an automobile industry where we're producing EVs in a global sector where 70% of EVs are—

[The Chair, Liberal, Salma Zahid]

Time is up. Can you just wind down?

[Julian Karaguesian]

Is that the time?

[The Chair, Liberal, Salma Zahid]

Yes. You can talk further when we go into the rounds of questioning.

With that, we will go to Dr. Johnson Bressan.

Please go ahead. You will have five minutes for your opening remarks.

[Nadja Johnson Bressan, Associate Dean, School of Trades, Niagara College of Applied Arts and Technology]

Good afternoon, Madam Chair and committee members. Thank you for the opportunity to appear before the committee today.

Niagara College is a community college that has been providing post-secondary education for over five decades, offering 1,950 courses, 130 full-time programs and 18 part-time programs, with 8,544 students.

Colleges and universities are the foundational pillars of the future, serving as critical engines for economic growth, industry innovation and social stability. Valero and Van Reenen reported a significant association between GDP per capita and post-secondary institutions, as well as an effect on views on democracy on a long-term basis.

This committee is collecting information for the preliminary agreement between Canada and the People's Republic of China in the electrical vehicle sector and its implications for Canadian society. To understand the impact of the educational system, an analysis of the production of these electrical vehicles in Canada must be addressed first.

In 2025, 10,700 zero-emission vehicles were produced and sold in Canada. Honda reported 55,987 conventional hybrid vehicles produced, with 35,325 sold in Canada, for a total of 46,025. This figure represents the production of HEVs and ZEVs sold domestically and accounts for 93% of the quota of vehicles produced in China that are anticipated to be commercialized in Canada.

Although the initial projections indicate that the automotive industry would bear the brunt of the change, the implementation of a quota for electrical vehicles in Canada has given rise to a far more significant and intricate imbalance.

The low-carbon industry workforce requires technical skill sets that align technology with green literacy and transferable skills, shifting from fossil fuels to renewable energy, energy efficiency and technologies for carbon capture. The current geopolitical climate has thrust the world into an unprecedented reality that we can no longer ignore. Unemployment in Canada has kept to 6.7% over the past six months, while new industries, such as low-carbon industries, struggle to find workers with the skills necessary to perform within the new industry technology.

Skills shortages account for 7% of the labour productivity gap, placing Canada behind the United States. The projections for low-carbon industries are encouraging; however, they are constrained by the need for training and skills to adapt to the new technologies.

The current EV arrangement will affect the production of EVs in Canada and in Ontario, with consequences not only for employment but also for recruiting, retention and retraining of the workforce. Different regions and countries are now competing for a limited pool of skilled labour. Canada is experiencing labour shortages in nearly every sector, with a greater impact in skilled trades opportunities. The Canadian occupational production system has estimated 1.2 million jobs opening in skilled trades between 2022 and 2031, with one in five Red Seal workers at retirement age.

Adding to the factors already mentioned that limit and constrain the post-secondary sector, between 12% and 22% of total jobs across Canada rely on exports. To adapt to the new market, the automotive industry has retrained on skills, shifting towards electrical vehicles and the low-carbon industry, making the decision to import EVs a challenge for the job market.

Given the intersecting challenges already stated, growing evidence suggests that importing electrical vehicles not manufactured in Canada and equipped with foreign software and telemetry represents not only a disadvantage to our society, but, in the long run, a challenge for consumers when maintaining and upkeeping their vehicles. Other technological challenges have arisen from EV technology in recent years in addressing safety concerns on how to rescue vehicles and passengers from accidents involving fire and battery packs that accumulate 680 volts and 140 amps of live current.

Niagara College, in partnership with an economic institution, has launched a program to educate and train firefighters and paramedics on this technology. This was only possible due to partnership with the automotive industry and their guidance in providing reliable access to design and engineering specifications to safely and reliably put out fires while rescuing victims.

Reliance solely on market dynamics will not adequately capture the socio-economic benefits of the low-carbon economy. We must instead actively pursue industrial strategies that employ a targeted set of policy instrument strategies, involving all sectors of our economy, to achieve favourable outcomes and build the future together.

[The Chair, Liberal, Salma Zahid]

Thank you.

With that, we will get into our first round of questioning. We will begin our six-minute round with MP Baldinelli.

You will have six minutes, MP Baldinelli. Please go ahead.

[Tony Baldinelli, Conservative, Niagara Falls—Niagara-on-the-Lake, ON]

Thank you, Madam Chair.

Thank you to the witnesses for being here today.

I'm going to begin with you, Dr. Johnson Bressan. Thank you for being here.

Niagara College is ranked the number one research college in Canada, and it attracts over $40 million in funding, going back to 2023-24. I'm always so proud to highlight the incredible work of the students and faculty at our Niagara-on-the-Lake campus and the important work that is being done in Welland as well.

Ms. Bressan, Niagara College has a number of programs for students looking to enter Canada's auto manufacturing sector. In 2018, the college opened a new $1.4-million green automotive technology lab. In 2024, the college received funding from the federal government of about $365,000 for their motive power program. Then in 2025, you had this innovative program with the RBC Foundation, which helped fund an electric vehicle first responders training program at Niagara College, and that was worth about $450,000 in pledged programs. The work that you're doing in such a short amount of time is incredible.

You talked about the 49,000 assembled Chinese EVs coming into the country. You talked about the disadvantage of that. Are Chinese EVs a risk and threat to the future and viability of EV auto manufacturing programs like the one at Niagara College?

[Nadja Johnson Bressan]

The challenge that is posed here is that we have no access to the design of these vehicles. While we have access currently to the design of vehicles in Canada at the moment, we are finding challenges in making sure that we are safely deploying rescue teams when rescuing people from vehicles during accidents.

In this partnership, if we don't have any access to the design and specifications of these cars, we have no idea how to deactivate a battery. That can kill someone, like a paramedic getting into a car as a first responder and having no idea if that battery is alive or was unplugged at the moment of the accident. We don't have access to those plans.

[Tony Baldinelli, Conservative, Niagara Falls—Niagara-on-the-Lake, ON]

That's interesting.

From a research perspective, the big three automakers spend about $980 million each year on research here in North America, and that flows down to places like Niagara College and to the programs that you present to students who enrol.

Chinese EVs and Chinese companies will not be doing that research. What's the impact on Niagara College, for example? What would be the impact on future student enrolment because of that loss in research dollars?

[Nadja Johnson Bressan]

The research dollars are just one piece of the impact. When we think about how many of the trades are inside an automotive manufacturing plant, we are talking about all of them, from welders to motive power to electricians. It's all of the trades.

The impact on research is enormous, because part of what we are doing at Niagara College right now is research on this sector and how to identify these key factors of the batteries and the construction, the building of the car. We can only do that because we are in constant communication with the automotive industry in the development of this research.

Now, in a partnership, it is possible if this partnership provides access to the specifications and the development of this car. I am not certain that we have that.

[Tony Baldinelli, Conservative, Niagara Falls—Niagara-on-the-Lake, ON]

The great thing about the college system is the relationships it establishes within the communities and the businesses that utilize the services and the training of the students that are there.

We have a General Motors engine propulsion system located in St. Catharines, and GM has a relationship with Niagara College. Do you think that this relationship could be put at risk as the government pursues Chinese EVs?

[Nadja Johnson Bressan]

If they're manufacturing at their plant and the jobs they have today are placed at risk, then their relationship with the college—not just Niagara College but any college—will be at risk.

[Tony Baldinelli, Conservative, Niagara Falls—Niagara-on-the-Lake, ON]

I have a quick question about something you mentioned in your remarks.

Last week, probably all members met with local firefighters. The International Association of Fire Fighters was in town with Jim Lee. The union from Niagara Falls was in town. The number one issue they had and discussed was lithium-ion battery fires, which they describe as “not ordinary fires”. When a cell enters thermal runaway, it generates intense heat that can exceed 700°C.

You talked about the innovative program that was established and struck last year with the RBC Foundation so that you could provide training to firefighters, paramedics and emergency services personnel. If you have some time, can you describe that program a little bit more?

[Nadja Johnson Bressan]

When a battery—a pack of batteries, actually—catches on fire, it can reach 3,000°C. If one of the cables that feeds those batteries is pinched or damaged for any reason, the car gets to a place where there can be 140 amps on its chassis, and I'll just remind you that 10 amps can kill you. It could be 140 amps, depending on the vehicle, and that's the thing. We are talking about electrical vehicles, but we are not being very specific. What type of electric vehicle? Are they HEVs? Are they zero-emission vehicles? Are they hybrids? What kind of technology are we talking about?

Depending on the technology, it will not have an impact on our jobs, but depending on the technology, it could have a different impact on our economy. We have provided this training to—

[The Chair, Liberal, Salma Zahid]

I'm sorry for interrupting, but we've gone beyond time. Thank you.

We will now proceed to MP Rana for six minutes.

Please go ahead.

[Aslam Rana, Liberal, Hamilton Centre, ON]

Thank you, Madam Chair.

Thank you to all the witnesses for your time.

Professor Karaguesian, you recently argued that Canada is going to gain more than what we'll lose from this arrangement, but some people are a little hard on it and don't agree with these comments. What do you think? What are they missing?

[Julian Karaguesian]

Do you mean whether Canada would be a net beneficiary or benefit more than China would benefit from a relationship with us? Do you mean whether we will benefit in a significant way?

[Aslam Rana, Liberal, Hamilton Centre, ON]

Yes.

[Julian Karaguesian]

Well, we could do ivory tower economics, but we're not going to do that here, and I don't think we should do that at all. However, there are some useful models in economics. One of them is the gravity model: How much trade would there be between two countries if there were only geography to consider, and no geopolitics or tariffs?

My own back-of-the-envelope calculations—and those of my colleagues, and right across the board—suggest that we'd go from about $130 billion in two-way trade with China to about $370 billion. Those are my own estimates, based on how I compute the gravity model—to get technical.

Based on the fact that we're complementary economies—we're a natural resource superpower, while they're a manufacturing superpower—my own estimates suggest a threefold increase within 10 to 20 years in trade if there were no geopolitical considerations.

[Aslam Rana, Liberal, Hamilton Centre, ON]

How do you weigh the benefits of the cheaper EVs for Canadian consumers against the pressure they put on domestic producers? Is there a way to have both, or is this a real trade-off?

[Julian Karaguesian]

I think there are a few benefits. One is affordability. Two is clean air and climate change mitigation. Three, if we want a broader relationship with China and the rest of the global south, there has to be a quid pro quo. We have to give something up, but I'm not suggesting in any way to give up our manufacturing or our skilled workers, not in the least.

Four, whether intentionally or not, the actions of the current Trump administration and the previous Biden administration were and are an attack on our economic model, and we have to expand trade with the rest of the world and with the global south, where three out of every four people on this planet live and which has 60% of global GDP at purchasing power parity. It is in our long-term interest to mend fences and trade with the entire planet. We can be a prosperous country, even if some of our manufacturing is just parts of global supply chains.

Then there's the technology transfer. I'm talking about technology transfer to Canada from the People's Republic of China, where they lead in 66 of 76 technologies, according to the Australian Strategic Policy Institute, according to The Economist magazine, according to the EIU and a range of other institutes with expertise in technology.

[Aslam Rana, Liberal, Hamilton Centre, ON]

Do you think this arrangement will complicate relations between the U.S. and Canada?

[Julian Karaguesian]

I do. I think it already has, but we're facing a kind of unintentional—or intentional—forced decline by Washington. They are making trade with the United States more costly for us. We've been an incredibly loyal ally. We've not hurt them in any way. They are making trade with the United States costly with a range of tariffs. They're telling us that they're going to repatriate the rest of the automobile sector with the Detroit three. They're also telling us that if we try to diversify our exports, they'll punish us.

Our only choice is to diversify our exports, which will make us more resilient, more sovereign and, in the long run, more prosperous.

[Aslam Rana, Liberal, Hamilton Centre, ON]

Thank you very much.

Dr. Zaghib, what are the biggest research gaps Canada needs to close to stay relevant in the battery space over the next decade?