Transport Committee on May 2nd, 2022

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

To Mr. Veldman of the Prince Rupert Port Authority, you referenced in your recommendations the need for more timing and more certain regulatory processes. I'm wondering if you could be a bit more specific and elaborate on whether there are some specific pain points, areas of red tape or barriers that could be removed. You indicated that obviously these are resulting in some delays.

Perhaps the Vancouver port authority has a perspective on that as well, given their size as a port in Canada.

[Ken Veldman]

Thank you. I'd be happy to.

I mentioned the size of our investment portfolio earlier. We have private sector investment ready to be deployed. The reality is that we have projects, whether export logistics transload or Vopak Pacific Canada and their proposal to move more transitional fuels on an export basis. These are absolutely critical in terms of time.

To be clear, the suggestion is not to remove red tape but to make these processes become more efficient and transparent. These are small projects that don't meet the threshold for a full, designated project under the Impact Assessment Agency, yet it continues to take years to complete an environmental effects evaluation. We just need it to be faster.

These global supply chains are critical to Canada's competitiveness. We often think about it on an export basis, but what we're hearing today is that it's also on an import basis. In order to be able to develop these kinds of competitive capacities within Canada, we need to have a fully integrated, leading-edge supply chain. As we look to bring in these critical pieces of trade infrastructure, lagging behind our competitors in being able to put these capacities and capabilities in place is to our own detriment. The rest of the world is moving very fast. We have to find ways to be competitive on a timely basis as well.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

It sounds like Canada is falling behind.

Is there anything further from the Vancouver port authority?

[David Miller]

There's no question that it's been a real challenge.

I spoke about the new terminal we're hoping to build. We've been in the environmental review process for nine years. Even if we get approval this year, we'll require several more permits, and then it's a six-year construction period. That's a long period from beginning to end. There's no question of that. We certainly believe that a faster, more efficient process would be in everybody's best interest.

We have the power to approve certain projects within the port ourselves. Our terminals and other partners sometimes feel we take too long to approve them, but for us to take two years is pretty rare.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Miller, and thank you very much, Mr. Muys.

Next we have Mr. Chahal. The floor is yours. You have five minutes.

[George Chahal, Liberal, Calgary Skyview, AB]

Thank you, Mr. Chair, and thank you to all the witnesses for presenting today.

I'm going to start off with Mr. Paterson from GM.

Our recent budget 2022 proposed providing $1.5 billion in targeted support towards critical minerals projects. You highlighted that this is a “generational opportunity” in the EV market. You also mentioned mining, moving, processing and recycling, and that you welcomed the critical minerals plan in the budget.

You mentioned that we have to get this policy framework right. Could you elaborate on what you would like to see in order to get this policy framework right?

[David Paterson]

We were first among the auto companies to make a significant processing announcement, but we're certainly not the only one. There are a number that are moving quickly. We see that different provinces are moving in this area, but they're doing so because of their constitutional responsibilities. Quebec perhaps moved the most quickly and impressively in this regard. Ontario is taking some steps as well. We need to align our federal processes.

Some of these issues are going to be not dissimilar to what we just talked about with regard to the port of Vancouver, and that's going to be the timing of being able to accelerate current reserves that are in place. For example, in the electric battery area, one of the areas that Canada has a distinct advantage in is nickel. It's one of the most essential of the processed materials, particularly for cathode active materials. We don't have huge resources in the United States or Mexico in that area. There are some, but that's just one example of where we're blessed with some competitive advantage.

Being able to move or accelerate those reserves and being able to then coordinate the processing of them means integration between federal and provincial governments. It's about resources and regulatory timing to be able to move forward.

I have to say that I am impressed with Quebec being on the front foot to try to just solve problems day in and day out. I'm doing this half of my day every day to move those things forward. When you look at the opportunity, it's huge. We'll probably see a significant uptick from what we're doing already.

[George Chahal, Liberal, Calgary Skyview, AB]

Thank you for that.

My next question is to the port authorities, maybe to Mr. Miller or Mr. Rogge, who I guess is the land person in charge at the Vancouver port authority.

We talked about the potential challenges to ports and the congestion there. What are the opportunities that are available at our inland ports? Calgary, in my riding, has the airport. We have CP headquartered here in Calgary, with a connection to Vancouver, but we also have the CN spur line. What are the opportunities from the port's perspective here in Calgary or in Edmonton, given the shortage of land in Vancouver?

[David Miller]

Greg, do you want to take that?

[Greg Rogge]

I would certainly say that there are definitely opportunities to leverage inland capacity. We have the Ashcroft facility, and we've certainly seen a number of large BCOs, beneficial cargo owners, move into the Calgary area, but it also requires the infrastructure within the port, and the container capacity is still critical. Timely, transparent approval of large infrastructure projects is still essential, and they're precursors to private investment as well.

We heard the Prince Rupert Port Authority talk about a lot of private investment being ready to go, and we have the same thing. They are precursors to those kinds of things. There are definitely opportunities for inland facilities. We would like to see that leveraged, but we still need to solve the problem that we have with capacity issues within the terminal area itself.

[George Chahal, Liberal, Calgary Skyview, AB]

What can you off-load to our inland ports while you deal with challenges and capacity? With the shortage of land in Vancouver, what can you off-load to centres like Calgary, Edmonton and Regina to help support your space requirements?

[Greg Rogge]

There's a lot of transloading that occurs, particularly with the container rates that are occurring today. Containers are coming into the west coast ports, and then they're being transloaded from marine containers into intermodal containers to be moved east. The warehousing capacity in the Lower Mainland is past capacity. Moving those kinds of intermodal or rail containers farther east into some of the inland capacity and allowing the transloading to occur in those locations is definitely an opportunity that can occur outside of the Lower Mainland of Vancouver.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Chahal and Mr. Rogge.

Can I just ask you to select your microphone? The interpreters have just informed us that they're having difficulty with interpretation because your microphone isn't selected properly. You have to select it at the bottom left of your screen.

[Greg Rogge]

I will attempt to do so.

[The Chair, Liberal, Peter Schiefke]

Okay.

Let us know if you're having any difficulties, and we'll work with you to get that done.

Mr. Barsalou‑Duval, you have the floor for two and a half minutes.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you, Mr. Chair.

My question is for Mr. Kingston from the Canadian Vehicle Manufacturers' Association.

Over the past few months, I've noticed that your association has been critical, to say the least, of steps the government has taken to electrify transportation. In particular, you have been critical of the targets.

In your opinion, why doesn't the industry have the resources to electrify transportation? Do you think the government has a strategy for reaching those targets?

I'd like to hear your comments on that. Then I will ask you some more questions.

[Brian Kingston]

Thank you.

As I've outlined in my remarks, the industry and CVMA members are investing billions into electrification. You're going to see more and more vehicles coming to market, and many of these vehicles are going to be built right here in Canada.

The challenge we're seeing with the government strategy is on the demand side of the equation. We're being very successful in building an EV supply chain here in Canada, but in order to achieve the targets that the government has set out, we have to help consumers make the switch to electric.

We know what those barriers are. They've been very well documented by government surveys and by industry surveys. It is the cost of electric vehicles. They are more expensive than gas-powered vehicles. As we've outlined, due to some of the supply chain challenges, you are actually seeing the prices increasing. On top of that is charging infrastructure. No one will buy an electric vehicle if they don't think they can charge it at home or access convenient public charging infrastructure.

While we're completely aligned with the government on the ambition to get more Canadians into electric vehicles, the government's approach is to introduce a regulated sales mandate to regulate the vehicles that Canadians buy. That is not the right approach. Leading jurisdictions around the world, the top four countries that are leading in ZEV adoption, don't use the regulatory sales tool to do that. What they've done is build comprehensive charging infrastructure and a range of incentives to help every Canadian purchase and make that switch to electric. We'd like to see more done on that. We have plenty of ideas on how to achieve that and ultimately work with the government to get to the sales targets that they have laid out.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Kingston.

Thank you very much, Mr. Barsalou‑Duval.

Next is Mr. Bachrach.

Mr. Bachrach, the floor is yours. You have two and a half minutes.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

I'd like to pick up right where Mr. Barsalou-Duval left off with some questions to Mr. Paterson from GM, for no other reason than that I drive a GM electric vehicle, and it's been doing really well for my family and me. I'm keen to ask some questions about these electric vehicle mandates.

Canada's climate plan leans heavily on the adoption of electric vehicles to meet the emissions targets. They want 20% of light-duty vehicles sold by 2026 to be zero-emission vehicles. Right now we're at 5%, so we're not going to hit 20% with the current policies that are in place and with the current patterns of adoption.

Around the world we see jurisdictions that have these mandates in place, and I think, a little bit contrary to what Mr. Kingston said, we tend to see these jurisdictions have higher adoption, and they have more supply of vehicles for a consumer. Certainly in Canada, most of the electric vehicles sold are in Quebec and B.C., the two provinces that have supply mandates.

My questions are for Mr. Paterson from GM. First, what is GM's position on a national ZEV supply mandate? Second, putting yourself in the shoes of the federal government, given the goals that we have and given what we see around the world, why wouldn't you put in place one of these supply mandates to make sure consumers have access to the vehicles they want to buy?

[David Paterson]

First of all, I completely agree with what Mr. Kingston just said. Being able to move Canadians to electric vehicle purchases is not simply a function of pushing demand. My company is all in on electrification. We're going to have all of our light-duty vehicles electrified by 2035, and we have a slew of them coming into the market right now. We're making a $35-billion bet on this, and it will be a complete disaster if we cannot sell those vehicles.

What's different in the electric vehicle area is consumers. Consumers have to make this decision. As Brian just said, if the consumers are not able, in the transition period while EV batteries and vehicles are more expensive, to have some assistance to move EVs, or if there is no sufficient charging—you can't charge in your apartment or you can't charge on your street—people are going to make decisions with their wallets and with their sensibility.

We have to join the dots between these policies. Countries like Norway are famously talked about as having the highest EV adoption level. They don't have sales mandates and they are oil-producing countries. What they do is have very smart incentives for consumers to get them attracted to electric vehicles. We need that to take place or else our electrification strategy will fail, and we need to make sure the electric grid is going to be ready to go for those things.

You have to join the dots. The comparison to this adoption of EVs was famously made to asking all Canadians to lose weight because we need to cure obesity.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

I think the challenge—and I have just a couple of seconds left—is that in many provinces in Canada, we have unmet demand. There's more consumer demand than there are vehicles, and we're trying to figure out how to get more of your vehicles into the hands of consumers who are on wait-lists for them.

It doesn't seem like the problem is enough charging infrastructure—certainly not in British Columbia—

[David Paterson]

It is.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

—the issue is not enough electric vehicles on the lots.

[David Paterson]

No.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

How do we convince these companies like yours to supply more electric vehicles for consumers who clearly want them?