:
Good evening, everyone.
I call this meeting to order.
Welcome to meeting number 123 of the House of Commons Standing Committee on Industry and Technology.
Today's meeting is taking place in hybrid format, pursuant to the Standing Orders.
Before we begin, I would like to remind all members and participants of the following important preventive measures. In order to prevent disruptive and potentially harmful audio feedback incidents that could cause injuries, all in-person participants are reminded to keep their earpieces away from all microphones at all times.
As indicated in the communiqué from the Speaker to all members on Monday, April 29, 2024, the following measures have been taken to help prevent audio feedback incidents.
All earpieces have been replaced by a model that significantly reduces the likelihood of audio feedback.
The new earpieces are black, whereas the old ones were grey.
Please use only the approved black earpieces. By default, all unused earpieces will be unplugged at the start of a meeting.
When you are not using your earpiece, please place it face down in the middle of the sticker on the table, as shown in the image there.
Please refer to the cards on the table for guidelines on preventing audio feedback incidents.
Finally, the room layout has been adjusted, as you can see, to increase the distance between microphones and reduce the risk of feedback caused by an ambient earpiece.
These measures are in place so that we can carry out our activities without interruption and, of course, to protect the health and safety of all participants, including the interpreters.
Thank you all for your co-operation.
Dear colleagues, before we begin, I'd like to talk to you about a budget-related topic.
We've received two budget requests. One is for the study we're doing today, which is on ELYSIS technology, for which we're asking for $2,500, and the other is for the main expense budget, for $500.
Is there unanimous consent to adopt them both?
[English]
Some hon. members: Agreed.
The Chair: I thank you for that.
[Translation]
Pursuant to the motion adopted on Monday, March 18, 2024, the committee is resuming its study of the Development and Deployment of ELYSIS Technology at Rio Tinto and Alcoa Facilities.
I’d like to welcome the Honourable François‑Philippe Champagne, Minister of Innovation, Science and Industry here with us today, as well as Mr. Simon Kennedy, deputy minister.
As everyone knows, the first hour of the meeting will focus on ELYSIS technology, while the second will be devoted to the 2024-25 Main Estimates. I would therefore ask you to adhere, as far as possible, to today's meeting schedule and to focus your questions on ELYSIS technology during the first hour of the meeting.
Without further ado, Minister, I yield the floor to you to deliver your opening remarks.
Dear colleagues, it is a great pleasure to be here today.
Thank you for inviting me to speak on two important topics, one of which is the aluminum industry. I have to say that this industry is the pride and joy of the people back home in Saguenay—Lac‑Saint‑Jean, Mauricie, Quebec and across the country.
The second topic is the main estimates, about which I'm sure I'll be asked more general questions.
[English]
As I was saying, it's my pleasure to appear before this committee today to discuss the main estimates for fiscal year 2024-25 and to answer any questions on Canada's aluminum industry and some key investments. I must say that we have seen record investments in the aluminum industry in our country, so it's going to be good to talk with this committee and see what more we can do together.
The request we put forward in the main estimates is for $11.5 billion, which includes funding for normal operations and also for program delivery for both the department and the portfolio agencies that we have. It also includes funding to continue the implementation of budget 2023 measures, as well as spending reductions under the refocusing government spending initiative that we have launched.
[Translation]
From the automotive sector to biomanufacturing, and from artificial intelligence to green and digital industries, we must ensure that Canadian companies remain at the forefront.
[English]
That's why our government has introduced tax incentives to encourage the adoption of clean technologies across the country. That's why we're making landmark investments in new industries, such as EV and battery manufacturing.
Colleagues will have seen that Canada is winning big in the world. I think we're becoming the reference when it comes to EV vehicles, and that is really thanks to our workers, who are the best in the world.
These investments are attracting attention from the major automakers and battery manufacturers around the world. In fact, you will have seen just last month that we welcomed the news that Honda Canada will be investing $15 billion to create our country's first comprehensive electric vehicle supply chain.
I just want to say to colleagues that this is the largest investment by a company in Canada's history. It's the largest investment in Honda's history, and it's the largest investment in our auto industry since the creation of Canada—that was big news for everyone.
These investments are a strong vote of confidence in Canada. It's a strong vote of confidence in our skilled workers. It's also a strong vote of confidence in the ecosystems that we have been building and in the competitive business environment that we have created in this country.
[Translation]
My colleagues are well aware that Canadian companies are world leaders in carbon capture and hydrogen fuel cell technology.
[English]
That's why we will continue to support the adoption of made-in-Canada clean-tech solutions for the net-zero economy.
On the digital front, we are working to connect all Canadians, regardless of where they live, with high-speed access at affordable prices. We are also trying to balance digital innovation with trust and privacy through our digital charter.
[Translation]
In fact, Canada's Digital Charter, which you have right in front of you, will strengthen the protection of the privacy of Canadian citizens, and it will define new ways to frame the development and use of new technologies, such as artificial intelligence.
On the subject of artificial intelligence, the Pan-Canadian Artificial Intelligence Strategy is doing just that, helping leading Canadian companies reach new heights, attract the best talent and train our young researchers.
For your information, you should know that the Pan-Canadian Artificial Intelligence Strategy is the first strategy of its kind in the world. I can tell you that my colleagues around the world are hailing Canada's initiative and leadership in this field.
[English]
Colleagues will have seen that we have recently announced an historic investment of $2.4 billion in artificial intelligence to keep our leading position. This is in what we call “computing capacity”. To make sure we have the best talent, we need to give them the tools to continue to have that leadership position. This support is earmarked to build and provide access to computing capabilities for Canada's world-leading AI researchers, start-ups and scale-ups. It will also, among other measures, help small and medium-sized businesses adopt AI solutions and support workers in dealing with this very new technology.
[Translation]
Dear colleagues, let me now move on to another very important subject, the Canadian aluminum industry, of which I am proud. As everyone knows, this industry is recognized worldwide.
I'm originally from Shawinigan, and the first aluminum plant in North America was set up in my region. It stayed there for a century. Most of my uncles even worked at the Alcan aluminum plant. It's an industry I know particularly well.
We're the world's fourth-largest aluminum producer and have been a strategic supplier to North America's industrial base for over a century. My colleagues in Saguenay—Lac‑Saint‑Jean, in particular, are well aware of this: the industry's contribution to our economy is considerable. We're talking $3.45 billion and over 30,000 jobs last year alone.
I would say that today, the activities carried out in Saguenay—Lac‑Saint‑Jean are the largest in the world, if you exclude China.
[English]
As nations seek to catch up and reduce their carbon footprints, carbon-free aluminum will become an increasingly essential commodity.
[Translation]
This is why it's important to invest in technologies like ELYSIS, which is the subject of the committee meeting.
ELYSIS technology enables Canada to play its part in reducing greenhouse gas emissions on a global scale, while maintaining its competitive edge. ELYSIS technology represents the aluminum industry's most significant innovation in over a century. It's being done right here, by local engineers, talent and workers. It's the biggest aluminum innovation in 100 years, and it's happening in Quebec. So it's a source of pride.
This new technology has also led to a historic partnership between two of the world's largest aluminum producers, Rio Tinto and Alcoa. Canada is proud to be part of this great collaboration with both companies and, of course, the Quebec government. It's investments like these that will enable our country to lay a solid foundation for the decarbonization of the aluminum industry, which is the envy of the world.
When I talk to the major automakers, I see that they all dream of being able to source their aluminum here in Quebec.
[English]
For many of our strategic trading partners, the question is no longer “Why Canada?” but rather how and when they can invest in Canada. They realize that we have what very few countries have, and I call them the five pillars.
The first one is that we have a very talented workforce. I would say that we have the best workers in the world, and people recognize that. Canada is a big magnet for talent.
The second thing is that we have strong and growing ecosystems in the automaking industry, in EVs, in batteries, in aerospace and energy, and so on. We have been blessed with natural resources and resources that can build not only batteries but also semiconductors. I would say that when I talk to the OEMs, it's all about proximity: proximity to resources, market and the assembly line.
Third, we have abundant renewable energy. Quebec, in particular, has about 99%, and generally, Canada has about 80%, so if you want to decarbonize, Canada becomes the place of choice.
Finally, thanks to our network of trade agreements, we now have access to 1.5 billion consumers around the world. Canada is the only G7 country that has a free trade agreement with all the other G7 nations. I can tell you that when you say that to investors, they understand that Canada is the place to be in the 21st century.
To sum it up, together we're building Canada's future, a future that's going to be green, a future that is digital, a future in which our industries transform and gear up for a future we can all take part in and benefit from.
I want to say thank you for your time, and again, Mr. Chair, if you allow me, I just want to take the opportunity to thank our Canadian workers. I know people always ask me, what do investors ask you first? The first thing is about talent, and everyone recognizes we have the best workers in the world.
With that I'm happy to take questions.
[Translation]
Thank you, colleagues.
:
Well, that's a very good question. That might also be a study for the committee in the future, when you've passed Bill , because that is a very interesting part.
I'll give you an example. I was just in Washington recently, and in Nebraska over the weekend.
First, I'll tell you about cobalt—colleagues may know or not know. When I was in Washington, I asked my colleagues if they knew that there was only one refinery of cobalt in all of North America. Everyone was pretty surprised by that. I asked if they wanted me to tell them where it was. They said they guessed I was going to tell them even if they didn't ask. I said it was in Cobalt, Ontario. I asked them whether they knew how long it took to permit that. I said it took about a good part of a decade for that. I said to my American friends that it would probably be better if we worked together to scale, because what we need now is speed and scale. If they wanted to have theirs, it was going to take at least a decade. So, cobalt is a good example.
If I come back to the motion you had on Rio Tinto, you may have seen that now Canada is the largest producer of titanium in the world. We've displaced Russia, thanks to an investment by Rio Tinto, in fact, which invested close to $1 billion in Sorel, which is a small town in Quebec.
Now, what do you do with the titanium? Imagine, now you can produce titanium powder, and with that powder, you produce 3D printing of titanium parts. With that, you can basically repair jets on aircraft carriers. That's just giving you an example of where we're making headway. However, I would say we need to work together—and this committee has a role in that—because it's all about speed and scale, like you say, to make sure we have a resilient supply chain in North America.
Thank you for being here, Mr. Minister.
First of all, I really appreciate your recognition of workers. It's important that you do that. You've done that not just here at this committee; I've also seen you do that in public statements and so forth. Coming from a union environment myself, where the workers negotiate the work and are sitting down at the table.... We can support through public policy, but the skill set is there.
I really appreciate that. Some people like to take victory laps when things happen, and we should be focused on that and being attractive to the United States as well, fighting back on our auto jobs. I give you credit: We're on offence on auto for the first time in the 20-plus years I've been here. I appreciate that, because usually we're having to come and mop up a spill over something else. I do appreciate that.
I want to ask, though, about one thing I'm concerned about in the recent announcement. It's not the announcement itself, but we might have workers who can't afford the vehicles they're making. It's similar to the people working in the grocery stores who can't afford certain things that are on the shelves they are stocking.
The United States has incentives for electric vehicles at $7,500 U.S., which translates to probably $30,000 Canadian. No, I'm kidding. It's not $30,000 Canadian. It's probably about $10,000. So we have ours at $5,000. On top of that, they have a used incentive for $4,000. They're going to be very assertively getting the vehicles into the market.
It seems that we always have money for the companies and the corporations, but we don't have in the province of Ontario any subsidy in terms of an incentive for electric vehicle purchasing. Ontario has abandoned that policy. Ironically, the minivan made in Windsor can get upwards of $15,000 to $20,000 bought in the U.S., depending on where you buy it, whereas in Canada you can get only $5,000. I've called for some reciprocity. We've talked about reciprocity in the auto sector, from bumpers to everything else. Do you have any thoughts on that? I've asked for this government to look at some sort of reciprocity for Canadian consumers.
Lastly, just to summarize, with the U.S. having a $4,000 incentive to buy used, we could actually have a business, a cottage industry business, of shipping electric vehicles that are used out of Canada into the United States, lowering our target margins that we're trying to reach, because they'll be able to get incentives on the vehicles that are in the used market. Used vehicles are traded back and forth along the border on a regular basis. They will have a $4,000 U.S. incentive, which is probably about $6,000 Canadian. We could actually be losing some of our threshold target markets.
:
Well, I want to say thank you, Mr. Masse, because when we talk about workers, we're on the same line; I think you and I have been acknowledging that. What makes Canada competitive today is that we have the best workers in the world. You're right—in every speech I give and in every announcement, I always thank them, because at the end of the day, it starts with them. As you know, if you don't have the talent.... It's the same thing with the aluminum and the same thing with cars.
I remember the first meeting I had with the chairman of Honda in Tokyo two years ago. I think I had a piece of paper that said that the Alliston plant was the best on this planet. I said, “Trust our people; they're the best.” Then, obviously, two years later, he said, “I heard you being patient. That was patience well invested.”
To your point, I think we started with incentives for electric cars. I just want to put in perspective that when I became Minister of Industry, you will recall that one of the first briefings I received was, basically, about preparing for the end of the auto sector in Canada and how we might follow suit with the U.K. and Australia. I must say that thanks to what we did together as a nation, we turned that around. I was looking, and I think since 2020—I just saw the data—we have had $46 billion of investment.
You're right—you come from Windsor, and you've been fighting all your life for the workers. Do you remember when we used to be at the table and we were hoping to get something? Now, as you know, there is Volkswagen, with the first gigafactory outside of Germany. There's the largest investment in Honda's history. There are Ford, GM and Stellantis.
To your point, we started with incentives for the cars, and I'm happy to study those. If the committee wants to study other measures, we can do that. The other thing we're doing is trying to reduce the cost of the batteries, because at the end of the day batteries represent about 40% of the cost of an electric vehicle. By regrouping the supply chain in Canada, we're hoping to be able to decrease the cost and make greener batteries, so that the cars will be more affordable, because affordability is an issue.
:
Mr. Van Bynen, thank you very much for raising a question that would interest most Canadians watching.
I can tell you that we were one of very few countries in the world that had a competition commissioner with no subpoena power. Our colleagues should listen to that. Imagine.
Basically, before we amended the law, the head of competition in this country could write a letter to a company and ask them to provide information. Then, some would say, “Thanks, but no thanks,” and that was basically the end of it. To me, that was one of the priorities we had, to give enforcement power.
Now, if you do a market study, you have subpoena power. If they say that they don't want to give the information, then we'll seek it through court. That is probably one of the most fundamental things, if we want to have a market study.
I look at Mr. Masse and Monsieur Garon, who are here. When we did the last one on grocery, it was all on a voluntary basis, but if you want Canadians, Parliament and government to have a view of a certain market, you need to be able to compel companies to provide information.
We would probably be the only country in the G7.... I can imagine. I'm a lawyer myself, and having an enforcement agency that knocks on your door and says, “Would you please give me information?”, is not what you need. That's what we changed.
I'll give you an example of other things we did that will go to Mr. Williams' question. It's well known that I've been talking to some foreign grocers to see whether we could bring deep discounters into this country to have more competition. Mr. Van Bynen, one that I met said that they looked at Canada a couple of years ago, but before we changed the law, you could have one of the major grocers with a store within a plaza, and because of the restrictive covenants, you couldn't have a store within five or 10 kilometres. Worse, even if they were to leave, no one could go there, so you would have these food deserts in Canada.
I can tell you, I was with the CEO of one large grocer in the United States. They have the wherewithal of billions of dollars behind them. They said that they had tried to lease 400 to 500 properties in Canada, and no one would lease to them. He said that now that we've changed the law and now that these restrictive covenants are illegal, they're going to be able to look again at the market.
Will I succeed? I don't know. Is it worth the effort? Definitely. Am I going to fight? Yes. That's the type of issue on which, thanks to Parliament, our government, and the vision of my colleagues, we've been able to make changes.
I was saying that, in reforming competition, this is probably the most important dividend we've created for Canada for generations to come, because those are fundamental pillars. Yes, you can attract investment, and you can do this and that, but when you have more choice, you have—usually, and we've seen it everywhere in the world—better prices and more options. That's what we want to see in every sector of our economy.
:
Working closely with the commissioner of competition and the minister, obviously, we have tried to advance a fairly comprehensive set of reforms to competition.
A couple of examples that would be relevant not only to the grocery sector but also to others would be the ability of the commissioner to conduct market studies. As the minister talked about before, if there's a concern about behaviour in a particular industry and the commissioner wishes to study it, in the past, actually getting access to the data was entirely dependent on the voluntary participation of the industry players. Now there'll be much better power to go in there and do the study and shine a light on areas where there may be problems.
There were changes made to better get at the issue of so-called horizontal collaboration. In an industry, if you have players who are colluding, working together to reduce competition, that's illegal. For example, you have two grocery companies in the industry that get together. It wasn't, strictly speaking, a problem if you had people in two completely different sectors getting together—for example, landlords with restrictive covenants in their tenancy agreements.
That has been addressed by the reforms to the competition legislation.
There is now, I believe, a private right of action, so that parties that feel aggrieved—they are injured—can actually go to the tribunal and seek relief.
There's a whole series of reforms that have been made to, frankly, make it easier to get relief in the case of problems and to make it easier for the commission to go after examples of anti-competitive conduct.
We have removed the efficiencies defence. I think honourable members will know about that. Basically, in Canada, as a result of jurisprudence and so on, it had become an absolute right of defence. As long as your merger resulted in a more efficient outcome that outweighed the damages, that was an absolute defence you could bring to the table to justify your merger. Literally, prices could rise, consumers could be harmed, choice could go down in the market and workers could be let go. As long as the new enterprise was more efficient than the previous two, all of that was fine. Well, efficiencies are no longer a defence that's available to companies.
There have been very significant structural changes made to the legislation. There's been a lot of commentary on that, so maybe I won't add further at this time, but I am happy to have us go into detail if there's a desire.
Thanks.
:
Thank you very much, MP Van Bynen.
That concludes our round and the hour, so I want to thank the officials for joining us this evening.
Colleagues, before I adjourn the meeting, we have to vote on the estimates. I don't know if you want to do this right now. It's not very long, and it's a familiar process.
The first thing is that I would need unanimous consent to group them all together. Do I have unanimous consent?
Some hon. members: Agreed.
The Chair: Shall all the votes, less the amounts voted in the interim supply, carry?
ATLANTIC CANADA OPPORTUNITIES AGENCY
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Vote 1—Operating expenditures..........$70,390,767
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Vote 5—Grants and contributions..........$306,694,872
(Votes 1 and 5 agreed to on division)
CANADIAN NORTHERN ECONOMIC DEVELOPMENT AGENCY
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Vote 1—Operating expenditures..........$21,698,804
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Vote 5—Grants and contributions..........$47,557,663
(Votes 1 and 5 agreed to on division)
ç
Vote 1—Operating expenditures..........$242,285,439
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Vote 5—Capital expenditures..........$80,059,782
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Vote 10—Grants and contributions..........$79,468,000
(Votes 1, 5 and 10 agreed to on division)
CANADIAN TOURISM COMMISSION
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Vote 1—Payments to Commission..........$115,967,712
(Vote 1 agreed to on division)
ç
Vote 1—Program expenditures..........$4,045,082
(Vote 1 agreed to on division)
ç
Vote 1—Operating expenditures..........$618,058,710
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Vote 5—Capital expenditures..........$76,406,772
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Vote 10—Grants and contributions..........$5,243,950,500
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Vote L15—Payments under subsection 14(2) of the Department of Industry Act..........$300,000
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Vote L20—Loans under paragraph 14(1)(a) of the Department of Industry Act..........$500,000
(Votes 1, 5, 10, L15 and L20 agreed to on division)
DEPARTMENT OF WESTERN ECONOMIC DIVERSIFICATION
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Vote 1—Operating expenditures..........$41,478,066
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Vote 5—Grants and contributions..........$275,379,745
(Votes 1 and 5 agreed to on division)
ECONOMIC DEVELOPMENT AGENCY OF CANADA FOR THE REGIONS OF QUEBEC
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Vote 1—Operating expenditures..........$44,487,260
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Vote 5—Grants and contributions..........$266,261,739
(Votes 1 and 5 agreed to on division)
FEDERAL ECONOMIC DEVELOPMENT AGENCY FOR NORTHERN ONTARIO
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Vote 1—Operating expenditures..........$15,173,274
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Vote 5—Grants and contributions..........$38,172,996
(Votes 1 and 5 agreed to on division)
FEDERAL ECONOMIC DEVELOPMENT AGENCY FOR SOUTHERN ONTARIO
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Vote 1—Operating expenditures..........$34,929,462
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Vote 5—Grants and contributions..........$190,020,359
(Votes 1 and 5 agreed to on division)
NATIONAL RESEARCH COUNCIL OF CANADA
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Vote 1—Operating expenditures..........$582,386,328
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Vote 5—Capital expenditures..........$152,061,000
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Vote 10—Grants and contributions..........$610,696,760
(Votes 1, 5 and 10 agreed to on division)
NATURAL SCIENCES AND ENGINEERING RESEARCH COUNCIL
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Vote 1—Operating expenditures..........$58,597,413
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Vote 5—Grants..........$1,318,171,508
(Votes 1 and 5 agreed to on division)
PACIFIC ECONOMIC DEVELOPMENT AGENCY OF CANADA
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Vote 1—Operating expenditures..........$29,134,464
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Vote 5—Grants and contributions..........$89,283,824
(Votes 1 and 5 agreed to on division)
SOCIAL SCIENCES AND HUMANITIES RESEARCH COUNCIL
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Vote 1—Operating expenditures..........$44,248,882
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Vote 5—Grants..........$1,148,878,654
(Votes 1 and 5 agreed to on division)
STANDARDS COUNCIL OF CANADA
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Vote 1—Payments to the Council..........$21,397,106
(Vote 1 agreed to on division)
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Vote 1—Program expenditures..........$648,221,726
(Vote 1 agreed to on division)