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Good afternoon on this fine Monday.
I call the meeting to order.
Welcome to meeting number 66 of the House of Commons Standing Committee on Industry and Technology.
Pursuant to Standing Order 108(2) and the motion adopted by the committee on Monday, November 28, 2022, the committee is meeting to study the development and support of the electronics, metals and plastics recycling industry.
Today's meeting is taking place in a hybrid format, pursuant to the House order of Thursday, June 23, 2022.
We have quite a few witnesses joining us today as we continue our study. With us are Jean Simard, president and chief executive officer of the Aluminium Association of Canada; Christa Seaman, vice-president of the plastics division at the Chemistry Industry Association of Canada; Peter Fuchs, vice-president of corporate affairs for nickel, and Alexis Segal, head of government relations and communications, both from Glencore Canada; and lastly, Maria Kelleher, principal at Kelleher Environmental.
Thank you all for being with us.
Now, without further ado, we will begin the rounds of questions.
Thank you to the committee members for inviting me to share our experience in the circular economy.
As you know, the aluminum industry has a strong footprint in Canada, with nine aluminum smelters, most of which are in Quebec and British Columbia. The association is a founding member of the Pôle québécois de concertation sur l’économie circulaire, a Quebec centre for consultation on the circular economy. Our members are also involved regionally in a range of activities that support circularity.
My remarks will focus on two aspects of recycling: metal recycling and production by-product recycling.
Post-production metal, in other words, before it gets to the consumer—so after processing—is almost entirely reused in our plants. It has tremendous value, and is much easier to recover and incorporate back into the system. Post-consumer metal has a number of limitations, and I'll talk about that later.
The second line of reasoning has to do with production by-products, so non-metal products. Various by-products are generated, whether it be carbon, spent potlining or scum. The industry is working very hard towards its goal of zero landfill waste for these types of products.
We can now say that more than 80% of by-products are reused, recycled or recovered. The remaining materials pose a problem, one that calls for a regulatory response as much as a technical response. Their properties are less suitable, which means they require pretreatment and mixing. They also generate hazardous materials from a regulatory standpoint.
Now I'll come back to post-consumer metal, which is found in packaging, transport vehicles and buildings. That's what we call aluminum deposits. Consumption generates a variety of objects that can be recovered and reused to produce new aluminum. An aluminum can has a life cycle of about 60 days before a new can is manufactured from the same metal. It's longer for vehicles, between 10 and 12 years. In the case of a building, it takes about 50 to 70 years before the metal can be recovered.
The success or recovery rate varies from one sector to another. In Quebec, cans with a deposit have a recovery rate of 66%. In the transportation sector, the rate is between 80% and 90%. Keep in mind, however, the 10-to-12-year life cycle in the automobile sector. Lastly, in the building sector, the rate is 80%. It's important to understand that half of everything that's recovered is not reused. That's very important to know because it represents a lost resource for society and the economy. There is a lot of work being done in that area.
There's a major challenge in Canada: we don't have a critical mass. That's a structural and systemic issue. Quebec, for instance, has about 1.3 billion consumer cans a year. While that may seem high, it's actually quite low. An empty can amounts to air. For the purposes of a critical mass, the cans need to be crushed, baled and sent to a centre where the metal can be melted down. A wide range of technical complexities also come into play, such as removing the lacquer from the paint. What's more, it all has to be done in a way that's economically sustainable. Our critical mass is so small because of our small population size. As a result, solutions that may seem obvious won't work here because the necessary infrastructure would result in losses year after year.
Consequently, our metal is sent to the U.S., not far from the border, to places like Massena, New York. There it is melted down and reused. At the end of the day, it's not a bad thing because most of the plants in the U.S. run on coal, so this helps them reduce their carbon footprint significantly and thus their greenhouse gas emissions.
Beyond that, we also carry out a lot of research for other production by‑products. We have scientists looking for ways to transform residual materials into products. Rio Tinto, for instance, has nine scientific experts working on marketing and supply.
Transforming residual materials into products is good, but then, they have to serve a purpose. They often need to be repositioned in a new market where they can provide value.
That concludes my remarks. I am available to answer any questions.
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Thank you, Honourable Chair Lightbound and committee members.
Chemistry and plastics are Canada's third-largest manufacturing sector, adding $54 billion and $28 billion respectively to the Canadian economy. Eighty per cent of the sector's annual plastics production is export-oriented, with the majority destined for the United States.
Our industry is committed to a low-carbon circular economy for plastics. End-of-life plastics represent a lost $8-billion-per-year resource, which will grow to $11 billion by 2030. If recovered, this would strengthen our economy and our export potential while keeping plastics out of the environment. Not only does a circular economy ensure we are using our resources efficiently, but it further provides our industry with substantial greenhouse gas reduction opportunities, thus supporting Canada's net-zero goals.
An example is Quebec's success with polystyrene. Companies such as Pyrowave and Polystyvert use advanced recycling technologies to return post-use polystyrene to its molecular origins, making it indistinguishable from virgin plastic, but with a lower greenhouse gas footprint.
A further example is NOVA Chemicals' aspirations of net zero by 2050, 30% polyethylene sales from recycled content by 2030 and a 30% reduction in their scope 1 and 2 absolute CO2 emissions.
I'd be happy to share other examples of Canadian innovation driving the circular economy during the question period that follows my remarks.
You heard in your last committee meeting about the role that extended producer responsibility, or EPR, plays in a circular economy. EPR makes those that bring plastic products and packaging into the market responsible for their end-of-life management. Industry welcomes this responsibility and is working actively with provinces and territories to develop and implement regulations that will set ambitious recovery and recycling rates.
Although many provinces are in the early implementation stages, B.C. has a very successful EPR. Some highlights include that 99.3% of B.C. households in 183 communities had access to recycling services at no cost to taxpayers. Producers now fund the nearly $110-million recycling program. In just four years, while recycling has been stagnant across Canada, plastics recycling in British Columbia has increased from 42% to 55%, with 97% of all recovered plastics being processed within B.C., which creates new business opportunities. In 2021, greenhouse gas emissions for the program declined by 20.7%.
There is an important role for the federal government in creating the conditions for a successful low-carbon circular economy for plastics.
The first is investment in recycling infrastructure and innovation, as was reflected in the 2021 ministerial mandate letters for both Environment and Climate Change Canada and the industry department. Unfortunately, that fund has not materialized yet, but it is needed to accelerate innovation and investment in circularity as well as to deliver on other federal policy objectives.
The second area is creating incentives to incorporate recycled content into products. This can take many forms, but the one notably already under development is the setting of recycled content minimums for certain plastic products, which in turn relies on innovation and access to feedstocks to meet recycled content requirements. This, again, links back to EPR and investment.
The journey to a circular economy for plastics in Canada is well under way. We welcome this committee's assistance in framing the appropriate supporting roles of the federal government on this exciting and challenging journey.
I look forward to your questions.
Good afternoon, and thank you to the committee for the opportunity for us to share Glencore's perspective on metals recycling in Canada.
My name is Peter Fuchs. I'm the vice-president of corporate affairs for nickel at Glencore. Joining me today are Alexis Segal, the head of corporate affairs for Glencore Canada, and Marie-Elise Viger, environment manager of North American copper assets and the Philippines, who's based in our smelting operation in Rouyn-Noranda, Quebec.
Glencore is one of the world's largest globally diversified natural resource companies. We are a global company, but with a long history and deep commitment here in Canada. Through the scale and diversity of our industrial and marketing businesses, we responsibly supply the commodities that are fundamental to the building blocks of life and are an important pillar in the Canadian critical minerals value chain.
Glencore is one of the world's leading recyclers of electronics and a major recycler of secondary copper, nickel, cobalt, gold, silver, platinum and palladium. Our operations were among the first to discover how to process end-of-life electronics, and we have been one of the leading recyclers of metals ever since.
Our company plays a fundamental role in the circular economy, giving a second life to these commodities. Our approach is underpinned by Glencore's leading technological expertise, a commitment to customer excellence and embedded sustainability across our business.
To give you a little more colour in terms of what we recycle, it varies from electronics to batteries and other metal-bearing materials, including end-of-life automotive parts and jet engines.
Some of the core assets in Glencore's recycling operations are right here in Canada. As I'm from our nickel business, I will take another moment to describe our recycling capabilities at our integrated nickel operations, and then pass you to my colleague Marie-Elise to speak to you about the copper facilities.
Our smelter in Sudbury, Ontario, is a key part of the global Glencore recycling network. For 33 years, the Sudbury smelter has been safely processing end-of-life materials, production scrap and waste streams. Last year, the Sudbury smelter recovered more than 26,000 tonnes of recycled materials, containing 6,200 tonnes of nickel, almost 2,000 tonnes of cobalt and 1,300 tonnes of copper.
I'm also proud to say that we are making major new investments in the region by investing $1.3 billion to build the new all-electric Onaping depth mine underneath our existing Craig mine, which will extend our life-of-mine in the Sudbury area to at least 2035.
Now I'll pass you on to my colleague.
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With respect to zinc, we have the CEZinc Refinery, in Salaberry‑de‑Valleyfield, the only zinc refinery in northeastern North America. In Montreal, we have a small plant specializing in lead anode manufacturing and recycling. Lead anodes are essential to zinc electrolytic production. We also have a base metal mine in Timmins, in northern Ontario—the deepest base metal mine in the world. The Kidd mine produces copper and zinc concentrates.
In conclusion, Mr. Chair, our company has a 100‑year-plus history in Canada and a deep commitment to this country. We plan to work closely with the government to ensure that this strategic asset continues to support Canada and its allies' need for critical minerals.
To that end, we welcome the release of the critical minerals strategy, and we were particularly happy to see the emphasis on recycling and the circular economy in the strategy.
One topic we would like to put to the committee is the issue of certainty around the way recyclable and other inputs to our smelters are handled. Our facilities have capacity to process more supply in Canada. However, in order to sustain and grow our recycling business, we need predictability for the handling and classification of our inputs. For example, Environment and Climate Change Canada is studying the way e‑waste is imported into the country. We would suggest to the committee that Canada facilitate the exemption of imports of e‑waste from the United States to support the circular economy in Canada and for our neighbour to the south.
We welcome any questions you have.
Thank you, Mr. Chair.
Good afternoon, everyone, and thank you for inviting me to speak to the committee.
I want to briefly address the findings of two reports my company prepared that are relevant to the committee's work.
First of all, I'd like to say that recycling is a prominent and integral part of the circular economy, but it is a complicated business. It involves many different types of materials, products, producers, users and other stakeholders. Some materials are valuable, particularly metals, and some are not as valuable. Some products are short-lived, like beverage containers, and some are long-lived, like buildings.
There are three broad user groups or sectors in recycling: residential; industrial, commercial and institutional; and construction and demolition. Different management systems or plans are required for each of the materials, products and sectors.
The preliminary circular economy report card we developed was an effort to document how Canada is faring in the circular economy. We pulled together available information on the recycling of a number of materials in Canada, including paper, scrap metals, glass, plastic, food and yard waste, lumber and wood, drywall, auto hulks, tires, batteries, e-waste and selected industrial residuals. We identified that millions of tonnes of materials are already recycled in Canada. However, we noted a number of information gaps and concluded that Canada needs more comprehensive tracking systems to fully identify our circular economy performance.
The electric vehicle battery is the second thing I want to talk about. Electric vehicle battery cells are made from an anode, a cathode and an electrolyte, all of which are made from critical minerals and metals. They contain lithium in the electrolyte and graphite in the anode, with varying amounts of critical minerals, such as nickel, cobalt, manganese and aluminum used in the cathodes.
While the numbers are small today, the numbers of electric vehicle batteries at end of life will grow over the years, and grow rapidly after the year 2030. Many electric vehicle batteries can have a second life after their first life, once they're no longer suitable for a vehicle. They can be put into energy storage and other applications, which can extend their lives. We already have a few small companies in Canada that do this work, and a number in the U.S.
It should be stressed that Canada, the U.S. and Mexico are basically one market for the auto and recycling sector, and any regulatory or financial barriers that restrict the movement of used electric vehicle batteries across borders for reuse and recycling should be addressed.
Environment Canada's XBR allows electric vehicle batteries to cross the Canada-U.S. border without a permit when destined for research and development, remanufacturing or repurposing. However, if you're crossing the border in either direction for recycling, you need Environment and Climate Change Canada and EPA permits. This prevents the needed electric vehicle batteries destined for recycling from flowing freely.
There are a number of issues around Transport Canada's regulations not being fully consistent with U.S. regulations; these cause challenges for recyclers. Also, there's a 7% duty placed on batteries crossing the Canada-U.S. border if they're destined for repurposing, whereas there's a 3% duty on batteries going in the other direction, from Canada to the U.S. We certainly should have a level playing field in this arena.
We're extremely fortunate in Canada to have a world-leading ecosystem in lithium battery recycling to recover the critical minerals needed to make new batteries and turn them into chemicals that are sold back into the battery supply chain.
Canada's market and main trading partner is the U.S., and any barriers to trade between the two countries in terms of these electric vehicle batteries, which are part of the new economy and the transition to an electrified future—a low-carbon future—need to be addressed.
Thank you. I'd be happy to take your questions.
Thank you to all the witnesses.
Before I begin with my questions, at our last meeting—I believe it was on March 29—I moved a motion that “the committee order the department of Industry to provide a copy of all papers, documents and emails related to the Government of Canada investment in Volkswagen to develop a new battery plant in Canada.” I believe the committee reached some form of consensus, Mr. Chair, that the information would be provided in good faith.
Mr. Chair, can you confirm whether or not we received that information?
I'd ask for an amendment to the motion to remove the timeline. I don't think 48 hours is very reasonable. I haven't seen the contract, but I imagine it's not just a one-pager that's been signed with Volkswagen. However long it is, it's probably in one language and it has to be translated to a second language. It has to be verified. There were holidays that came in between our last meeting, so there's only been one meeting since the last one.
I'd ask Mr. Vis, through you, Chair, to remove the timeline.
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I'll just say, Mr. Chair, that we asked over two weeks ago to receive this information. I moved a motion from this committee floor to receive that information, so with all due respect, Mr. Gaheer, it's like you're trying to rag the puck on me.
We had lots of time. I, in good faith, moved my motion last time to get this information, and Mr. Fillmore promised me that we would have it today, but we didn't receive it. I, as you will note, did not put a timeline in the new motion that was circulated.
The fact of the matter is that there are some big numbers floating around about the amount of money the government put forward or has given to Volkswagen to create a new battery plant. This is the only car company that's been charged, in my understanding, under the Canadian Environmental Protection Act laws on emissions. That was within the last seven years. It was Catherine McKenna, the former environment minister, who used those powers under the Canadian Environmental Protection Act.
Now we're in a position where.... An unprecedented action was taken in the budget and they said that we'll give you these numbers in due time. Well, we're going to have a vote on the budget pretty soon, and I don't know how much money is going to Volkswagen. I've heard “billions” being floated around, and some of the other numbers being proposed by other countries, before this government came forward with great fanfare to announce this seminal investment, yet this government is afraid to give Canadians the number. Why can't we just get the number? What's the big deal?
I would even take this motion off and just ask for two things: the number of jobs and the amount of money.
I'm not asking for anything inappropriate. If the government stands by their investment, they'll give us the numbers. I don't need obfuscation. We need to have transparency. What I'm seeing here from those two comments is a lack of transparency and a fear of committee members to give Canadians an answer that they deserve.
The motion stands as it is, but we need this information, Mr. Chair. I'm not out of order. This is common-sense stuff. Previous governments have been in this situation before, and they provided information. The parliamentary secretary promised me that he would have it here today, and he didn't follow up with an email or anything or say we need a bit more time or we're redacting certain information. Not a peep. It's like you guys didn't even expect this would come today.
This is a straightforward, good-faith motion on something that the Government of Canada should be proud to share with Canadians.
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Currently, the motion does not stipulate a timeline or going in camera.
Mr. Masse has moved an amendment that we need to deal with before we move on to Mr. Lemire’s amendment, which would add a one-week deadline. Once we have dealt with that amendment, we will be able to deal with Mr. Lemire’s amendment asking that this take place in camera.
This makes the process more cumbersome than the original motion. Mr. Masse, I understand that you are proposing an amendment that would add a one-week timeline to the motion.
Mr. Masse’s amendment is now before the committee.
If no one has anything to add, we will proceed to a vote.
Mr. Vis, you have the floor.
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We're adding a one-week timeline.
The amendment is to add one week as a timeline to the motion that has been circulated electronically. I see consensus around the table.
(Amendment agreed to)
The Chair: Now we have Mr. Lemire's amendment.
[Translation]
Mr. Lemire moved to add that whatever the department produces should be provided to the committee, but not made public. It would therefore be available, in camera, to committee members.
Mr. Vis, you have the floor.
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I'll just give a point of clarification.
[Translation]
I believe that what Mr. Lemire is proposing with respect to in camera, is that the results be sent to members’ personal email address and that they be considered confidential, as are the draft reports. Of course, under these circumstances, committee members are required not to make public the information they've received.
According to Mr. Vis’ comments, I believe he disagrees.
Mr. Perkins, you have the floor.
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To answer your question, the battery recycling plants are in B.C., Ontario and Quebec. In B.C., Cirba Solutions, which used to be Retriev, has been recycling lithium batteries for 40 years, and they are continuing to evolve their technology to the newer hydrometallurgical processes that provide high-value chemicals to go back into the battery supply chain. In Ontario we have a company called Li-Cycle, and in Quebec, a company called Lithion.
The traditional way to recycle lithium batteries was really to create a black mass that had metals in it and send it to Glencore, which would smelt it and then pull the metals out, the nickel and cobalt in particular. Then they would need to be sent somewhere else to make the chemicals that the battery people want.
However, the new recycling technologies are leading edge, and Canada is a world leader in this area. They actually take the batteries, get all the critical minerals and metals out, and make the chemicals that they can sell back into the battery supply chain.
In the last meeting we had, I was able to ask some officials from, I believe, Environment Canada about exportation licences related to plastic waste, and negative and positive lists of the toxic, in some cases, plastics that would be exported through the United States without really knowing their final destination.
Do you think we have a robust enough system in Canada to understand where all plastic waste originating in Canada actually ends up?
[English]
My questions are for the Glencore officials who are here. I'm the MP for Sudbury, so I know the other Peter from Sudbury.
The critical minerals strategy is important. It's important to us for achieving net zero in electric vehicle batteries, clean energy, information and communication technology, and defence applications. As the world moves towards a lower-carbon economy, a key question on which we must collectively focus is how to build on Canada's comparative advantages. One key action item towards that end is to determine how to best utilize the abundance of resources and technology and experience that exists in this country.
Can you describe for the committee what initiatives Canada has put in place specifically to reuse critical minerals that are in waste?
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Absolutely. As we begin looking at what other jurisdictions are doing, Canada is actually advanced, compared to the United States, when it comes to the advancement of extended producer responsibility programs. We're hoping to export that learning.
However, as we look at Europe, there are opportunities to learn from and engage with the different companies and members we have that operate in Europe. We do work with Plastics Europe to understand what is taking place in the EU that is helping the EU to increase its recycling rates.
Again, you need to take into account the fact that there are significant differences in population density. That affects the ability to collect the waste plastic at the economies of scale that are needed. It's to actually support the investment in some of these areas. When we look at what Canada can do to help bridge that gap, it's really going back to having the federal government implement the $100-million fund to support innovation and infrastructure that was committed in the ministerial mandates in 2021.
I want to thank Glencore Canada for accepting our invitation to participate in this important study on the scrap industry, which focuses specifically on the recycling of metals, plastics and electronics, from a circular economy perspective.
I was born in Rouyn-Noranda. My grandfather Ernest arrived with his father, Eugène, in 1923. It was a little before the first casting in Noranda. So I care deeply about this city. My children are part of the fifth generation to grow up in this town.
That said, something has been bothering at me lately. Is the threat of closing the smelter, used during negotiations with Quebec City, real?
Also, how would you characterize your level of responsibility for the health of Rouyn-Noranda’s population?
One of the fundamental aspects, in my view, is the notion of transparency and availability of data. This notion is important to citizens. In Mount Isa, Australia, your company uses a mobile app to allow citizens to see the levels of sulphur dioxide in the air. A similar model was developed in Quebec City, in the Limoilou district, to track red iron oxide dust levels online.
Do you intend to go down this path in Rouyn-Noranda? What transparency measures would you like to put in place for citizens?
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Thank you, Mr. Chair. Maybe I'll go to Ms. Seaman first.
With regard to our trade agreements, should we include or start to think about having recycling as part of those trade agreements? It's something I've been mulling over.
Without recycling, you can have subsidization of industries with regard to lack of recycling and so forth, with disposal. I wonder about our U.S.-Mexico-Canada trade agreement, or others where we are in a regional area trading back and forth on so many things.
The auto industry has long talked about auto recycling, extended producer liability and so forth. Could you give us some thoughts? If anybody else on the panel outside of the room here wants to also add their comments on this, please think about that, and then I'll go to the room when nobody online wants to respond.
Could you start us, please?
First of all, I'd like to, through the chair, thank the MP for the very thoughtful question. When we look at the market and the need for feedstock—recycled plastic—for our recycling facilities, the opportunity to keep the borders open and not restrict flow between Canada, the U.S. and Mexico and including it, whether it be in trade agreements....
Ultimately what we'd like to see as a sector is that this isn't a waste but a resource, so we're looking at resource recovery. Looking at trading post-use plastic as a feedstock or as a resource would be extremely helpful as we look at trying to build the economies of scale that we need to support investment in Canada. We know we have a lot of really valuable innovations taking place from a recycling perspective in Canada, and the ability to draw from the U.S., likely starting close to the Canada-U.S. border, would be beneficial.
We need to keep in mind that one of the challenges we have with the transportation of plastic waste is that it's usually fairly light, so you have high transportation costs and greenhouse gas emissions associated with that. As we look at trying to keep the borders open for trade and keep the flow of this new post-use plastic resource open, any agreements we can put in place would be helpful.
Thank you.
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I think one of the greatest mythological creatures in North America is the free market economy. We don't see it in the United States at all. I guess we'll find out a little bit more, because I haven't seen it either.
I'll give you a practical example. In the auto sector where I come from, they're going to require some of the contracts to have American content, reshoring some of our contracts. It's not even just companies, but contracts are going to get reshored because if they want to get some of this money, they have to have that content.
In the tool-and-die mould-making sector, for example, we've already seen some companies having to relocate won contracts to other companies, because they have the percentage there when they go back and ship it. This is going to get out of control, and it's going to get more complicated.
Then having those companies even break that information down and be compliant on a regular basis is something that's really just concerning.
Please go ahead.
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We have a lot of industry-led initiatives, whether they be at a company level.... A lot of the drivers for change we've seen have been coming from consumer demand, so we have companies such as Polystyvert and Pyrowave, which I spoke about, that have said that they've heard that polystyrene is an issue and that they want to find a way to collect and recycle it. They've been working on that.
In fact, Quebec has a circular economy for polystyrene, which is why polystyrene will be added to their extended producer responsibility program in 2025.
We also have other projects and programs in place. We had an initiative that our members supported in London, Ontario, the Hefty EnergyBag. Unfortunately, because the end markets didn't develop as fast as we would have liked, that project did sunset and did not go beyond the pilot scale.
There are other initiatives. The Chemistry Industry Association of Canada was one of the founding members of the circular plastics task force, which is a consortium of organizations working on implementing, testing and piloting circular plastics projects for collection and recycling of flexibles. Think of your Saran wrap and stand-up pouches for packaging.
We have other initiatives. We have a collaboration that we're working with—
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If you could submit that in writing, that would be great.
The point I'm getting to is that I think we really support industry-led initiatives and ensuring that if we're doing circular recycling, it comes from the industry and that recycling of plastics in Canada gets supported in that for other things that we've talked about earlier, like investment in Canada, international trade, jobs and GDP.
The big story is that when we go to the grocery store right now, plastic bags, for instance, have been banned provincially. That's the plastic bag your bread is wrapped in. Your jug of milk is in plastic and your sandwich is wrapped in plastic.
As my last question to you, can the plastic division of the Chemistry Industry Association of Canada actually do more with support to eliminate or circulate plastics, meaning that it's better for the environment, if there's more support from the federal government?
I will carry on with Glencore Canada’s representatives.
The Centre technologique des résidus industriels, or CTRI, the Cégep de l’Abitibi-Témiscamingue and the Université du Québec en Abitibi-Témiscamingue, or UQAT, through its Institut de recherche en mines et environnement, or IRME, have significant research expertise in the mining field, particularly with respect to industrial waste.
Historically, let’s just say that you don’t necessarily have a reputation for providing exemplary collaboration with the institutional community. Currently, and going forward, what kind of collaboration would you be willing to develop with these institutions? How could these resources help you perhaps go further in achieving your ambitions in terms of investment performance and reducing the level of toxic materials in Rouyn-Noranda’s air?
In Sudbury, Ontario, XPS, or Expert Process Solutions, is a test work centre where we're doing quite a lot of work on recycling capabilities. It's looking at lithium ion batteries, for example, and at how we do more of them and how we get them to work well with our current processing.
Certainly we're looking very closely into research and development and are eager to do more of it as well.
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Thank you for the question.
In fact, we recover certain percentages depending on the source of the materials. In the residential, commercial and institutional sectors, for example, we recover 35% of residual materials. In the case of cans, we recover 66% of these materials. In the shipping sector, the recovery percentage is between 80% and 90%, and in the construction sector, it's about the same. Of all these volumes, 50% of residual materials are not recovered.
The situation is like this because of technological problems. Very often, it is a question of material contamination. In fact, in the containers we recover, there may be two or three more materials than aluminum. Dividing these materials can then pose a technological problem when it comes to isolating the aluminum, which generates additional costs. As I said at the beginning, you end up with volumes that, because of the low critical mass in Canada, are not suitable for recovery.
So we are dealing with contamination and multiple materials. In the automotive industry, for example, there is a metal called zorba, which contains multiple materials. Once this metal is shredded, each of the materials must be isolated and recovered. Again, there is waste.
So it's both a technical problem and a critical mass problem. This means that research is needed to develop technologies that will optimize the recovery stage, and perhaps technologies that will allow small volumes to be processed economically. However, this is a very big challenge.
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This is also a question we ask ourselves, as we are focused on achieving results.
Again, I come back to the systemic and structural problem in Canada: we don't have a critical mass. We get a lot of requests from entrepreneurs in the Saguenay region, among others, who dream of setting up a system to manufacture aluminum cans from recycled aluminum, as is done elsewhere. But we don't have the critical mass.
In the United States, more than 100 billion cans are consumed each year. In Quebec, about 1.3 billion cans are consumed during the same period. That sounds like a lot, but it's not enough. We are far from the break-even point. Several years ago, we made calculations to set up a centre that would have benefited from the potential critical mass in Quebec, but that would have generated annual losses of $20 million, even if we got volumes from outside Quebec and elsewhere in Canada.
In my opinion, we need to focus on areas where we can make a difference, such as in other sectors where very good research is being done, for example in Saguenay, in the field of aluminum.
We must therefore be prudent in our investments and focus on areas where it counts.
Ms. Viger, you say that, at Glencore Canada, you use about 15% of Canadian materials in the processing that you do and that you would like to use more. What could be done in Canada to use as much Canadian material as possible?
Obviously, we'd like to know what more the federal government can do to support processing, recycling, etc. What more could the government do to help you get more Canadian materials or to give you permission to get more?
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Aluminum, some will say, is eternally recyclable or indefinitely recyclable and doesn't lose its key characteristics. It's a very sustainable material.
One of the key benefits of recycling aluminum is that you need only 5% of the energy that is required to do primary metal when you recycle aluminum. Thereby, not only do you reduce by 95% the use of energy, but you also reduce emissions in the order of 95%, which is a great achievement in terms of greenhouse gas emissions.
There are complexities. As I mentioned earlier, some of the aluminum that comes back into the system needs to be segregated in terms of alloys—original alloys or series—and cannot necessarily be repurposed for the same use or for another use. There is an extra level of complexity to ensure you can optimally recycle all the metal that comes back into the stream, but increasing the use of recycled aluminum in the future to produce new material is certainly part of the world's aluminum pathway to decarbonization.
One of the key examples is what we now call “hybrid” smelters, which we will see more and more of. They are smelters producing primary metals, but they use their dilution factor to increase the use of recycled aluminum, and by doing so, they reduce their carbon footprint at the end.
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I would say the most strategic challenge, right now, is the sorting of aluminum coming from streams such as automotive or consumer packaging.
You either avoid using multiple materials, including aluminum, when designing packages—in order to enable tracking the aluminum and bringing it out of the stream—or have the challenge of sorting the various materials downstream and being able to disassemble the materials from one another. A good example is the Tetra Pak container, which has layers of different materials. It's a very complex type of container to deal with when you want to recycle the materials optimally.
It can be in the design, which is smart to do. You can do it upstream. You address the issue when you design the container, package or object. If you don't do that, you have to accept the challenge of dealing with it downstream at the end, when it's very complex. It has been used, so there are contamination problems and stuff like that. You have to choose your challenge.
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I will answer part of the question and let Ms. Viger answer the one about residual materials.
In the case of anode sludge, for example, the price of a barrel is the same as that of a Ferrari. So it's not waste, it's a valuable product. In fact, Canada recovers silver, gold, platinum, palladium, tellurium and bismuth. These are the very elements and metals that we need. In fact, they are very valuable and we take great care of them.
That said, when they are processed, there are sometimes residues. Ms. Viger could tell you about that now.
I'm coming to the end of my remarks, but in closing, I'd like to know if, in the event that the committee would like to go onsite and visit large recycling facilities, you would be willing to have us come by and give us a more detailed presentation of the projects related to investments, including the PHENIX project.
In my younger days, I was a tour guide at the Horne Foundry, and I could, if you like, play the role of host.
In any case, I think it could be a very enlightening experience for our committee.