INDU Committee Meeting

    Good afternoon, everyone.

    I hope you had a good two weeks in your ridings.

    We are here for two hours this afternoon. The first hour will be with Minister Joly.

    She will talk to us about a number of things about the Department of Industry.

     We have officials who are going to stick around for the second hour.

    I can confirm that all the audiovisual tests have been done.

     Colleagues, this is pursuant to Standing Order 81(4) and the motion adopted by this committee on Thursday, March 12, 2026, for us to commence a study on the main estimates. Pursuant to Standing Order 108(2), a motion was adopted by us on that same day to study the subject matter of the supplementary estimates 2025-26.

    With that, Minister, I'll give you the floor.

    Thank you, Mr. Chair.

    It's a pleasure to be here.

    We're going through a moment right now of profound global transformation, as we know. We're living through a period of significant economic change. Around the world, governments are moving quickly to secure supply chains and protect strategic industries, and trade patterns are shifting. We all know that. Uncertainty is no longer the exception; it's the environment in which we operate.

    We have seen this first-hand in recent months, from decision-taking in Washington to growing protectionism and direct impacts on sectors such as aerospace, steel and auto.

    Mr. Chair, let's put it bluntly. We are in a trade war. Canada has been required to respond in real time. We know these pressures will continue, but we also know this. While there are many things in the world that we cannot control, and we certainly cannot control what's going on in Washington, there are many things we can control here at home.

    In 2025, we were much more in reaction mode. In 2026, we have a plan, and we're putting it into place. The results are already there.

    Last year, Canada created 189,000 jobs, more than the United States, despite having an economy 10 times smaller.

    Our approach is simple and focused. It can be summed up in three verbs: protect, create and attract.

    First, it's about protecting jobs.

    In sectors like steel, aluminum, forestry, critical minerals and manufacturing, Canadian workers are facing very real pressures, so we took action.

    We have strengthened the enforcement of our trade rules to ensure a level playing field.

    We have also increased support for affected industries through targeted liquidity and investment tools. That includes the recent announcement of a new $1‑billion program at the Business Development Bank of Canada, or BDC, to strengthen Canada's economic resilience, including in key sectors such as steel, aluminum and copper.

    On top of that, we have set up a new envelope of $500 million as part of the regional tariff response initiative to give real support to the various businesses affected by the tariffs in all sectors combined.

    We are also working directly with businesses to maintain production and protect jobs across the country. That is certainly the case in the automotive sector.

    As we all know, over 90% of Canada's auto production is exported to a single market, which is now facing tariffs. We acted quickly. Through our auto strategy, we're protecting over 500,000 jobs while positioning Canada for the future. Within the next five years, we know that 40% of vehicles sold globally are expected to be electric. Canada will not fall behind; we will lead.

    We're supporting companies as they invest and adapt and rewarding those who choose Canada and invest in Canadian workers. Through the strategic response fund, we have committed $3 billion to help firms diversify, modernize and compete globally. We're also prioritizing Canadian sourcing through procurement and strengthening domestic supply chains to reduce vulnerability.

    At the same time, we're leveraging our 52 trade agreements to expand into new markets. We know that resilience requires diversification and strength. This is why I also announced last Friday 200 new jobs and a $76-million federal investment in Tenaris's project in Sault Ste. Marie. This will modernize and diversify Canadian steel production and strengthen our domestic industrial base. Basically, our plan is working.

    Second, as we're creating jobs, we want to make sure that we're building industries for the future. We're advancing major national projects. Of course, we're thinking of nuclear reactors in Darlington and the high-speed rail between Toronto and Quebec City. We're also accelerating approvals for major projects. We're investing in artificial intelligence, quantum computing and advanced manufacturing.

    We're supporting the scaling up of Canadian firms through access to capital and helping companies grow into global leaders. We recently announced $55.7 million to MDS Coating. That's a very important company in P.E.I. that is maintaining and creating up to 230 well-paying careers on the island. That's in the aerospace sector.

    Third, our goal is to attract talent and investment.

    At a time when many countries are turning inward, we want to move forward and open up even more. We have launched an ambitious talent attraction strategy with a budget of $1 billion. The goal is to both attract the best researchers to our universities and create a space where we can create more support between our universities and the industry to really position Canada as a global innovation hub.

    Finally, we're currently working to attract new capital. The best example I could give you is that, as many of you already know, AirAsia chose Canada by buying 150 new Airbus A220 aircraft manufactured right here at home, that is, in Mirabel, Quebec. This is the largest order of its kind in our history. It's truly a vote of confidence in our industry and our workers.

    I could also talk to you about the defence industrial strategy, which aims to create 125,000 jobs, as well as rebuild an industrial base in defence, but I know that speaking time is limited.

     I will just say to end that in a world of increasing geopolitical competition, Canada must act from a position of strength. We must strengthen our domestic capacity and reduce vulnerability.

    Mr. Chair, Canada is not standing still. We're protecting what we have built, we're creating what comes next and we're attracting the people and the capital that will define our future.

    Thank you. I'm ready to answer all your questions.

    Thank you very much, Minister.

    In my excitement to get us going, I forgot to introduce your colleagues. I'm going to take a moment to do that.

    I'm all yours.

     Joining us is Valerie Huot, acting chief financial officer and assistant deputy minister. With her is Mark Schaan, associate deputy minister.

    Thank you very much to my colleagues on this side for allowing me the grace to make that introduction.

    With that, we will go into our first line of questioning.

    Madam Dancho, the floor will be yours for six minutes.

     Thank you very much, Mr. Chair.

     I thank you and your colleagues, Minister, for being with us today.

     Minister, you outlined in part the crisis facing our auto sector. Can you clearly outline the top-line argument you have for importing 49,000 Chinese EVs into Canada and how that will benefit—or not—our domestic auto manufacturing sector?

    I think the plan was clear, and the Prime Minister mentioned it at the time. Our goal was to make sure that, first, we would be able to support our canola farmers, who are so important in the Prairies, as you know. Second was being able to protect our fishers, who also have been targeted by tariffs. That was good for people in Atlantic Canada, in the north and on the west coast. Third, in 2023, Canada was already importing 43,000 cars from China. This is a small increase from where we were in 2023.

    Thank you very much.

     I appreciate your bringing up the agricultural exports. As you know, that's not really an equal exchange, the way that your government negotiated. It was only a temporary reprieve of some of the agricultural export controls that China put on, as pork still remains, canola oil still remains and the reprieve that you did get is expiring by the end of this year.

     When these Chinese EVs come into Canada, as you well know, they're here to stay. You didn't negotiate a long-term agreement for our canola farmers, and they don't think that exchange is quite how you're selling it, but I am glad that you brought up 2023, because it was in the following year, about a year and a half ago, I suppose, that you yourself, as you know, put in quite strong restrictions for Chinese electric vehicles.

     In fact, you said the reason was that they would put unwarranted downward pressure on pricing, challenging the profitability of Canadian producers, and they would reduce choice by crowding out other imports. You were really correct in that instance, Minister. Of course, in Mexico, Indonesia, Brazil, Australia and most places that have allowed Chinese EVs, they have crowded out that market and jeopardized that domestic supply chain. Again, I'm not clear why you're bringing these in when we're facing such a crisis in the auto sector in Canada.

    First, when it comes to negotiations with China, I think that many premiers were actually very positive regarding the importance of this deal and the consequences for Canadians, particularly those in the Prairies, including Premier Moe, the Conservative premier. I think it was important to be able to settle key issues, particularly when it comes to agriculture.

     At the same time, I think it was important—

    They're not settled. Those issues are not settled, Minister.

    I think it is also important to understand that although 49,000 vehicles will be imported, that is less than 3% of the entire production in Canada—

     But 40% of our electric vehicle—

     I'm sorry. My colleague is talking over me, but I just want to finish my answer.

    Madam Dancho, I'm going to give the minister another 20 seconds or so to wrap up her response, at which point we'll go back to you.

    My point is that it's less than 3% of production, and in that sense we are working already with many companies that will be importing to Canada. At the same time, we're trying to support not only ongoing production in Canada but also an increase in production, and that increase is exactly what has happened in the last year in the auto sector.

     The agriculture issue is not by any means settled. Again, it's a temporary reprieve on part of the agricultural exports. In fact, in the last 10 years that you have been a minister and that the Liberal government has been in power, the Chinese government has used our agriculture and our farmers as a baton to beat Canada with, to coerce us, over four or five times, I believe. Consistently this is an issue that you have failed to resolve in the long term.

    One of the three standards for allowing these vehicles into Canada, which you cited the last time you were here, was labour standards. I want to go back to the forced labour issue.

    You said to my colleague Mr. Falk that your point of view will always be to follow what the UN is saying. The UN is unequivocal, and of course, as you know from the Office of the UN High Commissioner on Human Rights, they've said that there were various coercive methods being used to secure surplus labourers in Xinjiang. Serious human rights violations have been committed in XUAR.

     A 2022 UN report says there are indications that labour and employment schemes appear to be discriminatory in nature and involve elements of coercion. In January of this year, a UN report says, “UN experts...expressed deep concern regarding persistent allegations of forced labour”. The report quoted them as saying, “In many cases, the coercive elements are so severe that they may amount to forcible transfer and/or enslavement as a crime against humanity.”

    If you're agreeing with the UN, how are you allowing the import of vehicles that may have aluminum in them, for example, which has been traced to forced labour help? How are you justifying this?

     There was an entire testimony on my part three weeks ago, just before the recess, where I spent an hour explaining our position on EVs. I think there's been an entire study on the part of parliamentarians.

    Of course, everything that I said at the time still holds, and everything that I said on forced labour still holds.

    At the time you kicked the bucket over to CBSA and your Public Safety colleague. You said that he'll deal with it, but if you agree that there's forced labour going on, you have allowed this negotiation to allow these 49,000 vehicles to enter, and you're saying, well, Public Safety will deal with it.

    This is a nonsensical position. Either you believe this is happening, that they therefore should not come in, or you're kicking it over to your Public Safety colleague and saying, well, maybe he'll catch them.

    Is the federal government's position, then, that Public Safety and CBSA will turn them away?

     I think you're making an assumption on the 49,000 EVs that is only linked to different Chinese auto companies. I would challenge that, and we are—

     You don't believe you have forced labour on—

    Can I just finish my answer?

    Yes.

    We're going to be over time, so I'm going to give the minister the opportunity to reply.

    My point is that there will be lots of western auto companies shipping their cars to Canada, and eventually there will also be—

    What about Chinese ones?

    —a Chinese team, but at this point the allocation of the 49,000 is not over yet.

     Thank you very much, Madam Dancho.

    Madam O'Rourke, the floor is yours for six minutes.

     Thank you, Chair Carr.

    Welcome, Madam Minister. It's lovely to see you again.

    We're speaking about the estimates and about these significant investments in supporting industries that have been fully attacked in this trade war, and also about helping other industries to develop, to take advantage of a number of new opportunities in defence, aerospace, nuclear, electricity, infrastructure, major projects and the buy Canadian policy.

    We're investing in shoring up and protecting some industries and then expanding others, and also making sure that we train the people to do the building here in Canada. I'm wondering if you would like to share with us what you're hearing from Canadian industry in terms of the steps the government has taken in the past year to support them through the trade war, to help them pivot. What's their feeling about all of the opportunity that is before us in the coming year?

     Listen, it's been a tough year for many Canadian businesses, which are dealing with so much uncertainty at a time when a lot of their business models have been very much focused toward exporting to the U.S. That definitely was the business model of the steel sector, the aluminum sector, the auto sector, the forestry sector and many of the small and medium-sized businesses across the country. We still have the best deal on planet earth when it comes to access to the U.S., but the tariffs have been impacting a lot of people.

     That being said, I think the reaction has been positive. That's because, first, we have a plan, and second, as our plan is being put into place, really it is working.

     The best example I can give you is Tenaris, where I was last week with Premier Ford, who is the Ontario premier, as we all know. We were in Sault Ste. Marie, and we announced 200 new jobs and an investment of more than $70 million. That investment was possible because of the fact that we've approved many of the energy sector projects out in the west. Now Tenaris, which is a global company, has decided to invest more in its pipes and tubes processing, because it believes the demand is increasing in Canada and therefore there's a business case for it. What does that mean? It means it's good news for Algoma in Sault Ste. Marie, and it's also good news for Tenaris.

     At the same time, the other example I could give you is definitely the defence sector. We started from having nearly no defence sector or a very small defence sector in Canada, and now we have an opportunity that is actually one of the biggest commercial opportunities in decades. We came up with this defence industrial strategy. Our goal is to create 125,000 jobs, as I said in my introductory remarks. I say that because, of all the industrial strategies that the government has ever announced, it is the most funded since the Second World War, because it's supported by a $500-billion budget.

    What are we seeing concretely? We're seeing the aerospace sector really investing and trying to create new jobs. That was the example of MDS Coating in P.E.I. It was the biggest private investment and federal investment that we've seen in the last decades in P.E.I., and it's creating and maintaining 230 jobs in the aerospace sector.

    We're seeing that in investments in the aerospace sector in Mirabel—at L3Harris and also Airbus. We're seeing that across the country, as we know that the manufacturing sector is affected by the tariffs.

     My last point would be that we know that the auto sector is really impacted, so we want to make sure that certain plants can work on the defence front, to save jobs.

     I'd like to thank you, Minister, for responding very quickly to the new interpretation of section 232 tariffs for steel, aluminum and copper. Thank you for the immediate response, with the $1.5 billion of support for those industries. It's meant a lot to southwestern Ontario.

     What are you hearing from people on the ground?

    I'm hearing particularly from people in southwestern Ontario. I know you represent Guelph well. You've been a strong advocate for the manufacturing sector in the region, Dominique.

     I think the support has been timely. I think we needed to react quickly. Why? It was because the White House had changed its interpretation of the steel and aluminum tariffs and expanded it to derivative products. Companies that were not necessarily impacted by tariffs are now impacted, because, basically, the interpretation is now the full value of the product in which steel and/or aluminum can be included.

    Based on that, we needed to come up with some real support, which is not only support through loans but also support through subsidies in order to protect companies and not have them go into a spiral of debt. It was also influenced by what we did last time during the section 232 tariffs under the first Trump administration. Based on that, we decided to go further. I think the reaction is good.

     Let me be frank: We're not claiming victory, whatsoever. We will continue to work with the sectors that are impacted, and we'll continue to be in listening mode and action mode.

     Thank you.

    Thank you, Ms. O'Rourke.

    Mr. Ste‑Marie, you have the floor for six minutes.

    Thank you, Mr. Chair.

    Minister, Mr. Schaan and Ms. Huot, thank you for being here at the committee meeting.

    I'm going to start with a comment. There was talk of Chinese electric vehicles and western canola, but, again, there was no opening for Quebec pork. It's important for our producers to have an outlet to Asia, particularly to China, which was a major client. Thank you for taking note of that.

    Minister, you were with us three weeks ago. We see each other often in this committee.

    Yes, I'm so available; it's incredible.

    Thank you for being here.

    On the subject of electric vehicles, I had asked you to tell us the total amounts paid toward the battery industry by province. I don't think the committee has received that information.

    I also asked you for something else related to the matter that Mr. O'Rourke discussed. I asked you to provide us with an overview of the number of small and medium-sized businesses and jobs, by region and by sector, that had been affected by the executive order that the U.S. President signed in early April. At that committee meeting, Ms. Gould cited, for example, a University of Calgary study that said that around 60% of the products exported from Ontario and Quebec could be targeted. Desjardins published a study indicating that it would actually be a quarter of Quebec's products that would be affected. In that case, Quebec businesses would be the most affected.

    Could your department give us an overview so that we know what the situation is?

    First, on the issue of Quebec pork, there's no problem. We are indeed taking steps, and we're very aware of the situation. I'm working with the Minister of Agriculture and Agri-Food and the Prime Minister on this, so it goes without saying that this is a priority. Of course, the goal is to have zero tariffs imposed by China on any of our agricultural products and any of our fishery and seafood products.

    Second, you had indeed given me two requests, and I'm going to answer them, because I agreed to them. I would just like to clarify the requests so that both Mr. Schaan and Ms. Huot can hear them. You wanted to know the total amounts paid in the battery sector, by province, as well as the number of SMEs, by region and by sector, affected by the U.S. tariffs.

    My request concerned the SMEs affected by the President's latest executive order, but also the number of jobs affected.

    Yes, we're indeed talking about the latest executive order on steel, aluminum and copper.

    We have an interpretation for this issue, but I don't think we're going to have a completely set point of view, because there are still many companies that are gradually realizing that they're affected by this order or that they aren't. There can also sometimes be issues with the clarity or interpretation of the order, depending on the officials. However, we decided to not wait and to put an approach in place.

    We'll be able to read the situation better once the Business Development Bank of Canada and the regional economic development agencies can give us their accounts of the demand.

    Thank you very much for all that.

    Has your government discussed the consequences of this executive order with the U.S. administration? Could the United States review this order or is it like everything else?

    I have raised it a number of times with the Prime Minister and with Hon. Dominic LeBlanc. Minister LeBlanc is very aware of the situation. He has had a number of conversations. Just this morning, he spoke with Mr. Greer, the U.S. trade representative. I think you should ask him directly.

    For my part, know that since I'm responsible for the impact of the tariffs, I'm working work with Minister LeBlanc, with Janice Charette, who is the Prime Minister's representative in the Canada—United States—Mexico Agreement negotiations, with Mark Wiseman, who is Canada's ambassador in Washington, and, of course, with the Prime Minister.

    I would now like to talk about the $1.5‑billion assistance plan that you quickly rolled out. In fact, we welcome this initiative and sincerely thank you for it. However, I'm hearing a concern from SMEs. The government is investing $500 million in the program to encourage the purchase of machinery and to increase productivity. It's an excellent program, but it may not be very well suited to SMEs, which are currently facing fewer orders and therefore less revenue, so they don't have the capacity to buy new machinery.

    As for the loan program, there are many concerns that the targeted businesses may be too large compared with the reality of SMEs. Entrepreneurs told me that, in times of hardship, they could access a loan of $100,000 or $200,000. A two‑million dollar loan is much bigger.

    Could the criteria be changed, if necessary?

    I'm completely open to changing the criteria. We have always been able to adjust.

    Let me explain my concern. There's a lot of work with the major contractors, the big companies. However, it's really important to understand what's happening in the supply chain and in small and medium-sized businesses. I have actually had a number of conversations about this with the Prime Minister.

    I'm very open to feedback, of course. We're also in contact with a number of SMEs that give us their feedback. It would be my pleasure to work with you, Mr. Ste‑Marie.

    Once again, thank you for all that, Ms. Joly.

    Regarding the forestry crisis, there was the Business Development Bank of Canada program to support struggling forestry companies, but some of them were ineligible. I recently heard that there could be an opening and that the programs could be reassessed to expand the assistance. I would like you to give us some details on that.

    The industry and the unions are also suggesting that the government assume half of the illegal countervailing duties imposed by the U.S. government so that companies can export their products. It's held in a trust fund. Our companies have always come out ahead after years of fighting the U.S. government. The government could repay itself at that point.

    Is that a strategy you're studying?

    Mr. Ste‑Marie is the best member at taking advantage of the clock: He knows he asked a question when he had no time left. That said, Minister, I'll allow you to quickly answer the question.

    Thank you, Mr. Chair.

    My colleague Tim Hodgson is currently working with the industry and the unions. He has set up a round table, and the recommendations will be submitted shortly. I will have the opportunity to work on the forestry industry with him and the Prime Minister this week.

    I'm involved in this file because the Business Development Bank of Canada has been there from the start, and the BDC is my responsibility. However, it goes without saying that the BDC program doesn't go far enough. That's why, while we have made some adjustments for steel, aluminum and copper, we want to do the same for the forestry industry. My colleague Mr. Hodgson will soon have an opportunity to share some good news with a sector that's heavily affected by this.

    Thank you, Minister.

    Thank you, Mr. Ste‑Marie.

     Ms. Dancho, the floor is yours.

     Thank you, Mr. Chair.

     I want to talk a little more about the security implications of the Chinese EVs.

    As you know, your government banned TikTok from government devices. You prohibited Huawei and had all the technology and cell phones removed from Canada. Today, in fact, the RCMP in Ontario restricted the use of Chinese EV drones, all for very similar security issues. As you're well aware, CSIS has said that the People's Republic of China is Canada's greatest espionage and foreign interference threat, and that its activities threaten Canada's national security and long-term economic prosperity. Your former colleague Chrystia Freeland said that your government was “absolutely” considering banning “Chinese-made software” in electric vehicles to counter “the security threat from China”. You cited a similar rationale in your ban a year and a half ago.

    Really, nothing has changed in terms of the security threat from the software. The last time you were here, you said that you're “working on a...framework”, but the import of these is now allowed. Is this framework considering banning the software from those vehicles? Are they going to come in as empty shells in that regard?

    These are really good questions that should be asked of the Minister of Public Safety and the Minister of Transport, as they are working on a new software approach when it comes to EVs.

     You are working on that with them. You said that the last time you were here.

    Are you not being consulted on this?

     I am, but I am not in charge of CSIS.

    That's right, but you are being consulted on the framework. That is what you said the last time you were here.

    Yes, when it comes to our industrial capacity, of course.

    You're not concerned about the security implications. It's not your job to worry about that. You're just bringing them in and—

    You have specific demands linked to CSIS and their analysis. You know very well, being a very seasoned MP, that this is not under my purview.

    Of course I'll work with them, but I don't have specific intelligence to prove any form of—

    That was your analysis, as well, a year and a half ago, when you banned them.

    Can I finish my answer?

    I would like to finish my answer.

    Go ahead, Minister.

    As I was saying, if there's specific intel linked to Chinese EV software per se, of course we will take that into account. Of course we will be working as a team.

    Right now, you're asking me questions that are linked to the Minister of Public Safety. They are extremely important—

     You made the agreement.

    —and I don't want them to go unanswered. That's why I think he should be the one to answer them.

     Did you not make the agreement? Were you not in charge of the agreement to bring in 49,000 Chinese EVs?

     I was working with the Prime Minister, and I stand by it. I think it is a very good agreement and Canadians widely support it.

     It's interesting that you won't answer the security questions.

     I will put one more question to you.

    Michael Kovrig was here. I know you know who he is. He said a very interesting thing, and I want your perspective on it.

    He said:

    Do you agree with Mr. Kovrig?

     I have a lot of time and respect for Mr. Kovrig. I've talked and worked with him on many occasions.

    I also think it is important for us to have a relationship with China, including on the industrial front, where we are able to do business together, because we do business together. We do business together because a lot of our great farmers and fishers send a lot of great Canadian products there. Also, a lot of our financial sector is in China. We also have many service-providing companies there. Meanwhile, we import from China many goods that Canadians enjoy every single day.

    In the circumstances—

    You don't seem to be concerned with the cost this may have for Canada. We'll move on.

    Mr. Chair, with my remaining time, I'd like to give the last minute to Mr. Guglielmin.

     There's a lot of crosstalk.

    Minister, I'm going to give you 15 seconds to finish that thought.

    I've paused the clock. Mr. Guglielmin, when you take over, you'll have 60 seconds, which means you'll have time, probably, for one question.

    Minister, answer really quickly, please.

    At a time when we're the victim of a trade war waged by the U.S., Canada needs to have a relationship with China that is stable and that is based also on the agreement that we were able to ratify back in January. Meanwhile, we're protecting our sectors that are victims of U.S. protectionism.

     Mr. Guglielmin, I'm going to start the clock again. You'll have a minute, sir.

     Minister, thank you for being here today.

    Earlier this month, you appeared at this committee, and my colleague, Ted Falk, asked you when the EV mandate would be repealed. Your exact words were, “There is no EV mandate.” The very next hour, we had Brian Kingston from the Canadian Vehicle Manufacturers' Association here. You know him. I reiterated your response to him, and he told the committee, “The mandate is still in force today, and it continues to create financial and legal compliance burdens for companies.”

    Given the fact that we're in this trade war and that businesses in this country, especially the auto sector, need certainty, which is it? Is the EV mandate repealed, as you suggested last time you were at committee, or is it still on the books, as the industry suggests?

     At the federal level, there's no EV mandate. Of course, don't take it from me. You can take it from the department. My assistant deputy minister will be able to answer that.

     I think what Mr. Kingston was referring to is the fact that there are EV mandates in Quebec and B.C., under provincial jurisdiction.

    No, Minister, that's not what he was referring to.

     In the auto strategy, it is clear. Our goal is to make sure that there's no EV mandate.

     It's been repealed in rhetoric but not in law. According to the industry experts, that EV mandate is still very much in place. We're looking for a date when it's actually going to be repealed.

    It's going to be my priority that it is repealed very quickly, because we have said clearly that we're getting rid of it.

    It hasn't been done yet.

     That is not the information I have.

    Potentially, Mr. Kingston and I need to talk to each other. That's not a problem. We'll do that. Clearly, the goal of the government and my order to my department, working with the Minister of Environment and, of course, under the Prime Minister's leadership, is to repeal the EV mandate.

    Can you report the date back to this committee?

    Mr. Guglielmin, I gave you three extra questions and 50 extra seconds, which I think was more than fair.

    I'm going now to Mr. Fanjoy.

    The floor is yours for five minutes. I understand you may be splitting your time with Monsieur Ntumba as well.

    That's correct, Mr. Chair.

    Minister, the Government of Canada recently launched a national electricity strategy, a plan to double our electric grid with clean, reliable and affordable energy by 2050. How will a strengthened electric grid support the growth of our domestic EV market and tie into the government's auto strategy? Specifically, how will it attract investments to Canada and boost EV demand?

     Thank you, Bruce. There are a couple of things. First and foremost, the electricity strategy is important to make sure that we protect Canadians. As electricity demand increases, we want to make sure that electricity prices stay at a reasonable rate. It's a big affordability issue. That's been our priority.

     Second, we've been wanting to address the manufacturing part of the electricity front. What I mean by this is that I was at Tenaris in Sault Ste. Marie, and it's because of energy sector projects—linked, obviously, to the grid also—that we will be able to increase the demand for steel in Canada, in pipes and in tubes. The other thing is that we just announced in Quebec that Hitachi, also a very important Japanese company, is investing in Canada in order to do more transformers. I've been in conversation with other Japanese companies wanting to invest in Ontario to be able to continue that supply chain that is so important. I've also been in conversation with many major steel companies that are affected by the tariffs and are now looking to have a strong demand in Canada for their steel products in the context of the electricity strategy. Really, when you think about building Canada strong, that's what we mean.

     To your question regarding EVs, I think by 2030, nearly half, or 40%, of all cars in the world will be EVs. That will have, of course, an impact here at home. We know that EV adoption is actually up. We know that Canada and North America need to be able to develop the latest and the best technology when it comes to the auto sector. We have always done that. We cannot be leapfrogged by other countries in the world. We need to be able to adopt these technologies. That's what Canadians are looking for. Because it will have an impact on the grid, we also need to increase our electricity capacity. That's why the electricity strategy is so important to attract investments. We're also working with the provinces and territories to be able to have a full sovereign grid across the country, from east to west.

    Thank you.

     Thank you.

    Mr. Ntumba, you have the floor for the remaining two minutes.

    Thank you, Mr. Chair.

    Good afternoon, Minister. You were here three weeks ago, and we're happy to have you back.

    The last time you appeared, in April, you announced a tariff response following new measures imposed by the United States. Since then, there have been a number of announcements across the country, from east to west.

    After that tour following the announcement, have you seen any real effects on the ground? How has the announcement been received across the country?

    Are you talking about steel and aluminum?

    Yes.

    I have seen a very positive reaction, certainly from the various chambers of commerce—whether in Quebec, Ontario or elsewhere—as well as the Conseil du patronat du Québec, among others. I have also had a number of conversations with businesses that have been directly affected by the tariffs, such as Bombardier Recreational Products and Manac, a semi-trailer company.

    At the end of the day, these are illegal and unjustified tariffs. It's difficult. We're offering assistance to these businesses and are glad to be able to support them, but, fundamentally, we're trying to negotiate with the Americans and fight these tariffs. We're trying to do both at the same time: counteract the tariffs' impact by supporting our businesses while seeking a lasting solution with the Americans. Of course, we know that there's a lot of unpredictability when it comes to dealing with the White House.

    I'm going to continue along the same lines. It's true that there is a plan in place. The Americans keep tripping us up, so to speak.

    What is your medium-term and long-term vision for the support you're going to provide for innovation in Canada?

    Despite all the insecurity and uncertainty created by the tariffs, and despite the significant global and geopolitical insecurity that particularly stems from the impacts of the war in Iran, Canada remains the G7 country that attracts the most foreign investment. It was able to do so in 2025, and that's still the case now, in 2026. That's no small feat. We know that we're dependent on the United States for exports. Despite everything, we have been able to attract those investments. We have worked very hard to do so, including through major projects in energy, critical minerals and transportation, such as ports. It helps.

    At the same time, our objective is also to protect the manufacturing sector, which is really the target of the tariffs, and that's what I'm working on. Despite everything, we were able to announce investments in the battery sector, particularly from LG and Volkswagen. We have also announced new investments from Siemens and investments in the aerospace sector. Even more good news will be announced this week.

    Thank you, Mr. Ntumba.

    Mr. Ste‑Marie, you have the floor for two and a half minutes.

    Thank you, Mr. Chair.

    All of the departmental plans provide for the development and implementation of a series of industrial and other strategies. I counted nine, including defence, automotive, quantum science and tourism. However, there are still none for Quebec's technological driver and number one exporter, aerospace.

    I am very pleased by the announcement of the AirAsia Airbus mega contract in Mirabel. I understand that the defence strategy will include a significant share for aerospace, but Canada is the only country with such a significant aerospace industry that still doesn't have an industrial strategy. Are you planning to put one in place?

    At the moment, the aerospace sector is mainly focused on gradually securing its investments not only from a commercial standpoint, as we see in the case of Airbus at Mirabel, and in innovation, as we did in the case of MDS Coating, but also fundamentally from a defence standpoint.

    What I'm being asked in terms of aerospace is really what our industrial and technological benefits policy will be. We're being asked how we're going to implement defence procurement for aerospace. That's really the kind of request I'm getting.

    Certainly, I always want to do a lot for the aerospace industry. That goes without saying, because I'm a Quebecker and I'm very proud of it. As you know, my roots are in Mirabel. My grandmother and grandfather were from Saint‑Canut and Sainte‑Scholastique.

    In short, I'm currently trying to focus on the sectors affected by the tariffs—steel, aluminum, automotive and defence—because this affects the entire manufacturing sector targeted by the tariffs. I'm also working on a new strategy for life sciences, which are very much affected by Mr. Trump's policies too.

    What affects the aerospace sector certainly affects Bombardier as well. I am having conversations with its CEO, Éric Martel. In fact, I spoke to him again this morning. There is a lot of good news on the horizon for the aerospace sector in the coming weeks. In my opinion and that of the industry, things are going well right now.

    Thank you, Minister.

    Mr. Chair, I think my time is up, so I'll stop here.

    Thank you.

    Thank you, Mr. Ste‑Marie.

     Mr. Chambers, welcome to the committee, sir. The floor is yours for five minutes.

    Minister, thank you for being here. It's nice to see you again. I wish some of your cabinet colleagues would also attend committee meetings when they're invited, so thank you.

     I'll pass the word along, just for you.

    Do you recall using this line? You've used it a few times. In mid- to late February, you used the line in a CTV interview and also in a speech. You said Canadians would make “the best cars in the world, for the world”. Do you remember that line?

    Yes, of course, and I stand by it.

     Is it your position that Canadian automakers will export vehicles from Canada around the world to markets other than in the United States?

    I think that Canadian automakers are reckoning with the fact that there is an over-dependence on the U.S., with 90% and more of the entire production being exported to the U.S. We will anchor them, protect them and support them.

     Seventy-five per cent of all the auto production in Canada is by Honda and Toyota. I was on the phone this weekend with Dave Jamieson, the CEO of Honda Canada, to make sure that that's the case for Honda, and we'll do that for Toyota.

    Ford, for example, is undergoing a major investment of $4 billion, the biggest investment in its history in Canada. It is also looking at exporting elsewhere, and that's part of its business model.

     I'm not stating this because it's something that I wish; it's based—

    I'm sorry. I'm going to jump in here.

    No, I just want to finish my sentence.

     Yes, I'm going to let you, I'm just going to explain—

    My point is that I'm getting that from automakers themselves.

    Adam, don't worry. I paused it.

    Okay, so you believe that there is a business case that supports Canadian automakers' exporting vehicles globally to markets outside the U.S. Is that correct?

    Based on my conversations with them, that's what they're proposing to us.

    Has your department done economic analysis on this business case? Is there economic analysis that the government has done that shows it's viable for Canadian automakers to produce vehicles here to export them to Asia or Europe, as an example?

     Or the Middle East.... That's exactly why the Prime Minister has been going around the world and signing 52—

    The question is this. Are you aware of any economic analysis that your department or any department in the government has done that supports the notion that Canadian automakers will export or can export vehicles elsewhere?

    I get your point, but it is not up to the government to make that assumption. If the companies want to do that, and they're proposing that, we will support them. I think they're also looking at passenger vehicles and defence production. You're going to see that more and more as we put into place our defence industrial strategy.

    Is your testimony that Canadian automakers have approached the government to say that they believe there's a global market?

    Absolutely.

    Okay, so Honda and Toyota have told you, for example, that they believe they can build cars in Canada and export them to the Middle East, Asia or elsewhere.

    I'll say two things on that point. First, we've been approached by companies, and I can't say which ones, because obviously that is confidential business information—commercial, private information.

    Well, no company has come to any of the committees on Parliament Hill or gone to the media to suggest that this is a viable business plan.

     Listen, I'm telling you that's what we're getting as information.

    We also have free trade agreements with many different markets and countries around the world. That's also why it's important. What I would say also is, of course we know that the auto sector is affected by the tariffs. We know we need to protect the auto sector, and that is why we'll fight for it in the context of the revision of the USMCA.

    Do you believe that the Canadian auto sector can survive without access to the U.S. market?

    I think that we need to be able to work on many scenarios. Right now, as the conversation with the U.S. government is continuing, we're also finding solutions to reopen Ingersoll and Brampton.

     My understanding is that there's supposed to be a remissions process set up for the auto sector. It's been a year. My understanding is that the remissions process is still not set up. Are you aware of that?

     No, I think you're wrong. I think that the remissions system was put in place a year ago because we had countertariffs. I want you to understand the remissions system.

     In my remaining time, if I'm wrong, do you think that you'd be able to provide to the committee the amount of money that's been remitted to Canadian automakers under the remissions process?

    We can definitely work on finding you the right information.

     What I can tell you is that the remissions framework is a year old, because it's based on countertariffs. What I think you're alluding to is the fact that, in the auto strategy, we would be reviewing this remissions framework, which we want to review because we want to be able to say to Honda and Toyota, which have increased their production, that they would be able to increase the market access of cars made in the U.S. without tariffs. That is why—

     Well, I look forward to the information that you'll share with the committee that shows the dollar value that Canadian automakers have received from—

     At this point, Mr. Chambers, I'm going to direct the discussion to our final line of questioning.

    Mr. Ma, the floor is yours for five minutes, sir.

     Thank you, Chair.

    Hello, Minister.

    The government has produced a series of domain-specific strategies covering domains like defence, auto and electricity, which you talked about earlier. Can you walk us through how these strategies intersect to help build Canada strong for our economy and particularly for our workers?

     Thank you for that.

    We have worked to protect jobs and create jobs and also attract talent and investment. They have been the three pillars, the three priorities, we're working on. On the protect front, what we want to do is, obviously, auto...a fundamental 500,000 jobs impacted potentially. We're working night and day on protecting our auto sector.

    I was with Premier Ford on Friday. We spent an hour going through all the different investments, and I must say that our auto strategy is working. We have now a third shift in Windsor, at Stellantis, where Kathy is coming from. We also have new investments that were announced a month and a half ago by GM in St. Catharines, with $690 million for their engine facility.

    We have the two new battery plants, one in Windsor, which has been opened and launched and has started production, and the one that is being built in St. Thomas right now. That's for auto. Also, there were investments that I announced in Hanover, for Siemens in Oakville. That's for battery production as well. That's one thing.

    When it comes to steel and aluminum, I've talked about it a lot, because of course we need to adapt every time the Americans are changing their interpretation of tariffs. We're seeing that the plan is working, but what I really think is different from past years is that the defence industrial strategy is our way to be able to empower the manufacturing sector and potentially help in the auto, steel and aluminum sectors by really being able to repurpose some of the plants or transition some of the workers towards the defence industry.

     We know that the support we're giving to the Canadian Armed Forces can also be used as an important economic stimulus to protect the businesses that are affected by the tariffs, and we certainly intend to do that.

    Thank you, Minister.

     Colleges, polytechnics and similar industry training institutions have recently received $165 million in investments from the government. These institutions work directly with industry to deliver and train the next generation of Canadians. Can you help us understand why colleges and institutions are so important in developing Canadian talent?

     They are, because they do a lot of applied research. Since they do so, they're able to train a lot of the students who will eventually work in the different sectors of the manufacturing sector. I was with Doly, your friend, in Scarborough, and we announced an important initiative whereby—across the country, basically—we would be reinvesting in applied research. I think it was well received.

    Doly and I were hearing so many testimonies, so many stories, of students who may be working in AI right now or working in order to eventually get the right education to be able to work in the transportation industry or the aerospace industry or the auto sector. These are just examples of what we're able to support through our science funding.

    Thank you.

    I think you mentioned this earlier. Given the current fracturing world order, the government has worked to diversify Canada's trading relationships. What actions has the government taken to develop, maintain and deepen our relationships with old and new international partners?

     What is really important right now is that we have to work on two fronts. We have to work to create new trade agreements. That's definitely what the Prime Minister is working on—52 trade agreements. It's really important.

    At the same time, all countries are reacting to protectionism. All of them, including, for example, the European Union, are closing their borders to, for example, steel and aluminum, because they're reacting to U.S. protectionism and section 232 tariffs on steel and aluminum.

    What we need to do, and I've been working with the EU on this, is make sure that Canada is not a collateral victim of that protectionism and that we basically have a common market on steel and aluminum with the EU. We need to do that with Japan. We need to do that with other countries around the world. That's just an example of actually being able to align industrial policies, which is more than free trade. It's being able to have the same approach when it comes to our market economies, and also the same type of support.

    That will have an impact because Algoma Steel, for example—I was at Algoma in the Soo on Friday—plans to export steel to Europe. It has a new electric arc furnace, which would obviously comply with the European requirements.

    It's the same for aluminum. Aluminum is an important product that NATO will need. A lot of aluminum products are made either in northern Europe or in Canada. We need to have access to the European market.

    I must say, my colleague Stéphane Séjourné—the industry minister of the European Union—and I have had very constructive conversations. He's coming to Montreal in two weeks, and I intend to continue the EU-Canada dialogue on this. I really think we can do more together.

     Thank you, Minister.

     Thank you, Mr. Ma.

    Colleagues, that brings us to the end of our first hour. We're going to suspend momentarily in order to—

    I was ready to continue for another hour, but Mark is happy to be here for me.

     I believe some ears perked up there, Minister. I suspect there will be plenty of side conversations.

    With that, I'm going to suspend briefly. We'll come back, and Madame Huot and Mr. Schaan will stay with us, although we may have a reduced second hour.

     Colleagues, let's start. We're going to cut the time down a bit here. We're already about 35 minutes behind as a result of the votes, and I have a couple of pieces of committee business that we have to deal with at the end. It won't take us too long, but we might call a bit of an audible midway through here.

    Nonetheless, we have four officials from the ministry joining us here today: Valerie Huot, acting chief financial officer and assistant deputy minister; Mark Schaan, associate deputy minister; Stephanie Tanton, assistant deputy minister, Innovation Canada; and Samir Chhabra, director general, marketplace framework policy branch.

    We'll go right into the first line of questioning. That will go to our Conservative colleagues.

    I'll turn the floor over to you, Mr. Falk. Go ahead, sir.

     Thanks, Mr. Chair.

    Thank you to the department officials for coming to committee today to answer some of our questions and certainly satisfy our curiosity about things.

    I want to start with a few questions about Spaceport and Maritime Launch Services. We've heard some very interesting numbers out there, and we've read some of these numbers. They've entered into a 10-year, $200-million lease on a property that Maritime Launch Services has secured for roughly $13,500 a year. Was it your department that did the due diligence on that $200-million lease?

    No. It was not our department.

    Which department would that have been?

     The Department of National Defence would have done that.

    It's not at all under your purview.

    That's correct.

    Okay. Good. Then we will move on.

    In 2025, 30.4% of performance indicators were met, while a large share were unmet or not measurable. That comes from the results performance management program for executives for 2024-25.

    Can you explain to Parliament why this level of performance would be acceptable?

     Thanks so much for the question.

    The performance management framework as a whole looks to try to establish both credible and ambitious targets for executives to ensure that their performance is well understood within the context of the public service. I think what we need to understand when we look at overall executive performance is that many of those metrics are individualized and are dynamic to a very changing and often agile kind of environment. Insofar as those measures either could not be recorded or were not met, it may be very much an indication of the fact that they evolved over the course of the year or the fact that there were changes to the nature of the work.

    According to the Treasury Board Secretariat's 2025 results for the executive performance management program, almost $6 million was spent on performance pay within ISED. If so few performance indicators are met, why are executives continuing to be rewarded? Who makes those decisions on performance pay?

    The overall performance pay framework is under the jurisdiction of a mixture of our senior personnel and the Privy Council Office, and then by the Office of the Chief Human Resources Officer at the Treasury Board Secretariat. Individual allocation decisions for executives are made by the deputy head of the organization, who is the departmental accounting officer.

    Performance pay is a mixture. It's worth noting that a good chunk of it is withheld pay for the purposes of basic performance. In very, very exceptional cases, additional performance pay is allocated on an individual executive basis.

     As well, 316 out of 318 executives from ISED, or 99.4%, received bonuses in 2025, while only 30.4% of performance indicators were met. What is the reason for such a great disparity between success and reward within the department?

     As noted, there are two aspects of performance pay for executives within the overall rubric of the public service. It's probably worth having a conversation with the office of the chief human resources officer and the folks at the Treasury Board who set the overall framework.

    However, as I noted, the vast majority of performance pay for executives is actually withheld pay for basic performance, and that is allocated on the basis of meeting your overall basic assumptions of work. Then there are a very select number of individuals who receive bonuses on the basis of very exceptional performance indicators and an exceptional performance in a given year.

     It would appear that 99% of executives receive bonuses, while only 30%—

     I would have to double-check your numbers. However, Mr. Chair, my understanding is that the 99% is reflective of the folks who would have received the basic amount of performance pay, which is the withheld pay for any given executive on the basis of base performance.

     With the EVs, we know that there are several EV investments that the Government of Canada has made, and we know that some of these plants are not moving in the direction that was anticipated. I'm just wondering, could some factories leave or shrink once they're offered a better deal from another country? Have you done that analysis?

     Over the recent years, the federal and provincial governments have collaborated with industry and attracted significant investments to support the transition to electric vehicle production and establish a Canadian battery supply chain. We recognize that any industrial transformation takes time, and that responsible risk-taking is part of supporting innovation in a competitive global economy.

    While the time frame for specific projects may vary with market conditions, our automotive industry remains well positioned for long-term success. Each individual project, obviously, will go on its own trajectory. The government seeks to support those investments as they materialize, and, obviously, it continues to work with industry as it responds dynamically.

     I'd like to get one more question in quickly. We know the EV market has shrunk down to 8% of overall Canadian vehicle sales. There's roughly $34 billion of investment the Canadian government has committed to. How much of that is at risk?

    I think that, of the overall envelope of funding we provided for the auto industry, we've tried to dynamically respond to the realities of the industry. It would be difficult for me to talk about a percentage of risk, because I think we continue to work with industry to ensure that we can be there for what they need.

    Is the money all out the door?

    Oh, was that it?

    Yes, Mr. Falk, that was it. I permitted an extra question for you there.

    We're going to you, Mr. Bardeesy, for six minutes, sir.

     Thank you very much. I have a couple of questions about auto and then a couple of questions about other policy files.

    In the earlier round, there were some questions about the automotive remissions framework. I'm wondering, can you just explain the government's thinking for the creation of the remission frameworks and then, maybe, provide an explanation of how it works?

     Thank you for the question.

    As it relates to the remissions framework, we want to make sure that the framework aligns Canada's trade policy with the industrial and workforce objectives, including exploring the introduction of a tradable credit system. The initial remissions framework, as the minister noted, was essentially to try to respond to the tariffs that were in place and to ensure that, as we were collecting countertariffs, there would be the opportunity to disburse those funds.

    I think the opportunity that now presents itself in the revised auto strategy is to look at a tradable system. A public consultation has been launched, and it is focused on leveraging that framework to reinforce domestic production and attract investment. How can we ensure that there's reward for folks who are making significant investments here and allow that remissions framework to essentially, potentially, allow for their overall production to continue to be exported and imported at reasonable tariffs?

     The framework also rewards companies that are doing the manufacturing here in Canada, at levels that are consonant with or in excess of what is being sold here in Canada.

     That's right. As noted, the public consultation imagines a credit system that provides significant incentives to allow for enhancements to production here, including for the purposes of export.

     There were a few questions as well about the future export footprint of Canadian autos outside of the United States. I'm just wondering, can you speak more generally to not just the vehicle itself but some of the inputs into vehicles, including software and critical minerals, which then result in battery supply chains? Can you speak to the growth of that part of the assembly and auto sector as being different from what we've seen, perhaps, in past generations of auto assembly in Canada?

     The traditional logic has been that the auto value chain is one of heavy inputs that potentially restrict the overall mobility. However, the reality is that, increasingly, cars become more agile and dynamic. The overall automotive sector becomes one that is a pairing of inputs on the critical minerals side at the very beginning of the value chain through to the actual dynamic parts process and then through to software and continued electronics, so that you actually have a greater amount of potential to influence the overall supply chain with areas of comparative advantage.

     Take a firm like BlackBerry, for instance. In its automotive division, it is producing significant amounts of software to try to ensure the continued mobility and protection of the vehicle. You can also look at some of the areas where you may have specialized vehicle capacity that is more exportable or potentially of a comparative advantage because it's a niche market.

    The auto strategy seeks to make sure that where Canada has opportunities within that full chain—whether it be all the way at the input side through to the output side of whether or not its actual application is living on top of the vehicle itself—we're pursuing where Canada can play to its strengths.

     Presumably, that also includes the kinds of investments that the government might be making in research and IP protection, the kinds of things that can result not only in more exportability but also in more value capture in Canada. That would be part of the overall thinking around the policy.

     Absolutely. You need to take it as a basket of approaches, including for those that are in either the software or some of our ICT sectors, where they may not be seen as traditional auto parts providers but are actually now part of a connected approach.

    Our overall strategy is trying to rest as much intellectual property here in Canada, maximize the comparative advantage of our overall IP generation and then find the places where it can slot into appropriate sectors. That's part of the broad vision.

     The estimates also reflect some increased investments in research more broadly through the three main granting councils and also through defence research.

    I'm wondering if you could share the intended impact of those investments, not just for the researchers themselves but for the potential downstream beneficiaries in the economy.

     It's worth understanding the research as, in many ways, an industrial strategy. You can take everything from the $1.7 billion of the impact+ program, attracting talent to the country, to the significant increases to the granting councils and then the work that those councils and some of our applied research programs are doing, playing in things like the defence industrial strategy, where you can really see the connection between base intellectual capacity and actual industrial output. It's even things like the recent additions to the college and community innovation program and work through the National Research Council's IRAP. A bunch of these are pairing industrial capacity with academic capacity in order to fit into these sectors that are hot and emerging at the moment, where Canada has a real opportunity.

     Thank you.

    Thank you.

    Mr. Ste‑Marie, you have the floor for six minutes.

    Thank you, Mr. Chair.

    Good afternoon to the deputy ministers and other department managers.

    For my first question, I would take us back to the time before the last election, when Mr. Champagne was the minister of Innovation, Science and Industry. He held round tables with the aerospace industries to identify their needs for the development of a national aerospace strategy that was promised for budget 2024.

    Does the department intend to make the results of these consultations public?

    I don't know if the results of the consultations have been published, but the results, in principle, are really reflected in the defence industrial strategy. As the minister said, it's really a strategy that includes all the capabilities and skills of the aerospace sector and that really aims to protect and promote the sector, including the business that is really the focus of the government's plan.

    Okay. Thank you for that.

    I have a question on a completely different topic, clean technology.

    The number of projects supported by the department with a clean-tech component was 136 last year and is expected to drop to 17 this year, a decrease of 87%, according to departmental plans. I get the feeling that the government is abandoning the environment or writing it off.

    Can you explain why the number of projects is being reduced by 87%?

    There are funds that are really dedicated to clean tech. That said, as I said in my answer about the aerospace sector, it's now included in the other sectors. Projects are not being abandoned. The reality is that there is a clean-tech aspect in many other sectors and many other projects. Now, companies that are continuing down the path of clean tech in one sector really have an opportunity to access government support in another form that might better meet their needs.

    In the departmental plans, it also says that the government will make targeted cuts to some entrepreneurship and innovation programs, as well as the Canada Foundation for Innovation, but it doesn't specify which ones.

    Can you tell us which ones will face budget cuts? If you don't have the information here, you can send it to the clerk.

    Innovation, Science and Economic Development Canada, or ISED, ensures that departmental spending is cost-effective and delivers results for Canada.

    As part of the comprehensive spending review, ISED is directing and reprioritizing programs in its area of expertise, science and industry, to avoid duplication and improve alignment with the minister's specific mandate while eliminating impacts on stakeholders and clients. ISED is achieving efficiencies by consolidating its functions, simplifying its internal structures and processes, and reducing its operational footprint. We will continue to support economic growth across the country by focusing on an inclusive, equitable and ambitious Canadian economy.

    The department is making spending cuts. The next plan will lay out more clearly what the key aspects are. It must be said that this is a three-year exercise, requiring the department to run it with agility while recognizing that the department has received new funding for the other priorities. That said, it will be clear in the next departmental plan.

    I'll move on to another topic altogether.

    We see that the government is doing a lot to attract foreign investment. Today, there is the delegation from India. Later this week, the Prime Minister is going to New York. That's a good thing, but there are still concerns about a takeover of companies or strategic sectors, such as critical minerals.

    If I'm not mistaken, your department is the one that studies the impact of foreign investments, particularly on strategic sectors. Would it be possible for you to block such investments if they undermined Canadian sovereignty? How do you plan to analyze these foreign investments?

    I'm the associate deputy minister of the department, but I'm also the director of investments for the Investment Canada Act. I have a dual mandate.

    On the one hand, it's really important to increase Canada's ability to diversify into other markets. We are at the point where our businesses really need to get foreign investment and access to markets. On the other hand, Canada's sovereignty, intellectual property and corporate-related aspects really need to be protected. In my opinion, there really needs to be a balance between the two.

    That said, we are very comfortable blocking investments that are truly harmful to the Canadian economy and, at the same time, having a more open approach to ensure that Canadian businesses have access to the capital they need to grow in the global market.

    Thank you for all your answers.

    Thank you, Mr. Ste‑Marie.

     Colleagues, what we're going to do is go to Ms. Borrelli for five minutes and Ms. Begum for five minutes, and then that will conclude our lines of questioning. We have a bit of committee business to do once we allow our colleagues to go.

    With that, Ms. Borrelli, the floor is yours for five minutes.

     Thank you, Chair.

    Ms. Huot, witnesses who previously came to the committee during our study on the advanced manufacturing and metallurgical sectors said many SMEs are facing excessive pressure due to the new section 232 tariffs of April 6. They said specifically that loans will not help them, since they are already operating at a loss with the burden of these new tariffs.

     The minister came out during that study—actually, on the last day of that study—and made the announcement of the various loans that would be available to these companies suffering from these tariff pressures. Why did the industry department decide to provide debt-driven support versus direct assistance for manufacturers and SMEs?

     I'll start, simply because, as the associate deputy, I have the policy responsibilities, as opposed to the CFO, who would be responsible for the accounting. I think it's important to recognize that it's a diversified approach that's been taken by the government with respect to the changing nature of section 232 tariffs. While some of those supports are in fact loans, many of them are actually repayable or nonrepayable contributions, depending on the mechanism that's in place.

    Excuse me. I fully understand the different offers that were made and the $1 billion through the BDC and the $500 million through FedDev. What I'm asking is, why were loans offered when testimony was already given that loans wouldn't help them and they needed tariff relief?

     Again, I'll just note that, including through mechanisms like the regional development agencies, the approach is actually often a mixture of both repayable and nonrepayable contributions, depending on the public benefits that are created by the project at play. It's important to look at it as a balanced approach that uses a distinct variety of instruments, recognizing the needs of industry.

    Okay. Thank you very much. Some of these larger companies are able to hire consultants and lawyers to apply for the loans, because it's very complicated to apply for these loans. Small and some medium SMEs cannot. They cannot spare the staff to do that. Really, they're very insistent that the tariff relief is what they need. They cannot repay the loans. They're not operating at a profit. Thank you very much.

    I'm going to share the rest of my time with MP Dancho.

     Thank you, Mr. Chair.

    Thank you for being here. I did want to ask about the impact assessment, the impact analysis, that your department has done or perhaps has had done regarding the import of the 49,000 Chinese EVs. Could you provide that analysis?

     Thank you, Mr. Chair, and thank you also to the member, who happens to be my parents' MP. I appreciate that. I would just note, on the question of the analysis, that, as the minister noted, the amount of 49,000 is a small increase from the 43,000 imports that were part of the previous process. We did look at the overall makeup of the imports of vehicles and, obviously, assessed it alongside those previous numbers.

    I see. So you updated your analysis from what you did before they were banned. Is that correct?

     I think we took stock of the fact that prior to the ban there were already 43,000 vehicles coming into the country.

    You did an analysis of the impact on North American manufactured automobiles. I suppose my question is this: Is that part of the analysis?

    Our industry sector, which has a dedicated division related to the automotive and transportation industries, has a constantly evolving analysis of the overall state of the industry. It has very close connections with the industry and the manufacturers here. It's not a singular analysis; it's a continued relationship with the industry to make sure that we know how it's playing out and what exactly the requirements are.

     Could you provide some of that analysis to the committee?

     I'd be happy to go back and see what might be possible to share with respect to our overall assessment of the auto sector of Canada.

    This analysis was done prior to the agreement with China. Is that correct?

    As I note, we have a dedicated sector that has a full unit that works continually with the auto sector. It's not a single point in time. It's a fundamental part of our job as the industry department to make sure that we have a very strong and robust analysis and understanding of the auto sector.

    What is the name of that part of your department?

    It's the industry sector, and it's the automotive and transportation industries branch within it.

     Thank you very much. I appreciate that.

    Thank you very much.

    Ms. Begum, the floor is yours for five minutes.

     Thank you very much, Chair.

     I appreciate you all for being here today. I want to continue on this line of questioning for the auto sector. Recently, in March, EVs made up about 12.2% of the total auto sales in Canada. We know what's happening and the struggle that we face, especially in the face of tariffs. Why is it important to ensure that the auto sector has a strong and diverse auto export capacity?

     As someone who has worked in the department for a long time, I can say that our commitment to the auto sector and its unique economic benefits is long-standing. One of the reasons for that support has been the diversified nature of the economic benefits it produces.

    When you look at the overall supply chain and the continuous number of small firms that continue to support overall inputs, and you then add in, as per the question from one of your colleagues, some of the new inputs that are going into vehicles, it's simply a very significant force multiplier of economic benefits, jobs and stable production that allows for Canadians to have access to both product but also jobs capacity and overall economic well-being.

    Our support for the auto sector is premised on this notion that we need to make sure that we have the capacity to maximize those jobs and that production, and then find the markets where it is best suited and continue to assess the emerging markets that potentially are in some of these areas of comparative advantage.

     Thank you very much.

    I know I have limited time, so I want to ask about something that's dear to my heart regarding some of the work I did in my previous position as a provincial member. It's something I'm really excited our government is working on: all Canadians having access to broadband Internet by 2030. I know a lot of folks, especially in rural and primarily indigenous communities, really struggle with that. It hinders their ability to do almost everything, and to excel, flourish and prosper within their communities.

    How does Innovation, Science and Economic Development Canada assess the likelihood of achieving that connectivity goal by 2030, particularly in rural and indigenous communities?

    Thank you for the question.

    The operations of the universal broadband fund, the primary program through which the Department of Innovation, Science and Economic Development pursues the government's connectivity goals.... It should be noted at the outset that this is one program. There are a number of other elements. The CRTC has its own programming related to building out infrastructure capacity, as do our colleagues at Indigenous Services Canada.

     The UBF is premised on a fairly significant continuous mapping of the overall connectivity rate in Canada, including the number of households that have access to what we consider to be high-speed Internet—or 50/10, as we define it in the standard, in terms of upload and download speeds. We are routinely assessing this. When we do an intake of new projects with each province, we are able to assess the overall current baseline rate. As the project moves along, the degree to which it will allow us to get to households that, right now, are potentially not within our standard for high-speed Internet....

    Our current assessment continues to be that we are on track and that our investments are continuing to provide that very meaningful and important connectivity to a whole host of communities. It will come through a diversity of approaches. In a number of these places, we need to be very sensitive to the notion of what's going to work in terms of connectivity. That's why we take a regional, place-based approach to ensuring that we have the projects in place so all Canadian households can have access to high-speed Internet by 2030.

    Thank you for that.

    Would you be able to elaborate on how many additional households, businesses and communities the department expects to connect to broadband Internet, in terms of the funding in the estimates?

    I would be happy to come back to the committee with our current statistics on the performance of the universal broadband fund—including projects that have recently come online and those in the pipeline—in order to ensure that we are meeting our goal as we live out that program's important contributions.

     That's great.

    Thank you so much, Mr. Chair.

    You can ask a quick one if you like, Madame O'Rourke.

     I will, through you, Chair, to Mr. Schaan.

     This committee studied AI. We looked at a number of investments in AI.

    I'm wondering how quickly those investments are rolling out, and what the plan is to assess the return on investment for those AI investments.

    I recognize that time is tight.

     Investments have been made through the pan-Canadian AI strategy, particularly budget 2024 investments of $2 billion for AI infrastructure and to support commercialization and adoption. The vast majority of those are starting to crystallize or are already out. I'm happy to come back to ensure that we outline the benefits being accrued.

     For instance, we've had initial investments through our AI compute access fund. We've had some deals through our AI compute challenge program. There are requests for proposals for our AI sovereign compute infrastructure program and the supercomputer that will drive AI capacity for research and as a test bed for industry. That RFP closed on June 1. We are very excited to advance that process.

     Hopefully, you'll see more announcements forthcoming as we finalize the AI strategy for the country.

     That's fantastic. Thanks.

    Thank you, Ms. O'Rourke.

    Mr. Ste‑Marie, because you sincerely apologized for going over your time in the last round, I'm going to give you 30 seconds for one last question.

    Thank you, Mr. Chair. I will be eternally grateful.

    To replace the fleet of CP‑140 Aurora aircraft, the government chose Boeing over Bombardier. Last week, we learned that Boeing was going to deliver its aircraft three years later than anticipated.

    Is it too late to buy Canadian planes?

    The decision to purchase an aircraft really falls to our colleagues at the Department of National Defence. That's a question that should really be put to the people at the Department of National Defence.

    Thank you.

     Thank you very much, Madam Huot, Mr. Schaan, Madam Tanton and Mr. Chhabra, for being here. We very much appreciate your testimony and insight. I wish all of you a wonderful rest of your day. You are permitted to go.

    Colleagues, we have a few matters to discuss very briefly.

    We have a $500 budget that we need to approve just for this extra meeting.

    Seeing no opposition, I'm going to say that's approved.

    We have to pass a motion for an informal meeting that we have coming up on Thursday.

    Unfortunately, I have to return to Winnipeg to attend a funeral service, so Madam Dancho will be in the chair on Thursday. We have a delegation that features the state minister, Dr. Florian Herrmann, who's the head of the Bavarian State Chancellery. Members from the Standing Committee on National Defence will be joining us. We have a regular meeting that will start at 11 o'clock. We just need agreement that everybody is okay with this informal meeting. I suspect it's okay

    Some hon. members: Agreed.

    The Chair: Excellent.

    The most important matter of business is in regard to the committee passing various line items of the main estimates, which we were just engaging with officials on. It's my responsibility as chair to report back to the House on behalf of the committee in relation to the estimates. There are quite a few.

    I have a suggestion on the easiest way for us to proceed. I did have conversations with the representatives from each political party around the table earlier, so I hope that we can move forward in this way. It's simply to grant unanimous consent for the passage of all line items related to the main estimates that flow through this committee. Should I not receive unanimous consent, I will go through all of them individually if it is the will of the committee, but I am going to just look to seek unanimous consent.

    Shall the votes carry on division?

    Yes, if you wish. Adopting on division is always an option, even for you, Mr. Ste‑Marie.

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    Colleagues, with that, I will take your direction to report the main estimates on the committee's behalf back to the House. I'm just looking for agreement on that.

    Some hon. members: Agreed.

    An hon. member: On division.

    The Chair: Okay.

    With that, colleagues, thank you for the great afternoon we've spent together, as always.

    As I said, Madam Dancho will be in the chair on my behalf on Thursday so that I can attend a service in my riding, but I'm very confident that we will continue to have a productive set of conversations.

    With that, the meeting is adjourned.