Navdeep Bains, Policy Options
September 17, 2020
Canada is already on the leading edge of research into zero-emission vehicles. Our natural resources, used in ZEV batteries, give us another leg up.
For decades, Canada’s auto industry has relied on what I would call a “people advantage.” Canadian workers made better quality, innovative vehicles and, as a result, automakers recognized the value in making cars in Canada.
The transition towards autonomous vehicles has put our people advantage to the test, challenging the ingenuity and durability of our domestic industry to remain competitive in a transforming global market. Once again, however, Canada has risen to the challenge, proving to be a force in the kind of connected technologies and artificial intelligence upon which self-driving cars and trucks are based.
Researchers and students at Canadian post-secondary institutions have made Canada a destination of choice for autonomous vehicle research. General Motors built a 150,000 square-foot technical centre in Markham, Ontario, to develop autonomous vehicle technology, as well as committing to the opening of an Urban Mobility Research and Development Centre in Toronto. Ford and Blackberry QNX teamed up with Invest Ottawa, Uber and other partners to create the Ottawa Autonomous Vehicle Cluster, which includes a 16-kilometre test facility. Building on this momentum, the Automotive Parts Manufacturers’ Association of Canada launched Project Arrow — a challenge to Canadian university students to partner with Canadian industry in developing a 100 percent made-in-Canada concept car of the future.
As we look to the future, consumer interests and market forces are driving a shift to low-carbon transportation models. More and more Canadians want electric vehicles, and automakers are prepared to make investments to shift their manufacturing accordingly. Canada now has an opportunity to invest in electrification and drive a green recovery to help achieve our climate change goals.
Fortunately, Canada has a competitive advantage in this realm, too: our natural resources and the scientific excellence and manufacturing skills to maximize them. More specifically, we are the only nation in the western hemisphere with an abundance of cobalt, graphite, lithium and nickel, the minerals needed to make next-generation electric batteries.
I call this advantage “mines to mobility” because it is about more than just cars and trucks; electrification is also gaining traction with buses, planes, ships and trains. For example, with two facilities located in Quebec, Nova Bus is making a name for itself and winning contracts for its electric and hybrid buses. British Columbia-based Harbour Air conducted the world’s first successful flight of an all-electric commercial aircraft last December. And, of course, we have large automakers such as Toyota and Fiat Chrysler making hybrid vehicles in Cambridge and Windsor respectively.
The opportunity for Canada to be a leader in electric transportation is enormous. For starters, returning Canada’s auto industry to pre-COVID levels will take more than just the status quo. Electrification offers one of several critical opportunities that our domestic industry can aggressively pursue to rebuild our economy cleaner and stronger. We can accomplish this by working with industry to attract zero-emission vehicle (ZEV) manufacturing facilities through large-scale investments. We must also use our Canadian research expertise to carve out a niche for solving barriers to ZEV adoption, such as the challenges of operating electric vehicles in cold weather.
Equally important is our work to build Canada’s battery value chain. The International Energy Agency forecasts that by 2030, production of electric vehicles could reach 43 million units per year with production valued at more than US$567 billion. That is up from 2 million electric vehicles made in 2018. By 2040, the international market for energy storage will attract US$662 billion in investments. The lithium ion battery is at the heart of this evolution.
With Canada’s natural resources and skilled workforce providing a competitive advantage, we absolutely must support the development of the next generation of battery supply chains, right here in Canada. The ability of Canadian industry to pivot quickly has been on display since the outset of the COVID-19 pandemic. In a matter of months, Canadian manufacturers were able to retool their existing production lines and set up new manufacturing facilities to produce much-needed PPE and other critical supplies. There is no reason we cannot see the same kind of rapid retooling of existing facilities – and eventually the construction of new ones – to take on the manufacture of battery materials. Doing so would provide positive results across various sectors, including mining and critical minerals, automotive and bus manufacturers, research and development — all of which drive economic growth.
As with any emerging industry trend, time is of the essence. The window of opportunity for first-mover advantage is short. In charting this road to recovery, the government is analyzing new investment opportunities, programs and partnerships while also keeping one eye on the consumer. If the adoption of electric mobility is going to accelerate, we know we must make ZEVs more affordable for Canadians, put charging and refuelling stations where Canadians need them, and raise Canadians’ understanding of such vehicles.
Over the last decade, the shift to a low carbon economy has been driving major business decisions and industry approaches. And the early evidence suggests that the COVID-19 pandemic has accelerated these trends. We must continue working to ensure that Canadian industry is well positioned to take advantage.
Our economic recovery and climate change goals depend on it; we are leaving nothing to chance.