Canada is home to one of the world’s largest automotive manufacturing sectors, it’s a globally recognized leader in mining, mining finance, and metallurgical engineering, and has an abundance of clean power. This gives us a chance to play a significant role in the rapidly expanding global electric vehicle sector.
In recent months, we’ve seen a surge of investment by EV manufacturers, battery firms and tech startups, some of it drawn by generous grants from federal and provincial governments. Multinationals such as General Motors, Ford, LG, BASF and Stellantis have all committed billions to expanding their EV operations in Ontario and Quebec.
Those deals represent an encouraging start, but many difficult questions remain. Should Canadian governments try to back individual firms or sectors? Can Ottawa ensure that firms in Canada’s EV supply chain gain access to the U.S. market? And how should we shape research and development (R&D) policies that spur EV innovation but also support the commercialization of Canadian-owned intellectual property?
Perhaps the most salient question is this: Will Canadians manufacture EVs and their components, as we have done with automobiles and light trucks for decades, or will we merely consume EVs produced elsewhere, as we do with laptops and most other consumer electronics?
The answers to these questions will play out in the business pages for the next 15 years. As the world experiences rising temperatures and the related urgency to hit the Paris GHG targets, Canada and other countries have pledged to phase out the internal combustion engine in 2035, thereby drastically accelerating demand for EVs, battery minerals, charging infrastructure and clean grids.
To ensure that Canada finds its place in the global EV manufacturing supply chain, Canadian policymakers need to focus on four key goals.
Develop an EV labour force. Domestic firms and foreign investors alike will only establish operations in Canada if they can be assured of recruiting the technicians, programmers and chemical/metallurgical engineers who will be in demand for the EV manufacturing value chain.
Build genuinely collaborative relationships with First Nations communities. Canada has the valuable and sought-after mineral deposits required for EV battery production. But miners seeking to tap lithium, cobalt or copper reserves must not only consult First Nations but establish truly meaningful partnerships and wealth-sharing arrangements.
Strategically prioritize the allocation of public resources. Industry groups and policymakers must develop a common understanding of how and where to direct investment, paying particular attention to global market dynamics, the need for a highly flexible and nimble approach, and a parallel focus on supporting R&D and early-stage ventures.
Update trade agreements to ensure access to the North American market. The enduring lesson of the 1965 Auto Pact was the thoroughly reciprocal relationship between the United States and Canada. Our trade negotiators are battling against U.S. protectionism that extends to a range of sectors, including the EV supply chain. Canadian governments must co-ordinate their efforts to ensure that the U.S. removes barriers if it wants access to Canada’s natural resources.
The stakes are enormous: Canada’s automotive sector contributed $12.5 billion to GDP in 2020 and directly employed more than 117,000 workers, as well as 370,000 more in after-market companies and car dealers. Five global manufacturers (Stellantis, Ford, GM, Honda and Toyota) assemble vehicles in Ontario and these plants sit at the hub of a network of about 700 parts suppliers.
Yet this automotive manufacturing ecosystem faces an existential threat because EVs rely on far fewer components and powertrain technologies that have been largely developed elsewhere. To date, no EVs are built here except two hybrids (Chrysler Pacifica and Lexus RX450), while China dominates global EV battery and bus production.
Whether Canada carves out a meaningful place in this highly dynamic global industry will depend on many factors, from innovative R&D to hard-nosed bargaining in trade agreements. Policymakers and other Canadians must also not forget the point of the exercise, which is to decarbonize mobility — a goal that entails reworking our own grids, discouraging sprawl and developing technologies that enable other countries to do the same.
Canada’s role in the EV revolution must be about industrial development, but also equity, innovation and sustainability. One cannot succeed without the others.
John Lorinc is a Toronto journalist and writes regularly about climate, cleantech and green urban development for Corporate Knights, Spacing and The Globe and Mail. He is the author of the IEC report Pick a Lane: Canada and the EV Opportunity
Comments
Pick a lane?
How about the bus lane? The train tracks? The cycling path? The sidewalk?
The author takes the switch to EVs as a given.
Not so fast.
Replacing hundreds of millions of ICE cars with hundreds of millions of EVs is not a green solution.
The bigger problem is cars, car culture, and sprawl — not the power source.
Climate change is not our only environmental problem.
Wealthy progressives want EV subsidies so they can salve their guilty conscience over their outsize footprint without having to make any real change in their unsustainable lifestyles.
The affluent give no thought to transportation options for the marginalized.
EVs are the yuppie response to climate change. (It's not for nothing that most of the first EV models were luxury cars beyond the reach of most citizens.)
"A developed country is not a place where the poor have cars. It's where the rich use public transportation" – Gustavo Petro, Mayor of Bogotá
Use public dollars to make public investments in public transportation — not private.
"Shifting to EVs is not enough. The deeper problem is our car dependence" (CBC, Jul 31, 2022)
https://www.cbc.ca/news/opinion/opinion-electric-vehicles-car-dependenc…
"The Int'l Energy Agency estimates that there will need to be a significant increase in mineral extraction to fuel a green transition that places emphasis on EVs over alternatives like public transit and cycling. For example, demand for lithium is expected to soar by 4,200% and cobalt by 2,100%.
"Those figures sound great to the mining industry, which hopes to use EVs to greenwash its operations, but they have severe human and environmental consequences throughout the supply chain.
"The 'lithium triangle' in South America is poised to be a significant source of the mineral, but already it's polluting the water and lowering the water table, threatening fresh water access for local communities.
"Meanwhile, the site of much of the world's cobalt extraction in the Democratic Republic of the Congo (DRC) experiences high rates of birth defects, contaminated water, and around 40,000 children are believed to work in artisanal mines. In 2019, electric carmaker Tesla was among a number of companies named in a lawsuit over child deaths at cobalt mines in the DRC."
"But car dependence isn't just an environmental problem. In 2020, an estimated 1,745 people died in motor vehicle collisions and another 7,868 people sustained serious injuries.
"Commute times are also getting longer in Canadian cities, and sitting in a car is associated with a whole range of adverse health impacts."
"The climate crisis offers us an unprecedented opportunity to re-imagine how we move and how we build our communities, but the push for electric vehicles is about making the smallest possible change — one that likely won't deliver the scale of emissions reductions we need. Meeting the scale of that challenge requires taking on the dominance of cars in our communities.
"The federal govt has increased transit funding, but much of the money won't flow until 2026 and beyond. Meanwhile, subways in the major cities need expansions to keep up with demand, municipal bus systems need operations funding to provide a more frequent and reliable service, and many Canadian cities lack proper cycling infrastructure.
"Similarly, the Liberals finally approved VIA Rail's high-frequency rail plan between Toronto and Quebec City after 5 years of delay, but even then it won't arrive until the early 2030s. And it still won't match the high-speed rail being built in countries across Asia and Europe. The ambition we need simply isn't there."