Thanks very much.

Good morning, Madam Chair and members of the committee. I'm grateful, as always, for the invitation to speak with you today.

I'm here on behalf of Unifor, which represents 315,000 working people across the country in virtually every major sector of the economy. This includes approximately 40,000 of our members, who work in the automotive industry.

Canada's auto sector supports more than 500,000 jobs throughout the economy and makes an outsized contribution to GDP and Canadian exports. The auto sector is also a source of good union jobs, which are highly skilled, highly productive and the economic lifeblood of many communities. This sector's shift toward electrification makes it even more important as a contributor to greenhouse gas emission reduction efforts.

Our federal government has demonstrated that it understands the opportunity this EV shift presents to Canada, with major investments to celebrate, including in various unionized assembly plants, with hopefully more to come. However, a lot of Canada's future success depends on how the government understands and responds to the U.S. Inflation Reduction Act.

The good news, as others have mentioned, is that the IRA resolves what's been nearly a two-year dispute centred on consumer vehicle purchase incentives that were only applicable to U.S.-assembled EVs. Cutting Canada out of that incentive program would have devastated the industry, with a cloud of uncertainty hanging over scheduled EV investments at various Canadian assembly plants.

There are many positive policy developments in the IRA that are worth noting. The act tailors incentives for EVs, batteries and battery parts to those built in North America. This is a novel approach, possibly the first-ever example of a buy-continental policy, which may present pathways to resolving other lingering disputes around local content provisions. The act creates progressively stricter demands for automakers to use responsibly sourced critical minerals and rare earth elements to qualify for the purchase incentives. That not only builds greater accountability into the supply chain, but it presents major opportunities for Canada to develop this upstream segment of the market. The act also lifts automaker sales incentive caps for EVs, which will help bolster new EV production on both sides of the border.

From a top-line market access perspective, the IRA is, in fact, quite good news for Canada. However, the IRA does present some important challenges of which policy-makers have to be mindful. For instance, the IRA establishes new manufacturing tax credits for clean energy production—a mess of new supports that can offset, in some cases, 30% of investment in new factories, including for batteries. Included in this is a $35-per-kilowatt-hour subsidy for U.S. battery cell production, as well as additional subsidies for battery cell packing and mineral processing on a scale we've not seen from the U.S. federal government, frankly.

To put the battery cell subsidy into perspective, a Ford F-150 Lightning contains a battery capacity of up to about 130 kilowatt hours. Under IRA terms, that equates to a subsidy of at least $4,500 per vehicle for the cells, and more if we include the battery packing. Put another way, a plant the size of the new gigafactory that is scheduled to come to Windsor would be subsidized at around $1.5 billion just on that program alone. It speaks to the very aggressive competitive landscape for these investments.

It's also important to get a bead on the time scale of these IRA provisions. The act requires a significant share of critical minerals to be sourced domestically or from partner nations, which will rise to 80% by 2027. Despite Canada sitting on stores of known mineral deposits, it will take many years before those products are mined, refined and EV-ready. Whether and how Canada can benefit from this condition and what bearing it will have on Canadian investments in this space is still unclear.

What we do know is the IRA offers a much brighter future for Canada's auto sector than what was initially presented through the build back better plan. Canada has to take advantage of the certainty the IRA provides and be emboldened to set its own ambitious industrial strategy to maximize growth potential, to grow good jobs and to transition affected workers along the path to net zero. However, let's not pretend the IRA is anything other than a bill that advances U.S. interests first.

Our union is very encouraged by the comments we've heard from Minister Freeland and Minister Wilkinson, and by assurances that Canada is prepared to respond to these investment concerns, as required. That is very good news.

Once again, I appreciate the invitation to speak and to share these thoughts. I look forward to any questions.