Good afternoon, Mr. Chair. Thank you very much to you and the esteemed members of the committee for having me and Mr. Morency here this afternoon.

The study you find yourselves currently undertaking will have big implications for the country and how we chart the path to net zero. We are grateful for your thoughtful deliberations to date and are excited to bring our insights to your conversation.

Electro-Federation Canada is an industry organization with 260 members that represents a thriving industry of electrical manufacturers, wholesale distributors, sales agents and field service providers who design, develop, distribute and install electrical and automation products that support energy efficiency and contribute to a net-zero future. Our electrical and automation industry members are the technology makers, innovation experts and supply chain partners for a net-zero economy. We're powering a changing world.

EFC members contribute over $15 billion to the Canadian economy annually and support 109,000 jobs directly and indirectly in more than 1,400 facilities nationwide. Though we have long been active in advancing these initiatives, it is only in the last few years that we've trained a more intense focus on working with departments and Parliament here in Ottawa.

Last year, in conjunction with The Pembina Institute, we published an industry white paper entitled “Decarbonizing Canada via ‘Electrification’”, which provided a road map of where we believe strategic investments and policies need to be made in order to achieve the ambitious targets laid out before us. Specific to this study, we made recommendations on investing in distribution system upgrades and further emphasizing developing regional electricity interties. We also conducted two Hill Day exercises in February 2023 and 2024 respectively, where we met with parliamentarians of all stripes to discuss and raise these issues and recommendations. We have been encouraged by the reception we've received to date.

We note the brief that Mr. Manvir Sandhu submitted to the committee as part of this study. We are aligned with its four recommendations regarding the development of a national electricity strategy, increasing interprovincial transmission capacity, modernizing and upgrading requisite infrastructure and increasing decentralized energy capacity countrywide. In addition, we state that, as all these substantive investments are being made, it is important to support the four recommendations with an industrial strategy that helps secure a global supply of energy transition solutions and promotes local manufacturing and supply chain building with investment tax credits to meet Canada's timelines for achieving a greener, electrified Canada.

To put the supply issue in context, the demand for switchgear and transformers is no longer driven by building starts alone. Solar, batteries and storage in data centres are all competing for this technology. A study done by Scotiabank on the U.S. states that the demand for switchgear and transformers will increase by five times annually to meet the demand in the U.S. in the next 15 to 18 years.

We know that a new mix of energy is required, and this impacts demand for components. For example, a 1,000-megawatt nuclear or gas plant will require 55 to 70 transformers, whereas the comparable amount of output from wind or solar with 1,000 megawatt hours of on-site battery energy storage will require 900 to 1,250 transformers. At the same time, a large hyperscale data centre needs 1,400 to 1,700 transformers per site. All of this is creating a tremendous demand for electrical equipment and electrical power generation.

One of our four Canadian transformer manufacturers is committed to the grid and is saving their capacity for utilities. However, they may have to face a business decision, as the data centre market is moving quicker and is willing to pay more for equivalent products. This competitive activity was also highlighted in the Scotiabank report. Today's lead time for transformers is over two years, and the lead time for switchgear has gone from 20 weeks to over one year. It is important to secure a Canadian supply for our energy security.

We know that net zero is important for our environment and the next generation of Canadians. At the same time, the push to net zero is good for the economy. Because of Canada's hard work in decarbonizing our grid, we have become an attractive destination for investment by companies that have made low-carbon commitments and see the economic value of a lower-emitting energy system. We are also seeing this investment create new jobs.

This is a win-win—a win for the environment and a win for the economy. We are in a global race, and our members can unlock capacity, secure supply chains and provide technical assistance to get this job done efficiently for Canada. We're here to help, and we want to make a positive difference.

Thank you for your time. We eagerly welcome your questions about our work and initiatives.