International Trade Committee on Feb. 13th, 2013

[Tom Sundher]

Thank you.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thanks, Ron.

Thanks to both of our witnesses for presenting to us today on this subject.

I come from Vancouver, Mr. Sundher. I certainly hope your grandson gets traded to the Canucks, but that's another story.

[Some hon. members]

Oh, oh!

[Tom Sundher]

That's what we're hoping for. The Canucks missed a big opportunity.

[Andrew Saxton, Conservative, North Vancouver, BC]

We'll keep hoping.

I just want to go back to wood products. Wood products already represent a fairly large percentage of our exports to India, even though the absolute numbers are quite small.

Mr. Sundher, you mentioned that the primary uses you see are really doors, window frames, flooring, and that sort of thing. What about construction of framed buildings? You haven't really mentioned that so much. Is it because they don't have the building codes and standards, or they don't have the skills to build framed buildings? In your opinion, is that an opportunity?

[Tom Sundher]

There's an opportunity. Where I see the first opportunity coming from is that a lot of construction is going on there in cement, because cement is cheaper. Steel is cheaper, too. Most of the buildings are going up in cement and steel, but all the interiors are wood. Most of the high-end finishes are from hardwoods. As I said before, the hardwoods are diminishing. The prices are going up. We can be very competitive in introducing our wood into that market area.

For the last 10 or 15 years I've been exporting the coastal species of hemlock, fir and cedar. They've been accepted, but it's taken a lot of work. First you have to find somebody who will work with you and introduce them into the project, but it's continuous. Once they get using them, they'll use them continuously.

I think the opportunity for wood framing will first come out of those high-rises. Where they put cement in the walls now, they could put in wood. It would be much more practical to make the room dividers out of wood, like 2x4s or 2x6s, rather than using cement walls. I think that opportunity exists for us.

They're working on it in China. I don't see why that opportunity....

We just came back two or three weeks ago from a trip to India. If you look at the cities of Mumbai, Bangalore, and Delhi, there are so many high-rises going up. It's just phenomenal. We had a meeting with architects and designers. The number of wood doors is phenomenal. Our wood is in the manufacture of those wooden doors.

Granted, they're experienced with hardwoods so they're using hardwoods now, but the opportunity to increase our market share is huge. We can't go anywhere but up.

[Andrew Saxton, Conservative, North Vancouver, BC]

Do you see any potential demand for the pine beetle wood in India, the blue pine?

[Tom Sundher]

Yes. I think for furniture and that. I think Tolko, PALCO, West Fraser, and those interior companies have good opportunities to do that. I think they're working on that. As a matter of fact, I think some of their wood of that sort has gone into India. I'm not that familiar with that, but they are. They're pretty good at that.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

I believe Monsieur Morin and Madame Papillon were going to share or split time, for five minutes.

Go ahead.

[Marc-André Morin, NDP, Laurentides—Labelle, QC]

Thank you.

Mr. Sundher, I know you're from the west coast.

[Tom Sundher]

Yes, sir.

[Marc-André Morin, NDP, Laurentides—Labelle, QC]

In eastern Canada we have plenty of hardwood. We have maple and birch and all sorts of hardwood. There are some very functional shipping lanes to ship from the east coast. Do you think there could be a market, eventually, for eastern Canadian hardwood?

[Tom Sundher]

Absolutely. There is now.

When I was there, Quebec Wood was there. They've been there just about every time I've visited. They're working hard. As a matter of fact, 10 years ago Quebec Wood was working on India. Shipping out of the east coast is much cheaper than out of the west coast. The opportunity is there. For sure, it's there.

[Marc-André Morin, NDP, Laurentides—Labelle, QC]

I have another short question. When we talk about non-tariff barriers, there are some that are mean-spirited, clearly, to stop trade. Sometimes they have to do with the difference in governance between our countries, like the powers of the different states and different jurisdictions.

To you, are there more of those mean-spirited non-tariff barriers? Are the other structural components of the Indian economy a big part of that problem? If you can take this....

[Tom Sundher]

I don't think it's mean-spirited. I met a lot of the people. I met my customers. It's just that the documentation is so complicated. If there are errors, the person on duty inspecting the documents is going to check that they're done correctly. If they're done correctly, there's not an issue. If there is a mistake, then you have to deal with it. But I don't think it's mean-spirited. I think it's just a matter of clearing up the understanding from our side. There are a lot of issues with paperwork that could be cleared up by our bureaucrats when they're dealing face to face like we're talking now. They're not insurmountable. India is moving forward, and the young people who are now coming into play are not mean-spirited. They want things to happen. They travel around the world, and they see a lot of things. They want their country to progress like any other country.

[Marc-André Morin, NDP, Laurentides—Labelle, QC]

I'm sorry I used the term “mean-spirited”. That's not exactly what I meant. I was referring to some practices we see in a lot of countries. They don't want to admit they want to limit importation and they use euphemisms. “Mean-spirited” is a little bit off; I should have said “hidden tariff barriers”. I understand your point.

Thank you very much.

[Tom Sundher]

Thank you.

[The Chair, Conservative, Rob Merrifield]

You have one minute left.

[Annick Papillon, NDP, Québec, QC]

First of all, I would like to ask you, Mr. Sundher, what you wanted to say before Mr. Easter started a few minutes ago. I don't know if you made that point already.

[Tom Sundher]

I just wanted to clarify Mr. Sahsi's point.

Hardwoods are the preferred species. Hardwoods are used in windows and doors. Our efforts are going to be introducing our softwoods. Our softwoods are used worldwide for furniture, doors, windows, interiors, stair parts. Our goal has to be to introduce and educate the Indian users on the qualities of our wood to be used for those purposes. I just wanted to clear up that point. I found that of all the shipments that we've been making in India we don't go for the lowest common denominator. We have to go to competing against the hardwoods. That's the market in India, and what we want to do in Canada is get our share of that market. Right now it's below 1%, so we have a huge challenge.

[Annick Papillon, NDP, Québec, QC]

Can you think of any solutions that would help them know more about species of wood?

[Tom Sundher]

Absolutely, and right now we're working on that. The Canadian government and the provincial government have.... FII and Canada Wood have offices there. They have a technical adviser who just started this year, and a staff of four or five people. They'll be helping the Canadian exporters, like ourselves, all the Canadian companies, with the Indian manufacturers that are making furniture, windows, and wooden doors. They'll work with them and give them the opportunity to use our wood. If they have any questions, we can answer them. I think it's a matter of education.

[The Chair, Conservative, Rob Merrifield]

Thank you.

Mr. Keddy.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Thank you, Mr. Chairman. Welcome to our witnesses.

I have a couple of questions. I'm just trying to get some clarification. Mr. Sundher. You were very clear that you used the Canadian trade commissioner service in India. We've expanded those services and it's good to hear that they're working well and that they're a practical tool for you to use.

Mr. Sahsi, it wasn't clear whether you used the trade commissioners in India or not, and whether they were helpful in breaking through some of what appears to be almost a non-tariff barrier, the paperwork and having your documentation in the proper order.

[Darshan Singh Sahsi]

Mr. Keddy, when I started this operation in India in 2001, I went to the consulate in Chandigarh. I met Mr. Sobti. He recommended a few people to me. At that time, I was thinking to start this operation in the Punjab. I tried for a licence in Delhi and Bombay and Madras, but I was refused. I did use their services. I spent almost half a year in India, on the ground. I met Scot Slessor, the consul general. I went to Scot's house for dinner. I used the opportunity to ask Scot if he would visit my plant sometime. It would show the local officials that we were connected to the Canadian government. If they did anything, then obviously we could always contact the Government of Canada.

He requested that somebody in Bombay, but there was.... Actually, we were having an annual meeting. The president of Savers from America and some people from Goodwill and the Salvation Army were there. I asked if the Canadian consulate could send somebody from the Canadian government to join us, just to give the local officials and commissioners....

Unfortunately, nobody was there. Maybe next year I will try again. They are good people. They listen to us. They respect us.