International Trade Committee on Oct. 7th, 2014

[Don Davies, NDP, Vancouver Kingsway, BC]

I see. Thank you.

Mr. Suk, you mentioned, the phrase I wrote down was, “emerging industries of tomorrow”. Could you describe for us what you think some of those industries are?

[Mike M. Suk]

You can look at South Korea as being a tastemaker in Asia. Look at K-pop—Korean popular music—or look at the movie industry in Korea, look at the commercials, or at how music is being distributed on multiple platforms such as iTunes, for example. I believe that in British Columbia, tapping into the entertainment industry in South Korea is something that is definitely worth looking at. It leads to other benefits as well, in terms of what you just asked Mr. Lee. Korea is looked at as a tastemaker right now in Asia. I feel that marketing products in Canada with Korean companies can give you a better visibility in the Asian markets.

[Don Davies, NDP, Vancouver Kingsway, BC]

I see.

You mentioned you have a broad exposure to the Korean community in British Columbia, not only the economic, but also the cultural and social. In your view, how is the Canada-Korea free trade agreement viewed among the Korean Canadian population?

[Mike M. Suk]

I can speak only for the younger generation in my community, and we just don't know about it. I think there's a very big disconnect between how the government is run and how people in local ethnic minorities view the system, how they see the system working for them. I think it's just a matter of time for them to be educated on these things and see them as a very good opportunity to prosper.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you.

Mr. Lindsay, what percentage of the forestry industry is unionized?

[David Lindsay]

I don't have exact numbers. I was at Unifor's Good Jobs Summit this past weekend, and we have a good working relationship with both Unifor and the steelworkers. Unifor represents a lot of our mills in eastern Canada, and the steelworkers union represents a lot of the forest workers. So I'd be taking a guess, and I wouldn't want to do that, but it's—

[Don Davies, NDP, Vancouver Kingsway, BC]

It's a significant percentage?

[David Lindsay]

—a significant percentage.

[Don Davies, NDP, Vancouver Kingsway, BC]

In terms of value-added production, I think all of us in this room from all parties want to see that Canada doesn't just rely on raw exports, but that we actually add value to those raw resources in Canada and increase the value of our exports.

Do you have any advice to give the federal government in terms of policies that will help your sector add that value that we all want to see?

[David Lindsay]

That's an excellent question, Mr. Davies. Thank you.

The whole premise of our Vision2020 is to continue to innovate and find new uses of the forest fibre. So it's not just old lumber and two-by-fours. We used to send tall ship masts for the British navy; the British navy doesn't need our pine trees anymore. We need new products, and that requires innovation. The government has been helpful in supporting an agency called FPInnovations, Forest Products Innovations, which is a public-private partnership; in academic research; and in promoting the trade opportunities. I don't want to bore you with a lot of details, but we can do everything from make the gloss sheen that goes on lipstick, to the flat screen TVs that can have a cellulosic filament, to auto parts. The Ford Motor Company is working with Weyerhaeuser to make auto parts so they're lighter and less carbon-intensive.

[The Chair, Conservative, Randy Hoback]

Okay, we are going to have to move on to Ms. Grewal.

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Thank you, Chair, and thank you to the witnesses for their time and presentations.

My question is to Mr. Lindsay.

Mr. Lindsay, can you please elaborate on value-added wood products? Is this an area that Canadian producers have an advantage in, and how does the FTA impact the sector?

[David Lindsay]

As I began to say to Mr. Davies, it's a wonderful, exciting opportunity for the forestry industry. Everything from the use of wood for construction.... We have something called cross-laminated timber. You can make taller wood buildings in countries that have earthquake challenges. Timber construction is actually more malleable and better in an earthquake zone. That would be an opportunity to sell, in a new and innovative way, the very old material of wood. Engineered wood and cross-laminated timber is on the wood side.

On the pulp and paper side we have an amazing array of chemical processes and new uses. I'll give you a couple of practical examples. I mentioned the automobile parts. As you boil down the fibres to make pulp, there are oils and sugars that come out of that. You further refine those for making methanol. One of our companies sells it to make windshield wiper fluid. So oils and sugars that come out of the cells of the trees can be made into new products. We didn't use the whole tree 50 or 60 years ago. We left a lot of sawdust and debris as a waste product. Now those waste streams, the lignans, are turned into oils. The sawdust and the other materials can be further refined to make new products. We're now using 95%-plus of the logs we bring into our mills. It's much more sophisticated today than it was 25 or 30 years ago.

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

You use the number $500 million in exports to South Korea from the western provinces. How much will that number increase after the trade agreement?

[David Lindsay]

I can't give you an estimate on how much. I think the companies are keen to increase their market share. I know that on the wood side our increase in sales into Korea has been in the order of magnitude of about 20% in the last couple of years, so there's a growth opportunity there. What we did in China, for example, was to make sure we have good in-market sales, and explaining how to use the materials will help us to grow. Free trade is an important first step, but then there's a whole bunch of marketing that needs to take place after that.

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

My questions go to Mr. Suk and Mr. Lee.

Can you please elaborate on the activities and events that your organizations run here in Canada? What are some examples of anything you do to inform the South Korean community or the Canadian community about this free trade agreement?

[Mike M. Suk]

We were established in 2000. Mainly we do an annual festival every summer. It's a community-based event. There's cultural programming and food tasting. It's a fun, family-oriented event. But I think, based on this year's numbers.... If you look at last year's festival, we did 6,000. This year we did over 26,000, so I think you see that even in Vancouver not only Koreans are interested in Korea, but other ethnic minorities and other groups are interested in Korea as well. I think this is a good platform to also share some of the ways that the community can get involved with this agreement and, again, prosper.

[David Lee]

I also provide a festival. It's called the Canada Korea Literary Festival. I'm actually a poet and I started that festival five years ago. We invite Canadian poets and they read their Canadian poetry in English. Then we translate it into Korean. We introduce Canadian literature to the Korean community.

Who is huge in America or huge in Canada? Because they're almost the same, in Korea they don't know what Canada is. To introduce Canada, I have that event every year. But if we get the FTA, I think that kind of cultural event will be very helpful in assisting a Canadian company to go to the Korean market. If the people are culturally familiar, the food and products will be more familiar.

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Do you think that the Canada-Korea free trade agreement will deepen the cultural links between the two countries? If so, how?

[David Lee]

Yes, sure, definitely, I think so.

[The Chair, Conservative, Randy Hoback]

You have one minute left.

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Okay.

How does the wider South Korean community feel about the free trade agreement being implemented? What does the business community in South Korea think of the protections for investors in the agreement?

[David Lee]

What they think about protecting investments from Canada?

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Yes.

[David Lee]

Actually, I think it's kind of old history. For a while, Koreans didn't want to open their market to something like that, but the most important thing—as I mentioned—is that Korea is more familiar, actually, with the U.S.A. than with Canada. We didn't know a great deal. Even me, until I came here, I didn't know what Canada was.