Natural Resources Committee on Dec. 12th, 2011

[Stella Ambler, Conservative, Mississauga South, ON]

Thank you, Mr. Chair.

Mr. Lazar, my question has to do with the environment. I'd like to know if government programs have helped the industry to maximize the bottom line—jobs, economic growth, the environment, and clean energy initiatives. That's where my interests lie. You mentioned that part of the survival plan was the branding and the environment. Can you give us an example of a program that illustrates this? Would you agree that government programs have helped the industry? If so, which ones?

[Avrim Lazar]

The biggest was the green transformation fund—the billion dollars that I was acknowledging. It was a lot, and I want more. Our competitors get more. That billion-dollar program was available only for environmental enhancements. Those environmental enhancements almost all increased economic efficiency. They protect the jobs. In fact, there are many towns where, if it wasn't for the green transformation fund money, it's likely that the mill would not be competitive. It was a social win because the town survived and an economic win because the mill is more economical. It all worked.

There was also the LEAF program, which provides money for environmental reputation. It's nice to be good, but if no one hears how good you are, you don't get the reputational return on it. The LEAF program allowed us to tell the marketplace what we've done environmentally. We're extremely interested in having the LEAF program extended in the next government, and having it amended to make it more flexible so that we can use it in implementing the boreal agreement.

[Catherine Cobden]

May I add a comment about the LEAF program? We have been hearing from our U.S. counterparts, our competition. They have been living with their government support on the black liquor subsidy program. They are envious of the work that has been going on in the LEAF program, particularly in China. I think some gains have been made.

[Stella Ambler, Conservative, Mississauga South, ON]

I have a question about market diversification. You said this was part of your four-point survival plan. Could you tell us what the impact of our government's market diversification programs have been?

[Avrim Lazar]

I better let Catherine talk or she will never come with me again.

[Catherine Cobden]

I think the point I was just making speaks to that quite significantly. Our competition is looking at what we've been doing on market diversification. Not only do they want to know how they can replicate it; they want to know if they can get it. One thing we need to be wary of is that success will bring other parties to the table. We need to look at the Canadian interests.

We spoke about India. There is a huge opportunity to diversify markets in India. Diversification of markets isn't just geography. It's also about how we use the product. Some absolutely transformative things are going on in the world, particularly in China. They don't live in single-family homes; they live in multi-storey dwellings. As they shift to building these dwellings over wood, a tremendous market opportunity emerges for us. Continuing to work on these multi-storey buildings and non-residential applications is a great area we've been working together on that we need to continue to pursue.

[Stella Ambler, Conservative, Mississauga South, ON]

I know Mr. Anderson had one more question he wanted to ask.

[The Chair, Conservative, Leon Benoit]

Okay.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

I was interested in the U.S. subsidization. Have there been job losses in the forestry industry?

[Avrim Lazar]

There have been lots.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

How many?

[Avrim Lazar]

I don't have the numbers here.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

They spent this massive amount of money. They haven't been able to stop the hemorrhaging in spite of the money they've spent. Mike talked about one of the programs, thinking it was a Cadillac compared with what they were getting down there. They spent all that money, and they still have the same or poorer results because they haven't made the switch to the new climate. Is that a correct analysis?

[Avrim Lazar]

It's a little more complex than that.

Certainly our government spent far smarter than the U.S. government, but when you're talking about a ratio of six to one, even a bit of clumsiness still gets you more results. The big difference we've seen is that at a time in which everyone was struggling to stay alive, the Americans were able to pay down their debt. That was a huge advantage for them, but it did not create the incentive for improving efficiency.

[An hon. member]

They lost jobs?

[Avrim Lazar]

They definitely lost lots of jobs.

[The Chair, Conservative, Leon Benoit]

Thank you, Ms. Ambler and Mr. Anderson.

We go now to Mr. Stewart for five minutes. Go ahead.

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

Thank you, Mr. Chair.

I want to speak a little bit about the mountain pine beetle, if we can. I'm from British Columbia and my brother's a forester, so I've heard lots about this and I've heard first-hand the devastating impact of this insect. I was pretty struck by a map my brother showed me that shows it's like a cancer that spreads from the middle of the province right through. It's very devastating to the entire industry.

I know that the federal government did allocate millions to help with this. All of it, I understand, has been spent by March of this year. I was just reading a report that said it was spent by March.

I'm just wondering, is this job done, or is there more that needs to come from the federal government regarding the pine beetle?

[Avrim Lazar]

Certainly, we would like to see more.

There are two types of spending on pine beetle. One is actually dealing with the research and stopping the beetle. I know the folks in Alberta are especially worried that there is insufficient federal money being spent fighting the pine beetle in Alberta, and those in Saskatchewan are beginning to get worried too, because our problem with the pine beetle is that it doesn't stay home.

We see a possibility of it jumping species and moving across the country. There is the need for more aggressive funding for pine beetle control.

The second element is that where the pine beetle has eaten the wood supply, the communities need help with adjustment, and that is not over as well. Although a large part of what had to be done has been done, more could be done.

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

Many observers say the pine beetle epidemic is caused by climate change, and if I can actually just read some of your own words back to you, you said in a March 2007 press release that:

The devastating consequences of the pine beetle epidemic serve as excellent examples of just how vulnerable Canada’s environment and economy are to a changed climate.... For this reason, as governments focus on implementing climate change mitigation measures, it is also important for them to undertake strategies that give adaptation measures greater prominence. We are already living in a changed climate and must not only focus on how to reduce Canada’s impact on the climate but also put far more emphasis on how Canada can adapt to the impact of a changing climate on us.

I was just wondering—that was 2007—do you still stand by those words?

[Avrim Lazar]

Absolutely. If anything, more.

To be fair to the Department of Natural Resources, they have shifted quite a bit of their focus to adaptation and on how growth patterns of the forest are changing. But I would say that overall, Canada and every other developed country are spending far too little attention on how to live successfully with a changed climate.

The huge political drama over how much to mitigate, who's going to reduce greenhouse gases, who isn't, is it fair, is it not fair.... All of that has drawn all the political attention away from the simple fact that the climate has already started to change, and regardless of what we do—if we deal with it, it will change less. If we don't deal with it, it will change more. There's no escaping a changed climate, and we're not ready.

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

That was written in 2007. Do you think things have gotten better or worse since then over the last four years, and if so, maybe you can give us some examples of how things have—

[Avrim Lazar]

We're not seeing things get much worse in the forest. We've certainly have had drier seasons, and therefore more fires in the drier seasons than what the climate models would predict. Nothing to compare to the failure to kill off the beetle, which we depended upon cold winters for.

But generally speaking in the forest industry, our view is that the changed climate is a threat to the health of the ecosystems on which we depend for our livelihoods and has to be addressed. Because addressing it requires global commitment, which seems to be elusive, we think at minimum there should be far more attention paid to adaptation.

[The Chair, Conservative, Leon Benoit]

You have half a minute.

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

Okay, thanks.

I just want to shift quickly to community forestry, another sector my brother has worked in besides all the other types of forestry you can do. Do you have any comments on that, and perhaps how that might be grown? You have local communities looking after local wood sources and milling it themselves. Do you have any comments on that?