Natural Resources Committee on Feb. 17th, 2015

[Pierre Lapointe]

One of the big things, as I was mentioning, is intelligent inventory, so that we know what we are harvesting and that we can choose the right tree to go to the right sawmill for the right product. That's obviously the logistical transportation aspect.

On the transportation aspect, there's a lot of research that is done. I will give you a very simple example: automatic inflating of tires. When you're on gravel road you have low pressure and when you're on pavement you have high pressure, so you reduce the cost by 12%. By increasing the axle number for driving in winter, you reduce the cost by something like 12% to 18%.

Those types of technologies may seem simple—automatically inflating a tire—but have a major impact on the cost of the wood. If you go towards the pulp and paper side, it is to improve the type of paper, tissue, cardboard that we're producing. Our fibre is better. However, it's also going towards the sugar stream and the lignin type to produce new construction material.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

With regard to policy items that are driving this, is it that we're spending the money for the research, or are there other things, policy-wise, that give us a lead?

[Pierre Lapointe]

On the policy aspect, I think the area where we're very fortunate, especially with some of the provinces, B.C. and Alberta, is the willingness to try different technology, like road safety and road construction. Those are policies. It is the same thing with Transport Canada accepting new technology on trucking. There are policy issues that are quite open and positive.

One should also realize that there are changes to the building code, which is not necessarily a policy, but it is important. The changes, both at the federal level and the provincial level, open new markets. In the case of four- to six-storey buildings, in the U.S., that represents billions of dollar of new market. Those are not specific policies, but they are aspects of opening new markets.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

I have one other question that I'd like to bridge to, and that's the environmental advantage that we have.

I suspect that Mr. O'Carroll might want to get in on this one, as could the other members at our table.

What is the environmental advantage that we have, and how does that provide us with a competitive advantage? I think that is going to be a little harder for a lot of us to understand.

[Aran O'Carroll]

The Canadian Boreal Forest Agreement and the commitments that the forest industry has made to that agreement will put the Canadian industry in a globally leading position in terms of its environmental reputation. It would be widely celebrated and have a broad base of support.

There are certain fundamental challenges that the Canadian industry faces in a globally competitive marketplace, but building on the environmental commitments that the industry has made, including their commitments to greenhouse gas reduction and third party certification, etc., and fulfilling the commitments of the CBFA, will position the industry for its long-term financial stability. There's no question about that. It will create a niche market in the global marketplace for green products.

That's certainly our vision with the CBFA.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Trost.

We will go now to Ms. Crockatt, followed by Ms. Duncan. Then we'll thank the witnesses and very quickly have a look at the budget for this study, and hopefully approve that.

Ms. Crockatt, go ahead, please, for up to five minutes.

[Joan Crockatt, Conservative, Calgary Centre, AB]

Thank you.

I was going to ask Mr. Hubert this question, but I think he's stepped out for a minute, so maybe I'll go to Mr. Lindsay.

It has to do with the aboriginal employment in this sector. I think we're now seeing the advantages of our sector, and the renewal of it, in more of a 360-degree way, and the public sees that as a great step forward if we're getting good employment in the aboriginal sector.

I wonder if you could let us know what is working there and why you think we're making some good progress in getting aboriginals involved in the forest sector—maybe as compared to some other sectors too.

[David Lindsay]

Again, that is an excellent question.

We just talked about the forest products industry's environmental credentials and our third party certification through the international certification standards such as FSC, SFI, and so on. There is a component of that in which they look to see your engagement with aboriginal people. So this has been a long-standing practice of the forest products industry. As part of our credentials as a good corporate citizen, engaging with neighbours on the landscape is part of our forestry practices. It is a requirement of our provincial forest certification processes.

So ongoing engagement with first nations is not a new territory for the forest industry. It has been in place with us for a long time. Hence the employment results that I mentioned earlier, where on average we have twice the number of first nations people working in our sector as in the population generally. Why? One reason is proximity. A second is that we see it's good business practice to be working with our partners on the landscape.

We've done a number of specific things. If you go to our website you will see we give two annual awards. One is an aboriginal youth award for an upstanding member of a first nations community who is studying forestry or engaged in a forest company. So promoting young people to come into the forest industry is one example of a very specific thing we do. Each of our companies does many more things on the ground, but as a national association that's the one we lead.

We have a good working relationship with the aboriginal business council, and we give an annual award to the aboriginal forestry business of the year. So again, there is opportunity. There are many subcontractors in the forest industry and many opportunities for first nations. If you go to our website, you will see the winners for the last four or five years—first nations businesses engaging in making a living on the land, working with forestry companies to do forestry practices, trucking, hauling, and lots of the supply chain they work with us on.

So both with individuals and by corporate connection is how we work across the landscape.

[Joan Crockatt, Conservative, Calgary Centre, AB]

Thank you.

I will go to you, Mr. Lapointe, and if you need Mr. Martel in this too, I would encourage you.

I think that we would be doing a disservice if we didn't actually give a moment or more to talk about these tremendous technological advances that we're seeing. I notice in your brief that you are talking about the Canadian forest sector being a world leader in the bio-economy, having the first cellulose nanocrystals plant. Can you talk about those plants, where they are, what they are doing that is so phenomenal, and why this has been successful?

[Pierre Lapointe]

In the case of the NCC plant, which is a joint venture of Domtar and FPInnovations, we are the only one in the world capable of producing a tonne of NCC a day.

Yesterday there was an announcement of SDTC investing $4 million into the new product. The new product is going to be used in the oil and gas industry by an international company, Schlumberger. It will have an impact on drilling mud. It will increase the recovery of oil and gas by a factor, which I cannot share, but a major factor. So it means that for the oil and gas industry it will be a major step toward larger recovery methods and obviously environmentally better methodology.

In the case of the NCC, there's a replacement of polymer in the trucking industry—

[Joan Crockatt, Conservative, Calgary Centre, AB]

Could you tell us where they are?

[Pierre Lapointe]

In the case of NCC they are located in Windsor, in the Eastern Townships, which is about 150 kilometres out of Montreal.

[Jean-Pierre Martel, Vice President, Strategic Partnerships, FPInnovations]

If I may add something here, you talk about the role of technology and innovation in transformation. Basically transformation takes time and energy and investment for the long term. It's important to recognize that, in the past, we were pushing technology and now we're trying to be more mindful of the market and understand how those new materials and products will be used in the marketplace and where there is the most potential for growth for those materials.

One other important element of this is making sure that we strengthen the foundation of the existing industry, because in many cases co-location makes a lot of sense from many different perspectives, because of savings, utilities in place, water treatment, and other things in those co-locations.

So it's important to have both a strong foundation, which is the traditional products, but also have the transformation with new products, together. So transformation will take both basically: true competitiveness and also a long-term investment in transformation. You don't change a sector or transform it in five years. It takes a while.

[Joan Crockatt, Conservative, Calgary Centre, AB]

Could I ask something? Am I finished?

[The Chair, Conservative, Leon Benoit]

No, Ms. Crockatt, unfortunately, you can't. Thank you very much for your answer and thank you for your questions.

Finally, we move to Ms. Duncan for up to five minutes.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Thank you very much.

I'm really encouraged to hear about all this work on value-added in the forest sector, in all directions, including the manufacturing of the equipment in use.

I don't know if you follow architecture awards, but you probably do because it gives you ideas for the forest sector. I'm aware of the Moriyama RAIC international architecture prize. The prize was won by a Chinese all-wooden library, which is an extraordinary facility. I believe both the inside and outside were all built of wood. Obviously, there's great interest in the world of beautiful as opposed to functional, and kudos to you for pursuing that.

We used to have arenas with big wooden beams, and it sounds as if we're going back in that direction. I have a friend in Montreal who's promoting those kinds of arenas.

I've also heard from the firefighters. By coincidence, I was in a conversation with the fire chief from Edmonton, coming here for a meeting. He was concerned that they have not been consulted in this move to the use of cross laminated timber. In my understanding, it would be something to do with the strength, but it's probably also to do with the toxins. I know there's been a long-standing concern about the use of fire retardants in furniture. Has there been any outreach to the firefighters in the development of these new building codes?

[David Lindsay]

I will certainly defer to my friends in FPInnovations on the technical aspects of what's in cross laminated timber, but the firefighters are quite intimately involved in the building code process. They're able to make submissions and presentations throughout the process. It's a very public and open process.

We have made a number of changes to the building code process. I don't sit on that committee; other colleagues from the Canadian Wood Council do. They have made changes at the request of the firefighters. The use of sprinklers in everything from the balconies to the external cladding of buildings was made at the request of the firefighters. The use of cement for elevator shafts was made at the request of the firefighters, so I think they have been involved.

I can't speak to the specific chemicals in cross laminated timber, but I do know the firefighters have been involved, and we want to continue to work with them. The Canadian Wood Council, which I know is going to be here shortly, has been working with the firefighters to find additional ways we can ensure safety, and not only during the construction period, which is probably when there's a greater degree of risk. Before you get the sprinklers up, before you get the Gyproc up, that's when you have the vulnerable point. Once it's constructed, it has the same standards and same calibre as any other construction material.

[The Chair, Conservative, Leon Benoit]

Mr. Lapointe, you wanted to—

[Linda Duncan, NDP, Edmonton Strathcona, AB]

I have additional questions for these gentlemen, so maybe I'll ask them and they could respond to both.

[The Chair, Conservative, Leon Benoit]

Sure. Go ahead, Ms. Duncan.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

This information about the development of value-added products is really interesting. Here is one thing that's occurred to me—and it sounds as if there has been some federal investment in the development of those value-added products. Do you have any concern that because of issues we've heard about—transportation, marketing, and so forth—we are at risk of having our scientists develop these value-added products, but then they're simply sold to somebody in another country?

If you wanted to answer the other question as well, I would welcome your input.

[Pierre Lapointe]

In the case of fire, three weeks ago the testing of cross laminated timber was done in a mechanical room at the NRC facility in Ottawa. A large representation from the Canadian firefighting associations was present. I just confirm what we are seeing, what David was saying. They are always present. The tests are vetted both on the toxins' side and on the fire side, and the firemen's association is present.

In the case of new products, is there a chance they will leave Canada? We're doing everything so they do not, but the competition is worldwide. The market is worldwide and is highly competitive.

[The Chair, Conservative, Leon Benoit]

Thank you.

I really want to thank all three panellists here today for your excellent presentations and really good, solid answers to questions. It's a great way to move this study along, so thank you to all: from the Canadian Boreal Forest Agreement, Aran O'Carroll, executive director, and Mark Hubert; from the Forest Products Association of Canada, David Lindsay, president and chief executive officer, and Catherine Cobden, executive vice-president; and from FPInnovations, by video conference, Pierre Lapointe, president and CEO, and Jean-Pierre Martel, vice-president, strategic partnerships.

Members of the committee, you've had a look at the budget, I would assume. You have a copy in front of you. Are there any questions on the budget?

Is it agreed that we approve the draft budget as prepared by the clerk?

[Some hon. members]

Agreed.

[The Chair, Conservative, Leon Benoit]

Thank you all so much, and thank you all for your input into a really good meeting.

The meeting is adjourned.