Good afternoon and thank you, Mr. Chair and committee members.
Université Laval, the first francophone university in North America, currently has 48,000 students, including 6,600 international students. The Faculty of Forestry, Geography and Geomatics trains specialists, such as forest engineers, in forest management and environment and in forest operations, as well as engineers specializing in wood engineering and the use of wood in construction.
We also have graduate programs to train researchers and highly skilled personnel in these areas, namely forestry and wood science. We are proud to manage the largest university teaching and research forest in the world, the Montmorency forest, with an area of 412,000 hectares.
Our research focuses on areas ranging from tree genetics to eco-friendly building in wood, including remote sensing, hydrology, ecology, silviculture, forest operations, wood processing and the lumber industry. Collaborative research is our preferred approach and method of inquiry. I intend to give you an overview during my presentation.
In Canada, the forest sector is facing a double challenge, including that of balancing the value creation network in the forest industry. This is a short-term challenge that is strategically important. This network is in the process of permanently losing its printing paper component, including newsprint, of which we are the top producers in the world. This product is end of life and it currently consumes a large proportion of the wood fibre harvested in Canada, in this case more than 30%. If we stop producing this high-value-added product, we will have to replace it with products of at least equivalent added value, to ensure the survival of other segments of our forestry sector, that is, forest management industries. We are talking about planning, silviculture, harvesting and transportation of wood and the wood products processing industries, including lumber and panel production industries.
The forest, wood and pulp and paper components are highly interdependent. The paper component, including printing paper, is undergoing a structural crisis that threatens the entire industry. Ultimately, if we fail to meet this strategic challenge, 230,000 direct jobs will be threatened in more than 200 communities in Canada, mainly in rural areas where there are few employment options.
This industry's sales total $58 billion, representing a contribution of $19 billion to Canada's trade balance. Therefore, what is at stake here is the survival of entire regions, our ability to live on the land, a way of life and the economic health of the country. As my colleagues mentioned earlier , the solutions to this problem rely on bio-refinery, green chemistry and certain emerging sectors that will form the backbone of the green economy of the future. This will, of course, include an energy component.
Positive examples of this type of development include the nanocrystalline cellulose plant CelluForce, a partnership between Domtar and FPInnovations, in Windsor; the Kruger cellulose filament plant, in Trois-Rivières; and Cascades' hemicellulose extraction process to produce sugar, in Cabano. The challenge is to ensure that bio-refining, which currently yields tens or thousands of tons of products, will generate hundreds or hundreds of thousands or millions of tonnes of those same products, or a level of production on the scale of our printing paper and newsprint industries.
As the newsprint segment decreases, we must increase the bio-refinery, chemistry and energy components at a such rate and in such a manner as to maintain the value added and ensure the survival of the whole industry.
We will have to meet this challenge in the short term, or in the next 5 to 10 years, but at the same time we will also have to meet a strategically important challenge in the longer term, namely improving the competitiveness of forestry companies in the lumber and primary manufacturing sectors and developing value-added industries, including providing for larger amounts of finished products, especially from secondary wood processing.
Even if we solve our short-term problems, sectors that in principle are not in mortal danger still have a competitiveness problem. Therefore, we have to improve our performance by reducing our supply and processing costs, generating greater added value and diversifying our markets.
Let me tell you a success story that, for me, is emblematic. It involves Chantiers Chibougamau, whose subsidiary is Nordic Bois d'ingénierie, now Nordic Structures. Over the past 15 years, this company has grown from 300 to 600 employees in the town of Chibougamau, in a remote region of Quebec, while, during the same period, the forest industry in the province lost 30,000 jobs.
These people definitely do things right. Instead of selling softwood lumber, they have developed and now sell turnkey wood structure solutions. These are complete solutions. They improved material performance in their primary processing plant to decrease levels of by-products, including wood chips, and to produce more wood of very small size that they glue afterwards to make very large beams, large enough to make indoor soccer stadiums. In doing so, they simultaneously improved the competitiveness of their processing plant, dramatically increased the value added by the business and doubled the level of employment in a small-sized city like Chibougamau.
Our challenge is figuring out how to develop such strategies across the entire forest industry.
Canadian universities are helping us meet these challenges. For example, Laval University developed the FORAC research consortium, whose work in industrial engineering focuses on the design of value creation networks for the forest industry. It develops decision support tools to optimize the industry and make it more competitive by helping reduce costs, improve revenues and generate better margins.
FORAC partners include Domtar, Kruger, Resolute, Maibec, the Quebec federation of forestry cooperatives, the Quebec Ministère des Forêts, de la Faune et des Parcs and FPInnovations. The consortium receives major funding from the Natural Sciences and Engineering Research Council of Canada, NSERC. Currently, the consortium has 26 students at the master's and doctoral levels. These future highly skilled specialists will conduct research on these strategic issues with our partners from the industry, from the institutional or private research communities.
The establishment of FORAC made it possible to create the national Value Chain Optimization, or VCO, network. This is a Canada-wide network of researchers working on the optimization of processes and value creation networks that includes 15 universities and is now training over 30 research students at the master's, doctoral and post-doctoral levels. We are talking about highly skilled personnel, again, in this area of strategic importance.
Another example is the NSERC Industrial Research Chair on Eco-responsible Wood Construction, which mobilizes researchers in architecture, in wood, civil and industrial engineering and in business administration to develop prefabricated wood construction systems that are highly performing, environmentally and economically. This makes it possible to set up the value creation network for wood construction ??involving the following industrial partners: Kruger, Maibec, Chantiers Chibougamau, FPInnovations and WoodPlus Coatings, as well as consulting engineering firms such as Roche, architectural firms like Coarchitecture and Provencher Roy, general contractor Pomerleau, and institutional actors such as the Quebec Ministère des Forêts, de la Faune et des Parcs, the Société d'habitation du Québec and FPInnovations. Under this initiative, 15 students are currently being trained to research these issues, which are also of strategic importance for the development of the Canadian value-added forest industry .
Behind this research chair there is also a Canada-wide network, NEWBuildS, a network of researchers from 12 universities. At this time, it is also training 30 research graduate students in the area of eco-responsible wood construction. Both VCO and NEWBuildS are part of a network of seven networks that is known as FIBRE.
FIBRE is the network of networks that train graduate students and highly skilled personnel in seven areas that are strategic to the future of the forest sector. FIBRE's seven member networks are VCO; NEWBuildS; ForValueNet, which studies the relationship between silviculture, wood quality and the value of forest-based products; the NSERC strategic Bioconversion Network, which studies the conversion of lignocellulosic material—wood—into ethanol and green chemistry products; Lignoworks, a network that studies the conversion of lignin, one of the three main components of wood, into chemistry products and materials of the future; the NSERC strategic Green Wood Fibre Network, which studies the modification of wood fibre into eco-responsible materials and products; and the Sentinel Bioactive Paper Network, which studies the development of new bioactive paper.
Those seven networks were created under the forest sector initiative in response to the 2008 federal budget. They were funded by NSERC and they all required the active participation and leadership of FPInnovations. We thank NSERC, FPInnovations and industrial partners for all the support they provided to this initiative.
Over the past five years, these networks have helped train over 450 students to research the most strategic issues facing the Canadian forest industry. We need highly qualified personnel to facilitate the strategic evolution of the industry and meet the challenges of today.
The Forest Products Association of Canada—FPAC—and FPInnovations have come forward in recent months to support the idea that this effort to build a Canada-wide network in more than 30 universities should continue in the future. Currently, we are up against the end of funding for these seven networks. Canadian universities are eager to continue mobilizing to meet the strategic challenges facing the forestry sector. We would like to work with you to determine the next steps we should take to ensure that the forest sector and our forestry regions have a future, and thus contribute to Canada's economic future.
We believe that universities are part of the solution for a sustainable future for the forest sector, rural areas and employment in all regions of Canada.
Thank you.