Thank you, Mr. Chair and members of the committee. Copies of my remarks have been made available to the clerk if you need them after.
My name is Robert Larocque and I am here today with my colleagues Kate Lindsay, our vice president of sustainability and environmental partnership, and Étienne Bélanger, director of forestry. We are very pleased to be here to represent the Forest Products Association of Canada as part of your study on the implementation of the pan-Canadian framework, relative to increasing carbon stores and reducing GHG emissions, and to the role of the forest sector.
The Forest Products Association of Canada is the voice of Canada's wood, pulp and paper producers nationally and internationally in government, trade, and environmental affairs, as well as the topic we will be discussing today, namely the implementation of the Pan-Canadian Framework for Clean Growth and Climate Change and our sector.
Let me give you a quick snapshot of how important the forest products sector is to Canada's economy. It is a $69 billion a year industry that represents 2% of Canada's GDP. The industry is one of Canada's largest employers, operating in 600 forest-dependent communities from coast to coast. We directly employ 230,000 Canadians across the country.
The sector is also important when it comes to the Canadian environment. As custodians of almost 10% of the world's forests, we take our responsibilities as environmental stewards very seriously. There is no better testimony to the seriousness of our commitment than to have the most independently certified forests in the world, 170 million hectares or about 40% of all the certified forest. Forest certification is a third party verification of voluntary measures that go above and beyond current regulations. In fact, repeated surveys of international customers have shown that the Canadian forest products industry has one of the best environmental reputations in the world.
Climate change is emerging as the signature issue of our time. Forest product companies have stayed ahead of the curve by aggressively reducing our carbon footprint and running more efficient facilities. In fact, pulp and paper mills have reduced greenhouse gas emissions by an impressive 66% since 1990, the equivalent of nine megatons or a million tonnes of CO2 per year. The sector does not use coal anymore and we barely use any oil, less than 1% of all the energy we need. We now have more than 30 facilities that generate green electricity, which is enough to power the city of Vancouver, from biomass residue at the mill sites.
Following Canada's commitment under the Paris Agreement, the forest products industry pledged in May 2016 to remove 30 megatons a year of greenhouse gas emissions by 2030. That's about 13% of the government's emissions reduction target. We call this initiative the “30 by 30” climate change challenge. We are very proud to be part of the solution and there is no question that the Canadian forest products industry is an environmental leader.
The effects of climate change will have an impact on our sector, whether it is negative consequences, such as forest fires or insect infestations, or positive effects, such as speeding up the transformation of the sector to produce biofuels, biomaterials and tall wood buildings.
Today, I would like to focus my comments on the management of our forests, the potential innovation of using new products and the positive and negative impacts related to our mills.
Canada's forests are truly an astonishing resource. They represent 348 million hectares of our forest land. The forest absorbs a tremendous amount of carbon dioxide, and by doing so, helps regulate the world's climate system. In 2016 forest lands managed for timber production were a sink in Canada of 20 million tonnes of carbon, or 20 megatons. That's according to the “The State of Canada's Forests” report for 2018 from Natural Resources Canada.
Therefore, as Canada faces the challenge of transitioning to a low-carbon economy, we're very pleased the pan-Canadian framework on clean growth and climate change mentioned the need to increase the carbon sinks from forests, wetlands and agricultural lands. There is a great opportunity for the federal, provincial and territorial governments to work with industry to increase the implementation of forest carbon mitigation strategies. For example, harvesting more efficiently by collecting more wood per hectare harvested commercially and using it for products thereby reduces the amount of harvest waste that is left on the forest floor to decay and be burned. This would reduce greenhouse gas emissions from decaying and burning of wood.
We could also strive to increase the growth rate of trees above current levels through various techniques like planting improved seeds or tree species, or fertilization. This will capture carbon from the atmosphere more rapidly because the trees would grow faster.
Finally, more could be done in reallocation or reforestation. We could plant trees in areas recently affected by insects and fires where trees are growing poorly. As it stands, the industry does regenerate all our harvested areas; however, no one is really responsible for regenerating areas that are affected by natural disturbances where trees can sometimes take longer to come back. Such a strategy would capture carbon from the atmosphere more rapidly through faster regeneration.
The forest sector is also collaborating with academics, government and groups such as Ducks Unlimited Canada to better measure and conserve carbon stores in wetlands and peatland complexes. These areas hold enormous amounts of carbon, but we need more research to quantify their storage.
Climate change effects, such as increased forest fires and pest infestation, have a significant impact on Canadians, our communities and the forest industry. We also believe that more can be done to make our forests more resilient and ensure long-term sustainability. Another word would be adaptation.
We must continue research of long-term potential climate change impacts, such as modelling, implementing climate resilient solutions such as FireSmart communities, and work with our provincial counterparts to modify our forest management activities to allow for selecting and planting trees, based on the changing climate conditions.
A new forest bioproduct such as a wood fibre composite can replace plastic, for example, in a console of a Lincoln model by Ford. This contributes to a low-carbon economy in two ways. First, it replaces plastic from fossil fuels and, second, it reduces the vehicle's weight, which reduces its fuel consumption.
The forestry sector can also produce pyrolysis oil, a product recently announced by Canfor and Licella, which will replace oil produced from non-renewable sources. We must also remember that wood stores carbon in our homes and buildings in the long term.
Canada has an opportunity to make changes to the National Building Code to allow the construction of tall wood buildings, such as the 18-storey residence at the University of British Columbia. In fact, this afternoon, at about 3:30 p.m., I believe, Sidewalk Labs will be announcing a solid wood building in Toronto, which is a positive step in the fight against climate change. Each cubic metre of wood used represents nearly one tonne of carbon removed from the atmosphere and stored over the long term.
As I mentioned earlier, the forest products industry has already reduced their GHG emissions at the mill site by 66% since 1990. It will be challenging to reduce the carbon footprint at the facilities, but we believe we can reduce our emissions further. We can continue to improve our energy efficiency, looking at our mill operations. We can “fuel switch” using mill waste to displace fossil fuel, for example, biogas from our waste-water treatment system to replace natural gas. We can reduce our transportation emissions by bringing the trees to the mill or shipping our products to our customers, for example, looking at increasing the use of rail versus trucks.
We believe our efforts provide an excellent example of how industry and government can co-operate to tackle climate change on behalf of Canadians, but these opportunities will require capital investment. With that in mind, we do applaud the immediate capital investment tax reduction that was announced in the fall economic update, particularly related to clean energy, the writeoffs for clean energy, and the accelerated investment incentive.
While the sector does support a price on carbon, it is very important that carbon pricing revenue generated by governments should be revenue neutral and returned to the industry in some form, like a technology fund.
I would also like to highlight that our sector is a significant exporter of goods. Seventy per cent of what we produce gets exported, and it's a value of $37 billion. Our competition for wood products is Russia and the United States, and for pulp and paper it's the United States, Asia and South America. This globally competitive landscape has made it imperative that a carbon pricing scheme considers competitiveness. As a trade-exposed industry, our suppliers—chemicals, fuels, electricity and transportation—pass on the cost to our sector, but our sector has to absorb all the cost, and we cannot change the international commodity prices.
In conclusion, the world is facing an urgent need to address climate change and reduce carbon emissions. We will have to work together to develop innovative ideas and ensure that effective policies and programs are in place. The Canadian forest products industry is committed and willing to contribute to the transition to a low-carbon economy and to work with governments to achieve the objectives of the Paris Agreement.
Thank you for your attention. I would be happy to answer any questions you may have.
