Government Operations Committee on Oct. 21st, 2010

[The Chair, Liberal, John McKay]

Ladies and gentlemen, I call this meeting to order.

Welcome to this 31st meeting of the Standing Committee on Government Operations and Estimates.

Welcome, Mr. Asselin and Mr. Ouellet. Each witness has five minutes for an opening statement. After hearing your testimony, members will have questions for you.

Mr. Asselin, I would ask that you begin now.

[Gérard Asselin, Bloc, Manicouagan, QC]

Mr. Chairman, thank you very much for inviting us and the other witnesses to appear before the Standing Committee on Government Operations and Estimates. Mr. Labbé is not here yet, but he should join us soon as a witness.

Mr. Chairman, Bill C-429 has just completed another step—an important one. Today, we are appearing before you, before your staff and our colleagues from the House of Commons. I am accompanied today by a number of witnesses, including our researcher who is responsible for Bill 429, as well as Mr. Ouellet, the member of Parliament for Brome—Missisquoi and an architect. I would like to ask the people seated to my left to introduce themselves.

[Marianne Berube, Executive Director, Ontario Wood WORKS!, Canadian Wood Council]

I'm Marianne Berube. I am the director for Wood WORKS!, Canadian Wood Council.

[Gérard Asselin, Bloc, Manicouagan, QC]

Thank you.

Next.

[Andrew Casey, Vice-President, Public Affairs and International Trade, Forest Products Association of Canada]

Good morning. I'm Andrew Casey. I'm the vice-president of public affairs and international trade with the Forest Products Association. I'm joined by my colleague Isabelle Des Chênes, the vice-president of market relations and market development.

[Gérard Asselin, Bloc, Manicouagan, QC]

As you can see, Mr. Chairman, this is a bill containing only one paragraph, but it is worth its weight in gold. There is absolutely no point in having a 100-page bill if, ultimately, it can be summarized in a single paragraph. You will see, as I have, that this one paragraph in Bill C-129 is worth its weight in gold.

Mr. Chairman, I am proud of the fact that a majority of colleagues in the House voted in favour of this bill. That gives us an opportunity to review it in committee and hear today from witnesses who may or may not support it. Our hope is that when the Committee has completed its review of the bill, the vote will be a favourable one, which will give the House of Commons the opportunity to examine the bill at third reading.

Mr. Chairman, like my colleagues and myself, you will note that the bill has three objectives. The first objective of Bill C-429, an Act to Amend the Department of Public Works and Government Services Act (use of wood), is to help the forest industry. I would like to take the time to read that paragraph.

(1.1) Despite subsection (1), before soliciting bids for the construction, maintenance or repair of public works, federal immovables and federal real property, the Minister shall give preference to the concept that promotes the use of wood, while taking into account the cost and greenhouse gas emissions.

Mr. Chairman, as I was saying, although it is short, this bill is worth its weight in gold. It presents three goals, the first and foremost of which is to assist the forest industry, which is currently struggling, through greater use of wood when repairs are made to public works and federal buildings. Furthermore, Mr. Chairman, I imagine that if I asked all the members who are here today and support the idea of helping the forest industry, to raise their hands if they are in favour of passing this bill, I imagine that everyone would do that. If I asked that members raise their hands if they are in favour of the government meeting its greenhouse gas reduction targets, Mr. Chairman, I'm sure you would see that everyone would do that. The fact is that everyone is in favour.

When the government issues a call for tenders with respect to the construction, renovation or maintenance of federal buildings and allows entrepreneurs to use wood as a material, that is free competition. Companies that work with steel are not the only ones that can bid on a building project; there are also companies out there that prefer to work with wood. When there is competition, Mr. Chairman, like myself, you will see that, very often, the work that is carried out is of a very high quality and is performed at a better price.

In closing, Mr. Chairman, I hope that the Committee will fully consider the perspective of witnesses who will be presenting their views—because they are highly qualified to address this and have come a long way. They come from Ontario, British Columbia and all across Canada. The forest industry is not only a concern in Quebec, but all across Ontario, British Columbia and the four corners of the country.

I would like to turn it over now to Ms. Berube, who will make her opening statement.

[The Chair, Liberal, John McKay]

Thank you, Mr. Asselin.

Ms. Berube, the Quebec Wood Export Bureau was to be next, according to the order, but I understand that Mr. Labbé is in traffic. Go ahead, s'il vous plaît.

[Marianne Berube]

Honourable chair, members of the Standing Committee on Government Operations and Estimates, I'd like to thank you for the opportunity to speak today. This is an important issue for all of us and we want to make sure that everyone is making informed choices.

I represent the Canadian Wood Council and Wood WORKS! The Canadian Wood Council represents the wood products associations across Canada. It takes care of market access and shares codes and standards. Wood WORKS! is a special project that promotes the use of wood in non-residential construction and provides technical support and education to the design communities across Canada.

First, I'd like to let you know that I'm not here to lobby for or against Bill C-429, but rather to educate the MPs who will have to make a strategic decision on why using wood is good.

For the past 10 years, we in Ontario and my colleagues across Canada have been building a wood culture. For a country that depends so heavily on our forest economy, we do not stand up and take pride in our wood products and resources as you see in very many European countries. We have, however, made great progress with many communities across Canada, with specified wood options and buildings that will leave a lasting legacy for many generations. Hospitals, cultural centres, and community centres I can speak for in Ontario. You all are very familiar with the Olympic venues and many projects in B.C. and others across Canada. These are a few that have demonstrated we can build cost-effective, sustainable buildings using Canadian wood products that will last for generations.

Now more than ever, designers and leaders are seeing that wood has a critical role to play in achieving green building mandates. Wood is the only renewable product; wood outperforms other major building materials with regard to life-cycle assessment, or LCA. This is a scientific process for assessing the impact that building materials have on our environment. LCA assesses the impact of materials from extraction through manufacturing, processing, transportation, use on site, maintenance, disposal, and reuse. In some countries, including France and New Zealand, government policy has been put in place to use more wood in public buildings to help them reach the carbon goals. Using wood is good for mitigating climate change, and helps sequester carbon.

In Canada, B.C. has enacted a Wood First Act and Quebec has established policies for using more wood in public buildings. Ontario is currently studying similar policies. I was just yesterday in Toronto, where we're also working on and moving ahead with changing building codes that will permit the use of wood in more buildings.

Over the past two years, Wood WORKS! and the Canadian Wood Council have tried to get the federal government to use wood in some of their buildings, only to find that current policy restricts its usage. It is discouraging to see this type of prejudice against the wood industry. For example, we were working on a project, a forestry service centre in northern Ontario, in Sault Ste. Marie. They were doing a retrofit and they couldn't even get a wood floor in their entranceway because current policy forbids the use of wood, not only structurally but even for interior finishes.

Other perfect examples that have happened have involved mixed-use projects, such as the new hospitals in Ontario. We've made great strides in health care. A North Bay hospital is about to open, and Credit Valley in Mississauga. This is a perfect example whereby wood is featured in public corridors, exterior canopies. Of course, with large buildings, like many of the federal government buildings, you're going to have a lot of areas that cannot use wood, but there are opportunities to use it in public places.

Whatever you decide going forward, we ask that wood be considered on as equal a playing field as other building materials such as steel and concrete. We are not asking for any exclusion of a product. In fact, the use of mixed materials, which includes wood, is very competitive, innovative, and aesthetically pleasing.

Let's leave a lasting legacy and be proud of Canada's forest sector, an industry that is very much the fabric of Canadian culture, while helping to meet our environmental goals.

Thank you.

[The Chair, Liberal, John McKay]

Thank you, Ms. Berube, and thank you for staying within the time limit.

Mr. Casey.

[Andrew Casey]

Thank you, Mr. Chairman, and thank you, committee.

I thank you on behalf of the members of the Forest Products Association for this opportunity to contribute to your study of Bill C-429.

By way of introduction, the Forest Products Association is Canada's national association representing the forest products industry of Canada. Our members have operations from coast to coast in virtually every province across this country.

The industry, more broadly, is a significant part of the Canadian economy. We represent about 12% of Canada's manufacturing GDP. We directly employ over 200,000 Canadians and another 366,000 or so indirectly. That makes us a significant player in the economy, but also, more importantly, to a number of communities across the country--over 200, to be exact--that are highly dependent on this industry and its well-being.

The past couple of years, as parliamentarians are well aware, have been a particularly challenging period of time for the industry. We've seen our markets go soft quite dramatically. We've arguably been the hardest hit of all industries in the economy. Certainly a number of MPs in the House and some around this table have had constituencies that have been particularly hard hit by the economic downturn of the past couple of years.

We certainly appreciate the strong support we've received from all sides of the House for the industry over the past couple of years as we sort of work through this economic challenge. I'm pleased to say that it does look like there's some light at the end of the tunnel. How quickly we get to that light is still yet to be determined. While economists debate whether or not we're in a “W” or a long “U”, the industry is quickly getting prepared for when markets do return to full strength.

As part of that preparation, we've put in place sort of a four-part strategy. If I might, I'll just walk you through a little bit of that to give you a sense as to where we're going. Part of this bill folds into that overall strategy.

The first part is to make ourselves a little bit more productive and more competitive. The past couple of years have provided the industry the opportunity to restructure and to get leaner and meaner, to use an overused expression.

A second part of it is that we have to continue to improve our environmental performance and leverage that environmental performance in the marketplace, where it's becoming an importantly critical part of our marketing. The industry has done so. In fact, we're one of the leaders in sustainable forestry in the world.

A third important part of our strategy moving forward is the aggressive move into the bio-economy. We have to find ways to maximize the use of the fibre and what we extract out of the forest, and one of the ways we're doing that is moving into the bio-chemical and bio-product field. When we layer that on top of the existing industry structure, we see a very strong and healthy industry and an enormous opportunity ahead.

The fourth part is to make sure that we expand and diversify our markets. We're an enormously dependent industry on exports: $24 billion a year is what we export of what we make. A lion's share of that, obviously, goes down to the U.S. housing market. We've seen what that can do when that market goes south, and that's one of the key reasons we have to diversify and find new markets outside of the U.S. We've done so aggressively and through great support of the Canadian government. We've moved into new marketplaces, such as China, where we're trying to find new ways to build with wood and change cultures.

That's one of our big challenges abroad, changing wood cultures and changing stereotypical thoughts of what wood can be used for. For that reason, we are urging the government to do likewise here in Canada. We need to demonstrate abroad that we as Canadians support the use of wood and understand that wood can be used in new ways that we couldn't possibly use it for before.

As for Bill C-429, we understand that there are some technical challenges to the bill, and if I might, I'll maybe suggest a few places where we could look to improve the bill.

The first one is that the bill makes no mention of where the wood needs to come from. We as a country are great leaders in sustainable and certified forests. We think the bill could use a change that would insist that the wood comes from legal, certified sources. We've seen too much illegal timber enter the marketplace, a large contributor to deforestation around the world, and that has to come to an end. Canada has to show leadership from that standpoint.

The second one, and it's one that Marianne just spoke a bit to, is the national building code. It has not kept pace with the technological developments in wood and the achievements that we've been able to do with wood. It needs to be updated, or modernized if you will.

The third one is to include life-cycle assessment in the choosing of materials for buildings and structures. We need to do a better job of ensuring that our buildings have the least amount of environmental impact possible. If you take a look at the resurgence of wood in the world, a big part of it is because we've now reached new technical achievements with the ability to use wood and the environmental performance of wood. We need to understand that wood--I'll use a transportation analogy--is a Prius, not a horse and buggy.

I would encourage the committee to help educate Canadians, as Marianne was saying, on better ways to use wood. It helps us abroad and it helps us here.

Thank you, Mr. Chair.

[The Chair, Liberal, John McKay]

Thank you, Mr. Casey.

Has Mr. Labbé arrived yet?

Colleagues, I propose at this point to open it up to questioning by members, but in the event that Mr. Labbé arrives, I propose to halt the questioning--at the end of the member's time--and give him an opportunity to say what he needs to say.

Mr. Regan, you have eight minutes.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you, Mr. Chair.

Mr. Casey, I enjoyed your comparison to the Prius, because I'm an owner of a Prius. There's a high initial cost but a low operating cost. In fact, they say that even the maintenance cost is low.

I don't know if that's true with wood as compared to other products, but do you want to elaborate on that?

[Andrew Casey]

Well, we would say that it's low-cost to begin with.

I think the point I'm trying to make is that the Prius is seen is as an environmental step forward. Part of it is due to the technological achievements that the Prius engineers have been able to achieve. We think there are different ways to use wood, and if you take into account the life-cycle assessment of the making of the material and then of course the building itself that the materials are used for, we should be looking longer-term.

One of the challenges you have with the Prius is that, as I understand it, there are some high-end expenses put into it, but then also it becomes like a regular car at the end of the day, and maybe even more environmentally detrimental at the end of the day. We think using wood is a better way for the long-term horizon for the building structure.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you.

I see that neither you nor Ms. Berube had much to say about the bill itself. You're here advocating on behalf of the forest products industry, the wood industry. I'm certainly very aware of the challenges that the lumber industry is having these days.

I'm not only concerned about the fact that we have the housing situation in the U.S., where there is something like a glut of a million houses available and there's not likely going to be a takeoff in construction of houses in the U.S. anytime soon, which is very important to our lumber mills across Canada and to an awful lot of small communities. Not only that, but there is also the problem when they do get going—when the housing construction sector gets taking off in the U.S. again—you still have the problem now that pulp and paper mills are less active. Fewer people are buying The Washington Post and The New York Times and reading those newspapers, for example. It means that there is less demand for pulp and paper, and therefore the sharing of the cost of bringing the lumber out of the woods is less there. That's more challenging for our lumber industry and makes them a little less competitive. That's an ongoing concern that I'm very aware of, as a former critic on our side for natural resources.

Let me ask you something. This bill would give preference to wood, and that's a real concern to other industries, as you're no doubt aware. We're going to hear from some of those today. Do you think that on all sides...? I think Ms. Berube mentioned the need to put wood on an equal footing, as opposed to a preferred footing. Is there a way to do that?

Secondly, what is the best way for the Government of Canada to support the forestry industry, perhaps without taking jobs away from other industries, which I don't think you want to do?

[Andrew Casey]

I think that's right. I don't think you want to get into a situation where you're looking at a forestry job as being more important than a steel job or a cement job. I think that's exactly right, Mr. Regan.

To your question, we support the bill because it advocates the use of wood. Are there technical ways to make it better? I'll leave that up to the committee as legislators, but we certainly think that one way to do it is to put everything on a level playing field. The way to do that is through the life-cycle assessment and incorporating that into the decision-making process in terms of choosing materials for your buildings and for your upgrades.

The other part of it of course is one I highlighted in my notes, which is to update or modernize the national building code, which right now doesn't allow structures beyond four stories to be made out of wood. Other parts of the world are doing that; other parts of this country are doing that. We see no reason why you can't. With the engineered woods that we have out there, we can go well beyond; if you look at the Richmond oval in Vancouver that was used for the Olympics, you're spanning a 300-foot span with that.

Wood has gone well beyond where we used to think of it being used for 10 or 15 years ago, and we think the code should reflect those changes.

[Geoff Regan, Liberal, Halifax West, NS]

You talked about the importance of--

Oh, Madame Berube, I'm sorry. Go ahead, please.

[Marianne Berube]

Okay. I would just add a couple of quick comments to that.

That is what we have been doing with the Wood WORKS! project for the last two years. You mentioned access to the United States, and relying so heavily on that economy. That's why we are trying to encourage more use of wood in Canada. But I mentioned several specific examples; there is a place for all building products. These hospitals are a great example of where we can all work together, and hybrid projects do work very well. That's why it's important, though, that we look in Canada and use more wood here to diversify our markets.

[Geoff Regan, Liberal, Halifax West, NS]

Well, as we look around this room, we see the very nice wood panelling on the lower third, or whatever that is, of these walls, and there's no question it's very attractive. Obviously it wasn't put there yesterday. I don't think it's brand new. But it is good to see.

Back to Mr. Casey, on the concern you had about the need to specify legal, certified sources of wood, if that were not in this bill, what would be the implications?

[Andrew Casey]

I think it would be a lost opportunity, quite frankly.

The largest amount of certified forest in the world is found in Canada. We're leaders from that standpoint. It's a market advantage when we go out into the marketplace. A number of customers now--global customers, large customers--are insisting that it come from legal and certified sources. We've gone to great lengths to make sure our wood does come from legal and certified sources. Why would we not take advantage of that opportunity and show leadership here?

Perhaps I can ask my colleague to elaborate a little bit further.

[Isabelle Des Chênes, Vice President, Market Relations and Communications, Forest Products Association of Canada]

Certainly one of the things we do in the marketplace...and particularly we've been focusing a lot on the emerging market in China. The important thing there is that they're in the process of developing their policies. They're doing a lot of work around trying to wrap their heads around certification, and legality of supply.

China is also a large remanufacturer, so it's top-of-mind for them. They're being faced with issues like...in the United States, there's the Lacey Act. Europe recently passed its due diligence requirements around illegal logging.

So it's really important for us to demonstrate to them that we have a strong story on that side and that, if we're asking them to source from legal suppliers, we have policies in place that recognize that, too.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you very much.

Do any of the witnesses have suggestions as to how to enhance this bill?

[The Chair, Liberal, John McKay]

Mr. Asselin.

[Gérard Asselin, Bloc, Manicouagan, QC]

I think it's important that people understand that, when I tabled and sponsored Bill C-429, my goal was not to promote the use of wood to the detriment of steel. Steel certainly has its role to play in the market. But we also want to give wood its rightful place in the market. We simply want to ensure that the sun shines for everyone.

When drawings and specifications are being prepared, we will just be putting another player on the ice; that is what we will tell the forest industry and our sawmills—on the North Shore, in Manicouagan, there are municipalities like Schefferville, Fermont, Havre-Saint-Pierre, Sept-Îles and Baie-Comeau which have mining resources. There are also a lot of sawmills, such as in Rivière-Pentecôte, Rivière-Saint-Jean, Baie-Trinité, Ragueneau and Forestville, which are closed.

To answer the member's question, I would say that the government will come out a winner once it has created a structure and lumber suppliers can bid, in the same way that steel suppliers can. And when there is market competition, we should end up with better quality and a better price.

[The Chair, Liberal, John McKay]

Thank you, Mr. Asselin.

Thank you, Mr. Regan.

I see that you have arrived, Mr. Labbé. Welcome to the committee.

You have five minutes.

After that, a member of the Bloc Québécois will have five minutes.

[Sylvain Labbé, Chief Executive Officer, Quebec Wood Export Bureau]

Thank you very much.

I have just come back from Geneva, and that is the reason why I arrived a little late. There a UN committee is working on environmental construction rules and discussing exactly the same issues that have been raised here.

Every country in the world knows, as a result of the 2007 IPCC report, that when wood replaces concrete or steel, greenhouse gas emissions are reduced. What is currently being negotiated is the sequestration of wood products—in other words, the carbon found in wood. Those negotiations will take place in Cancun. Everyone agreed on the science, and now begins the political process to secure acceptance of carbon credits for sequestration. So, in South Africa, it is quite possible that there will be another ton of emissions when wood products are used.

The procedure differs from one country to the next. Some countries have strict policies: wood is included and the volume is calculated to determine the emission level. Other countries are softer. For example, what is proposed here is very soft, in my opinion. If words like “reduce the environmental footprint of public buildings” is too tough, you can use any words you like, because the result will be the same. It is important for Canada to play a leadership role, since we are in fact a wood producer.