Government Operations Committee on Oct. 21st, 2010

[The Chair, Liberal, John McKay]

You have two minutes.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Thank you, Mr. Chairman.

Good morning, ladies and gentlemen. I have one question for you. Since I have very little time, I will get right to the point. We were discussing wood exports and foreign trade.

My question is addressed to Mr. Beaulieu. In what way would giving preference to wood in the construction of federal government buildings violate international agreements?

[Jean-David Beaulieu, Researcher, Bloc Québécois Research Bureau, Bloc Québécois]

There are currently three agreements that apply to government procurement: the WTO Government Procurement Agreement, the NAFTA rules and the Internal Trade Agreement.

In all of these agreements, the non-discrimination obligations relating to products used by the Canadian government deal only with what are called similar products. As Mr. Labbé pointed out, it is now internationally recognized that wood is a very different product from concrete or steel. So, we are not talking about similar products.

It should also be noted that the bill refers to “wood”, as opposed to “Canadian wood”. Therefore, the wood used could come from the United States or another country. In no way does this bill pose a threat to our export markets.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

I have a short question for Mr. Ouellet.

We were talking about competition. Just to reassure the Liberals on this point, perhaps you could very briefly explain the process, the concept and cost evaluation. What is the process? How does it work? When there is a call for tenders, how does the principle of competition in terms of the price of materials or a preference for wood actually apply? We talked about this briefly, but only in general terms; could you explain that again?

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

To begin with, when the decision is made to construct the building, a plan is developed. You start by determining how the work will be carried out and by what means. In any contract, the first thing to be specified is the materials that are to be used. Now if you're only building a garage, that may not be the case. It could even be a rammed earth construction as Mr. Martin was saying, if that was the decision, except that the code does not allow for that. What he said goes against the code.

[The Chair, Liberal, John McKay]

To respond to that answer, Mr. Warkentin, you have two minutes.

[Chris Warkentin, Conservative, Peace River, AB]

Thank you, Mr. Chair. I'll try to be quick, because I do need to get out a number of points.

First, I'm going to read from the international trade articles. It states that documents can contain specific requirements for particular materials when required for technical or operational reasons, but “the biasing of technical specifications in favour of, or against, particular goods or services, including those goods or services included in construction contracts” is prohibited. You can reference the trade agreements.

Then, in the WTO agreements, it makes it very clear that the preference for wood in tenders, in the absence of technical reasons, would be an unnecessary obstacle to trade.

So what I am suggesting is that we have a bill right now that has a good intent. It has a good intent to promote wood. I come from a lumber-producing area. Let me tell you that there'd be nothing greater for me than to be able to go home and tell my folks to open up the mills, to fire everything up because we're going to build every federal government building with wood. It's not going to happen, though. In fact, if we were in contravention of the trade agreements, we would shut down all the mills that are currently open.

I think what I'd like to know, Mr. Casey and Ms. Berube, is this. If in fact this would impact international trade agreements, is this a correct way to go? Or would you prefer that this committee look at levelling the playing field for wood at the national level, if we as a committee were to look at the national building code and something like that? Because let me be absolutely clear: if this bill passes this committee and becomes law, you have to live with all of the impacts, including the possible shutting down of international trade agreements. So will you live with that if in fact that's what this bill does?

[The Chair, Liberal, John McKay]

Mr. Casey, Mr. Warkentin just blew through the two minutes, but out of courtesy I'm going to give you 30 seconds to respond to what is actually a very important question.

[Andrew Casey]

Absolutely.

As legislators, as parliamentarians, you always have a balance of interests you've got to keep in mind, and you have to keep it. So there may be technical problems with this bill, I don't doubt that. I have not seen the technical language around those bills. I believe that.

I also believe that you support the intention of the bill. And if that is the case, then I would urge the committee, if this bill does not work, to sit down with the industry and let's figure out a way to make it work--maybe that's life-cycle assessment or changing the building codes--and we'd be more than happy to come back at any given point in time to do that with you.

[The Chair, Liberal, John McKay]

Thank you, Monsieur Asselin, and all the witnesses.

I'm going to suspend for two minutes. We're just going to do a technical check with Vancouver.

[The Chair, Liberal, John McKay]

Ladies and gentlemen, could we call this meeting to order, please.

We are starting the second hour of our study of Bill C-429. We have four more witnesses: Canadian Construction Association; Canadian Concrete Masonry Producers; ARXX Building Products Inc.; and Quebec Forest Industry Council. Joining us from Vancouver via video conference is Coast Forest Products Association.

I'm assuming, Mr. Jeffery, you can hear me.

[Rick Jeffery, President and Chief Executive Officer, Coast Forest Products Association]

Yes indeed, I can hear you.

[The Chair, Liberal, John McKay]

Good. Thank you very much.

We will go in the order in which you're listed on the order paper. We'll start with the Canadian Construction Association.

Mr. Atkinson, five minutes, please.

[Michael Atkinson, President, Canadian Construction Association]

Thank you, Mr. Chairman.

As you heard, my name is Michael Atkinson. I am president of the Canadian Construction Association. I'm here today not only in that capacity, but also as a member of the Coalition for Fair Construction Practices. Joining me this morning are three other members of our coalition: Mr. Gary Sturgeon, technical services engineer for the Canadian Concrete Masonry Producers Association, who will also be speaking before you today; Mr. Ed Whalen, president of Canadian Institute of Steel Construction; and Ms. Marina de Souza, managing director of the Canadian Concrete Masonry Producers Association. Since our concerns are very similar, Mr. Sturgeon and I have agreed to combine our statements and our time.

Our coalition consists of 20 members representing the steel, cement, concrete, concrete product, brick, and masonry industrial sectors. Collectively we represent hundreds of thousands of jobs and workers from every community in this country, 1.2 million in the construction industry alone. Combined, we account for billions of dollars in domestic sales, exports, and construction services in Canada every year. Again, construction alone accounts for just under 7% of Canada's gross domestic product.

Many of the heads and senior executives of the coalition members are here with us today. This large and varied group has come together to oppose the passage of this bill because it would: one, favour wood over other construction materials, which is not only discriminatory but could increase construction costs by limiting the types of materials available for use on federal projects; two, limit the design freedom of construction professionals in the selection of materials; three, potentially undermine the National Building Code of Canada; and four, possibly violate Canada's obligations under domestic and international trade agreements.

To begin, I think it's important to state that all of the members of our coalition support a healthy Canadian wood industry. Wood, steel, brick, concrete, and other construction materials, are vital to construction in Canada. Together these materials and their associated industries offer synergy. All contribute to providing Canada's sustainable social and commercial environments. Like the wood industry, coalition industries are located in small towns and communities across this country, and have been hard hit by the economic events of the past two years and continue to struggle with declining demand in both domestic and traditional export markets.

To be clear on this point, the Canadian Construction Association and the coalition oppose Bill C-429. We do not oppose the wood forestry industry. Assuredly, we would have been here today united to oppose the bill had it otherwise been written to favour any particular building material. The fact that it is wood is immaterial.

To my first point, the federal government is a significant purchaser of construction materials across this country. As such, its activities affect the national economy and can influence both the price and the availability of goods and services, including construction services, within the marketplace. Furthermore, decisions of Public Works and Government Services Canada on procurement practices often influence not only the practices of other levels of government, but also those of the private sector. Therefore, the impact of any change in federal procurement policy must be viewed through that lens.

We believe it is neither good nor acceptable public policy for our governments to promote one building material--in this case wood--by excluding alternative, viable, and competitive Canadian materials from Canadian construction markets. We strongly believe that all construction materials should operate on a level playing field and in a competitive, fair, and open economic environment.

Specific to the federal government, proposed Bill C-429 is philosophically contrary to the performance and procurement policies and methods currently followed by the Department of Public Works and Government Services Canada that actively promote and ensure openness, fairness, and transparency. If enacted, we believe that Bill C-429 would eliminate these fundamental qualities within our built environment. Bill C-429 would effectively legislate advantage, protection, and gain for the wood industry at the expense of other supplier industries to the construction industry. Ultimately, if enacted, it would assuredly not create any new jobs.

I move now to our second objection. Bill C-429 will limit and undermine the freedom of a design professional or experienced contractor to select the most appropriate construction material for its intended function and service.

Legislation that compels or influences our design professionals to specify the preferred product for use where it is not suited to the function or service has attendant risks. Consequences include an increased likelihood of non-performance, premature failure, and higher initial costs for construction or ongoing costs for repair and maintenance.

The selection of the appropriate building material must remain the purview of those qualified and licensed to practise in the area of building design and construction.

The Canadian built environment is founded on this principle. Our slogan is, “Choose the right building material for the right job”. With no artificial preference currently in place in the design and construction industry, the right material for the right job is already being selected.

With that, I would now like to turn to Mr. Sturgeon to expand on our other comments.

[The Chair, Liberal, John McKay]

Thank you.

Mr. Sturgeon, you have four minutes.

[Gary Sturgeon, Consultant and Structural Engineer, Canadian Concrete Masonry Producers Association]

Mr. Chairman, I also want to thank you and the committee for the opportunity to speak with you today.

Let me begin by building on Mr. Atkinson's comments about material selection and specification, and the relation of Bill C-429 to the National Building Code of Canada.

The motto of the National Building Code of Canada serves as the basis for specifying materials, testing, design, and construction. The National Building Code of Canada is an objective-based code.

Unlike a prescriptive-based code, the objective-based code is specifically intended to facilitate the selection and use of any and all materials that satisfy its stated objectives and performance requirements. It's specifically intended not to limit the application and use of any material component or assembly. Whereas the objective-based National Building Code of Canada is inclusive, a “wood first” policy is exclusive by its very nature. Bill C-429 could undermine the effectiveness and credibility of the National Building Code of Canada.

A wood first policy is intended to influence a designer's choice of construction material. Simply, a designer is encouraged to select wood. Wood becomes the prescribed preference. In effect, Bill C-429 positions wood as the performance benchmark against which all other materials and assemblies will be measured, contrasted, compared, and judged for use in selection. Ultimately, this will adversely affect the development of performance requirements in the National Building Code of Canada by virtually substituting the properties of wood as the performance targets.

This is assuredly not desirable, and effectively caps material and assembly performance to equivalency with those of wood, undermines the spirit of competition to achieve higher performances through research and development, and subordinates and marginalizes other preferred properties not characterized by wood.

Canadian building codes have effectively served the needs and expectations of Canadians for over 60 years. The coalition is steadfast in its belief that Canadian building codes already provide the needed flexibility for design professionals to appropriately select construction materials. The very fact that our building codes prescribe certain conditions under which construction materials, including wood, cannot be used is evidence that no material is always the most appropriate choice.

Publicly funded construction should respect our Canadian building codes, their philosophy for development, system for development, content application, and credibility. A policy for preferential choice of a particular building material does not respect these.

This brings us to our fourth point for consideration: a free marketplace. There are significant legal and trade implications that we believe Bill C-429 cannot avoid. In the interest of time today, I think this was well vetted in the earlier presentations. I think this group has a good understanding of the contraventions that this bill could propose for international trade agreements and domestic trade agreements.

As a final discussion today, we're compelled to address some of the claims made about the sustainable attributes of wood. Certainly, it's a positive step for governments to increasingly demand that buildings and infrastructure be constructed and operated in a more sustainable manner. It's our observation and opinion that all industries that manufacture materials and components for construction are rapidly greening their processes and better respecting principles of sustainability.

Some proponents of Bill C-429 argue that wood is a preferred environmental building material because of its carbon sequestration attributes and because wood products require comparatively less fossil fuel to manufacture. While these material attributes are positive, alone they provide a very limited picture of whole building sustainability. Only a life-cycle assessment of the environmental impact of a whole building over its full service life can identify all attributes that potentially offset greenhouse gases and underscore the real carbon cost.

The honourable members have copies of the presentations. Again, in the interest of time I'll summarize.

Life-cycle analysis provides a complete picture. It requires careful and detailed work by the building sustainability and scientific communities. This type of research has led to the emergence, development, and indeed application and practice of advanced and comprehensive design specifications, and guidelines found in such programs as LEED and other green building programs. A wood first policy undermines their development and use.

In conclusion, we can all agree we want our economy to get moving again and we want all Canadian building products to be more widely used. However, all members of the Coalition for Fair Construction Practices believe that no construction material or assembly should be awarded a legislated priority over others. Let professional judgment, practical application, fair competition, and respect for our building code system determine the best materials for the application and service.

All of the members of the Coalition for Fair Construction Practices express strong disapproval with Bill C-429. Honourable government and opposition members of this committee, we respectfully request that Bill C-429, or any such similar legislation, be not recommended for consideration by the House of Commons.

[The Chair, Liberal, John McKay]

Thank you, Mr. Sturgeon.

Ms. Mourant from ARXX Building Products Inc. is next.

[Gael Mourant, President and Chief Executive Officer, ARXX Building Products Inc.]

Thank you, Mr. Chairman, and honourable members of the committee.

My name is Gael Mourant, and I am president and CEO of ARXX Building Products, based in Cobourg, Ontario. I'd like to thank the committee for the opportunity to appear before you and provide some insight with respect to Bill C-429.

Our company is a leading supplier of insulating concrete forms, also known as ICFs, an innovative green building material. ICFs represent Canadian technology that is being successfully exported to many parts of the world. Our wall assemblies are highly energy efficient, fire-resistant, can withstand tornado and hurricane force winds, can be engineered for the highest seismic zones, are resistant to rot, mold, and mildew, and meet the U.S. federal government design criteria for minimum anti-terrorism standards.

I'm not here to advocate for one construction material over another. I'm here to say that Canadian public policy should support innovation that achieves critical goals for our society such as the reduced cost of construction and operation of buildings--including government buildings--higher energy efficiency, and support for the development of--and investment in--emerging Canadian companies, industries, and technology.

Through providing preference for wood, Bill C-429 is at odds with these objectives and can result in unintended consequences. Bill C-429 advocates convention over innovation. Conventional building methods and materials need to adapt and change in order to improve energy efficiency and save natural resources. According to McKinsey & Company, energy efficiency in built form represents some of the lowest cost abatement alternatives for greenhouse gas emissions.

There's no question that wood plays an important role as a construction material. But in the same way that wood construction materials have evolved through innovation from conventional lumber to engineered wood products, there is a need for continued innovation in building materials to meet the challenges of achieving cost-effective energy-efficient construction. Wood may not always represent the best alternative, and the choice of building material and method should be left in the hands of building scientists and professionals.

Fundamentally, though, natural resources, like taxpayers' funds, are scarce resources. Government policy should seek to maximize the opportunity to reduce the cost of ownership of public buildings and minimize the impact on the environment.

Bill C-429 moves Canada at odds with the EU and the U.S. in terms of recognizing the importance of energy efficiency in federally owned and publicly funded buildings. In fact the enactment of the U.S. Energy Independence and Security Act, which requires all U.S. federal buildings to achieve a 55% reduction in energy use by 2010 and a 100% reduction by 2030, has opened up new opportunities for our company. We expect to complete two projects for the U.S. military later this year.

It is unfortunate, as a company based in Canada, to have opportunities outside Canada driven by public policy initiatives, yet stifled within Canada by public policy initiatives such as Bill C-429.

Bill C-429 sends the wrong message to investors in clean tech. Our company is owned by three major venture capital investors in clean tech and green building materials, two of whom are based in the U.S. and one who is based in Switzerland. Our investors have over $2 billion in investments in clean tech.

We have successfully brought tens of millions of dollars of investment to Canada, supporting Canadian jobs, technology, and business. Canada should demonstrate that government policy supports investment in companies in Canada offering innovative solutions to global energy, resource, and environmental problems.

Investors do not expect protectionist policies to thwart the commercialization of emerging technology. They expect a level playing field. Bill C-429 flies in the face of this and can make it more difficult for companies in Canada to attract investment for developing energy-efficient and cost-effective means and methods for construction.

Bill C-429 represents a threat to jobs in other sectors. The manufacture and supply of ICFs employ thousands of Canadians. For example, Vaudreuil, Quebec, has two plants in that city. Granby, Quebec, has four plants. There's an ICF manufacturer based in Dartmouth, Nova Scotia, with two plants in the Atlantic provinces. Ontario, Alberta, and British Columbia have multiple plants making ICFs. This does not include the plastic injection moulding facilities, the tool and die moulders, and the transportation providers and thousands of building materials distributors and ICF installers who all look to ICF as a means of growing and developing their businesses.

ICFs are manufactured in plastic and foam-moulding facilities, many of which have had to turn to new products like ICFs in order to maintain volumes as reduction in volumes from automotive and packaging materials have threatened their businesses.

[The Chair, Liberal, John McKay]

Ms. Mourant, you're right at the very edge of five minutes. Could you wind it up, please?

[Gael Mourant]

Sure.

In conclusion, I want to reiterate our belief that public policy should support initiatives that are good for the environment, support sound fiscal management objectives, stimulate innovation and investment in desired areas, and support development of better means and methods. Bill C-429, in our view, does none of these things.

[The Chair, Liberal, John McKay]

Thank you, Ms. Mourant.

Mr. Chevrette, from the Quebec Forest Industry Council, you have five minutes for your presentation.

[Guy Chevrette, President and Chief Executive Officer, Quebec Forest Industry Council]

Good morning and thank you for the invitation to appear. I wasted no time answering it.

I would like to begin by saying that I do not appear before the Committee today with the intention of denigrating other construction materials. Rather, I am here to talk about the advantages and benefits of wood as a construction material, particularly in public buildings.

Furthermore, my participation today should not be seen as in any way partisan; rather it is intended as a constructive contribution addressed to all members of Parliament represented in the House of Commons.

Wood is considered to be the most environmental material of all, something which is prompting governments to promote it.

The Coalition BOIS Québec, for instance, which was supported by the two levels of government, carried out an awareness campaign on the uses of wood in not only the residential sector, but the commercial and industrial sectors as well. That campaign, whose spokespersons were the very well-known environmentalist, Steven Guilbeault, Assistant General Coordinator of the Équiterre group, Claudette Carbonneau, from the CSN central union body, and Alain Lemaire, from Cascades Papers, who is also a very well-known industrialist from Quebec, has had a real impact.

For several years now, governments have been talking a great deal about global warming and greenhouse gas reduction. And it's great to hear them talk about it. Now, however, the House of Commons has an opportunity to walk the talk by passing a bill that would allow us to capture greenhouse gas emissions by using wood, and to do so for dozens, and perhaps even hundreds, of years.

In addition, there would be nothing revolutionary about this at a global level, since many European countries are already advocating the use of wood for the construction of public buildings, by setting a minimum percentage of wood to be used for the construction of their own buildings.

Furthermore, I think it's time to take this opportunity to respond to certain completely false allegations which are clearly tendentious and misleading. The forest industry is not asking for any government grants. We are asking the government to set an appropriate minimum standard for the use of wood in the construction of public buildings.

The age-old fearmongering strategy has already surfaced in our industry. We are now told that it's a dangerous material in cases of fire or earthquakes, and so on, and I have just heard more of the same. Basically, everything is dangerous. There again, I have to say that this is absolutely false. Wooden structures resist fire longer than some built with other materials, and that has been tested not only in Quebec and Canada, but also in the United States.

I would add that, in terms of the visual environment, wood is a far more attractive and pleasant looking material than many others. Some examples that come to mind are Gene-H.-Kruger Hall at Laval University, the Chauveau soccer stadium in Quebec City and the skating oval that is part of the Olympic facilities in British Columbia.

I would also like to add that one of my groups is returning from Sweden, where they have begun to build bridges with wood beams. These bridges are guaranteed to have the same longevity as viaducts built with other materials. There are now more than 100 of them. So, let's set aside the taboos, look at what is being done around the world and open our eyes.

The forest industry represents more than 525,000 jobs in Canada and has every right to expect that the government and all political parties represented in the House of Commons will provide some support for such an initiative.

Where we're from, there is an expression in French we often hear, which may seem a little crude, but that I would like to use anyway, and which is that the boots have to follow the lips or walk the talk. What does that mean? It means that you cannot be saying one thing and doing another. It means there has to be some consistency between our actions and what we preach, recommend and advocate.

Now every leader of every political party in Canada has a chance to demonstrate that consistency between their actions and what they're saying in public. Yes, we are experiencing global warming; everyone knows that. So why not seize the opportunity to improve our environmental record? This is what we are offering.

Our industry, which has been pretty well abandoned in the economic crisis we have just been through, deserves a little bit of attention. This bill can be amended. That decision rests with you, not me.

Rather than talking about priorities, we should be talking about equity or I don't know what. We await the evidence.

Wood is a renewable resource and the most environmentally friendly material of all. Here in Canada, it generates jobs and is an economic engine in every one of the resource regions of this country.

In closing, I would just like to say that it is a renewable resource--

[The Chair, Liberal, John McKay]

Thank you, Mr. Chevrette. Your time is up.

[Guy Chevrette]

I thought I would have as much time as this lady here to complete my statement.

Thank you.

[The Chair, Liberal, John McKay]

Well, you were actually neck-and-neck.

Mr. Jeffery from the Coast Forest Products Association is next, via video conference .