Thank you.
Let me congratulate the subcommittee on having chosen to do this. We certainly appreciate the interest.
I represent the Forest Products Association of Canada, with members from coast to coast, in 70% of the forestry operations in Canada, including pulp and paper and lumber.
I'm sure the committee is aware that we are suffering major devastation across the country in the forest industry, and I'm sure members of Parliament have occasion to observe that when we talk about job losses, we're not just talking about individuals losing jobs, we're talking about whole communities being devastated, about house prices going to next to nothing, about increases in alcoholism and family abuse. The subject at hand is not simply job loss numbers; it's the social integrity of rural Canada.
Even though the devastation, heartbreak, and the disease of social disintegration we're experiencing is cause for deep concern, I also want to reassure the committee that prices for forest products will return and there will be new markets. When prices return, Canada will be very much advantaged.
Our job in the forest industry is twofold. The first job we have is to survive from now until markets return. The second job is to be prepared to be competitive when those markets return. The good news is that many of our competitors are similarly devastated. Brazil and Russia have been stopped because of the credit crisis; they depend on credit. The Europeans have been tremendously impacted, and not just by the credit crisis but by rising prices.
The question that I'm certain is on your mind is, what can government do? We know what we have to do in the industry, and we're doing it, but what can government do?
Clearly, you can't increase demand for newsprint or raise lumber prices--we have to wait for markets to do that--but you can help us get from here to the return of markets. The government has made a lot of the right moves in EI work sharing, which is keeping many mills open that would have otherwise closed. The announcements to EDC changes and new funding for debt are very positive, and we're hoping to see speedy passage of the legislation to allow EDC to have an expanded mandate.
This is tremendously important. If you can't get your credit renewed, you can't survive until markets return. I would hope that the government would expand EDC's mandate to allow more domestic activity for export-oriented markets. That would make a very large difference because the credit markets that we've seen in the past have just disappeared. Our customers can't get their credit renewed, our suppliers can't get their credit renewed, and we can't. Without that, healthy competitive businesses will go down.
Helping the communities during this time is, of course, primordial, and again the government has done a very good job of creating a fund, but we haven't seen the fund yet. So like the increase in credit, the EI work sharing, and the community development stuff, it has to actually happen on the ground before it helps.
Beyond getting through this crisis, helping the industry become competitive through better business climate conditions and assistance to transformation is essential. When we get through this crisis, it's going to be a more competitive world than at any time in the past.
Your committee did a great job with the manufacturing report; go back to it. There are a lot of good ideas in there. The natural resources committee did a great job with the natural resources report on forestry; go back to it. Parliamentarians worked hard and smart and many of these recommendations are still relevant.
What the government can do beyond helping us through this crisis, through debt and EI work sharing, is to increase funding for research. There was significant money for that in the budget and more is necessary.
Make SR and ED tax credits refundable. That will help us innovate our way out of the current problem.
Fix the transportation system. We are made uncompetitive because of the monopolistic avaricious behaviour of Canada's railways.
Encourage the use of responsibly harvested wood in all federal buildings in the home renovation program and in the infrastructure program.
Help fund the transition of the industry into the use of green energy. Help fund the industry's pollution abatement commitment. Anything we can do on retooling the green side of the industry will be tremendously useful.
Finally, we're inviting the government to join with us in partnership on a project called pathways to transformation, which will look at where future markets are, where Canada's competitive advantage exists, and what's necessary to accelerate our transformation to be able to take advantage of those opportunities.
I would be remiss if I didn't share with you our concern on the softwood lumber deal constraints. Our access to the United States market is absolutely essential. Anything that gives the Americans an excuse to take action against us would be a mistake. The materiality of being shut out of the U.S. market is very large, but the softwood lumber deal should not be an excuse for inaction. There are many things governments can do. There are many things already announced in the budget. There are many things now being contemplated that would assist the industry, that would not be subject to countervail or objection under softwood lumber. The secret to all those actions is that they be applied industry-wide rather than specifically to the forest industry.
Thank you.