Thank you, and thank you for inviting us.
You probably don't understand how important to us it is that you take a chance to hear us, or how much we depend upon your attention and how much we appreciate it.
The impact of the dollar on the forest industry is not hard to calculate: everything we sell, we sell in U.S. dollars; all our input costs are in Canadian dollars. If the dollar goes up 40%, our cost structure is up 40%. The result is massive layoffs—almost 55,000 since 2003.
At the same time, there is good news. We have an industry that is responsible for 820,000 jobs still. That's 12% of Canada's manufacturing employment, and we're the largest employer of aboriginal Canadians. It's an industry that has business relationships with 1,600 aboriginal businesses and is situated in a global marketplace in which there's massive expansion of demand. Global demand for our products is going up 3% a year, which is equal to twice the production of all of Quebec every single year.
The good news is that we've got what the world wants: natural resources. We've got the water, the energy, and the fibre that the whole world is asking for. There's huge demand, and unlike many other sectors of the economy, our sector actually has a natural advantage—so we've got to ask ourselves how it is that we're closing so many mills at a time when the world needs what we produce.
Some of my friends in Toronto say, “That's globalization, Lazar; just suck it up and relax. It happens.” I think that's wrong. I think it's mistaken and I think it's misguided. It's not globalization; it's a failure to adapt and to adjust to globalization. It's a failure to have foresight. It's a Canadian failure, by all of us, to have the vision and will to do what's necessary to succeed in a globalized world.
Ten years from now, when this Parliament is judged, it's going to be on one factor and one factor only: whether or not there was the vision to prepare Canada for new economic realities. With all the competition coming out of China, Indonesia, and South America, if we get ready for Canada to compete in this new global economic reality, we will be judged to have done the right thing. If we don't, we will have doomed Canada to an impoverished future.
If you read all the books about the new global economic reality, they're quite clear: what we see today is just the beginning. They're also quite clear that it creates a huge world of opportunity for the sorts of things Canada can produce. In the forest sector, that means a huge opportunity to sell to the world what we have in abundance. Why are we not doing it?
The answer comes in many parts.
The first is that we are doing it today. We are the world's most successful nation in exporting forest products. We've got the know-how. We've got the track record.
The second part of the answer is that we have grown a little easy in our seats because a low dollar allowed us to export at an advantage. Governments and industry enjoyed that advantage, and we did not restructure and rebuild the industry when the dollar was low.
Governments can look at themselves in the mirror because they prevented rationalization, prevented consolidation, and taxed and regulated at rates that were only affordable at a low dollar. Industry can look at itself in the mirror and say that at a time when there was capital to invest, we went along with government's sense of ease and just played the game. Now that the dollar has gone up, we're all looking at ourselves in the mirror and asking if we can do anything now. The answer is yes, we can. The answer is yes, we have the competitive advantage if we have the courage, vision, and foresight to act.
Certainly what this committee came up with last year is a very good first step, and implementing that report is urgent. Most urgent is the refundability of the SR and ED credits, because you want industry to innovate their way out of trouble. Why would the government abandon that support, those tax credits, just when industry most needs them, when there is no profit?
Expanding the CCA writeoff for five years—I actually prefer my colleague's concept of “for eternity”—makes a lot of sense, because you want people to invest their way out of trouble, but that is not enough. We need a sector-specific policy. We need a sector-specific vision.
I am calling on parliamentarians from all sides to form a task force on the future of Canada's forest industry. It can be a subcommittee of this committee, it can be a subcommittee of natural resources, or you could actually get together and do it.
Industry has put out a vision for the future based upon markets and competitiveness. We need governments to partner with us in shaping and delivering this vision. We have seen from this committee what happens when parliamentarians put aside partisan stances, partisan positioning, and actually try to solve our problems.
We'd like to see that replicated in a future forest sector committee—all parties, this committee, natural resources, however you think you have to do it—and let's make it an urgent task. We'll work with you night and day to develop a path for prosperity. It's entirely doable. It's within our grasp. We have the natural resources. There is global demand. We simply have to get on with it and we need governments to partner with us.
I'll stop there.