Industry Committee on May 17th, 2016

[Iain Christie]

Yes.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

That's a good answer, now let's expand. You can put more seconds into that.

[Iain Christie]

To go farther, it's going to take more than a minute. The short answer is yes.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

How does it have an impact in the aerospace industry?

[Iain Christie]

You have only to look at the massive innovation engine that the U.S. Department of Defence represents to understand how government can use public procurement spending to generate innovation in an aerospace industry.

The government can use and leverage the money that it spends to encourage innovation in a number of different ways. Again, the long answer is much longer, but the bottom line is that the government spends a lot of money on aerospace products. I believe it has the right and the duty to explain to the industry that it's buying from what its industrial policies are and what its expectations are on the companies it spends that money on and how those companies spend that money in Canada.

I think there are a number of different levers the government can use to encourage those people who are the recipients of government funding to use it in ways that the government wants them to, which includes fostering innovation.

[Joseph Galimberti]

Certainly, we think that steel can contribute to public infrastructure projects. I mentioned engineering demands and continual product improvement specifications in Canada. We feel like we meet those needs. Frankly, I have every confidence in our members as the market evolves to meet those needs on a go-forward basis.

The second point is government policies. I'll use the carbon policy. I know the costing mechanisms are provincial, but it's a good example. If you're talking about a $120-billion, 10-year investment in things like green infrastructure, it benefits to source the cleanest, most GHG-efficient inputs possible. Canadian inputs specific to steel, because our supply chain is as tight as it is because there is no transport—

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

So you would build GHG requirements into the procurement?

[Joseph Galimberti]

I think if the government has commoditized carbon, it should be intellectually consistent in commoditizing carbon when it does its sourcing, right? If you have established a cost and built it into the system in which we are producing, then that product—

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Got it.

Paul, you have about five seconds.

[Paul Lansbergen]

Actually I was going to build on that. I'll be very quick about carbon first. It's a principle for infrastructure spending procurement to encourage decision-makers to select the least carbon-intensive option when they are making their decisions. I'll send you some more information on that.

The other idea is that I think the build in Canada innovation program that is currently on the books could be strengthened to help the government facilitate, incent, and support more innovation before products get to market.

[The Chair, Liberal, Dan Ruimy]

Thank you. Sorry to cut you off.

Could you actually forward that to the clerk?

[Paul Lansbergen]

Definitely, yes.

[The Chair, Liberal, Dan Ruimy]

And any information that you guys want to send, just send it to the clerk so we can all get it. Thank you very much.

Mr. Albas, you have seven minutes.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Thank you very much, Mr. Chair.

Thank you to all our witnesses for being here, and for the great representation you do for your different industry groups.

I'd like to start first with the Forestry Products Association of Canada.

There are a number of value-added wood products that are being sold right across the country, right across the world. Some of the names that I know from my riding are Princeton Wood products; Gorman Bros.; Geometrik, which is now actually in Kelowna; FPInnovations, which is working with Westbank First Nation; Structurlam, in Penticton and Okanagan Falls, with cross-laminated timber. These are all great examples of innovation.

You were going to elaborate a little further on how specifically the Canadian government can approach, from a policy perspective, further innovation in your industry. Could you give us a few details on that?

[Paul Lansbergen]

One of the most important programs that they've had so far is a program called investments in forest industry transformation. It was a grant program to support transformative investments in the forest industry, and Structurlam was one of their recipients. They received money to expand their production of cross-laminated timber, which is a mass timber-engineered wood product that enables us to build taller with wood. There's an architecture firm in Chicago that has designed a 42-storey, wood/concrete hybrid building. UBC is putting up an 18-storey building that is all wood. It's this CLT product. That program has also supported lignin extraction, which is the glue in the tree. Take it out and we can produce glues from it, we can produce chemicals that can be used in mining and oil and gas applications. There are a whole host of technologies that could be supported that way. Government has also been supporting R and D, whether it be in the academic community, through FPInnovations, or collaboratively with both of those and the companies, and all of that is very important.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

When we talk about building with wood, particularly CLT, groups like Structurlam are starting to develop and really export. When we talk about those kinds of things there's a committee that actually deals with the Canadian building code. It's a voluntary code, but provinces right across the country can adopt it. Do you know if that has been looked at by that committee?

[Paul Lansbergen]

The national model building code is a voluntary one. It is reviewed every five years. Typically, the provinces take a look at the new version and decide whether to accept it as is or accept it with modifications. Some of the provinces have already expanded the use of wood by raising the limit from four storeys to six. The national model code now says six—I'm not sure if some of the provinces have adopted it—but we can go a lot higher. We can go to 10 pretty easily, 12, 20, and demonstration projects that are occurring are showing us the art of the possible.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

I think architects also need to study it and understand it and start building with that in mind. Both the industry as well as government have to better understand it, and I hope that people who are listening to this conversation take up that idea.

[Paul Lansbergen]

I'd like to make one quick comment about that. The Canadian Wood Council is an industry-funded organization that is a collection of engineers who work on the codes and standards, and they're already working on the next set of revisions for the national code.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Okay, thank you.

I'd like to move on just to discuss again the Canadian aerospace industry.

Sir, you've mentioned different types of innovation. I do know that in many elements of our transportation sector ownership, as far as foreign ownership, has a lot of stipulations. In regard to the financing, to me that's one of the logical steps. Are many of these tech companies that deal in aerospace innovation also inhibited by very low thresholds for foreign investment?

[Iain Christie]

It isn't the subject that comes up very often.

Typically, we as an association don't represent...airlines are representing the manufacturers. Most of the companies that are the targets of what I call the process innovators are by and large privately owned. They tend to be individual businessmen or small partnerships, so foreign ownership is not so much of an issue.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

I just thought I'd ask the question. Alpine Aerotech is right in west Kelowna.

[Iain Christie]

Okay.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Actually, a whole cluster of similar businesses have located around them and they serve governments right across the world, they serve businesses right across the world, and they've done some fantastic modifications—

[Iain Christie]

Of course, you also have Kelowna Flightcraft, which is the real star in the industry.