Industry Committee on May 11th, 2021

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

I feel that fathers are as responsible for children and grandchildren as mothers.

It's fine to set grand objectives, such as those you have mentioned. In my opinion, consumers will make the difference. Governments have a role but there also needs to be personal awareness and responsibility. I make an effort every day myself: I have had the same car for nine years, with a diesel engine and 450,000 kilometres on the odometer. The fact that I have not changed my car in all that time is good for the environment.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Our next round of questions—

[Dr. Laure Waridel]

Can I answer that?

[The Chair, Liberal, Sherry Romanado]

I am sorry but the member's time is up. You may have the opportunity to answer in the next round of questions.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

I am sure that Mr. Lemire will come back to it.

[Dr. Laure Waridel]

Thank you.

[The Chair, Liberal, Sherry Romanado]

I'll now go to MP Amos.

You have the floor for six minutes.

[William Amos, Liberal, Pontiac, QC]

Thank you, Chair.

Thank you to our witnesses.

I won't waste any time.

This is a very important issue for us all.

I would like to focus on the testimony from Mr. Samray and Ms. Waridel.

The constituency I represent is located in the Pontiac region. Historically, forestry and sustainable development have been important in my constituency and that remains the case today. It is actually one of the most progressive constituencies.

I don't know whether Ms. Waridel remembers, but I was previously a lawyer. I represented Équiterre in matters related to chapter 11 of NAFTA, including in St. Lawrence Cement Inc. v. Barrette.

So I understand that there has to be a happy medium between regional representation and the need for development. We have to make a green shift in terms of natural resources. There must also be changes in legislative and economic institutions so that we can get to the vision that the organization that Ms. Waridel represents would like us to consider.

Here is an invitation to Ms. Waridel and Mr. Samray. I would like to be able to meet with each one of them separately.

Here is my question, which I am asking as parliamentary secretary to the Minister of Innovation, Science and Industry.

Our government has just announced a historic fund of $8 billion for our industries to make the green shift. It is unprecedented. Whether it is for cement, steel, aviation or forestry, funding is available through the net zero accelerator fund.

What are your concerns and your suggestions for managing those funds? What would the eligibility criteria be? What we are talking about at the moment is not vague, it is very specific. In the budget, we made an investment of $8 billion. What will we do with that money?

[Dr. Laure Waridel]

As I had the floor previously, I will let Mr. Samray answer your question. After that, I can gladly answer.

[Jean-François Samray]

Thank you, Ms. Waridel.

For the Pontiac region, I believe the important factors are diversification and the development of new products. As I mentioned, the budget proposes an investment of $55 million in the IFIT program. That is clearly insufficient, given the popularity of the program. There are a huge number of applications. Some projects have been recommended but, once three or four projects have been approved, there is no longer enough money.

You mentioned an investment of $8 billion. That is a good investment. However, the investment is $8 billion for the entire economy. Let me use an image: it is as if someone invited everyone in the neighbourhood to his house, once the pandemic is over, and said that he'd be buying the beer for everyone. But he puts only one case of 24 on the table.

What I mean by that is that $8 billion is a good start, but more investments will be needed. You have to count on the conversions and to conduct lifecycle analyses. There have to be jobs and employees have to be converted to them. In my opinion, that is critical. We must ensure that the products developed give us an advantage.

You just have to look at what the governments in Finland and Sweden have done for the paper mills controlled by Stora Enso and UPM. Why are those companies now leaders? Because the government was there for them.

[William Amos, Liberal, Pontiac, QC]

The net zero accelerator fund excludes no industries. You are focusing on IFIT, but that doesn't mean that there are no other possibilities.

[Jean-François Samray]

I agree with you, Mr. Amos. That's precisely it. Because no one is excluded, everyone is included. Eight billion dollars for everyone is just a start.

[Dr. Laure Waridel]

Thank you for your question, Mr. Amos.

Let me add to Mr. Samray's comments. If you compare $8 billion to the $30 billion that have been given to the fossil energy sector since the beginning of COVID-19, you realize that the priorities were perhaps poorly chosen in terms of a green recovery. Very concrete choices need to be made.

I would like to emphasize that we have to make the right decisions and avoid simply shifting the problems to other sectors. We must therefore base ourselves on lifecycle analysis criteria that consider the impacts, the problems and the solutions from the time the raw materials are extracted to the end of the production cycle and even to the post-consumer use stage. Sometimes solutions that are falsely good are suggested. At the moment, for example, nuclear power is being widely talked about as a solution. Nuclear power may produce few, if any, greenhouse gas emissions, but it generates other problems that will also fall onto the shoulders of our children.

So it is important to look closely at the science and to conduct lifecycle analyses. It's also helpful to look at the circular economy in general, starting with source reductions.

[William Amos, Liberal, Pontiac, QC]

Thank you.

Given that time is flying, I would invite our witnesses, after this discussion, to send us recommendations for the net zero accelerator fund.

[Dr. Laure Waridel]

I will gladly send you some.

[The Chair, Liberal, Sherry Romanado]

Thank you.

Mr. Lemire, you have the floor for six minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Madam Chair.

I would like to start by paying tribute to Serge Bouchard, whose death we have just learned about. In the context of this study on the green economic recovery, we had in him an inspiring model precisely for the way we can live together with the planet, with Indigenous peoples, with our origins and with our roots. As an anthropologist, his legacy to us was a whole story, our story. I believe that it is incumbent on us to assume the responsibility of living his message. I am grieving deeply this morning and I wanted to share it with the members of the committee.

My question is for Mr. Samray from the Quebec Forest Industry Council.

You have talked about the bioeconomy, which uses resources from sources such as agriculture, forestry, biomass and organic waste.

In your opinion, do the best solutions in supporting a focus on bioeconomy in Canada lie in increasing the budgets for basic research and developing a value chain for secondary and tertiary processing of forestry resources?

Parallel to that, what do you think of the Investments in Forest Industry Transformation program, the IFIT you have talked so much about? Which aspects of the program can be improved?

[Jean-François Samray]

That is too vast a question for me to be able to answer it in five minutes. My colleague Michel Vincent may be able to answer it as well, because he is our reference point for economics.

When you cut down a tree, you use the trunk to make boards. But, since you are cutting a square from inside a circle, material is left over. Residual forest biomass means that the material left over has a value in that it can be used to make panels, or even to produce bioenergy. That is a plus, because it can replace fossil fuels and the carbon you produce is biogenic. It is a plus for the economy.

However, as we said in our presentation, we must ensure that those products come in addition to those made by companies whose products also add value. We do not want to cannibalize them. At the end of the day, if we close a panel board mill to supply a pellet plant, we will not necessarily have improved the situation in terms of the entire lifecycle. You have to pay attention to where the plants are located.

In terms of research and development, I gave you the example of the UPM paper mill, which, with government support, took its black liquor and developed it into biodiesel. Please, take a look at UPM's financial statements. Don't take my word for it, check them yourselves. It will show you that biofuels now make a fortune for the company. It was able to use a residue that used to be burned off and make it into a product that meets a social need.

Investment in research and development is critical and the role of the state in creating a receptive market to attract those products is also critical. I am thinking, for example, of the role of the Canadian Armed Forces, a major purchaser of goods. By increasing the amount of biofuels used by the Canadian Armed Forces, the federal government can use that leverage to create an economy. The Americans are doing it and it is working very well for them. I don't see why Canadians would not do it.

As for the IFIT program, I can say that, in the Pontiac and the Gaspé, by way of example, the forests are hardwood. Everyone agrees that those species are made to be harvested and they are somewhat getting in way of developing and harvesting softwood, which would help the construction sector.

A company that wanted to make pallets of bonded wood that would prevent parasite infestations during transportation applied for financial support under the IFIT program. They were told that it was a very good project that was recommended and they would be given money when it was possible. Unfortunately, there never was enough money. The program does not have enough money.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

We feel that many federal programs have closed envelopes that limit innovation. You never know when innovation will happen. I understand your point.

I would like to ask you another question.

The federal government could implement a public procurement policy that would encourage the use of wood, including establishing the carbon footprint as a criterion for awarding contracts.

What do you think the benefits would be for forestry companies and the environment? Should that be promoted as a principle?

[Jean-François Samray]

I think so. Wood used for construction is carbon-negative, because it reduces emissions from buildings. Many of you have the Canadian flag behind you, with a maple leaf on it. Perhaps the architecture of our buildings should reflect the importance of forestry and wood.

The Chateau Montebello is great, and the Alpine Club of Canada makes beautiful houses. But if public buildings were made of wood, it would show our pride in that.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

We are talking about the fight against climate change. In your opinion, why should the federal government do everything it can to obtain a full exemption from any tariff on Quebec lumber exports to the United States?

We are talking about $1 billion for Quebec and $5 billion for the rest of Canada that is stuck at the border. The money could help boost our economy.

[Jean-François Samray]

The federal government really needs to work with associations like the National Association of Home Builders in the United States, which has written to more than 90 members of Congress. We really need to unclog this issue.

[The Chair, Liberal, Sherry Romanado]

Thank you so much.

Our next round of questions will go to MP Masse.

You have six minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair, and thanks to our witnesses.

I'll go to you, Ms. Petrunic. With regard to the budget, what opportunities do you see out of that? It has to be passed, and then there's a second budgetary bill that needs to be passed in September, but do you see any opportunities for transit out of the budget? What are they?

[Dr. Josipa Gordana Petrunic]

Thank you very much for the questions, Member. I appreciate it.

There are some very obvious opportunities that were articulated as far back as the Speech from the Throne and now are in the budget that has emerged. It's very clear, based on our calculations with our transit agencies, that if you want to get to zero-emission transit technology and get to zero at the municipal level, it's going to cost about $4 billion to get to the first 5,000 and, therefore, about $12 billion to get to all 15,000. The budget did identify $2.75 billion, essentially, for ZEB technologies and, within that, the $15 billion in permanent public transit funding. There's no doubt that it is a significant way forward towards those capital investments. That has been identified.

Some of the elements within that, though, are the nuanced items that we'd like to identify, building on some of the comments already articulated. Throwing money at the problem won't necessarily solve the problem if people don't know what to buy. In the zero-emission transit world, it is complicated. It is complex from a technology standpoint and an energy system standpoint, so we have advocated for the idea that a small portion of that should go towards feasibility studies, something along the lines of a small amount such as $10 million, which doesn't sound small to a Canadian, but in the grand scheme of things and in a budget like the one we've seen, it's a relatively small amount that could be allowed for transit agencies. There are about 20 of them in Canada that need to run their feasibility studies so that they know exactly what kind of battery electric bus to buy, what kind of fuel cell bus to buy and what kind of fuel supply chain to have. That's a small amount.

We've also identified the need within that $15 billion of permanent funding, or the $2.75 billion announced for ZEB, zero-emission bus technology, for about $10 million to be allocated to data analytics. This is a new area for transit and technologies in the public fleet domain. Generally, they don't collect data in real time about the energy performance of their systems. You didn't need to when the world was diesel and you could waste energy going up a hill and accelerating, with the heating turned on. It was terrible energy efficiency, but diesel was cheap enough that you could do it.

Now you can't waste an electron and you cannot waste a hydrogen molecule because you may run out of power in the middle of the day. The only way to assess that is data analytics. The only way to do that is a small amount of funding there within that program for telemetry devices, loggers and a data analytics program for transit.

Those are some of the opportunities we foresee. The signals are positive. It's now just that the devil is in the details and the nuancing.