Thank you very much for this opportunity to appear here today. I'm here serving in my capacity as the executive director for the Canadian Lumber Remanufacturers Alliance. I'm accompanied by Monsieur Martin Béland, who is our Quebec representative.
Our group represents leading independent remanufacturers with operations in Ontario, Quebec, Manitoba, Alberta, and the Maritimes. In 2001, leading producers came together from across the country to create the CLRA. The objective was to give voice to the issues and unique circumstances confronting Canada's independent producers.
All too often, the “reman” perspective has been lost in forums dominated by tenure holders and large primary sawmill operations. To help you appreciate the role independent producers play in Canada's value chain, here's a little bit on what they do and what they don't do.
As a byproduct of manufacturing lumber, about 15% ends up as low-grade sawn lumber. This byproduct has very little value without further processing. For remanufacturers, this is the starting point. They take this low-grade lumber and further manufacturer it; hence they “reman” it. This is the key to remember: remanufacturing begins with sawn lumber, not logs. They buy this sawn lumber at arm's length and they subject it to further processing, be it a change in thickness, width, length, profile, texture, grade, or otherwise.
The output from this remanufacturing process is softwood lumber products that cut across all product codes, from basic 2x4s to window and door frame components and more. If it's a lumber product, remanners make it. This is what remanners bring to Canada's value chain: they maximize the extraction of the value of our wood resource. They do it by investing here in communities, and they employ Canadians.
All low-grade lumber needs to get remanufactured. The key question for policy-makers is, do you want to keep this in Canada moving forward, or do you want to export these value-added jobs to the U.S. along with the low-grade lumber?
The second important concept to appreciate about remanners is why they are independent. As a group, remanners do not hold Crown tenure, and they are not owned, controlled, or affiliated with tenure holders. Simply put, they do not cut down trees or process logs and they are not affiliated with those who do. This is what makes remanners independent. Remanners buy the lumber at arm's length from the primary producers; hence they're both producers and consumers of lumber in Canada.
As producers, Canada's remanufacturers have no allegations of subsidy against them in the current trade dispute. They're widely regarded as collateral damage or innocent victims in a trade war aimed at and being fought over tenure in logs.
We are not here today to complain about the process or the swift pace of negotiations. We support Canada's negotiators and we support ongoing negotiations. We want officials back to the table. We want and we need a deal as soon as possible.
When Minister Emerson appeared before you, he stated that Canada's independent remanufacturers have experienced disproportionate negative economic injury over the dispute period. This is very true. Since the dispute began in 2001, our members, depending on the region, have lost between 65% and 80% of their exports to the United States. In terms of Canada's total exports, to put this in perspective, when the dispute began remanufacturers accounted for between 7% and 10% of Canada's total exports to the U.S.; now we stand at less than 3%.
This is why Minister Emerson said we also have to make sure that remanufacturers benefit disproportionately moving forward. The deal needs to make provisions to address this reman or quota gap. If the status quo prevails, independent remanufacturing in Canada will die. These are not empty words; it's a fact.
We need the government to deliver on the April framework. It recognizes independence and makes provisions for a first mill tax rate for all remanufactured products. Although not perfect, it's a start.
I'd like to turn it over for a few moments to my colleague Monsieur Béland.