Thank you very much, Mr. Chair.
Thank you very much, members of the committee, for the opportunity to present to you for the first time. I have been pleased to be the president of the Forest Products Association of Canada for 92 days, not that I'm counting. It's a great experience and a great organization.
The work that you're doing at this committee is quite important to us. It's a pleasure for me to be here to make a few comments and engage in a dialogue with you about trade and the forest products sector and India, in particular. I will begin with an overview of the forest sector in Canada.
Coast to coast, it's a very large employer. We have some 230,000 direct employees and spinoffs in excess of 600,000 well-paid jobs in rural and northern communities across this country. Some 200 communities depend on the forest sector for their major source of income. It's a major source of local taxes and a large economic driver in a lot of communities, in a lot of your ridings across the country.
As you would also know, the forest sector did face a number of very difficult years prior to the 2008 economic meltdown, the Lehman Brothers issue and the challenges that were faced in the financial sector. The housing market in the U.S. was dropping for a number of years before that. The forest sector was feeling a reduction in product demand in the United States on the lumber side. Of course all of you who now read your morning news on the Internet, or your iPad or follow it on Twitter can appreciate that the newsprint sector was dropping quite significantly in North America. We were taking a lot of hits as a sector. In the meantime, the Canadian dollar was continuing to appreciate, so our products that were going to the United States were becoming more expensive.
The industry and the members of the Forest Products Association realized we needed to have a really deep think on where we were going and create a transformational agenda and a renewal agenda for the forest sector. I'm pleased to quickly highlight that earlier in the summer we launched Vision 2020, as we're referring to it. It is available on our website. It has three ambitious goals to help us transform the forest sector into a productive, continuing to be job-creating opportunity in the next decade and beyond.
Vision 2020 has set three ambitious goals of increasing our products, the markets we sell to—and we'll speak specifically about India today—and the types of products we make, the value-added products we want to produce in the forest sector, to the tune of some $20 billion of additional economic activity on a base of about $54 billion to $55 billion today. That's ambitious, almost twice the growth of GDP between now and 2020.
In order to do that, we will need some 60,000 additional employees. We will need 40,000 because of demographics, to replace the aging baby boomers, and there will be another 20,000 employment opportunities across the forest sector. I'm not even speaking to the indirect employment. That's the direct employment we estimate by 2020. Skilled workers in the forest right through to the sales force in our international markets will be required.
The third leg of our stool to continue to advance the forest sector as a key economic driver and employer in the Canadian economy is to make sure we continue to have a good social licence so we can continue to sell our products internationally. Europe and other markets want to know that we're green and we're a clean renewable resource. In our Vision 2020 we are committed to continue to improve our environmental metrics: our NOx, our SOx, our greenhouse gas emissions, our water and our effluent, and our forest management practices by an additional 35% by the year 2020.
Those are the three legs of the stool: improve our products, improve our processes, and add to our people. To do that, we're going to need new customers. India is an important potential opportunity for us in the forest products sector.
For example, we've already done quite well in China. In 2001, we were selling $32 million of product to China. One decade later we're selling $1.5 billion of product to China. I can't do the math off the top of my head, but it's in excess of a forty-fold increase. There is huge growth potential in China yet to be realized. While we've had exponential growth for this last decade, there's still much more opportunity there.
We're at the beginning stages in India of what I will present to you as a similar growth trajectory and a similar opportunity.
The government has been a very important strategic partner to us over the last decade. It will have to continue to be an important partner to us into the future, not just for free trade agreements, but because we need people to help open doors in those domestic markets. The trade officials, the trade offices, and the embassies in China and elsewhere around the world have already been incredibly helpful to us. As we discuss free trade and trade opportunities, we should also not forget the importance of the infrastructure on the ground to help us relate to those markets and connect with the customers we need to connect with.
We can talk more about those details in the Q and A, I'm sure, but let me take a few minutes to speak specifically about India as my time is running by quickly here.
In 2011 the forest products sector exported about $400 million of pulp, paper, and wood products to India. That's actually our fifth largest global market already so we're quite involved in India right now, but as I suggest, there's much more potential going forward.
We believe the pulp, paper, and wood products are about the second largest export, by dollars, we send to India. We're a big part of the trade story with India already, but there are lots of possibilities. For example, a study we commissioned about a year and a half ago, and we'd be glad to make copies of this study available to your staff as they prepare your report, estimated that newsprint demand in India, unlike in North America, is expected to increase by a rate of about 8% a year over the next couple of years. There's great potential there, but there are tariffs on newsprint right now. A free trade deal would help unleash that opportunity.
On the paper side other than for newsprint, in 2009 India passed a piece of legislation, the right to education act. I don't have the exact numbers, but there will be roughly 200 million young people in India who are going to be getting an education as a result of this piece of legislation.
Not all of those communities, not all of those schools have electricity, or reliable electricity, so iPads and the Internet are not necessarily going to be their first source of learning tools. Books, which some of you around this table might have learned from, will be an important commodity for the education system in India. Some of our members are keen to get into that market in India as well.
I could speak about lumber, but maybe we can save that one for Q and A, because it doesn't have as great a potential in India right now. There are some issues with it that we have to work our way through.
One that is quite interesting is dissolving pulp. For those of you who are not familiar with it—after my vast 90-day experience I cannot pretend to tell you the details either—it is an important input into rayon and the production of fabric. Those of you who remember your history will remember Gandhi weaving cotton. The textile industry is an important industry in India.
Indian innovators and entrepreneurs are trying to figure out how to use textiles and their textile technology and knowledge to create flexible tubing. So much more than just clothing, they are making industrial products through their textile production.
The use of dissolving pulp to create rayons and other fabric material stronger than steel is a growth opportunity in terms of innovative new forest products that we can use to help the growth of the Indian economy.
As I said, the Indian market faces a number of barriers. Tariffs range from about 5% to 12% on various value-added products. We have details if you want them. A free trade agreement would be incredibly important to help us break down some of those barriers.
To access those markets, we need the help of people on the ground and government-to-government dialogue. There are lots of issues at the state level and at the local level we need to address, and not just for a trade deal. We actually need staff on the ground to help navigate our way through some of those barriers.
Conscious of the time, Mr. Chairman, I'll just finalize my comments. I can't let the opportunity go by without pointing out that you cannot actually sell a product into China or into India if you can't get it off the loading dock at your mill. I understand that the government has committed to bring forward some legislation to deal with some issues we have with the railway service agreements. Although that's not the subject of discussion today, my employers would not want me to let an opportunity go by without at least mentioning that.
I will conclude with that. I look forward to a dialogue.