Evidence of meeting #14 for International Trade in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was industry.
A recording is available from Parliament.
9:30 a.m.
Conservative
Todd Doherty Conservative Cariboo—Prince George, BC
Your Canadian operations are only one-third. You have considerably more in the U.S, correct?
9:30 a.m.
Co-Chair, BCLT, President and Chief Executive Officer, Interfor Corporation, B.C. Lumber Trade Council
You have to tell me what happens to product prices in the U.S. market before I could tell you what the impact would be on our U.S. business.
9:30 a.m.
Conservative
Todd Doherty Conservative Cariboo—Prince George, BC
Okay. Fair enough.
We are under the understanding the U.S. coalition has shared with the U.S. trade group what they believe would be a fair market share for Canada under their hard-capped quota system. Is this something the minister has shared with you—
9:30 a.m.
Co-Chair, BCLT, President and Chief Executive Officer, Interfor Corporation, B.C. Lumber Trade Council
I'm aware—
9:30 a.m.
Co-Chair, BCLT, President and Chief Executive Officer, Interfor Corporation, B.C. Lumber Trade Council
I am aware the U.S. industry has shared that information with USTR.
9:35 a.m.
Co-Chair, BCLT, President and Chief Executive Officer, Interfor Corporation, B.C. Lumber Trade Council
No, I do not. I've asked, but I haven't been told, and I don't know whether or not USTR has shared that information with Global Affairs as yet. My understanding is they have not.
9:35 a.m.
Conservative
Todd Doherty Conservative Cariboo—Prince George, BC
Global Affairs has been going down the path. I think we're at day 54 in the 100 days of the 100-day agreement. We have a U.S. political cycle that is fast approaching, and we have a president who may or may not have the balance of power within their House.
Are you confident we're going to be able to see an agreement in the next 46 days, or a framework that will allow us to get to one? Is there any concern for you, or Mr. Edgson, or Ms. Yurkovich that we could be sitting here as we rapidly approach October in the political cycle we're seeing across the border?
9:35 a.m.
Co-Chair, BCLT, President and Chief Executive Officer, Interfor Corporation, B.C. Lumber Trade Council
I think Kevin characterized it well: he said it boils down to the goodwill on both sides of the border. If both sides want to work constructively to find a resolution to this matter, then there is sufficient time available between now and the end of the 100 days to be able to do that.
I can tell you from my involvement that the Canadian authorities are working actively on this issue. The delays have been on the other side in putting forward their positions to Canada.
9:35 a.m.
Liberal
The Chair Liberal Mark Eyking
You're at six minutes now, and we don't usually give that to visiting members. I'm just letting you know.
We're going to move over, and I think we only have one position left for questioning, one MP.
Ms. Ludwig, go ahead.
9:35 a.m.
Liberal
Karen Ludwig Liberal New Brunswick Southwest, NB
Thank you.
Thank you very much for your presentations.
Mr. Davies, you mentioned during your presentation that there has been a change in terms of building supplies, meaning steel, cement, and composite. How much loss in market share has that competition caused for softwood lumber?
9:35 a.m.
Co-Chair, BCLT, President and Chief Executive Officer, Interfor Corporation, B.C. Lumber Trade Council
I couldn't quantify that off the top of my head, but the observation that I would make is that as we have fought the various iterations of the lumber dispute, we've lost sight of the fact that softwood lumber is in competition with other products that can be used for similar purposes.
Only through the 2006 SLA was the industry given the opportunity to work constructively to combat both the loss of market share to these other products and also to grow market in segments of the industry where we had historically not been well represented, through groups like the Binational Softwood Lumber Council and the Softwood Lumber Board.
I'm actively involved with both of those groups. I can tell you that the work that has been done has been absolutely tremendous, both in terms of stopping the loss of market share and actually growing the market.
Those of you from British Columbia will know that there's an 18-storey wooden building being constructed in Vancouver, and there are tall wood buildings being constructed in eastern Canada, the United States, and other markets. That's all the result of the constructive efforts to grow market, which I think is a much better focus for everyone's attention than fighting over market share that's being eroded by other products.
9:35 a.m.
Member, CLTA, President and Chief Executive Officer, Eacom Timber, Canadian Lumber Trade Alliance
One other point is that it would be a terrible shame if the Softwood Lumber Board and this effort were to be a casualty of a legal dispute going forward.
9:35 a.m.
Liberal
Karen Ludwig Liberal New Brunswick Southwest, NB
It must be quite a challenge from a business perspective to try to balance the loss of market share and work on growing market share when there's always the uncertainty about the softwood lumber agreement hanging over you.
9:35 a.m.
Co-Chair, BCLT, President and Chief Executive Officer, Interfor Corporation, B.C. Lumber Trade Council
That's absolutely the case. It's also very difficult to run your business day to day if you don't know what the rules of access are to the primary market worldwide.
It's a major distraction in all respects. That's one of the great benefits of a managed trade agreement: you can put that aside and focus on running the business, making your company successful, and working on growing markets.
9:35 a.m.
Member, CLTA, President and Chief Executive Officer, Eacom Timber, Canadian Lumber Trade Alliance
The 2006 agreement was tied to a percentage of market share in the U.S., so there was every incentive for the Canadian industry to want to see that market grow. Therefore, we focused on the right thing under the last agreement, which was growing the pie, because there's plenty enough room if the pie is big enough.
9:35 a.m.
Liberal
Karen Ludwig Liberal New Brunswick Southwest, NB
Looking at the U.S. market itself, do you have a quantifiable number of how much of the U.S. market is actually exported, or is it typically U.S. domestic consumption?
9:35 a.m.
Co-Chair, BCLT, President and Chief Executive Officer, Interfor Corporation, B.C. Lumber Trade Council
U.S. producers export a very small percentage of their total production. The U.S. market needs imported product, and Canada is by far and away the largest component of that import.
9:35 a.m.
Liberal
Karen Ludwig Liberal New Brunswick Southwest, NB
My next question is regarding diversification.
Each of you talked about the need for diversification, and certainly any Canadian producers should be focused on that and not so much focused on one particular market. What would be your greatest challenges to expanding into some of the emerging markets in Asia?
9:40 a.m.
Co-Chair, BCLT, President and Chief Executive Officer, Interfor Corporation, B.C. Lumber Trade Council
I think Canada has done a tremendous job. Susan talked about the work that has been done by the B.C. industry and the B.C. government. The Canadian federal government has been very actively involved and very supportive on the initiatives to grow markets offshore. I think it continues to grow in importance strategically.
The Japanese market has been one that we've been involved in for many years, but the growth in the Chinese market that has taken place, effectively beginning in 2004-2005, has been a tremendous success. There are opportunities to continue to expand our presence in that marketplace, as there are opportunities to grow in other Asia-Pacific markets, and India is receiving significant attention now.
We think those are very good programs with tremendous potential.
9:40 a.m.
President, B.C. Lumber Trade Council
There are a variety of things you need to do, though. We build with wood and we have a history of building with wood, but in some markets it's showing people how to use wood. It's dealing with architects, designers, engineers, etc., and getting acceptance of wood as a building product, in addition to issues around codes and standards, so it's important to work with governments to try to introduce building codes that allow for a higher number of storeys in construction.
There are government components. There is getting people to adopt wood construction and then there's promoting the wood product itself. It's multi-dimensional.