Mr. Chair, thank you for the opportunity to appear on behalf of the FPAC, Canada's voice for the forest products industry.
I’ll start with a quick commercial for the sector. Our industry remains a cornerstone of the Canadian economy, representing 12% of Canada’s manufacturing GDP, employing directly about 230,000 Canadians and indirectly about a million Canadians, and supporting over 200 rural communities where these good jobs are very important.
The industry recently went through a rough patch due to a downturn in the U.S. market, from 2006 until 2014, and we shed some mills and jobs. However, the industry has since become more competitive and productive. It has embraced transformation and innovation. We are seeing that the hard work is paying off.
I want to talk a bit about our environmental credentials because on the trade side of things, Canada's world-leading reputation in how we sustainably manage our forests and our environmental track record is really the envy of the world.
Canada’s forest products industry has the best environmental reputation in the world, according to a Leger survey of international customers completed in 2014. By embracing strong environmental standards and helping to build a green economy, we have come to be known as a trusted source of legal and sustainable forest products. All our harvested trees are regrown. Our air pollutants are down 52% and our water pollutants are down 70% since 2005. We have eliminated toxins such as PCBs and dioxins. We have eliminated the use of coal, and we have cut oil use by more than 90% since 2000.
As I said, we're a global leader in forest management, with more than 166 million hectares or 40% of the globe’s certified forests, by far the most of any country in the world. Earlier this year, on May 2, we were one of the first industry groups to launch a climate change challenge, our commitment to helping the federal government deliver on its climate change commitments. We are pledging to remove 30 megatonnes of carbon dioxide a year by 2030, and that represents more than 13% of the Canadian government’s overall emissions reduction target.
The vast forests we work in are not just a globally important ecosystem, but they are also a critical economic driver that helps support many indigenous peoples while acting as one of the largest sources of employment in the country for Canadians.
Let’s consider the importance of diversified markets. I think that's what the TPP really delivers for us. We learned the hard way with some of the downturns in the U.S. housing market over the years that we could not continue to rely heavily on the U.S. We're seeing a lot of that today with the current softwood lumber discussion. Our dependence on trade south of the border had been more than 80% up until 2002.
However, our efforts to enter new markets have borne fruit. We now sell $33 billion of products to about 180 countries around the world. On the wood side of the business, a lot of credit has to go to our team Canada approach to overseas market development known as the Canada wood program. Our biggest success definitely has been in Asia. Canada’s forest products are now Canada’s number one export to Asia. Wood product exports to China went up ninetyfold since 2000, and we now sell $5 billion of pulp, paper, and lumber to China every year. All of this has reduced our export dependence on the U.S. down to 66% from the 80% in 2002 that I referenced.
The continued expansion of existing markets and diversification into new markets remain critical to our success. For this reason, the industry is supportive of the government’s trade agenda. That includes the negotiation of new trade agreements and focused program spending to help open up new global markets.
That brings me to the TPP. It presents a unique opportunity to expand our trading relationship with some of the world’s fastest growing economies. For example, the TPP would allow the Canadian forest industry to both protect and expand its critical competitive position in the Japanese market, where New Zealand and Australia are currently significant competitors. If we were to capture just 2% more of the Japanese lumber market, it would mean an increase of $37 million in annual exports for Canadian producers.
It is also an opportunity to sell more innovative biochemicals and biomaterials. The fibre from our forest is being used increasingly in carbon-friendly bioproducts that can replace materials made from fossil fuels. This is a key contribution as well to combatting the climate change challenge that Canada and the world are facing.
As the TPP ratification process proceeds, we are calling on the government to do a few things.
Number one, we must ensure that tariffs are removed on Canadian paper and wood products across the TPP countries. There are still tariffs in place that range anywhere from 1% to 40% on the products we export.
Number two, the government needs to make sure that non-tariff trade barriers related to considerations such as standards are not being used to block access to markets for Canadian forest companies. Moreover, the deal should recognize Canada as a low to zero risk when it comes to illegal logging.
Number three, there must be fast regulatory approvals in TPP member states for the use of Canadian products made from forest fibre once they have been approved for safe use in Canada. This should apply to engineered wood products, fuels made from forest fibre, chemicals, and other specialty bioproducts.
We want to see the government hold firm on trade remedies. That's one of the big underscored points for us.
We appreciate the government's continued efforts in the area of freer trade. Expanding international trade relationships that help the industry to grow and diversify markets and products is critical. Our collective efforts do not stop with the ratification of this agreement. In order to ensure success, we must ensure we have in place all the enablers necessary to take advantage of all the opportunities this and other agreements provide.
From the vantage point of a commodity-based industry that is on an aggressive transformational path, these enablers include maintaining the excellent support of a broad network of trade offices that we benefit from globally; ensuring reliable and affordable rail and port systems serving all areas of this vast country; developing sufficient infrastructure to support new markets, particularly as trade flows move beyond north-south to east-west; and supporting and promoting the Canadian brand around the world.
In conclusion, I thank you for your time, and I really want to impress upon you that expanded international trade will help Canada's forest industry diversify markets and promote low-carbon products that we produce. Successfully ratifying the TPP will help Canada's forest communities and support job creation and prosperity across these communities.
Thank you, Mr. Chairman. I look forward to any questions.