International Trade Committee on May 14th, 2021

[Mahima Sharma]

Yes, Kate, that's correct.

For these masks, I believe phase two has been completed, and there remains one more phase. Right now they're still not being mass-produced, but they are ready to be.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

That's good news. I think that's a perfect example. I've seen from the Forest Products Association a really great graphic from the tree and whatnot all the way through to some of the PPE, so congratulations on that.

One of the things we've been talking about, obviously, with the softwood lumber situation, is that it's creating more value added in Canada, and then sending it over there it creates more jobs and more opportunity. I wanted to congratulate you on that.

Could you please define, in your opinion, what are the other opportunities in the forest industry as it relates to clean tech? We've heard testimony from the solar power people. We've heard from the small nuclear power people. Are any of those other technologies being incorporated into the Forest Products Association as a whole?

[Kate Lindsay]

Mahima, I'll let you answer that first. I might add in after.

[Mahima Sharma]

Yes, sure.

Absolutely. With biomass—out of wood, low-quality wood residue from the manufacturing process—there is an opportunity for the forest products sector to work collaboratively with other sectors that are looking to reduce their GHG emissions from the fuels they use. More importantly, I want to bring your attention to the 140 capital shovel-ready projects that are ready to go. They're worth $1.5 billion in economic value. They can further help improve environmental outcomes, strengthen Canada's global competitiveness and create jobs that are much needed in this time of crisis.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

I'm sorry, Ms. Lindsay, but I think Ms. Sharma has used up the time.

We go on to Mr. Savard-Tremblay for six minutes, please.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you, Madam Chair.

I would first like to give my regards to all the witnesses and thank them for their very enlightening presentations.

My question is for the representatives from the Forest Products Association of Canada.

The Bloc Québécois recently presented a study. It was not conducted by our party but by a third party. It was a fairly important study on maximizing Quebec's forestry potential. We proposed four priority recommendations for the industry. I won't list them now, but I want to tell you that one suggestion was to seize the opportunity of the new U.S. administration in the White House in order to obtain full exemption from all tariffs on Quebec softwood lumber exports to the U.S. In addition, the recommendation was to ensure that the development of the forest industry would be defined as a priority for the Government of Canada, given the strong economic potential and the essential role of forests in the fight against climate change.

What are your expectations of the government now that the Biden administration is in office?

[Kate Lindsay]

Thank you for the question. I will answer in English, if you don't mind.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

That is not a problem at all. We have an interpretation service.

[Kate Lindsay]

C'est parfait.

It's an excellent question.

The softwood lumber dispute and prior disputes have remained very problematic for the Canadian industry, but we see more and more now that it's causing harm to U.S. consumers of wood products as well, with rising prices.

FPAC very much supports the federal government's efforts to achieve a Canada-U.S. trade regime with the fewest trade restrictions possible. I will also say that we applaud the Bloc Québécois and the recent forest strategy. We hope that other parties look to pull components of that strategy moving forward as well.

Thank you.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you. I'm not sure whether your colleague would like to add anything.

[Mahima Sharma]

No, thank you. I have nothing to add.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Okay.

Have you been consulted recently on this issue?

What steps have been taken with respect to the softwood lumber dispute since Mr. Biden was elected president?

[Kate Lindsay]

I personally have not been part of those negotiations. I know our association works closely with the Softwood Lumber Board, which has been having those conversations. We look forward to revisiting those discussions and looking for better outcomes with the new administration.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

So you haven't heard of any real changes in terms of a complete exemption from tariffs yet. You have not been informed that there might be an agreement or news on that very soon.

[Kate Lindsay]

Not to my knowledge, no.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you.

Of course, there is the expanding market opportunities program, whose objective is to develop international markets for Canadian forest products and to promote the increased use of wood in the construction of mid-rise and non-residential buildings in North America.

However, the 2019 evaluation of this program indicated that it was serving western producers, particularly in British Columbia, much better than eastern producers in Ontario and Quebec. In 2020, about three-quarters of the program's funding went to organizations in British Columbia. That's what we have noticed.

How could this program be improved so that it also benefits eastern producers in a more equitable way?

[Kate Lindsay]

I would say that there have been recent gains in market development, particularly with some of the Asian trading partners—China, Japan and Korea—and we're very encouraging of that type of development activity taking place with other global markets, to expand beyond the existing global partners that we have.

We're encouraging the federal government to make that progress to benefit all Canadian forest producers.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Still, do any changes or improvements need to be made to this program? Could some criteria be adjusted so that the program also benefits eastern producers? Clearly, the program has not benefited eastern producers in an equitable manner. So it probably has shortcomings somewhere.

[Kate Lindsay]

I'm not the file lead internally at FPAC on this, but I will confer with my colleague Joel Neuheimer, who leads this work. There is a set of recommendations that we've recently put forward, as far as resilient recovery is concerned, which speak to many of the challenges that are in place, whether it's reliable transportation networks, ports, reliable port authorities and so on, moving forward. I'd be happy to provide that in a follow-up, because it's an excellent question.

[The Chair, Liberal, Judy Sgro]

Thank you, Ms. Lindsay.

We'll go on to Mr. Blaikie for six minutes.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much to our witnesses for being here with us today.

A recurring theme at this committee over the life of this Parliament has been a contention by many witnesses across many different industries that Canada really stands out in terms of not doing a lot of industrial planning, or sector-based industrial planning. I think what we've heard from a number of sectors is that they'd like to be able to sit down with government and hash out a medium- and long-term plan for their industry and really coordinate government policy with the aspirations of the industry.

Of course, when we're talking about a really important emerging industry, even less emerging now than it was five to 10 years ago, in terms of clean tech, obviously this is important.

Could each of you speak a bit to the way your industry is able to engage with government and the extent to which you feel there should be some more formal planning with government around your industry, whether it's trade policy or certain kinds of domestic policy, such as procurement, which I know has come up already today on several occasions? How can it work within your industry to make sure that there is actually a plan and that the actions of government and the policies of government are reinforcing the development of the industry in a way that's beneficial both to businesses and to workers within the industry?

Are you satisfied that the government is where it needs to be on that? Do you think Canada stands out as not doing as much as our allies and competitors around industrial planning? What do you think those missing pieces are?

I'll start with Ms. Jackson, and then we can go to our witnesses from the Forest Products Association.

Thank you.

[Jeanette Jackson]

Thank you, Mr. Blaikie, for the great question.

Though our roots are in British Columbia, we've actually supported industry and innovators across the country. However, I'm going to lean in a little on what we're seeing in British Columbia, just as an example.

We did a phase one cluster strategy to identify the real core competencies of the region and what the largest emitters in the province need to do to reach net-zero targets. We identified six areas of interest: water, resource, transportation, built environment, ag tech, the usual suspects.

What we find is that—you are correct—there is not enough capacity for industry to take a step back and reflect on where they really want to be in 2030 and 2050. We obviously have the policy pressure to reach climate targets, but what's the next layer of that? What's the how? How do we set priorities as a collective?

I'll give you an example. Again, 50% of our time is spent on acceleration; the other 50%-plus is actually spent on industry and investor engagement. We proposed an actual energy decision tree to decide where hydrogen, biofuels and electrification fit to help these large emitters transition.

That's just one of many different platforms that could be useful in helping industry make decisions, set priorities and be willing to take the risks where they need to. This can be expanded globally. In fact, we work very closely with FPInnovations on several of these conversations as well.

I'll pass it over to Kate.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you.

[Kate Lindsay]

Thank you, Mr. Blaikie.

I'll start, and then Mahima can feed in.

I would say, absolutely, we would look for a sector strategy. I wouldn't say that we've seen that yet to the extent possible. We do see it in some of our competing countries, like Finland and Sweden, where they have very strong forest sector strategies that the government has put forward specifically for climate change targets.

We have an existing bioeconomy framework that we would love to see implemented. Generally, we often see different regulatory or government programmatic areas that are at cross purposes with each other, whether it's low carbon, whether it's conservation agenda, or whether it's inclusive growth. We would absolutely appreciate sitting down with different departments federally to walk through pathways to success and to address some of those challenges.

I'll just see if Mahima has anything to add there.

[Mahima Sharma]

Yes, thank you, Kate.

As my colleague mentioned, a recent bioeconomy framework was published by the Canadian Council of Forest Ministers in 2017. With that in mind, I want to note that the federal government can play a key role in helping to facilitate and increase the demand for bioproducts. This could happen and be made possible by using better modelling tools, better data management for forest biomass supply that would help researchers understand and quantify the economic or bioeconomy opportunities that exist in Canada, reviewing regulatory processes to ensure that they're updated and appropriate—regulatory duplication and cumbersome regulations hurt the productivity and the competitiveness of the emerging markets—and recognizing relative reductions in GHG emissions from using wood when awarding contracts for public works.

These are just some of the ways that I think government can play a role.