Evidence of meeting #31 for International Trade in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was industry.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Clerk of the Committee  Ms. Christine Lafrance
Kate Lindsay  Senior Vice-President, Sustainability and Environmental Partnerships, Forest Products Association of Canada
Mahima Sharma  Director, Environment, Innovation and Mill Regulations, Forest Products Association of Canada
Jeanette Jackson  Chief Executive Officer, Foresight Cleantech Accelerator Centre
Rosaline Kwan  Director General, Trade Sectors, Department of Foreign Affairs, Trade and Development
Andrew Noseworthy  Assistant Deputy Minister, Clean Technology, Department of Industry
Daniel Dufour  Director General, Innovation Branch, Department of Natural Resources
Marco Presutti  Director General, Low Carbon Energy Sector, Electricity Resources Branch, Department of Natural Resources
Jeanne-Marie Huddleston  Director General, Bilateral Affairs and Trade, International Affairs Branch, Department of the Environment
Doug Forsyth  Director General, Market Access, Department of Foreign Affairs, Trade and Development
Guillermo Freire  Vice-President, Structured and Project Finance, Export Development Canada
Susan Rohac  Vice-President, Cleantech Practice, Business Development Bank of Canada

1 p.m.

Liberal

The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)) Liberal Judy Sgro

I call the meeting to order. We have a very full agenda today. Welcome to meeting number 31 of the House of Commons Standing Committee on International Trade.

Today's meeting is webcast and is taking place in a hybrid format, pursuant to the House order of January 25, 2021.

Pursuant to Standing Order 108 and the motion adopted by the committee on Friday, March 12, 2021, the committee will resume its study of Canada's exports of environmental and clean technology goods and services.

Before us today as witnesses we have, from Foresight Cleantech Accelerator Centre, Jeanette Jackson, chief executive officer; and from the Forest Products Association of Canada, Kate Lindsay, senior vice-president of sustainability and environmental partnerships, and Mahima Sharma, director of environment, innovation and mill regulations.

Ms. Jackson, you have the floor, please.

1 p.m.

The Clerk of the Committee Ms. Christine Lafrance

Maybe we can start with the second witness on the list, because I think Ms. Jackson has to connect the microphone on her computer.

1 p.m.

Liberal

The Chair Liberal Judy Sgro

All right. Then we'll go to Ms. Lindsay.

Ms. Lindsay, we turn the floor over to you, please.

1 p.m.

Kate Lindsay Senior Vice-President, Sustainability and Environmental Partnerships, Forest Products Association of Canada

My colleague, Mahima Sharma, will be starting off.

1 p.m.

Liberal

The Chair Liberal Judy Sgro

Okay.

1 p.m.

Mahima Sharma Director, Environment, Innovation and Mill Regulations, Forest Products Association of Canada

Thank you, Madam Chair.

My name is Mahima Sharma and I am the director of environment, innovation and mill regulations at the Forest Products Association of Canada. I am here today with my colleague, Kate Lindsay, FPAC's senior vice-president.

FPAC represents Canada's wood, pulp, paper and wood fibre-based bioproduct manufacturers. We're an $80-billion industry directly employing 230,000 Canadians and supporting another 600,000 Canadian families indirectly in 600 communities.

FPAC sees opportunity for our sector to be a solutions provider in supporting the federal government's goals for a green economic recovery. As we map the path to net-zero carbon by 2050, the sector continues to pursue opportunities toward next-generation biorefinery capabilities and the development of new biosourced products for use here in Canada, and also for global export, with the U.S. being a more immediate export market.

The following are two great examples of clean technology and product development going on in Canada.

Arbios Biotech, a joint venture between Licella and the integrated forest products company Canfor Pulp in Prince George, B.C., converts end-of-life wood and biomass into biocrude oil. Earlier this week, this joint venture announced a new global alliance with Shell Catalysts and Technologies, which provides the capability to upgrade biocrude into next-generation biofuels and biochemicals such as transportation fuels for heavy-duty vehicles and aviation in one continuous, efficient process.

One of our proudest moments through this pandemic, with the support of Natural Resources Canada and Canadian scientists and researchers at FPInnovations, has been the development of a biodegradable non-medical mask from what would have otherwise been wood waste, a Canadian innovation and first of its kind in the world. Turning wood residues into low-carbon, value-added products such as face masks is another way Canada's forest products sector can help us power green recovery while supporting the Canadian government's efforts to reduce single-use plastics.

These first-in-kind technologies and innovative solutions offer global solutions from Canada's forest products sector. These are just a few examples that can further enhance the made-in-Canada brand with the potential to export clean technology and bioproducts on a global scale.

I will now turn our presentation over to my colleague, Kate Lindsay.

1 p.m.

Senior Vice-President, Sustainability and Environmental Partnerships, Forest Products Association of Canada

Kate Lindsay

Thank you, Mahima.

I will provide just one more example of a positive disruptive clean technology product gaining momentum here in Canada, and that is mass timber and tall wood buildings. In addition to the societal benefits of using wood, mass timber provides enhanced benefits of carbon storage, displacement of more emission-intensive building materials, as well as showcasing the innovative design aspects of wood.

Canada now has a number of companies that play a role in the global mass timber construction space, with facilities located in Quebec, Ontario and British Columbia currently. As an example, Quebec's Nordic Structures recently supplied the glulam beams and cross-laminated timber, or CLT, for a college being built in Houston, Texas. The wood for the prefabricated beams and CLT panels was grown in northern Quebec, manufactured in Montreal, and sent to Houston by rail to lower the transportation greenhouse gas emissions. This is just one example where Canadian innovation and manufacturing, as well as integrated supply chains, are allowing Canada to supply these excellent carbon-sequestering products to the world.

We see the recent U.S.-Canada greening government initiative as a great example of where forest products, both wood construction and the bio-based products my colleague spoke of, can contribute to positive changes through the value chain.

Other areas where the government can show support to advance these opportunities include, first, recognizing that Canada's forest products sector is a key contributor to a global low-carbon economy, with great potential to further develop the bioeconomy and export market. Second, the federal government should recognize and promote Canada's world-leading forest management practices with global customers and other governments. This would avoid any unnecessary and additional regulatory requirements that are creating confusion and a challenging investment climate. Finally, there are some key policy and programmatic areas, including modernized building codes, procurement strategies that recognize low-carbon products, ensuring that government funding programs are readily accessible across the sector, and reliable transportation and supply chain networks.

We want to thank you for the opportunity to speak with you today. We look forward to answering any questions and following up with you in the future.

Thank you.

1:05 p.m.

Liberal

The Chair Liberal Judy Sgro

Thank you very much, Ms. Lindsay.

We move to Ms. Jackson, please.

1:05 p.m.

Jeanette Jackson Chief Executive Officer, Foresight Cleantech Accelerator Centre

Good morning. I'm assuming everyone can hear me this time.

1:05 p.m.

Liberal

The Chair Liberal Judy Sgro

Right now it's fine. Thank you.

1:05 p.m.

Chief Executive Officer, Foresight Cleantech Accelerator Centre

Jeanette Jackson

That's glorious. Thank you for having me.

I wish to acknowledge that the lands on which our office is located are part of the traditional unceded territory of the Musqueam, Squamish, Tsleil-Waututh and Tsawwassen nations.

Foresight is Canada's clean-tech ecosystem accelerator. We bring together partners to identify, commercialize and adopt the clean technologies needed to support a global transition to a green economy. The innovation community is the heart of everything we do, supported by our partners in industry, academia, government and, of course, the investment community. Our whole mandate is to position Canada as a global leader in clean-tech innovation through programming and relevant initiatives.

I'd like to start with a few statements and applaud the efforts to position Canada as this global leader. To expand clean-tech innovation and adoption, we need to better connect Canadian clean-tech companies to global markets and investors, and government agencies play a key role in a few areas.

The first is around policy and partnerships. The Canadian government has an opportunity to provide thought leadership. An example is through our progressive carbon tax. Through thought leadership, we create confidence in the markets for international buyers and investors to come to Canada because of those types of policy initiatives.

We also want to look at trade agreements. CETA and other progressive trade agreements will also allow us to have better relationships with these regions and ensure that clean-tech ventures understand the best practices to enter those markets and do business.

I'd also like to highlight some of the national strategy opportunities. We've seen lots of great conversations between Canadian and European governments, as an example, on how hydrogen, CCUS and the bioeconomy can play a significant role in both of our economies through collaboration, understanding the needs of each of our respective regions and honing in on what innovation opportunities we can export.

We also need to look at adoption. If we're truly going to scale clean-tech ventures in Canada, we do need a strong domestic procurement incentive program. Really, it's those demonstrations that allow us to home-grow our solutions in Canada and showcase those solutions internationally.

We've also been working on some other adoption opportunities through our SDG connect program in partnership with the trade commissioner service. This strategic matchmaking gives an opportunity for international buyers to showcase to Canadian innovators what their needs are and, again, create opportunities for Canadians to innovate on a global scale and to export.

The next bucket is on capital. We've seen lots of different international mechanisms that really create strong capital environments for early-stage and later-stage investments. It's also important to have strategic investor matchmaking sessions profiling Canadian ventures in all of the respective regions where their technologies could apply.

The next bucket is around innovation. While we are starting to see many clean-tech companies scale, it's important that we have a really strong, robust funnel of earlier-stage ventures as well. I think we need, as a collective, to dig in and ensure that the number of high-quality early-stage ventures are problem-driven and understand the opportunities both domestically and globally. Of course, programs from FedDev and provincial government agencies can really help drive these types of initiatives.

Finally, in terms of scale, we need to see more investment in scaling ventures. I know there have been lots of announcements recently on support to do that, but if we can continue to feed that scale-up mentality and that growth mentality to the ventures and provide the support they need, they'll be much better positioned for exponential export growth. While clean tech 101 was challenging for investors, what we've really seen over the last year is that over $1.7 trillion in capital inflows to ESG and sustainability-related funds have come to fruition, and a record $23.7 billion of venture capital investment was deployed to 1,255 climate technologies.

A combined policy and capital push is a generational opportunity for Canada. We have great technology developers and terrific universities, but our markets and local investors are insufficient to fully capitalize our ventures to compete on a global scale. In fact, a study by SDTC and Cycle Capital shows that Canadian clean-tech ventures are generally able to raise only about half the equity and debt capital as a comparable clean-tech company in the U.S. and other European regions. We need to get Canada's private capital and industry off the sidelines and massively engaged with our clean-tech entrepreneurs if we want to compete in the decades ahead.

To showcase some success stories, we are succeeding in some areas on the international stage. Occidental has a partnership with Carbon Engineering in Texas. Svante has a great partnership with Chevron in California. MineSense has projects in South America, and Enerkem has waste-to-chemicals plants in Spain and China.

We're starting to see momentum, but how do we turn these four stories into a hundred stories? That's what we're really trying to dig into.

As a bit of feedback, SDTC is a great opportunity and mechanism to showcase the demonstration of technologies. It would be interesting to look at having a first project deployment off site as well, as part of that funding model.

EDC is also great in supporting the export development opportunities. It would be nice to see some more flexibility in financing options. EDC is not empowered to take technology risks and below-market returns.

Global Affairs has also been a great strategic partner for us in our ventures. We work very closely with the trade commissioner service. Things like industry matchmaking events or SDG connect events are a great opportunity to profile Canadian ventures and position Canada as that global leader.

ECCC has also been very supportive across Canada in supporting CETA workshops. These types of programs help educate all the different stakeholders in the community to understand what we need to do in order to do good business and follow all the trade expectations that have been set at the federal level.

Finally, IRAP's pilot program, both domestically and internationally, is another great tool.

In terms of closing remarks, we really are doing everything we can to help SMEs scale at home to help sell abroad, but we need more resources and tools to do that as an accelerator community. We need to scale the supply of export-ready companies and more proactively source overseas companies seeking Canadian innovation.

We propose a ready-to-export training program—an expanded SDG connect program—that scales our pipeline of export-ready companies. We have some opportunities to present the proposals in that regard.

There is also a critical need for further development of relationships between Canada and the global network of clean-tech accelerators in partner countries. This includes the U.S., the EU, Asia and Latin America. These accelerators are beachheads and validation points for our companies to access these global markets and investors. While we have done some of the work in this area off the side of our desks, we'd love to lean in on this with the federal government as well.

Finally, there are some interesting best practices that we can lean in on. Yesterday an article came out regarding the CAN Health model, which can be applied to clean tech. We would love to work with all of you and your various partners and collaborators to see how that model can help clean tech in Canada scale and really position us as export-ready for global markets.

Thank you for having me. I look forward to Q and A.

1:15 p.m.

Liberal

The Chair Liberal Judy Sgro

Thank you very much, Ms. Jackson.

We will move on to Mr. Lobb for six minutes, please.

1:15 p.m.

Conservative

Ben Lobb Conservative Huron—Bruce, ON

Thank you, Madam Chair.

My first question would be for the Forest Products Association.

I think you were talking about the mass timber initiative. We all see the news. We see the price of a two-by-four triple or quadruple in a year or a year and a half.

When somebody is looking at timber versus concrete, what is the value proposition? This is an export opportunity.

1:15 p.m.

Senior Vice-President, Sustainability and Environmental Partnerships, Forest Products Association of Canada

Kate Lindsay

Thank you for the question.

There is a little difference between the price of conventional lumber right now and the mass timber market. Where we see the real advantages with mass timber are where it can replace some of the other, more emission-intensive building materials, such as concrete and steel. It's really proving to have many advantages as far as its carbon footprint is concerned—there is less carbon footprint. It's prefabricated, in many cases, so construction can happen more quickly. There is a lot of benefit even just in the beauty of the product and the way the inhabitants feel when they're in it. There are lots of different value propositions there.

It's also something that can be made out of some of the waste material of other lumber manufacturing processes. It's a value-added product, which is great to see. It can also be a longer-lived wood product, so there is the ability to store that carbon for longer periods of time instead of it going back into the atmosphere or being landfilled, which is really exciting.

It's something that really was initiated in Europe, but we're seeing it in North America and primarily here in Canada recently. It's just great to see this new adoption of technology.

One of the challenges is having the architecture and construction professions become more familiar with this building product. Lots of great work is going on right now to educate and do demonstration projects.

Then, of course, there are the building codes. Right now we're at mid-rise tall wood buildings, but if those building codes increase, we can have taller wood buildings into the future.

1:15 p.m.

Conservative

Ben Lobb Conservative Huron—Bruce, ON

From an export perspective on the engineered lumber—the Trus Joists, the manufactured floor joists, the OSB, plywood, MDF and all that stuff—how is that export market for Canadian lumber companies right now?

1:15 p.m.

Senior Vice-President, Sustainability and Environmental Partnerships, Forest Products Association of Canada

Kate Lindsay

I'm not our trade expert specifically on this file. I can get back to you with more of the stats on that.

We're definitely seeing increased investment, particularly some in the OSB and siding, so there is a lot more building happening with those products in the North American market. We're even seeing that a couple of our member companies, in particular in British Columbia, have opened facilities that had been closed since the mountain pine beetle outbreak and some of the closures of mills from the recession back in 2007-08.

I think that's a case in point. We're seeing more demand for those products, with those facilities being reopened recently.

1:15 p.m.

Conservative

Ben Lobb Conservative Huron—Bruce, ON

Do you have anything to do with the cardboard box industry? Do you liaise with anything in that?

1:15 p.m.

Senior Vice-President, Sustainability and Environmental Partnerships, Forest Products Association of Canada

Kate Lindsay

There is a separate packaging association, which I'm happy to put you in contact with. We stay in touch. There's collaboration with a number of associations that are within the same sphere of wood products and associated products. I can put you in contact with that individual if that would be helpful.

1:15 p.m.

Conservative

Ben Lobb Conservative Huron—Bruce, ON

Okay.

My other question is on biosecurity, and you have already touched on it. In Ontario, my home province, from the west to the east end, we've been decimated by the emerald ash borer.

Yes, this study is looking at the environmental export opportunities, but also—in this particular case, with you here today—there has to be a little recognition of biosecurity with respect to invasive species coming in and destroying the very thing you're trying to export.

Do you work with CFIA? The members of your board of directors are all the biggest players in Canada. Can you explain to us how you work on biosecurity? Is there any discussion on that in your association?

1:20 p.m.

Senior Vice-President, Sustainability and Environmental Partnerships, Forest Products Association of Canada

Kate Lindsay

There is, to some degree. We do work closely with our government counterparts at Natural Resources Canada and the Food Inspection Agency on ways—absolutely, trade routes—to minimize the import of exotic invasives. The emerald ash borer that we've seen is a case in point. That work is under way. It's not a core function of FPAC's work, although our member companies and those that use those trade routes are very aware of the requirements.

We also want to make sure.... There are native pest species that we've had significant problems with, such as the mountain pine beetle, the spruce budworm and others. They are having a real impact on trees and healthy forests in Canada, so that's where we have a primary role, to build resiliency into the forest moving forward.

1:20 p.m.

Liberal

The Chair Liberal Judy Sgro

Thank you very much, Mr. Lobb. I'm sorry, but your time is up.

We'll go on to Mr. Sheehan for six minutes, please.

May 14th, 2021 / 1:20 p.m.

Liberal

Terry Sheehan Liberal Sault Ste. Marie, ON

Thank you very much for that absolutely fabulous testimony. I was pleased to have you here on our last day, with such great information.

I wanted to drill down on a couple of things. I'm going to start with Jeanette Jackson.

You described some of what your clean-tech accelerator is doing. Could you help the committee understand and give some testimony around a couple of the programs you're developing or have developed and how they differ from current programs? I'll start with the ready-to-export program as it relates to clean tech. What kind of differences are you seeing for those new entrepreneurs or for entrepreneurs who are fairly new and want to scale up? How is your programming different? I'll let you expand from there on the particular programs you touched on.

1:20 p.m.

Chief Executive Officer, Foresight Cleantech Accelerator Centre

Jeanette Jackson

Absolutely.

We've supported over 550 ventures across Canada over the last three and a half years. We find there are still too many innovators that are technologies looking for problems. In our new strategic plan and all of our programming, we're reimagining the accelerator model. We're working with industry to clearly identify the innovation gaps they need to reach to achieve a net-zero target. What you do is put that at the start of the funnel in your call for the cohort.

An example would be water. We know we have several large multinationals in the manufacturing space and production space that use a lot of water, and they're looking for innovation to solve specific problems. We actually do calls for those innovators and weed them out, and really help the industry partners better understand and work closely with those ventures to improve the probability of success.

Now, one of the important notes on those calls is that it's not only domestic, but international. We have a pretty strong network through the trade commissioner service, through other networks, where industry partners are looking to Canada. We've become somewhat well known for our ability to innovate in clean tech broadly. Through the programming, we can actually curate and support ventures that have a higher probability of success right out of the gate because they're problem-driven right out of the gate.

On the export readiness side, it's really making sure they have the right team, value-prop business model and competitive advantage to compete, and they're properly funded so they can export at scale. A lot of our programming provides that support or guidance to ensure they are export-ready.

You need to be at a certain threshold. You need to have demonstrated your technology. Your business model has to make sense for that scalable opportunity. We really dig into those specifics.

Clean tech is broad, so now we're starting to break it down and be more proactive in finding ventures that solve real problems, and that people will pay a lot of money for as well.

1:20 p.m.

Liberal

Terry Sheehan Liberal Sault Ste. Marie, ON

Thank you for that.

I'm going to switch over to Kate.

First of all, congratulations on the program of creating the PPE masks. It's just amazing.

Are those masks subject to any duties or anything like that as they cross the American border with the new CUSMA agreement?

1:20 p.m.

Senior Vice-President, Sustainability and Environmental Partnerships, Forest Products Association of Canada

Kate Lindsay

I'm not aware. It's my understanding—and maybe Mahima can correct me if I'm wrong—that it has just been trialed; it's not in a commercial capacity at the moment.