International Trade Committee on March 28th, 2022

[The Chair, Liberal, Judy Sgro]

Yes. I heard about him.

[A voice]

Wasn't he one of your colleagues, Brian?

[Brian Masse, NDP, Windsor West, ON]

Oh, oh!

[The Chair, Liberal, Judy Sgro]

Yes. I did hear about Pierre Pettigrew.

[Voices]

Oh, oh!

[Brian Masse, NDP, Windsor West, ON]

It's because the first trip I took as an MP was with him, down to Washington, D.C., 20 years ago, on softwood lumber, and here we are again, dealing with this issue. The industry committee dealt with this last session too.

I think I want to try a new angle, though, in all of this.

Mr. Balisky, do you have support from other indigenous and aboriginal groups in the United States for the position that you have here? One thing there's been some degree of success with is getting some of the supply chains and the distributors on the U.S. side at least advocating for Canada over there. It's a tough nut to crack, as Mr. Hoback knows and as the chair knows too. We've been in many congressional and senate offices trying to push this issue over a long period of time.

I'm just wondering whether you have any support from third party groups over in the United States for your position here.

[Al Balisky]

That's a super interesting question. You know, the way these disagreements go is that you start in year one. You're hopeful that it will end by year two. Then it moves into year three. Here we are in year five.

We're one of one, as far as we know. We have not initiated that action, but it's very interesting that you should bring that up, because we will be initiating that. That's been some of the guidance we've received. We're going to be exploring that.

[Brian Masse, NDP, Windsor West, ON]

I would hope that we would actually have some governmental support for you, and perhaps we can follow up with that as well, for those types of initiatives, be it our embassy, or trade, or consuls general or so forth. I think there's been a fairly robust attempt to lobby. For all my years in different governments—minority, majority, changing political leadership—there seems to be some good infrastructure to try to push this issue.

Do you have any natural allies over there, just on the surface? I don't want to put you on the spot here, but do you think this is something you could achieve?

[Al Balisky]

Very briefly, we are pursuing that actively. We are working with the Government of Canada on some options there. We'll be pursuing that.

It's a wonderful suggestion, and it's something that we are taking action on.

[Brian Masse, NDP, Windsor West, ON]

Great.

[Al Balisky]

One thing I'll point out—I suppose Resolute notwithstanding, Rémi—is that the large producers have been able to get a foot in the yellow pine into the southeast U.S. There's a bit of an operation on both sides of the border, which kind of creates a bit of a buffer against some of these machinations of trade disputes. We're not able to do that. We're pretty much locked into Saskatchewan and haven't had quite the [Technical difficulty—Editor] to make that leap across the border.

Certainly, it's something that would make a lot of sense to do. We're looking at that. Thank you for that suggestion.

[Brian Masse, NDP, Windsor West, ON]

I know it's really challenging. There are so many different things to go after. I know that for some other issues, we're seeing some cross-border co-operation. I'm doing it on the Great Lakes. It's been unique, some of the extra things that are happening outside of the sword-rattling of protectionism.

Mr. Lalonde, we've signed a series of trade agreements over the last couple of decades. In fact, the last decade was fairly robust. Has there been an analysis in terms of how they benefited your industry? I mean, that was the big selling point. I can't tell you how many times I heard that this was going to open up a whole series of markets and that. Are you being left behind?

I know, though, that when I look at some of the documents and some of the promised trade benefits of some of the countries we've done free trade agreements with, they haven't come to fruition. Some have. I'm just wondering if there has been some work done there, or if we are missing some diversification that's possible. Is that basically out there?

Finally, I know that some smaller countries—I think Sri Lanka right now, actually—can't get paper for newspaper. I'm just wondering whether we're missing some opportunities that we could help on. What are the obstacles there, or are they just not sufficient markets?

[Rémi Lalonde]

It's not a demand problem. I will put it that way. I think it was Jean Chrétien who famously said to Paul Martin, when he handed over the keys, something like, “There's free trade between the U.S. and Canada on everything except softwood lumber.”

The reality is—and there are folks on the video conference here who probably know more about this than I do—the industry interests in the U.S. are very influential, and they are the ones who bring forward these complaints.

The National Association of Home Builders has been very clear about how it disagrees with the position that the Coalition for Fair Lumber Imports, as they call themselves, have taken. They are very influential.

As I indicated, it's a debate we have been having for four years. Notwithstanding the fact that Canadian producers have historically consistently been proven correct in the position we have taken, the issues keep coming back and coming back.

It is a big challenge. As I said, though, it's not a demand problem. The reality is that the U.S. is not able to meet more than 70% of its internal demand need for softwood lumber, so it always needs to fill it with something else. Canada is the logical partner, but today, as a result of duties, we have seen imports of lumber from Europe. If you think about that for a second, it's hard to comprehend how it makes more sense economically to import lumber from Europe.

To your point about diversification, one of the things that I think is unfortunate about a debate like this one is.... There's a great opportunity. I think Mr. Lee mentioned it earlier as well, but there's a wonderful opportunity to promote the use of lumber in different applications, in taller wood buildings, what we call “mass structures”. There are plenty of good stories. Wood is 100% renewable. Its carbon footprint is a fraction of what concrete and steel would be, but that's a harder story to tell than the one we're telling today on tariffs.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

I'm sorry, Mr. Masse. Your time is well up.

[Brian Masse, NDP, Windsor West, ON]

Thanks, Madam Chair.

[The Chair, Liberal, Judy Sgro]

Mr. Martel, please.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

I'd like to thank the witnesses for being with us today.

Mr. Lalonde, I believe you represent the company that has been most affected by the softwood lumber tariffs to date. I'd like to hear from you on that.

How do you explain the federal government's lack of urgency to negotiate a new agreement with the United States?

[Rémi Lalonde]

I'll answer your question in two parts.

The U.S. government has done a very damaging analysis of the treatment of Quebec's forestry regime. It claims to be comparing the price of standing timber to that of Nova Scotia. The World Trade Organization rejected that approach, but that means that we pay different prices, which the U.S. government considers a subsidy. That has been refuted, but that is the reality.

The Canadian government should establish a dialogue with the Americans. From our perspective, there's not much movement or political will to move this forward in the United States. We think the solution lies in a reasonable negotiation between two parties that want to negotiate. However, it's clear that this is not an important political issue for the Americans today.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Mr. Lalonde, as you know, the Department of the Environment wants to strengthen protection for caribou. Of course, we are in favour of that, since we don't want this population to decline. You said that the cut area had already been significantly reduced to protect this species. I would like to hear what impact this will have.

[Rémi Lalonde]

We will have to see how that is implemented. We favour a collaborative approach. The Government of Quebec also looked at this issue.

To answer your question, if we reduce the cut areas, that will change the distribution of the areas allocated to producers to harvest. When we have to go further and change the way we do things, that increases costs. I was talking earlier about the fact that the cost of fibre is increasing in Canada. In Quebec in particular, it's already the most expensive fibre in North America, so it has to be done in a thoughtful and practical way. What we're asking is that socio‑economic impacts be taken into account when these analyses are done and that all stakeholders be at the table to discuss them.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Do you think that those who want to protect the caribou are exaggerating when they blame the forestry industry entirely?

[Rémi Lalonde]

We don't agree with that conclusion. In fact, we believe that, in addition to taking into account socio‑economic interests, we must ensure that we are well supported by science. Several people who are more familiar with the scientific issues than I am have questioned the hypotheses put forward to explain the major setbacks in terms of available areas.

We believe that all interests should be represented in the discussions, that the issue should be addressed from a socio‑economic perspective and that it should be based on science.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Thank you.

Mr. Lee, could you tell me what the barriers are to building more homes to help young people get into their first home?

[Kevin Lee]

I'm sorry; the question that came through the interpretation was, “What are the costs that are affecting young people attempting to buy their first home?”

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

What is stopping more houses from being built to help young people get access to their first home? Cost is a factor at present, but scarcity is too. We need a lot more houses.