International Trade Committee on Nov. 4th, 2024

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

Thank you, Mr. Laplante.

[The Chair, Liberal, Judy Sgro]

Mr. Arya, go ahead for five minutes, please.

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Madam Chair.

This is my 10th year as a member of Parliament. If there's one issue that has never been fully resolved and continues to be here even today, it's the softwood lumber dispute.

Mr. Laplante, you talked quite a bit about reforms to have more value-added product. You suggested shifting to a possible niche in order to revitalize the industry. You also talked about the need for an industrial policy that will give Canadian firms more share in the Canadian domestic market, and about incentivizing the industry to make it more dynamic. I will come back to you. However, if I don't have time, it would be good if you could provide us with much more detail on the reforms, industrial policy and real incentivizing that you're talking about, etc.

Mr. Niquidet, I have a quick question.

What percentage of your members in British Columbia have foreign ownership?

[Kurt Niquidet]

I think the overwhelming majority are Canadian-based companies with Canadian ownership. We represent small, independent, family companies, which would 100% be—

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Mr. Niquidet.

Tomorrow, a new president is going to get elected.

Do you see any change in policy depending on who comes to power, whether that's Donald Trump or Kamala Harris?

[Kurt Niquidet]

We've certainly seen protectionism from both parties, so it's very hard to say, but certainly the Trump campaign has been more vocal about protectionism.

Again, under both parties, we've seen similar types of policies.

[Chandra Arya, Liberal, Nepean, ON]

Basically, what you're saying is that, irrespective of who becomes the president, this is not going to get resolved soon. We have to gear up for a new round of disputes.

Is that correct?

[Kurt Niquidet]

We need to make it a priority, and we need to be willing to engage and work with either administration.

[Chandra Arya, Liberal, Nepean, ON]

Yes.

Mr. Laplante, to come back to you, are there any specific points you would like to make, whether on the reform side, on the need to shift to niche products by the industry, or on the industrial policy you talked about? Are there any particular points you wish to emphasize?

[Robert Laplante]

I'd like to focus on one of the issues in dispute that is particularly acute and sensitive, namely the price of supply.

If we want to insist on a policy aimed at encouraging companies, on a truly voluntary basis, to switch to value-added, we need to review the royalty method we demand from companies.

I have proposed, on several occasions, a reversal of the way things are done. Since fibre is so precious, we should adopt an approach whereby the less it is processed, the more it costs. This would encourage companies that want to reduce their supply costs to develop higher value-added niches, which—

[Chandra Arya, Liberal, Nepean, ON]

I'm sorry; I have very limited time.

Whenever the term incentivize is used or someone says that we need to provide incentives, I get concerned, because that is asking for more taxpayers' dollars for the industry. Taxpayers have already funded quite a bit in this sector.

When you say value-added product, I think that the Quebec-based industry is adding much more value to this compared to other parts of Canada. Am I right about that?

[Robert Laplante]

This is indeed the case in several sectors of the industry. There are some very promising initiatives, particularly in the production of engineered wood and prefabricated components for construction units. This is the avenue that should be favoured, because that's how we'll be able to do more with wood species that are becoming increasingly rare.

Here's what I propose. Since wood is scarce, for it to become a source of wealth, it has to cost more.

[The Chair, Liberal, Judy Sgro]

Thank you very much, sir.

Mr. Savard-Tremblay, you have two and a half minutes.

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

Mr. Laplante, earlier, you didn't have a chance to finish your answer. I'd like to give you the opportunity. I'd also like to ask you another question.

What is the advantage of using wood over other materials, such as concrete, in future constructions?

[Robert Laplante]

It seems to me that this is the avenue to focus on among the measures we could put in place to solve the housing crisis. We need to step up construction, and wood has exceptional properties. It will help reduce the carbon footprint of the major construction project that needs to be launched. Wood won't make this major project completely carbon-neutral, but it will still enable us to achieve a carbon footprint well below that which could be achieved with all the other materials we could use to increase Canada's housing stock.

Moreover, this fibre is not only renewable, but also has enormous potential for diversification. Today, forestry specialists no longer speak of the forest as a reservoir of fibre. Instead, they speak of the forest as a large reservoir of molecules that can be used, in particular to promote substitutes for petrochemical products. We can therefore develop xylochemistry, which is also a promising avenue.

We should therefore approach wood in terms of the challenges posed by sustainable development and the replacement of non-renewable materials with renewable ones. In this respect, Canada and Quebec are particularly well endowed, because the boreal forest, even if it has its vulnerabilities, remains a very solid base for redeploying the new economy.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Next is Mr. Desjarlais for two and a half minutes.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much, Madam Chair, and thank you again to the witnesses for being present on this incredibly important study.

Listen, Canadians deserve an economy that works for them. It means they need a softwood lumber industry that can help deliver good union jobs, which are good-paying jobs, combat the climate crisis that we're in—Mr. Laplante has been clear about that—and bring lower prices for Canadians hoping to build a home.

These things are paramount to any economy right now. They are paramount to the United States economy; they are paramount to most developed western economies, and they are paramount to Canadians. We're experiencing one of the greatest cost of living crises we've ever seen.

What I've noticed in particular when it comes to resource development industries is this great desire to pursue that next frontier of development for products, which I'm really encouraged for and by, and also this very important need to retool our economy for the challenges Canadians are about to face. Those challenges include the climate crisis. Those challenges include affordability. Those challenges are about delivering good-paying jobs. How we get there is through an industrial strategy. How we get there is through an industrial policy that incentivizes the good members that Mr. Niquidet represents towards better, high-input products in an environment created by legislators that will deliver a lower cost of goods for Canadians while also building up more good jobs.

On the area of the value added and the innovation required on this side of things, I'm very keen to know from you, Mr. Niquidet, what your members and associate members are doing to help diversify the output products of your members. How are those products giving us, in terms of the Canadian software lumber industry, an advantage globally and even domestically? I think of a time when Canadians made things. We produced and invented stuff, and we sent it all over the world for everyone.

What kind of innovation is on the horizon for Canadian softwood lumber?

[Kurt Niquidet]

We're already producing a diverse array of products, and some of it depends on the species. B.C. has a number of different species, which is an advantage.

One thing that I think has a lot of potential is mass timber. Certainly, if we're wanting to build it into multi-storey homes, into bigger structures, then mass timber would be the way to go. That can mean producing it ourselves—some of our members are starting to do that—but also being the supplier to those mass timber producers. They need lumber to produce that.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

For our witnesses, the members are timed. It's difficult to interrupt, and I'm sorry, but if I don't interrupt, we're taking away another member's time.

Next is Mr. Zimmer for four minutes, please.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Thank you, Madam Chair. It's good to be at committee.

After nine years and three U.S. presidents, Trudeau and the Liberals have failed to get a deal with the Americans on softwood lumber. Under our former prime minister, Stephen Harper, we got a deal done within 80 days of becoming a government and his becoming prime minister.

A mill manager in northeastern B.C. who wishes to remain anonymous said the main reasons mills have had to close are political decisions. The trees are still there to support a vibrant sustainable forest industry. However, they said access to those trees has been heavily restricted. The combined impact of these political decisions is estimated to have reduced the area available for harvesting by 50%, and based on where these areas are located, the impact on the annual allowable cut will be greater than 50%.

This is enough of an impact to cause the closure of two of five mills in the Peace, in my riding, costing the area $100 million annually, and that is just in logging and hauling. That's a very limited part of what forestry impacts in my community. Some may have heard of the Prime Minister's goals of 30 by 30 and 50 by 50. There's the effect such a radical policy will have, especially on forestry.

My question is for you, Mr. Niquidet.

Will there be any forestry jobs left in northeastern B.C. if the federal and provincial governments' restrictions and closures are fully implemented?

[Kurt Niquidet]

Well, we certainly hope so. I think what you're referring to there are also provincial policies. Something we've been very vocal about is the need for a working forest within British Columbia. We certainly support the protection of biodiversity, but there needs to be a balance. We need to have a land base that is designated for timber production, to support jobs and communities.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

I think, too, Mr. Niquidet, the question around proper forest management....

We've seen forest fires in my community as well. What I've often heard from folks who are loggers in the areas is that these areas have often been left untouched. They're not even being properly managed, and all they do is burn. We've been affected by spruce kill and pine beetle kill as well. Instead of actually harvesting that wood, it's just left there to rot and eventually burn.

My second question, again, is for Mr. Niquidet. The Prime Minister dismissed his failures on softwood lumber as a small issue. You might have seen it on the New York talk show, when forestry and softwood lumber were referred to as a “small issue”. Just weeks after, the U.S. slapped Canada with a 14.5% tariff on softwood, nearly doubling it overnight.

Since the announcement, two mills in B.C. have closed. Another mill in my community was lost after that, putting nearly 500 workers out of a job. The economic impacts are beyond $100 million, as you just heard in my question earlier.

After nine years and three U.S. presidents, Trudeau and the Liberals have failed to get a deal with the Americans on softwood lumber. Again, we got it done within 80 days.

I hear my colleagues across the way. They throw up their hands and say it's up to the U.S. government to come up with a decision. Well, we got it done within 80 days. Obama was the president in 2015 when your Prime Minister came in. There was big fanfare that the agreement was going to get done in Ottawa. The president simply left, and no agreement was signed.

I have a simpler question, Kurt, because I think the “small issue” reference is offensive to a lot of us, where forestry is really the backbone of the British Columbia economy. Do you think the Prime Minister's failure on softwood lumber is a small issue?

[The Chair, Liberal, Judy Sgro]

I'm sorry, gentlemen. I know Bob would like a response, but you know you have to watch the clock. It was only four minutes.

Mr. Sidhu, you have four minutes.

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you, Madam Chair.

Thank you to our witnesses for being here on this very important study.

Of course, our government values the lumber industry and the workers, and we'll continue to support that industry. Our government has been very mindful in its deliberations when it comes to any trade negotiations. Our priority is to secure a good deal for Canadian industries and workers. I know the Conservative approach is to get a deal no matter what, and not to worry about the workers but to just get a deal done.

This is my question for the witnesses here. Would you agree that a good deal is better than a fast deal, and what would constitute a good deal, in your opinion?

Maybe we can start with Mr. Niquidet.

[Kurt Niquidet]

Thanks for the question.

We need to be careful. We want to make sure the terms are fair for Canada. Part of that is getting a long-term deal and making sure that we have access to a sizable portion of the U.S. market share, consistent with what we have had historically. I think those are two key components.

It is important to make this a priority and to push for a deal, but we don't want to sign on to just anything. It has to be a good deal for Canada.