International Trade Committee on Nov. 27th, 2024

[Greg Stewart]

I think, fundamentally, the answer to that is yes. If you look at.... Even within British Columbia, if we were to fully utilize all the wood that was produced here to build mass timber, for example, we still have 95% at least of our wood that needs to be exported outside of the province of British Columbia. There is a significant amount of lumber available for those projects, and we should be able to support the housing construction.

What's interesting in all of that is that, if you move to off-site construction, so that you can better deploy housing solutions, it may open up the opportunity for increased value-added use around engineered wood products in those off-site constructions, because they rely so much on consistency of raw materials.

[Maninder Sidhu, Liberal, Brampton East, ON]

I'd like to hear from you guys on something. We have a housing accelerator fund, and we heard the Leader of the Opposition say he wants to cancel it.

In my city of Brampton, that's going to help build close to 24,000 homes, working with the municipality and working with city hall there. The housing accelerator fund is going to build thousands of units across Canada. What we're hearing from mayors is that it's a vital fund to get houses built and get plans in place.

What are your thoughts on our ambitious strategy to build more homes, and how can it support local businesses like yours?

[Jean-François Samray]

If I may answer this one, I think it is important. The federal government and the provincial governments definitely have a role in order to make better use of forest products. It is a GHG-neutral product that is also helping to reduce GHG emissions. On top of that, some regulations could be made, the way they did in the city of Toronto, putting a threshold on the maximum carbon footprint for each and every building in order to embed carbon into construction.

It's a win-win-win situation. Provincial, federal and municipal governments do have a critical role in making it happen.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Savard-Tremblay, you have six minutes, please.

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

Thank you, Madam Chair.

Thanks to the witnesses for being here.

Mr. Samray, we have had two budget announcements recently. First, Ottawa is temporarily suspending the GST. That is the topic of the hour, but it affects you too. Second, Quebec has announced that it is putting an industry loan program in place in order to restore cash flow to businesses, while waiting to recover the deposits being withheld because of the lumber dispute.

Do you have any comments on these two measures? Do you think they are useful measures?

In addition, should Ottawa follow in Quebec's footsteps on the loan program?

[Jean-François Samray]

I think the witnesses have given a good explanation of the situation. There is an enormous cash flow problem associated with the duty deposits. I am going to weigh my words carefully, because I know the American coalition and its lawyers have access to the transcripts of our meetings. I don't know how those people get them, but we are going to be careful about what we say, since our words could be used against us.

That said, I think the Quebec government has taken an initial measure that will bring us up to the end of the budget year. The program will offer a total of $100 million in loans. Each company will be able to get a loan of up to $5 million. While that is a tiny fraction of the duty deposits, this will provide cash flow for the companies and give them an opportunity to finance the growing stock of wood they have to harvest, given that no one goes into the forest during the thaw. So that is essential.

As I think you have heard from all the companies and representatives Canada-wide, a measure like this has to be put in place nationally also. Ten percent is a magnificent effort, but it is not enough, given everything it represents. As well, that money will go directly into the Canadian economy, so it is a necessity.

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

What do you think a reasonable time would be for granting these loans? Do you think this money should be released on an urgent basis?

[Jean-François Samray]

I think this is a national priority. I believe the money should be disbursed immediately, and then the government will get it back out of taxes and other levies, in addition to it fuelling the industry as a whole.

In the coming year, there might actually be higher tariffs solely because of the lumber dispute. In the circumstances, this liquidity would enable everyone to get through the next year.

I think this is a decisive factor. This kind of government action is urgently needed, preferably before the Christmas holiday.

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

We hear what you're saying.

The lumber dispute has arisen so persistently in the last 40 years that it has become a kind of background noise to politics in Canada, Quebec and the United States. As you know better than anyone here.

You testified before the committee in the past, for a previous study. I would like to ask you a question again that I asked at that time, because the issue has unfortunately not been resolved yet. I had asked you whether you agreed on recognizing the distinctiveness of Quebec's forest system, and your answer was yes. As we know, that system was redesigned and revised precisely to comply with the free trade rules. That is the goal. It was made specifically for that. We told ourselves that the problems were behind us and the price would now be set by auction—by the market.

In November 2023, in connection with a similar study, this committee tabled a report in which the idea you had supported was the subject of one of our recommendations. Even though the Minister of International Trade literally said that the Government of Canada accepted that recommendation, from what I see today, that distinction is no longer recognized.

Do you still take that position?

[Jean-François Samray]

I think Quebec's present system was designed to meet the American needs, as were Ontario's and British Columbia's, for example. That is the case for most of the systems. In Quebec, we have always sought to do better, again and again. Ultimately, the industry finds itself having to face the limitations created by the system.

Are we obliged to do this much? I think we have to ask ourselves the question in the context of a review of the existing forest system. Should we instead do the bare minimum required, given that once the trade peace ends, a new demand for tariffs will be made? I think there is something to consider here.

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

As you say, a lot of sacrifices and changes have been made, but this has not produced the anticipated results. To get to that, we have to dispel the confusion created by Washington when it says that if the forest is public then it is necessarily subsidized in some way. This confusion must be dispelled and we have to explain the truth of the matter.

[Jean-François Samray]

Yes. That said, what I am going to tell you may surprise the members of the committee, but the judges appointed by President Trump during his previous term, who were more conservative, handed down a decision in the Loper Bright Enterprises case that is crucial for what comes next in the discussion. That decision held that the United States Department of Commerce may no longer interpret legislation or other measures enacted by Congress that are not clear by saying that Commerce itself cannot err. The United States Supreme Court has thus held that such provisions may not be interpreted freely and in such a way as to see what it wants to see in them, but which does not truly reflect congressional intent. This was a significant change. I think that from the perspective of the decision to be made in the coming year, that might bring about some progress in the lumber dispute.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Desjarlais, go ahead for six minutes, please.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much.

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

I'll start with Mr. Stewart.

British Columbia is right next to Alberta, right next to us. I imagine that you know that, both right across the border and right across the west, many families deeply depend on softwood lumber and the very good jobs that it brings to many folks, particularly in rural parts of the west. It brings so many jobs, in fact, that many communities deeply rely on them.

For this committee's better attention and for the study report, would you be able to provide us with the number of unionized workers within your business?

[Greg Stewart]

Sure. Within my business, there is one operation that is unionized, with approximately 135 employees.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much.

Mr. Samray, I'll ask the same question of you.

[Jean-François Samray]

The Quebec Forest Industry Council has close to 40 employees who are not unionized, but the industry is mostly unionized. Starting with the paper mill, the cardboard.... It is mostly unionized jobs in the forest sector in Quebec.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much.

What is the average hourly wage or salary of these workers?

Go ahead, Mr. Stewart.

[Greg Stewart]

I think you can expect that people are making, on average, between $70,000 and $100,000 a year. Off the top of my head, I can't tell you specifically what the hourly wage rate would be.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

That's okay.

Mr. Samray.

[Jean-François Samray]

I'd say it's more or less the same thing. The more value is added to the product, the more specific the job is and the more knowledge it takes, the better the pay is. For sure, this level of income in rural communities is like $300,000 in Toronto.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

I would agree, and I think you would agree that these are good, well-paying jobs and, in many cases, good union jobs. Is that correct, Mr. Stewart?

[Greg Stewart]

Yes, absolutely. They're great, well-paying jobs, and they lead to great livelihoods for families.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Mr. Samray, do you have any additional information?

[Jean-François Samray]

It's definitely a well-paid job that supports suppliers and supports the entire community. Being unionized or not doesn't make a difference. They are important jobs, and we also have some co-operatives in Quebec that are doing a lot of work. For them, they're the owners, so they have a different way of looking at it. They need to be unionized. For them, they are the owner, so they do the management as well but, yes, they are well-paid jobs that are important for vibrant communities.