International Trade Committee on April 30th, 2026

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

Thank you, Madam Chair.

I'd like to thank the witnesses for being here and for their presentations.

I feel as though my first question should probably be directed to both Mr. Nankivell and Mr. Holmes. We'll come back to the wood issue later, because Quebec is also a major producer. However, I know that we don't export much to Japan. It tends to come from British Columbia. We'll come back to that.

We really have a lot of fish harvesters in Quebec. We have a major fishing industry. We know that the Japanese are major consumers of fish and seafood products. However, they are also right next to China, which engages in militarized overfishing. We know that China uses gigantic ships that are overfishing and destroying the oceans.

Is Japan faring well in that regard? Where do the fish and seafood products consumed by the Japanese primarily come from? In other words, do we have opportunities along those lines, similar to the opportunities mentioned by the representative of the Canadian Cattle Association in the first part of the meeting?

[Matthew Holmes]

Seafood in particular is an incredible staple and a rich tradition within Japanese culinary culture, of course, but also more broadly within the Indo-Pacific and Asia. There are products that Canada is a major exporter of that we don't consume and most Canadians would find abhorrent, quite frankly. Sea cucumber is my personal choice on that list, and we export an incredible amount of that to parts of Asia.

This is also an interesting angle because our air transport is critical for this commodity in particular. If you think of lobsters, for example, those are often shipped by air, so our domestic carriers, having direct ties to Japan and other key hubs in Asia, are an important part of our export strategy.

[Jeff Nankivell]

I might add that this already represents a significant portion of our exports. Canadian companies have long been involved in exporting seafood to Japan. Of course, we could always do more.

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

To what extent is Japan hampered by Chinese practices, right next door, across the water?

[Jeff Nankivell]

In the sense—

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

One can imagine that, through its overfishing, China is hindering and penalizing Japan in its fishing capabilities.

[Jeff Nankivell]

I'm not an expert in this field, but security of supply is a key concern for Japan's leaders. For the Prime Minister's Office, this is a critical issue that must not be overlooked. The Japanese are always looking for sources of supply for products like fish and seafood. As my colleague said, it's a very important part of their diet.

[Matthew Holmes]

Japan is committed to—I can't remember the exact terminology—a free and open Indo-Pacific. That's a maritime strategy. I think that is important geopolitically not just for maritime travel, the supply of goods and global supply chains, but also for fisheries and the availability of other minerals. It's something that Canada would be quite committed to as well on multiple fronts: economically, socially, politically and geopolitically. I think that's an important priority.

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

Thank you. That's very enlightening.

I'm going to move on to Mr. Nighbor, if I still have time.

I touched on this quickly before I asked my previous question. British Columbia does, after all, export a lot to Japan now. In the case of Quebec, it's still primarily with the United States, which causes all the problems we're familiar with regarding the never-ending softwood lumber crises. People keep saying that we need to diversify the markets further.

Do you think there would also be room for Quebec lumber in trade with Japan?

[Derek Nighbor]

The opportunities are more limited for eastern Canada, including Quebec. I think we see for Quebec a lot more opportunity domestically as we think about diversifying and finding new markets. More mid-rise construction in both Ontario and Quebec is a big opportunity for the domestic sectors. Looking across the Atlantic, the U.K. housing strategy is probably a better fit.

On the diversification piece, if you're in Saskatchewan, you're landlocked. If you're in Ontario or further east, there are opportunities across the Atlantic or maybe in the Caribbean and Mexico, and then more in the Asia-Pacific if you're west of the Ontario-Manitoba border.

[The Chair, Liberal, Judy Sgro]

You have 30 seconds.

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

In 30 seconds, what more can be said?

Why would it be more difficult for producers in the east?

[The Chair, Liberal, Judy Sgro]

You can give a brief answer.

[Derek Nighbor]

It's really the cost of shipping. It's more expensive to move it across.

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

So that's all there is to it.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Savard-Tremblay, would you please come and take the chair for the remaining 20 minutes of the meeting?

[The Vice-Chair, Bloc, Simon-Pierre Savard-Tremblay]

Ms. Kronis, the floor is yours for five minutes.

[Tamara Kronis, Conservative, Nanaimo—Ladysmith, BC]

Thank you, Mr. Chair.

Mr. Nighbor, it's wonderful to see you here today.

Diversification has been the topic of the day. Can you share with us the important work that the Canada Wood Group does on the ground in Japan and how maintaining that kind of in-market presence is important for Canada?

[Derek Nighbor]

Harmac Pacific in Nanaimo is an important, proudly employee-owned mill in our ecosystem. The pulp sector has a bit of an easier path in terms of its ability to tap into foreign markets. Wood is an involved process, so having boots on the ground so we can work with architects and engineers, governments and building code officials in Japan is important.

It took us 20 years to get OSB, or oriented strand board, into Japan because of the steps to get it operationalized and into the system. Mid-ply wall systems took us 10 years. That's for seismic strength and whatnot.

We did have a reduction in funding. Our hope is that the funding is going to be more than restored. That will be critical, because once you come out, you need to stay in and you need to continue investing, in our case, for the long run.

[Tamara Kronis, Conservative, Nanaimo—Ladysmith, BC]

Thank you for that. Of course, we are incredibly proud of Harmac in our community.

Given the current challenges with the U.S. market, how much mitigation can Japan really provide, and how important is it for Canadian lumber producers and the people who are a part of your association that Canada gets a deal with the United States?

[Derek Nighbor]

It's an important incremental opportunity. I don't want to give the illusion that.... On the lumber side, it's $800 million a year to Japan versus $8 billion to the U.S. If we can get a few hundred million more to Japan, that would be important as one of the many measures we're taking to try to minimize the risk.

That said, because of the cost of shipping and the close proximity, there are natural relationships. The other thing that's often not talked about is the quality of Canadian-grown wood. Because of our colder temperatures and our longer growing cycles, it brings out properties in the wood that make U.S. homebuilders want to frame homes with it. They'd prefer to use spruce pine and fir over southern yellow pine, so there's a natural advantage in the marketplace for Canada right now.

The challenge is that 45%. We're still selling. The difference is that between 2006 and 2009, during that downturn, markets absolutely collapsed. Housing starts were 600,000 in the U.S. and they're at 1.3 million now. It's just soft. It's been soft for three years. The tariffs and duties at 45% and the ongoing uncertainty are just not good for our business.

[Tamara Kronis, Conservative, Nanaimo—Ladysmith, BC]

Before I turn back, do you get regular updates from the Canadian government on those negotiations? Do you have a good window into where we're headed?

[Derek Nighbor]

There are elements, of course, that we're not going to be privy to, but in terms of them asking, “What might work for you?”, yes, those conversations have been ongoing.

[Tamara Kronis, Conservative, Nanaimo—Ladysmith, BC]

Turning back to the Japanese relationship and our more global efforts at diversification, I understand that the Canada Wood Group has had its federal funding reduced over the last few years.

How is that keeping pace with our competitors? As we look towards diversification, are our competitors investing more in these relationships?

[Derek Nighbor]

They are, and Japan is doing more domestically as well, so the threat is from inside the house in Japan. In terms of our competitive threats in the marketplace, we had pretty consistently, from 2019 to 2023, funding of between $5 million and $8.7 million. In 2023-24, that was cut to $4,000. I think there's been an admission that was a mistake, but because of that reduction in 2023-24, we had to lay off a bunch of staff and we lost some time.

That's why Canada Wood Group is looking for $5 million at least over the next three years, which I don't think is exorbitant, because they need to scale back up.