Thank you very much, Mr. Chairman.
I must say that I'm very pleased and I find very commendable the fact that this committee is spending the effort, time, and seriousness in looking at the forest sector, and looking at it not so much from a perspective of the crisis we're having, but the possible future direction this sector can take. We're very excited about the possibilities. I think if there's a willingness to move forward on this by all parties, and that includes government as well as industry and labour, we can have a bright future. I want to take a few minutes today to outline some of the thoughts I have on that.
I believe you all received a copy en français et en anglais of the “Technology and Innovation” piece. I'll highlight a few of those points, but within the next 10 minutes I'll hope to perhaps leave you with a feeling of hope and a clear indication of some of the things you might consider doing as parliamentarians.
Let's look, first of all, at the forest sector from an R and D perspective and at FPInnovations. We all know it's been several years now since the industry and two levels of government have been looking at ways to revitalize the Canadian forest sector. I think it's fair to say we've had limited success on that. What's different today? Well, specifically what we're seeing today is a serious attempt by both industry and governments to tackle the underlying issues that drive competitiveness.
At the meeting two weeks ago, Mr. Chairman, Avrim Lazar was here as well as Hugues Simon and Michel Vincent to talk about some of the things the industry was looking at doing and at some of the things they felt that government should do. I'm not going to dwell on that aspect, but perhaps take a little more time to discuss the key role of technology.
I think we all have realized that if we're going to transform, we'll move the industry from the state we're in now to a future desired state. Technology and innovation is going to play a very key role. I think we have to say the forest sector also recognized that the way we did research had to change. You have heard the expression of silos, of fragmentation in the R and D community, and the need to bring people together on a common focus that was directed towards problem-solving solutions for the current situation we're in.
It was with that spirit that FPInnovations was created. They took three national institutes, one in the pulp and paper side, one in the wood product side, and one in the forest harvesting and engineering side and brought them together. In bringing them together they added a fourth division. They added what is called the Canadian Wood Fibre Centre, which is really a novel approach to taking public sector research and bringing it into a different model of delivery. I know Cassie Doyle and Jim Farrell talked a bit about that when they were here the last time.
Basically what this has meant is that with those four divisions we are now an organization with a budget of around $100 million and with about 675 employees. That positions us to be the largest private, not-for-profit research organization in forestry in the world. Now, that sounds nice, but there's a lot of expectation that goes with that. That is something we have to deliver on. As a result, we are now in a position to address sector-wide issues along the entire value chain, from genetics to forestry, production to manufacturing, all the way to market intelligence, market development, and performance of products in the marketplace.
It's truly a private-public partnership. It involves funding, investments from both levels of government--federal, provincial--as well as industry, and it is focused very much on applied research and demonstration and implementation of research. This organization has been set up. There is some excellent progress. For instance, if you're from the island, you'd be quite interested in the coastal strategy that's under way that's being led by FPInnovations. We can talk at some length on that off-line perhaps. If you're in Prince George, you're of course very concerned about the mountain pine beetle, and there is some excellent work that we're in a position to do, and that we are actually doing. So we're quite excited about that.
The next step of the strategy that the industry and governments wanted was to say, okay, we have FPInnovations together; how do we integrate the university capacity? I mentioned we're doing applied and application. Universities are a hotbed of activity for more fundamental work and training of people. How do we bring this in? What we're currently doing is trying to work...and when I say “we”, I'm talking about a very senior board of FPInnovations involving senior government officials from the provinces and from the federal government as well as industry. So that's where we are currently, and we're quite excited about the progress.
Let's look closer at the industry. We've been in the past primarily in the commodity business. That means we've been price-takers in the marketplace. That's made us particularly vulnerable to price pressures in the marketplace and to stiff global competition. The world has changed, and at the same time, we've had a tendency, because of our business model, to be disconnected from the end users, our customers. Now, I believe--and I can see it--that the industry is accepting the need to change the business model, moving from a commodity product focus, moving from two-by-fours to providing housing solutions. It's a completely different approach. That kind of approach requires more knowledge, more technology, more training, and more innovation.
We know the recent public concern about greenhouse gas emissions, climate change, and the depletion of non-renewable resources. That has triggered, as we can all recognize, a global movement towards the new bioeconomy, which is based on renewable fibre sources. Growing trees sequesters carbon dioxide. That continues to be stored when you cut that tree down and make a product, whether it's a desk of wood or a house of wood. In fact, if you take a typically wood-framed house, it stores between 28 and 32 tonnes of carbon dioxide in its wood. That's equivalent to driving a family SUV for seven or eight years. In the future this planet will look to renewable feedstocks for energy, shelter, packaging, and even to other bold uses like chemicals that we currently produce from fossil fuels.
We're also working on nanomaterials for application and structural biocomposites. Some of you involved in southern Ontario are well aware of BioAuto and the goal of having a car made out of material that's 50%-plus renewable, and cellulose is the answer in that capacity. So where are we as Canada? We're talking about trees becoming the building blocks of an emerging bioeconomy. We're incredibly wealthy. We have the land, we have the water, and we have an abundance of fibre. Along with that, I believe we have the infrastructure and experience to convert trees into products as well as being a world leader in sustainable forestry.
There are barriers to overcome. That's what I think this committee is very interested in following up on. There's obviously a resistance to change. There's limited investment in technology and innovation from the Canadian forest sector. We've seen, because of the poor economics in the market, slowdowns, terminations, and so on in the area of the people responsible--the technical people in the mills who are the receptors of technology. We don't have the same number as we had before.
I mentioned the fragmentation and the lack of focus of the R and D community and the poor business climate that addresses these factors. How do we overcome these barriers? First, I have to applaud the investments from the Government of Canada recently on forest sector innovation. That was announced last year--an investment of $55 million over three years to help create and move FPInnovations forward in terms of transformative technologies. It's a good start. We've been able to leverage considerable investments from provinces and companies to co-invest in this fund.
More needs to be done. We're suggesting the creation of perhaps a national innovation trust for the Canadian forest sector that focuses on transforming the sector with transformative technologies and applications using the same private-public partnership approach. The initial investment could perhaps come from the Government of Canada. We're convinced that with that kind of leadership we can absolutely guarantee that the industry and the provinces will be quickly willing to come in line. In fact, they've also given that indication.
We have an excellent track record, as you're probably aware, in bringing together and leveraging shareholders for forest sector research. The trust fund would support technology and innovation that's relevant to the industry, improve information and technology uptake, improve focus and coordination of university R and D, support national demonstration projects in locations like Thunder Bay, or in the Quebec City or St-Felicien area--these are things that are currently under discussion--and support sector-wide industry-led technology and innovation fora; in other words, find ways to really profile the importance and the application of R and D and incent industry as well as other players to invest more in that.
Quickly, take-home messages. The sector is weathering an unprecedented crisis. Technology and innovation are key to helping us cope with today's problems as well as positioning us to take full advantage of new opportunities. Sustaining current product streams and moving into new advanced products and applications require new knowledge and technologies. The Government of Canada can help in several ways that I've mentioned: increase receptor capacity for companies; help by being an investment partner in industry-led sector-wide initiatives; incent companies to implement new technologies through fiscal and regulatory means; and create the national innovation trust. The key success factor, of course, is building around a public-private partnership.
We're going through tough times as a sector, but we have, I believe, an incredibly promising future if we work together and we harness the full potential of technology and innovation.
Thank you, Mr. Chair.