Natural Resources Committee on March 6th, 2008

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

You said in your presentation, Mr. Gray, that Quebec is seriously considering certifying the Forest Stewardship Council. I would like to know how you distinguish between the Canadian Standards Association, the U.S. Sustainable Forestry Initiative and the Forest Stewardship Council.

[Tim Gray]

The fundamental difference is that FSC develops the standard on an ecosystem basis. For example, the boreal forest or the Great Lakes and St. Lawrence forests in southern Ontario and Quebec is a multi-stakeholder standard. You end up with industry, aboriginal groups, environmental groups, and labour. They get together and develop a standard around how logging will look on the ground. That is the basis by which certification is done. That's imposed from the outside.

The SFI and the CSA, which were both developed in response to the emergence of FSC as a certification system developed by industry, led by industry--those systems operate like an ISO standard. It's a management planning standard. The company chooses objectives they want to meet and then they monitor their own progress against meeting those standards. Whether those standards have been met is independently verified on the outside, unlike FSC, which has a broad community-based standard, in that all the participants involved set the standard, and that's what compliance is measured against.

Also, FSC has chain of custody, which means there's a label on the product that ends up in the marketplace. I think most importantly from an economic perspective is that FSC confers economic benefits to the companies that are certified, whereas the other two standards don't because of lack of recognition of their standards in the marketplace. The reason it gets more money in the marketplace is that the original basis is more rigorous, so not surprisingly you're going to get an economic benefit for something that is demonstrating performance.

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

Do you expect there will be significant climactic impact on the boreal forest, beyond what was mentioned for British Columbia?

[Tim Gray]

Yes, I think it's possible, and a lot of forest scientists are very concerned that the mountain pine beetle, for example, which is the existing insect problem we have in B.C., because it feeds on lodgepole pine, there's a significant possibility that this species could learn to adapt because there are such high population numbers. There's so much genetic change and generational change in that insect, it could end up moving into the jackpine forests and then move across to boreal forests in very closely related tree species. That's just one insect pest. There are many, many other insects, many other fungi, bacteria, that could change the relationship with changing weather conditions, changing water regimes, changing temperatures.

Environment Canada and many university scientists have done a lot of looking at how the temperature regime, as it shifts, will change the ability of particular tree species to grow in different areas. I'm sure some of you have seen that scenario, whereby suddenly you can grow black cherry very effectively in the James Bay lowlands by 2100. Black cherry is not going to get there, it has no way of getting there, but there's going to be a very different growing regime for the trees that would normally grow there, if it's suddenly that much warmer.

The interaction of all these factors is not terribly well known. I don't know a single research scientist who looks at this stuff who would say in this particular area--like north of Thunder Bay or north of North Bay--in this particular plot, this is what you can expect to happen. No one knows. It's change, and that's the only constant people look forward to.

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

Do you think this will have an impact on the amount of logging that will be possible in the next few years?

[Tim Gray]

It's highly likely. If the experience in British Columbia is any example, if you have a large-scale infestation by a bug or a fungus or a bacteria, you can count on a huge pulse of wood potentially being available, if the insect or disease vector doesn't damage the wood so you can't use it, then a rapid fall-off in the annual allowable cut.

British Columbia is facing that, of course, and so much of the government attention there is because of that pending reality. B.C. will have very, very similar economic conditions for forest-dependent communities in five or ten years, depending on how long the wood lasts, to what we've experienced in eastern North America, but in this case it will be driven by climate change as mediated by an insect.

[The Chair, Conservative, Leon Benoit]

Merci, Monsieur Ouellet.

Mr. Harris, you might have a slightly shortened question time here.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Thank you very much, and I'll shorten that with my colleague, Mr. Allen.

Thank you, ladies and gentlemen, for your presentations.

I was listening to the witnesses we've had so far. Mr. Fiset had some good comments. I think most of us agree that it's not fair to say that the sky is falling on the forest industry in Canada. That's just not so. Mr. Fiset quite rightly said that we're in a cyclical period, as the forest industry is used to.

Unfortunately, it is a perfect storm right now, and our communities need help. That's where I think the federal and provincial governments play roles in providing funding through various programs for basic infrastructure that's needed, that won't come from the taxes you might otherwise enjoy in the communities, and also for science and technology research. This is a time when the forest industry is transforming into everything that it can be when we come out of this perfect storm, and I think this is great.

One of the things that my colleague Mr. Allen brought up a couple of meetings ago was that we're good at developing new products and new ideas in biofuels and value-added products. We're good at that; our universities are doing a great job.

I have UNBC in my riding. It's going to be a leader in forest technology and value-added products some day, as I know Mr. Pelton talked about his research, and Mr. Rosenberg. One of the problems we have is finding entrepreneurs to pick up these new products and run with them. I think that's a huge area of opportunity for the forest industry.

The government can provide a lot of funding for science and research and can help the communities along, but there comes a time when the private sector has to step up to the plate. The entrepreneurs who see a good product, know a good product when they see it, are prepared to put the money up and go for it. The government can help with some tax incentives in this way, but I think it should be part of whatever comes out of this study and future studies. How do we attract the private sector entrepreneur dollars to play their role? It's a huge role.

Maybe you could just comment, in the short time we have on that, if you agree with me or if you have any ideas, or if we should, in any future round table or as we go forward in this, try to spend some time focusing on that and come up with some recommendations on how we do just that. How do we get that private sector dollar picking up on this new technology and running with it?

[Diana Blenkhorn]

If I had the answer to that, I'd take it back home and market it in its entirety.

However, what you describe is exactly what we need, and there are things government can do. We talked about creating an investment climate. What has typically happened in the past that may potentially describe some of the timidness is we make a new product, we have this leading edge in science, and before too many months have passed it's become another commodity because everybody is doing it.

I look at OSB. I can go through those areas. Or you have the alternative. Our distribution networks, especially the distribution networks that are dealing with the multitude of smaller to medium-sized operations--I'm not talking about the large public companies--where they're dependent on the wholesaling community, are putting everybody's product together and trying to sell it once, rather than marketing yours independently. Those are things we know and we understand.

How can we get completely by it? I'm very optimistic that the transition period we are in is going to lead us into those answers. We're not going to let history repeat itself. At least we know what to look for this time.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Good. Thank you.

[The Chair, Conservative, Leon Benoit]

Dr. Rosenberg, go ahead, please.

[George Rosenberg, As an Individual]

Yes, if I could, I'll answer this from the point of view of an example. If you look at our submission, one of the other networks we were involved with was the Mechanical Wood-Pulps Network. We have an example there of a technology that came out of the network that was picked up by an entrepreneur. In fact, he built his whole company around it, essentially.

So you have to have somebody who has some vision, somebody who understands something about the marketplace and knows how to sell into this market. At the same time, there has to be something on the other side. In other words, you're transferring technology from the university to industry.

Well, we did some very different things. Instead of providing him with only a report or a paper, we actually moved people into his facilities, and they worked very closely with his engineers. So while we were leading the research phase, he was leading the technology development and commercialization, and we were supporting him on-site. And he went from having a very small company with 12 employees to having something in the order of 35 or 40 employees, and he was the leading manufacturer of this kind of equipment. He built several other unique pieces of equipment at a later date. He continued, then, investing back into research at the universities and taking advantage of all the programs that were available to him, supported by provincial and federal governments.

So that's the example. How you make entrepreneurs is a much more difficult question. One of the things we're doing in our network is bringing in some experts who understand entrepreneurship, who have studied it at university, and who have firsthand experience with it, and we're teaching it to our graduating scientists and engineers. Maybe one of them will take that up and will become the next generation of entrepreneurs. But you have to be able to teach it.

Given my experience over the last 30 years--I came out of a Canadian university, did graduate work, worked in industry--I think the deficiency probably was that nobody ever exposed me to that while I was at university. And I would suggest that a course in that might be a useful requirement to have. Out of that you may have your next generation of entrepreneurs.

[The Chair, Conservative, Leon Benoit]

Thank you, Dr. Rosenberg.

Thank you, Mr. Harris. Your time is up.

Thank you to all the witnesses today for coming and for giving your presentations and answering questions. If you could just leave the table, we have very little time to deal with the motion that's before the committee. So thank you again very much.

We'll just go directly to the motion. I do want to mention that the clerk has received an answer from the minister, and he cannot come before the March 14 date that was suggested in that motion.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

Have you received a response?

[The Chair, Conservative, Leon Benoit]

We have received a response, and he cannot come. So I just want the committee to know that.

Mr. Alghabra, to your motion, if you present the motion and speak to it, then we'll go ahead and deal with it.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

Thank you, Mr. Chair.

I want to preface this by explaining to the committee and to you what the intent of this motion is.

Several weeks ago I spoke with the clerk and the researchers about developing some kind of report as an outcome of the study we conducted on AECL's NRU reactor and nuclear safety. I was informed that since we had not specifically said that we would have needed a report, a lot of the notes were not recorded as such, and no preparatory work was done.

So I thought, out of my desire to ensure that the study and the time we devoted to doing that study don't go to waste, I would instigate a smaller report. Ever since I tabled my motion, there have been some discussions with my colleagues in committee. And I think there is a desire, a consensus, that perhaps we should see if the researchers and the analysts can draft a report, perhaps a smaller report. If that's the case, I certainly support that, and I don't have a problem, because my whole intention was to ensure that at least the House and the public and the government are informed of the study we've conducted and of our recommendations. I'd hate to see that go to waste.

If that's the case, I wouldn't mind tabling my motion until we come up with that report. So perhaps we should see if we can develop a consensus on that.

[The Chair, Conservative, Leon Benoit]

I appreciate your presenting it in that way, Mr. Alghabra, because it's much better if the report does come from the researchers first and then the committee deals with it.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

That was exactly my intent.

[The Chair, Conservative, Leon Benoit]

We have the study on the forestry industry, of course, that we are proceeding with. Are you saying that it would be fine if the researchers first present the report on the forestry industry, then go to the report on AECL, and--

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

My opinion, Mr. Chair, given the time and the fact that we conducted the AECL NRU reactor study earlier, is that we do that report first, while we're still conducting our forestry study, because the forestry study is still not over. We have several weeks to do that.

In my opinion, it's more desirable to have it done first, and then, as we are listening to the witnesses, and after that, develop the forestry report.

[The Chair, Conservative, Leon Benoit]

The researchers have indicated that it will be very difficult to write two reports concurrently. We have to decide--

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

Then we do NRU first, because we've conducted that study and I don't want our memory to fade. I don't want the issue to be postponed.

The forestry study is extremely important, and we are, as we speak, conducting our hearings and listening to witnesses and stakeholders.

We've already listened to witnesses on the NRU reactor and I think that the committee should put together its recommendations as quickly as possible.

[The Chair, Conservative, Leon Benoit]

Are you finished, Mr. Alghabra?

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

Yes, thank you.

[The Chair, Conservative, Leon Benoit]

Monsieur Ouellet first and then Mr. Anderson.