Thank you for inviting me here today.
Chris Henschel is with me from the staff of the Canadian Parks and Wilderness Society here in Ottawa.
My name is Tim Gray, and I've been working on forest conservation, forest policy, and forest economic issues for about 15 years. I worked as the executive director of CPAWS's Ontario office for a long time, and now I'm the program director for the Ivey Foundation in Toronto. We support forest conservation here in Ontario and in most jurisdictions across Canada, with the goal of completing a protected areas network and improving sustainable forest management in Canada.
Today I am here to represent the Canadian Parks and Wilderness Society. I'm going to read from my presentation and I'll be leaving an updated version of that, which can be translated and distributed later.
CPAWS is a national wilderness conservation organization. We have 13 offices in nine provinces and two territories. For over 40 years, CPAWS has been working to establish new protected areas and improve forest management.
Canada's forests give us globally significant economic opportunities. If we can treat them as a capital asset in a rapidly changing world, we'll be able to welcome a world eager to buy the products they produce in the coming century and beyond. Climate change, loss of wilderness, and past harvest practices all threaten the ecological underpinnings of Canadian forests. As well, the forest industry itself faces significant challenges caused by the erosion of the quality of forests, as well as factors related to rapid change in the economic underpinnings of the industry.
Fortunately for Canadians, we still have time to make changes that can put us on the road to prosperity. Governments must play a central role in setting a new table for business opportunities that attract financial capital and provide community benefits. We recognize that the Canadian division of governmental authority means that often the provinces, and not the federal government, hold the levers to plan for the future of our forests. However, by working with common cause, both levels of government can contribute to transformation of our forest-based economy. As a result, in this brief we seek to identify actions that are best undertaken at the federal level, and those that are best delivered provincially with federal support.
CPAWS has worked collaboratively with the progressive forest industry, aboriginal people, governments, and communities. We've been instrumental in working with industry in the development of rigorous third-party certification systems. We have helped to create progressive land-use plans, and we've provided advice to governments and communities across Canada. We're committed to working to help make the recommendations included in our brief deliver real benefits.
As to wilderness conservation, only about 9% of Canada's boreal forest, where most of the logging occurs, is permanently protected from industrial activity and oil and gas development. Forestry and mining continue to move into remaining areas of wilderness, most often without setting areas aside for the protection of other values. We know that climate change is stressing forest ecosystems and threatening their survival, and that intact systems have a better chance of adapting, surviving, and providing migration corridors, fresh air and water, and wood for the future.
We also know that Canadian wilderness is a high-quality resource in a global market where there is diminishing supply. With access to fresh water, clean air, and a valuable recreational resource, many communities near wild areas will have a bright economic future.
Finally, proof of wilderness protection is becoming a requirement to access global forest product markets. Increasingly, the forest industry must help protect wild areas to sell its products, and government can help make this task easier.
In terms of recommendations, we believe that governments should require the completion of land-use plans that include ecologically appropriate protected areas before any industrial development is permitted in all remaining wild areas of Canada. This would mean across northern Canada, northern Ontario, northern Quebec, into the territories. Completing a protected-area network before new forestry moves into that area, before mining begins, makes the most sense, both from an ecological perspective and a community perspective, but also in terms of the long-term ability of the forest industry to sell its products in a market that is increasingly demanding environmental performance as part of their way of doing business.
To their credit, the Forest Products Association of Canada supports this approach. Unfortunately, we've seen very little adherence to this by provincial governments. I think the federal government record in the Northwest Territories, for example, in undertaking a protected-areas initiative there is the right way to go. And there are ways the federal government can help to persuade provincial governments to do the right thing and plan for the future.
One way is to require that the Canadian Environmental Assessment Act require land use planning in areas where new industrial developments are going to proceed. Examples of this would be in places like northern Quebec and northern Ontario, where there is rapid new mine development, and part of the screening process for the Canadian Environmental Assessment Act could be the requirement that land use planning be done before industrial approvals are given.
In places where the federal government has lead authority for land use planning, the federal government can work with aboriginal people to undertake that before development proceeds. That is happening in the NWT, to the government's credit.
Governments can also move to require wilderness protection in independent forest certification systems. This is aimed more at the provincial governments, but the federal government, through NRCan and the Canadian Forest Service, has some influence. When provincial governments are requiring certification systems—this is happening in Ontario and New Brunswick, and Quebec is considering this as well—there would be a requirement that systems that include wild area protection be the ones that are mandatory.
Forest tenure reform.... Canada’s industrial forest tenures were originally established as a social contract between government and industry. Industry provided the capital that created infrastructure and jobs in logging and in the mills. Governments provided wood supply and a favourable policy regime in terms of timber pricing, taxation, and direct support: road construction, staff for management planning, reforestation. Since that time, governments have sought to ensure the persistence of this relationship by requiring that industry keep mills in communities where wood supply was being provided.
In recent times that relationship has broken down. Industry would like an end to the requirement to have the wood flow from local areas, from their licence area, to mills in those local communities. As well, because of technological change, fewer people work in the mills and in the forests than previously. Industry feels that it needs an end of what's called “appurtenancy” requirement, the licensing requirements to force wood to flow from a given licence area to local mills. They need to be able to move it around the province or even move it between provinces in order to stay economic.
We've also heard from industry that they would like tenure reform. They argue that more private ownership over public land would ensure investment security, that there would be more capital flowing to the Canadian forest industry if we privatized public land. Interestingly, the large forest tracts that are privately held have no better record of forest management or no better record of long-term tenure than public land. In fact, large areas of private forest land have recently been put on the auction block as a revenue generator.
However, given both of these things, industry is asking for an end to the social contract that originally provided it with a wood supply, and it's also asking at the same time for greater ownership rights over public land. We, as Canadians, do need a healthy forest industry, so we do need to look at the request that the forestry industry is putting in front of us and look at them from the public interest perspective. What is the best for communities? What is the best way of rearranging that social contract under changing conditions?
We think the best way to move forward is to create area-based tenures on all crown lands and require that these be managed as not-for-profit or for-profit corporations with independent boards of directors. So instead of having our forest lands be seen as a cost centre for the forest industry—right now it's where you have to pay to get the timber from, and you're always looking to minimize those costs, always looking to get the wood as cheaply as possible—instead of looking at forests that way, we think they need to be rearranged. Set up independent corporations that sell the wood at market price to the highest bidder. It meets the industry demand for changes to appurtenancy. The wood could flow wherever it wants, but the communities surrounding those forests and the people who are running the boards of directors would have a mandate to get the highest value and the highest price for the wood that's publicly owned and to produce employment benefits for the community.
In tandem with that, we want to enable this and move to market-based pricing of timber. If we moved to setting up forests as a profit centre, we could sell wood at market price. Companies that are new entrants to the system would have access to wood if they could pay for it. There would be wood supply, of course, available for the existing companies, and they can compete on the open market. It would also help the federal government, especially the Department of Foreign Affairs and Trade, deal with frequent U.S. industry accusations that our administratively set stumpage system unfairly provides a benefit to the Canadian industry. If we moved to a market-based pricing system we would get away from their demands for public land privatization and take away their key argument around our stumpage system, because it would be market-based.
On forest certification, as you likely know, there are three certification systems operating in Canada. Only one of them enjoys the support of aboriginal communities and NGOs and delivers tangible benefits in the marketplace, and that's the Forest Stewardship Council. That system and companies that are certified under it have been enjoying growing market share and growing sales at the same time as the industry overall has been declining. I'm sure most of you will have seen Jim Lopez's comments in the media over the last few days about how being certified to that certification system helped that company recover from its bankruptcy protection.
The federal and provincial governments can support that system in a number of ways. The federal and provincial governments can require that when they develop purchase preference policies for wood products and paper products for their own use, they choose FSC; when they're doing marketing in Europe that they profile the gold standard companies that are FSC-certified; and that provincial governments, with federal government encouragement, move to new area-based tenures.
Lastly, on new business opportunities, I'd like to support the work that provinces and the federal government have done to create loan funds and financial guarantees for investment for the industry, and require that to be matched by actual capital, new capital that's flowing in, and not just turn it into handouts and grants, but actually require that there be a business case for this stuff to go forward. I think that's a very positive improvement over the way the industry has been treated in the past.
Lastly, the biofuels and biomass industry is new, and it has huge potential to be an important contributor to the Canadian economy. Government's role here is to set the policy playing field about how we're going to extract resources for this new industry. There are no rules out there right now; it's a completely new economic driver in our forests, and we need to think about the policy framework for that. NRCan and the Canadian Forest Service have the expertise to help, and help the provinces move forward, hopefully, on a Canadian standard for what biomass extraction would look like.
Thank you very much for your time, and thank you again for inviting me here today.