Natural Resources Committee on March 13th, 2008

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

I don't agree with you and I am an architect.

[Luc Bouthillier]

I'm referring to commercial construction.

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

Six-storey buildings are authorized.

Mr. Saddler, what is your recommendation to the government?

[Dr. Jack Saddler]

We need strong leadership right now. If I look at it, the forests belong to the province. One of our problems is that we're caught in this federal-provincial divide. Effectively, we need strong leadership, someone who is going to say “This is the vision for our forest sector”. It's not there right now. I think the federal government can provide that leadership for the short, middle, and long term. We need that vision.

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

Thank you.

Mr. Cohen.

[Dr. David Cohen]

I would define the domestic market as Canada and the U.S. Anyone in the industry knows how important the U.S. is. I'd say the best recommendation is to look outside, as opposed to internally. Quit standing at the mill and looking at the forest; start looking at the markets and the competitors.

The second thing is to recognize that we need different people looking at solving the problem, rather than the same people who have been looking at it for many years. We need a different set of eyes looking at it.

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

Mr. Matters.

[Bob Matters]

The short answer is that in the immediate term we need to have that summit to get all of these ideas together. But in respect to the last question, the summit has to stay focused on jobs in rural communities. What I call the green stuff could be a secondary item, but certainly if you focused on that it would take away from the overall issue of the round table. As the previous speaker said, we need to get immediate leadership, both on the provincial and federal level.

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

Mr. Irving, you referred to biomass. Could biomass become a major domestic market?

[James D. Irving]

No. Look, with biomass you could burn all the trees in Canada trying to make any amount of electricity. This is an add-on. It's a competitive advantage. We shouldn't waste a scrap in the forest. We should burn it for biomass. If we can turn it into biofuels, that's a good add-on to an existing pulp and paper operation. But it's an add-on.

I don't think it's going to become a primary product, because the cost of the fibre is too high. Maybe if oil gets higher, it will come into its own. Fundamentally, for the bio-business, the technology that's out there is not developed yet. It's coming, and we encourage all of that; we want it to happen. But it's not here today. And I think it will be a bolt-on to an existing pulp and paper operation, let's say.

In terms of biomass by itself or burning for energy, we should use whatever we can. But there's not enough out there to meet all our energy requirements as a country, if that's what you're thinking.

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

Mr. Cohen, wood composite materials are an up-and-coming sector and they have been developed in universities, including yours. Why do these materials not make it to our domestic market?

[Dr. David Cohen]

Actually, the products are, but they're not necessarily made here. The problem is that by doing composite materials and engineered products we're taking low-quality fibre and making high-quality products. People can produce low-quality fibre cheaper than we can. As we get more sophisticated products, it's cheaper to make them in Brazil, Uruguay, and Chile and ship them than for us to make them. Because our costs are higher, and a lot of it's the trees.

We see a lot of these products. I-beams have replaced over 70% of the structural flooring from two-by-tens in the last fifteen years. OSB is one of these products, and it's pretty much taken over from plywood, at over 70% of the market share. That's something we produce a lot of. We see a lot of these composite products. We're seeing more of them being developed, but they go where they can get the cheapest raw material supply, and that's not here.

[The Chair, Conservative, Leon Benoit]

Thank you.

Merci, Monsieur Ouellet.

We go now to the final questioner for today, Mr. Comuzzi, for about four minutes.

[Joe Comuzzi, Conservative, Thunder Bay—Superior North, ON]

Thank you, Mr. Chairman.

I know I won't get time for all of the answers, so I'm wondering if it would be proper for one or two of the witnesses to table the information that we'll need to come to a decision. Would that be in order?

[The Chair, Conservative, Leon Benoit]

We can ask them to do that, yes.

[Joe Comuzzi, Conservative, Thunder Bay—Superior North, ON]

I'm talking particularly about Mr. Matters and the logs that are exported out of the country. I agree with what you said, but I would like more facts. You don't necessarily have to name the companies, but I would like to know about how many logs and how many companies are involved in shipping out raw material for other countries to manufacture.

Can you provide that?

[Bob Matters]

If I did so immediately, it wouldn't be accurate, but I can certainly have something e-mailed here, probably this afternoon.

[Joe Comuzzi, Conservative, Thunder Bay—Superior North, ON]

Oh, no, it doesn't need to be that fast.

[Bob Matters]

It's important; I can have it here this afternoon.

[Joe Comuzzi, Conservative, Thunder Bay—Superior North, ON]

This is the government. We work a little more slowly.

Let me correct Mr. Hanlon on his references to northwestern Ontario. I think we need facts on this. As of 10 o'clock this morning, the Ontario government still had not signed on to the community program we announced. The nine other provinces have signed on, and Ontario still hasn't signed; they've promised to sign. Yet, as you know, the province is in forestry, and we can't do anything of any consequence until Ontario signs on.

We're willing and able, so get off our backs on that issue.

Secondly, on the softwood lumber, I happen to have been on both sides of the fence at various times. I was on that side during that debate and then I was excommunicated.

Let me be absolutely clear. I don't agree with the agreement that we made, but I voted for it. I voted for it because every company that I had in northern Ontario, and Mr. Boshcoff will agree, had to have that money that was released by the United States in order to continue operating.

You can argue this as much as you want. It's a fact of life: they would have been out of business a year and a half ago, rather than buying the 12, 15, or 18 months they got because that $4 billion was released. It's not debatable, and I don't want to take the time, because I want to talk to Mr. Irving.

I have three questions, Mr. Irving, that are absolutely critical. Hopefully a resolution will be passed after this meeting, but one of the things we are concerned about is that we really have three forestry businesses in Canada: one in British Columbia and Alberta, one in Ontario and Quebec, and one in eastern Canada. You would agree, I think, that any decision we make must bear in mind that there are certain differences in each section of the country and that those should be taken into consideration when those decisions are made.

[James D. Irving]

Absolutely. It's not one size fits all.

[Joe Comuzzi, Conservative, Thunder Bay—Superior North, ON]

That's right.

[James D. Irving]

It's a complex business, a complex country from that point of view. There are differences, and they need to be recognized.

[Joe Comuzzi, Conservative, Thunder Bay—Superior North, ON]

We just found out last night that the pine beetle has just been 85% eradicated, so that may be off, which is good news.

[James D. Irving]

The pine beetle is 85% eradicated? I didn't realize that.

Is that in B.C.?