Natural Resources Committee on Jan. 29th, 2015

[Glenn Mason]

To my knowledge, all forestry responsibility has been devolved. We have not retained anything.

I'll have another look to see if we've missed some dots, but the key issue is industrial forestry, right? We have a good relationship with the folks up there in Yukon and the Northwest Territories. The issue there is that, you know, industry is a guy with a half-ton and a chainsaw and he's cutting firewood. There's not an industrial business.

Having said that, we do have an initiative called the aboriginal forestry initiative. Through that we work with other Government of Canada departments and with first nations. We think there's remarkable opportunity in the north for some of these communities that are bringing in diesel fuel and that are off the grid to use bioenergy. There are almost turnkey solutions already from Europe that could be brought in where you could have combined heat and power, community heating, and that sort of thing to replace trucked-in diesel. We think that's a very exciting area that we would like to expand on. We have had some projects up in both Yukon and the Northwest Territories, and we hope to have more of them. That's a particular area of growth.

I also know there are some folks getting into pellets up there. That's a fairly easy kind of first step. It doesn't provide a lot of jobs, but it could be a feedstock to that bioenergy.

[Ryan Leef, Conservative, Yukon, YT]

Thanks for that.

In terms of incentivizing work on that front, I know there's so much provincial-territorial responsibility with developing these co-partners with industry, but rural Canada...and I would think it's probably a provincial policy right across the board, but I'll talk about Yukon and see if it does deploy across Canada.

In remote communities where forest fires happen—the Northwest Territories just had one heck of a summer for fires—a lot of firefighting policy is that if it's not threatening roadway and access and personal property, we just let it burn. Of course forest fires are a natural cycle of restoration and regrowth. They're an important contributor to environmental habitat regeneration, but at some point it seems there's a fine line between natural recycling and then just a complete waste of a good forest product.

Is there any sort of modelling or mapping that's possible to do to trigger Canadian locations that are flashpoint hot spots or more susceptible to fires so that we could sort of cherry-pick, for lack of a better word, to have an appropriate level of recycling in the burn cycle itself but also utilization of good forest products before they go up in smoke?

[Glenn Mason]

I have to commend you for knowing a lot about forestry and forest fires, because I think you pretty much got things right. Forest fires are a natural source of regeneration in the boreal. Forest fire suppression costs between $500 million to $1 billion across the country each year. It's a very expensive business. Increasingly, or perhaps almost across the board, certainly in the west, the management decision on the part of the provinces is that if it's not threatening public safety, if it's not threatening communities, you just let it burn. You can't afford to fight them all.

To your question on whether or not there is modelling going on, the Canadian Forest Service is actually the single largest source of forest fire research in Canada. We actually have a fair degree of expertise. We're well linked in with the provinces, and we're well linked in with the universities, etc., and a fair bit of what we offer is actually modelling, fire modelling and that sort of thing. But at the end of the day, those can only be predictive scientific tools that are then given to the managers on the ground to decide, with the resources that they have and the risks that are before them, what they will do.

[The Chair, Conservative, Leon Benoit]

Thank you very much, Mr. Leef.

We will go now to Ms. Crockatt, for up to five minutes.

[Joan Crockatt, Conservative, Calgary Centre, AB]

Thank you to our officials for being here today.

I may be one of several, or maybe I'm the only one...but I actually worked for the Alberta forest service planting trees during university and I loved it. It was one of the best things I did. So I have an investment in forests in Alberta.

I'm hoping to go over a little bit of ground we've covered in more depth. We're laying the groundwork today for what's going to be the most significant study this committee does in this sitting of Parliament. I would like you to go back a little bit over the history of where we were in 2008 and how we got to today. You mentioned that a lot of the recommendations in that 2008 report have been implemented.

I'm wondering if you could tell us what exactly the government has done that worked, what industry has done that worked, and how we got from 2008 to now.

[Glenn Mason]

Mr. Chair, that's a fairly broad question. How much time do I have?

[The Chair, Conservative, Leon Benoit]

You have four minutes.

[Voices]

Oh, oh!

[Glenn Mason]

What did government do that worked and what did industry do that worked?

The first thing industry did that worked was it shut mills. It closed mills, laid people off, and it retrenched. That was painful, but it had to be done in the face of collapsing markets.

The forest companies that are left today are the survivors. They're the ones that have gone to the wall. They're the CEOs who have for years, maybe, not been sure they could make payroll next week or next quarter. There have been a lot of very tough decisions to make.

What we did well as a sector.... I'm speaking about my predecessors, so I'm not taking personal credit for this. What the sector did well was it came together. Industry, government, academia to a certain extent, and provincial governments came together, and they came up with common responses and common solutions.

When industry came to government, it spoke with a single voice. In particular, I would note that FPAC played a very important role in bringing together the forest sector as a common voice, but obviously there are other actors.

The Government of Canada partnered with industry in very conscious ways. I mentioned earlier the creation of FPInnovations. FPInnovations is responsible to a great degree, not entirely but to a great degree, with filling the innovation pipeline with new ideas, new products, new techniques, and new processes. That has been a great success in which the Government of Canada, and industry though, played an important role in creating.

The industry and the government thought of things as an interconnected system and realized that we needed to work together. I spoke to those three big areas, and it was deciding what the big things are that we need to do and then getting about doing them.

What the Government of Canada got right was it supported industry, and it did so in a way that was intelligent. I'd love to tell a story of a master strategic plan where we absolutely knew what we were doing. That would be a little bit untruthful. What I can say is that we had a series of good decisions, a series of very good decisions where each individual decision was the right decision whether or not it fit into a master plan at the time. But decisions were made—

[Joan Crockatt, Conservative, Calgary Centre, AB]

Could we have some examples?

[Glenn Mason]

Yes, there's the creation of FPInnovations and the decision to create the pulp and paper green transformation program, which for a billion dollars put every penny into Canadian mills. Each of those Canadian mills that got money came out of that program stronger, more capable, and able to compete with their American cousins and internationally. We invested in export market promotion, such that the growth of exports, of lumber sales to China, is almost unprecedented at 1,400% over the time period. Also, we consciously invested in partnerships in the work that Bob spoke about with building codes.

We have pushed the boundaries and are continuing to push the boundaries of what you can do with wood safely in buildings in our built environment here in Canada. We're doing the same in the United States. That's important because the United States is a much bigger market. The more we can get the Americans to do the same, the bigger the market there will be for us.

At the same time, we redirected our science. We created the Canadian Wood Fibre Centre. We put about 50 or 60 scientists in it and said that they would get their directions from industry, that it wasn't the university of the CFS, that they would be doing work that matters to industry. The Canadian Wood Fibre Centre is part of FPInnovations. While they're supported and they're technically my employees, they actually get the operational direction from FPInnovations and through that from industry.

We also turned around our science such that if there is a phytosanitary issue, if there's a trade issue that is any way related to the health and safety of our products, we have scientists who are lined up and can respond right away. Whether it's the recent opening up of the ash market to Canadian products and the opening of the market in India to Canadian products, we're there, and we're able to turn the organization and focus our scientific expertise to support the international growth of the market.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Mason.

Thank you, Ms. Crockatt.

We'll go now to Ms. Duncan, followed by Ms. Perkins and Mr. Caron.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

I appreciate the chat earlier. It's always nice to meet former Albertans. They're deep roots.

I'm interested in the billion dollars minus the one million—essentially the pulp and paper—but I note that one of the recommendations from the last report was for the federal government to be giving a lot more support to the eco-energy and renewable power sector. You've mentioned that. You've mentioned the wood pellets. I note that there are almost 60 wood pellet operations across the country right now.

I have a question for you. We recently heard that the government has significantly underspent the moneys allocated for eco-energy and renewable power. I'm wondering what has happened to NRCan's commitment to actually be supporting the diversification of products rather than just shipping out wood or even lumber. What percentage of support are you giving to the renewable energy sector?

[Glenn Mason]

If we were to speak about new products, NRCan invests between $20 million and $25 million a year in FPInnovations, which is our primary investment. It's our biggest single investment in new product development. I would argue that as a sector we're putting an awful lot into new product development.

You spoke specifically about eco-energy, so I'm just going to check my notes here. That is a program run by another sector at NRCan. It was launched in 2007 with the purpose of encouraging the generation of electricity from renewable energy sources. The program was extended and is now slated to end on March 31, 2021.

As of March 31, 2011, 104 projects qualified for funding under the eco-energy program, representing investments of about $1.4 billion over 14 years and almost 4,500 megawatts of renewable power capacity. The majority of the projects with the contribution agreements under this program are for wind-related projects.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Right, but I just want to know about wood.

[Glenn Mason]

For wood, if I could just give a bit of a toot for the PPGT, pulp and paper green transformation, program—

[Linda Duncan, NDP, Edmonton Strathcona, AB]

I know all of that, so I don't need all of that. I'm specifically asking about wood.

[Glenn Mason]

The result of the PPGTP investments is that there is enough renewable electricity created to continuously power 140,000 homes and produce enough thermal energy to heat 135,000 homes.

In terms of wood, our investment in FPInnovations is producing a range of world firsts. Also, our investment in IFIT is producing a range of world firsts and Canadian firsts in new products and new processes, etc. You've probably heard about nanocrystalline cellulose, which is a big success of IFIT's. It's a nano product that is stronger than steel and has all kinds of amazing properties. It was invented at McGill in the 1960s—

[Linda Duncan, NDP, Edmonton Strathcona, AB]

That's not energy, right?

[Glenn Mason]

You said new products.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

No, I did not. My question is very specific. I want to know what percentage of the resources that have gone into diversifying the sector have gone into the renewable energy side on wood.

You don't have to give me all the details right now. If you could send us the breakdown for forest products innovations and what those have been allocated to, that would be really useful to see which direction and which sectors are being supported. All I'm really looking for is how much attention is being given to eco-energy as opposed to pulp and paper, and the export of logs, and so forth. If you have a breakdown on the FPI, that would be helpful.

One of the other recommendations from the last report was for the federal government to explore the Finnish approach to biofuel strategy. I'm wondering if in fact the government has pursued that, and if there's information you could share with us at some point on what you have learned from them, and what you're sharing with the sector.

[Glenn Mason]

Mr. Chairman, I thought the report referred in the Finnish context to the idea of clusters as opposed to biofuel, but I would be happy to get back to the committee on that.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Sure. Great.

My final question would be about the boreal forest. My understanding is we have 24% of the world's boreal forest, and therefore there's a big onus on us to be protecting that for all kinds of purposes, for exploitation and also for habitat.

Given the fact that a lot of that is in the northern territories and in the northern part of the provinces, can you tell us what kind of activities are involved in your part of NRCan in specifically targeting the boreal forest?

[Glenn Mason]

Thank you for that question.

The boreal forest is very important to Canada. Canada has 223 million hectares of boreal forest, which is about 24%, as you said, of the world's boreal forests. It makes up a very large percentage of our forest. As a result of that, a majority, probably, of our science—I couldn't give you a specific number—is focused on the boreal forest.

Recently, over the last year or year and a half, we've published what we call the “Boreal Synthesis”, which is a world-leading collection of 12 or 13 papers. They are massive synthesis papers of all the knowledge about a variety of aspects of the boreal forest.

Much of our wildfire science is focused on the boreal forest. We're doing an awful lot on the boreal forest.

[The Chair, Conservative, Leon Benoit]

Thank you, Ms. Duncan.

We go now to Ms. Perkins. It's probably your first round of questions as a member of Parliament at committee. I'm not certain of that, but I would think so.