Thank you, Mr. Chair.
I would like to mention that we sent a slide deck to you. I will refer to it. I won't go through each slide, but I will refer to them, because some pictures are worth a thousand words.
FPInnovations was born in that era of 2008 from the merger of four research organizations. Today, as we speak, we are the world's largest industrial R and D organization in the forest sector. We have 600 employees and a $100-million budget: one-third from industry, one-third from government, and one-third from contracts, royalties, and licensing.
I think it's important to note that we are doing the research from genes to markets, so we have the entire value chain. One thing that is important to understand is that we don't do all of this research personally. We make sure that this research gets done and gets done by the best.
You'll see here that we're looking not only at upstream innovation but at downstream innovation. On the upstream, which is harvesting, inventory, and genomics, I think it is important to know that we're working from what used to be the forest industry to what will be the forest industry of the future.
I have two examples. If you look at the enhanced forest inventory, you see that it was done by walking in the woods. As we speak, we're doing forest inventory using drone technology, and we will be doing species identification in the near future using genomics content. It's the same thing with forest harvesting. One of the issues with forest harvesting is that it's very hard work. We're working with different equipment companies in Canada to go from man-driven forest equipment towards unmanned forest equipment.
In the case of the downstream, it is very important to note that the philosophy and culture of the organization now is to make sure that we get the best value from the trees at each step of the harvesting. At the beginning, obviously, it's the wood product. After that, it's the pulp and paper, and then the chemicals. We are now at the step where we can extract other value from cellulose: cinnamon, nanocellulose, lignin, and sugars. At each of the steps, we try to go into the pre-commercial phase and go from there.
Let's look at some of the impacts. As David was saying, we live in a global context. Some of the driving forces in the global context are the driving forces for our research priorities. Population growth, urbanization, the emerging middle class, and the growing need for sustainable housing are obviously very important.
Let's look at some examples of the type of work we do. It's all related to the building code of Canada. In 1941 in Canada, you were able to construct wood-framed buildings of up to eight storeys. Because of the impact of other sources of building materials, in 1953 the building code only allowed us to go to four storeys, which meant that the construction impact of wood was much less. We hope that in March 2015 the building code of Canada will go back to six- and eight-storey buildings.
How do we do this work? We publish a lot of technical handbooks and technical solutions. Cross-laminated timber was mentioned a little earlier, as were engineered building woods for high-rise construction and also code implementation. A lot of research is done to make sure that Canada can construct in wood safely.
The opportunity obviously is really to increase the volume of wood used in construction using different technologies and different methodologies from light wood frame to hybrid.
If you look at the slide, you will see some of the new projects that are already in the system. I'll give you an example. The bridge you see in the picture is one of the seventeen bridges constructed by Nordic from Chibougamau to link Chibougamau to the Stornoway diamond mine. Those bridges can span 160 metres and can carry a 175-tonne load. Once the cement base is completed, a bridge can be constructed in one week.
A totally new era of infrastructure is in front of us. If you look at slide 12, you will see an eight-storey building in Prince George, which was opened only a few weeks ago and which holds the UNBC wood engineering school. That's already in place. If you look at slide 13, you will see a 13-storey building in Quebec City, which will be announced in a matter of days. Those are really the new types of products that allow us to go back to what we could have been doing in 1905. If you look at slide 14, you will see a series of other examples like the Richmond skating ring here in Vancouver, which was used for the Olympics and was constructed in four months from cross laminated timber.
In the future, we will be going towards a project that will be done, first, in Ontario and then in New Brunswick and Quebec. They are integrated wood product manufacturing systems. These will be, if you like, the sawmills of the future. So we will be able to do not only two-by-fours but also insulation, platforms, and acoustic platforms. We hope those will be built in 2015 and 2016.
Another project is the extraction of cellulosic sugar in northern Ontario, which will involve a partnership with the chemical industry in Sarnia. So the sugar stream is going to be changed into some of the green chemicals and shipped to Sarnia to be sold and transported and eventually challenge some of the hydrocarbons. At the same time, the byproduct, which is the lignin, can be used for bioproducts. As we speak, we are testing the lignin to be used in animal feedstock.
Since 2008, with Canadian industry—first with Domtar—we have been able to create the first cellulose nanocrystals plant in the world, producing one tonne a day in Windsor in the Eastern Townships. Last spring we opened a cellulose filament plant with Kruger in Trois-Rivières, and as we speak, we're completing a lignin extraction plant with West Fraser in Hinton, Alberta. If you look at those investments, they're worth well over $100 million. The first two are world premieres.
Finally with regard to improving competitiveness, the challenge of an R and D organization is to put new products and new processes into the market, but also to ensure that the integrated companies that are still doing pulp and paper and wood products can be efficient.
We have a competitiveness program optimizing existing assets in Canada. By 2020 we will be delivering savings of more than $50 million per year for each of the companies. One company alone in northern Ontario was able to save $15 million because of this optimization.
What you see is that from 2008, when FPInnovations was challenged to become the R and D and innovation branch of the forest sector, we have delivered. We'll continue to deliver. Transformation is the next step that we have planned, and we are already seeing examples of this.
Thank you.