Natural Resources Committee on April 28th, 2015

[The Chair, Conservative, Leon Benoit]

Thank you, and thank you, Ms. Perkins. Your seven minutes are up.

We go now to the official opposition, to Mr. Bevington for up to seven minutes.

Go ahead, please, Mr. Bevington.

[Dennis Bevington, NDP, Northwest Territories, NT]

Thanks, Mr. Chair, and welcome to all the witnesses. I'm pleased to have you here and to talk about the forest industry in the north.

I'd like to talk about biomass energy as well, but I think it needs to be linked with what's happening in our forest industry with the amount of forest fires we've had. Perhaps somebody could put it in perspective with our forests the conditions they are in and the hazards that they face with the forest fires.

[The Chair, Conservative, Leon Benoit]

Would someone from the Northwest Territories government like to answer that, to start?

[Evan Walz]

We recently had, in the summer of 2014, one of the worst fire seasons that we've had on record. We had drought conditions that proceeded right into the fall and at last count we had less snowfall, particularly in the Yellowknife region, than we did in an average year. With that and with the chair's indulgence, I would like to ask Mr. Frank Lepine to elaborate on some of that.

[The Chair, Conservative, Leon Benoit]

Go ahead, please, Mr. Lepine.

[Frank Lepine, Director, Forest Management Division, Government of the Northwest Territories]

Good afternoon.

In reference to the areas that are considered for harvesting for the future, there is a requirement to do some enhanced protection of those areas, which will increase the pressure on our existing forest fire management system. It's something that we have to contemplate and deal with. In addition to that, any of the forests that have been burned over in the past years, up to a certain point in time, can be used as biomass, but there's a period where they're no longer useful.

[The Chair, Conservative, Leon Benoit]

Thank you both.

Now to the Government of Yukon, with the same question.

[Lyle Dinn]

I wanted to identify that in the Yukon we have more extreme fire behaviour years but also years of low fire behaviour. It's almost getting more episodic in terms of what we're seeing, but the overall trend of forest fire behaviour in the Yukon is increasing.

What that has done is put an imminent threat on some of our communities, especially Whitehorse. The past practices of fuel management and fire management.... We have a tremendous amount of fuel loading around communities where strategies to do that could create a source of biomass. These are around the fuel reduction and landscape level fuel treatments in and around communities. These are very expensive upfront costs, but they have huge benefits for the north as a fuel source as well as protecting our communities.

[Dennis Bevington, NDP, Northwest Territories, NT]

Thank you. That's what I wanted to get on record here, that there is some very strong relationship between biomass harvesting and forest fire management. That relationship is one that also is important for employment and reducing the cost of fire protection.

Now, to the biomass industry itself, the Northwest Territories had great success in buying wood pellets from down south. It's estimated we're taking 10% of the pellet market in Canada right now. How big is the market in the Northwest Territories? Would you suggest that the market would extend anywhere in northern Canada where we're away from the natural gas provision lines and operating on fuel oil to the greatest extent?

Does anybody want to comment on that?

[The Chair, Conservative, Leon Benoit]

We'll maybe start with Mr. MacDonald.

[Brian MacDonald]

We looked at the feasibility of pellets and looked at the markets. What provided value for us, or interest for us, was that we are geographically isolated from the larger centres that we would be competing against. That was the largest factor we found that made it a viable option. That was back in about 2009 and oil was at a different price back then. How would that change now? I think we'd have to relook at the numbers, but it was definitely our geographical isolation that made it a value proposition we were prepared to invest in.

[The Chair, Conservative, Leon Benoit]

Anybody from the Government of Yukon...?

[Lyle Dinn]

I think the current demand in the Yukon for pellets—and I'm not in charge of this so it's an estimated figure—is roughly around 2,000 to 3,000 tonnes for domestic and commercial use. But that market has tremendous opportunity for growth.

During my presentation I mentioned that the Yukon imports around a total of $50 million in equivalent heating products for the north, so there's tremendous opportunity to capture some of that export wealth that's used in fossil fuels, and generate more wealth for Yukoners.

[The Chair, Conservative, Leon Benoit]

Thank you.

From the Government of the Northwest Territories....

[Evan Walz]

I can tell you that we in the government of the NWT certainly see the use of biomass fuels eventually throughout the Northwest Territories. We see the possibility to use this fuel source wherever we can. Right now the emphasis has been placed on the southern part of the territories.

I can also tell you that we have stats from 2012 suggesting that as a government we've displaced 2.4 million litres of heating oil as a result of using biomass fuel. Another stat I have at my fingertips that might be useful is that currently the GNWT, as I explained, are trying to move toward public buildings being heated by biomass. Our most current statistics suggest that a full 16% of the heating consumption of the GNWT now comes through biomass.

Finally, if the project that we spoke of earlier during our presentation gets off the ground, there is even a possibility that we may be exporting some pellets to other jurisdictions.

[The Chair, Conservative, Leon Benoit]

Thank you, and thank you, Mr. Bevington. Your time is up.

We go now to Mr. Regan for up to seven minutes. Mr. Regan is the Liberal member of Parliament on our committee.

Go ahead, please, Mr. Regan.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you very much, Mr. Chair.

I think this is the first time we've had a meeting solely by teleconference. I must say I like it, because I've often been told I have a face for radio—

[Some hon. members]

Oh, oh!

[Geoff Regan, Liberal, Halifax West, NS]

—so I think this is well suited.

Mr. Norlock was also saying a moment ago that we should be offering to ship some of the snow we've had this year in Nova Scotia up north to help out with the dry conditions. I never thought I would hear that, but we've had so much this year that it almost seems practical to do that.

Let me start with Mr. MacDonald. You talked about the effort to start up a small sawmill. You feel that things have changed in terms of forest management practices and perhaps other things. What has changed? How is it different now? What do you see as the prospects in the future, whether it be for a sawmill or something else?

[Brian MacDonald]

When we started this sawmill up it was actually prior to my involvement with the corporation. I was involved in the community and other aspects, so I'm quite familiar with this. At that time the softwood lumber disputes were happening between Canada and the U.S., which created a lot of ambiguity for the industry, and understanding what that industry.... There was a lot of volatility in the market at that time, so that was one of the factors. We weren't really fully engaged and probably didn't have sufficient capacity or support within the government , I think, to better understand that as a small northern company. A large part of that was because everything was being run out of Ottawa, so there wasn't a lot of local capacity to engage at that time to help us advance the model. There were some finances provided to the company on some of it, but at the end of the day I think the key was a better understanding of the market from that end.

The other thing that was a challenge for us and was unique to the Yukon, from what I understood, or unique to the north, from our experience, was the very limited timber harvesting agreements or permits that we were able to get. We would get very late in the year, with last-minute notice, authorization to harvest, say, 15,000 cubic metres within a three-week to four-week period. This required a very high level of mobilization in a very short period of time, which escalated the cost of doing that, to get it all done and out of the woodlot in a very short period of time.

Again, this was largely due to engagement through Ottawa. I think having direct access locally and having people who are actually able to be more adaptable with their policy would allow us to create timber harvesting that would probably be a little bit more effective with the realities up here, and hopefully, have direct access to allow us to be able to express our concerns a little more directly to the government.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you.

Let me turn to Mr. Walz. Speaking of capacity, tell me what is happening, if you would, in relation to training. Also, you mentioned that timber harvesting was planned for the winter of 2015. Of course, we are past that in most parts of the country, maybe not in mine or yours. I hope we are over it in Nova Scotia by now. Did it in fact happen? I wasn't sure what you meant when you said it was planned for the winter, since that winter is now gone by.

[Evan Walz]

I guess I should have clarified that it's for the winter of 2015-16, if we could make that clarification. Again, with the chair's indulgence, I will ask Mr. Lepine to speak to the issue of capacity.

[Frank Lepine]

Thank you, Mr. Regan. Sorry for not having clarified that, but just for information, some of the funding we have received through the CanNor process has gone into a partnership with our Department of Education, Culture and Employment. They have an aboriginal strategic education program in a lot of the smaller aboriginal communities. Through that process and through the Aurora College process, they are putting together a number of training programs that involve everything from local forestry work in the bush to eventually involving students in heavy equipment operation and that sort of thing, so the federal government has contributed to our education and training to date.

[Geoff Regan, Liberal, Halifax West, NS]

Let me ask you, Mr. Ross, about the bioenergy strategy you have in draft. How was it developed, and what hurdles have you faced along the way in that development, or what remain?

[George Ross]

Thank you.

I am going to let Lyle Dinn, our director of forest management, take that question.