Natural Resources Committee on May 7th, 2015

[Dany Morin, NDP, Chicoutimi—Le Fjord, QC]

Thank you very much.

My questions are for Mr. Veilleux and Mr. Pelletier.

I want to start by saying how disappointed I was to hear you give your presentation in English. I will be asking my questions in French.

I was pleased to hear you talk about the investments in forest industry transformation, or IFIT, program and its importance. My Conservative colleague, Mr. Trost, said that it was important for every federal dollar to go farther, and I agree with him. But it all boils down to the numbers.

Last year, the Conservative government proposed beefing up the program by $90.4 million over 4 years. As you mentioned, the needs of the forest industry are great indeed. In its pre-budget report, the Forest Products Association of Canada asked the government to increase the program's funding by $500 million over 6 years, because that amount accurately represented the forest industry's needs. Obviously, it's music to your ears when the forest industry gets money from the federal or another level of government.

I want you to talk about projects that you'd like to carry out if the federal government were to enhance the program's funding, projects that would be a boon for not just Canada's forest industry, but also the economy, as a whole. I'm often disappointed that the Conservative government, whose financial resources are limited, gives more money to the automobile sector than to the forestry sector.

If the federal government were to beef up IFIT program funding by $500 million, as requested by the Forest Products Association of Canada, what projects would your company, as well as the others represented here today, put forward?

[Yvon Pelletier]

I am going to answer your question, and then I'd like to follow up on an important point that was raised earlier in response to the previous question.

There were projects valued at more than a billion dollars that would lead to new product development and strengthen the industry's ability to compete, as well as promote the use of fibres here in Canada. There are a tremendous number of projects in various industries, be they wood, paper or pulp.

Without getting into specifics, we are continuing to develop the biorefining component. Some of our projects will enable us to use residue, which has some value, and develop it in order to manufacture new products that will replace plastics, fuels and the like. And all those efforts will make us more competitive.

The research that's been done over the last five or ten years holds significant potential and can certainly help Canada's industry grow more quickly and make it stronger.

Now I'd like to follow up on what was said about bamboo fibre.

[Dany Morin, NDP, Chicoutimi—Le Fjord, QC]

Excuse me, Mr. Pelletier, but I don't have much time and I'd like to ask you another question.

[Yvon Pelletier]

Okay.

[Dany Morin, NDP, Chicoutimi—Le Fjord, QC]

You mentioned biorefining. Do you support the Forest Products Association of Canada's request that the government redirect all undeployed capital from Sustainable Development Technology Canada's $500 million NextGen biofuels fund to a biorefinery fund that would cover the full spectrum of bio-energy, bio-chemical and bio-material opportunities?

[Yvon Pelletier]

Absolutely. We've looked at the fund numerous times. According to the comments we've heard, it's not being used because it's difficult to access. What's more, there is considerable potential there to advance the forest industry.

[Dany Morin, NDP, Chicoutimi—Le Fjord, QC]

Do you have the sense that the federal government isn't all that willing to change the eligibility criteria for those programs?

[Yvon Pelletier]

I can't really answer that, given that the request is fairly recent, if I'm not mistaken. So I can't comment on that.

[Dany Morin, NDP, Chicoutimi—Le Fjord, QC]

Do I have any time left, Mr. Chair?

[The Chair, Conservative, Leon Benoit]

Your time is up. There will be another round going to the New Democrats.

Next we have Mr. Leef.

[Ryan Leef, Conservative, Yukon, YT]

Thank you very much, Mr. Chair.

Thank you all.

Some of the testimony was interesting. It was pretty technical and very different from what we've heard in this study so far. It's going to be an excellent addition to what we've already heard.

I'm just wondering if I could ask a question of each of you, if we have the time to go through it. It's perhaps a bit of a pie-in-the-sky question, but maybe you'll be succinct. What do you see Canada having right now that no other country has that we can build on? I don't mean to restrict that to the raw resource itself, but include innovation, skills, human resources, diversity, political action, volumes of product, policies, or legislation. You can run the gamut if you want. Where does Canada stand in terms of the one thing nobody else in the world has?

[The Chair, Conservative, Leon Benoit]

Dr. Sain, go ahead, please.

[Prof. Mohini Mohan Sain]

I think Canada is a leader in developing the biorefinery concept. In particular, the products coming out of the university are not even comparable to any other vast quantity. I think our focus should be in that direction and we should work with our whole sector of forest products and others to advance that, and commercially that will make the market. This is the fundamental thing.

The second thing is about entrepreneurship The young generation wants to create their own companies, and they're creating their own companies. I can tell you, from the University of Toronto we create 364 companies every day. I have forest students who've created companies. We have to nurture that. We have to give them support so that they can have a commercial product, which can then be picked up by a factory like Mr. Pelletier has. That will integrate us and give it global market and capital. I think these are the things we need to do.

Thank you.

[Ryan Leef, Conservative, Yukon, YT]

Thank you.

[The Chair, Conservative, Leon Benoit]

Go ahead please, Professor.

[Prof. Sudip Kumar Rakshit]

Starting from the raw material, and you said not to talk about that, but since we have that, we have been working in all of these areas. In many areas we are leading, as I mentioned repeatedly, on the nanocrystalline material, carbon fibres, and such things.

As I have repeatedly said, there are many products, in spite of these innovations, where we are not able to meet the price, sourced from the crude petroleum oil industry. When the price bounces back, we will be in the game again.

We have the know-how, we have the scientists working on it, and entrepreneurs are working on products that are not bulk products but high-value small-volume products, but many of them are restricted by their sourcing from other raw material.

[Ryan Leef, Conservative, Yukon, YT]

Thank you.

[The Chair, Conservative, Leon Benoit]

Mr. Voss, do you want to speak to that?

[Ben Voss]

I can add a little different flavour. I'm an engineer and I love technology.

We do have tons of interesting innovation in Canada, but probably the one thing I'd say that no one else has said is that we're close to the U.S. market. The biggest consumer market in the world is right next door—a six-hour drive. It really is easy to produce here and ship into that market, and globally most companies want to position their production here if they can access the market. So that's a natural advantage that I don't know if we're capitalizing on as well as we could.

The whole concept of exporting the raw material and bringing it back here could be definitely explored further as some low-hanging fruit.

[Ryan Leef, Conservative, Yukon, YT]

Thank you.

[The Chair, Conservative, Leon Benoit]

Thank you.

Mr. Pelletier or Mr. Veilleux, go ahead please.

[Yvon Pelletier]

One point that we've made in our presentation, which Mr. Voss just spoke about again, is that we need to repatriate some of the products that are being made elsewhere. I think we need to create the right hosting conditions together. There are some people looking at that, but as I said, they are not taking the extra step because the hosting conditions are not quite there.

We need work, again, at the federal and provincial levels, and with some partners to create those hosting conditions, and I think we would bring in some products that are very innovative, that have gone through the development cycle.

The development cycle, for everyone's information, is not one or two to three years. It's five, ten or fifteen years for a product. The product I'm talking about has been in the market for 15 years and it's starting to get going right now.

We need to bridge the gap between now and 10 years, and there's not enough of that happening. We need to create those hosting conditions to bridge that gap.

[Marco Veilleux]

There is another key point. Canada's forests are sustainably managed. We do an excellent job of managing that resource; we are leaders in that respect. We have access to a renewable fibre that will be there for years to come. That's a key condition. We also have an extensive research network in Canada; we have many people with a lot of passion for forestry and the forest industry. Those are things that give our industry and Canada, overall, an advantage, but we have to put the right conditions in place to attract tertiary processing.

[The Chair, Conservative, Leon Benoit]

Thank you.

Thank you, Mr. Leef.

Finally, we'll go to Mr. Caron and Mr. Rafferty.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Mr. Chair. You're right, I will be sharing my time with Mr. Rafferty.

I just have one question. Mr. Pelletier, my sense is that you really wanted to say something about bamboo. And now I'm going to give you that chance.