Natural Resources Committee on May 12th, 2015

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Thank you.

Mr. Macdonald, you said that Canadians have typically focused on volume over high-quality and high-value products—in the traditional products, anyway—and those of us who do some woodworking know that's true. Do you see that as kind of where we've settled, and do you see that happening as we develop new technologies, that we're going to be the people who are focused on volume rather than those high-value products?

Second, you talked about the highly competitive products from Europe, and I'm wondering if you could comment on where they have set themselves. Are they trying to cover both of those things, or are theirs more the high-value products, if you don't mind talking about that?

[Iain Macdonald]

Yes. In regard to volume over value, I think it's easier to focus on the commodity products. That's been the traditional case with many parts of Canada's industry, certainly in B.C. My recommendation was that we should do all we can to encourage those companies that have traditionally produced volume-based products to move up the value chain. They have better access to capital. They have better management systems and are in a position to move into the kinds of products that would enable us to take advantage of the changes in the building codes, for example, to build cross laminated timber, base structures, and glued laminated structures.

There is a Natural Resources Canada program called IFIT, which is investments in forest industry transformation. It's a great program, but it only provides grants to the first company on board with a new technology in Canada. My comment was that, to have a really competitive sector, we need to have five, six, or 10 producers of cross laminated timber, instead of which we have two at the moment. We need to thicken the supply chain.

I think Europe is a more densely populated region and has much harsher competition. They've had other factors such as higher energy costs, which has spurred them on to focus on innovating in energy efficient housing and those kinds of things. They're earlier to the game than we are, and we're finding that you can land product from Europe 40% cheaper than buying the comparable products in Canada, even with shipping factored in.

We need to find mechanisms to be able to help not just the first company to market with a new product in Canada but the second, third, and fourth.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Thank you.

Ms. Berube, I'd like you to tell us a little about your Wood WORKS! awards. You have a great book here and I'm looking through it. It has some fantastic projects in it. I'd like you to speculate a little about what you think you'll be giving awards for 10 years from now—and maybe the others want to talk about that too. Where is the industry going, and what will be the cutting-edge technology in construction 10 years from now?

[The Chair, Conservative, Leon Benoit]

Do all of that in 30 seconds, please.

[Marianne Berube]

In 30 seconds...?

We started the awards program in Ontario 15 years ago, and now it's across Canada and even in the States. We were releasing a progression of the projects that have come in. It's mainly glulam, your regular projects in community centres, hospitals, etc. We've seen quite an advancement.

But as we move forward to the next generation, mid-rise, tall buildings, mass timber, all these new projects, and as we keep innovating, this is what will be.... The whole point of the awards is to encourage. Architects like to be recognized, and engineers, and universities and colleges, and the leaders who are doing this, so it's worked really well.

[The Chair, Conservative, Leon Benoit]

Thank you.

Thank you, Mr. Anderson.

Now, Ms. Crockatt, you have up to five minutes. Go ahead, please.

[Joan Crockatt, Conservative, Calgary Centre, AB]

Thank you very much.

Thank you to all of our panellists who are here today. This has been a fascinating study I think for all of us.

This cellulose wood product, or engineered wood, seems like a product that's almost too good to be true. It's green, it's cheaper, it's stronger, it's lighter, and you can build panels to put up buildings at a storey a week. What is the challenge? What is holding us back?

I'd first like to ask Marianne Berube, please, and then Mr. Archambault, if you could address what is the challenge holding us back, or are we full steam ahead now?

[Marianne Berube]

With the cellulose products, is that what you're talking about?

[Joan Crockatt, Conservative, Calgary Centre, AB]

Yes.

[Marianne Berube]

I'm more involved on the structural side, so I really can't answer that well.

[Joan Crockatt, Conservative, Calgary Centre, AB]

Mr. Archambault, I'll ask you that question.

[Daniel Archambault]

I'd say that we are in a sense full steam ahead because we have invested $43 million in an R and D facility focused only on that. The challenge will be to take the development we do with that R and D facility, put it at a commercial level, and sustain the development because after three years our funding will be over.

In some applications, most of the applications outside of the traditional sector, you're talking about a commercialization cycle of more than five to seven years rather than three years. We're going to have to find a way to continue to do the research and then do an alliance with potential users that will want to invest and do the development so they can use it in their end product and we can keep the technology. Then we grow the use and realize the full potential of the material.

[Joan Crockatt, Conservative, Calgary Centre, AB]

Okay. It was nice to hear the praise for the government programs, that NRCan believed in you from the beginning, and that you still feel—after going through what is normally the hardest part of going into a new area—you're getting that kind of support. It's nice to hear that.

Over the long term, do you feel this is a really sustainable development you've seen? When will it be economic, in your view?

[Daniel Archambault]

We believe our goal when we started the project was to be able to finance ourselves within five years. We hope to have one or two commercial applications before the year end, and we'll have one application outside of the pulp and paper world within the next two years. That's our goal. Then the ball will start rolling.

[Joan Crockatt, Conservative, Calgary Centre, AB]

I wonder if you could address one of the few comments I've seen about the industry from people asking, “Is wood not susceptible to fire?” Is there any advantage of the engineered wood products of cellulose fibres with regard to their flammability?

[Daniel Archambault]

No. The CF is a flammable material because it's made of wood fibres. I think in regard to tall buildings, Madam Berube or Mr. Macdonald is better placed than me to answer that.

[Joan Crockatt, Conservative, Calgary Centre, AB]

Would one of you like to take that?

[Marianne Berube]

Before the building codes were changed to six storeys there was much research done by FPInnovations, NRC, and a whole consortium. These buildings—there are tougher things in place—must have sprinklers, firewalls, and all kinds of safety precautions.

Wood is a flammable material, but if it's mitigated by buildings with sprinklers and done properly these will be safe buildings that are safer than a lot of currently existing three and four storeys that don't have that in place.

[Joan Crockatt, Conservative, Calgary Centre, AB]

I wonder if someone—and I throw this open to any of the four of you who want to take it on—could explain to us, for the layman, exactly what the nanotechnology looks like, so they can understand what a piece of engineered wood looks like, and why we've suddenly been able to transform this industry by taking what could have been scrap wood and transforming it into this new high-tech product. What does that look like?

[Iain Macdonald]

I think if I can—

[The Chair, Conservative, Leon Benoit]

Go ahead, please, Mr. Macdonald.

[Iain Macdonald]

We're dealing with two separate things. The mass timber that would be used in tall wood buildings, for example, is not a particularly technological product. It's taking two-by-fours and laying them this way, putting some glue on them, then taking two-by-fours and pressing it all together. It ends up with a material that can substitute for concrete very effectively, but not very technological. It requires some expensive machinery, but the process itself is quite simple.

[Joan Crockatt, Conservative, Calgary Centre, AB]

It's kind of like plywood, just turning it various ways.

[Iain Macdonald]

Like massive plywood, exactly, yes, and the advantage that you would have in terms of fire would be that this layer is now thick, and if you think about putting a huge log on a fire versus some kindling, the huge log won't catch, but the kindling does. It's the same comparing a two-by-four stick frame to this mass timber. In terms of the NCC, I know nothing about that, so I'm going to pass it over to my colleague here.

[Daniel Archambault]

NCC and cellulose filaments start from wood fibre and develop into a product that has unique properties but that is to be used outside of the traditional use of what we use for wood products. NCC and cellulosic filaments are mainly a strengthening agent. NCC has other characteristics in terms of change of rheology and things when you mix it with different products. So you take basically a wood-based raw material, and it's almost more a chemical than a wood product, but it's green and it's sustainable. That's the key element, and it has unique properties.