Natural Resources Committee on Nov. 1st, 2017

[Glenn Mason]

Obviously, there are some logs that are shipped overseas, but mostly it would be lumber.

[Ted Falk, Conservative, Provencher, MB]

The reason I ask that is that earlier in the year I was speaking with the ambassador from Guyana. She said that at one point the Chinese had made a deal with them to harvest their forests, because they have some very unique woods there, on the basis that they would contribute back to the economy. Instead what they did was that they pillaged their forests and just took the raw lumber over to China. They did all the value-adding in China, left them basically without the forests—the natural resource they had once had—and added no value to their economy.

I'm wondering whether that is a concern we need to have here in Canada.

[Glenn Mason]

I lived in Guyana for three years, and I'm relatively familiar with the Guyanese story. I can say that the issue of log exports is a very controversial one in British Columbia. It's the only place in Canada where we have controls on log exports. Those exports are in place in British Columbia because there is a view that it protects manufacturing jobs in Canada. Other than that, though, I would say that the forest sector has more secondary manufacturing than any other resource sector in Canada, within our borders. Most of what we harvest from the forest is processed in Canada. There are logs that go overseas, but it's not a huge amount.

[Ted Falk, Conservative, Provencher, MB]

That's excellent. I didn't realize I was asking the person who would actually have the right answer.

[Voices]

Oh, oh!

[Ted Falk, Conservative, Provencher, MB]

That's very interesting. Thank you for that.

Most of our resources are from crown-owned land that we have here in Canada, which is leased out to corporations. Currently do our leases mostly apply to Canadian-owned manufacturers or lumber companies, or do we have offshore countries like China starting to acquire leases in Canada?

[Glenn Mason]

I guess you would be referring to tenure, which is a system managed by provinces whereby they have long-term leases, in a sense, over forest tracts. These leases include forest management responsibilities in exchange for the ability to harvest wood. That would mostly be with Canadian-owned or North American-owned companies, like Weyerhaeuser, which is really an American company, or Domtar. These companies have tenure. To the extent that you have an operation or a company in Canada, you could have access to tenure.

Mr. Harvey mentioned Aditya Birla. I don't know if Aditya Birla has tenure, but having an operation in New Brunswick would probably give them a right to have tenure in New Brunswick.

[Ted Falk, Conservative, Provencher, MB]

Good. Thank you very much.

[The Chair, Liberal, James Maloney]

You saved 10 seconds.

Richard, over to you.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you all for being here today.

First, you mentioned the green construction piece. As you may know, I have a private member's bill coming forward on green construction through wood. The government has a program in next year's budget, $40 million over four years, on green construction.

I just wondered if you could expand on that to let me know where that money is being spent, what you hope to accomplish, and whether there are any plans to move forward in a broader way with that through government procurement on wood buildings.

[Glenn Mason]

That particular program, GCWood, was announced in the previous budget as part of the pan-Canadian framework on climate change. Its purpose is to contribute to reduction of GHGs through carbon sequestration of building with wood. That program was just launched by the minister in the last few weeks. That will be made available on a competitive basis for projects.

If you go back to our history on this, we had a tall wood building competition that resulted in the end in two buildings being built, the Origine building in Quebec City and Brock Commons at UBC. There was a third building that almost got built here on Sparks Street, and, in the end, the local condo market turned against the economics of that. We would see doing more of that, competitive ways to promote building with wood.

Again, our interest here is to promote things that can be economically sustainable, so it's not to subsidize a building to build a building, but rather to show that there are building systems that are available that can meet carbon sequestration benefits but also be competitive. Where that money has gone is not to subsidize the purchase of wood, but to pay, for instance, for fire testing.

In North America, we build 90%, 95%, or 98% of our houses out of wood, so there's not a lot of expansion in the domestic housing market, but buildings like this, malls, hospitals, and schools, can all be built out of mass timber, in particular, and we would love to see more expansion in that space. That's what we see promoting, also, and in particular—I think Quebec is a leader in this space—building bridges. There are quite a few timber bridges going up in northern Quebec, and that type of thing can be expanded. The non-traditional, non-residential is where we would hope to see more in that fashion.

[Robert Jones, Acting Director General, Trade, Economics and Industry Branch, Canadian Forest Service, Department of Natural Resources]

Perhaps I could add to that.

That's going to be the main part, demonstration buildings showing how wood could be used in construction, but also a part of the program is designed to provide resources to do the testing that the national building code needs to expand and go taller with wood. Currently six storeys are allowed under the building code, so with research and testing, we're looking at moving the yardsticks taller so that perhaps up to 12 storeys of massive heavy timber, cross-laminated timber, and glulam could be accepted in the building code.

The third element is to develop tools, life-cycle analysis tools, which will give builders and architects the design tools they need to make an informed choice on the type of building material they use in construction.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

I wasn't going to go into raw logs, but since you mentioned it, I thought I would go there, because it is a big issue in British Columbia. I've been told that there is a federal role in regulating the export of raw logs, especially when they're harvested from private lands rather than from provincial crown lands in British Columbia, for instance.

I just wondered if you could tell me about that.

[Glenn Mason]

There's something in notice 102, which is a federal regulation, that essentially mirrors the provincial regulation. It's an agreement between the Government of Canada through Foreign Affairs and the Government of British Columbia to require permits for the export of logs from the west coast. It's strictly a coastal issue in British Columbia. As you pointed out, it's extremely political locally. It's very touchy. There are people who disagree with it and there are people who agree with it. The economics of how it works are murky and complex, but it exists for historical reasons, which have been to protect industry jobs in manufacturing in British Columbia.

I would just imagine that, going forward, as in the past, the Government of Canada would not move on that without consulting the Government of British Columbia.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Okay.

You mentioned fires. We had a lot of fires in British Columbia this year, and there were fires in Alberta previously. It's happening more and more. It's a real concern in British Columbia as we get these hotter, drier summers. In interface areas such as where I live, people are very concerned about the safety.

One thing that the Filmon report said back in 2004 was that a good program of thinning forests around interface areas would provide jobs and provide materials for the forest industry but also make cities safer. The provincial government has not been very good at funding this. I'm just wondering if there's any role the federal government might play in the future in terms of public safety mixing with helping the forest industry. We talked about waste products, small timbers that could be used by pulp or whatever, so that we could get jobs as well as safer communities.

[Glenn Mason]

If you go back to the Filmon report and then the Canadian wildland fire strategy of 2005, which embodied those recommendations in it—it was a Canadian Council of Forest Ministers strategy and just renewed in 2016, so re-endorsed—everybody agrees that “firesmarting” communities is one of the best investments we can make. Frankly, everybody has under-invested in that in the past 10 years. To be fair, immediately following that was the global recession and the financial collapse. Folks didn't have as much money as they did when that strategy was made.

We're doing a lot of work on fire modelling and fire prediction at the Canadian Forest Service. It's one of our very important research areas, providing data and tools for decision-makers on the ground, and increasingly collaboration with the defence industry to access some of their technology in the sky for improving our ability to watch fires as they burn. Increasing the security around communities is absolutely one thing that need to be done. I can say that there are discussions going on and that they're probably the provincial governments' top priorities. I would hope to see some opportunity there.

[The Chair, Liberal, James Maloney]

Thank you.

Mr. Serré.

[Marc Serré, Liberal, Nickel Belt, ON]

Thank you, Mr. Chair.

I would like to thank the witnesses for their presentations.

In your brief, you state that there are 50,000 employees in the bioproducts sector, which generates revenues of approximately $24 billion.

Do you have any figures on the participation of women in this sector? Would you have any recommendations to increase their participation in this field?

[Anne-Hélène Mathey]

The information we have is dated. In a few weeks I think we'll have a bit more information from the last census. The last one that was undertaken didn't show a huge proportion of the workforce being female.

It's growing; I guess that's the historical trend, but it's very small. It's a bit higher in secondary manufacturing.

[Marc Serré, Liberal, Nickel Belt, ON]

Earlier you said that, in budget 2017, significant funding was allocated to this sector for the first time.

Can you elaborate on the benefits of this investment?

[Glenn Mason]

I think there were a number of things in the budget. I should mention the softwood lumber action plan, which was approved two months after the budget, which was about $867 million in off-cycle funding. Put together with the funds in the federal budget this year, I would say this is one of the biggest years, if not the biggest year ever, that the federal government has invested in the forest sector. Certainly it would parallel the PPGTP, the pulp and paper green transformation program of a few years ago, at around a billion dollars.

The funds in particular this year were the monies mentioned for the GCWood, so through the pan-Canadian framework on climate change; funding of around $40 million was provided. In addition, there are monies in the clean-tech piece. Between $40 million and $50 million will go to the forest sector for clean tech. In addition to that, there is about $55 million for off-grid diesel, so getting remote communities in particular off of diesel.

I think that's a good summary of the budget. They're well distributed, so between that and the softwood lumber action plan, which renewed all of our export market programming and our innovation programming, you're more or less at a billion dollars this year.

[Marc Serré, Liberal, Nickel Belt, ON]

That leads me to my next question. When you look at the bioproducts, biochemicals, and bioenergy, can you give us a sense of the potential to increase the export market? What can we do as a federal government to work with the private sector to see how we can expand? What potential do we have to expand on the export side?

[Glenn Mason]

Do you want to answer, Anne-Hélène?

[Anne-Hélène Mathey]

Oui.

It's good potential, I would say. Some of the most recent changes, I think, and some noticeable developments have been in either construction—I'll let you guys talk about China, maybe—or the energy front. We were talking about Canadians being quite good in terms of advanced technology for biofuels, for instance. Those are being sold quite successfully south of the border.

In terms of what would be useful, a lot of these new products in the secondary manufacturing or the advanced, for innovative products in general, what they need in order to be traded or exported are quality control specs and environmental assessments. This is where we are investing some efforts—again, I'll turn to Bob on that—or working with ISO to delineate some of these new products.

This is where we're putting a lot of effort, I would say, not only at the governmental level but also at the private level, because as soon as you have proper quality control and quality standards in place, you can trade.

[Marc Serré, Liberal, Nickel Belt, ON]

You mentioned Generation Energy, and indicated that 25 companies got together. You talked about the cluster. I just wanted to get a bit more of a sense about the location aspect. When you look at R and D and academia, when you look at the whole supply chain and the whole valley of death and trying to get products to commercialization, what have you done in that area to support the cluster, and what can we do to expand the cluster?