Thank you, Mr. Chair.
Thank you for the opportunity to testify before the panel.
My main message for you today is that the forest sector is increasingly a source of solutions for the challenges society faces.
My main message for you today is that the forest sector is increasingly a source of solutions for the challenges society faces. Today Canada has a clear opportunity to leverage its global forest sector leadership into bioproducts, biochemicals, and bioenergy that will lower our greenhouse gas emissions and drive economic growth across Canada and in rural areas in particular.
Canada's biomass availability is virtually unmatched elsewhere in the world. Canada has 9% of the world's forest, which is 17 times more forest per capita than for the average person in the world. Canada also uniquely possesses a well-integrated forest supply chain and state-of-the-art science and technology leadership.
I have just come back from Sweden, where I was asked by both Finnish and Swedish people alike why they can't be more like Canada. They were referring to our innovation ecosystem and to FPinnovations in particular, a unique public-private R and D organization. This integrated network is the national bioeconomy.
My goal this afternoon is to convey to you the magnitude of the bioeconomy opportunity, but first I would like to set the stage for the current state of affairs. The economic crisis, the U.S. housing crash, and the severe decline in paper demand severely affected the forest industry in the early 2000s. However, this crisis also spurred investments in innovation, a change in business models, and investment in market diversification, not just in terms of geographical destinations but also in terms of end uses for Canadian forest fibre.
Today the forest industry is much more efficient. It employs more than 213,000 Canadians and contributes more than $23 billion a year to our GDP. It provides more jobs per dollar of value added and contributes more to the balance of trade than any other resource sector. The forest industry exports more than $34 billion of forest products to 180 countries around the world.
Today forest products are strengthening composite car parts, making vehicles lighter, reducing emissions, and replacing plastics from non-renewable fossil fuels. A forestry worker is as likely to be wearing a white lab coat as a red plaid shirt. She might be a genomics researcher investigating ways to make trees more resistant to disease, or an economist working to optimize distribution. This is the bioeconomy: in broader terms, the secondary value chain products of the traditional forest sector.
Bioproducts, biochemical, and bioenergy can reduce demand for fossil-based and non-renewable materials such as cement and steel, substituting with renewable content. Anything you can make from a barrel of oil you can make from a tree. These products can deliver significant social and environmental benefits in particular when biomass is sourced from residual and waste streams. In this way, the bioeconomy can support high-carbon sectors in finding solutions to reduce their carbon footprint.
However, the bioeconomy is not just about greenhouse gas reductions. The bioeconomy provides other environmental benefits. It also creates employment and economic development opportunities for rural areas and indigenous communities, 70% of which are in or adjacent to forests. As such, the bioeconomy is a key element of a transition to a low-carbon economy.
The importance of the ongoing development of the bioeconomy to the forest sector cannot be overemphasized, given continued pressures facing the traditional industry ranging from softwood lumber and other trade disputes to market erosion of newsprint and other paper.
What is the scope of the secondary products sector? I would like to give you a precise idea of the contribution of the bioeconomy to Canada, but unfortunately I cannot. Only a portion of these products falls under the umbrella of the secondary forest sector manufacturing captured by Statistics Canada, which tallies their contribution to GDP at $6.3 billion. This is over a third of the total GDP contribution to the total forest sector. According to their available data, these products have grown by more than 7% over the last year alone, but this metric does not include cabinet-making, for instance, which has been a successful industry in Canada.
Similarly, the secondary paper products that Statistics Canada measures do not account for some of the more successful products issued from secondary or tertiary forest sector manufacturing. These often fall under other economic activities, such as organic chemistry or automotive.
For the bioeconomy more broadly, and its expanded forest sector value chain, this lack of data forces us to rely on proxy statistics. For instance, where measured, advanced bioeconomy revenue has been shown to grow on average over 10% each year over the past decade, which is much faster than the rest of the economy. The associated employment growth has also been shown to be more rapid compared against not only the overall private sector but also other knowledge-driven, technology-based sectors such as finance and insurance, aerospace, and computer hardware.
Critically, many of these products are already commercialized. This is not pie-in-the-sky. In the context of meeting the greenhouse gas mitigation targets of the Paris agreement, bio-based products and energy therefore present a realistic alternative to fossil-based products and chemicals today. In fact, the OECD estimates that by 2030 advanced bioproducts could contribute up to 35% of the output of chemicals and other industrial products, and up to 80% of pharmaceuticals and diagnostic production. For Canada, this would represent 50,000 jobs and generate $24 billion of revenue.
A specific example may be helpful. Forest biomass is one of the most promising options for reducing diesel dependency in remote communities. In the north, two-thirds of energy needs are for heating, which can be efficiently and environmentally provided by bioenergy. Research estimates that a remote community that relies on imported oil sees 90% of the energy revenue leave the community, but 75% of revenues from locally produced wood chips are reinvested in the community.
A final example is green construction. For instance, there is currently a global renaissance in building with wood. Origine, a tall wood building in the final stages of completion in Quebec City's Pointe-aux-Lièvres eco-district, is the tallest wood-constructed condominium in North America. Earlier this year the tallest modern wood building in the world officially opened—Brock Commons, a new student residence at the University of British Columbia. This magnificent building is not only an engineering and architectural showpiece, it is an environmental game-changer, storing close to 1,600 metric tons of carbon dioxide and saving more than 1,000 metric tons in greenhouse gas emissions. That's like taking 500 cars off the road for a year.
The pace of national and international developments of the bioeconomy has been accelerating. With the pan-Canadian framework for clean growth and climate change, the forest sector has been put in the spotlight as a source of solutions to transition to a low-carbon economy.
Budget 2017 marked the first time that programmatic funding was awarded to the Canadian Forest Service not specifically to support the forest industry but rather to leverage its benefits in other areas of the economy such as low-carbon construction, reducing diesel reliance in remote communities, and indigenous economic development. Governments understand that the economy of tomorrow will include the bioeconomy. In September the Canadian Council of Forest Ministers unanimously endorsed a forest bioeconomy framework for Canada aimed at making Canada a global leader in this space. That framework outlines a new vision for the future of the forest sector and the role for biomass in the transition to a low-carbon, sustainable economy.
Just a few weeks ago, the Department of Natural Resources hosted Generation Energy, the largest energy forum in our country's history. Biomass and bioenergy figured prominently in those discussions. The private sector is starting to get organized and rally around the bioeconomy.
Over 25 companies recently came together to submit a proposal to formally set up and fund a Canadian bioeconomy cluster, leveraging over $400 million in private investments around two national strategic areas of focus. The first is sustainable living, which is aimed at building value chains that generate advanced biomaterials and biochemicals. The second is clean transportation and infrastructure, which is aimed at lowering the carbon intensity of industrial processing and transportation by accelerating the scale-up and deployment of biofuels.
In conclusion, 2017 has been a challenging year for the forest sector, including multiple trade disputes and serious consequences from climate change, such as wildfires and pest outbreaks. Deploying forest sector solutions while navigating these challenges will determine the speed at which the bioeconomy takes hold, because it is not a question of if, but when, and whether Canada will be a leader or a follower.
Today governments, indigenous communities, forest companies, and environmentalists are all working together to promote the bioeconomy. Never before has the opportunity for Canada's forest sector been so strong, not just to survive but to lead, both nationally and internationally.
Thank you.
