Evidence of meeting #73 for Natural Resources in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was construction.
A recording is available from Parliament.
4:40 p.m.
Liberal
The Chair Liberal James Maloney
Thank you very much. We're going to have to stop there.
To all three of you gentlemen, we're very grateful for your taking the time to be here. Your evidence will be very helpful to our study that we're dealing with right now.
I'm going to suspend the meeting for two minutes, and I mean two minutes, and then we're going to start very promptly, so don't go anywhere.
Thank you.
4:45 p.m.
Liberal
The Chair Liberal James Maloney
We're going to resume, ladies and gentlemen.
Mr. Green, can you hear me?
4:45 p.m.
Liberal
The Chair Liberal James Maloney
Okay, that's great, and likewise. Thank you for joining us and thanks for your patience. We're running a little bit behind schedule today.
We will start with you. We're grateful you're able to join us today. We'll give you the floor for up to 10 minutes to deliver your remarks. Then we have another witness who will follow you, and then we'll open the floor to questions from the members around the table.
The floor is yours.
4:45 p.m.
Principal, Michael Green Architecture
Thanks very much.
By way of introduction, I'm an architect in Vancouver. I have my own practice of about 25 employees. We build around the world in wood and in advanced wood products, for the most part.
At this point, our firm is fairly well recognized as one of the most advanced wood design firms. Certainly in Europe we're seen that way, and in the North American context. We have had the privilege of being at the forefront of our industry in the use of wood products, and that has given us some insight that we're really pleased to share with you.
In addition to my firm, I run a not-for-profit school that specifically teaches designers how to build with wood, as well as a not-for-profit program called Timber Online Education, or TOE for short. This is a global program to advance the understanding of wood construction across all aspects of the construction industry. It's something that we are in the process of building, but it will certainly champion the advancement of the use of wood in building and of safety around it, which is specifically, but not only, for architects and designers. It is also for the construction industry, fabricators making wood products, policy-makers, city officials, and code officials, as well as environmentalists and the general public. Our interest is in expanding knowledge in all of those areas through this global online program, which has been translated into the world's languages, thus giving us a very wide reach.
Why I say all this is that we see wood products at a very interesting crossroads. It's clear that in the architectural realm, for the most part my focus is on structural products and advanced structural products. I wrote a book called The Case for Tall Wood Buildings, and then later I gave a TED talk that became the founding principles for moving us toward increasingly taller buildings in wood. We've had the good fortune of being able to do that.
Unfortunately, the commercial market here in Canada has not kept pace with the fact that in Canada we not only have enormously good products from forestry, obviously, but also enormous expertise within our industry. We have some of the finest engineers, builders, and fabricators working in wood. For some reason, we're not seeing those buildings advance as quickly as we could, whereas in countries like France, we have five different projects. The majority of buildings that we're seeing proposed across France right now are moving towards wood, which is quite interesting. Equally, we're very involved in the United States. They were very late to come to the game of talking about these advanced wood buildings, but they now have entered the race and are starting to build a lot of them.
Why that matters to all of us around the secondary wood product market specifically and in advancing the cause for Canada is that there are two organizations currently in the world looking to move the construction industry, which is largely a craft-based industry, from a craft into a sophisticated manufacturing process. It is the intention to dramatically change the cost of buildings in society by dramatically making buildings more affordable, reducing waste, and making them more sustainable by basically moving into a factory environment.
The state of the construction industry is such that you cannot factory-build in concrete because it's too heavy to transport. You can't do it in steel because again it's too heavy. However, mass timber panels and predominantly CLT, cross-laminated timber, are very robust materials that are also lightweight enough to allow manufacture in factories. These are very sophisticated factories using robotics, much like the car industry, allowing significant amounts of automation and customization.
This means that buildings can be unique but affordable, because they are built in a controlled environment. This is the revolution I see that is similar to the way Uber has impacted the taxi industry and Airbnb has impacted the hotel industry and Amazon has transformed the way products are bought.
We're working with one company in the United States, called Katerra, which has raised a little bit more than $1 billion in their first 18 months to develop it. It's a Silicon Valley-based company that is building the largest CLT plant in the world in Washington state and has plans for two more factories in the United States. This obviously has a huge impact not only on our construction industry but also on our forest products and where these panels are going to be built and how they're going to be used.
By the way, there's a similar company. It's enormous. It's called Legal & General. It's the insurance company in the U.K. that's doing this exact same thing in the U.K. Having never built a house before, L&G expects their system of factory-built housing to make them, in the next five years, the largest housing producer in the U.K., all based on using wood products, and specifically cross-laminated timber.
It is a a very significant change coming to our industry that the industry is very unaware of, frankly, and it requires a much more integrated model of understanding how wood products reach the market and how they're not simply a commodity we buy at the stores, but part of a systems approach to the future of building.
With regard to Katerra, they are Silicon Valley-based. With them, we're starting to work with Google. We're also starting to talk to Facebook with them to build huge campuses of housing, specifically in Silicon Valley, but obviously this is what we want to see happen here.
We expect this model to mean housing that will be about 30% less expensive than the current housing in California, which has a market similar to that of British Columbia. Therefore, if this company is as successful as I expect them to be—and certainly they're funded to be successful—we're going to see them having a huge impact on the use of wood products, as well as the affordability of buildings.
This same company is interested in investing in China and is partnered with a very large $180-billion-a-year company in the electronics market to expand construction using the CLT spot as their backbone into the Chinese markets. I'm certainly speaking to them about coming to Canada. I'm trying to encourage them to do so. I think they're open to it, to access not only our forestry products but also our design expertise industry here, but there are gaps in the system in terms of making that happen.
China obviously is of particular interest to all of us. I live on the west coast. It matters. Again, it's not about just shipping raw products, raw logs, or CLT panels; it's about shipping entire systems of building. The Chinese markets are open for it. I'm not sure if somebody has spoken to you yet, but until recently there were almost no wood buildings being built in China. On October 2, the codes in China were changed to allow buildings up to 18 storeys tall to be made of wood, specifically because of the leadership of what's happened here in western Canada, and yet unfortunately we don't have a market ready to go to access what could be a major transformation in the way they build in China.
I think the Katerra model is exceptional. It's something that I certainly want to see happen in Canada. Unfortunately, it definitely requires significant kinds of investment. The Silicon Valley folks are used to the scale of investment. The construction industry and the forest products industry are not used to that scale of investment, so obviously, as a matter of public policy, I believe there are opportunities to incentivize these companies to keep us at the forefront of the construction industry; therefore, in kind, we will be at the forefront of the forest products industry, as we should be.
There are several components to how I see that success happening that I'm happy to speak to. Certainly one is globalizing the education system around how to build in wood.
I am working with folks in Turkey and in Brazil, and have worked in the past with China, where there's interest in building this way but simply no knowledge about how to do it or how to use these wood products. For too long, certainly in British Columbia and I think in Canada, we have thought to export our wood products to places such as China by assuming they will adapt our building culture, meaning lightweight wood frame construction. That simply doesn't work, because building cultures take centuries to evolve. It doesn't happen overnight.
Instead, with the CLT market we're working with a system that can be adapted to their building culture and therefore will be much more marketable within countries such as China and India, and emerging markets, including Brazil. Places such as Turkey and Brazil have enormous interest in moving toward wood construction but simply don't have the experience. Again, I think this is an opportunity for foreign investment for our companies, for them to think not just about our own forests but about opportunities elsewhere.
I realize that I'm introducing concepts on a macro scale. I'm happy to speak to the details scale.
My experience has been that as I travel the world lecturing and speaking, I've realized that we are at the forefront. Every country is interested in this. We need to maintain some global leadership on this for our industry to benefit, but we need to think globally and of course act locally.
Investing in the forest sector is a global opportunity for us in terms of the investments made into companies like Structurlam or BC Passive House, and there have been various investments by government to encourage fabrication plants. Unfortunately, although we have very good companies, we are a mom-and-pop industry here in Canada for these wood products.
If you visit Switzerland or Austria, as I do often, you'll see that there are literally hundreds of companies making these products in fully automated, fully closed-loop energy systems. They're products of exceptional quality from, let's face it, a very small forestry market compared to ours, yet their products and their investment in innovation are far more significant. That's meant that as an architect today I can source wood products from Austria cheaper than I can from Canada for projects in Canada.
These things are the broken aspects of our current system that I think can be fixed, but it is going to take investment in education and investment in innovation—
5 p.m.
Liberal
The Chair Liberal James Maloney
Thanks.
The bad news is that I have to stop you, but our other witness wasn't able to join us, so the good news, members, is that we have more time to ask Mr. Green questions.
5 p.m.
Liberal
Mary Ng Liberal Markham—Thornhill, ON
Thank you, Mr. Green, for sharing your thinking with us. You've given us a lot to think about, even in that short opening that you gave us.
You said that there is a real opportunity to essentially ship an entire system of products that can be made and developed in this country. While you talked about it at the macro level, can you dig down just a bit and share with us what it is that we need to be thinking of? What kinds of investments do we need to be thinking of in order to enable that kind of a renewal, if you will—or not even a renewal, but a creation, in Canada?
5 p.m.
Principal, Michael Green Architecture
The challenge for us is that the companies doing this are vertically integrating their companies. They own everything from the wood products, which they're fabricating themselves, to the plumbing systems, the lighting systems, and all of the components that go into a building. They're putting them together in a factory and then shipping them to site, meaning that you shorten the construction time significantly. That reduces costs for projects and it increases the quality of the products.
The reason it's challenging for us is that currently we don't have companies big enough to make the scale of investment to do that. As for how we do it, I'm not personally clear. Private investment certainly is the bulk of it, but how are we going to compete should these U.S. companies, Silicon Valley-based companies, have those resources to do it? Their intention, as the CEO often has said, is that they want to be the Amazon of construction. They're going to be building with wood products, and right now it's only American wood products. How do we tap that market? I'm not clear on how we do it, but clearly we want to incentivize them to invest into Canada.
5 p.m.
Liberal
Mary Ng Liberal Markham—Thornhill, ON
Presumably there's the market out there, so there's elsewhere to ship to. We certainly have the raw material, right? We have that wealth in different parts of the country. How could we incentivize that here domestically? We have the U.S. example, but is there a way to do that here for our natural resources-rich tenures or companies that are already here?
5 p.m.
Principal, Michael Green Architecture
Certainly we should be feeding into those companies that are doing this, because they'll buy a lot more of the products. We're shifting our focus from this kind of consumer market to a more industrialized market. That's one part that will naturally happen.
As in Austria, we could have a lot more investment in the automation of smaller plants than we currently have. If you were to take 100 square kilometres in Austria, you would find 120 different cross-laminated timber factories. We have two in all of Canada. We have the largest sustainable forestry industry on earth, but we have only two factories making advanced wood products.
We can incentivize that into local communities, potentially, by either government investment or government tax incentives for companies to build smaller-scale, local, high-tech production for wood products.
5 p.m.
Liberal
Mary Ng Liberal Markham—Thornhill, ON
Right.
In earlier testimony, we heard from a group representing indigenous people in B.C. They talked about some of the challenges in providing opportunities in the traditional industry.
Does this mean there could be an opportunity to pivot, create capacity, enable the creation of those very companies by our indigenous people and have a job creation opportunity, because it is new?
5:05 p.m.
Principal, Michael Green Architecture
Yes, absolutely it is. That's right. Absolutely it's an opportunity for our first nations communities. I have spoken with three or four of them who have shown interest in this idea, and it is a big hurdle.
Part of the reason we have our online schools and online education is that you will be able to go there if you're interested in building one of these plants. It will walk you through the economic development plan, the equipment, the operating of the equipment, the safety issues associated with it, all of the high-tech training, as well as business development training, if you're specifically interested in developing this plan. I think a huge missing part of it is where you go to access this information. That's not unique to Canada, but a global one, which is why we started this program. However, I think this is a huge opportunity for first nations.
If I use the Austrian model, it's very small communities that are able to build these plants. The waste product from the system basically goes back into an energy production facility, meaning it's a closed-loop system. It's very cost-effective, and that makes it perfect for smaller remote communities.
5:05 p.m.
Liberal
Mary Ng Liberal Markham—Thornhill, ON
I have one last question.
We also heard from the Canadian building association and others, and they talked about how our building codes are prescriptive and not conducive to building wood structures.
Do you have any advice on that end of things? It isn't the creation but the adoption in Canada of greater fabrication, greater wood product buildings and products.
5:05 p.m.
Principal, Michael Green Architecture
There are two different conversations when it comes to wood. One is on light wood frame, which is buildings up to six storeys tall. In British Columbia, we're allowed six storeys; in other parts of Canada, it's only four storeys. That should become six storeys coast to coast. That will open up more of the market. If we can do it in B.C., where we have earthquakes, you can do it anywhere in Canada. That's a small code change coast to coast that would make a difference for light wood.
Mass timber moves you into buildings that are between seven storeys...and we've designed them up to 35 storeys tall. We haven't built yet, but in France we have 35 storeys. We believe we can go much, much taller. We've developed designs to 100 storeys, the point being that our building code in 2020 will allow buildings up to 12 storeys coast to coast. In B.C., we can get around it a little and get a bit higher.
I've said for more than a decade, since I wrote the book, that there should be no height limit on mass timber. The artificial height limit is arbitrary. It's not based on any building science. It's not based on any fire science or fire department access issues. It's an arbitrary height that's been created. What it effectively does is create a ceiling of innovation. That's a huge problem. If you want to go to the moon, you have to aim for the moon, and we are right now aiming for the clouds, not the moon. I think that's a code change that absolutely has to happen. We could be a world leader by demonstrating that we follow the science involved in code, not the emotion involved in code.
5:05 p.m.
Conservative
Jamie Schmale Conservative Haliburton—Kawartha Lakes—Brock, ON
Thank you, Chair.
Thank you, Mr. Green, for joining us. It's great to hear your comments.
I am very interested in the recent conversation regarding the building codes. I want to continue along that path, if you don't mind. Sometimes my issue with government is that it regulates for what is and not what can be or will be. I think from your comments that it seems that is true in this case.
Although you did lay out a few points, can you maybe expand a bit more on why the building codes are limited in such a way? Are you getting resistance from certain groups? You alluded to the fact that it seemed to be a clear path, but maybe I'm missing something. You kind of ran out of time, so could you explain it?
5:05 p.m.
Principal, Michael Green Architecture
Changing the code is a laborious process involving a lot of committees and a lot of professionals. It doesn't really rest on government. It rests on the whole industry, and that's the way it should be. It should be a cautious process to develop it. It's about life safety, and that's important.
On the other hand, it has become acceptable that every code takes five years to develop. That's what has created the slow transition. Nobody had ever imagined buildings 30 storeys tall made of wood, truthfully, until we started talking about it 10 to 12 years ago. In fairness, if you haven't imagined it, you don't write the code for it, but steel and concrete have no height limits attached to them.
It's not that we should see an entire world covered in very tall wood buildings. It's not that I believe that's the future, but I believe we should see a lot more large buildings in wood. Introducing these artificial and arbitrary height limits somehow says to the public that wood buildings aren't as good as steel and concrete.
That impression is part of the shift we that we need to change. I often say the hardest part of my job is shifting the public's perception of what is possible. It's not the engineering; that's easy. That shift of public possibility, I think, is a great opportunity for our government to say that we have a history going back to the first nations people of building in wood and that we are as good as anybody on earth at doing this, and so let's champion this as part of our national identity.
Even at a very primitive level, every two years at the Venice Biennale of Architecture, Canada somehow has been embarrassed to demonstrate our leadership in wood because I think there's a sense that we might be looking back at our past rather than recognizing part of our future. Instead we show concrete and steel buildings instead of wood buildings. I think that shift in public perception comes from some investment in.... In the same way that we talk about the national parks in public media and on television ads, we should be talking about Canadian wood products in that same forum.
In Australia that's what they've done. They had a public campaign around recycling tin cans. After that was finished, they moved into encouraging people to build in wood. They had public celebrities across Australia speaking about building in wood. This is from a country that has very little forest. They chose to invest that way, and it made a huge difference. People identified that recycling tin cans makes sense and obviously building in wood makes sense, and the consumer side of the industry started to adopt it.
You introduced the question around code. I think the broader question that we have to address is how the code impacts the perception of what's possible.
5:10 p.m.
Conservative
Jamie Schmale Conservative Haliburton—Kawartha Lakes—Brock, ON
I didn't think you were alluding to that in your original comments, but I'm glad to hear you say you don't necessarily want people living on top of each other in big buildings. I've very happy. I'm a country guy myself, and I like my open space.
Going forward, if we introduce the code changes and wood buildings get taller, are the national fire chiefs or any organization that you know of calling for increased sprinkler systems or fire prevention or stuff like that?
5:10 p.m.
Principal, Michael Green Architecture
The risk in the buildings is actually during construction. Most of the big fires you see are construction fires that happen when the building safety systems are not yet in place. Sprinkler systems aren't working, a torch is left on during construction, and in the middle of the night the building burns. I do think there are both process solutions and code solutions to specify that during construction, this is how you should protect a building if it's made of wood or any other material. We could improve in that area.
On the tall wood building side, although the code is going to allow it, you would still have to negotiate effectively with the local fire marshal around how you are building a building. They have enormous autonomy—as well they should, in many ways—to reject the concept of what you want to build.
To me the answer is education. They're not used to these buildings. They don't have a peer group that can help them learn about them. Through our Timber Online Education, the intent is to have fire marshals teaching other fire marshals to build a robust program that educates that group, because their mission is important and their concerns are very valid. They simply don't have access to the right information to understand why these buildings are safe. We have to expand that education for them.
5:10 p.m.
Conservative
Jamie Schmale Conservative Haliburton—Kawartha Lakes—Brock, ON
If we do move towards taller buildings and that type of thing, and if we do rely more on the lumber industry here in Canada, that obviously means the need for more product. Will our supply be able to absorb that need? Will we be able to continue to ensure new trees are planted and that the supply meets the demand?