Evidence of meeting #76 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 sector.
A recording is available from Parliament.
Liberal
The Chair Liberal James Maloney
Thank you, Mr. Falk.
Gentlemen, thank you very much for joining us today. All three of you, your evidence is very helpful to our study. Unfortunately, we only have a limited amount of time. As you can see, we have to keep things pretty tight, so we apologize for that. We do the best we can.
We'll suspend now for two minutes, and then we'll get going on the second hour.
Liberal
Liberal
The Chair Liberal James Maloney
Excellent.
Mr. Matters is joining us on behalf of the United Steelworkers and Mr. Moore on behalf of Trimmed-Line Seismic Services. Are you in Red Deer or Edmonton?
President, Tree Services, Trimmed-Line Seismic Services Ltd.
I'm in Edmonton right now for a conference, but we live in Red Deer.
Liberal
The Chair Liberal James Maloney
It said Red Deer on here, so I was confused. Things aren't always as obvious as they appear, you know.
Liberal
The Chair Liberal James Maloney
Thank you, both, for joining us today. We're very grateful.
Each of you will be given up to 10 minutes to make your presentation. After you both have completed your presentations, we'll open the floor to questions from around the table. You are welcome and encouraged to deliver your remarks in French or English, as you choose or see fit, and you may be asked questions in either official language too.
Mr. Matters, since you are here with us we will start with you. I'll give you the floor for up to 10 minutes.
Bob Matters Chair, Steelworkers' Wood Council, United Steelworkers
Good afternoon. I want to begin by thanking the committee for the opportunity to speak to this very important study. I am chair of the United Steelworkers' Wood Council. The council was created as a result of the 2004 merger between the USW and my former union, the Industrial Wood and Allied Workers of Canada. The USW now represents more than 18,000 forestry workers, 32% of whom work in the industry's secondary supply chain.
As a matter of fact, Structurlam in British Columbia, which was mentioned by the gentleman from FPInnovations, is our operation. I didn't see the pictures of the bridge at the presentation, but I was at a presentation they gave earlier, and the bridge in that picture was made by our members in Quebec. We're most known or thought about for our loggers or our mill workers, but we are everywhere.
Maintaining a strong forest industry is not only in the interest of our workers or our 600 forest-dependent communities but is crucial to the health of Canada's economy. Our union has launched a campaign aimed at support for workers and communities. It's called “The Working Forest”, and it can be found at workingforest.ca. That was my little commercial.
Last year, the forest industry contributed more than $23 billion—so we're on the right page there—to Canada's GDP. The secondary supply chain employs more than 92,000 people across the country; however, the value-added sector, which includes everything from guitars to the modern CLT construction, has lost more than 43,000 jobs since 2001. Our union believes the natural resources committee must acknowledge this decline and recommend a reversal, through a national forest strategy that recognizes the separate but integrated sectors within the forest industry.
In 2017, events such as the ongoing softwood lumber dispute with the United States, last summer's forest fires in British Columbia, and the mountain pine beetle—all things you've heard about today—have negatively impacted the forest industry and the secondary supply chain. Climate change, resulting in several warm winter seasons in a row, means the mountain pine beetle could continue to have an impact on the boreal forest for another 13 years.
On the trade file, with no softwood lumber agreement in sight, we're weeks away from the final determination of duties by the U.S. Department of Commerce. Since the expiry of that agreement, softwood lumber exports to the United States from the EU have increased. Finland alone has increased its exports to the U.S. by 293%. The unrest and instability this has caused is intolerable, obviously. The Government of Canada must come to a just and fair solution to this crisis.
Canada is of course faced with a protectionist mood not only in the U.S. but globally. With a natural resource that is abundant and renewable, our government's priorities should be to promote jobs and innovation in Canada to build an industry that is competitive and attractive in the global markets.
Corporate behaviour, to speak to some of your previous questions, also has an impact on jobs and communities and on our ability to compete. With no controls to prevent them, Canadian companies with their investments in the U.S. are essentially robbing investment from industry in this country.
A factor in Canada's ability to be competitive in the value-added sector is controlling the export of logs. Log exports have increased dramatically over the last two decades. In a few short years, from 1997 to 2004, the amount of unprocessed exported B.C. timber increased from 200,000 cubic metres to well over 5.5 million cubic metres annually.
Wood that is milled offshore has led directly to mill closures and job loss, and that fibre is not here to do the wonderful innovative product creation we heard about in the last session. The bottom line is that there is no hope for a viable value-added industry in this country if no attempt is made to stop wood from being exported and not being processed in Canada.
That said, our submission does not advocate for a total ban on exports. However, there is ample opportunity to reduce Canada’s exports of unprocessed timber coupled with supports for the retooling and revitalization of our many mills, which will increase the number of Canadian-made wood products available domestically and internationally. If the goal of this study is to recommend measures that will grow the industry, national and provincial strategies are required, strategies that clearly lay out the role for public investment and government policies that both discourage the excessive export of logs and encourage domestic manufacturing. The federal government must take the lead and work with provinces to create the conditions necessary for growth.
As an example, our submission details the need for infrastructure and particularly primary and secondary roads. We are in agreement with the Ontario Forestry Industries Association that the lack of infrastructure is inhibiting the sector's return to full productivity.
Adequate timber harvesting is another issue that must be addressed through a national forest industry strategy. For the secondary supply chain to grow, ensuring a consistent and adequate volume of lumber is imperative. That being said, research and development on wood products for a variety of applications, including construction, industrial products, consumer goods, and much more must continue with funding opportunities and a federal commitment to the use of wood and wood products in procurement.
To conclude, let me repeat that from logging to milling to processing to product development, everything is interrelated and dependent on sound public policy and strategic approaches to securing a future for forestry in Canada. Ours is a clean, green industry that has built Canada from coast to coast to coast.
I urge you to take this opportunity to support our members and our 600 forest-dependent communities by recommending a national strategy for sustainability in forestry and the related secondary supply chains.
Thank you again for this opportunity, and I welcome any questions you may have.
President, Tree Services, Trimmed-Line Seismic Services Ltd.
I would like to thank you guys for the opportunity to be a part of providing some solutions for secondary products in the forestry sector.
I'll tell you a little about myself. Since 1991, fresh out of high school, I was in the oil and gas industry as a seismic faller in line clearing. With the many ups and downs in the oil and gas industry, and the unhealthy workplace, I guess, and being away from home, I chose to diversify in 2012. Being on the tree end of things, I wanted to have the best tree company that I could before I bailed out of the industry. I attended a CanBio conference in Vancouver and got a few ideas and got started on my mission.
In the secondary supply chain steps in our company, we deal with urban wood now, more coming from the municipalities. We have a four-step approach. We remove, recycle, rebuild, and replant. With each step in this process of the tree, there are different products created. All of the products have various degrees of value and benefits, to the economy, the environment, and the bioenergy sector.
There are some pros and cons. When we did a tree removal before I started recycling, we would just take the tree down and get rid of it. That was a problem. In throwing it into the landfill or chipping it, there was little or no value to it. Once we started recycling it, the first step, and the easiest for most people, was to chip it, call it landfill cover or landscaping, water retention wood chips, but, again, with very little value. It can be used as biomass for wood chip boilers and such.
The next step that we took was to mill it. That had a moderate value, rough-cut lumber, undried stuff, used for fencing and building materials. It was still a bit unstable, so it presented its challenges.
Once we added our kiln, we found that was the level when it really took a jump. By kiln drying our lumber, this opened up a greater market. Anybody that wanted to build anything with it—houses, high-end furniture, anything from basically a pen to a cabin or a house—we had to get it to that level.
I didn't want to be only a supplier. I wanted to keep employees around all year, and add jobs. With basically controlling the raw product, we formed a supercluster with the businesses that I was selling it to. There are five of us working together. We have a timber frame company, a house-building company, a wood turner, and a custom CNC milling operation, and me, the tree guy.
We found that taking the raw product through all the steps was the best way to gain as many jobs as we could and obviously provide a varying degree of products and services.
Our last step, being the most crucial step that we do, is the replant. Working with municipalities in urban areas, we're not planting little seedlings. We use tree spades. We have a couple of different sizes of tree spades. It's urban reforestation and all the opportunities that the trees provide in the urban areas. There are some challenges and whatnot with urban forests being a quicker, I guess, takedown time. An urban forest typically lives for only a hundred years due to the strain of infrastructure and growth, so there is a good opportunity there for replanting our cities and urban areas.
Those are our four Rs in what we do in my company.
There are some challenges in urban logging and having a municipality take it back to the old way of doing things. We would clear a lot and instead of throwing it all away in the landfill we would do what grandpa used to do and build with it. It's a real challenge to convince the municipalities that this is good, stable wood, once it's kiln dried. We seem to order everything in from other countries. We throw our trees into the landfill and order building materials in. That's been our biggest challenge.
In the city of Red Deer, we're starting to make headway in building the products from the site back into the venue. The 2019 Winter Games are going to be in Red Deer. Just yesterday we used trees from one of our sites in the building that will house a skating oval. We have some projects we're pretty proud of.
There's a model that was done in Davis, California, called the Cannery. It sets a farm beside a neighbourhood, and the farm feeds the neighbourhood. Our approach is the same but with trees. We have a farm that recycles the lumber, and we build a neighbourhood beside it and then grow the food and the trees for the neighbourhood.
We also have a very cool education program we started called Sawing for Schools. We took a sawmill to the school. We cut up every kind of lumber or wood in our municipality and showed the students the processes and steps to getting it to a viable building material, and then we donated it back to the shop class. From there, we have started building unique cabins, live-edge Christmas trees, and other wood products with the students. We find that the education aspect of bringing it to the general public is very important, and we like to run it through the youth. We find they get good traction when you see a girl from grade 6 chainsaw carving at a home show. We're pretty proud of that.
That's what my company does.
I was listening to the comments of the other witnesses. Bioenergy is awesome, but if we extract everything we can for usable building materials out of the tree before we shred it, we can get a bit of bioenergy out of the wood, let it live for another couple of hundred years, and when that has to come out, we still have that biodiesel or bioenergy capability then. I like to use a tree to its fullest. We think this creates the most jobs and gives us the best value for our beautiful trees and forests. We can make products for export, but we can also keep our trees right here and make our neighbourhoods totally green.
Thank you.
Liberal
Liberal
Larry Bagnell Liberal Yukon, YT
Thank you very much, Mr. Chair.
Thank you for being here. This is very helpful for our study. I'm very impressed with the industry, first, because its cutting greenhouse gases, and second, because it's a big employer of aboriginal people, which is important for my area.
Mr. Moore, there are at least eight programs with over $1.5 billion in assistance for the industry, but it's more for the big industry and the workers. How could the government use this extra processing to build small businesses and manufacture products so that we get more jobs out of each piece of wood?
President, Tree Services, Trimmed-Line Seismic Services Ltd.
When you look at a large company that employs lots of people, the same can be accomplished with hundreds of small businesses doing the same thing. When you take a large approach, it's usually a big processing plant. When you go to bioenergy, wood chips, or large amounts of biomass, you tend to focus on the lower value. Urban logging everywhere presents challenges with small bits of forest here and there, so in making these big projects, it's not viable to pick up all the little bits and pieces of wood.
Therefore, if you rely on lots of investment or smaller investments in small programs, it's just like having gas stations across the country. If you had only one big gas station, you'd need a heck of a tank to drive coast to coast. If you create multiple tiny, little clusters or funnels for tree and wood products or wood waste to go into, that would be the greatest success.
It would create the same amount of jobs. When you look at a place like Banff with timber framing, and Prince George with the high-rises and cross-laminated timbers, I think a bunch of small businesses can handle producing those products and building green neighbourhoods within their communities very successfully.
Liberal
Larry Bagnell Liberal Yukon, YT
That's very interesting.
I'll go now to the United Steelworkers' Wood Council.
Obviously, the softwood lumber issue is a huge challenge for all of us, and we're trying to do it with a lot of representation in the United States. Would it be harder for you with your colleagues in the United States? What type of relationship do you have? I suppose it's a competitive thing, because what helps them doesn't help us.
Is there any way of interacting that can help us in getting some sensible equality in the supply of wood?
Chair, Steelworkers' Wood Council, United Steelworkers
When you reference it being harder for me, I'm assuming the question is for me as a member of the steelworkers. With our merger with the steelworkers, the steelworkers understood the significance of our role in Canada, and they made it crystal clear that we were going to be the voice of forestry policy for the steelworker union, North America-wide.
With respect to the softwood lumber agreement, our president, Leo Gerard, has made it painfully clear that he understands very clearly that the American coalition is off base. They are wrong. It's not that they don't understand the Canadian system. It's that they do not want to understand the Canadian system. We could not have a better ally in Washington than our president, Leo Gerard.
Liberal
Larry Bagnell Liberal Yukon, YT
That's excellent. We really appreciate that.
On another topic, you brought up a great point about the pine beetle. I have a couple of questions. Of course, the heat is bringing in insects, and there are other parts of Canada where there are some negative effects. Could you comment on that?
Also, there are species being changed because of the heat. I don't know if it's big enough to affect your industry, but obviously there are negative effects. Do you have any suggestions for us with regard to greenhouse gases? We did announce this week $155 million for the forest industry and other industries to develop clean technology, but do you have any suggestions?
Chair, Steelworkers' Wood Council, United Steelworkers
One unique characteristic of harvesting the pine beetle.... I think almost everybody in this room is very familiar with the file. You know that you are not getting top-quality lumber from beetle-killed timber. That is why the export market and the Chinese market were so critical in the last eight to 10 years, particularly 2006 to 2009. As many of you know, having access to the Chinese market completely, utterly saved the Canadian industry.
The pine beetle issue is not gone. It has resurrected itself on the east side of the borders. It's going to take a bit of time to get it fixed, but that's going to come only through more controls and more harvesting of that fibre, and then finding the appropriate home for that fibre.
I was in China last week. Ironically, China banned the harvesting of natural forests, which is why they are importing so many logs and so much lumber. They are doing that to protect and enhance their forests. They want to maintain them for the future, for the long term.
To your point about replanting, government initiatives and policies are critical so that when the industry is replanting the trees—including what Mr. Moore was talking about—we replant the appropriate species. It might, in fact, be a different species from what we harvest, depending on what the environmental models show the climate is going to be. The luxury of that, of course, is that those trees are going to take 100 or 200 years to reach their full maturity.
I have a bit of faith left in this industry that it will be able to adapt to that new fibre in 100 or 200 years, so I think the future is still good.
Conservative
Ted Falk Conservative Provencher, MB
Thank you, Mr. Chairman.
Thank you to both of our witnesses for their presentations.
Mr. Matters, I'd like to begin with you. You mentioned in your presentation that the amount of raw timber or unprocessed logs that is being exported, primarily to Asian markets, has increased from 200,000 cubic metres to 5.5 million cubic metres in a very short period of time. Is there a reason we are not adding value here in Canada, we are not doing further processing here and selling it to those same markets?
Chair, Steelworkers' Wood Council, United Steelworkers
Unfortunately, there are a whole bunch of reasons. The first is obvious from the presentation that you got earlier, prior to this one. These guys, FPI, are doing phenomenal work. They are doing it largely because governments, provincial and federal, are helping them. I forget who it was, but there was somebody who used to be at one of the pulp companies mentioned earlier. I include them, and I include MacMillan Bloedel from the west coast. They used to do amazing things with their research and development of the products. Frankly, I think it died before the 2008-09 crisis. It was long before then that they quit doing that. It's a shame, because B.C. and Canada were pioneering a whole bunch of things, but it all just went away.
Conservative
Ted Falk Conservative Provencher, MB
In markets like China, which is a big consumer of our logging industry, most of it is going into dimensional lumber once it reaches China. Would that be accurate?
Conservative
Ted Falk Conservative Provencher, MB
Why wouldn't we cut it into dimensional lumber here? Is it the cost of labour?