Natural Resources Committee on Jan. 30th, 2018

[Ted Falk, Conservative, Provencher, MB]

Thank you.

What kinds of barriers do you see going forward in your industry?

[Pascale Lagacé]

In those types of products I would say one of the key barriers is access to capital, and there is also the development of new markets.

[Ted Falk, Conservative, Provencher, MB]

You are a publicly traded company.

[Pascale Lagacé]

Yes.

[Ted Falk, Conservative, Provencher, MB]

You just ask for money and it comes, doesn't it?

[Voices]

Oh, oh!

[Pascale Lagacé]

We wish.

[Ted Falk, Conservative, Provencher, MB]

Your stock has done very well in the last year.

[Pascale Lagacé]

The stockholders are making lots of money.

[Ted Falk, Conservative, Provencher, MB]

Your company must be doing well.

Thank you.

[The Chair, Liberal, James Maloney]

Mr. Cannings.

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

Thank you, all, for coming here today.

I'm going to start with Mr. Struthers.

I want to talk first about the energy-producing ideas you talked about. I was just at a natural resource forum in Prince George where a number of groups talked about the use of wood residuals or wood chips to create energy-generation plants in remote areas to get them off diesel. One was in Fort Ware and another one was a remote community in north central B.C. that was being paid by BC Hydro to gather up all the logs that drifted up onto the beach of Lake Williston, a big reservoir, and burn them. They were paid to burn them on the beach. There was an engineering company working with them to develop this.

I'm just wondering what you see as the overall potential for these kinds of projects. We heard from Mr. Price previously. I don't know if you heard his testimony about the BRIMS project where you now have a database in Alberta, for instance, that shows you where biomass residuals are and how much are there. Do you have any idea of the future for this, to get these remote communities off diesel?

[Christopher Struthers]

The future is looking very good. The technology, I believe, is now there. As I said, I've looked at the numbers closely on what it would cost to generate power on a smaller scale. The key thing here is scalability and small communities need this to be done in smaller power plants. I believe the technology is there now, and now it's just a matter of adoption.

One of the challenges is the existing infrastructure. A lot of money has been invested in the existing diesel plants and things like that. It depends on the power supplier. In British Columbia, as you know, most of these communities are supplied by BC Hydro. It takes a bit more for a bigger firm to take a risk on a new technology, even though what we see is really the marriage of a couple of now very well-proven technologies. There's a bit of trouble with adoption and understanding and also on the regulatory side with what constitutes a utility, how to get this investment done, and how to make it work.

Technology-wise, I believe it's here now. It's ready to be used. Now it's a matter of getting the roadblocks out of the way to make it happen.

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

Just to follow up on that and to follow up on Mr. Serré's question about training, especially in these remote communities you have suggested that is an issue. I want to know what more specifics are. When I talked to people from Fort Ware they said the biggest problem they had was that all the equipment came from Germany and all the instructions were in German, so suddenly all these local people had to either learn German or get someone to translate the instructions.

There are two parts to that. One is specifically what kind of training do you find lacking in these remote communities that we could help with, or government could help with? Second, in this situation where most of the technology we're talking about with these new technologies around the forest industry, or much of it, is coming from Europe, I just wonder how we could build technologies here in Canada and what the government could do to help that.

[Christopher Struthers]

You're quite right. A lot of the bio-generation technologies are coming from Europe. The battery technologies certainly are a little more domestic, which is very promising. Training-wise, the sorts of people who are needed to operate and maintain these plants are electricians, power engineers, and people with steam and combustion experience. It will take some long-term investment in training, making sure that folks all the way from high school are getting exposed to the technology fields. It's not something in which you could just train people overnight; they have to be groomed for it for some years.

The investment in education needs to start early. There are certainly a lot of good programs out there, but of course, in remote communities, it's a struggle for folks to travel somewhere for long periods of time to go to school. The payoff, eventually, is if those folks can return to their communities with the training in hand, it's not only that they are employed in their own community, but also that the community does not have to rely on expensive outsourced or imported labour from one of the bigger centres. Getting folks to move to smaller communities to maintain this sort of equipment is always a challenge.

Certainly the investment and making sure that there's outreach starting at the high school level, making sure that kids are encouraged to go into trades and technologies, is very important.

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

I'll turn to Resolute and follow up on that. You said that IFIT and programs like the clean growth program were useful, but you said you wanted these to be broader. Could you expand on that? Where do you think we could help with building technologies like those we were just talking about?

[Alain Bourdages]

I would say that other than making construction lumber, wood buildings, or tall wood buildings, this is an excellent technology to develop. It's not necessarily where we are. In terms of the programs, our main concern is the availability under the envelopes that are awarded in the budgeting process. I don't know the exact numbers—you might know them more than I do—but I understand that, for example in the latest IFIT round, the proposals that were received were tenfold more than the available budget. That's our main concern. We think not only our projects, but most certainly those of others as well, are probably worthy of receiving funds. The IFIT process, the way we see it, is very rigorous. There are expert panels. I think it is a risky business to invest in start-up technologies and first deployments. The government is getting its money's worth to the extent it has the right process to evaluate those projects. It's a matter of expanding the envelopes, primarily.

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

Instead of adding new programs, giving out more money within those programs.

[Alain Bourdages]

Yes, and where we seem to be headed with the current IFIT program, and many programs that have asked for certain amounts to de-risk their projects, is that because of the multitude of projects and the need to try to help many, the awards per project will be smaller than what the projects will require. Certain projects are good, but lack funding. Because of that necessity, they end up not being done. All these things are difficult to manage, but that's a suggestion that would be worth looking at.

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

Thank you.

[The Chair, Liberal, James Maloney]

Mr. Tan, you have about three or four minutes.

[Geng Tan, Liberal, Don Valley North, ON]

Thank you, Chair.

I'm very impressed by your $21-million TMP-Bio pilot project. I guess it's thermomechanical pulp. This project was supported by the federal and provincial governments. Will the resources from this pilot project be shared with others in the industry in the future, and further create opportunities for innovation, not just in universities? That's one part.

The second part is that your project is very exceptional. I found out most of the funding is from the government, but quite often in the industry, this kind of pilot project is done by one company to initiate that project, and is supported by the industrial consortium, with or without support from government. In general, from your experience, how critical is the support from government in making your project a reality? In other words, if there's no endorsement or support from government, how can you sell your idea to attract more investment to make this project a reality?

[Alain Bourdages]

We have limited capital, as your previous witness said, so our objective is really to build a portfolio of innovative projects because, by nature, some innovative projects fail and some succeed. Our view is that we need to try many things. If we were to fund entirely the projects that we get into—and we would fund some—we would try fewer than we are now. I think the help from government helps us do that, to try many things from the laboratory to commercialization. That's the strategy we're adopting, and that's why we think government funding is so important. It allows us to try many technologies so that for the ones that work, we have not failed to try because of lack of funding.

Specifically on your question on TMP-Bio, the technology will benefit the entire industry. We've decided to participate in the funding of the commercialization or the piloting, so to speak, because to us there's a particular interest in trying to reuse thermomechanical pulping assets, which is what we use to make newsprint. Particularly for us, strategically, if this technology is successful and can be commercialized, then we have a lot to gain because we'll be making products that we could potentially sell at large volumes. A lot of our existing facilities that produce traditional paper grades use thermomechanical pulping technology; therefore, the replication potential for us, if successful, is extremely interesting. That's why we've participated, but the result of the research and development is going to be shared within the industry.

Perhaps you're not as familiar with FPInnovations, and maybe that's where your question comes from. FPInnovations is a membership-based organization. The R and D portion of the $21 million is essentially funded and conducted by FPInnovations, and all members will have access to it.

[Geng Tan, Liberal, Don Valley North, ON]

It's not purely from government, FPInnovations.

[Alain Bourdages]

No. It will be disseminated within industry.