Natural Resources Committee on Feb. 1st, 2018

[Greg Stewart]

I would put the plant as probably a kilometre or a kilometre and a half away from the civic centre.

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

Okay. It's interesting that it can be done that way.

On a map that one of our previous witnesses gave us about IFIT-funded projects, I see a Nechako forest products dot. Could you tell us about your use of IFIT, how that went, and any recommendations you'd have about that program?

[Greg Stewart]

Unfortunately, I'm not familiar with that. The one project I talked about in the previous answer was with Nechako Green Energy. We utilize waste heat to generate electricity.

In preparing for this talk, I was trying to do some research to see if they were able to access that, and I was under the impression that they had accessed IFIT funding. What that project was able to do was to be the first of its kind in all of Canada to use waste heat from a sawmill operation. It was great funding for that. I can't tell you what amount of money went into that project, but it did facilitate the first commercial application in Canada.

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

Okay. One thing I also learned at the natural resources forum was about the vast amount of wood pellets coming out of your region, both from your company and others, that is going through Prince Rupert and on to England and things like that to create energy. It was quite an eye-opener.

I want to come back to your home company and the panels you're making, the structural work. Can you export those products to the United States without softwood lumber tariffs? Or could you?

[Greg Stewart]

There are elements that remain outside the tariffs. There are other components that go with home construction that we do have to declare and pay tariffs on; generally speaking, there is going to be loose lumber and the like.

As of today, the U.S. market has not been a huge market for that particular business. In the past, when the dollar was weaker relative to the U.S. dollar, we saw roughly 30% of our production go south of the border. Today, we're sending maybe 5% to 10% of our product down there. We certainly haven't sent a lot of product since the duties were imposed.

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

Okay.

Another issue in British Columbia that I hear a lot about is the export of raw logs. With a company like yours that is seemingly doing a lot with every log you use, I wondered if you could comment on that. I know it's probably more of a coastal thing, but for the B.C. interior, are there things that you could use that fibre for here in Canada in terms of value added, like what we're talking about here today?

[Greg Stewart]

In terms of the export of raw logs, you're right: it is primarily coastal rather than interior.

There's an incredible demand for that fibre. A lot of the interior fibre is used in the interior. You don't see a lot of that exported. As for our ability to utilize some of these different species that are coming out of the coast, at this point we haven't really ventured much further beyond SPF, the spruce, pine, and fir species, which are largely the species in the interior of British Columbia. In the future there might be an opportunity, but today we don't utilize those species to any extent that would have a significant impact on those exports.

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

I'll leave it there. Thank you very much.

[The Chair, Liberal, James Maloney]

Mr. Serré, unless you're giving your time to Mr. Schmale, I believe you're next.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

That's a great idea. I think that's a fantastic idea.

[Marc Serré, Liberal, Nickel Belt, ON]

No. I like Mr. Schmale, though.

Thank you so much, Mr. Chair. Maybe I'll start with what Mr. Schmale mentioned.

I'm glad that you're now reading the Financial Post versus what you were reading previously, the CBC, Mr. Schmale. You were quoting from some articles. That's really good.

[Voices]

Oh, oh!

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

I like to mix it up.

[Marc Serré, Liberal, Nickel Belt, ON]

I want to also specify that the article was really focused on Montreal and Quebec.

Also, I hope you're not suggesting that we should stay with oil furnaces and not explore other heating sources. I just wanted to make sure that article—

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

A lot of my people are on oil, though.

[Marc Serré, Liberal, Nickel Belt, ON]

We have to try to see how we we move forward on that—

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Without a government subsidy.

[Marc Serré, Liberal, Nickel Belt, ON]

We'll look at that.

Thank you so much to our two witnesses for your testimony and the research you've done to prepare for today.

My first question is for you, Mr. Stewart. Several times you mentioned your first nations engagement. Can you give us a few examples of the successes you've had with the first nation communities and also any recommendations that you would have for industry and for us as part of our report?

[Greg Stewart]

Probably the one that I spoke about in terms of Tl'oh Forest Products and the 20-year relationship that we've had with the Nak'azdli band has been a great success. As part of that venture, we also established Ta-Da-Chun, their logging operation. We continue to this day to work with their logging operation.

Within our area, we have a number of different bands that we work with on a regular basis. In Fort St. James in terms of the next band that we'll probably work with, the closest is the Tl'azt'en band. We've worked with them around forestry management agreements, making sure that we're coordinating our efforts as well as helping them manage their forest to the benefit of their community, whether that's sales or purchase agreements. We've been working closely with them.

Right now, we're in the process of negotiating a forestry benefits agreement with the Saik'uz First Nation band south of Vanderhoof. That as well is a relationship that has gone on for over 20 years. We have been purchasing fibre from them over that duration. In addition to that, they have a forestry company, a logging company, that we have worked closely with. It is a top-notch logging company that we're quite happy to continue working with, and we're looking at opportunities to try to expand the amount of fibre that's available for them to harvest.

As part of those agreements, we're looking at what this means for education, training, employment, and the ability to purchase. We also look at what are some of the other opportunities around joint ventures. We've explored other joint ventures with the various bands. With Saik'uz, for example, we have looked at a log home business and a couple of other ones. Also, today we're talking about what other opportunities exist.

We have also tried to partner with a number of the local bands on first nations housing. One of the challenges with first nations housing is that it comes and goes; it's in fits and starts. It's not necessarily a steady flow of housing, so it's tough to establish any long-term working relationships on first nations housing. It's something that we're hoping to work with, and we're in conversations right now with Saik'uz on that.

[Marc Serré, Liberal, Nickel Belt, ON]

Thank you for your work with the first nations community.

Mr. Minhas, you talked at great length about the cluster. You talked about the R and D. You had UBC and their work. You're also looking at Laval. I'd also like to mention Laurentian University in Sudbury, which started an architectural school 10 years ago, the first architectural school in Canada in decades, and also is now in the construction phase of a new state-of-the-art engineering program that they're expanding. They're doing a lot of the work with Resolute and the forest industry. You might want to link in with them and see how they do that.

I have a question, though, when we talk about the R and D, the production, and the SMEs and, to them, the commercialization and the valley of death and the challenges that centres of excellence have. Can you expand a bit more on what you would recommend for the federal government in terms of playing a role here to support more attraction and more product sector investment, especially on the commercialization of these products?

[Gurminder Minhas]

Again, I think one of the keys—and the government has done a pretty good job at it to date—is supporting universities and research institutions to create new innovation. We are a licensee of technology, so we created the company—and that's not the single premise of our company. I should note. We are a licensee of technology that was created by FPInnovations.

We chose that technology because we thought it was very commercial ready. It got to that stage based on support from government. We took that technology, and now we've accelerated it even further. I would say that we're now pre-commercial, if not commercial, in certain applications.

Additional support is going to come in, since we're not just relying as a company on this one particular piece of technology or material to take us all the way to becoming a very large, successful company. We're also trying to fill our pipeline with additional technologies and innovations, whether we create them ourselves or we license them in. We're constantly seeking new innovations and new researchers.

Often, we bring ideas to universities and researchers where, since we're much more exposed to the market and commercialization than a professor in a laboratory, we think we know what industry needs a little bit more of than perhaps a professor. We bring ideas to professors and we sometimes get them very excited about working with us in certain areas.

Supporting the innovation pipeline and giving companies, such as ours, opportunities basically to pick and choose what we would believe to be very successful near-term opportunities for taking something from lab scale, and then into the pre-commercial and commercial scales is something the government can continue to support.

[Marc Serré, Liberal, Nickel Belt, ON]

Thank you.

In 45 seconds or less, Mr. Stewart, with previous witnesses, we've talked about Europe and Asia and billion-dollar biomass industries. What can we do better here in Canada to attract some of the investments and also to look at exporting our products to Europe and Asia?

[Greg Stewart]

From a biomass or bioenergy perspective, one of the areas we would love to see more development of is those end uses here in Canada through cofiring, as I mentioned, but I think we have to continue to make sure that we have access to markets. The recent TPP signing, although I haven't seen the details of it—I know there was speculation around wood fibre and its flows and the benefits that would be realized in Asia. Of course, Asia is one of the next growing areas for the use of biomass.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Serré.

Gentlemen, thank you both for joining us today. Unfortunately, that's all the time we have, so we'll stop there. We're very grateful to you for taking the time to be here, especially Mr. Stewart, because I know it's very early where you are. You probably had to get up a little early to participate in this. We're grateful for that. We'll let you two go.

There are just three things we have to deal with quickly, committee members. Regarding the detailed logistics of the program for our travel in two weeks, you should be getting that next week. As a reminder, we need lists of witnesses by next Wednesday, February 7.

That's it. We'll deal with the other issues next week, but you need to know that.

The meeting is adjourned.