Evidence of meeting #82 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 bioeconomy.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Catherine Cobden  President, Cobden Strategies
Rod Badcock  Partner, BioApplied
Antoine Charbonneau  Vice-President, Business Development, CelluForce Inc.
Gurminder Minhas  Managing Director, Performance BioFilaments Inc.
Greg Stewart  President, Sinclar Group Forest Products Ltd.

9:40 a.m.

Liberal

Marc Serré Liberal Nickel Belt, ON

—so we have to see how we would balance that out.

My question is for Mr. Badcock, but I will just make a comment first.

Mr. Charbonneau, I know when you talk about the valley of death and you look at commercialization, we've heard from many industries that have clusters that it is a really huge element there.

I want to go to my specific question.

Mr. Badcock, do you know how much money the private sector has been putting in the supercluster application on the biomass design? We heard from Domtar that they are investing $3.5 million. If you don't, can you provide the clerk with the number that the private sector was prepared to invest in that supercluster.

9:40 a.m.

Partner, BioApplied

Rod Badcock

For the details on that, I can ask the supercluster folks to provide that for me. My understanding was that $200 million in total projects was identified. I'm not sure if that was $200 million of industrial investment or $200 million in total, with some portion of it industrial investment.

9:40 a.m.

Liberal

Marc Serré Liberal Nickel Belt, ON

Thank you.

When we talk about interprovincial barriers or regulations, is there anything that we could do as a federal government to work more closely with the provinces to help your businesses, your industry, or your association to expand and create more jobs?

Are there one or two elements that you think we could do to remove some of those interprovincial barriers? Is there anything specific?

9:40 a.m.

President, Cobden Strategies

Catherine Cobden

Actually, I just had this experience two days ago of having assembled—again, I'm going to go back to my steel example, as it's the freshest in my mind—the steel industry; the forest industry; and a third industry, the clean-tech industry, to talk about this opportunity that I was describing earlier.

What was so exciting was that we invited the federal and provincial governments that were involved to participate. What became really clear was that, if there weren't cooperation and support—which goes back to this question of how much fibre is there, what's sustainably available, and what's sustainably and economically available—we can't come to those answers working with one government or the other. We actually do need that collaboration. If I may suggest, keep maintaining that strong working relationship between the provinces and the federal government on that type of information. It is crucial for this moving forward.

9:40 a.m.

Liberal

Marc Serré Liberal Nickel Belt, ON

Are there any other specific comments from the other witnesses on some of the barriers? No?

9:40 a.m.

President, Cobden Strategies

Catherine Cobden

I have one more comment and I'm a little bit scared to raise it, namely the ability of the funding programs to fit together and to make sure that any gaps in funding mechanisms in, for example, a province be addressed. I don't think there's a province with an IFIT type of program. Wouldn't that kind of thing be interesting? More alignment would be good.

My apologies for raising it. There are so many more things beyond funding, though.

9:40 a.m.

Conservative

Jamie Schmale Conservative Haliburton—Kawartha Lakes—Brock, ON

That is what I want to talk about.

Marc, split your time with me.

9:40 a.m.

Voices

Oh, oh!

9:40 a.m.

President, Cobden Strategies

Catherine Cobden

There's so many more things, it isn't fair.

9:40 a.m.

Liberal

Marc Serré Liberal Nickel Belt, ON

Not a chance. I like you, Jamie, but—

Looking back at the export market, we talked about Europe leading in the bioeconomy. Asia is also up there. As a federal government, what specifically do you think we could do to spur the innovation to look at creating jobs and expanding the export market to these countries?

9:45 a.m.

Partner, BioApplied

Rod Badcock

I'll start there maybe.

Maybe you touched on this, Antoine.

One of the things that we see is that the product development process involves a fair level of collaboration and business development. I would say it's about support for advancing commercial readiness levels. When I look at programs like clean growth and sustainable development, there is a lot about advancing the technical readiness level of projects, but advancing the commercial readiness level is also important. Relatively speaking, I would say there's an opportunity to either build into existing programs or maybe create a new program that focuses on that—that is, the business development resources required to actually build the commercial demand for the product.

9:45 a.m.

Liberal

Marc Serré Liberal Nickel Belt, ON

Be quick.

9:45 a.m.

President, Cobden Strategies

Catherine Cobden

One of the great things about this nation is that we have these strong green credentials. I think the work that the government does for “Brand Canada” is wonderful. We should continue to get the message out to our markets on green credentials for the industry and how strong we are, in terms of our forestry industry. It is already happening, but it needs to continue, please.

9:45 a.m.

Liberal

Marc Serré Liberal Nickel Belt, ON

Ms. Cobden, it's always good to see people from northern Ontario working in the national industry. I want to thank you very much for the work that you do.

My question is for you. Mr. Badcock spoke earlier of certain labour challenges. What would you recommend, specifically, to increase the number of women in the forest industry in scientific fields, technology, engineering and mathematics?

9:45 a.m.

President, Cobden Strategies

Catherine Cobden

There is another issue I'm highly passionate about. We've done some wonderful things. I don't know, for example, if you're familiar with Women in Wood or Women for Nature. Just be forewarned, gentlemen, the women in forestry are getting themselves together.

Championing, demonstrating, giving women opportunities—we are trying very hard. I'm looking at Ms. Rudd because in NRCan we've been trying very hard for things like conferences to make sure that women are participating as much as men on the panels. Women have very strong voices in the forest industry, but we need those outlets. Those types of things are crucial, and we have work to do on the glass ceiling as well.

9:45 a.m.

Liberal

Marc Serré Liberal Nickel Belt, ON

Just quickly, I don't know if you'll have a chance to answer, but for the three of you, if any parts of your associations have any specific recommendations on tax credits—we have 15% tax credits for mineral exploration, and there have been other tax credits. Do you have any specific recommendations you'd give to the clerk on what we could do, as the federal government, to spur innovation and exploration more on the forestry side and on biomass?

9:45 a.m.

President, Cobden Strategies

Catherine Cobden

It is a really good question. This is all a gut reaction, but more could be done there. I'm just not sure who's doing it, who has done it, or if we need to look at it.

9:45 a.m.

Partner, BioApplied

Rod Badcock

I'll add that one of the things we saw in exploration is that in Minnesota they have created a program that pays production incentives for production of biochemicals from a cellulosic base—so, wood fibre. It's a fairly substantial production incentive when you look at the price of the materials they are trying to encourage. While that's not a tax incentive, it's something unique that I haven't seen done elsewhere. What I like about it is it's very targeted at trying to use more wood fibre.

I'll be happy to provide details on that if that would help.

9:45 a.m.

Liberal

Marc Serré Liberal Nickel Belt, ON

That's good. Thank you.

9:45 a.m.

Liberal

The Chair Liberal James Maloney

Mr. Charbonneau, do you have something to add very quickly?

9:45 a.m.

Vice-President, Business Development, CelluForce Inc.

Antoine Charbonneau

There seems to be a gap in tax credits for capital equipment. I'm talking about continuous process improvement. Again, this is key again to crossing the valley of death, as it allows the cost structure of biomaterials to go down. This is just a suggestion.

9:45 a.m.

Liberal

The Chair Liberal James Maloney

Thanks very much.

Thanks to all three of you for taking the time to be here today. Your evidence will prove to be very valuable to our study.

We are going to suspend for about one minute. If we can keep it to one minute, then we can finish on time today.

9:55 a.m.

Liberal

The Chair Liberal James Maloney

All right, I'm going to start here.

Mr. Minhas, why don't we start with you?

February 1st, 2018 / 9:55 a.m.

Gurminder Minhas Managing Director, Performance BioFilaments Inc.

Thank you, Mr. Chair and members of the committee. I'm very pleased to be here today to speak on behalf of Performance BioFilaments as part of your study on the secondary supply chain products coming from the Canadian forestry sector. Copies of my remarks have been made available to you.

I'm Gurminder Minhas, the managing director of Performance BioFilaments, one of Canada's new and emerging biomaterials companies. We are leading the biomaterials revolution by improving the performance of many existing and new products while making our planet more sustainable with the use of forest-based renewable resources.

Performance BioFilaments was launched in 2014 as a joint venture between Vancouver-based Mercer International and Montreal-based Resolute Forest Products. Aside from myself, within the company we have two Ph.D. research scientists, two research associates, one full-time business development director, and two part-time business development professionals.

Performance BioFilaments is focused on providing microfibrillated and nanofibrillated cellulose products in application areas where they can add significant performance improvements in existing and new products combined with environmental benefits. Our core technology has been licensed from FPInnovations and involves the utilization of kraft pulp and other fibres as a feedstock and converting them into micro and nanofibrillated cellulose, also known as cellulose filaments. We're also developing our own processes and technologies for modifying these fibres and filaments to make them more suitable for specialized applications, where traditionally cellulosic fibres have not had widespread use, so we're actually creating new markets for some of the fibres that come from our forestry resources. Some of these applications include fibre-reinforced plastics and thermosets.

I'll highlight an example of a project we did with NRC's automotive and surface transportation group, where we successfully introduced cellulosic fibres into reinforced polypropylene. We achieved a similar strength to glass-fibre-reinforced polypropylene, the same strength, but at the same time we achieved a 16% reduction in the weight of these components. Plastic lightweighting is a major goal that the automotive sector is looking for.

We're also developing applications in high-performance concrete. In a study we did with UBC Civil Engineering, we demonstrated a 20% improvement in the compressive strength of concrete while virtually eliminating cracking due to plastic shrinkage. This was achieved by only a 0.1% addition of our cellulosic fibres into the concrete matrix, that is, a 20% increase in strength and elimination of cracking with a 0.1% addition of our material.

Another application we're developing is air and liquid filtration media. We've demonstrated improvements in the strength of the filtration medium while giving the filter manufacturer the ability to control pore size, thus allowing them to further engineer the filtration media that they're producing.

As you can see, Performance BioFilaments is developing applications in some very diverse and large markets. Our commercialization strategy is focused on becoming experts in the production and modification of cellulosic biomaterials. That said, we rely on subject matter experts at universities and research institutions to help us accelerate the use of our materials in some of these new applications. We are not experts in the plastics sector, we're not experts in concrete, and we're not experts in filtration media; we are experts in creating fibres that can perform to certain characteristics that are demanded by these industries. Then we rely on others, for example at the university level, at the institution level, and on their expertise in certain centres of excellence within Canada to help accelerate the development of our applications of our materials into these markets.

We've leveraged several government funding programs to date, such as NSERC engage grants and IRAP funding, to accelerate our application development work. These programs have allowed us to take advantage of the expertise and specialized equipment located within research institutions and Canadian universities.

Performance BioFilaments is also developing our first commercial plant. This plant will produce products for sale into our established markets as well as allow for accelerated development into new applications. As this is a first-of-kind plant, the risk is going to be quite high and we don't expect that we would qualify for traditional methods of project financing. We are looking to programs such as IFIT, SDTC, and the new NRCan clean growth program to help support getting our technology to commercial scale.

Specific to the question of how the Government of Canada can further support and accelerate the development of secondary supply chain products in the forestry sector, I have the following recommendations.

First, increased support for high-risk capital projects, specifically for demonstration and first of kind commercial plants, is needed. The IFIT program is a very good program. It was created to address this particular need and to provide financial assistance for innovative projects through a competitive selection process.

Previous IFIT calls have been extremely popular with the industry but have resulted in many good projects remaining unfunded. Continued investment in the IFIT program, as well as an annual or semi-annual request for projects from IFIT, will help the industry plan for capital projects accordingly. The SDTC program and the newly developed NRCan clean growth program will also help on this front, and these programs should be continued and broadened.

Second, government support in the early parts of the innovation cycle needs to be expanded. Increased support for universities and institutions to conduct new and innovative research, which typically is higher risk, should be considered and supported. This will create a pipeline of new innovations for companies such as ours to leverage, with the potential of licensing and commercializing these newly innovative technologies that are going to be produced based on the basic research and the fundamental research that is being conducted at universities.

Above and beyond that, this is also going to produce highly trained student researchers who will be ideal candidates for our future employees. Partnership funding such as NRC IRAP and the NSERC Engage grants should be further continued and expanded to allow for a greater opportunity for industry to collaborate with universities and research institutions.

Finally, on the market development side, support for new products should also be considered in both international and domestic markets so that we can appreciate that the majority of the products that we and others are developing are intended for international markets. Support for Canadian companies to become early adopters of these new materials would be very helpful in demonstrating the use and effectiveness of these materials at large scale, and it will help pave the road for expanding the applications that we create here in Canada to international markets.

In closing, I would like to just say that Canadian companies commercializing Canadian innovations created by Canadian researchers will create a win-win-win situation.

Thank you. I will take questions as they come.

10 a.m.

Liberal

The Chair Liberal James Maloney

Thank you very much.

Mr. Stewart, it's over to you.