Evidence of meeting #83 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 lignin.
A recording is available from Parliament.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
All you need is access to that resource. In this case it's forestry. It might be other resources elsewhere, because all these remote first nations have resources all around. That's one point.
On the other thing you've talked about was getting access to investment capital. You needed that government capital as a lever to get there. I'm just wondering if you could comment on the difficulty that first nations experience getting access to capital that private companies would not—
Community Development, Whitesand First Nation
How many banks did we walk into at the beginning, and we were basically told, “Nah, it's a forestry project. It's a first nations project. What are you going to put up?” Great. We would say that we had a power purchase agreement, and their eyes would open.
On that power purchase agreement, part of the negotiation is that it must remain in Whitesand First Nation. Nobody can come in and just take over the power purchase agreement. It's an extremely attractive revenue stream.
Even with that, we weren't openly welcome. On that gap acuity, the type we're talking about, let's make it a $75-million project. We can finance $25 million of that, and we're looking at those two capital funding programs. That's why they were designed for projects like ours.
The greenhouse gas reduction account is from carbon credit sales in Ontario, and it's specifically designed for projects such as ours that are going to build the low-carbon economy, the bioeconomy. Those are avenues, I think, any type of project can go into for it.
It would be very difficult without those programs for us to go to build. I don't know how we could do it.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
Mr. Boulard, could you elaborate on this problem with U.S. competition, how that works?
President, Ensyn Technologies Inc.
Just quickly, policy is a global issue. When we develop Canadian renewable energy policy and carbon reduction credit systems, we like to think it's a “made in Canada” solution. Renewable energy and carbon reduction are becoming a global competition, so policies have to be competitive. All we're talking about right now is the U.S. policy being more competitive, by which renewable fuels are accessible into a marketplace for a higher economic value than Canadian policy.
To say it again, the credit development that exists in the United States allows us to price our customer so that a customer in the U.S. can pay more for carbon reduction than a customer in Canada. Until our policies become competitive, that may always be the case. When we look at policy, whether it be environmental policy, credit policy, or renewable fuel standards and carbon reduction credits, we have to look at them in a global context as well as a domestic context.
Our type of fuel is just like crude, petroleum crude; you put it in a tanker and you ship it all over the world. The vision for liquid wood is similar. We already have 40 railcars. We ship it by railcar. We ship it by tanker truck. When our facility comes online in Q2 in Quebec, we're dealing with CN Railway to get that throughout the United States marketplace via railcar.
We're looking at these products as competitive. When I call myself an engineer of wood products, that's what we are. We line up with the trains that send two-by-fours down to Georgia and Florida...oriented strand board fibre and MDF fibre, we're the same thing, but on the energy side, when we look at our desire to reduce carbon, we have to also appreciate there's a competitive influence there.
Liberal
Marc Serré Liberal Nickel Belt, ON
Thank you to the witnesses.
I have so many questions and only seven minutes. Those were great presentations.
I want to start off with Mr. Marshall.
You talked about the first petrochemical cluster in Sarnia and building that cluster, how important that is for the value chain and jobs when you look at the R and D, right to the commercialization, with the value of that, and some of the challenges with that. I want to talk a bit about the innovation centres and the clusters, but, first, you indicated in your presentation that there were six policies that you would recommend to the federal government with the standards, the regulations, and you indicated R and D.
Executive Director, Bioindustrial Innovation Canada
They're in the forestry bioeconomy framework, so they're not actually ours. I was just referring to them because they came out of the forestry framework. They would be better asked to the guys in the NRCan forestry service.
Liberal
Marc Serré Liberal Nickel Belt, ON
Perfect. Because those are good recommendations, I also want to make sure we get more in-depth recommendations as part of those six policies.
We've talked a bit about the issue of government support, R and D, and commercialization. I want to get your sense of what those government investments linked to the private sector have done to foster innovation, to foster growth, and to support job creation in this industry and how important it is to the industry to move forward and really look at this billion-dollar market in Asia, Europe, and the U.S. in the future, because we're kind of falling behind, and we need to step up. I just want to get your sense of that.
Executive Director, Bioindustrial Innovation Canada
I'll talk mostly about the experience we have at Bioindustrial Innovation Canada, because we're working within the cluster structure. Our focus is commercialization, so we basically work directly with early-stage companies to try to move them through the valley of death to successful commercialization. I think that segment of working with those early-stage companies and helping them to succeed in Canada is really very important.
I came out of the traditional petrochemical industry. I worked for Polysar, Bayer, and Lanxess over my career. What I learned from my career working for a multinational that was not Canadian-based is that multinationals that aren't Canadian-based don't really have a long-term vision about Canada. We're basically a business entity for them.
If we're really going to be successful in creating businesses in Canada, we need to build and strengthen our own Canadian-based companies. We have a few large Canadian multinationals, but we don't have enough. Developing and supporting innovation in early-stage companies that have developed their technologies through Canadian universities, or wherever it came from, through all these awards from NSERC and the various innovation and support structures we have in Canada, is really very important. The challenge we have, though, is a lot of those technologies get developed, and then, ultimately, funding comes from somewhere in the United States, and then they get pulled away and commercialized elsewhere.
It's really very important that we put a big focus on commercializing technologies in Canada and having the mechanisms in place to support the commercialization. I focus that differently from innovation, because we are really good at innovation. In commercializing, there are so many aspects to it that can cause you to fail. Finding ways to deal with those pieces of commercialization that these companies have to overcome is very, very important.
Liberal
Marc Serré Liberal Nickel Belt, ON
Regarding commercialization, we've heard this from many industries. We need to really work on that aspect.
Mr. Boulard, is that an area that you want to expand on, for Canadian companies to compete against the U.S. companies? What are they doing differently from us?
President, Ensyn Technologies Inc.
From the Canadian standpoint, I think what we do really well is capital. I think we do gap capital really well.
Where the U.S. does really well is market access and openness. I think that's what we're experiencing. We're able to build facilities in Canada, at least the first major commercial ones, and therefore, spin off to others. We don't have a Canadian market. We have to go to the U.S. for market and market access.
I think those are some areas that we could improve.
Liberal
Marc Serré Liberal Nickel Belt, ON
Thank you so much.
Now, in two minutes or less, I want to focus on Mr. Mackett.
It's fantastic what you're doing. I commend you on the work and the persistence. When you're the leading edge and on new ground, as a pioneer, obviously there are going to be some challenges.
Can you make sure the clerk gets the presentation? I want to follow up on that.
How can we support? We've heard so many times from a first nations' perspective, across Inuit territories, through northwestern and northern Ontario and B.C., to get off diesel fuel...even mining companies to develop more resources.
How can we utilize your experience since 2009, to promote, expand, and build upon what you're doing across the country in other first nations communities?
Also, when we look at the 60 jobs, I'm pretty sure there are going to be a lot more indirect jobs that will come after that....
Community Development, Whitesand First Nation
You guys and your time limits.
Canada is doing the pan-Canadian framework on reducing diesel. You have some new programs coming out that will help communities do retrofits or fuel replacements. Ontario's doing the same. Ontario's actually moving to another treasury board to convert our homes now from diesel furnaces.
How do you support it across the whole country? What happens a lot is that these funding programs are competitive. Some first nations.... I'll have to say that we're one of them. Craig and I know how to write funding proposals; we've been very good at it. It turns into a competition and somebody is turned down. At times, I think we need to prioritize. Do we look at the largest or the most needy? It's very difficult to cross the whole landscape.
I met a girl from Austria. What they did, to get off diesel, and what it did to their gross domestic product.... Now, they are world leaders in pellet stoves and boilers and district heating systems, which are manufactured there, that now come to Canada. We're looking at a few. It's the same in Finland. By building this economy here.... We just got another offer. All of our pellets are going to Europe, right now. Why? We were just contacted by Canadian Tire, which would be great for us. We need to build that domestic market, so that people....
The price of diesel and propane in northern Ontario is crazy. Many people have traditional fireplaces, with wood, those things. That's even getting harder. I'm 61 now, so it's hard for me to do my firewood every year. I'm going to convert to pellets.
I think Ontario has a new program coming where you can do retrofits.
First nations are so innate.... If you put in one small heating system, electrical system, or district heating system in a first nation, you're creating one, two, three, four, or five jobs. That may not sound like a lot, but in a lot of these communities, that's the spinoff. The spinoff is that you're building the economy, capacity, and employment opportunities.
It's very hard to answer your questions very quickly.
Liberal
The Chair Liberal James Maloney
You did a good job and we're grateful for that.
Gentlemen, thanks to all of you for coming out this morning, to give your very interesting presentations. Your evidence will be a great help to this study.
Unfortunately, we do have time constraints. We could spend a lot more time discussing this with you, but we just can't, which is unfortunate.
Again, we're grateful. We will suspend for two minutes, sharp.
Liberal
The Chair Liberal James Maloney
We're going to get under way here. We have one presentation in this hour and then we're going to stop at about 20 to, because we have a few minutes of committee business to deal with at the end.
We have, from the National Research Council of Canada, Éric Baril and Nathalie Legros.
Thank you both for joining us today.
Mr. Baril, the floor is yours for 10 minutes.
Éric Baril Acting Director General, Automotive and Surface Transportation, National Research Council of Canada
Thank you, Mr. Chair. Bonjour.
My name is Éric Baril. I'm the Acting Director General of the Automotive and Surface Transportation Research Centre of the National Research Council. I'm joined today by Nathalie Legros, the technology leader for polymer and composite products manufacturing in the NRC advanced manufacturing program.
We are pleased to have been invited to speak with you today.
Before taking your questions, we would like to take this opportunity to briefly discuss with you where the NRC has been, what we are doing today in support of Government of Canada priorities and the Canadian economy, and, based on current trends, where we see the future of biomass research in Canada.
So to start, I want to share with you an idea of the scale and scope of the NRC.
The National Research Council Canada is a national organization with some 3,700 scientists, engineers, technicians, and other specialists, including 255 business and technology advisors through NRC's industrial research assistance program, located across the country.
Our 14 research centres operate out of 22 locations, spanning Canada's geography. You will find the NRC's ocean, coastal, and river engineering research facilities in St. John's, and our astronomy and astrophysics centre in British Columbia.
My own research centre, automotive and surface transportation, for example, operates research facilities here in Ottawa as well as four other facilities in Ontario and Quebec. Our work covers a broad range of research disciplines, the outcomes of which have changed the lives of Canadians and people around the globe. The 14 research centres are mobilized to deliver on 37 targeted R and D programs.
The NRC has been the Government of Canada's premier federal research and development organization over the past century. We have acquired a reputation for excellence, with breakthrough inventions such as radar, the pacemaker, the black box, canola, the Canadarm, a vaccine against meningitis, 100-year cement used for critical infrastructure, and the first bio-fueled jet flight in the world. Moreover, we are proud to claim the late Dr. Gerhard Herzberg, who won a Nobel Prize for his work in molecular spectroscopy, as one of our researchers.
Each year, our organization works closely with industry, conducting research and development work with over 1,000 businesses. We provide technical advice to some 11,000 SMEs, and we collaborate with close to 152 research hospitals, 72 universities and colleges, 34 federal departments, and 35 international partners.
The NRC is an organization that emphasizes collaboration and the convening of technologies. We are aligned with federal priorities, and today we focus on three core areas: delivery of business innovation, support for federal mandates, and advancing science and innovation through exploratory research.
The research conducted at NRC in support of the bioeconomy is highly interdisciplinary and multi-sectoral. That being the case, we conduct initiatives in bioenergy, bio-based specialty chemicals, and industrial biomaterials.
Today we will concentrate on industrial biomaterials.
Working directly with clients, we provide technical services, technology development support, and credible scientific advice to assist technology-based Canadian companies transform our country's renewable resources into sustainable, high-value products.
Over the past 20 years, the NRC bioproducts programs have contributed to accelerating the innovation process by ensuring that Canadian companies have access to the best and most cost-effective research and technology support available, to support the need to develop new processes and products, and to bring them to market as quickly as possible.
The NRC is active in the research and development of industrial biomaterials, defined as products made, entirely or partially, from renewable resources, to be used by many different industries. We focus on using the byproducts and residues of the agriculture and forestry industries to produce cost-effective, lightweight, and eco-responsible products that effectively reduce our dependence on non-renewable fossil fuels. This focus results in the enhancement of Canada's manufacturing companies and their competitiveness in the global market.
Our research transforms non-food-grade and renewable resources widely available in Canada, such as forest biomasses like lignin and wood-derived fibres, and agricultural fibres for development of value-added products.
We also work with renewable chemicals and bio-based materials, including cellulosic fibres, bio-resins, and bio-additives. These materials are used in the development of specific products, ultimately providing renewable alternatives to identical fossil fuel derived products.
The results of these products and processes are environmental benefits, stability, low-cost, and unique properties that benefit and differentiate Canadian industry in general and manufacturing in particular.
As the demand for energy and plastics continues to grow, the pressure to identify renewable resources for the production of such materials is increasing. Globally, economies seem to be shifting towards bio-based solutions. Driving this migration is an increased desire to be environmentally friendly and questions on the future accessibility and/or depletion of petroleum.
This shift presents opportunities in areas where Canada has clear advantages from its abundance of agricultural and forestry assets. With greater frequency, manufacturers are using Canadian biomass products that do not compete with the food chain to replace petroleum-sourced plastic and fibres. This can be seen in the transportation, packaging, and even construction industries.
The biomaterials sector is of strategic importance to the growth of Canada's bioeconomy, improved environmental sustainability, and job creation.
Bio-products can effectively contribute to the development of sustainable materials for manufacturing industries. A number of these bio-products have already been implemented in automotive and construction today. Currently, most vehicle interiors incorporate bio-composites made with cellulosic fibres that can come from hemp, flax, wood or cotton. Another well-known example is the wood fibre composite boards that have been used in housing in North America for over a century.
One illustration of the potential for bioproducts is the collaboration between NRC and Domtar. We have worked together on the transformation of lignin powder into a product in a pellet form. This form can be handled and used by the manufacturing industry for the production of plastic parts without going through the costly step of melt compounding. This collaboration has led to a commercial-scale demonstration at Domtar's Canadian-based operations, and application developments with funding support from Natural Resources Canada.
Technologies that like these that we are developing open new higher value markets for forest biomass products and enhances competitiveness. Canadian manufacturers able to produce greener plastic products will create new economic and employment opportunities.
Earlier, I mentioned lignin and I would like to come back to this innovative product. Lignin is the second most abundant renewable carbon source and also a byproduct of chemical pulp mills. Previously, as lignin was considered a byproduct, it was primarily used as a low-grade fuel. However, lignin now is used to replace conventional petroleum-based polymers.
The lignin-based polymer products are not only cost-competitive and cost-effective, but are also more environmentally friendly as compared to petroleum-based counterparts. Proofs of concept with plastics containing lignin were conducted for insulation foams, automotive seating, various moulded parts, construction panels, and plastic films. They can be formulated and processed in conventional equipment.
In addition to lignin, we are also concentrating our research efforts on the utilization of Canadian wood and agricultural fibres for the production of biocomposites. The NRC has worked together with the automotive supply chain to develop cost-effective, light biocomposites for automotive interiors. The project outcomes provide effective solutions in converting Canadian cellulosic fibres into eco-responsible interior products. This ultimately contributes to the Canadian economy by generating wealth and creating jobs, while reducing pollution from vehicle production and in-service maintenance.
Overall, the NRC strengthens Canada's role as a leader in the development of sustainable bio-sourced materials and technologies.
Through collaboration and partnerships, like the examples offered, we are capable of integrating our technical expertise with the entrepreneurial spirit and business know-how of Canadian industry leaders. Together with industry, we are creating solutions for the manufacturing of new, lightweight, cost-effective material.
This technology will be used in future vehicles and homes.
In the course of achieving these impacts, NRC will lead the way in collaborative research and development with other science-based departments.
We will be validating hypotheses and claims, developing new knowledge, asking new questions, providing validated answers and solutions, and ultimately filling current knowledge gaps.
These research and development activities will be invaluable for industry when responding to new business opportunities created by the rapidly emerging bio-economy. Further, our research and development activities will be relevant for industry by ensuring that solutions are cost-effective and available where and when needed.
Going forward, we are equally well positioned to convene the right stakeholders to work collectively to play a major and distinct role in achieving Canadian goals for a vibrant bioeconomy. We accomplish this by supporting Canadian manufacturers and their supply chains, strengthening their research and technology development, product innovation, and manufacturing process capabilities. This, in turn, results in the successful development of commercially viable bioproducts and systems. This will make a difference to Canadians now and in decades to come.
To close, it is the NRC's breadth of experience, our unique scientific infrastructure, and our national scope, all combined, that enable us to bring players together from across Canada and abroad.
Thank you for your interest in the NRC. My colleague Nathalie and I will be pleased to answer any of your questions.
Liberal
The Chair Liberal James Maloney
Mr. Baril, thank you very much.
Mr. Serré, you're going to start us off.
Liberal
Marc Serré Liberal Nickel Belt, ON
Thank you, Mr. Chair.
Mr. Baril, thank you for the research work you are doing across Canada for the benefit of all our industries.
You kind of answered the first question I had for you in your presentation when you spoke about the importance of government investment in the private sector. You mentioned things like pacemakers, vaccines, and the Canadarm. A number of examples show us that, without government investment, those innovations would not have seen the light of day.
As I understand it, it will be possible to strengthen Canada's position as a leader in the development of bio-materials, if the government invests in the private sector. Are you in agreement with that?
Acting Director General, Automotive and Surface Transportation, National Research Council of Canada
Yes, I am.
Liberal
Marc Serré Liberal Nickel Belt, ON
Thank you very much. So let us continue down that road.
We hear a lot of talk about industrial clusters in all sectors and about the importance that your research and development provides. We also hear a lot of talk about commercialization and some associated problems. The United States and some other countries have moved ahead of us in this area.
What support do you provide to industry in terms of bringing their products to market? What more could the government do?
Acting Director General, Automotive and Surface Transportation, National Research Council of Canada
That is an excellent question.
In recent years the NRC has established industrial research groups. We do not limit ourselves to Canadian partners, which allows us to go beyond our borders and encourage Canadian, American and international players to come together to work on issues in research and development. Ms. Legros will be able to give you a number of examples later.
The industrial research groups allow us to establish contacts between the players in industry, to determine precise issues, to tackle those issues and find solutions together. That also allows us to create partnerships that will bring products to market. Commercialization is not done in isolation, but through partnerships.
Nathalie Legros Research Council Officer, Automotive and Surface Transportation, National Research Council of Canada
If I may, I will add to Mr. Baril's answer.
Forest biomass is an important factor in our work. We are trying to incorporate it into biomaterials to be used in construction and in automotives. We are trying to establish projects that bring different partners together. For example, we arrange for manufacturers of biomass products such as lignin and cellulosic fibre to work together with automobile manufacturers to develop biomaterials that will be used in the next generation of vehicles.