Natural Resources Committee on Feb. 6th, 2018

[Marc Serré, Liberal, Nickel Belt, ON]

That is excellent.

We have heard a lot of testimony about the labour shortage in the industry. The private sector is looking for people.

What recommendations could we make to government to encourage women to join that workforce and to participate in the economy of the forestry and natural resources industries? What role is the National Research Council Canada currently playing to encourage women's participation? I am a member of the Standing Committee on the Status of Women, where we are talking about quotas, but that is always a controversial subject. In terms of funding, do you encourage the hiring of women in science, technology and engineering? What additional role could the NRC and the government play in order to increase the participation of women in those fields?

[Éric Baril]

That is an excellent question.

I can attest our organization's stance in that regard. In our research centre in Boucherville, the biomaterials group is led by a woman. That group is also managed by Ms. Legros, who is here today. So we have a lot of women and I think that they are living proof that women can progress in this career,

[Marc Serré, Liberal, Nickel Belt, ON]

Does the funding you provide come with any requirements? Should there be any?

[Éric Baril]

I am not personally involved in the funding side.

In hiring, we give priority of access to women. The research centre's advisory committee is made up of men and women equally. We encourage the presence of women in all NRC's decision-making processes and in its structure.

[Marc Serré, Liberal, Nickel Belt, ON]

Ms. Legros, do you want to add anything?

[Nathalie Legros]

I think I am a good example.

[Marc Serré, Liberal, Nickel Belt, ON]

Indeed.

[Nathalie Legros]

That is all the more true given that I work in the automobile and surface transportation sector, where there a lot of men. The fact that I am a woman working in a slightly more male environment sets an example and greatly encourages other women to become involved in sectors of the industry like automotives or construction.

In my opinion, the NRC is doing as much as it can to provide access for highly qualified women.

[Marc Serré, Liberal, Nickel Belt, ON]

Thank you.

In terms of possible international markets, do you have any specific recommendations? We have heard witnesses say that Asia, Europe and even the United States are further ahead than we are in the field of biomaterials and they are better at seizing the opportunities presented to them. Can you give us two or three examples of specific areas in which the federal government could work with the private sector in order to increase exports of our products to the world? This is a several-billion dollar market to which we presently have no access.

[Éric Baril]

It's a good question.

[Nathalie Legros]

I will answer your question with an example on lignin.

Lignin can be precipitated from black liquor, a by-product of the pulp and paper industry. We can do many things with lignin, particularly polyurethane foam, which is used in building insulation and car seats, as this foam material also provides comfortable seating. The NRC has developed innovative technology that allows lignin to be used in the chemical composition of polyurethane.

Allow me to draw a parallel with Ford Motor Company, one of the world's leading car manufacturers. Ford currently uses soybean oil in almost all of the car seats it manufactures.

If Canada can convince one or several car manufacturers or car seat manufacturers to use small amounts of lignin in the polyurethane foam that goes into these seats, I think that it would have a positive impact on the environment, as well as on Canada's economy and bio-economy.

Though Ford only currently uses small amounts of soybean oil, it does manufacture a considerable number of car seats.

In Canada, we now have this very interesting technology that allows us to integrate lignin into polyurethane foam, so we should find a way to take advantage of it.

[The Chair, Liberal, James Maloney]

Thanks very much.

Go ahead, Mr. Schmale.

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

Thank you very much, you two, for joining us here today, and thank you for your contributions to research in your fields, which is very impressive.

I wonder if I can start with your point number 17. I just want to clarify, and it doesn't really matter who answers.

In the sentence, “Driving this migration is an increased desire to be environmentally-friendly and questions on the future accessibility and/or depletion of petroleum”, could you just clarify what you mean by that last little bit there, the “depletion of petroleum”?

[Éric Baril]

The sentence means the depletion of access to petroleum. Petroleum is becoming more expensive because of difficulty of access, so that's one dependency we can see for these products, that the costs will become higher because of the depletion of easily accessible sources of petroleum.

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

Are you seeing that more of access, or would you say...? It's hard for you to say this, but I'm trying to phrase this in a way that.... The stats I'm looking at don't indicate access. The stats I'm seeing are indicating that within the next 50 years demand for petroleum-based products is going to increase. We know that in the oil sands they're looking at 50 to 100 years of known reserves, and they're just starting to find new sources in Alberta and Saskatchewan.

Is it more the fact that more and more taxes are being put on these products, because what we're saying is that it's not basically access, and prices are fairly low?

[Éric Baril]

Yes, you're right. I cannot say more about that.

Actually, in here what we meant is certainly that there is a competition between products from a renewable source and petroleum products. The switch point between the two will be price-wise, when the petroleum price will be in competition or at a competitive price with the biosource products. I think that switch point will happen because of either accessibility, high demand of petroleum products for.... Petroleum products will remain for driving the transportation economy, for sure, and therefore, having plastics and other products sourced from other sources will leave petroleum for other applications and maybe pointed application for the petroleum use. I think that's the only thing I can say about it.

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

In the study we've done, we've had various witnesses testify about where government plays a role, and we all do agree that government does play a role. But what we're noticing is that the level of government subsidies in some of these industries is almost putting in a very uneven playing field. According to the stats from my friend, in 2016–17, oil received only 6% of all government subsidies, and most of that was in the range of a tax credit through their exploration tax credit.

Is that what it's called?

[Shannon Stubbs, Conservative, Lakeland, AB]

Yes, subsidies to energy.

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

Yes, or subsidies to energy, where 75% of those subsidies went to wind power, and we know how that worked out for Ontario so far.

Marc, that was for you.

Rather than pitting sector versus sector—and I know it's hard for both of you to answer this question—we want all of them to thrive. When you're dealing with these new projects like lignin—and I don't know if you two know this—what level of subsidy is the government providing to develop that product?

[Nathalie Legros]

It's very hard for me to answer this question.

We develop technologies that allow us to replace certain polymeric products with lignin. These days, enormous amounts of plastics are produced. To replace a small portion of these plastics with lignin, which is seen as a bio-plastic, would already be interesting. Given that plastics are derived from petroleum, they are subject to the same price fluctuations. If plastics manufacturers can integrate small amounts of bio-sourced materials, they will be able to better control the price of the plastics they manufacture.

I'm not sure that I answered your question well.

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

For the most part, yes. I guess what I'm trying to get at, and what we saw with the witnesses, is the fact that the industry is heavily subsidized and this is, again, as I pointed out, not Liberal versus Conservative or what have you, because a lot of the subsidies were in the previous Parliament too. What we're looking at are better ways, but also in this, in my opinion, the government should be enhancing our freedoms, not controlling our behaviour through the tax code or distributing wealth in a way that puts one sector at a severe disadvantage. We are noticing that with these products if there is a market for them, the market will pay for them. However, we don't want the oil and gas industry to be negatively affected as a result of some of these decisions because there are thousands upon thousands of jobs that depend on this.

However, if the market does move in a direction to replace some of these products, as you pointed out, that would be fine. I'm more curious about how much the government subsidized it because with this type of thing, of course, companies are going to be very happy with this. If a company can say, the government will help me in my research, that's a cost I do not have to incur, and that is a cost I do not have to roll into the price of my product on the other side of things, and which affects the price.

Is there anything else you want to add? That's what I was getting at.

[Éric Baril]

One of the challenges of this industry is there was a lot of investment in the upstream part of the industry, the genesis of the raw material, but very few investments into the downstream part, the application. Right now what we see is there's an interest in the downstream. Ford is an example. There are a couple of users that see the integration of the biomass products into their product as something good for their client. There's a demand for that, more and more. I think they're looking at answers for that. That will drive the product from upstream to downstream and create the value chain that you need to create to have a sustainable economy for these types of products. This is where we're playing right now. We're playing on the downstream part, defining products that will work for the business and for the industry that are cost-effective. We are not investing money in this, we're doing the research. We're the tier one of the research; we're the arm of the research and we're answering the demand and trying to get the best product on the market.

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

Most of what I was saying was a rant, too.

[Nathalie Legros]

We don't think the bioproduct should replace—

[The Chair, Liberal, James Maloney]

I am going to have to stop you there, sorry, Ms. Legros.