Evidence of meeting #86 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 procurement.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Veronica Silva  Director General, Technical Services, Real Property Services, Department of Public Works and Government Services
John Kozij  Director General, Trade, Economics and Industry Branch, Canadian Forest Service, Department of Natural Resources
Matthew Sreter  Executive Director, Strategic Policy Development and Integration, Aquisitions, Department of Public Works and Government Services
Mohammad Mohammad  Senior Research Advisor, Trade, Economics and Industry Branch, Canadian Forest Service, Department of Natural Resources

9 a.m.

Liberal

The Chair Liberal James Maloney

We're in public now. We can bring the people back in, if we want.

We are starting a new episode today, a piece of legislation that was referred to us from the House, moved by none other than our own committee member Richard Cannings, who is here today as our first witness.

I won't bother explaining to you how our committee works or what the procedure is, because you know it as well as or better than we do. However, I should tell you that there are some pretty tough characters around this table, so you should be prepared for some tough questions.

On that note, Mr. Cannings, I will give you the floor for your presentation, and then we'll open the floor to questions.

February 27th, 2018 / 9 a.m.

NDP

Richard Cannings NDP South Okanagan—West Kootenay, BC

Well, thank you, Mr. Chair.

Good morning, everyone. It's quite an honour, of course, to be here testifying before my own committee. I didn't sleep last night because I was pretty keyed up about this.

I'm here obviously to talk about my private member's bill, Bill C-354. It's such a short bill that I'm just going to read the one clause that is really all there is to the bill. It just amends the Department of Public Works and Government Services Act, I believe. I didn't put that in there. Under Use of Wood, proposed new subsection 7(1.1) would read:

In awarding contracts for the construction, maintenance or repair of public works, federal real property or federal immovables, the Minister shall give preference to projects that promote the use of wood, taking into account the associated costs and reductions in greenhouse gas emissions.

That's basically it. It does state a clear preference for using wood, but that decision would be predicated on two tests, one that looks at the overall cost to the project and the materials used, and the other looking at the carbon footprint of the project.

I'm just going to open with a short piece on why I chose this bill and why I decided to move ahead with it. It's because this bill brings together several themes that are important to me and, I think, to many Canadians. One is the support for the forest sector in Canada. This is one of the big natural resource sectors across our country, which built our country. It's important in almost every province. I don't need to go into much detail on why the forest sector needs our support. It's had several challenges in recent years, but suffice it to say that if we can develop new markets for our forest sector, both domestically and internationally, I think we can maintain and grow our forest industries, creating jobs and wealth across the country.

Second, it speaks specifically to the important role that buildings play in our carbon footprint as a country, as a society, and therefore, the important role they must play in our efforts to significantly reduce that footprint.

Third, although it's not specifically mentioned in the bill—but you all know it around this table—it's meant to promote engineered wood or mass timber construction. This innovative technology is taking hold in North America with the leading manufacturers being in Canada, both in British Columbia and Quebec. These companies, and others like them, would greatly benefit from government procurement that allowed them to grow and maintain this leading position in the continental market.

Now, there are other models of this bill out there. This is not a new idea. For one thing, there have been several bills like this that have been tabled in the House of Commons before, in past Parliaments. There are several pieces of legislation in provinces, notably in British Columbia and Quebec, and other countries, especially Europe. I would like to touch on some of these.

The first is the B.C. Wood First Act. This is an act that was brought in, in British Columbia, in 2009. Again, it's a fairly short and succinct piece of legislation, and the one paragraph that is really sort of half of that bill says:

The purpose of this Act is to facilitate a culture of wood by requiring the use of wood as the primary building material in all new provincially funded buildings, in a manner consistent with the building regulations within the meaning of the Building Act.

It simply says that there should be a preference for using wood in provincially funded infrastructure. The Wood First Act has been successful in creating that culture of building with wood in British Columbia.

Michael Green, who appeared before us in our study on the value added aspects of the forest industry, is an architect, and he said that the Wood First Act has “made a big difference simply because it introduces the concept into the conversation”.

Bill Downing of Structurlam, one of the two main companies building mass timber products in Canada, said that the bill was a wake-up call that prompted B.C. architects, engineers, and contractors to consider wood in their projects and that it would be very helpful if the federal government did the same on a national scale.

Quebec also has a policy promoting the use of wood in government infrastructure called the Wood Charter and it states that:

in every project financed wholly or partly by public funds, the project manager must consider the possibility of using wood before the project begins, and must carry out a comparative analysis of greenhouse gas emissions for different materials.

It goes on to say:

A greenhouse gas emission measurement tool, which uses the tried-and-tested life cycle analysis method, is available to all professionals who wish to compare wood with other construction materials. The tool is reliable, effective and easy to use, and produces objective, standardized results that are easy to compare.

Other countries have similar policies. France offers incentives for meeting embodied carbon and net zero energy targets and has a plan to move from 5% wood buildings to 30% over the next 30 years. Other European countries, including Germany, the Netherlands, Sweden, Switzerland and the U.K., require or promote full life cycle analysis and embodied carbon reporting for many or all large building projects.

I'm just going to go on with a few of the concerns I've heard about this bill in debate in the House. I think there are really three main areas. One is about fire safety. I just have to say that these mass timber buildings are very different from the wood stick construction, the two-by-four wood frame buildings. Numerous tests have shown them to be as safe or safer than standard steel and concrete construction.

The NRC performed tests on walls and floors that were built by Nordic Structures, which is the main company in Quebec that produces these products, before they constructed a 13-story building called Origine in Quebec. The walls and floors resisted fire for the three and a half hours of the test at 1,200 degrees Celsius, far longer than the standard two hours that is required for that test.

Another test used a mock-up of rooms with stair and elevator shafts, and in spite of a full scale blaze in the room there was no detectable increase in temperature or smoke in the vertical shaft.

In British Columbia, where several buildings have been constructed using this method, fire chiefs are generally comfortable with mass timber construction and I hope we can get one of them here before us to talk about that. In fact, one of the newly built wood buildings in the province is the Qualicum Beach fire hall.

Another theme in the concerns I've heard is about trade and exposure to trade concerns, free trade agreements where there might be some issues about restricting what we build our buildings with. I assume we would have heard about these trade concerns if there are any legitimate ones. We've had a B.C. Wood First Act for nine years. No one who I know of has come forward with issues about that, and the same with the Quebec policies. I think in this litigious atmosphere we live in, in terms of other countries going to the WTO or NAFTA, we would have heard about concerns on those policies.

This bill specifically does not use the word...it's a use wood bill, it's not a use Canadian wood bill. I think that protects it as well. If we said, you must use Canadian wood to build buildings, then I think we might hear some complaints. It might have some serious trade implications.

I also think that the dual test of the cost and the carbon footprint of the project will allay other trade agreement concerns, but we'll hear from department witnesses on that. I've heard from British Columbia that they feel their act stands that test because they don't say “use B.C. wood”. I've heard from the Forest Products Association of Canada that it's that dual test that is also useful in protecting trade concerns.

The other concern I've heard is that this bill picks winners and losers. It says that we should prefer to use wood and not other products like concrete or steel. Of course, those industries will likely express some concerns about that.

To that I would say, first, building large buildings with wood is a very new thing. Only about 5% of our buildings use wood as a structural component, so even if we doubled or tripled that market share, it wouldn't affect the cement and steel industries significantly.

Second, in talking to the cement industry, they came to my offices and perhaps to yours as well with a specific ask of the government. Their ask was that they wanted projects to be looked at with the dual lens of carbon footprint and overall lifetime cost. That's exactly what this bill asks. Cement feels that they would do well in that test, and that would be great. If they use those lifetime cost analyses and come out ahead, then I think that's great because it will have achieved what I think is really important in our building, and that is to reduce our greenhouse gases, our carbon footprint. I would be happy, and they would be happy.

Third, most of the buildings using this mass timber construction are hybrid buildings of some sort. The first floor is often fully concrete. They use steel in the elevator shafts. A lot of them use cement in flooring for sound issues and heating. These buildings will use a lot of those other materials as well, so all sectors would benefit from this new construction.

I'll just close by saying that this bill is about giving wood a chance. We are facing a dramatic change in how we construct buildings, and Canadian companies are on the forefront of that change now in North America. Europe is way ahead of us. Government procurement would allow that sector to grow and maintain the leadership position. We need to actively promote the use of wood in new buildings during this shift, so that we don't lose out to American and European products and technologies.

This bill is about nurturing that culture of using and building with wood; creating beautiful, safe buildings with a low carbon footprint; and supporting the Canadian forest industry from coast to coast.

Thank you.

9:10 a.m.

Liberal

The Chair Liberal James Maloney

Thank you, Mr. Cannings.

Mr. Serré, you're going to start us off.

9:10 a.m.

Liberal

Marc Serré Liberal Nickel Belt, ON

Thank you, Mr. Cannings. Congratulations on having your bill come to committee and moving it forward. You answered some of my questions, but I just want to confirm.

First, are you saying that 5% of the current federal buildings are with wood?

9:10 a.m.

NDP

Richard Cannings NDP South Okanagan—West Kootenay, BC

That's a number I've heard from various sources. It's the number of buildings in France that are currently wood. It's the number of buildings that Quebec reports as being currently built with wood. I've heard 3% to 5% from other people.

9:10 a.m.

Liberal

Marc Serré Liberal Nickel Belt, ON

What would be your estimate if this bill were to become legislation? What would be the estimate of wood that the federal government would use? Is there any data on that at all?

9:10 a.m.

NDP

Richard Cannings NDP South Okanagan—West Kootenay, BC

I haven't gone to the extent of talking to people about what the size of that change would be. As I said, France thinks they can move to 30% of the new buildings being made with this new wood technology in 30 years.

That might be something to look at, but I'm just saying that any increase would help the forest industry.

9:10 a.m.

Liberal

Marc Serré Liberal Nickel Belt, ON

With the B.C. Wood First Act and the Quebec Wood Charter, what do you think are some of the lessons or concerns that we could learn as parliamentarians from those two acts that we could incorporate better into the bill?

9:10 a.m.

NDP

Richard Cannings NDP South Okanagan—West Kootenay, BC

I think both of those policies—and it specifically states so in the B.C. one—want to create a culture of wood. They want to create a situation where project managers who have to build a new warehouse for the federal government will think of building with wood, where they won't automatically think they have to build with concrete and steel. It creates a culture where wood is part of that picture, whereas it hasn't been.

Really, the main goal here is to make that shift in how people think about building with wood. I think that's where they have been successful. You could say that they're a successful PR campaign in a way, but they create that culture of thinking about wood, and what we heard repeatedly from Michael Green and Bill Downing was to give wood a chance and to consider wood.

9:15 a.m.

Liberal

Marc Serré Liberal Nickel Belt, ON

We've heard from other witnesses that there's a large skills shortage in Canada for engineers and architects. In your research for the bill and the work that you've done, do you feel that by increasing more of the wood structures that it could address the issue of a skills shortage for architects and engineers?

9:15 a.m.

NDP

Richard Cannings NDP South Okanagan—West Kootenay, BC

Yes. Again, we heard from Michael Green about that problem. He's taken it on, as a personal thing, to tell Canada about building with wood, by training people, training architects, and training engineers how to build these new buildings. Again, we're way behind the Europeans. When you look at companies, like Structurlam, my office is working with Structurlam because they're bringing in people from Germany, so they have to deal with the work permits and things like that, because nobody in Canada knows how to do this at the engineering and design levels. I think that, if we provide this government procurement and grow the industry, it would create that critical mass, so that people, like engineers, will say that they want to learn about this and it will give them a niche that they can grow into. I think that can only help.

As I said, right now, we're way behind the Europeans and we have to buy their equipment and bring in their people that they've trained.

9:15 a.m.

Liberal

Marc Serré Liberal Nickel Belt, ON

Do you have any insight or research on our indigenous communities about how this could engage and benefit them, by providing them with the expertise that they could utilize to create the wood structures themselves?

9:15 a.m.

NDP

Richard Cannings NDP South Okanagan—West Kootenay, BC

The one thing that this does, no matter whether you're looking at building with engineered wood or regular wood, is that it would help the small and medium-sized mills across the country to thrive. Structurlam, in my home town of Penticton, buys wood from all over my riding and beyond. Most of the douglas fir it gets for its beams comes from a company called Kalesnikoff in Castlegar, on the other side of my riding. It's a small, family-owned mill and they really appreciate that extra business.

I think Bill Downing mentioned that they got the contract to rebuild the Microsoft campus in Washington state and with that, they put in an order for $4 million to Canfor, which has mills all across British Columbia and Alberta.

The thing about this wood construction is that you can use any kind of wood, whether it's black spruce from the north or lodgepole pine from beetle-killed areas, you can use all that wood. If we have indigenous communities—and a lot of indigenous communities in my riding have forest companies that they operate—it would help those companies.

9:15 a.m.

Liberal

Marc Serré Liberal Nickel Belt, ON

In the last minute I have, I wanted to mention the impact it has on other industries, like cement and steel, as you mentioned. I have my honourable colleague from Sault Ste. Marie beside me and I know you alluded to that in your opening remarks, but what further assurance can you provide for the other industries, when you look at the impact that this could have on them?

9:15 a.m.

NDP

Richard Cannings NDP South Okanagan—West Kootenay, BC

All I know is that the United Steelworkers are all behind this bill. I can say that right up front. I think that this is a chance to grow the wood industry. It's not really about taking away from the steel industry or cement. When I talked to cement, I know that they were more worried about government infrastructure using plastics and things like that for piping. That's where they really felt that they had a good advantage. That is a totally separate issue. These industries have aspects that wood would never touch, so I really think that, if there's any effect on steel, it would be very minor. Regarding the stuff that steel does really well, that would stay the same.

As I said, we're talking about a relatively small number of projects at first. We just have to grow them. We're at that critical stage, which is the valley of death for some of these companies, so it's growing that small sector of the market and helping the forest industry.

9:20 a.m.

Liberal

Marc Serré Liberal Nickel Belt, ON

Thank you.

9:20 a.m.

Liberal

The Chair Liberal James Maloney

Thank you, Mr. Serré.

Mr. Schmale.

9:20 a.m.

Conservative

Jamie Schmale Conservative Haliburton—Kawartha Lakes—Brock, ON

Thank you very much, Mr. Chair.

I appreciate the comments from Richard.

Just to let you know, I was going to give you a bunch of lob ball questions, but Ted said that I have to go hard on you, and Mark Serré did too.

9:20 a.m.

NDP

Richard Cannings NDP South Okanagan—West Kootenay, BC

Ted's that way.

9:20 a.m.

Conservative

Jamie Schmale Conservative Haliburton—Kawartha Lakes—Brock, ON

Actually, I do appreciate your bill. However, I do have some concerns about it, and I think you probably guessed that by the way the vote went the other day.

9:20 a.m.

NDP

Richard Cannings NDP South Okanagan—West Kootenay, BC

I got that distinct impression, yes.

9:20 a.m.

Conservative

Jamie Schmale Conservative Haliburton—Kawartha Lakes—Brock, ON

It was hard voting against you. I can see that you're a great guy. Where I have a bit of an issue is basically with the government compelling citizens to buy something from a private sector business. I know that the government does that often, controlling behaviour through a tax code or with rules and regulations, but that doesn't always mean that it's the right thing to do. This is one of my issues with that.

9:20 a.m.

NDP

Richard Cannings NDP South Okanagan—West Kootenay, BC

First, I want to say that the B.C. Wood First Act and the Quebec wood charter, asking for preference, were brought in by Gordon Campbell and Jean Charest. They're not raving communists, you know.

9:20 a.m.

Conservative

Jamie Schmale Conservative Haliburton—Kawartha Lakes—Brock, ON

I'm glad you brought that up because that actually leads me to my next question. Wouldn't it be more efficient to leave it to the provinces?

9:20 a.m.

NDP

Richard Cannings NDP South Okanagan—West Kootenay, BC

I think both the provinces and the federal government do infrastructure, so if you're talking about procurement.... We've often talked on the committee about how government procurement can help different sectors at certain times of their development.

Just to get back to your first question about compelling a private sector company—and I forget exactly what the question was—this is not compelling the government to buy from a certain company or anything. It's just that if we are doing infrastructure, let's put that project to a couple of tests. First, what would be the best buy for our dollars and cents over the lifetime of that project? Second, what aspect of the project would lower the carbon footprint? I haven't specified in the bill how that balance would be made. Normally, we would just look at the costs. I've added the carbon footprint and said that we should show a preference for wood. In that, I'm implying that if it comes out more or less equal, then we should use wood because it will also do those other things I mentioned.