Natural Resources Committee on Feb. 27th, 2018

[The Chair, Liberal, James Maloney]

Thanks very much, Mr. Kozij.

Go ahead, Mr. Harvey.

[TJ Harvey, Liberal, Tobique—Mactaquac, NB]

Thank you, Mr. Chair.

I want to start with Mr. Kozij. You talked a lot about the positive outcomes from new construction with wood, as well as some of the benefits. What are some of the impediments, as you see them at NRCan, to this type of wood construction?

[John Kozij]

I think they can be classed into three large areas.

One would be around culture and being able to change the culture of wood in Canada and have a greater acceptance of using wood in different applications, especially with the realization that we have new products on the market that offer new solutions. We've supported Wood WORKS!, as have the provinces, to be able to build that culture in Canada as well as emphasize that new products are available.

A secondary one is really around perception. This is overcoming, I think, some of the myths—especially with new engineered wood products—around fire safety, seismic stability, and even, in a second tier of issues, acoustics.

A third issue is really around codes. One of the key things, as I mentioned, was that a change of the building codes to allow six storeys in 2015 has really led to an enormous growth of mid-rise residential construction in Canada. That's why our work, I think, on building codes, while not sexy, is pretty important to the growth of wood construction in Canada.

[TJ Harvey, Liberal, Tobique—Mactaquac, NB]

Thank you.

Ms. Silva, do you want to comment briefly, from a Public Works and Procurement standpoint, on some of the possible impediments, the government view, and the ability of government to utilize this type of wood construction for government buildings?

[Veronica Silva]

I'll let my colleague speak to the procurement side.

From a non-procurement side, from a design and construction perspective, I can only speak for the department, Public Services and Procurement Canada. I think culture is an element that spans across whether or not you're a federal public servant, so I think that is a reality for the department and others to consider as well.

That being said, from a design and construction perspective, we have to be objective and we have to consider one of the primary initiatives of GHG reduction. GHG reduction is achieved partially by the way we operate and maintain our existing portfolio, which is a very large portfolio. In terms of either renovation or new construction, it is by looking at the best approaches to the design aspects of those renovations.

Therefore, in theory, culture should not be an impact, because you, as a designer, are supposed to be looking at it objectively.

[Matthew Sreter, Executive Director, Strategic Policy Development and Integration, Aquisitions, Department of Public Works and Government Services]

From a procurement perspective, PSPC is the government's common service provider. We provide services to more than 100 federal departments and agencies, and we're undertaking numerous steps to modernize our procurement to make sure we incorporate better environmental and sustainable procurement practices within our procurement regime.

However, the procurement regime, as you well know, does operate within a complex system—a web of rules, if you will—stemming from international rules straight through to domestic, in terms of our domestic policies and PSPC's policies.

We are trying to modernize, but we also are cognizant that we do have obligations to comply with international obligations as well as our legislative and policy requirements.

[Veronica Silva]

May I add something?

I'm not sure if I gave enough nuance, but in the opening statement I did speak to the options analysis the department has developed for GHG reductions. That is not only a design and technical tool, but it is a tool, from a cultural perspective, to change the way we think about looking at the design process.

We are looking at the design process not only from the perspective of achieving the construction of a building but also from the perspective of GHG reductions. We have four tiers of options with different costings through a life cycle costing methodology that is, then, put on the table for decision-makers to choose based on the GHG reductions and therefore, indirectly, the material selected.

[TJ Harvey, Liberal, Tobique—Mactaquac, NB]

Going back to you, Mr. Kozij, in a previous study some of the extracted testimony from Michael Green explained that the Government of France was looking to move from 5% wood buildings in the residential market to 30% over the next 30 years as a matter of public policy around climate change. Which building market do you see the proposed changes mostly taking place in—residential, industrial, the government procurement side? Where do you think the true opportunity for this type of construction lies?

[John Kozij]

I think what we've seen from the code changes in 2015 around mid-rise construction is significant increase across the board in traditional stick frame construction up to six storeys. I think we'll continue to see that growth. As I mentioned, that growth has largely come in British Columbia, but I think we'll start seeing more of that in Quebec and Ontario, given their more recent code changes around mid-rise construction and just by virtue of the fact that they're larger markets and we'll see growth there.

I think we hope that our tall wood building under the GCWood demonstration initiative will demonstrate the utilization of new products that can go higher. We think the sweet spot, and why we're aiming for a tall wood building change to the national building code in 2020, is really around that 10- to 12-storey market in residential/non-residential buildings. But we're also hoping to break into the commercial buildings, like Costco and Home Depot, that can also be built with wood, and also try to make some inroads around smaller wooden bridges that also use engineered wood.

Mohammad, did you want to add to that in any way?

[Mohammad Mohammad, Senior Research Advisor, Trade, Economics and Industry Branch, Canadian Forest Service, Department of Natural Resources]

Thanks, John.

Thanks for the opportunity to be here.

John described this very well. Mixed occupancy is where we're heading, basically a mix, let's say, where the first couple of storeys would be commercial, retail, offices, and others, while the rest of the buildings, especially in tall wood buildings, would be residential, condominiums, etc.

FPInnovations has actually conducted a market analysis study, with funding from NRCan. This is really what drives the research and our efforts, actually the market studies. We want to know what building sectors wood buildings could actually benefit. The tall wood building sweet spot, as John mentioned, is anywhere between, let's say, six and 12 storeys. But, really, it's all about opening up, looking at wood as a unique building material with all the advancements that have been mentioned by Mr. Cannings, John, and others.

It is necessary to not overlook wood as an innovative building material, and this is what we have been probably experiencing in Canada, and the same in the U.S. Wood has been overlooked by architects, by design artists, by engineers, and by the building codes to some extent. However, building codes are responding to those recent advancements in engineered wood products, recent advancements in connections, in design tools; so that's why we're able to change our building codes from a four- to a six-storey limit. Of course, we're ultimately pushing for a performance-based building code that will not differentiate between what type of construction or building material you will use. That will kind of level the playing field for all building materials: wood, concrete, steel, and others.

[The Chair, Liberal, James Maloney]

Thank you. I'll stop you there.

Go ahead, Mr. Schmale.

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

Thank you very much, Chair.

I'll try to be quick, and then I'll cede my time maybe to Mr. Cannings, because I think we're going to be cut off by the vote. If I have some extra time, I will let Richard take his full seven minutes. It's his bill, and he should get a bit more question time.

I'll get right to it.

Again, our concern on this side is picking winners and losers in the industry. I think we all agree that wood construction has come a long way, based on the presentation and on our previous study. I think we all agree that, whether it be the fire control, whether it be the way you can really have energy efficiency in some of the units, it's a good thing.

My question is this. If this piece of legislation does not pass, for whatever reason, this doesn't seem to stop, maybe for public works, your movement into the wood industry within your buildings. I don't think it would stop it at all based on what you've said, but you could maybe clarify.

[Veronica Silva]

The work that PSPC is doing would not be affected. We would not change. We are focused on GHG reductions and using the right sustainable methodologies, materials, and processes.

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

That's based on everything we've heard, right?

[Veronica Silva]

Yes.

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

You're moving in that direction because it's a good thing to do because of all the benefit, but also because of the fact that technology innovation has got to the point where it can compete with some of the other uses of construction. The government shutting the door on other industries may happen naturally without a piece of legislation, because the market and innovation are happening so fast. Is that reasonable to say?

[Veronica Silva]

Again, from a custodial perspective—PSPC is a custodian—we are committed to reducing GHG emissions and putting the options in front of decision-makers based on what we can do, what we can achieve, and what the cost is, to reduce GHGs. Using all the right materials, methodologies, processes, procedures, and procurement approaches contributes to that. It is an evolution in how PSPC is doing work.

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

Absolutely.

[Matthew Sreter]

May I add something?

Within the PSPC procurement system, we shouldn't shy away from the principles of openness, fairness, and transparency. They're espoused in law in the Financial Administration Act. They're espoused in our regulations. They're espoused in our trade agreement obligations. We're trying to be innovative and we're trying to make sure that PSPC provides that opportunity to innovate and supports socio-economic policy goals, but at the same time abides by its commitments so that we can ensure—and this is a key phrase that was used earlier—a level playing field.

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

Yes, but you can do that without tipping the scales in one industry or the other.

[Matthew Sreter]

That is correct.

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

Thank you.

I can't remember who said it, either Mr. Mohammad or Mr. Kozij, but one of you talked about getting more private sector organizations to lean in this direction as well.

Could you expand on how you see that going? I can't remember who said it, so I do apologize. You talked about Costco.

[John Kozij]

I talked about Costco.There are a couple of parts to this. In the first part, this is a new material. I'm an economist by training, and John Maynard Keynes had a great quote, “When I receive new information, I alter my conclusions.” The cheeky part of that quote was, “What do you do...?” On the first part, I think it's really getting to that point where we're providing new information to people so that they can make wise choices. As you mentioned, it's not so much about preferences as about getting to that place where we're levelling the playing field. We are in a place, despite that growth, where we still need to level the playing field. That's why we've put in tremendous effort with the private sector, as well as Wood WORKS! in the provinces, on building that culture and appreciation, and working with the specifiers—the contractors, builders, and architects—so that they have an appreciation of the performance of wood and they are thinking about it as a material choice.

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

As I see it now, if wood wants to compete, which it is, it has to get up to the level of, or exceed, what concrete and steel are doing, and it has done that. That's a good thing. I think if you have the choice and people are making the decision on which mode of construction to go with, they can make that decision based on the information available, whether it's energy efficiency in the long run or they want to be a better partner to the environment, that kind of thing. They'll make those decisions. My concern is that we're picking winners and losers and we may be tipping the scales a bit. That's where I have a bit of a problem. With respect to the wording, as Mr. Falk pointed out in his line of questioning, the word “preference” was in there, and I think it almost does that.

I don't know if anyone wants to respond or if Mr. Falk has anything to say, but I have a few minutes left and I'll cede the floor to Mr. Cannings if no one else has anything.

[Mohammad Mohammad]

The underpinning principle here is treating the wood as a building material in the same way as concrete, steel, and others. It is not just giving a preference to wood; it's just bringing wood to where it should be.

There have been a lot of innovations supported by advancement in R and D, and fire, seismic, acoustics, etc., testing in support, but as John mentioned, one of the basic impediments is building codes. Designers and building officials want to see this codified. We are working in that direction and hopefully targeting it on a performance base so that we don't need to go through all those efforts.

The way it is now is that in order for you, as a designer or architect, to build with wood, especially beyond the code, you would have to do extensive R and D. You would have to demonstrate equivalency: that your wood building performs on the same basis as a concrete, code-compliant type of project. That could be costly because of all the innovation, all the testing, etc. The point here is that we are working on revising building codes so that wood is treated equally to concrete without compromising safety. This is all supported by science-based.... If wood is treated equally, and if designers and architects think of wood in the same way as our thinking in regard to concrete and steel, we've achieved our objective. This is really our target.