Natural Resources Committee on March 1st, 2018

[The Chair, Liberal, James Maloney]

Good morning, everybody. Thanks for joining us today.

We have two witnesses this first hour. From the Forest Products Association of Canada, we have Derek Nighbor and from the Canadian Wood Council, we have Michael Giroux.

In case you're not familiar with our process, we give each of you up to 10 minutes to make a presentation, and then we open the table up to questions. You have earpieces there if you need translation services. You probably will get questions in French and English, and, of course, you're free to deliver your remarks or answer questions in either official language.

Mr. Nighbor, we'll start with you.

[Derek Nighbor, Chief Executive Officer, Forest Products Association of Canada]

Thank you, Mr. Chair and members of the committee. Copies of my remarks are available for committee members.

Bonjour. My name is Derek Nighbor, and I'm the chief executive officer at Forest Products Association of Canada. I'm pleased to be here today to discuss Mr. Cannings' Bill C-354 and to talk about why it's important that wood be given every consideration as part of the federal government's procurement strategy.

I would like to thank Mr. Cannings for his diligence for being a strong and thoughtful voice for our sector not only in his community, but throughout British Columbia.

My colleague Bob Larocque appeared before this committee a couple of times back in November and again in February on the secondary supply chain work this group has been doing. In his remarks, Bob shared a fair bit of information about the importance of our sector to the Canadian economy, especially as it pertains to the over 600 communities across rural and northern Canada that depend on forestry. I see Mr. Harvey and others here who can attest to that in a personal way.

Not only economic benefits, but also real environmental benefits are derived by the way in which we manage Canada's forests, because wood products lock in carbon and therefore are a key solutions provider in our fight to reduce greenhouse gas emissions. I won't go into a lot of detail on that information, as I know all of you are well aware of the importance of our sector to communities where, more often than not, the forest and mills jobs are among the best in town.

I want to thank the members of this committee for their focus on forestry over the past number of months. We're a sector that has not been without its challenges. Although many of the headlines tend to be about the Canada-U.S. trade disputes we're kind of stuck in the middle of, I know I speak for FPAC members and the broader industry value chain when I say it's very important for us to focus on the things we can control.

One of those things is the acceleration of innovation in forestry. In the forests, at the mills, and through the carbon-storing products we make, our sector holds promise to deliver on 13% of the federal government's overall GHG reduction goals under the Paris Agreement, but we need the ongoing support of federal and provincial governments to help us make that happen. Predictable and reliable access to wood fibre, a competitive tax regime, a skilled workforce for tomorrow, and a reliable transportation network to get our goods to market are all central to our future success.

I want to speak more specifically now to the role we believe wood should play in the federal government's procurement plate per Mr. Cannings' private member's bill. We view this bill as an opportunity to give wood the recognition it deserves as a material of high value and choice in construction.

Similar bills have come before the House in the past in the same sphere as this bill. I know former Bloc Québecois MP Claude Patry from Jonquière tabled the bill back in 2009 and then again a couple of years later. What has changed since 2009 when Monsieur Patry tabled his bill for the first time is quite simply innovation in wood construction, a greater awareness, and a heightened worldwide understanding of the benefits building with wood can bring.

You heard on Tuesday from federal officials about the examples of wood construction projects in Canada and the growing chorus of engineers and architects who are turning to wood as a safe, resilient, cost-effective, and environmentally friendly material of choice.

Eight years ago when Monsieur Patry tabled his bill, there was less enthusiasm among federal officials regarding changes to procurement approaches. Changing that is the big opportunity that's before us here with this bill and this discussion today.

In passing this bill, the government will send a clear signal that governments around the world have already recognized wood is a safe, durable, and high-performing material that fares well against competing materials in building construction and, in the past, has often been overlooked.

The built environment accounts for a significant portion of greenhouse gas emissions, so if Canada wants to make real headway in reducing GHGs, a procurement strategy focused on reducing the carbon footprint of construction materials represents a real opportunity. We have already seen countries like Germany, the Netherlands, Switzerland, and others make moves to advance green building procurement, so there are many examples and ideas to draw from.

Here at home we have seen provincial procurement strategies rolled out in Quebec and British Columbia in the same vein as Mr. Cannings' bill, and the B.C. story, which I know my colleagues from Forestry Innovation Investment Ltd. will speak to in greater detail in the next session. We have seen B.C. emerge as a market leader in the design, manufacturing, and construction of wood products and systems, largely in part to B.C.'s focus on wood building.

In addition to Mr. Cannings' bill, I would be remiss if I did not highlight the leadership from other members of the House in this space like Halifax MP Andy Fillmore in the tabling of Motion No. 45 that motion supports the greening of infrastructure projects over $500,000 funded by the federal government and the greening government initiative that has been led internally by Vancouver Quadra MP Joyce Murray.

Innovation has changed how procurement should work. It's no longer about using the same materials and the same forms we've traditionally turned to. We believe it's important to ingrain this in Canada's procurement strategy.

To the point about how things have changed, earlier this week researchers at Purdue University spoke to the opportunities that microscopic wood nanocrystals fused in concrete can bring to support an even stronger bridge they plan to build in California. While some are trying to position Mr. Cannings' bill as favouring one material over another, we view it as a bill that sends a signal that the game has changed. This bill rightly profiles the growing role wood can play as a leading green option in building construction, and therefore that should be reflected in federal government procurement.

Let me be clear. We support fully and expect that thorough life-cycle assessments will and should rule the day when it comes to the evaluation of materials in procurement decision-making.

Experience in Canada and from around the world tells us that when it comes to the carbon question, wood-based materials perform very well against other materials. I'd encourage the committee to look at the Athena Sustainable Materials Institute as a leading not-for-profit research collaborative that's supporting a lot of life-cycle analysis work in building construction.

Mr. Chair, thanks for the opportunity today.

Thank you for your attention. I welcome your questions.

[The Chair, Liberal, James Maloney]

Thank you very much.

Mr. Giroux.

[Michael Giroux, President, Canadian Wood Council]

Good morning, standing committee members. Bonjour à tous.

Thank you for this opportunity to speak to you about Bill C-354 and the Wood Council's reaction to it.

I do apologize. I have a bit of a speech impediment at this time, but I'll work my way through it. It only affects me when I try to say anything with three syllables or more.

I'll tell you a little bit about the Canadian Wood Council. We are a national industry association. We represent more than 90% of the wood product production in Canada, so that means lumber, panels, and engineered wood products. Unlike in the case of other structural materials, our members are almost exclusively Canadian-owned, proudly so, which means that they not only produce in Canada but also that they have interests in growing the markets in Canada. They are totally invested in this market.

The CWC's mission is twofold. The first part is to ensure that current and innovative new products and building systems are fairly represented in the building codes, because what gets represented in those building codes gets built. They are regulatory tools, which is a very important point. The second area our mission talks about is the area of education. In that area, we support students and professors in their curricula as well as the continuing education of practitioners, including architects, engineers, and builders.

I'd be remiss if I didn't give you a couple of quick facts about building codes, which will be relevant a little later on.

The first thing is that building codes and related standards take about five years to develop. There's a five-year cycle ingrained in all of this. You might think that's long, and it is, and you might think that it impedes innovation, and it does, but it ensures that the codes actually meet the objectives as stated by the Canadian Commission on Building and Fire Codes. So, yes, Canada has objective-based building codes, and their targets are energy and water-use efficiency, fire and structural protection, fire and structural safety, as well as health and accessibility, but there's nothing in there that speaks to carbon or greenhouse gas, and there is nothing in there that speaks about the use of wood, although that would be really nice.

Why is this information important? Since the mid-1900s, before the advent of sprinklers and protection systems or what we call encapsulation, concrete and steel products in building systems kind of ruled. They were the only game in town. These were used in institutional, commercial, and industrial applications, as well as in multi-family residential applications. Much has changed.

Earlier on, the codes were prescriptive. An example of a prescriptive code would be, for a firewall, something like a firewall must be made with masonry blocks. That's prescriptive. It tells you what to do. A change took place about 10 years ago when the National Research Council's codes centre embarked on the development of an objective-based code. Because of those objectives which I stated earlier, codes then became a little more objective-oriented. Instead of, for something like that firewall I just mentioned, that it must be built out of masonry blocks, it now says that a firewall must have a two-hour fire rating. This allows for an increased use of innovation in the solutions. There are some wood solutions associated with drywall on them that can be used now. It also has allowed us to move further into the codes with mid-rise provisions of five and six storeys. It allows us to look at tall buildings, but in the end, it's the 2025 move by the National Research Council towards performance-based codes that will allow us to really get more into the market of these tall buildings.

This is important because, as slow as the building codes are to get updated, and there's that cycle, the federal real property and Public Works purchasing practices are also. They are sometimes updated, but we don't know this. Those updates are not transparent.

It is for that reason, and that reason primarily, we support Bill C-354. At the end, they will update these as the result of this bill action, either through the bill itself or an act, or a policy developed from this will cause the Public Works department to actually take action and consider wood more equally. That doesn't mean they have to win on a first costs basis, but at least there will be a balance.

At the end, the solution is to update those practices to make them product neutral and greenhouse gas savvy or, as Bill C-354 suggests, to force Public Works, through an act or policy, to consider wood use with that carbon metric. In this way, the federal government can catch up to B.C.'s Wood First Act or Quebec's Charte du bois, or wood equally policy.

I'll say a few words about costs and reductions in greenhouse gas. The first is something that is no surprise to me, particularly in our innovation. Wood does not always score first when it comes to costs, especially new wood building systems, but because of the work of some of our funders and research partners, including FPInnovations and the NRC, we see an increase in new solutions that are helping us to evolve these building systems. If you look at Brock Commons, it's the tallest contemporary wood building in North America, well, in the world really, at 18 storeys. You can look at that building and say that it did not win on a first costs basis, but when you look at the construction practices that evolved from it, that building came under budget. Future buildings of that nature will do very well.

In terms of greenhouse gas tools, Derek mentioned that the Athena institute has tools of this nature, life-cycle assessment tools that not only look at greenhouse gas but at other environmental impacts. The Quebec government, working with Cecobois, which is associated with the Conseil de l'industrie forestière du Québec, also has a tool in development that will help them in policy judgments associated with carbon or greenhouse gases. For them, it's not just a question of “wood equally”, as in the Charte du bois; it's also to compare or to look at that extra metric. That is the tool that's being developed. That tool is now being co-funded by the Province of Ontario. B.C. is interested, and the American Wood Council is interested as well. There is an opportunity to take this to governments for policy support.

Is the greenhouse gas metric important? Yes, obviously, to meet government policy objectives. A more rapid adoption considering embodied or avoided energy or greenhouse gas is really important, because early action compounds over time. I would encourage that we consider or look at embodied energy in the products, as well as the operational side, the whole life cycle. Early action is really important in order to meet those life-cycle goals.

Are wood products or wood building systems the final solution here? In my view, maybe, but really, speaking practically, down the road we will see hybrid systems evolve that will use wood, concrete, all those products. Think about the problems we want to solve, including the seismic situations in B.C., for instance. We saw this in Christchurch, New Zealand, particularly. An earthquake happens, the building shakes, the building survives, and people get out. It meets code. However, the buildings are damaged in such a way that they are not reusable. Wouldn't it be nicer to have lighter buildings that could move on their podiums? That area, that lightness, is important. Wood products, and wood fibres in, for instance, concrete, could serve us well into the future.

Mr. Chair, those were my opening remarks. I do have some other comments, if I have another minute or so.

[The Chair, Liberal, James Maloney]

Sure.

[Michael Giroux]

This will address more of the comments that we sometimes hear when bills like this are being addressed.

Often it is asked whether Bill C-354 picks sides. Really, this is a Public Works real properties act or policy and in the end, should wood not be treated or considered equally? It is a structural material much like concrete or steel and should be considered equally.

The spirit of this bill causes that to happen. Our experience with the private sector is that builders love a third choice. If nothing else, it forces everybody to sharpen their pencils and you get better value for your investments. That's a terrific acknowledgement right there.

Are jobs affected? I would say not likely. Most wood buildings are in fact hybrid wood, concrete, steel buildings. Given the expansion of the infrastructure sector and the work in that sector right now, I don't think any material is suffering job loss. Now, there's been a shrinkage in the U.S., so maybe an industry that shipped up to 30% of their product into the U.S. might have some losses as a result of that, but not because of the Canadian market. A lot of what we do is expanding the market, allowing for cost-efficient solutions to happen now rather than later.

The question I would like to address is whether wood buildings are unsafe or not durable. That comment is often made in respect to a code plus discussion. In the end, durability is by design. Climate change adaptation or durability are by design. We can design wood building systems that meet any requirement of the future. We can put our minds to it, and we have great research institutions that will allow us to get there. All that to say that I don't buy that argument at all. What's most important in this situation is that codes and requirements are kept performance based, which allows all materials to act on these solutions independently or in their own right.

Those are my comments. Thank you very much.

[The Chair, Liberal, James Maloney]

Thank you.

Ms. Ng, you're going to start us off.

[Mary Ng, Liberal, Markham—Thornhill, ON]

Thank you very much, Chair. Thank you to both of you for coming in today and sharing your perspective with us. It's very helpful.

I have two sets of questions, so maybe I will ask you, Mr. Nighbor, and then you, Mr. Giroux. They are two different sets of questions. One is more economic based, and the other one is on your advice which delves a little further into what you've already stated.

Mr. Nighbor, can you talk to us about what the implementation of this bill would look like in terms of jobs across the forestry sector across this country?

[Derek Nighbor]

I'd hesitate to put a firm number on that, but we've seen from the B.C. experience.... I think the folks at FII can talk a little more about the specific experience in B.C. in terms of market leadership and some of the benefits, and the Structurlam. I believe Ms. Rudd has also visited that further advanced manufacturing facility in B.C.

We see significant opportunity. We're seeing market share growth around the world. There's a real renaissance for wood products. We view this bill as being an opportunity to move us into the modern age. This is a modernization of procurement. This is about not doing things the way we used to do them. This is about tapping into some of the innovation that we and other sectors have been doing.

This is about opening up and getting into what is possible as far as procurement goes. As I said, the shift we're seeing now is greater awareness about what is possible. I think the focus around GHG opportunities is really going to profile this. That's why we're strongly in support of the bill.

[Mary Ng, Liberal, Markham—Thornhill, ON]

I'll pick up on that. I don't know if you have data or your members have a perspective on this, but with regard to increasing the use of hardwood lumber as a building material, do you have any sense of the trickle-down effect? I know it's a limited experience here in Canada, but is there any information about the benefits of that in other jurisdictions?

[Derek Nighbor]

We're seeing two opportunities. There definitely is a domestic opportunity to see more Structurlams come to be in Canada.

The other thing we're seeing is the international opportunity around export opportunities, not only exporting products but exporting technologies and Canadian know-how. Michael Green, an architect in Vancouver, is world renowned, and he's travelling the world. They're turning to him, so it's not only been in B.C. We're now looking at demonstration projects in Asia and other opportunities, so it's not only the domestic job opportunity but the opportunity to sell Canada to the world.

[Mary Ng, Liberal, Markham—Thornhill, ON]

That`s great. If the market share of wood building and the products were to increase, what would we need to do to increase that supply of technical expertise or trainer skills? You both talked about it a bit. Can you talk to us about that?

[Derek Nighbor]

I will defer to Michael on that because he's been doing a lot of work with those groups.

[Michael Giroux]

There are two sides to that. One is the continuing education of our professionals. We have programs and seminars and wood solutions fairs that are structured around that focus on the new opportunity.

More important at this time for our students and for professors, we are in the midst of an update of our curriculums for those programs. In engineering, as an example, we would have one-third, one-third, one-third. We would provide a module that would support a basic engineering program. We would have several modules that would support a full course. Then we would have another one where a school would want a full program, a wood program, or a centre of excellence. We're working on that and we should see something in the next year.

[Mary Ng, Liberal, Markham—Thornhill, ON]

I'm going to have you delve a little further into what you talked to us about around the need for procurement rules and practices to change or be modified. As this piece of legislation makes its way through, and should it become law, the government, etc., will need to turn their minds to how to do the application, how to begin enabling implementation.

You touched on the need to modify the rules and practices and so forth. Let us look at where some of those stumbling blocks are and what needs to happen on the federal government side and perhaps with others around code changes. Can you talk to us about what some of those challenges might be so we are attuned to them and where some of the opportunities might be that might lead to an ease of implementation?

[Michael Giroux]

For many years the Wood Council in our woodworks program has tried to discuss this point with real property practices to see what those practices are and to see if they're fair. It's not a very transparent opportunity.

One of them, in the absence of an act like this or a policy would be to review those policies to make sure they are product neutral and greenhouse gas savvy. That's clearly one option that's available.

We see opportunities in B.C. and Quebec, but in Quebec, the Charte du bois is basically there. They say in public works you must show that you've considered wood, so on paper you have to show it. They have a committee that verifies these things down the road, but then it goes further. They say you must also do a greenhouse gas calculation. The decision is made on that. I don't know exactly how they balance cost and greenhouse gas, but that is what they do.

The wood first policy is not unlike that. It's more an act as well.

[Mary Ng, Liberal, Markham—Thornhill, ON]

You talked about the opportunity that exists for wood material to get into other material so that it really does innovate the way these materials will be used down the road. Is there any advice you might offer whereby incentives could be created or how to accelerate or enable that in some way?

[Michael Giroux]

When you establish a vision, a carbon or a net zero future—and a lot of work has been done in that area—then you want your new and existing products to merge into the building of the future, whatever that looks like.

We really don't know yet where this is going to go, but we do know for sure there is a lack of investment in the building level systems R and D, whether that's with the National Research Council or FP Innovations. This area is really important when we're trying to achieve those net zero buildings. A single product will not get us there.

[Mary Ng, Liberal, Markham—Thornhill, ON]

Thank you.

[Derek Nighbor]

I'll quickly add that on the nanocrystal example I shared, there are huge innovation opportunities emerging but the markets are still being developed. One of the things we want to see is a balance in that investment in the science projects to understand what's possible, but also investment in building and developing those markets.

There is a bit of a disconnect there, and I think we can do a better job on the latter.

[The Chair, Liberal, James Maloney]

Thank you.

Mr. Schmale.

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

Thank you very much, Chair.

Thank you, gentlemen, for your comments today. They were great presentations. We enjoy the work done by the members you represent in the wood industry. We respect and appreciate all of that.

Both of you mentioned in your presentations about believing it's not picking one side or the other. The problem the official opposition has with this bill is that we believe it does. There is no doubt that there is great innovation and technology happening in the wood industry. We have been studying this for quite some time now. We've heard from a wide range of people in the industry, and I think we can all agree with that 100%.

The wording here in this bill that we have the issue with is, “the Minister shall give preference to”. I agree that if wood were on an equal playing field, that would be much better. Had the bill read, “the Minister shall give equal preference”, or something to that effect, I don't think we'd have as much issue with that.

I think, Mr. Giroux, although you said that the spirit of the legislation is this, we think by the way it's written that is not necessarily the case.

[Derek Nighbor]

I'll defer to the members of the House in terms of amendments they might want to present or discuss, but I will say that what Mr. Cannings has brought forward is about modernizing the procurement strategy for Canada, giving profile to a material that many around the world are turning to. People love wood not only for a whole host of environmental and economic opportunities, but also just for the more social and health-related opportunities that being in a wood building can bring to bear.

I won't get into an amendment conversation or changing words, but for us it's really important that the spirit of what Mr. Cannings is trying to get done here gets done.

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

I agree with you. I agree people in the world are turning to wood and other options, but that is actually happening organically. That's happening naturally. They're seeing the benefits of this. That building we all talk about that was built in British Columbia, that happened for a reason, right? It may have been partly to do with the B.C. legislation, but it was moving in that direction anyway. The technology on how you can make buildings more energy efficient and airtight is developing because of technology innovation in the marketplace.

My concern is that when you pick winners and losers in the industry, you're also building a wall between those looking to start up. If you're giving preferential treatment to wood, what if there is this new magical product that comes forward that's even better than wood, but you have built a wall saying the government is giving preference to wood? If you're the winner it's great, but if you're the loser it kind of sucks.

[Derek Nighbor]

The government has an opportunity to catch up with the times. You know, there is the 18-storey building at UBC that you talked about, and a 13-storey building in Quebec. A lot of that has been driven by movements in those provinces to support those projects. We're seeing a couple of wood buildings at U of T and George Brown College in Toronto.

We believe federal procurement plays in this space. In terms of the materials of choice, it has fallen behind the times in innovation and technology, and we view this as an opportunity to catch up.