Natural Resources Committee on March 20th, 2018

[The Chair, Liberal, James Maloney]

Good morning, everybody.

Welcome back. I hope everybody had a productive and enjoyable two weeks in their constituencies or wherever they may have been.

We're back with two sets of witnesses this morning. First, we have Mr. Joseph Galimberti, President, and Ms. Aleksandra Pogoda, Director, from the Canadian Steel Producers Association. We also have Mr. Scott Marks from the International Association of Fire Fighters.

Thank you all for joining us.

The process, in case you're not familiar with it, is that each group gets up to 10 minutes for their presentation, which you can and are encouraged to do in either official language. There are hearing pieces there if you need interpretation. You may be asked questions in French or English afterwards.

After your presentations, we'll go around the table for questions from the members.

My job is to keep time, so if I have to interrupt you or cut you off, I apologize in advance. Unfortunately, that's one of my jobs.

Ms. Pogoda, why don't we start with you to lead us off?

[Aleksandra Pogoda, Director, Environment, Canadian Steel Producers Association]

Good morning.

I'll actually be deferring it to Joe for most of the introductory remarks.

[Joseph Galimberti, President, Canadian Steel Producers Association]

Thank you.

Good morning, honourable members of the committee, and thank you very much for the opportunity to present to you today on behalf of the Canadian Steel Producers Association as regards your study of Bill C-354, An Act to amend the Department of Public Works and Government Services Act (use of wood).

The CSPA is the national voice of Canada's $14 billion primary steel production industry. Canadian steel producers are integral to the automotive, energy, construction, and other demanding industrial supply chains in Canada. Our members produce roughly 13 million tonnes of primary steel and an additional one million tonnes of steel pipe and tube products on an annual basis. This provides direct employment to over 22,000 Canadians while supporting an additional 100,000 indirect jobs.

To start today, I think it's important to state that all of our members support a healthy Canadian construction industry. Wood, steel, brick, concrete, and other construction materials are all important links in a competitive Canadian business environment focused on meeting the needs of domestic supply chain stakeholders. With that open and competitive market balance in mind, the CSPA cannot support Bill C-354 as currently constituted. We are concerned that this legislation would create a permanent legislative preference for wood over other construction materials, which would undermine competition and ultimately inflate infrastructure costs by limiting the types of materials available for use on federal projects.

Further, we worry this bill will limit the design freedom of construction professionals in the selection of materials and create potential conflicts with Canada's National Building Code. We worry that the legislation could call into question Canada's obligations under domestic and international trade agreements, and we worry that the legislation threatens green procurement policies by discouraging ongoing assessments of total carbon and life-cycle footprint for the products that the Government of Canada uses in its projects.

The federal government is a significant purchaser of construction material across the country. Its activities affect the national economy and can influence the price and the availability of goods and services, including construction services within the marketplace. Moreover, the Government of Canada's decisions on procurement practices not only influence the practices of other levels of government, but also those of the private sector. As such, any change in federal procurement policy—in this case the creation of a permanent legislative preference for the use of wood over other construction materials—should be carefully considered so as to avoid unintended market consequences.

Our association believes that it is neither good nor acceptable public policy for our governments to promote one building material by excluding alternative, viable, and competitive Canadian materials from Canadian construction markets. We strongly believe that all construction material should operate on a level playing field, and in a competitive, fair, and open economic environment. We believe the proposed Bill C-354 to be philosophically contrary to the performance and procurement policies and methods currently employed by the Department of Public Works and Government Services to actively promote and ensure openness, fairness, and transparency. If enacted, we believe the bill would distort these fundamental equalities and send a clear discriminatory signal as regards other construction materials and industries.

As I indicated earlier, Bill C-354 will also limit and undermine the freedom of a design professional or experienced contractor to select the most appropriate construction material for an intended function and service. Legislation that compels or influences design professionals to specify the preferred product for use where it is not suited to the function or service has attendant risks. There becomes an increased likelihood of non-performance, permanent failure, and higher initial costs for construction, and elevated ongoing costs for repair and maintenance.

The National Building Code of Canada serves as the basis for specifying materials, testing, design, and construction. It is specifically designed not to limit the application and use of any material, component, or assembly. A “wood first” policy inherently undermines that neutrality by seeking to actively influence a designer's choice of construction material. The selection of appropriate building materials must remain under the purview of those qualified and licensed to practice in the area of building design and construction. The Canadian built environment is founded on that principle.

We also believe the bill implies significant unintended legal and trade consequences. By virtue of the federal Competition Act, the federal government has an obligation to maintain and encourage competition in Canada and to promote equitable opportunities for economic participation. This bill hinders competition and skews the market balance. It clearly violates the spirit of the Competition Act.

We should also be mindful of respecting Canada's trade agreements. The procurement requirements of Bill C-354 would likely violate several international trade agreements, including NAFTA, CETA, and the WTO agreement on government procurement.

At this very moment, while the Government of Canada is working to negotiate and implement globally inclusive agreements while at the same time resisting protectionist policies like Buy American, the implementation of a “wood first” policy is inconsistent with the direction of Canada's government and may be seen by other nations as a non-tariff barrier violating several areas of Canada's international agreements on trade.

The bill further seeks to grant preference to projects that promote the use of wood, taking into account the associated costs and reductions in greenhouse emissions. Appreciating that the government is working in partnership with industry across Canada towards a low-carbon economy, this bill remains commercially discriminatory.

Instead of focusing on the permanent establishment of a place of preference for a single building material, the government should consider the implementation of complete life-cycle analyses at the centre of all projects involving construction materials moving forward. A sustainable, circular economy is one in which society reduces the burden on nature by ensuring resources remain in use for as long as possible, and that once the maximum value has been extracted, the resources are then recovered and reused, remanufactured, or recycled to create new products.

As a permanent material that can be recycled over and over again without losing its properties, steel is fundamental to the circular economy and has inherent advantages throughout a full life-cycle analysis. While it is not our intent today to promote the use of steel over any other construction material in government projects, we would rather encourage the government to consider maintaining a fair, competitive construction market.

We would suggest the government can further support the entire domestic construction industry by implementing government-wide procurement policies that give significant recognition to the total carbon and life-cycle footprints of the products it uses in its projects.

In conclusion, while we all agree that we want our domestic economy to continue to grow and for all of our Canadian building products to be more widely used, we would also suggest that it remains our belief that no construction material or assembly should be awarded a legislated priority over others.

Professional judgment, practical application, fair competition, respect for our building codes, and the evolution of construction practices and product innovations should determine the best materials for the application and service.

With this in mind, we respectfully request that Bill C-354 or any similar legislation not be recommended for additional consideration by the House of Commons.

Thank you for your time, and I'm happy to take any questions the committee might have.

[The Chair, Liberal, James Maloney]

Thank you very much.

Mr. Marks, over to you.

[Scott Marks, Assistant to the General President, Canadian Operations, International Association of Fire Fighters]

Thank you, Mr. Chair, for the opportunity to share our views on Mr. Canning's Bill C-354 today. It's a pleasure for the International Association of Fire Fighters to return to this committee after our appearance in December.

To briefly introduce our organization, the IAFF represents 310,000 professional firefighters across North America, including 25,000 here in Canada. In Canada's largest cities and towns, our members are on scene in minutes, in any kind of emergency large and small, including structure fires, medical emergencies, water and ice rescues, hazardous materials incidents, and more.

I'd like to reiterate the remarks made by our 13th district vice president, Fred LeBlanc, which were conveyed last December, about our concerns with the expanded use of wood products in construction in the context of firefighter safety. The IAFF certainly supports a vibrant economy and a successful, sustainable wood and wood products industry, including the expansion of the forestry sector and opportunities for its workers both domestically and abroad.

At the same time, as national and provincial building codes are responding quickly to the need for innovation and the expanded use of wood products, we urge the committee to exercise caution and do what it can to regulate or encourage the regulation of adequate fire protection, meaning firefighter and public safety. As fire protection is a municipal responsibility that is also provincially regulated, we suggest that this should be the topic of discussion for the federal government's municipal and provincial partners.

National and provincial building codes currently include provisions for mid-rise, and recently high-rise wood-frame construction. The rush to allow wood-frame construction of up to 12 storeys, which is proposed for the 2020 edition of the National Building Code, has been billed as an economic boost for the forestry sector. As we have formally stated to the Canadian Commission on Building and Fire Codes, and to the federal government, we remain unconvinced about the fire performance of tall wood structures and whether our urban fire departments and front-line personnel are prepared to safely and effectively protect the public in the event of a fire inside of a tall wood structure.

We are aware of studies that discuss the fire performance of cross-laminated timbers and glulam, and the charring effect that supposedly protects these materials from failure. I was a firefighter in the city of Toronto for 28 years, and I can attest to the fact that what happens in a large structure filled with modern combustible materials can be very different than what happens in the confines of a controlled test environment.

Our chief concern is that a majority of urban fire departments in Canada probably lack the equipment, resources, and the training to safely and effectively respond to a fire in a tall or large wood-frame structure. Firefighters may be required to be inside a burning structure long after other occupants have escaped in order to search for and rescue anyone still trapped, and to provide aggressive interior suppression in order to save the building and its contents. That's what the public expects from us. Firefighters will be inside or in close proximity to one of these structures in the event of a collapse.

In our view, there are too many unknowns about the way that a completed six-storey, 10-storey, or 12-storey combustible wood-frame structure would respond in a real fire situation. It's hard to predict the weight load and the fuel load of a particular structure once it's built and populated.

There is also the prospect, as was tragically seen in the Grenfell Tower fire in London, U.K., last year, that modifications—in that case, a flammable exterior cladding—may be added to an existing structure many years later. Neither the National Building Code, National Fire Code, nor respective provincial building codes address fire department response capabilities as they relate to the suitability or safety of a particular structure.

There was no reference in proposals for mid-rise wood-frame construction to any fire protection standards, such as NFPA 1710, a science-based standard from the National Fire Protection Association, that quantifies the adequate fire department deployment in an urban setting. The truth is, very few Canadian cities currently meet the response time and personnel standards for existing two-storey structures, let alone high-density structures made of combustible materials. Even if a community does have adequate fire protection resources to protect a particular structure, there's no guarantee that they will be there during the entire lifespan of that building.

What we are seeing in many communities across Canada right now is the propensity to reduce fire department resources and capabilities for political and budgetary reasons. I can point to numerous communities in Canada, large and small, that have experienced station closures and firefighter layoffs, and many that are contemplating initiatives that would increase response times and decrease the personnel and equipment available to respond.

This common scenario would leave occupants of any given structure with even less protection than builders and authorities anticipated when it was built. Commonly, when these kinds of cuts are made, fire prevention and inspection are amongst the first to be targeted. These are the fire safety individuals on whom occupants of these structures would rely the most to ensure the structure is always in compliance with codes and regulations; for example, when modifications are made.

Firefighter safety is another concern. In our view, the move to permit higher and taller wood-frame buildings in the National Building Code is set against a backdrop of an objective-based code that does not include firefighter safety as an objective. As a result, firefighter safety cannot be used as a basis for a code change request. I would also note that the National Building Code, despite being a model code, establishes an absolute minimum performance that builders are required to achieve. It's not a Cadillac level; it's a minimum

Six-storey wood-frame structures were first permitted under the British Columbia building code. The first such structure was consumed in a massive blaze in Richmond in May 2011, confirming that they are particularly vulnerable when they are under construction.

In December 2013, the four-storey wood-frame student residence under construction in downtown Kingston, Ontario, caught fire, sparking a massive inferno that spread to two adjacent buildings while taxing the city's emergency response infrastructure to its limit for 48 hours. The builders were subsequently charged by the Ontario Ministry of Labour with 22 offences, 11 of which were related to fire safety precautions that were not followed.

Having fire safety regulations and having an existing level of fire protection in the community are not guarantees that any particular structure is safe. The truth is that every working fire represents a danger not only to the public but to the firefighters who respond. Large blazes such as the Richmond and Kingston wood-frame blazes also reduce the resources that fire departments have available to handle simultaneous responses.

In closing, the IFF is not opposed to the context of Bill C-354, but if we are going to give preference in federal procurements to promote the use of wood, we urge a more thorough discussion of firefighter and public safety considerations against the backdrop I have described of inadequate fire protection and the prospect that any given municipality may reduce its fire protection capabilities in the future.

Again, I appreciate the opportunity to present our views to the committee on behalf of Canada's professional firefighters, and I look forward to answering any questions.

[The Chair, Liberal, James Maloney]

Thanks very much, Mr. Marks.

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

[Geng Tan, Liberal, Don Valley North, ON]

Thank you, witnesses, for being here with us.

My first question goes to the CSPA. We have heard from producers and users of wood products in construction, and in the next weeks, we're going to hear from a similar witness from a cement producer and users in construction.

You just mentioned in your statement that the CSPA does not support giving preference to the use of wood over other construction materials because of less competition or higher costs, from what you said in the statement. Can you give us more details on your argument?

[Joseph Galimberti]

Clearly, if you establish a preference for one building material over others, then that is inherently a disincentive to take a look at.... I'll use the example of a building design that fundamentally frames the building or completes the structure with steel or concrete or an alternative construction material. There is an inherent competitive imbalance in saying we give preference to wood construction.

As to increasing costs, generally the way these things work is that, once you've introduced an inhibitor as far as competitiveness is concerned, you introduce a cost escalation. That's what logically follows. There may be instances where, in designs or projects, there would be a more economical path to take with steel or cement or whatever sort of combination solution, which could include wood, but if you were to give preference to wood, you might see an elevated cost that way.

[Geng Tan, Liberal, Don Valley North, ON]

Can you tell the committee roughly what percentage of all the steel consumption in Canada the domestic building construction industry accounts for?

Also, suppose we encourage more use of wood for the construction industry, what kind of impact might we see of this wood building material in construction on all steel usage in Canada's building construction industry? Is it negligible or very significant?

[Joseph Galimberti]

It fluctuates year to year. Traditionally, the consumption pattern in Canada for steel has been about one third of domestic production; domestic consumption is in automotive. One third is in energy and one third is in building and infrastructure. Traditionally, that's kind of the mix.

With regard to influence, I would be concerned about a knock-on effect or a signal to the market. The federal government has significant purchasing power. Clearly, the steps that the Government of Canada takes influence the market generally, so I would be concerned about a bleed forward.

I hope that answers what you're looking for.

[Geng Tan, Liberal, Don Valley North, ON]

On your website, you promote your product as the “greenest” steel made in Canada. The numbers, from what I see, are very impressive. How do you account for the huge difference in the CO2 levels between Canada, at only 42 kilograms of CO2 per tonne, and India, for example, at more than 900 kilograms? How do you do this kind of comparison or calculation?

[Joseph Galimberti]

From a steel perspective, Canada is a very unique market in that we are extraordinarily close to the natural resources that are required for the process of making steel. We have close proximity to metallurgical coal, to iron ore, to the raw materials that go into steel. We are also the beneficiary of really efficient supply networks. The Great Lakes shipping network and the rail network between Canada and the United States are outstanding for these purposes. Canada's largely renewable energy grid contributes to that significantly. When you take a look at the GHG benefit implied from using Canadian steel in Canada versus imported steel from elsewhere, where they don't have that same access to natural resources and the clean energy supply, and you are incurring the GHG costs of shipping to this market, then yes, the benefits are really significant.

I should also mention that Canada's steel producers are also Canada's largest recyclers by volume. Steel is an infinitely recyclable material. You get bridges that have been made out of old bridges. You get in automotive the recycling of cars. Old cars are turned into new cars. From a recycling perspective, it is a tremendously efficient material.

[Geng Tan, Liberal, Don Valley North, ON]

Thank you.

Mr. Marks, thank you for being a firefighter for the past 28 years. Thank you for your contribution and for your service to the country. As it happens, I'm also from the city of Toronto.

You just voiced your concern about the use of a combustible wood-frame structure in a real fire situation. Similar to your comments, though, the committee heard from firefighters who have already expressed the concern, from a health and safety perspective, for firefighters and residents from engineered wood buildings.

On the other hand, the past president of the B.C. association for fire chiefs, Mr. Garis, describes this fire safety concern, and I just quote here, as a “red herring”. According to Fire Chief Garis, “Once [wood buildings] are constructed and operating, they are no different than any other building constructed of other material.” As a result, the B.C. association of fire chiefs has already endorsed the B.C. code change as long as the buildings are equipped with a sufficient number of sprinklers and smoke alarms.

Can you give us some comments about the endorsement made by Mr. Garis?

[Scott Marks]

Yes, I'm very aware of Fire Chief Garis's view on the subject. I would not disagree with the statement he made there, which was that once these buildings are made, their fire safety performance is equal. Where I think Mr. Garis and I would differ is with regard to his belief that somehow things will always remain the same.

I've spent a lot of time in high-rise buildings where we had fires, where all sorts of safety precautions were in effect that did not respond or do the job that they had originally been intended to do, in most cases because the occupants in those buildings had made modifications. Some modifications are actually done by building personnel unknowingly doing things that breach the code or that impact the ability of those protections to do what they're supposed to do. More often, it's individuals in a building who decide they want a new cable TV outlet in a bedroom, and they poke a hole through a wall, and now you have a possible breach of the fire protection that's there.

A lot of the wood-frame fire protection relies on using gypsum board and different things to wrap around the combustible materials to ensure that they meet the same kind of standard as other non-flammable materials do. Again, as someone who has spent a lot of time working in the industry, I think that's great, but I also think that there's a huge potential for modifications or vandalism or some other impact or thing to change the ability of that material to perform as it was intended to.

Again, the Grenfell fire in London is an example of how no one really anticipated that wrapping that building would have the impact it did. That's a building that was built with non-flammable materials. Again, I'm not suggesting that this bill would allow something like that to happen, but when you make major modifications to a building 20 or 30 years later, whether or not all the considerations of what was originally put into that building are being looked at when those modifications are being made, you're relying on a lot of different people doing the proper analysis of it. I'm talking about building code people, fire code people, fire inspectors, and fire prevention people. As I said, what we have seen, particularly in the city of Toronto, is that the minute they look at saving money in the city of Toronto, they cut fire inspection jobs, and they cut fire prevention jobs. Those are the people we're relying on to do that.

[The Chair, Liberal, James Maloney]

I'm going to have to stop you there, Mr. Marks.

Mr. Falk.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Mr. Chairman.

I'm going to be splitting some of my time with Mr. Schmale.

Mr. Galimberti, I'll start with you. I appreciated your presentation. I think it was very clear. I think you have a good understanding.

Just to clarify a little further, what would be your thoughts on individuals or groups receiving preference, receiving funding, based on ideology?

[Joseph Galimberti]

Based on ideology?

[Ted Falk, Conservative, Provencher, MB]

Yes, because the way I look at this bill, that's kind of what it is, right?

[Joseph Galimberti]

I don't think you want to create a competitive imbalance among materials in the Canadian marketplace. I guess I draw a bit of a distinction here. I appreciate that there are arguments to be made for using domestic infrastructure funds to support the domestic economy, to ensure that those funds stay close to home and generate employment here. I think it's also important to be mindful of the fact that there are Canadian employees in all of these industries that supply building materials.

I appreciate that there are levers that the government can try to pull to mitigate GHG and that environmental benefits are something the government should consider in infrastructure. I also think that there are solid arguments to be made, examining the full range of projects in which the government participates, that there is a right material solution for the problem, and it may not all be one material.

As far as conferring advantage on anyone goes, I think the competitive environment sort of dictates that whatever is best and whatever provides the best solution should be allowed to prevail.

[Ted Falk, Conservative, Provencher, MB]

I think your presentation was clearer than your last explanation. I think in your presentation it was very clear that you don't think a government should be giving preference to one industry over another when it comes to building construction or the ideology behind a building construction. You were very clear then, but your last statement kind of muddied the waters.

[Joseph Galimberti]

Well, yes, I don't think—

[Ted Falk, Conservative, Provencher, MB]

I think you know where I was going, and I think you were skating around that, so that's fine, and I appreciate that.

[Joseph Galimberti]

I don't think it's good government policy to lock in a preference for any one material, just bluntly.

[Ted Falk, Conservative, Provencher, MB]

Okay.

Can you also tell this committee a little bit about the challenges facing your industry today and how a bill like this would impact that?

[Joseph Galimberti]

I think we have some great success stories to tell in the Canadian steel industry in more innovative advanced manufacturing with some of the most efficient and advanced producers in the world.

Clearly, the last several weeks in steel have been remarkable, given the sort of action south of the border. Ultimately, Canada has a temporary exclusion as relates to the U.S. tariffs, but it is a temporary exclusion, and we need to be mindful that there is going to be a challenge in our largest export market going forward. We are also significantly challenged in accessing the U.S. market by a suite of Buy America and Buy American policies.

Having that as our largest export market and being challenged there, then having another challenge domestically as far as another material being granted preference for bidding on government infrastructure work would create an additional unnecessary challenge from our perspective.