Thank you, Mr. Chair and members of the committee.
My name is Adam Auer, and I'm the vice-president of environment and sustainability with the Cement Association of Canada. I'm joined by my colleague Steve Morrissey, executive vice-president at the CAC. Thank you for the opportunity to present our views on Bill C-354.
First, let me state that the Canadian cement industry unequivocally supports the notion that federal procurement of infrastructure, whether direct or indirect through investment transfers to other levels of government, can and should influence construction markets toward low-carbon and climate-resilient design. We also agree with, and in fact have consistently championed, the use of life-cycle tools as the best tools, although not yet perfected, for advancing sustainability in the built environment.
Our issue with Bill C-354 is that it calls on the federal government to leverage its enormous purchasing power to “give preference to projects that promote the use of wood”. The bill appears to be attempting to serve two objectives—first, to support Canada's forest sector, which is suffering under a number of pressures, including softwood lumber tariffs; and second, to help reduce the greenhouse gases associated with buildings in Canada.
Let me start with the first objective. When governments arbitrarily give preference to one product or technology over another, it has a clear distortionary effect on the market, undermining the healthy, fair, and open competition that defines successful modern economies. Canada's forest industry already benefits from tremendous federal and provincial support. The 2017 federal budget alone offered some $40 million to support the promotion of wood. Such wood-related organizations as FPInnovations benefit from substantial support from the Canadian Forest Service in just about every province and territory. Taxpayer dollars have played an instrumental role in code development and demonstration projects related to tall wood buildings. Governments have also taken the unusual step of leveraging political authority to change building codes to allow taller wood structures. Finally, the wood industry has actively promoted preferential treatment of wood through such policies as “wood first” in British Columbia.
All things being equal, it would be hard to fault governments for looking after the interests of major domestic industries. In reality, however, such measures often simply rob Peter to pay Paul, artificially shifting economic activity from one domestic industry to another.
I would remind committee members that concrete and steel are also important to Canada's economy. My sector alone employs some 150,000 Canadians and contributes some $73 billion in economic activity. Because concrete is an inherently local material, our economic impact directly benefits just about every community across Canada. Like forestry, we are also under tremendous economic pressure. For example, in B.C. our sector has lost some 40% of market share to Asian and U.S. imports because those imports are able to bypass B.C.'s carbon tax. Canadian steel is also struggling in the global economy despite producing some of the highest-quality and most environmentally responsible steel in the world.
While there are things government can do to help balance these pressures, never have we suggested, and nor will we suggest, the preferential treatment of concrete over other materials as being among those measures. History has taught us that picking winners is bad policy. It's bad for the economy and fiscally inefficient. Perhaps most importantly, when it comes to transformative challenges like climate change, it disrupts natural innovation cycles that are constantly pushing competing industries to do better. In the case of cement and concrete, this means dampened investment in a raft of transformative low-carbon technologies, including low-carbon fuels and the burgeoning trillion-dollar market for carbon capture and utilization technologies.
Let me use that as a segue into the second stated purpose of the bill, which is reducing greenhouse gases from buildings. First, it is important to understand that carbon emissions from buildings are overwhelmingly associated with the operation of those buildings, primarily heating and cooling. While I would not argue that materials are unimportant, they represent as little as 4% of any given building's global warming potential. In fact, in a well-designed energy-efficient structure, the most important variable in determining climate impacts is longevity. In a high-efficiency, long service life structure, the impact of materials is vanishingly small.
Wood advocates argue that wood buildings yield a net carbon benefit over alternatives. These claims are based on an assumed zero-sum balance between commercial logging and afforestation. You cut a tree and a new one grows in its place. You cut a forest and an ecologically equivalent forest grows in its place. This is a misleading oversimplification of forest carbon cycles and a misrepresentation of the real-world success of reforestation programs, particularly in Canada, where most logging occurs in first-growth forests.
In fact, recent science suggests that when land use change impacts of deforestation are taken into account, even accounting for the regrowth of new trees, some 13 tonnes of greenhouse gases are lost to the atmosphere for every tonne sequestered in a wood product. While life-cycle assessment is the best tool we have to account for a carbon built environment, current standards around the treatment of land use impacts are out of sync with this emerging science. All whole building LCAs of wood buildings, including some of the best tools like the ones advanced by our colleagues at Athena, are restricted by these standards and their assumptions.
Let me end by supporting a notion forwarded by Mr. Giroux of the Wood Council about hybrid buildings in his appearance before this committee. Many of the most interesting, innovative, and sustainable buildings standing today utilize a variety of materials, including concrete, steel, and wood, not because government required any particular material to be used, but because of the natural process of market innovation increasingly directed towards sustainability. It is this very concept the life-cycle integration and optimization of materials and design that must dominate the discussion on low-carbon, climate resilient construction. All three levels of government purchase directly and indirectly some 60% of building materials consumed in Canada. A balanced approach to reducing greenhouse gases from the production and use of all of those materials is the only sensible policy.
Thank you very much for your attention.