Natural Resources Committee on March 22nd, 2018

[The Chair, Liberal, James Maloney]

Good morning, everybody. Welcome to our final meeting on Bill C-354.

We are joined this morning by three sets of witnesses. From Athena Sustainable Materials Institute we have Jennifer O'Connor and Jamie Meil, and from the Cement Association of Canada we have Steve Morrissey and Adam Auer.

Thank you very much for being here.

By video conference, I hope we have Mr. Beaulieu from the Quebec Forest Industry Council.

[Gérald Beaulieu, Director, Centre d'expertise sur la construction commerciale en bois (CECOBOIS), Quebec Forest Industry Council]

Good morning, sir.

[The Chair, Liberal, James Maloney]

Perfect. Our system is working.

Again, thank you all for being here this morning. The process is that each of your groups will be given up to 10 minutes to deliver your remarks. Following that, we'll open the table up for questions to any or all of you. There are translation devices available if you need them. You will probably be asked questions in both official languages. You are, of course, free to deliver your remarks in either or both languages.

Ms. O'Connor and Mr. Meil, perhaps we can start with you.

[Jennifer O'Connor, President, Athena Sustainable Materials Institute]

Thank you very much and good morning. Thank you to the committee for inviting us today. I certainly hope that we can be of service to you.

I'm Jennifer O'Connor and I'm the president of the Athena Sustainable Materials Institute. I'm joined here by my colleague, Jamie Meil, who's our research principal.

I want to take a moment to tell you a little bit about the Athena Institute to help frame the questions later. We are a non-profit research and advocacy group in life-cycle assessment, or LCA. Our mandate is to advance LCA for a more sustainable built environment.

I just want to give you a little glimpse of our history. The organization started about 30 years ago as a research project at an organization called Forintek, Canada's wood products research lab. It's now known as FPInnovations. The work started because there was an interest there in broadening the dialogue, the environmental conversation, about wood products. That led to life-cycle assessment, and that led to gathering up representatives from across different material industries. It eventually became quite clear that, if that work was going to gain acceptance, advance, and be seen as credible, it would have to leave the wood industry, so 21 years ago the Athena Institute was launched as an independent non-profit research institute. Over that time, those 21 years, we have built a substantial reputation. We're seen as an international leader and pioneer in life-cycle assessment applied to the built environment. Our work has directly enabled the uptake of LCA in practice and policy in North America.

One of the key reasons I think that we've been effective and so successful is our ability to put together multi-stakeholder collaborations, to get multi-stakeholder engagement. It's really key to our credibility. It's key to our objectivity. You can see that on our board of directors, where we have representation from across material industries, and these groups are then coming together on our board helping to move the agenda forward, because they all want to be part of the solution in reducing environmental impacts of the built environment.

Just to tell you a little bit more about myself and Jamie, Jamie's bringing here deep expertise in LCA and in materials manufacturing. I'm bringing to you a background in architecture and engineering, and also a very deep background in wood product sustainability and market research, because I spent a good piece of my career at FPInnovations.

The scope of our remarks today will be limited. I note that the bill has two objectives, one of which is to support the wood products industry and promote more wood construction. We are not going to focus on that part of the bill. Our comments are focused on the part of the bill that references reductions in greenhouse gas emissions, GHGs. I would like to share remarks with you that are building on what you have already heard here in committee, what you've already discussed. I'd like to summarize and support that. I've read the transcripts. I'm impressed at the committee's interest in reducing the embodied impacts of construction.

I know you've heard from the wood industry. I appreciate that they've talked to you about embodied impacts. They've talked to you about LCA already. That industry is a long-time champion of cradle-to-grave scientific accounting of GHGs. You heard from them about the value of performance-based policy versus prescriptive policy. You heard from them about the value of using data to ensure that intended GHG reductions actually happen. What I'd like to do is take those messages and share with you how those are reflected in some leading-edge policy today.

Right here, in our own federal government, we've seen a lot of movement over the last couple of years towards evidence-based policy, towards data-driven policy, and life-cycle thinking. We've just seen in January the announcement from the Treasury Board Secretariat that greening government strategy has a strong emphasis on cradle-to-grave, full-scope LCA, and over the past couple of years, there's been some interest in greening infrastructure.

We had MP Andy Fillmore’s motion 45 a couple of years back and we had Joyce Murray’s accountable green lens initiative. Both of those were about bringing GHG accounting to infrastructure spending. A number of initiatives at the provincial and municipal levels are happening along these lines. Overseas, particularly in northern Europe, there's some policy already there.

The question is this: how do you implement an accountable green lens, or the carbon test that you've been referencing here, in policy? How do you go about doing that? We certainly agree that a carbon test is critical, but how do you do that in way that achieves the objectives?

I would like to encourage you to step back and consider this the way that we've been thinking about it—that is, what sort of policy gets put in place to encourage the sorts of actions that have verifiable GHG reductions? You might want to see an encouraging of product improvements across the board, including wood products. You'd want to encourage innovation in industry and in design. You'd like to encourage the reduction in the use of materials. The idea is to optimize, not maximize, material use. You'd want to be sure you had a robust, fair, and transparent system for doing the accounting, with stakeholder buy-in for credibility and acceptance. That requires a really strong technical foundation.

We have a number of ideas about what constitutes that foundation. It involves really good data. It involves standard methods so that we all follow the same rules. It involves tools and all that. I've captured a summary of those comments in a briefing note that I hope you've had a chance to see.

That concludes my remarks, Mr. Chairman.

[The Chair, Liberal, James Maloney]

Thank you very much.

Mr. Morrissey or Mr. Auer.

[Adam Auer, Vice-President, Environment and Sustainability, Cement Association of Canada]

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.

[The Chair, Liberal, James Maloney]

Thank you very much.

Mr. Beaulieu, over to you.

[Gérald Beaulieu]

Good morning, Mr. Chair. Thank you very much for the opportunity to talk to members of the committee about Bill C-354. I will speak on behalf of the Quebec Forest Industry Council.

I run the program of the Centre d'expertise sur la construction commerciale en bois (Cecobois) in Quebec. This organization was born in 2007 out of the Government of Quebec's desire to diversify Quebec's forestry economy. The rest of the country was experiencing the same problems.

As you know, in 2007, Canada's forest industry faced an unprecedented economic crisis. To maintain jobs in the regions, the government set up a consultation process on the diversification of the forest industry. Soon, the non-residential construction market emerged.

Let me explain. When I talk about non-residential construction, I'm referring to everything other than single-family homes, where 99% of the wood is used. The single-family housing market is experiencing a sharp decline, in favour of the multi-family housing sector. Wood may become an increasingly important material in non-residential sectors. So I mean institutional construction projects, such as schools, the commercial sector and multi-family housing.

Cecobois' mandate is to provide technical services and communication tools to architects and engineers to help them integrate wood in construction. It must also be noted that Canadian universities do not teach the use of wood as a building material. We do a lot of work to get professors to offer those courses, so that students in civil engineering or architecture can have training on all materials that can be used in construction, such as concrete and steel but also wood.

Cecobois has been around for 10 years. We have become involved with students, professors and professionals to help them, which has significantly helped increase the wood market in Quebec. Every two years, we will see the progress made in this market. In 2001, wood was used in non-residential construction about 15% of the time. A recent study published in September 2017 demonstrates that, in 2016, the wood market share in that sector had reached 28%. The figure was confirmed by a survey of engineers and architects.

According to the same survey, 40% of engineers and architects said that they intended to use wood for the main structure of the buildings they wanted to build. There is still a lot of work to be done to amend the code, although some amendments have already been made. We know that the process is very long. People in the forest industry, Cecobois and the Canadian Wood Council do not want to cut corners. We want to make sure that changes to the code will be based on technical and scientific data. Regulatory authorities, whether Canadian or provincial, must take action to ensure that wood is recognized as a building material.

Earlier, I mentioned the transformation of the market in terms of the use of wood. In 2001, single-family home construction accounted for over 60% of the Canadian housing market. The market has changed a great deal. Today, 73% of construction in the housing sector is multi-family dwellings. We must diversify our designs and use different types of materials to reduce the environmental footprint of those buildings. They significantly contribute to greenhouse gas emissions, which the federal government and other governments are committed to reducing.

Wood has a number of advantages. By using wood, we reduce the environmental footprint of buildings and we store carbon. This is recognized by a number of international agencies. As early as 2007, a report by the Intergovernmental Panel on Climate Change confirmed that the forest sector in general could make a significant contribution to reducing greenhouse gases, when they are stored by trees during their growth or when they are sequestered throughout the life of the building.

I am going to follow up on Ms. O'Connor's comments on the life cycle analysis.

A number of those studies show that wood sequesters more carbon than other materials, and even has a positive carbon footprint. To this end, let me refer to a study that compares beams made of different materials, but able to support the same load, so having the same mechanical strength in use. One cubic metre of wood emits 60 kilograms of carbon, compared to 345 kilograms for the same volume of concrete and 252 kilograms for steel. You calculate the ratio, but it is clearly established. These are studies by internationally recognized third parties.

Furthermore, wood has very positive effects on people's health, which has been demonstrated in several international studies. I am talking about a decrease in blood pressure and heart rate, and also a marked decrease in the recovery period. In the workplace, wood, which is a natural element, promotes creativity. In schools, it stimulates concentration and attention, while decreasing the aggressiveness of the occupants. Those effects are very appealing.

To explain why we are in favour of a form of wood charter at the federal level, I would like to talk about what has been done in Quebec.

In 2015, the Government of Quebec recognized the Wood Charter as a political commitment, which raised the awareness of government stakeholders and brought them together to reflect on the increased use of wood in public buildings. It seems that this had a major impact on what happened next.

The Wood Charter states that, in every project financed by public funds, the project manager must consider the possibility of using wood. It does not say that wood must be used, but that it must be considered as a building material. A few days ago, Minister Blanchette confirmed that more than 54% of the 188 projects identified had incorporated wood in the final design, which is very interesting. Furthermore, 75% of those projects used wood for the structure, and the others used it as a material for cosmetic purposes.

Why promote wood in Quebec and Canada? It is a local resource that helps create jobs along the entire value chain in rural communities in all provinces. In addition, many entrepreneurs have taken up the challenge of designing new products to help designers create high performance buildings with a reduced environmental footprint.

We say yes to Bill C-354, which we think seeks to be a policy to use wood. This bill recognizes the benefits of wood for economic development, but also its positive effects, especially on the quality of life of the occupants. It also addresses Canadians' need for greater use of wood. The bill builds on what is already being done in several provinces, including Quebec, British Columbia, Ontario and Alberta. I also know that Nova Scotia is considering a similar program.

In response to the remarks by Ms. O'Connor and the representatives from the Cement Association of Canada, I would like to point out that we must promote wood, but not under any conditions.

We must quickly improve the normative environment so that the choice of materials is guided more by their carbon footprint, energy efficiency and embodied energy for the life of a building.

At the same time, it is important to promote the adoption of green technologies and solutions. Your government is very committed to that. We are talking about buildings with an environmental footprint that is much more carbon-efficient. You are involved in the construction of high-rise buildings; we must demonstrate that wood can be an effective and efficient material.

Furthermore, the appearance wood market, architectural woodwork, employs tens of thousands of people in Canada. It is a popular market for architects and engineers who want to use those materials. For us, this is a very attractive area in which we want to continue to design new products.

Wood represents a very good opportunity for regional economic development. Let me give you some significant figures. A cubic metre of wood in a plant's yard is worth about $69, but when it is converted into structural products installed in a building, such as cross-laminated timber, it is worth more than $2,200. By increasing the value of wood from $69 to $2,200, wealth is created in all regions of Quebec and all along the value chain, in addition to reducing the environmental footprint of buildings.

That brings me to the end of my presentation.

Thank you, Mr. Chair.

[The Chair, Liberal, James Maloney]

Thank you very much.

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

[Nick Whalen, Liberal, St. John's East, NL]

Thank you very much, Mr. Chair, and thanks to all of you for coming to what I understand is our last meeting on this legislation.

Ms. O'Connor, does Athena measure the carbon footprint of the deforestation associated with creating wood products? Do you guys have figures associated with that?

[Jennifer O'Connor]

I'd like to give that question to Jamie.

[Jamie Meil, Research Principal, Athena Sustainable Materials Institute]

There are various standards for doing LCA. We've looked, of course, at the linkage between what's happening in the forest and what's happening with the wood product throughout its life cycle. Certainly, there is a disconnect there in terms of the LCA standards internationally.

The latest one that we are typically following at this point is called ISO 21930. It just came out in 2017. It is basically the governing document, if you will, for how to do an LCA for construction work. Essentially what it says is that what's happening in the forest is very site-specific, as opposed to what may happen with the wood product going downstream—

[Nick Whalen, Liberal, St. John's East, NL]

You do measure it according to this standard?

[Jamie Meil]

We do it according to a standard.

[Nick Whalen, Liberal, St. John's East, NL]

The Cement Association has made a claim in their remarks that “13 tonnes of greenhouse gases are lost to the atmosphere for every tonne sequestered in a wood product”. Do you think that would be an accurate assessment for wood products created in Canada?

[Jamie Meil]

Not necessarily: it depends on what type of forest. There is certainly a high degree of uncertainty as to what's happening in the forests and how it's being—

[Nick Whalen, Liberal, St. John's East, NL]

Are they within the right order of magnitude? Is it a 13:1 ratio?

[Jamie Meil]

I don't think it's a 13:1 ratio, no.

[Nick Whalen, Liberal, St. John's East, NL]

What's the order of magnitude?

[Jamie Meil]

It's probably around 4:1.

[Nick Whalen, Liberal, St. John's East, NL]

Okay.

Mr. Morrissey and Mr. Auer, can you table before the clerk at your earliest convenience the math that you used to come up with this statement made in your opening remarks? It seems a little incredulous—

[Adam Auer]

It's not our math. It's from the Bureau of Land Management in Oregon, which did the study.

[Nick Whalen, Liberal, St. John's East, NL]

Okay. You'll table their report.

[Adam Auer]

I'll table the study, yes.

[Nick Whalen, Liberal, St. John's East, NL]

To you, Ms. O'Connor, with respect to something like cement, does your organization measure the carbon sequestration potential of cement and concrete?