Natural Resources Committee on March 9th, 2020

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you, Chair. Thank you to the witnesses.

I want to start with your 2017 softwood lumber action plan, which had $605 million for loans and loan guarantees. Can you tell me how many companies took advantage of that opportunity? How much funding remains? Has an analysis been done of how it was used? If you don't have all of that information, can you table it?

[Jeff Waring]

Mr. Chair, the softwood lumber action plan had allocated $867 million in support for workers, as well as for businesses.

As for the $600 million that was provided through Export Development Canada as well as Business Development Canada, what we've indicated is that EDC and BDC have provided to date more than $560 million and $369 million in financial products and services respectively. This is as of October 31, 2019.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Can you give me an example of a typical project they would have supported?

[Jeff Waring]

Mr. Chair, that question would likely be best answered by Export Development Canada or Business Development Canada. Those investments and how they support forest companies are commercially sensitive, and so it would be best for them to provide that answer.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Are you recommending that this program be renewed? I ask because it was through your jurisdiction. You don't have a sense of whether it worked or made a difference. I'm not asking for commercially sensitive information, but it would be useful to get a general idea of how the money was used.

If you don't have it, perhaps we could send a letter to the organizations that were just identified to ask them for generic, not commercially sensitive, information on that loan program. That's a lot of money and I think it would be helpful for us to know if it had some benefit.

I'll move to the next area I'm interested in. You talked about indigenous communities. You have a huge opportunity. I'll use a local example. A mill closed down and was transferring its cut to another mill. The challenge is that you have to compensate...and certainly the first nation communities are very interested in a portion of that cut that's been transferred to another mill. B.C. now has some new legislation, but I think the bigger issue is the opportunity for the indigenous communities, the first nations, to actually have an equity partnership in some of that cut.

Do you have anything that supports those communities in purchasing cuts?

[Beth MacNeil]

Our money and our programming doesn't go to purchase the timber. I was speaking with B.C.'s chief forester last Friday about where we can help by working hand in hand with B.C. They can identify opportunities. She determines the annual allowable cut, but we have a couple of programs, not just the indigenous forestry initiative but also our investments in forest industry transformation, where we can look at mills that have either closed or are about to close to see if we can develop new partnerships with the local communities, whether they be first nation or not, or both.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

I asked because I certainly perceive that it will be a major barrier in terms of the 10-year transfers if there's no opportunity to become an equity partner.

Next, perhaps you can advise me on the following. We have an example of a company that produces a value-added product, which we, of course, would like to see. They sell their product into the States, and because it's a value-added product they get captured under codes 4407 and 4409 of the export control list. Essentially it's a value-added product on which an astronomical duty is being paid—not the 20%. Their argument is that they just got captured in the softwood lumber challenges.

I understand there is more than just this one company. Have you identified a number of examples throughout this country of people who have been caught up and are being challenged by this sort of categorization?

That's number one, and I think it's important—

[The Chair, Liberal, James Maloney]

Sorry, you're not going to have time for number two. We're already over time. Let's get a quick answer to that and we'll move on.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thanks.

[Beth MacNeil]

I will defer to my colleagues who will be here on Wednesday from Global Affairs Canada.

Mr. Chair, if the question pertains to remanufacturers, then yes, we have identified a number of firms across Canada that have been impacted.

[The Chair, Liberal, James Maloney]

Thank you.

Ms. Jones.

[Yvonne Jones, Liberal, Labrador, NL]

Thank you, Mr. Chair. Thank you both for being here today. We appreciate the information that you're giving us.

I come from the province of Newfoundland and Labrador, so I don't have to tell you that we lost our industry 10 or 12 years ago with the closure of two of our three pulp and paper mills. Because there was no market for byproduct, it affected many of our mill operations. We've seen massive closures all over the province. Unlike today, we didn't have innovation programs. There was no funding support that allowed for transition in the industry.

I'm really happy to see these programs today and that there is a focus on innovation, on skilled training and definitely on expanding market opportunities for products. In the province where I am there are regions—like my riding in particular—that are heavily involved in forest industry product development and no longer have an industry. Very little still exists. We haven't seen as much as a forest access road built in 15 years. It's unfortunate because there is still sustainable fibre content and opportunity to look at new development within that industry. I'm really happy to see the programs that are there.

My question is around those programs. One is with regard to the forest innovation program where I know we're investing $92 million over the next three years. How is that program delivered? Is it delivered through provinces and territories? Is it directly by the federal government? How can regions that want to look at new and innovative ways of developing forest industry or forestry products access those types of programs right now?

[Beth MacNeil]

I'll mention a couple of programs. First is the investment in forest industry transformation. Upon the renewal there will be a call for proposals where individual firms will work with Natural Resources Canada and consultants. They will be reviewed by an external review panel. The money does not go through the provinces.

I'll give you an example of something outside of our programming, but within the federal government. That's ISED's strategic innovation fund. The Kruger mill in Corner Brook, Newfoundland received, I believe, $13.8 million to increase the efficiency of the mill and keep it operating in Corner Brook. They worked directly with ISED.

Firms across Atlantic Canada and across Canada can work directly with us once the call for proposals is up and out.

[Yvonne Jones, Liberal, Labrador, NL]

You mentioned the forest industry transformation program, the expanding market opportunities program, and there's the forest innovation program. Are all of those programs available now or are they getting ready to be rolled out?

[Beth MacNeil]

They're fully committed now. However, Mr. Chair, budget 2019 announced the renewal of $251 million. We hope to be in a position in early April to announce a new call for proposals.

[Yvonne Jones, Liberal, Labrador, NL]

Okay.

I know from my colleagues at the table and obviously from listening to the news that there are significant challenges within the industry today in British Columbia in particular. Are there any other provinces that are affected in such a significant way in Canada or other regions, or is this more singular to what's happening in British Columbia right now?

[Beth MacNeil]

Mr. Chair, British Columbia is really is seeing the impacts of several things with the wildland fire, mountain pine beetle, trade disputes and the growing desire to protect both species and spaces.

However, Northern Pulp in Nova Scotia has supported 92% of the sawmills that exist in that province. With the closure of Northern Pulp, which happened in January 2020, we're going to see significant suffering along the full value chain in the province of Nova Scotia.

[The Chair, Liberal, James Maloney]

Thanks. Unfortunately I'm going to have to stop you there.

Mr. Simard, I can give you about one minute, but it's a firm one minute.

[Mario Simard, Bloc, Jonquière, QC]

I'd like to make a brief aside for Mr. Généreux. There's something called Dutch disease. Oil is causing both a rise in our dollar and a breakdown in our environmental sector.

Mr. Lefebvre, when you were talking about your measurements, you were talking about $1.2 billion. Well, I can tell you about building a pipeline that will cost $12 billion and buying a pipeline that will cost $4 billion. So we're at $18 billion. In my opinion, that's a staggering amount.

Quickly, I'd like to ask you a question about tree planting. Maybe the Conservatives will like it. I don't know if you're aware of it, but in Australia there's something similar to a carbon exchange: countries that are not able to plant trees on their own territory are going to plant them elsewhere. It would be entirely possible to do so in Quebec and Canada. That is called forest gardening. We have to make the difference, which we did not do earlier, between afforestation and reforestation. These are two different concepts...

[The Chair, Liberal, James Maloney]

The one minute includes the answer to your question.

[Mario Simard, Bloc, Jonquière, QC]

All right. I beg your pardon.

Have you ever investigated this possibility before?

[The Chair, Liberal, James Maloney]

If you can answer in about 30 seconds, we can wrap up.

[Beth MacNeil]

I know that in Australia they've committed to planting one billion trees.

I don't know the details, but we certainly are looking at best practices around the world.

[The Chair, Liberal, James Maloney]

Thank you.

I apologize. My job is chief interrupter.

[Mario Simard, Bloc, Jonquière, QC]

Your answer was better than my question. I thank you for that.