Natural Resources Committee on March 11th, 2020

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Thank you so much, Mr. Chair.

Good afternoon to our witnesses.

I'd like to welcome you to your House of Commons.

I'm an MP from Quebec. In my riding, there aren't, strictly speaking, any forest areas and forestry companies as vast and successful as the ones you mentioned earlier.

However, I'd still like to point out that this industry is very important to the Quebec economy. Earlier, Ms. Brassard gave us a good picture of the reality: the industry is much more than just producing planks, much more than lumberjack work, it's also high-tech.

Three years ago, I went to the Fjord region, in the riding of Chicoutimi—Le Fjord, and I discovered the scent of wood. I was very happy to discover that smell, a smell I like to breathe when I'm walking around. Moreover, wood is used in the composition of many by-products. As Ms. Brassard said earlier, the industry is modernizing, it gives rise to added value. It must change, improve, and that is exactly what's happening.

Ms. Brassard also reported on the investments that have been made and the steps taken by Canada Economic Development. During the years 2009 to 2013, when I was a member of the provincial government, there were fruitful and interesting collaborations that proved beneficial to Quebec workers in the forestry sector. I am also very pleased to point out that those years coincided with my time in government.

Thereafter, we cannot say that things have improved. By a strange coincidence, exactly four years ago today, March 11, do you know where our Prime Minister was? He was in the White House with his good friend, the president at the time, Barack Obama—it's nice to have good relationships like that—and it would have been an extraordinary opportunity to resolve the softwood lumber dispute between Canada and the United States.

What existed four years ago still exists today. Unfortunately, four years ago, when there was perfect harmony between the two heads of state, the Canadian head of state and the American head of state, our Prime Minister failed to resolve this problem which, unfortunately, is affecting the forestry sector, both in Quebec and across Canada, namely the issue of tariffs.

The issue of the tariff problem is a huge one; it is still a 20% tariff, and its application has repercussions. We won another victory last September. Once again, the arbitration tribunal ruled in our favour as Canadians. So what's the big deal? The problem is that this victory has yet to be proven and more needs to be done.

Ms. Brassard, can you explain to us what impact the U.S. anti-dumping tariff, which was challenged by the court, has had on the forestry industry in Quebec?

[Manon Brassard]

Unfortunately, I think the colleagues who spoke before me would probably be in a better position to answer that question.

We have really focused our energy and our funds on ways to help the industry as a whole, given the projects that have come before us, to counteract or lessen the impact of the softwood lumber tariff.

However, I'm not able to give you a more specific answer.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Perfect.

Entrepreneurs are knocking on your door, and your advertisements say that you're the only bank to invest in businesses.

[Manon Brassard]

You're confusing us with BDC.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

You're right. I'm sorry, and I apologize. I'm using the wrong abbreviation.

What is the main concern of entrepreneurs when they knock on your door? What brings them to you, other than the fact that they have to deal with this U.S. tariff of more than 20%?

[Manon Brassard]

When entrepreneurs come to us, it's often because they want to diversify their production and penetrate other markets, which is why I've highlighted the projects or examples I've given you. Through the CCTTs, we want to support companies, accelerate research and development for other products, help them move into biofuel and biomass in general.

With the Damabois Group, which I also told you about, we want to develop a new product. It's a matter of helping to develop products and markets, and turning to exports so there is less dependence on softwood lumber production alone.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

As for softwood lumber, our main customer is definitely the United States because it's the closest country to us, geographically.

At the same time, it's the country that's holding us most hostage when they charge such a high tariff. Do entrepreneurs tell you about it when they knock on your door?

[Manon Brassard]

When they knock on our door, it's really to tell us about a project and how to finance it. We don't really discuss why they come to us. I think they're really focused on presenting their project and how they're going to carry it out.

In addition, we make sure to invite to the table, when necessary, representatives of the National Research Council of Canada's industrial research assistance program, or NRC-IRAP, as well as the Government of Quebec. We are truly committed to a project-based approach to help companies grow and have a positive impact on the community.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Can we talk about networking between Canadian companies and provincial companies?

Quebec companies obviously work together to support each other. However, can we consider more co-operative networking with other Canadian companies from coast to coast to coast?

[Manon Brassard]

I don't see what could prevent this.

We often work with small and medium-sized businesses. These businesses are often well established in Quebec, and we primarily work with them.

Since research doesn't necessarily stop at borders, from time to time and together with college technology transfer centres, we can encourage people who develop specific expertises, no matter where they are, to share those expertises with everyone. We can encourage interaction through this type of co-operation.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Very good, thank you.

That's what we want.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Deltell. You're very efficient, you're right on time.

Mr. Weiler, we'll move over to you.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you, Mr. Chair.

Thank you to all the witnesses who are here today and who are participating online as well.

As an MP from British Columbia I'm primarily interested in some of the work that's being done by Western Diversification to support the forestry sector workers. You mentioned a few programs in your statement. I was hoping that you could speak a little more to the programs that are available through Western Economic Diversification, including the two that you indicated here: the targeted community resilience initiative and the community adjustment initiatives.

[Gerry Salembier]

I should emphasize that we have been working hard on the community resilience initiative since January. If it's successful, it would come under our community economic development stream. Typically, our project development process takes a number of months. We are in discussion with the mill closure task force that was put together by the Community Futures organizations.

As I said in my opening remarks, this idea is modelled pretty closely on what we were able to do in response to the 2017 and 2018 wildfires. The essence is to put together teams of individuals that can go into communities affected by this downturn in the forest sector, or in the case of the wildfires, by the wildfires themselves, to help the members of the community—including small businesses and entrepreneurs in and outside the forest sector, those indirectly affected and those affected by the induced effects of the slowdown—to access government services, including access to financing, technical services, marketing services, business plan development, even extending to mental health services. When situations like this occur in communities, the impact is broad and includes a psychological dimension on the community as a whole.

It's about sending in ambassadors to the community to help those affected access those services and, in the case of a small business, to reformulate their business plans to adapt to the changed circumstances. The changed circumstances in this case include, as previous witnesses have indicated to you, a dramatic reduction in fibre supply. There is also, of course, the market impact as a result of the tariffs by the United States. It's quite difficult to disentangle those impacts, but we're looking now in B.C. at up to 10,000 workers who are affected by the downturn in the industry. Those are workers in small communities where the options are often quite limited.

That's one that we're working hard on right now.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

That's great.

A lot of the different measures you mentioned involve multiple agencies or multiple sources of funding. Could you talk a little about the efforts being made to ensure effective collaboration among different development agencies and provincial governments to ensure that the programs are complementary?

[Gerry Salembier]

I mentioned the interdepartmental, intergovernmental committee that we are a part of, as are the other regional development agencies. It's an exercise that's been struck recently to bring to bear the full resources of the federal government and coordinate them with the resources of the provincial government. A number of provincial government departments are a part of that initiative as well, including the Ministry of Forests, Lands, Natural Resource Operations and Rural Development and the Ministry of Jobs, Economic Development and Competitiveness. They have a presence on the ground that we can take advantage of. They are of course the principle administrators of the forest tenure system in British Columbia, so they have information on those direct impacts that is quite important to us. It's quite a good coordination exercise, so we're pretty confident that we're going to be able to identify the gaps in available supports and prioritize those gaps so that we're using whatever money we do have on the most important problems that communities are facing.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

For the programs we have, are you finding that both businesses and communities are aware of the different opportunities that are available? What type of work is being done to communicate that?

[Gerry Salembier]

Businesses are aware; we have a pretty active communications program in Western Economic Diversification. You can get a first cut at a lot of our services by going to our website and applying for our programming in that fashion. It often takes more than that, particularly when you're dealing with really small enterprises and really small communities; hence, the approach we took during the wildfires, and that we're looking to take here again of sending people into communities who are known in those communities. That's why these Community Futures organizations are so important. A small business person spends his or her time meeting payroll and often isn't able ability to spend their time sorting through and navigating the admittedly rather complex suite of programs that most federal agencies have, including our own. So having those people on the ground to help sort through it is one of the most important parts of our communication effort.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Absolutely.

I was hoping you could speak a bit to the business scale-up and productivity program. I understand that there's a specific priority area for clean resources. I'm curious as to what types of opportunities might be available for the forestry sector.

[Gerry Salembier]

That business scale-up and productivity program is one where there is an intake process, a call that's open now. That is one where you can go to our website and access the information required in order to submit an application.

The program provides repayable contributions, as we say in government-speak, which for anyone else means a loan. It is a zero-interest loan with no security, so it's non-recourse. It's non-dilutive financing, and it's very patient capital. The payback is over a period of up to nine years, back-end loaded to the last five years of that period.

It's open to any sector, although we have expressed an interest, a preference, in this intake for a number of areas, including, as you mentioned, clean technology. B.C. has quite a number of clean technology companies, ranging up to 300. One of the principal ones is located right in your riding—

[The Chair, Liberal, James Maloney]

We'll have to cut you off there. It's a high note for Mr. Weiler, so why don't we just stop there?

[Some hon. members]

Oh, oh!

[The Chair, Liberal, James Maloney]

Mr. Simard, it's over to you.

[Mario Simard, Bloc, Jonquière, QC]

Thank you.

Good afternoon, Ms. Brassard.

I'm speaking to you, but I don't want you to think that I mean to criticize you personally. Instead, I'll criticize the government's actions.

In your presentation, you talked about the community adjustment fund, which was in place from 2009 to 2011, and the temporary initiative for the strengthening of Quebec's forest economies, which was in place from 2010 to 2013. However, I believe that, since 2013, not much has been done for the forest industry.

You spoke of a strategy to address the spruce budworm epidemic, but I don't have any information on this issue.

Can you provide that information?

[Manon Brassard]

The funding amounts to $6 million, and we worked with Quebec.