Natural Resources Committee on Oct. 30th, 2020

[Beth MacNeil]

Mr. Chair, I'm sorry, but I don't know the details. We don't have a national forest strategy. Is the honourable member referring to our forest sector programming?

[Mario Simard, Bloc, Jonquière, QC]

Yes, that's it.

[Beth MacNeil]

In terms of recent investments, as I mentioned, budget 2019 allocated $251 million to our forest sector competitiveness programs. On top of that, this summer the Government of Canada allocated an additional $30 million for COVID-related health and safety measures affecting tree planting operations and mill operations across the country.

As for what has been allocated, we did the call for proposals in the summer, and we are going through the expressions of interest right now. We hope to be financing some of those projects before the end of the fiscal year.

[Mario Simard, Bloc, Jonquière, QC]

I'm going to come back to Ms. MacNeil shortly. Would it be possible to have the analysts or researchers give us an overview of the investments that were made in the forestry sector? That might be helpful to the committee.

Ms. MacNeil, you brought up the softwood lumber dispute and the need for liquidity. In speaking to a number of stakeholders, I have been told that it's hard to access liquidity and that the federal program is unsuitable because businesses have to be technically bankrupt in order to obtain government support. My fellow member Mr. Zimmer talked about the challenges the dispute poses and the WTO ruling in Canada's favour.

Keeping in mind your purview and the latitude you have to answer, I'd like to know whether it would be smart to develop a loan guarantee program with full knowledge that Canada will come out the winner of this trade war once all the legal proceedings have come to an end.

[Beth MacNeil]

I think that for the specifics on these questions I would suggest that my colleagues at Finance Canada or ISED—Industry, Science and Economic Development—be invited to respond.

There were COVID-related measures set up, and I believe what the honourable member is asking about is in particular the large employer program, the LEEFF program.

I would add, though, that with regard to the pressure and the stress we saw on softwood lumber operations in the winter and in the early months of the COVID period, we are not seeing those pressures today. Mills are up at full operation, and what they're getting per thousand board feet has increased from approximately $295 per thousand board feet to, this week, $540. That again was what I referred to. It hit a high of about $1,000.

[Mario Simard, Bloc, Jonquière, QC]

Thank you.

Another issue I'm quite concerned about is the pulp and paper industry's transition. You mentioned the bioeconomy, which is the key to the pulp and paper industry's transition. As far as you know, do any existing federal programs support research and development and the pulp and paper industry's transition towards a bioeconomy?

[Beth MacNeil]

Yes, there are. I will mention two Government of Canada programs.

One is the investments in forest industry transformation program. In the past, we have funded projects that are related to pulp and paper and support the bioeconomy. Certainly in the letters of expression of interest that we're reviewing right now, there are operations that would be under pulp and paper.

I would also say that the Government of Canada funds approximately one-third of FPInnovations, and there are several pulp and paper members in that organization that benefit from our efforts to advance the bioeconomy bioproducts.

[The Chair, Liberal, James Maloney]

Thank you, Ms. MacNeil.

Mr. Simard, you have about 15 seconds. I'm not sure if that gives you enough time to ask another question.

[Mario Simard, Bloc, Jonquière, QC]

That doesn't leave me much time for a question.

Thank you, Ms. MacNeil. I have just 15 seconds left.

Could the analysts prepare some sort of fact sheet on the programs relevant to the bioeconomy? Certainly, that is an issue we'll be looking at next week. I don't know for sure, of course.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Simard.

Mr. Cannings, we will go over to you.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

Thank you, Ms. MacNeil, for appearing before us again. It's always good to see you and hear from you.

As you know, one of the themes of this study that we're undertaking is how the forest sector can help Canada reach its climate targets; how it can help reduce our emissions. I know the government takes credit for carbon sequestration in forests when it's calculating its emissions reductions. I forget the most recent figure, but I think it's somewhere around 20 megatonnes to 40 megatonnes. I have no idea how they calculate that or if it's just some magical algorithm.

I'm wondering if you could help me in terms of how those figures are calculated. I'm assuming that the emissions reductions they're putting in there are really additive and are the result of changes in the actions the government and industry are taking in changing past practices. Otherwise, we're taking credit for a carbon sequestration that's been going on for millennia while our emissions are going up. We're taking credit for 20 megatonnes in bad forest fire years, as we've not had this year, but in British Columbia, emissions are on the order of 200 megatonnes from those fires in that one province alone.

I'm wondering if you could help me with how that contribution of the forest sector is calculated in our carbon emission accounting.

[Beth MacNeil]

For the specifics, I would invite Dr. Werner Kurz, one of my colleagues, to come and explain the methodology on that calculation.

We do take into account that in Canada right now there are 14 megatonnes of carbon sequestered in the managed forest and derived wood products, but as we do those calculations, you are correct to say that we have to take into account the emissions that happen when, for instance, the mountain pine beetle goes through and destroys forests, as well as wildland forest fires, so that natural disasters are counted in that.

Then we have a modelling, called the carbon budget model, that the government and NRCan produced. It's used around the world and is in line with the United Nations requirements. As to the technical aspects of the model, I can't answer that today.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you. I think Werner Kurz is on our witness list, or at least on the NDP's witness list, to appear here.

You mentioned IFIT, the investments in forest industry transformation. One of the issues I've been hearing about a lot in my riding over the last few months is proposals for renewable natural gas plants that use forest waste right now. As you know, a lot of the forest waste—in British Columbia, anyway—is burned at the end of the year in slash piles that produce as much carbon in our atmosphere as all the cars in British Columbia put together. If we could eliminate or reduce those emissions, it would go a long way toward helping us.

I'm wondering if you are aware of whether IFIT is helping to fund innovations in that regard in new plants that will be using that material, creating renewable natural gas instead of just burning it into the atmosphere.

[Beth MacNeil]

Getting more value from wood and wood residue for certain is funded by and eligible under the IFIT program. I don't know what the result is of the early call for proposals, but 70 expressions of interest came in by the end of August. Yes, that would be the type of project.

The other source is ISED's strategic innovation fund. As well, $100 million was set aside in the fall Speech from the Throne, I believe, in 2018. Of course, I think the proposed clean fuel standard that's under development will help create further demand for these types of transitions and bioproducts.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Okay.

I have time for another question, I hope.

[The Chair, Liberal, James Maloney]

You have one minute.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

I'll just follow up on my first question.

You mentioned the plan to plant two billion trees to help reduce emissions. I implore you to make sure that those actions are additive. As an ecologist, I know that if we harvest a forest or if pine beetles kill a lot of mature trees in a forest, Mother Nature will plant millions of trees on her own. If we go in there and mow all those trees down and plant, we can't take credit for those emissions reductions through sequestration.

If there are plans to actually plant these trees, will they be planted in situations where trees would not have grown otherwise?

[Beth MacNeil]

That's an excellent question. The intent in the announcement was that those trees be incremental. Canada is a world leader, as you know, in sustainable forest management, and what that actually means is that if you harvest a tree, you're legally obligated to plant one. We are looking at an area twice the size of Prince Edward Island. They would be incremental, adding new forest cover to Canada's landscape.

[The Chair, Liberal, James Maloney]

Thank you, Ms. MacNeil and Mr. Cannings.

We're moving into the five-minute round, and somebody from the Conservatives is up.

I see that you're back, Mr. McLean. I'm sorry that you had technical challenges briefly, but we're glad to see you. I'm not sure who's going up next from your side.

[Greg McLean, Conservative, Calgary Centre, AB]

I think Rachael is.

[The Chair, Liberal, James Maloney]

You're up, Ms. Harder.

[Rachael Thomas, Conservative, Lethbridge, AB]

Greg, do you want to go ahead?

[Greg McLean, Conservative, Calgary Centre, AB]

No, I don't, because I haven't heard anything, so I think I'm going to defer to my colleagues.

[Rachael Thomas, Conservative, Lethbridge, AB]

Okay, perfect.

I guess my question for the witness is that I'm wondering if you can comment a bit further on this idea that two billion trees would be planted by 2030. My understanding is that as of September, not a single one of these trees had been put in the ground. I would look to you for confirmation of that.

You've just said that when an organization or a company takes a tree from the land, they're expected to replace it with another tree. Is this announcement from the Prime Minister for the two billion trees on top of the trees that the private sector is already required to replace, or is this the government paying for those replacements that the private sector would otherwise have covered?

[Beth MacNeil]

That's a very good question.

On the two billion trees, the recent Speech from the Throne last month reaffirmed Canada's commitment. We are awaiting a budget decision, but in the meantime, since late last fall, we do continue—I and my team—to engage with potential partners.

It is above the requirement and above the numbers that companies and provinces already are committed to planting. When I say “incremental”, that means we're not paying for what they already have to do by the law in Canada under the regulatory regimes in the provinces.

I would also add that the government has supported, in the last few years, under the low-carbon economy fund and infrastructure, disaster and adaptation—