Natural Resources Committee on Nov. 3rd, 2020

[Derek Nighbor]

I'm not going to prejudge what their decision is going to be. We've been feeding into the process. We've been talking to the ADM responsible and Minister Wilkinson's office to try to work toward a solution. That's going to bring good benefit for our sector and that bioforest economy.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you.

Let's talk about GHG emissions here if we can, which are also very important to this equation. I noticed that the bulk of the energy consumed by the pulp and paper industry is actually sourced, so it actually is, you could say, wood residue that powers the pulp and paper industry. Can you explain what the GHG emissions are on self-sourced, as in wood fibre, vis-à-vis what we look at with coal, which is a high- GHG emission industry?

[Derek Nighbor]

Kate, can you speak to that?

[Kate Lindsay]

Derek mentioned in his opening remarks that pulp and paper mills have reduced their greenhouse gas emissions by 66% since 1990 and that has been done largely through a transition away from coal and more and more away from fossil fuels as well.

Pulp and paper companies have taken the initiative to do green transformation and to build what's called cogeneration components in their facilities, so they are using the wood waste that's provided through the sawmilling process. That wood waste is used in a large-scale boiler to create electricity that runs the pulp and paper mill.

In many instances in Canada the facilities are now creating excess green electricity, which is going back into the public electricity grid. Currently we estimate that the amount of green electricity would power the city of Calgary, so it's quite significant.

I would say there are instances, just based on where facilities are located, in which there may be fewer options for transitioning away from fossil fuels but it's still very much the intention of the forest sector to provide low-carbon solutions and to have full utilization of that wood product so that there is zero waste.

Then the carbon is being sequestered—

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you, Ms. Lindsay. I need to interrupt here.

[The Chair, Liberal, James Maloney]

Mr. McLean, you have 15 seconds.

[Greg McLean, Conservative, Calgary Centre, AB]

I need a scientific explanation on how wood residue has less soot and less of a carbon footprint than hydrocarbons do. Can you provide that, please?

[Kate Lindsay]

I will do my best to get you some information in writing from a life-cycle analysis, which would compare the two. It might be best to provide that to you in writing.

[The Chair, Liberal, James Maloney]

Thanks very much.

Mr. Lefebvre.

[Paul Lefebvre, Liberal, Sudbury, ON]

Thank you, Mr. Chair.

Hello, everyone.

Derek, it's a pleasure to see you again.

Mr. Samray, I am delighted to meet you.

My riding is Sudbury, but I am originally from Kapuskasing. My father and grandfather worked at the pulp and paper mill in Spruce Falls. So I found your comments really interesting.

In your statement, you talked about the difference between the percentage of trees harvested...

[The Chair, Liberal, James Maloney]

Could I interrupt you for a second? There is a problem with the translation. I am hearing you and the translator at the same time and it's very tough to follow.

[Paul Lefebvre, Liberal, Sudbury, ON]

Mr. Clerk, is it better this way or do we still hear the translation at the same time?

[The Clerk of the Committee, Mr. Marc-Olivier Girard]

Mr. Lefebvre, could you please make sure that you have selected French under the language option at the bottom of your screen in Zoom?

That should fix the problem.

[Paul Lefebvre, Liberal, Sudbury, ON]

Okay.

Mr. Samray, in your statement you said that 0.2% of forest trees are harvested in Quebec, even though the timber harvest allocation could take this to 1%. Is this correct?

If so, can you quickly explain why this is so?

[Jean-François Samray]

In fact, 0.2% of 905,000 square kilometres is harvested and the reason is quite simple. One-third of the forest is accessible to industry for reasons of proximity, and the remaining two-thirds are preserved for environmental reasons, for the protection of waterways, as Mr. Nighbor explained, or for relations with first nations. The forest accessible to industry represents one third of the total area in Quebec. We are not exploiting all of the forest potential because there are rules that stipulate that a maximum amount of resources can be cut or harvested in one year and that we cannot exceed it.

In some places, stands of hardwood forests are mixed with softwoods. Sometimes no harvesting is done because the pulp and paper sector is satisfied with chips and there have been several closures.

To answer your question, I would say that I think it's essential to transition the pulp and paper, fibre, cellulose and the new green chemistry sector, so that we can maximize processing all the available trees and harvest them in a sustainable way. This will contribute to the creation of products to combat the use of single-use plastics.

There is work to be done and I think programs should be developed to do this.

[Paul Lefebvre, Liberal, Sudbury, ON]

That's a very good point, which I wanted to address.

Is an initiative such as the Investments in Forest Industry Transformation, or IFIT, sufficient?

Forest products involve bioeconomy, biomass, bioplastics and biofuel. So there is a lot of potential. Basically, our study aims to determine whether the economic potential of the forest industry should be maximized. I think the answer is no.

What program could be improved, or even created, so that the transition you're talking about could take place?

[Jean-François Samray]

The IFIT program is already very popular. As I said, for every dollar allocated, 10 are requested for projects. For the most part, these are perfectly eligible and acceptable. Therefore, more investment should be made in this program. I think the forest industry is fundamental to the Canadian economy. It deserves better support and a better transition.

Remember the number I mentioned earlier and think about it. To get back to back to the $4.8 billion, every cubic metre cut represents $155 paid to governments in taxes. One-third of that goes to the federal government and two-thirds goes to the provincial government. The more we use wood, the more money goes into the federal government's coffers, and may I remind you that this is done in a sustainable way.

We are talking here about programs that would allow the transformation. On the biofuels side, things can also be done, for example using biomass to replace several fuels for heating. The goal must be to increase value added, which means investing more in innovation and in the federal government's strategic purchasing programs. The federal government can provide an opportunity for start-up companies to get their first contract with the federal government, and to prove that they can meet this challenge. This approach is very popular in Scandinavian countries. I think Canada would benefit from enhancing these types of programs.

[Paul Lefebvre, Liberal, Sudbury, ON]

Thank you.

Mr. Chair, how much time do I have left?

[The Chair, Liberal, James Maloney]

I gave you a little extra time to make up for the time we lost, but I think we're at the end here.

We have just under five minutes left in this segment. Mr. Simard and Mr. Cannings each have two and a half minutes.

Mr. Simard, why don't you go first?

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

I would like to return to the IFIT program. For the next three years, we're talking about $82.9 million. Just for comparison, which may seem petty, I would point out that for one project, Coastal GasLink, $500 million has been allocated. So, $82 million on one side and $500 million on the other. That gives a pretty clear idea of the inequity that I think exists between these two natural resource sectors of oil and gas and the forestry industry.

I won't ask you to react to that, Mr. Samray.

Earlier, one of my colleagues talked about fossil fuel targets. We're asking for 5% on gasoline and 2% on diesel and heating oil. Knowing that Canada is probably the country with the highest biomass resource per person, do you think that 2% and 5% on clean fuels is enough? Shouldn't we have much more ambitious targets?

[Jean-François Samray]

The good thing about the targets is that we can reach them as quickly as possible, review how we got there and then look at how we can change the targets.

The forestry sector uses a fair amount of fossil fuels for harvesting. Consumers were eligible for a federal government program that provided $4,000 for the purchase of hybrid vehicles to replace 1,800 litres of gasoline for 10 years. If we had this type of program for the forest industry to purchase new hybrid equipment—which is being developed—and to do research and development on hydrogen and other equipment to reduce carbon emissions and improve the carbon neutrality of the sector, it would be worthwhile.

Projects have been funded for consumers. On the industry side, it would be the right time to do this. It would be fitting to provide the same thing that the mining industry received, which is help with obtaining equipment that produces fewer greenhouse gases. For the forest industry, this would be an asset.

[Mario Simard, Bloc, Jonquière, QC]

Could you respond quickly to—

[The Chair, Liberal, James Maloney]

Thank you, Mr. Simard.

Unfortunately, that's all the time you have.

Mr. Cannings, you are last but not least.

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

Thank you.

I'll ask this of Mr. Nighbor again.

He mentioned sustainable forestry and certified products. I think these are increasingly important, especially when I think of the value-added situation we're looking at with engineered wood, mass timber. Sometimes very big projects come up. For instance, one came to Structurlam, when Microsoft was rebuilding its campus. They demanded that 100% of that engineered wood be from sustainable, certified forests. They basically had to buy every stick of certified wood available in British Columbia at the time to meet that order.

Is there a trend in those certifications? What percentage of the wood products we're producing would meet that certification?

[Derek Nighbor]

All of FPAC's members are third party certified, either through sustainable forestry initiatives, a forest stewardship council, or the Canadian Standards Association. The certification piece is really important, both on pulp and paper products and on lumber products. I would say that some markets, such as North America and Europe, might have it as a requirement or be more fixated on it than maybe some parts of Asia. I think there's always an evolution there in terms of understanding.

The other thing we're hearing a lot about in the customer and investment community are the UN sustainable development goals and ESG factors. Certification is certainly a strong playing card for Canada, and it continues to be that way. We're even looking more broadly at getting bigger questions from a number of our customers and their investors, to talk about things like “What is your carbon story?” and “What is your plan to support species at risk?” Although certification touches on that, we are seeing more demands across multiple industries—including forestry—for more transparency, more information and more specifics. In addition to certification, I think it's important for us and for governments to continue to work with customers and investors on that.