Natural Resources Committee on Nov. 3rd, 2020

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

Thank you.

I'll leave it there.

[The Chair, Liberal, James Maloney]

Perfect.

Thank you, Mr. Cannings.

Mr. Samray, thank you very much for joining us today.

Unfortunately, we're out of time in this hour, so we have to move on.

Derek Nighbor is sticking around, I believe.

[Jean-François Samray]

It's been my pleasure.

Feel free to contact us if you have further questions.

Thank you.

[The Chair, Liberal, James Maloney]

Thank you for your contribution, Mr. Samray.

[Derek Nighbor]

Thank you.

[The Chair, Liberal, James Maloney]

We'll suspend for a minute, and then come back on with the next panel.

Let's jump right back in.

Welcome to our new witnesses.

Mr. Nighbor and Ms. Lindsay, maybe you can fill us in on what's new since the last time you were at the committee.

We have Mr. Renou and Ms. Mathie from FPInnovations. Thank you both for joining us today. We also have Mr. Dallain from SEREX.

Mr. Nighbor and Ms. Lindsay, I'm assuming that you won't be making another presentation. That said, both FPInnovations and SEREX have up to 10 minutes for opening remarks. Then we'll open the floor to questions.

Why don't we start with Mr. Renou.

[Stéphane Renou, President and Chief Executive Officer, FPInnovations]

Thank you, Mr. Chair. We are glad to be here today in front of you. We're here to talk to you about the relaunch of the forestry industry.

For us, it's really about scaling up. It's about moving faster, accelerating the transformation of the industry towards the bioeconomy. That's what we're going to talk about today. I think you all received a document from us. I will move to slide 2 if that's the case.

Can you confirm, Mr. Chair, that you received the document?

[The Chair, Liberal, James Maloney]

I personally don't recall seeing it. When did you send it?

Mr. Clerk, do we have that document translated? Maybe that's the problem.

[Stéphane Renou]

We sent it in both languages.

[The Clerk]

Yes, I think I sent it prior to the meeting.

[The Chair, Liberal, James Maloney]

I don't have a copy of it.

[The Clerk]

Let me look into it, and I can send it electronically if need be. I will resend it, thank you.

[Stéphane Renou]

That's okay. We can still go forward. I will talk first.

Good afternoon, everyone.

If there are any questions in French, I'll gladly answer them.

I'll do the piece in English and then we can move on from there.

First, what is FPInnovations? FPInnovations is a private, not-for-profit organization. It's an applied research centre, so we don't do fundamental research. We are focusing on research that makes things happen in the sawmill directly, for real.

Our key mission is to help the forest industry be more competitive, and also to help it transform, to evolve. That's critical in the situation we are in now. The pandemic, the situation with COVID, has created a place in which we actually have shaken up the markets a bit and shaken up the industry, so it's all about relaunching and pulling forward more quickly so we can take our place in the bioeconomy.

What is that? What is the bioeconomy? To put it simply, it's creating an economy based on biology. For us, in the forest industry, it's about how we use trees, how we use the forest to create a more active economy.

How do we use a sustainable forest? We harvest trees and then we use them to build more with wood. We use fibre from the forest and put it in a multitude of products. So we can create products that help to capture carbon. We can create new products that actually reduce the load of carbon across the economy and we can create products that are biodegradable or that can be recycled more easily.

All that's a great concept, but if you really get down to it, what is it to have a bioeconomy? In the end, practically speaking, it means that, at a certain point in time, you should be able to look around you and see more things built of wood. You should also see—if you're in Prince George, Saguenay, La Tuque or Thunder Bay—biorefineries, bioproduct plants that transform chips of wood, the residue of wood, into bioproducts, the precursor chemistries that will create the new bioplastic. Concretely, that's what success in a bioeconomy means. It's not just a concept; it's creating those mills.

In Canada, we're actually at a tipping point right now. Other countries have moved more quickly than we have. In Europe you can now see biorefineries, complete plants, being built in the Nordic countries. In Germany and even in Brazil there have been some announcements recently.

In Canada we need to accelerate. We need to go faster. We need to create the context in which we can do that at scale. Scale is important. That's what we need to do.

But what's great about the bioeconomy? What is great about the forest industry? Something fundamental that we all need to remember constantly is that the forest industry does three things for all of us when we grow it. Of course it creates more economic impact for the regions; it creates more economic impact per se, and it also helps climate change. It's actually one of the rare sectors that help three things at the same time: the economy, regional growth and the carbon economy. It does all three at the same time, so anytime we grow, we can do this.

We actually put in the federal pre-budget consultations two asks. We tried to make them as clear and crisp as possible. Those are the missing pieces to accelerate the bioeconomy, to accelerate the scale-up of the bioeconomy

The first recommendation was to provide funding in the order of $10 million per year for five years to demonstrate and accelerate those scale-up elements and to help reduce the risk of scaling up. If you want to construct a large biorefinery tomorrow, it won't take an investment of $10 million; it could take as much as half a billion dollars, so we need to help the industry de-risk that path as quickly as possible so we can help their decision-making process.

We also need to really understand where to go. The bioeconomy needs multiple products that come out of the trees in multiple elements that we can form; we need to enter multiple supply chains. From the same wood, I'll have product that goes into asphalt, product that goes into plastic, and product that goes into insulation in construction. These are all different molecules going into all different markets that need to open at the same time, so reducing risk is important. That's the first recommendation.

The second one is to create a public procurement policy. We can pull on those markets, we can prime them, we can start them, and that starts with a public procurement policy.

Select the right market to enter, create the public policy and de-risk the industry capital investment with the right technical activity. That's what we need to accelerate. Is that possible? Is that real, or am I just talking in big terms? I will give you an example that we lived through this summer when we started a project to create masks to respond to the pandemic. We took the challenge with the help of NRCan to ask if it was possible to create a biodegradable mask tomorrow to produce at large scale.

Taking up the challenge, within three months we did a demonstration that this could be industrialized and put on a tissue machine in the order of weeks now, from the work we've done. Why or how could we do that? We could do that because we had the facility to scale up rapidly. I could pass from my chemistry lab, and in the afternoon I was on the pilot machine and I was running the pilot machine, and if it runs on the pilot machine, I can then go into a mill, and within one week I can produce millions of filtration media per day. That's what we need to do, more of those industrially focused activities in R and D to accelerate the scale up of products.

If we do that, then we can dream of the bioeconomy. We can dream of those plants being created in Prince George, in Quesnel, in Thunder Bay and in La Tuque. We can think about the future for an industry that is not under the stress of a rapidly transforming economy.

With this, Mr. Chair, I complete my presentation.

[The Chair, Liberal, James Maloney]

That's great, thanks very much.

It's been pointed out to me that I said the witnesses had up to 10 minutes. That's an example of old habits dying hard. It's actually five minutes, which we agreed to earlier. My apologies, but in the circumstances, Mr. Dallain, I'll give you more than five minutes, which I did for the others.

Please proceed.

[Patrick Dallain, General Manager, SEREX]

Thank you, Mr. Chair.

In five minutes, I can provide a short introduction. I already set a time of five minutes. I'll try not to go too far over those five minutes to leave more time for questions.

Let me first tell you about our organization.

[The Chair, Liberal, James Maloney]

Thanks for bailing me out.

[Patrick Dallain]

At SEREX, we conduct applied research at the college level. We're part of a network of 59 college technology transfer centres affiliated with various colleges and CEGEPs in Quebec. We're affiliated with the Cégep de Rimouski. Our laboratories are located in Amqui, in the Matapedia Valley, which is a highly forested area. Like all college technology transfer centres, we provide applied research, technical assistance and training services. Our specialties are wood processing and sustainable construction. We also have additional expertise in chemistry and biomass energy. We're a small centre compared to FPInnovations. We have 18 full-time employees, wood science researchers—engineers, chemists, technicians. Our team includes CEGEP teachers from different disciplines, such as architecture and engineering, who contribute to our research projects. We also hire students. Over the past year, 11 college and university interns have worked with us.

In the past year, our turnover amounted to just over $2 million. This enabled us to carry out over 80 applied research, technical assistance and training projects for 67 clients. We work extensively with SMEs throughout Quebec.

I said that we're part of the Synchronex network. Since 2019, we've been recognized as a technology access centre by the Natural Sciences and Engineering Research Council of Canada, or NSERC. We're part of the Tech-Access Canada network, which includes 60 college-level technology access centres across Canada.

Our two associations, Synchronex and Tech-Access Canada, have partnered with Polytechnics Canada and Colleges and Institutes Canada, which are major players in college research in Canada. Recently, they proposed a strategy to the government for investing in the applied research strength of colleges and institutes across Canada to support Canada's social and economic research and development. I won't go into the details of this request. However, it involves $165 million, divided into two parts and distributed among all the different colleges.

We're also part of a group of eight centres within Synchronex. These centres provide services in several fields related to forestry resources, such as forestry, furniture, pulp and paper, sawmilling and panels. Other research centres also work in forestry research, and we collaborate with these centres on a regular basis. This group of forestry resources consists of 250 experts, including 50 teachers. Each year, with private and public investments of $18 million, we work with over 400 clients on innovation projects. We also help train about 60 college students. Last year, we provided over 11,000 hours of internships. These are hours of student participation in projects.

I'll quickly propose a few measures to support the forestry sector's role in the fight against climate change. I heard that, in the other part of the meeting, you spoke about increasing forest management, reforestation, and so on, in order to store more carbon in the forest. This would be a good thing. I also heard that you spoke about the transition from pulp and paper mills to the production of bioproducts as a substitute for plastics.

While drawing from SEREX's expertise in the construction field, for example, we must encourage biosourced construction, low-carbon construction, not only on a structural level, but also when it comes to insulation and other bioproducts that can be incorporated into construction.

We must also work on developing added value in the sawmill sector, to avoid producing only first-level products and constantly encountering issues with the tariffs imposed by the Americans. We must maximize the use of the forest biomass as a source of bioproducts and renewable energy.

I'll be happy to provide more details when you ask questions.

Thank you for your attention.

[The Chair, Liberal, James Maloney]

Thank you very much, sir. We appreciate that.

Mr. Patzer, you are first up, for six minutes.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thank you very much, Mr. Chair. I appreciate that.

I want to thank everybody for sharing today. I'm going to start with Mr. Nighbor.

As somebody who grew up in an agricultural riding with a farm background, I see a lot of similarities between the two sectors and some shared issues. In terms of further developing your industry, especially with a clear focus on technological innovations, I'm curious to know how the lack of rural and remote access to broadband or cell services affects these efforts.

[Derek Nighbor]

It's significant, and we do have a lot in common with our friends in agriculture. One of the big differences is the significant public land base upon which we are operating, which means different regulatory frameworks and whatnot, but when you think about where we are operating and the kind of stewardship work we're doing and how important that is to families and rural communities, we're in lockstep.

I don't know if Stéphane might want to talk a little bit about some of the Forestry 4.0 work that FPInnovations is doing, but broadband access is really critical to us not only for doing day-to-day work in some of these more rural and remote communities but also for advancing drone technology and accelerating some of the innovation in forestry.

Stéphane, I don't mean to put you on the spot, but is there anything there you want to share? That is a huge barrier and a huge opportunity for our sector.

[Stéphane Renou]

If I may, Mr. Chair, I would like to add a little bit here.

It is a shared challenge. It is a shared opportunity as well. I agree that it is for mining and for everything up north where broadband is a bit more scarce.

It's also about developing communications solutions, so we're working on other communications solutions that could involve broadband or something different. We need to transfer data. We need to transfer enough data so that we can optimize operations and automate machinery. We can dream of someday having everything automated up north, a certain part of a mining field or a forestry field, but basic access to data so people can optimize operations is something we need today.

Increasing bandwidth and getting to broadband is something we need to strive toward, but getting collaboration in all of these sectors is probably the key to accessing that.

We live on roads every day. We construct roads with the mining sector. We construct roads with the military to optimize the north. Keeping that up is extremely important.

I don't know if that covers what you wanted me to cover.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

I'm sure it does.

Both of you might want to take a turn answering this too. You mentioned mining, whether that's oil and gas or in other sectors. They are building out broadband and access to data at the same time they are building these operations. Is that happening in forestry as well? Is there a way to build that infrastructure out at the same time?

[Stéphane Renou]

It's all a matter of planning. The difference is that in planning roads we have a history of doing it over the long term and we keep doing it. Technology has evolved rapidly and the need for technology in forestry in terms of broadband has surged, I would say, over the last few years. We can dream now about what we can do with broadband that we were not dreaming about 10 years ago. There are synergies. There's an accelerated need for it. It's also a way, which is extremely important, of getting jobs of higher quality around forestry as well.

Think about this. If someone can operate machinery with all of those screens around them, with all the intelligence and the robotics that enable them to be in the field and to control five machines at the same time, that's a much cooler job for our young kids up north than just roughing it alone with their diesel machine. That's where we're going.

It's the same thing the mining industry has done with transfers in some sections of the world. We need to get there because we don't have enough people and we need to attract the young.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Exactly.

Mr. Nighbor, in your opening remarks you mentioned that you are concerned about a misinformation campaign to prevent Canadian forestry from thriving. I'm sure you're aware that this issue is not unique to forestry but that it is shared across the natural resource sector.

Do you have any specific examples you would like to share here with this committee?

[Derek Nighbor]

Yes.

Today, the election day in the U.S., when we are talking about polarization and emotion, I don't need to talk to a group of MPs about fake news and frustration with messages being distorted. I don't want to be here whining about this, but it is frustrating when you do have such a strong story to tell and there are groups, many of them outside of Canada, trying to influence Canadian land-based decisions and local community decisions.

The one I would highlight would be the Natural Resource Defense Council built out of the U.S., which is working with some Canadian surrogates to try to lobby companies like Procter & Gamble and others to stop sourcing from Canada. It's spreading misinformation.

Once again, I go back to our public land, the work we do with provincial and federal governments, and the data that the Canadian Forest Service has when it comes to carbon information, and how robust our forests are according to the reports that NRCan issues on the state of Canada's forests every year. We're the only country in the world that I'm aware of that does a formal, comprehensive, full report on the state of our forests. We have an active Canadian Council of Forest Ministers at the provincial and territorial level, which has a lot of information. We're going to stand up for ourselves and our workers, but given the public land piece of this as well, we believe there's more that governments, federally and provincially, can do to speak truth to some of this silliness.