Evidence of meeting #4 for Natural Resources in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was industry.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Don Roberts  President and Chief Executive Officer, Nawitka Capital Advisors Ltd.
Tina Rasmussen  Corporate Development and Administration Officer, Meadow Lake Tribal Council Industrial Investments
Jeff Bromley  Chair, Wood Council, United Steelworkers
Jason Krips  President and Chief Executive Officer, Alberta Forest Products Association
Susan Yurkovich  President and Chief Executive Officer, British Columbia Council of Forest Industries
Sylvain Labbé  Chief Executive Officer, Quebec Wood Export Bureau

Noon

Corporate Development and Administration Officer, Meadow Lake Tribal Council Industrial Investments

Tina Rasmussen

I'm probably not the best one to comment on that because I don't work directly with NorSask Forest Products, but just in general it makes it more difficult for us to ride the ebbs and flows of the market. If you're a multinational company with investments in the United States, you're not paying tariffs on a portion of the material you're producing, whereas for us, 100% of everything we sell into the United States has tariffs on it, so I think the ebb and flow is not quite as good for us as it might be for a larger corporation that's able to have its company spread over two countries.

12:05 p.m.

Conservative

Rachael Thomas Conservative Lethbridge, AB

Finally, could you just provide a brief comment with regard to the opportunities for autonomy that the forestry industry and other natural-resource industries offer you as indigenous communities?

12:05 p.m.

Corporate Development and Administration Officer, Meadow Lake Tribal Council Industrial Investments

Tina Rasmussen

That's a huge one for us: 31% of the people working in the forestry industry are either first nation or Métis. The number of people and families it is impacting is tremendous. That includes the people who are working in the harvesting companies and the trucking companies. The forestry industry in northern Saskatchewan and the ability of MLTC to participate in it has created a pathway for first nations communities.

We have two first nations communities: Canoe Lake and Waterhen Lake. Both have very large timber harvesting corporations and run their own trucking companies. That wouldn't have happened, I don't believe, if a multinational owned and was running NorSask Forest Products.

I think about 38% of our population working in our sawmill is aboriginal. We can't influence those things. As an aboriginal shareholder owning a company, we have direct influence over those things so we're able to make tremendous strides.

Even in the new bioenergy facility, right now we have—

12:05 p.m.

Liberal

The Chair Liberal James Maloney

I'm going to have to ask you to wrap up again, Ms. Rasmussen. I apologize for interrupting, but that's my job.

12:05 p.m.

Corporate Development and Administration Officer, Meadow Lake Tribal Council Industrial Investments

12:05 p.m.

Conservative

Rachael Thomas Conservative Lethbridge, AB

Thank you.

12:05 p.m.

Liberal

The Chair Liberal James Maloney

Thanks, Ms. Harder.

Mr. Sidhu, you are the last up in this round.

12:05 p.m.

Liberal

Maninder Sidhu Liberal Brampton East, ON

Thank you, Mr. Chair.

Thank you to our guests—Mr. Roberts, Ms. Rasmussen and Mr. Bromley—for taking the time to be with us today.

I'm sorry, Ms. Rasmussen, that you keep getting cut off, but I know you briefly mentioned the bioenergy centre. I was hoping to hear more about that centre that is currently under construction. I understand that you may be nearing completion within a year's time and that federal funding has accounted for more than half the total project costs—so $52 million has accounted for more than half your total project costs.

Can you please tell us more about this bioenergy centre, the types of technologies being deployed here and the economic potential the centre represents, not only for your nine-member first nations communities, but also for Canadians?

12:05 p.m.

Corporate Development and Administration Officer, Meadow Lake Tribal Council Industrial Investments

Tina Rasmussen

Yes, the bioenergy centre will be completed probably by December 2021. I invite you to check it out. You can watch it go up completely online at www.mltcbioenergy.ca.

Yes, the government contributed $52.5 million. That equates to about 75% of the overall cost of construction of this facility and, quite frankly, if they hadn't contributed, there would be no facility. There are not enough dollars in the coffers of MLTC and in our first nation communities to be able to take on this type of endeavour.

As most of you, and in particular Mr. Roberts, will attest, the sale of energy is very low cost and has very little return. At the end of the day, we're only going to end up returning probably about three-quarters of a million dollars to our nine first nations communities, so the revenue is not a lot, but to us as first nations people, it's important to see that timber product from the beginning to the end and to get the absolute most use, the most revenue and most jobs, we can out of that product.

I'm sorry. I missed what else you wanted to know about the energy centre.

12:05 p.m.

Liberal

Maninder Sidhu Liberal Brampton East, ON

I know it's a very impressive project. Do you see potential for future projects similar to bioenergy centre for other indigenous communities?

12:05 p.m.

Corporate Development and Administration Officer, Meadow Lake Tribal Council Industrial Investments

Tina Rasmussen

We would hold it up as an opportunity for all indigenous communities, but as I said earlier, the issue is how do you afford to do it? Selling the energy doesn't make it economically viable; it has to be supported by governments.

This went through a grant process. We received $52 million. As I said, it wouldn't have happened if we hadn't received that, simply because these projects are not economically viable on their own.

I think as Canadians we need to work on that, and as a government we need to focus on ensuring that if this is the way we're going we're supporting this.

12:10 p.m.

Liberal

Maninder Sidhu Liberal Brampton East, ON

Thank you, Ms. Rasmussen.

Powering homes with greener energy is definitely critical. We have heard that NRCan's indigenous forestry initiative has been widely popular and is often oversubscribed. It is a program that provides financial support for indigenous-led economic development projects in the forestry sector.

Have you been able to take advantage of this program? What type of feedback for the program would you have going forward?

12:10 p.m.

Corporate Development and Administration Officer, Meadow Lake Tribal Council Industrial Investments

Tina Rasmussen

Yes, we have. We are currently using the grant program to the tune of about $3.4 million. For NorSask Forest Products it has been very, very helpful. I think if you look at the program itself, you will see that a lot of the aboriginal communities or indigenous groups that have been accessing it have done so for relatively minor amounts of money. The grant program, although helpful, is more about doing studies and gaining better understanding of land use and a lot less about building infrastructure and creating economic development.

If there was anything I'd say about it, it would be that it's definitely a needed program but it really needs to have more flexibility added to it in terms of what the revenue and the grant program are actually used for. The amounts of money could also be looked at. I mean, this is not an industry that takes a little bit of money to get into, even when you're talking about new potential....

12:10 p.m.

Liberal

Maninder Sidhu Liberal Brampton East, ON

I appreciate that. Thank you so much, Ms. Rasmussen. You were very, very helpful—

12:10 p.m.

Liberal

The Chair Liberal James Maloney

Mr. Sidhu, rather than my having to interrupt witnesses again, I'll interrupt you this time.

I think that's all the time we have in this round. Thank you to—

12:10 p.m.

Bloc

Mario Simard Bloc Jonquière, QC

Would I have time to ask a very quick question, Mr. Chair?

12:10 p.m.

Liberal

The Chair Liberal James Maloney

Well, I extended the hour already to account for the technical difficulties we had at the beginning, and we do have a second panel waiting, so we really are beyond our time. Unfortunately, we'll have to move into the next hour. I apologize for that, but we are somewhat limited. We have some time at the end, which we'll make up in the next panel.

I'd like to thank all three witnesses for joining us today. We really appreciate your taking the time to offer your contribution.

We'll suspend while the next panel gets ready.

Thank you.

12:15 p.m.

Liberal

The Chair Liberal James Maloney

All right, everybody, we can resume. Welcome back.

I want to welcome our three new witnesses and thank them for joining us today. From the Alberta Forest Products Association, we have Jason Krips; from the British Columbia Council of Forest Industries, Susan Yurkovich; and from the Quebec Wood Export Bureau, Sylvain Labbé.

Thank you to the three of you for taking the time to be here. I will give each of you up to five minutes to deliver opening remarks. Then I will open the floor to questions from around the table. You are free to speak in either official language. Translation services are available.

I will warn you in advance that my job is to be the chief interrupter. If people go on longer than they're supposed to, I will be rude and interrupt and kindly ask you to wrap things up.

On that note, I will go in order of your names on the schedule.

Mr. Krips, why don't you start? Thank you.

12:15 p.m.

Jason Krips President and Chief Executive Officer, Alberta Forest Products Association

Great.

Thank you very much, Mr. Chair and committee members. I really appreciate this opportunity.

In the forest industry we're proud of the work we do and the products we make. Forestry is vitally important for our lives, whether it's building materials for a safe place to live; pulp for essential services and products like PPE, laboratory filters and food packaging; and sustainable energy to keep the lights on in the cold Canadian winter, even in cloudy Vancouver.

I'd like to add to that: a secure and sustainable livelihood for 230,000 Canadians who work in our industry, not to mention the additional 370,000 Canadians whose jobs are created by our economic activity. That's 600,000 jobs in total, dependent on forestry in Canada. People can feel good about those products and jobs. They're contributing to the management of the most sustainable forest resource in the world, a resource that's part of the solution for our climate change and a vehicle to get us to net zero.

In terms of the economic side, our forest industry is key to the recovery right across the country, but in Alberta it's even more acute. We've seen our economy decimated by the downturn in the energy industry. Rural communities have been hit especially hard with many resource jobs disappearing. Forestry communities, though, have faired much better. Our industry supports 40,000 jobs throughout the province, and they're stable, well-paying jobs. For many families, forestry has been a harbour in the storm.

Our industry is stable, but we do have real needs to maintain our vibrant future.

First, I'd like to look at the positive steps. I think that governments, both federally and provincially, have taken positive steps for forestry in Alberta, and indeed right across Canada. Minister O'Regan announced nearly $70 million to support pine beetle control work in Alberta. This work is absolutely essential to the forest health nationwide. I know that Ms. Yurkovich and our colleagues in British Columbia know all too well the destruction of the mountain pine beetle from both an environmental and economic perspective. By helping us to hold the line in Alberta you're helping to prevent the destruction that is occurring in forest communities across this country. We really want to acknowledge Minister O'Regan and his excellent departmental officials at Natural Resources Canada for this important funding.

Second, we are appreciative of the Government of Canada's recognition that forestry is part of the solution to climate change. We are encouraged that the throne speech identified foresters as the key personnel in this fight, and committed to planting two billion trees. We will partner with you on these initiatives every step of the way.

On the need side, the first and most pressing item for our industry is to maintain access to the land base. Without that land base and a stable supply of wood, nothing happens in the forest. Investments don't happen, jobs don't get created and products that the world needs won't get manufactured.

One of the real challenges to maintain that access and those jobs is the Species at Risk Act. This is a prescriptive piece of legislation that often calls for drastic steps. The real challenge is that there doesn't seem to be much of a 30,000-foot approach present. One day you're forced to take drastic measures that help one species but may not be beneficial to another. A year later a different species comes up for review and a whole different set of measures are on the table. It's a tunnel vision approach, and for our industry it's really damaging. It's difficult to know where we're going, and many of the measures restrict access to the land base. It's difficult to make investments and plan for growth.

We need an approach that looks at the land base and our species holistically and drives toward the broader goal of healthy landscapes and forests that support a diversity of species. It's time to end the prescriptive, one-off approach and move to something more sustainable for both the environment and our economy. It's time to consider overhauling the Species at Risk Act and transitioning to a multi-species approach.

It's also time for a firm commitment to a working forest. By that I mean forests that are managed collaboratively by government, communities and foresters.

We need to recognize that sterilizing our land base by excluding forestry and other resource industries is not a tenable solution. It will lead to unhealthy landscapes that are susceptible to forest fires and pest infestations. These events will not support species biodiversity and will harm recovery efforts. It will also hurt communities and undermine Canada's economic recovery. It will take the greatest tool on the fight against climate change out of our hands: That tool is sustainably managed forests.

We know that forests that are carefully planned and managed through harvesting and replanting are much more effective carbon sinks than those that are left untouched. Harvesting older forests and sequestering carbon in our homes, buildings and products that we use every day allows for planting of new forests. These new forests capture carbon as they grow, and that growth and sequestration is the best way to achieve our net-zero goals.

By committing to a working forest, we're doing the right thing for our communities. We're doing the right thing for our economy, and we're doing the right thing for our planet.

Thank you very much for your time and attention this afternoon.

12:25 p.m.

Liberal

The Chair Liberal James Maloney

Thank you very much, sir. That's right on time.

Ms. Yurkovich, maybe you can go next.

12:25 p.m.

Susan Yurkovich President and Chief Executive Officer, British Columbia Council of Forest Industries

Thanks very much, Mr. Chair.

We appreciate the opportunity to be here this morning, or this afternoon, and while much uncertainty remains as to the health and economic crisis and what it holds for Canadians in the months ahead, what is certain from our perspective is that the forest industry, like industry here in British Columbia, like across Canada, is well-positioned to help Canadians get back to work, to lift communities up and to deliver low-carbon products that the world wants.

The pandemic initially forced mill shutdowns, but operators were able to put safe work practices in place to get back up and running much more quickly than consumer-facing industries. Strong demand fuelled by home renovations and rising housing starts also helped, allowing many families to get back up on their feet and demonstrating how our sector's deep roots and resilient supply chain are critical to our collective economic recovery.

As Jason said, B.C.'s forest industry also has a huge economic impact here. It accounts for a third of B.C.'s exports. It's $13 billion in GDP and about $4 billion in taxes annually that fund important health and social services; and in 2019, our companies at COFI purchased $7 billion worth of goods and services from 10,000 suppliers in 340 communities across our province. While many people will think of that as just being rural and remote communities, it will be interesting to know that Vancouver had the highest spend for the forest sector last year. All of this is to say that our industry is going to be the cornerstone of the economy and critical to our economic recovery, whether you are in Prince George, Campbell River, Victoria or Surrey.

However, while we have weathered this crisis in the short term relatively well, we face foundational challenges that predate the pandemic, including rising costs, regulatory complexity, trade volatility and growing global competition. Therefore, as your committee here today considers the important role that our sector can play in our collective economic recovery, we'd urge you to focus on the following five key actions.

First, as Jason said, it's critically important that we invest in and protect our working forest land base. In British Columbia, about 52% of the land base has some form of conservation value on it. That's a huge commitment. It makes B.C. a great place in which to work and it's a model for sustainable development, but in addition to the conservation values, we also value our renewable forest resource for the jobs and opportunities it provides to families and communities.

Secure access to fibre at a reasonable cost is the single biggest factor that can help attract new investment and contribute to economic recovery. That's why we think that, just like parks and protected areas, we should decide on the size of the working forest and then lock it in. Once we've done that, we need to explore innovative ways to manage the forest resource.

We are already an industry leader in forest certification. We're employing new technologies and are ready to roll up our sleeves on the two-billion tree initiative, but managing in a world of climate change is going to require us all to take a fresh look. There are new ideas that need to be explored to improve the health of our forests, our industry, our communities and our country.

Secondly, we want to have good rules that protect our environment, but right now, forestry in B.C. is governed by close to 60 federal and provincial legislative statutes and regulations: layers of complexity that create uncertainty, add costs and impair our ability to compete. We need to increase coordination and eliminate redundancies without jeopardizing environmental protection, and we'd welcome the opportunity to work collaboratively to make changes where it makes sense.

The third critical priority is our partnership with first nations. In B.C. today, we have 5,300 indigenous people who are directly employed in our sector, with many more in business-to-business relationships, joint ventures, forest management, and so on. We're very proud of the relationships established over many years, but we know there's a lot more work to do. As we work towards reconciliation and the implementation of the UN declaration, it's critical that we do this work together to make sure we get it right, to make sure the outcomes are clear, and to make sure that we create the conditions where all can prosper.

Fourthly, as we look to the future, we need to double down on both market and product diversification. Over the last couple of decades, working with the provinces and federal governments, B.C. has led the charge to expand our market, particularly into Asia where we now sell 30% of our products. That reduces our reliance on the U.S., where we continue to face punishing tariffs.

Our partnership with NRCan really can be seen as a gold standard on how to create partnerships and get results. However, developing new markets and products is not a short-term game. It requires years to develop product familiarity, codes, standards and market acceptance. We believe that must continue.

Finally we would say that the time is absolutely right to aggressively build on our reputation as a green leader, a world leader in building with wood. There are incredible examples of low-carbon wood construction across our country. We have people, resources, know-how and the ability to lead the world. We can be the place that the world looks to for the next big idea on how to use the resources that come from the forest in a way that has a lighter climate impact. We need to pursue opportunities to grow demand for our home-grown products, incent the development of mass timber, help builders navigate the building codes and create more awareness about the incredible benefits of building with wood. By doing that, we will also create new kinds of jobs for the next generation of forest workers, which is something I think we're all excited about.

There's a big task ahead for you all. Lifting our economy up after this unprecedented blow will be hard, but the forest industry can and will play a significant role. You can help magnify that positive impact by helping to address some of the fundamental challenges we face, and, importantly, by championing this industry as we work to leverage our low-carbon forest products as a climate-change solution for the world.

Thank you. I look forward to the questions.

12:30 p.m.

Liberal

The Chair Liberal James Maloney

Thank you very much.

Mr. Labbé, we will go over to you, for five minutes, please.

12:30 p.m.

Sylvain Labbé Chief Executive Officer, Quebec Wood Export Bureau

Thank you, Mr. Chair.

I would like to thank the Standing Committee on Natural Resources for this opportunity to talk about the economic recovery.

The Quebec Wood Export Bureau represents an industry association of approximately 200 companies in five sectors of the wood industry: softwood lumber, hardwood, flooring, energy pellets, and the manufacture of wood constructions and building products.

I'm going to talk about the importance of our industry. According to a recent PricewaterhouseCoopers study conducted in Quebec, our industry represents 142,000 jobs, contrary to the figures that were previously reported. It's made up of three sectors: forestry operations, which represents about 20,000 jobs; pulp and paper, which represents about 55,000 jobs; and wood products, which represents about 65,000 jobs. What's interesting is that the wood products sector represents about 970 companies. However, two-thirds of the jobs in the wood industry come from the secondary manufacturing value-added products sector in Quebec, which accounts for 63% of the companies in the sector.

I'll come back to the diversification strategy we discussed. As you all know, we've been dealing with the softwood lumber dispute for over 20 years. This is our sixth conflict. There are two ways to diversify the Canadian industry: either we sell our softwood lumber products to other foreign markets or we sell our softwood lumber products to make new value-added duty-free wood products. Both options have the same result: reducing the pressure of the conflict with the United States.

For the industry in western Canada, the Asian solution was ideal. Our friends in British Columbia have done a fantastic job over the last few years developing the market in Asia. For eastern Canada, the solution is more difficult geographically, and will instead be to create value-added products, which will then be exported both to the United States and overseas. It must be said that this production creates four times more value added than lumber. In addition to increasing our exports, we create more jobs. The American and global demand for this type of value-added product is growing strongly, due to the scarcity of labour and the increased use of wood in construction for reasons of fighting climate change.

This strategy was established in Quebec in 2016. The objective was to increase exports of value-added structural products from $400 million to $3 billion by 2030. In 2020, exports are worth $400 million; in 2014, they were worth $200 million. So exports have doubled, and we want them to increase to $3 billion.

Lumber industry exports to the United States are approximately $1.5 billion. By taking one-third of that, or $500 million, and making structural products, we get four times that value. We get $2 billion worth of exports. That's the strategy we've been employing for the last three years. There's a lot of work ahead of us, but the outlook is excellent.

Construction in North America will be a key component of the recovery. According to economists, it will be a V-shaped recovery. The fundamentals are all in place in the United States for a very strong construction recovery. With housing starts lower than historical averages, there is room for growth. There is also a new craze for single-family homes outside urban centres. COVID-19 is creating a phenomenon: everyone wants to get out of the cities. It's a new trend.

Measures to combat climate change are also being refined around the world, mainly in Europe, creating additional demand for wood construction, which is preferred over other more energy-intensive materials. In this regard, I fully agree with Mr. Roberts, who spoke this morning. We have gone to great lengths to develop policies for materials or technologies to increase wood construction.

I think we need to move to a performance stage and stop talking about materials and technologies. Instead, we need to put in place policies that include performance obligations in terms of carbon emissions in kilograms per square metre and energy expenditure in kilowatts per square metre, and let industry do its job. I am telling you that the wood industry will win hands down and our market share will grow.

This is more noble than trying to impose prescriptive measures. In the long term, as Europe has shown, when performance measures are put in place and everyone has the right to achieve this performance, the results in terms of growth in wood demand are greater than those of a prescriptive policy.

In terms of the drivers of success for this industry, there are four—

12:35 p.m.

Liberal

The Chair Liberal James Maloney

I'm going to have to ask you to wrap up very quickly, sir.

12:35 p.m.

Chief Executive Officer, Quebec Wood Export Bureau

Sylvain Labbé

Okay.

There are two elements to achieve this: marketing and exporting. There is the program—