Natural Resources Committee on Nov. 23rd, 2020

[Maxime Cossette]

We've had support for certain of our facilities from the federal government mainly, where we had to go through shutdowns because of the difficulty with the coated paper and publication paper market.

On one side of the Kruger company, it was very difficult, but on the other side, as Mr. Verreault just mentioned, we are the biggest tissue manufacturer in Canada, and clearly we've seen a lot of people hoarding toilet paper and paper towels. We've seen our inventory drop quite drastically, which puts some pressure on us to speed up the launch of our new $600 million facility in Brompton, Sherbrooke, which will produce top quality paper towels, tissue paper and facial tissues.

[Bryan May, Liberal, Cambridge, ON]

Thank you.

I don't see Mr. Fehr back on. Am I correct in saying he's not on? I'll maybe turn it over to the other gentlemen. I believe it was Mr. Baarda who joined in as well.

[Brian Baarda]

Yes, I'm also with Peak Renewables. I think Mr. Fehr must have stepped out or something like that.

Regardless, we're a start-up company, and as a start-up in the middle of COVID, I'd say the main challenge has been being able to effectively meet with people. During the pandemic situation, it's very tough to create the momentum to get a company really up and going and started. Having to do things as well as this particular process we're doing today works. It becomes that much more challenging as we try to start up a business and create investment in B.C. and other places in Canada.

[Bryan May, Liberal, Cambridge, ON]

Thank you.

[The Chair, Liberal, James Maloney]

Thank you, Mr. May. That's all your time, unfortunately.

We go over to you, Ms. Harder, for five minutes.

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you so much, Mr. Chair.

Mr. Kalesnikoff, my question is for you. You've provided us with some interesting information today with regard to the forestry industry. In one of your comments, you said that you didn't want to be a conspiracy theorist, which I can respect. However, there is evidence that organizations like the Rockefeller Foundation and the Tides Foundation have pumped a ton of money into Canada and hired summer students to help them with their cause, including creating rallies to stop pipelines.

There is also evidence that they've influenced the forest industry. I'm just wondering if you'd like to talk about that more.

[Ken Kalesnikoff]

Again, it is a subject that I believe is real. I've heard enough times that it is actually happening, and it is very frustrating. When you look at just the election, you could see that their ability to manipulate things is pretty significant.

I guess what I would ask is that we have a way of just telling the real story. I think that's so important, so as not to have the people of Canada swayed by an influence that has an agenda.

As I said, I'm trying to remember her name and I can't remember it, but she did a presentation that I listened to, and she did a fantastic job and was able to connect those dots.

I don't know what a government could do to prevent that. I don't know if you could stop funding from outside sources, or if we should be taking the high road and just spending a lot of time, energy and money promoting the industry the other way, which is just the truth. What do we actually do? What are the things that we do very well? That's what I would rather see us doing, if it were possible.

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you.

To that end, you mentioned that right now you're seeing is a lack of leadership. You said it's an issue of leadership in response to the misperceptions and misinformation being propagated about the forest sector. You also mentioned the fact that the government has a key role to play in making sure that people have accurate information at their fingertips.

Now, the following words are mine. I understand that they're not yours, but I would say that the current government has participated in perpetuating that misinformation, basically targeting certain organizations, particularly those within natural resource sectors, in order to prop up its agenda for climate change, etc.

Now what you're saying is that the forest industry is very helpful when it comes to taking care of the environment, sequestering carbon and taking out greenhouse gases. Can you just comment on that a little bit more? What exactly is the government's role in making sure that an accurate understanding is being put out there for the general public?

[Ken Kalesnikoff]

Let me start by saying that I'm not getting into a political discussion about who has done what the right way or the wrong way.

Locally here, we're not a big company, so I don't tend to get to Ottawa often and don't work so much at the federal level, but provincially I've worked with three types of governments—the NDP, the Liberals and the Social Credit—and to be really honest, they're all the same.

I haven't seen anyone take a particular leadership role that would promote the forest industry. I know that is a big undertaking because for every positive, there is an equal and opposite reaction, and so as much as I will sit here and tell you how good the forest industry is, because that's my love and what I've been brought up in, you will get a preservationist saying.... And I won't even give them the opportunity to be called “environmentalists” because, as far as I'm concerned, the guys who log for us up in the bush look after things so well, they're environmentalists.

The preservationists only have one agenda and that's to stop...and on whether the governments listen to them, and whether or not it sways their opinion or direction, I can't comment. I'm not that closely involved in it, but it needs to stop.

We just need to come down to the truth. My uncle Koozma's words haunt me every time I get into these conversations: “Take care of the land and the land will take care of you”. It's as simple as that.

We have the opportunity. We are not dumb people; we have the expertise. I think we've got a real opportunity here to have the forest industry play a vital role in both recovery in carbon, in climate change, and all of it.

[The Chair, Liberal, James Maloney]

Thanks very much, Ms. Harder. That's all of your time.

I don't know if you have a headset and if we will get back to you later in the meeting, but the interpreters were having a difficult time hearing you.

Mr. Lefebvre, over to you for five minutes.

[Paul Lefebvre, Liberal, Sudbury, ON]

Thank you, Mr. Chair, and hello, everyone.

I'm very pleased to be here. There a lot of great information.

I have the honour of being the Parliamentary Secretary to the Minister of Natural Resources.

By way of background, I'm from Kapuskasing, a pulp and paper town up in northern Ontario. My dad was a welder there and my grandfather helped build the mill back in the 1920s and 1930s, and my uncles and cousins all worked there, so I was able to afford an education. They're good-paying jobs, great middle-class jobs there, so I'm a big champion of the forestry industry.

I've seen it first-hand where it is: the people planting trees and cutting those trees, and the innovation in that sector. I have a lot of questions and very little time.

I do not have a lot of time. I am first going to turn to Mr. Cossette.

At the beginning, you spoke about the challenges facing the pulp and paper industry. What steps do you think you will be taking to adapt to the changes that are coming? How do you see the future of the pulp and paper industry? How will it go about innovation?

You have about one minute.

[Maxime Cossette]

In terms of innovation, we have to change our mentality. Everyone was manufacturing the same basic products and selling them at the same price. If the products were of good quality, we could put tons of them onto the market. That was the paper manufacturers' classic mindset. We have to change that mindset and pay more attention to the needs of the consumers, even if we are not selling our products to them directly.

When we say specialty paper, it is not just a trendy term. It means meeting the criteria of different clients. We have to diversify and innovate, but with the assets we have at the moment. As I mentioned, the investments required to transform a mill are extremely high.

[Paul Lefebvre, Liberal, Sudbury, ON]

Thank you very much.

That is the major challenge of this transition. We are talking about value-added products. It also applies to the pulp and paper industry.

Mr. Verreault, I am happy to see you again. I had the honour of visiting your plants...

[The Chair, Liberal, James Maloney]

I'm sorry. Can I stop you for a second?

I don't know if other people are having the same problem, but I'm hearing you louder than I'm hearing the interpreter.

[Ken Kalesnikoff]

Yes.

[The Chair, Liberal, James Maloney]

That's better. Yes, that's good.

[Paul Lefebvre, Liberal, Sudbury, ON]

Mr. Verreault, I was fascinated to see how much you have transformed the industry. When we spoke about two years ago, you were facing the challenge of meeting the demand. You saw enormous potential.

How have you met the demand? How do you see your future activities? How could the government support you in that continued expansion?

[Frédéric Verreault]

I am pleased to see you again, Mr. Lefebvre.

Generally, the demand is taking shape. It's somewhat of a paradox, because, in a lot of economic sectors, the need is for diversification, investments and jobs, but there is no market. In this case, there is a market, and it is mature and receptive.

Our little challenge is about skills in engineering and designing structures. We have to turn to solutions like immigration, which is lengthy and complicated. We have no quick way to meet our needs. That is the first challenge.

There is another. No engineering faculty specializes in the material in Quebec or in Canada. The market is certainly showing strong growth, but it is still too small to give engineering and architecture throughout the entire university family a shot in the arm.

For example, if, as government clients in Europe or the United States are doing, the Government of Canada were to recognize that wood does a good and effective job, if it stopped moving forward one project at a time, always comparing and choosing one over the other, firm assumptions could be made and it could be the change of course that engineering faculties need to really raise their game. At the moment, that is one of the obstacles to the growth of the business.

[Paul Lefebvre, Liberal, Sudbury, ON]

Thank you very much.

This is very interesting. We should follow it through.

Thank you to our folks from Peak Renewables.

You guys are obviously into the biomass and obviously working with the pellets. I really want to hear a bit more about the way you see this bioenergy space evolving and the potential for wood pellets.

Maybe you can share that with us.

[The Chair, Liberal, James Maloney]

Be very quick, please.

[Brian Baarda]

Thank you.

What we're seeing, particularly in Asia, are pretty significant increases in the demand for wood pellets as they try to get rid of coal, to eliminate the use of coal. We would love to see a similar type of action taken in Canada, for example, at coal-fired plants in places like Alberta and so on. It would be nice to see similar types of policies encouraging that type of action in Canada as well.

Of course, I think a lot of us would like to see the next phase of wood pellets, which would be black pellets or some sort of bioenergy such as LNG or hydrogen, but what I would say at this stage is that most of those types of products are in the very early stages of development, and for the clean energy types of programs, those types of products are what we need to deliver on for the Clean Canada and CleanBC types of initiatives.

[The Chair, Liberal, James Maloney]

Thank you very much, Mr. Lefebvre.

We'll go over to Mr. Simard for two and a half minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

Mr. Verreault, you wounded my pride a little because I am a former instructor at the Université du Québec à Chicoutimi. Among our number was Sylvain Ménard, one of the leading experts in wood infrastructure. But, in terms of skills, it is true that perhaps not enough structural engineers specialize in this issue. That's just my friendly comment to you.

I want to go back to what we were saying just now. You talked about a contract you had in the United States where some rules had been established that made wood easier to qualify. We talked about that here a few weeks ago, and it was a proposal that we made.

If the Government of Canada were to establish carbon footprint as a criterion for awarding contracts as part of its procurement policy, would that help, in your opinion? We know that there might be a little squabble if we tried to establish something similar to the Charte du bois. I know there is also a similar standard in British Columbia.

Does that solution seem helpful to you?

[Frédéric Verreault]

To help heal your pride, Mr. Simard, as you mentioned, the Université du Québec à Chicoutimi does indeed offer a perfectly fine graduate program in wood construction. However, it's really intended for very specialized, dedicated and focused professionals, whereas we need it to be normal to learn about wood, just as it is normal to learn about steel or concrete. We need your example to create a ripple effect.

In terms of the decision-making processes leading to construction using wood, as long as partial criteria are established—as we tiptoe around the issue—things become complex, lengthy, onerous and costly. It works well when private clients realize that wood does a better job and they dispense with all other comparisons. They have to specify at the outset that they want wood. Then competitors in the wood market will submit competitive bids.

Those are the circumstances that make projects quick, effective and completed within budget. That's where the Government of Canada clearly has the potential to make a difference. If it wants specific results, it must take specific action.

The education about the suitability of the material that my colleague Mr. Kalesnikoff was referring to will no longer be a debate or a rhetorical argument. We will have facts and figures. At that point, we will be able to move forward and build on a solid base.

[The Chair, Liberal, James Maloney]

Thank you very much.

Mr. Cannings, you have two and a half minutes.