Thank you, Mr. Chair.
Thank you for the opportunity to speak about Kruger today. I'm corporate VP for sustainability, biomaterials and fibre at Kruger. I'm glad to be in front of all of you today.
As probably many of you know, Kruger is a fourth-generation, family-owned company. The third generation is still at the helm with Joseph Kruger II. His kids are in now as well, with Gene and Sarah being active on the board. Clearly, we believe we can be part of the whole decarbonization of the economy.
The problem we're facing today is that we're accelerating the development of bioproducts, but at the same time some of our main sources of revenue are declining at a rapid pace, much more rapidly than we anticipated, because of COVID-19.
While newsprint and coated paper were declining at a rate of 15%, roughly on a yearly basis, we've seen drops of over 40% since COVID hit us back in March. We're facing short-term challenges while we also need to work on longer-term challenges with the bioeconomy and bioproducts.
We've been very glad of the support we've had from different programs in the past, namely IFIT, and we believe this can be a very good vehicle for bigger projects moving forward. The size of the envelope right now makes it difficult to bring transformative projects into declining mills, and for which sales are not there anymore, to support the growth and transformation of the mill.
One of the main problems we have also seen in the past is a shift from plastic to paper in various different applications, one of the key ones being grocery bags and shopping bags where they want to phase out plastic. The fibre is there, the capacity to transform paper into recycled low-carbon footprint for those bags is there, but there is a big bottleneck in the converting capacity because back in the early 1990s, most of the paper bag manufacturers shut down their operations.
Today, we would also like to see this committee and the government try to support the converters further down the supply chain, which would then be positioned to take the product that companies like Kruger can put onto the market and transform it into low-carbon solutions.
Obviously, certain locations are more at risk. As probably most of you know, Corner Brook Pulp and Paper is the last operating mill in Newfoundland and Labrador. The situation right now, being a newsprint producer with COVID having hit, is that it's very difficult to continue at that pace. We need to get support from both the provincial and federal governments so we can keep those 500 plus high-paying jobs alive and keep a future for that mill.
We also believe that you have a very good mechanism. It's probably not the time—because we believe time is of the essence—to to try to develop and engineer new programs. We believe programs such as IFIT are the right vehicles again, but they need to have more funds and also be able to support higher capex projects for the future.
Finally, we believe that the forestry industry can be one of the main players to achieve that target of a carbon neutral country by 2050.
Thank you for your time today.
I will be glad to answer any questions you may have.