Natural Resources Committee on Nov. 23rd, 2020

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you, Mr. Chair, and to all of the witnesses.

It's very good to hear about all of the environmental advantages associated with your businesses and how much you've added value historically to Canada, as one of Canada's traditional resource industries that continues to innovate and add value in the world. It's great to have you here and making sure that we get that point known.

I'll start with Mr. Kalesnikoff with a quick question on that narrative. How do we actually balance the narrative that we hear from so many groups, who are telling us all the time that the trees we're cutting down are causing significant environmental damage?

[Ken Kalesnikoff]

I think I'd like to start by going back to what I said earlier.

I think government really needs to take a leading role in nailing down the truth and a direction. If our focus is to do something by 2050, what is the exact path we're going on? Also, quit listening to the very vocal 20% who are out there sometimes.

This needs to be real. Every one of us wants to do the right thing, so what is it? Every time we say one thing, the opposite side will say the other. That's healthy and good for debate, and it's up to government to come up with the plan as to what is the right approach. What does government want to be able to make it right? We need a balance and we need to make it work.

Again, I'll just use the same example I used before. From what I understand—and I am not an expert—it's the young trees that use carbon, it's the old trees that sequester it, and it's a natural cycle. We need to really verify that, if that is the case.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you, Mr. Kalesnikoff.

My next question is for Mr. Fehr.

Mr. Fehr, you brought up the clean fuel standard. I want to drill into that with you. What fuel does your plant in Canada use right now?

[Brian Baarda, Chief Executive Officer, Peak Renewables]

I think Mr. Fehr is no longer on the line. Hopefully my microphone is working okay.

[The Chair, Liberal, James Maloney]

We can hear you okay.

[Brian Baarda]

Thank you.

You were asking what kind of fuel the plant in Canada is using.

[Greg McLean, Conservative, Calgary Centre, AB]

Yes.

[Brian Baarda]

The proposed plant in Fort Nelson will be using the residual waste from the wood we bring in to make the pellets. That will actually be—

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you.

That's the case in most of the plants around Canada.

[Brian Baarda]

Yes.

[Greg McLean, Conservative, Calgary Centre, AB]

Are you aware of how the clean fuel standard will affect the costing of your input fuel?

[Brian Baarda]

I can't comment on that at this point.

[Greg McLean, Conservative, Calgary Centre, AB]

Is that because you're unaware?

[Brian Baarda]

Correct. It's because I'm not up to speed on that.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you.

I'll go to Mr. Cossette.

Mr. Cossette, you talked about the capex and government grants required for your facility. Regarding the capex you require from the government on this, is that because on a stand-alone basis the capital requirements for refit or new construction aren't justified by the economics of the output, if you will?

[Maxime Cossette]

Well, as you know, pulp and paper is quite intense in terms of capital expenditure because usually what you do is you continue running your existing operations and take the free cash flow to fund your transformation. However, in a situation of a crisis like today, where basically your main source of funds is not there anymore because of the declining market, then the shift towards transforming your facility requires financial support if you want to make the economics work.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you.

Mr. Verreault, I have one question here, if I have the time.

You talked about replacing buildings with wood, and I think we all agree with that. The construction that will be replaced, for instance, cement and steel—industries that are supposedly making carbon justifications about how they're reducing their footprint, are obviously going to have less of the economy going forward here.

How do you talk to those industries about the jobs, particularly cement, if you will, if you think about how we've allowed cement plants to be built in Canada without environmental assessments? How do you compare the two?

[The Chair, Liberal, James Maloney]

We're actually over the time, but I'll give you time for a very brief answer.

[Frédéric Verreault]

We believe that demonizing steel or concrete is absolutely pointless and unproductive. Any timber structure needs concrete foundations and steel connectors. The materials complement each other and each one has its role.

Do we ask ourselves what happened to the jobs in the factories that made diesel vehicles? There is a natural evolution and a transition, and then a balance is achieved.

In all cases, it's not a matter of liking one approach or another approach but of achieving the objective of reducing greenhouse gases.

[The Chair, Liberal, James Maloney]

Thank you very much.

Ms. Jones, it's over to you for five minutes.

I'm afraid she may have lost the connection.

Mr. May, do you want to jump in here for five minutes?

[Bryan May, Liberal, Cambridge, ON]

Just to clarify, my riding of Cambridge in North Dumfries, has a lot of aggregate and cement. I can assure the previous questioner that there are absolutely environmental assessments done whenever there is a new facility built.

My question is a general one for any of the witnesses willing to answer. Obviously, COVID has had an impact on all sectors of the economy. How, in your opinion, has COVID-19 impacted your operations? Have you found support in any of the federal relief programs?

We can start from my left to right on the screen. Mr. Verreault, you can jump in first.

[Frédéric Verreault]

First of all, COVID-19 brought insecurity and the unknown. It is as if the floor beneath our feet became very unstable last March 11. We had no idea of the form everything would take in the days that followed, until the middle of April.

Support from the federal government, specifically the CERB, turned out to be a calming response, preventing panic and improvisation. It provided financial security that kept people at work.

That was a good thing, because the market for wood construction products, both residential and nonresidential, was extremely solid. We have packaging, paper towels, and all the sanitary products made from wood fibre. Those products complement our activities. In my opinion, the response was the right one.

[Bryan May, Liberal, Cambridge, ON]

Thank you.

Mr. Kalesnikoff, I'll ask you the same question.

[Ken Kalesnikoff]

I'll echo what Mr. Verreault said. I think the government assistance that we received through the programs at that time, back in the spring, was very helpful. We too felt the uncertainty and wondered how things were going to progress. We did take advantage of some of those programs, which was really good. I think a lot of us dealt with people out there who took advantage personally and decided to stay home and collect money, which was a bit frustrating, but in our area we did not experience that.

I think it's going to take more of that type of support from our federal government to help us get through this next wave. I think our biggest issue right now is going to be testing. We need to make sure we get the testing done quickly so that we can look forward on that and hope that the government continues to support us in the industry.

[Bryan May, Liberal, Cambridge, ON]

Mr. Cossette.