Evidence of meeting #5 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 right.
A recording is available from Parliament.
12:55 p.m.
Liberal
Yvonne Jones Liberal Labrador, NL
You're much more familiar, obviously, with the industry than I am, but are there options for actually increasing any of the value-added manufacturing right now in the pulp and paper sector in Canada or here in this province, either over the short term or long term?
Do you just see it as a matter of trying to maintain the competitive edge and keeping the doors open at this stage?
12:55 p.m.
Vice-President, Fiber, Biomaterials and Sustainability, Kruger Inc.
It's kind of the chicken and the egg. You need to think for the long term, but to be able to get there you also need to have a cash flow coming in for the short term. In terms of transforming a mill the size of Corner Brook, it's undoable to basically switch one paper machine to innovative products without the market's having been fully developed. You will not have enough cash flow from only one operating unit to support the growth and the marketing of the new product.
It's a difficult situation, but what we're working on with partners such as FPInnovations and others is to try to pilot scale certain novel products so that if the market is there, if the economics are there, then we can more easily develop and deploy at the mill site.
12:55 p.m.
Liberal
Yvonne Jones Liberal Labrador, NL
Obviously, you are familiar with several of the major projects that we've launched as a government over the last four years to support the forest industry in Canada and diversity in the industry.
From your perspective where you sit today—and this is a question for all of panel if there's time to answer it—what other measures do you think the federal government should be implementing to support the industry in these very unprecedented times, whether it's from COVID-19 or transitioning from market demands? I'm open to suggestions. Maybe it's about enhancing programs that are already there, but is there a gap that we're not filling?
12:55 p.m.
Vice-President, Fiber, Biomaterials and Sustainability, Kruger Inc.
Quite frankly, if you look again at the IFIT program, the team there is pretty knowledgeable about the forestry industry. The problem is the size of the envelope right now. I believe it has been recapitalized for a couple of years with $84 million. We need to be able to expand that envelope. I'm not saying do it only through non-repayable contributions. It might be a mix of repayable and non-repayable contributions, but if you look at a conversion project that you will cost you hundreds of millions of dollars, yes, you can go and get $5 million from IFIT, but I don't think it's going to change the economics of the project. We need to have access to a larger envelope.
Again, I'm not only asking for grants; we are open, and I'm sure the rest of the industry is open, to all kinds of mechanisms. As you might probably imagine, right now we're in a declining business and that going through a more traditional financing route is proving to be very difficult.
1 p.m.
Liberal
The Chair Liberal James Maloney
All right. That's all the time we have.
Thanks, Ms. Jones.
Thank you to all of our participants, particularly our witnesses. That was very informative and helpful. We're grateful for sharing your time with us today.
I will see everybody on Friday. I remind you that the minister will be attending on Friday afternoon.
Thanks very much.
The meeting is adjourned.