Natural Resources Committee on Dec. 7th, 2020

[Devin Dreeshen]

In Alberta, the forestry sector is our third-largest resource sector. We have about 40,000 people who are employed every year within the sector. We want to ensure we can always promote the industry.

I was still a little hazy on the translation, but I believe the overall question dealt with the importance of forestry to the province.

The translation wasn't actually coming through on my feed, so I was going on my very rusty French. I apologize.

[Mario Simard, Bloc, Jonquière, QC]

No worries. You're experiencing what a francophone does constantly.

I have a quick question for Ms. Nicholls.

We have spoken to several stakeholders in the field. You have indicated a willingness to move towards more value-added products. We were told that what is marketed in British Columbia is mostly commodity products. To that end, there's a program that supports market development, and British Columbia is going to get the lion's share, with close to 80% of the envelope. We know that this program doesn't emphasize value-added.

Would you agree that we should redesign the program to include incentives to make value-added products?

[Diane Nicholls]

Yes, I would suggest a different approach in the sense that B.C. very much benefits from the program that you infer. It is around commodity, dimensional kinds of products, and certainly mass timber, which is very important to the province of British Columbia and others across Canada. We need that support ongoing.

I would also suggest that to move the dial across Canada, and certainly in British Columbia, into some of these new products, we need to really create the demand and the awareness that those products are there, that they are greener products and that they are better for greenhouse gas emissions than petroleum products.

I know that's difficult sometimes because you're trading one industry with another, but I think it's really about the health of the planet and the opportunities that exist.

Yes, it would be lovely to have a program that creates those markets and brings the demand for these new products just as much as we need the continued support for the conventional products we produce.

[Mario Simard, Bloc, Jonquière, QC]

Further to what you just said, would you also agree that if we had carbon footprint standards in government procurement contracts, as is the case in several European countries, then perhaps we would have had an easier time selling wood products?

Would you support the idea of including a carbon footprint criterion in federal government procurement contracts?

[Diane Nicholls]

On the carbon footprint, in British Columbia we have carbon targets, just like the federal government does, in our CleanBC plan. Certainly long-lived wood products fit into that. As well, certainly planting of trees and doing forest management the right way feed into that, wildfire mitigation being key to that and the utilization of the fibre rather than burning it in slash pile burnings.

If I'm understanding your question correctly, with regard to a requirement of a sequestration amount attached to products as a way of benefiting or promoting more of a demand, I think that is one approach.

I also think there are opportunities for possible incentives from government. When you look at the building codes and how we got wood construction happening, you see there was an incentive around changing the building codes nationally. Then the provinces followed, and that allowed for an emergence of wood-building construction, architecture training, engineering training, fire safety training, etc., to make that happen. Now we're going upwards in those building codes, and that's progressive.

I think if we had incentives in play not just regarding the utilization of mass timber and changing building codes and pushing that advancement, but also regarding bringing in the elements of maybe a percentage of wood biomass used in building so that everything from insulation to bioplastics in buildings to biomaterials and/or biochemicals.... We can use wood filaments in concrete rather than glass filaments, as an example. We could create some innovative structures—

[The Chair, Liberal, James Maloney]

Thank you, Ms. Nicholls. I'm going to have to stop you there.

Mr. Cannings, it's over to you.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

I'd also like to thank all the witnesses who have come before us today.

I'm also going to identify as a B.C. MP and address my questions to Ms. Nicholls, at least in this round.

You talked several times about this concept of the right fibre for the right product, and mentioned ways, I think, that the Government of B.C. is trying to incent pathways to open up new uses for parts of the tree that we haven't been using very much, taking slash piles or whatever and using them for better products rather than burning them.

I'm just wondering if there is a B.C. policy or strategy to make sure the really valuable logs go to their highest use. I hear from sawmill operators, especially smaller ones, all the time that they have trouble accessing large, old-growth logs that are being used for pulp and paper, or something like that, or sent to wood pellets....They would like to be making big beams from them, or two-by-tens or two-by-sixes, instead of having them just ground up and used in pulp and paper.

I'm just wondering if there's any strategy in the forest service in B.C. to really not just incent that to happen but to actually push and force that strategy.

[Diane Nicholls]

Yes, we do have elements in our policy and our regulations that help that. Most of how the wood is used is based on business-to-business operations.

Sawmill operators are making dimensional lumber, two-by-fours.... If it's a high-value log for that product, they will be utilizing it for that product.

Some of the smaller operators have difficulty with the pricing that's being asked for certain logs that they would like to get their hands on. Others will pay. It's a competitive market, is what I am saying. We can't always get what we want all the time.

However, there are penalties if a pulp mill is utilizing two-by-four material or material that should be going to others.

B.C. is looking at ways of strengthening that and is working with industry on trying to find the best path forward on strengthening that so that we have a diversity of not just large producers but also small community-based producers. We've made some recent legislation changes and policy changes that we're just implementing now to see what kind of effect they will have. That's going to be very important going forward.

When we talk about slash pile burning alternatives for that fibre and/or those harvest residuals that are left on site, right now those are not being used, other than under the forest carbon initiative, where we've been able to bring the slash out of the woods and find a home for it. There is a real opportunity there to make sure that the fibre gets used.

When I say “right fibre, right place”, it gets back to that circular forest sector economy, as in “Let's not just take it and put it into burning for energy, but let's take it and try to make these other higher-value products first, and then use the residuals in burning for energy.”

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

In terms of burning for energy, I have a company that's working in my riding in a brownfield site to build a renewable natural gas product from forest residuals. I realize that we've heard from other witnesses that burning two-by-four material for energy is definitely not the best step forward, but when we're burning those residuals.... I am just wondering if that's a trend you see happening across the province.

As I say, I have this one company that has plans for three of these sites in my riding alone. I'm just wondering if you're promoting that or incentivizing that, and whether you see that as one of the paths forward, taking material that would be burned in slash piles to create renewable natural gas that FortisBC is really looking for sources for.

[Diane Nicholls]

As I said earlier, I think it really is a combination of products that we want to develop.

Certainly, renewable natural gas and/or the pellet industry for energy, shipping overseas and exporting are very helpful globally in the sense of getting us off coal and moving us to a cleaner energy fuel source, so it helps globally.

My concern is that we don't want to be using whole trees that will go into a pellet facility and into energy. We want to focus on using the whole tree in the right way so that two-thirds of it goes to our commodity-based dimensional products and the top third goes into that energy production, for example.

I think that every product has a place and that every area and region is different and specific. I think we have to pay attention to where the opportunities are the right fit for the right reasons. I think there is an opportunity, and the signals from both Canada and B.C. with regard to renewable natural gas have shown us that this has attracted investment.

My personal opinion is that we need to do something similar for these new products that people are less aware of—these bioplastics, biomaterials and biochemicals that actually have a higher value per cubic metre—and to receive benefits for the province and Canada. However, they're less known, and they're less recognized as being tried-and-true technologies. Globally, there is a big surge now for pellets. There are a number of markets—certainly the Asian markets, particularly Japan, and Scandinavia—that are looking for a pellet supply, and that's forging a big push in British Columbia and a big interest in investment to go into that square.

Over time those—

[The Chair, Liberal, James Maloney]

Thank you, Ms. Nicholls. Unfortunately, I have to stop you again.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

[The Chair, Liberal, James Maloney]

We'll move now into the five-minute round.

I will remind our panel members that the industry exists east of British Columbia too. Keep that in mind in asking your questions.

We'll start with Mr. McLean.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you, ministers and officials, for coming in today and sharing some of your information with us. It's very interesting.

Minister Dreeshen, you talked about competitiveness in the industry in Alberta and how it is a driving force in the expansion of the industry. Congratulations on the industry's role in the economy growing, at this stage especially.

Can you tell us how the carbon fuel standard might affect that competitive nature vis-à-vis our competitors in the United States?

[Devin Dreeshen]

The clean fuel standard is something our industry has had concerns about here in Alberta. Originally, burnt wood not being allowed as feedstock was something that concerned them. There seem to be some positive moves on that, which is good from a smaller-scale level. One of the biggest issues our industry has, and our government has, is the duplication it has for our regulation. To have the clean fuel standards create a new framework for environmental and biodiversity standards...we don't think there is a need to have two sets of regulations that ultimately do the same thing.

I'd be happy to table with this committee our sustainable management framework in Alberta that does everything that we've heard the clean fuel standards would like to do. I just don't see how that's a prudent regulation or decision-making process to have another level of government duplicate a regulatory framework or regulations that the provincial governments have the authority to do, and are already doing.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you, Minister.

Can I pose the same question to Minister Yakabuski as well, please?

[John Yakabuski]

I could pretty much give you the same answer as well. We also have our concerns with the clean fuel standard, because this is a provincial responsibility.

The government has worked with Natural Resources Canada, Global Affairs Canada and other provinces to promote the sustainability of our forest management legal and policy frameworks in forest products markets throughout the world. We're concerned that a duplicative system from the federal government would only serve to confuse international investors and raise doubts about whether or not our industries are supported and supportive. We're asking why it's necessary for the Canadian government to add additional requirements in order to ensure sustainability. We have, we're convinced, the most sustainable industries out there. We're very proud of the way we conduct them here in Ontario.

In terms of a clean fuel standard that is the purview of the provinces, we believe the federal government should be supportive of ours and not actually duplicating it by imposing its own.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you very much.

Ms. Nicholls, you talked about more jobs...more efficient than biofuels. I wanted to explore the biofuels versus the wood fuels. I presume you mean biofuels from wood versus biofuels from grains in terms of more jobs. Is it more economically viable to get biofuels from wood than it is from feed grains?

[Diane Nicholls]

No. We've done some work with both our economists and Canadian Forest Service economists. When you look at the amount of renewable natural gas that's being produced globally, most of the feedstock is corn and whatnot. It's much more efficient, effective and cheaper economically. When you're looking at the best use of fibre and wood biomass, it may not be in the fuel realm. It may be in some of these other realms where the structural components of wood are very helpful, versus the structure that corn...that we can't compete with.

[Greg McLean, Conservative, Calgary Centre, AB]

I probably only have time for one quick question.

When you talk about forest management, forest management includes residues on the forest floor. Of course, forest management means limiting forest fires, yet the two seem to overlap. The more you get forest management, the more intense your forest fires.

Where's the balance here? When you talk about cleaning the forest floor, which is slowly emitting carbon, taking that forest residue and quickly burning it, so emitting that carbon very quickly, therefore maintaining the viability of the forest that doesn't burn as intensely in an unmanaged forest fire.... Where's the balance here, as far as the carbon that stays in the earth to feed the next growth of carbon-reducing trees and the carbon that is swept up and burned or processed quickly?

[Diane Nicholls]

That's a really complicated question. It would take longer than two minutes.

[The Chair, Liberal, James Maloney]

It's going to have to take about 30 seconds.

[Diane Nicholls]

It is a balance. What we manage for is a variability of mosaics across the land base so that we have that diverse, opening-closing forest management, fire mitigation and all those practices combined in a balanced effect so you have transition across your landscape.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you.

[The Chair, Liberal, James Maloney]

Mr. Lefebvre, over to you for five minutes, please