Natural Resources Committee on Nov. 22nd, 2022

[Jean-François Samray]

Well, I think the Canadian government is measuring all of its actions. What would be a subsidy would be something that would support some costs that are directly paid to the industry. The department is taking into account what is financed yearly by the Canadian government and what is financed by different provincial governments. There's also some review done yearly. There will be some hearings. We'll start them really soon. We'll have a good discussion on what is a support and what is not.

The U.S. is claiming that green electricity is a support to the industry when it is not. The way electricity is generated in Quebec is through a call for tenders. Then after that, all the electricity is put in a pool. Then it is sold to the different users. So claims that the Quebec government is subsidizing electricity to the industry are totally false. Quebec is using the same types of programs the States are using to back up some capacity. There's huge discussion on what is being claimed to be a subsidy and what would count as one.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thank you for that. I appreciate that.

I'm just wondering, for any of the witnesses who are here from the forestry side, if you guys have any comments around that. We've heard there are some misinformation campaigns towards the industry. I'm just wondering if you have any thoughts on that or could maybe just elaborate on what that misinformation is. Maybe it's on whether or not you are subsidized or what that might look like.

[Derek Nighbor]

I think there are two parts to that.

On the subsidies side, I think the Americans will try to call anything a subsidy. That's part of the exercise here. I know they have even claimed that one of our youth mentoring programs that gets some government funding is a subsidy. This is what we're dealing with. That's one thing.

On the misinformation campaign, I think there are a few streams here. I think on the misinformation campaign—NRCan is well aware of this—we're seeing some trends in terms of U.S.-funded groups. We can assume the motivation. Is it protecting U.S. industry? I don't think any of us can prove that. There's an uptick in action to stop accessing materials coming from Canada's boreal forest. One bit of the language we're seeing in the trend lines is “stop sourcing in primary forests”. Primary forests are defined as forests that have never been harvested before. We're a young country. We have a lot of them. In the boreal they burn in about 100-year cycles. Now let's talk about the loss of economic opportunity, critical infrastructure, community evacuation, and the carbon impacts of those fires. This whole issue of primary forests and not harvesting in primary forests is ridiculous. The context of that needs to be figured out.

On the other one, Canada doesn't have a deforestation problem. There are deforestation statistics around urban development, agricultural development and those kinds of things, as well as some forestry roads. But for the majority in forestry, it's regenerating and renewing. The deforestation piece doesn't work in Canada. The new term is degradation, which is not globally defined. You are degrading the forest. Well, what does that mean?

These terms on primary forests and degradation are a couple of the emotive, sensational terms that we're seeing in international campaigns against Canadian forestry to try to undermine it. I do know that NRCan is working in a global circle to try to address those two terms, if you will.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Okay.

Is there anybody else?

We have about 30 seconds.

Is there anybody else who would like to comment on that at all?

[Linda Coady]

I would just add to what Derek was saying about the U.S. Inflation Reduction Act. In terms of the billions of dollars—and it's all carrots in that act—and industry incentives for net-zero and clean electricity there's just a massive, if you want to say, “subsidy” or massive subsidization beginning to happen there as well. So it's a question of an equal playing field.

[The Chair, Liberal, John Aldag]

Thank you.

We're going to move to Ms. Dabrusin next for her five minutes of questions.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

Thank you. I want to pick up a little bit on the conversation that we had had earlier about mass timber and green buildings. I would ask Ms. Coady maybe to start.

When we're talking about the different ways to encourage green buildings and mass timber, there are a few different pieces that can come together. If we're looking at the certainty and creating the right market for more mass timber, what would you be suggesting we need? We've talked a bit about credits and tax credits. Are there regulatory pieces? Is it subsidies? Is it tax credits? What should we be looking at?

[Linda Coady]

It's probably—sorry, I'm having trouble here.

Derek, could you take that? I'm just having trouble here.

[Derek Nighbor]

I think it's a mix. I think some of that's on us in industry too in terms of working.... I'm giving a speech in Toronto to about 400 architects and engineers on Thursday to talk about forestry 101. And also it's the ability to scale up. I think we're seeing more mass timber capacity. There's now an Element5 plant in St. Thomas, Ontario. We have Chantiers Chibougamau in Northern Quebec. We've got a couple in the interior of B.C.

I think building that capacity is going to be key. I think the pandemic and the lumber price issue was a challenge there for a little bit for sure, but I think education and awareness. Even for electricians, how can you think at the front end of a building design about the mass timber opportunity and how does that change all of the work of electricians and whatnot throughout? I say this because it is new

I think a bit of that awareness is on our part. But definitely on the government side, there are tax credits, awareness through the GCWood campaign at NRCan, which is excellent, and continuing to promote the carbon benefit.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

Just to jump in, are you saying this is something ongoing that you think is going well, or is it something that's [Inaudible—Editor]

[Derek Nighbor]

Yes, it's going very well.

I think it's a mix of things. I also think, you know what, that the best thing this government and all MPs can do for Canadian forestry and mass timber is to talk more proudly about us. I'm always shocked when I'm talking to some MPs and they want to talk about forestry in the context of 2 billion trees or conservation. That's all really important, but I thought Bradley talked really eloquently about the fact there is conserving and protecting, and there's also managing. And if you look at the most recent state of Canada's forests report, if you look at the area we're managing and renewing, 25 times that land base is getting hit by pests and fires every year. We've got a massive fire problem. Look at California and what's going on there in forest management.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

I'm going to jump in. I'm really focused on the green building piece and I think we've kind of ventured away a little bit. How can we support promoting more of mass timber and green buildings? I just wanted to bring you back there.

[Derek Nighbor]

I think that where I was going is that you can't build green buildings unless you harvest trees sustainably. I think we need to be talking about it and Canada is a leader. I'm an adviser to the UN Forum on Forests. The global people are coming to me, the Swedes and the Finns. We've got a lot to be proud of here. I think the mass timber thing—and you'll know with the George Brown College building being adjacent to your riding—is a great way to connect with urbanites who might not know a lot about the industry in terms of the mass timber potential.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

Thank you.

[Linda Coady]

Yes, and I would just.... Sorry, I can't get my camera to work.

I would just add to what Derek has said that what's really critical here to building out this sector is building out the supply chain and attracting the investment into the supply chain. I think at the B.C. end of it, the B.C. government has put together a task force that is looking at ways to do that, and I'm sure there will be lots of opportunities to collaborate with us at the federal level around this.

[The Chair, Liberal, John Aldag]

Sorry, I just need to jump in. I'm going to stop the clock for a second.

The issue is that because we're televised and for the interpreters, we do need to have cameras working when we speak.

We'll hope, Ms. Coady, that you can get yours reliably going before you jump in again. I just wanted to clarify that point.

Back to you, Ms. Dabrusin.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

Before we go back, was it working with a flashing light or are there no more questions?

[The Chair, Liberal, John Aldag]

When she had it for her opening statement, there was a bit of glitching. That's okay. Anyway we're good. We have that intervention on record.

You have a minute left.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

Thank you.

Mr. Renou, do you have any ideas on how we can better support the construction of green buildings using lumber products?

[Stéphane Renou]

I'm going to answer in English so my colleagues can expand on what I've said, or correct me if need be.

Listen, what if we were always asking them why they don't build with wood when they do a public building, and check that first. The alternative will always be positive from a carbon perspective to build with wood first. That question is asked in some locations, but not everywhere. Can you build in wood? Why are you not building in wood? Why is this public building not built in wood first? That's the first thing.

The second is codes and standards. This sounds boring. All of the codes and standards are built thinking about steel and concrete, not wood. We need codes and standards that are performance-based. It's not how you build it, but how the performance is.

We're going towards that. We're progressing. That's the emphasis—not to pick the material, but to pick the performance.

[The Chair, Liberal, John Aldag]

Thank you.

Now we'll to Monsieur Simard for a brief two-and-a-half minute question.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

To be perfectly frank, it feels like Groundhog Day. You're giving us the same answers we heard when we did our study on the forestry sector.

I have a question for Mr. Renou and Mr. Samray.

The pre-budget consultations will be getting under way soon, but in the very short term, what concrete actions can the federal government take to support the forest industry?

One of the recommendations at the time was to make the carbon footprint a criterion for awarding contracts for federal procurement. That is something that wouldn't cost a fortune. That's what I think, anyways, but what do you think? What can the federal government do in the short term to provide tangible support to the forest industry?

[The Chair, Liberal, John Aldag]

[Technical difficulty—Editor]

I think the question was going to be to Monsieur Samray and then Monsieur Renou.

I've stopped the clock here until we get it sorted out.

Monsieur Samray, perhaps you'd like to start with your response.

[Jean-François Samray]

With pleasure, Mr. Chair.

I keep coming back to the fact that new materials need to be processed. On one hand, the IFIT program needs to support transformational change, as is the case in other sectors. That's what the program should focus on, but it needs the funding to match the ambition. That is fundamental.

On the other hand, I agree with Mr. Renou that we need codes and standards that are performance-based when it comes to the carbon footprint and emissions per volume, cubic metre or otherwise. That, too, is fundamental.

You are in a room where wood is everywhere. The paper in front of you is also a wood product. I'm in a building made of solid wood. It can be done. The people here are proud of it and they talk about it. We have to lead by example. We need to make that a policy.

[Stéphane Renou]

We need government funding for innovation programs.

We need to take a deeper look and understand how much funding is needed. Mr. Samray mentioned converting a mill into a kraft pulp mill. That's not something that costs $20 million or even $50 million. A kraft pulp mill costs between $500 million and $1 billion.

The forest industry needs certainty and the ability to look ahead in order to ensure supply. Once again, it all comes back to the forest.