Natural Resources Committee on May 30th, 2023

[Jean-François Guillot]

We operate according to the rules of stewardship, whether those of the Forest Stewardship Council, the Sustainable Forestry Initiative, or various organizations in Europe. Our commitment, as a company and in our businesses, is to respect these stewardship rules and the law. If there are consultation committees to help these rules evolve, we want to participate in a positive way.

[George Chahal, Liberal, Calgary Skyview, AB]

Can you give us some examples of where you've had some challenges, or have you had any challenges here in Canada with your company and the environment?

[Jean-François Guillot]

I would say that there have been some challenges, or rather some solutions to be found. We've had situations to resolve, some of which we are still working on, but we're looking to the future in a positive way. Many people are saying that the forestry industry is in decline. We, however, are convinced that the industry is evolving and that its future is bright.

[George Chahal, Liberal, Calgary Skyview, AB]

With regard to your environmental stewardship, I'd like a little bit more detail on some of the problems that you may have had. You said that you've had some problems.

Have you dealt with those challenges, or are you still in the process? Can you give some examples of the challenges that you mentioned?

[Jean-François Guillot]

Some people are aware of what's going on with Greenpeace, but since that case is before the courts, I can't give any more details. However, I would ask Mr. Gibson or Ms. Wilhelm, who are also involved in the—

[The Chair, Liberal, John Aldag]

Regrettably, we're out of time in this six-minute round. Again, there may be a chance to further explore this as we go around.

The next six minutes are going to go to Monsieur Simard.

The floor is yours.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

Mr. Williams or Mr. Guillot, you know that the corporate structure of Paper Excellence has raised a lot of questions, and rightly so, in my opinion, because of conflicting information that has been difficult to parse. When Paper Excellence became the owner of Resolute Forest Products, your company was given rights to 25% of Quebec's forests. You can therefore understand that these concerns are well founded.

I think a good way to get some clarity would be to ask Mr. Wijaya to allow the committee to review the discussions he had with Mr. François-Philippe Champagne, the Minister of Innovation. In fact, we're going to table a motion to that effect. I think it would reassure everyone to know what the basis of these discussions was. Are you aware of the discussions that took place between Mr. Champagne and Mr. Wijaya? If so, can you tell us about them?

[John Williams]

We don't know the details of those discussions.

[Mario Simard, Bloc, Jonquière, QC]

You don't know the details, okay. We'll be tabling a motion on the topic shortly.

One major concern is the future of kraft pulp. In my region, in Saguenay—Lac‑Saint‑Jean, we have a mill in Saint‑Félicien that produces kraft pulp. Industry stakeholders have contacted us to say that if Paper Excellence aims to export this kraft pulp to Asia, there could be a significant impact on the Quebec and Canadian economies. To your knowledge, does part of Paper Excellence's business plan include shipping kraft pulp to Asia?

[John Williams]

Absolutely not.

[Mario Simard, Bloc, Jonquière, QC]

So, if I understand you correctly, the kraft pulp mill in Saint‑Félicien in Saguenay—Lac‑Saint‑Jean has no Asian customer base. Is that correct?

[John Williams]

I'm sorry. I was waiting for the translation. I apologize.

At this moment in time, that's a very successful pulp mill—it's probably one of the best pulp mills, actually, in the whole of Canada—so it's a great asset, quite frankly, with a very strong customer base. It's largely a North American customer base. We're only too happy to maintain that customer base. We have no agenda to change that customer base.

[Mario Simard, Bloc, Jonquière, QC]

Looking at the long term, will Saint‑Félicien's kraft pulp mill production be marketed in North America ?

[John Williams]

Absolutely.

To be clear, we need to focus on markets where we know we can be competitive. That mill is extremely competitive in North America, so it would be idiocy on our part to make that change.

[Mario Simard, Bloc, Jonquière, QC]

Thank you. I understand.

If I'm not mistaken, the transaction between Paper Excellence and Resolute Forest Products is worth $2.7 billion. I'm told that building a mill like the one in Saint‑Félicien would cost about $2.7 billion. The concern I'm hearing from people in my region is that Paper Excellence will settle for the kraft pulp mill and abandon the many other facilities in Saguenay—Lac‑Saint‑Jean, including a number of small sawmills. Do you have a plan to ensure the viability of all the other facilities that belonged to Resolute Forest Products?

[John Williams]

If I might, Mr. Chairman, it's a very interesting question. Obviously, we're now privately owned by an individual. We're no longer on the public market. One of the great benefits of that is that we can actually take a long-term view on investment. We have this vision. We think there are opportunities in the Canadian forest products industry to really build a strong business, hence the reason we've purchased both Domtar and Resolute in the last two and a half years.

I think we've proven, and will continue to prove, that we're a good long-term owner of these assets and a thoughtful long-term owner of these assets.

[Mario Simard, Bloc, Jonquière, QC]

Resolute Forest Products developed a fantastic product called cellulose fibre that is currently being produced in Kénogami in my riding.

Do you intend to maintain cellulose fibre operations? Do you have a marketing plan for this fibre? I know that Resolute Forest Products set up a company to promote cellulose fibre. Is that still on the agenda at Paper Excellence?

[John Williams]

They do. The answer is as did we at Domtar, interestingly. We called it CelluForce. It was based and still is based at our Windsor mill. Yes, we're still highly motivated by that technology, because over time we think that could be transformational for the industry.

It will take time. These things do take time, but we're still highly motivated by that idea.

[Mario Simard, Bloc, Jonquière, QC]

In the short or medium term, can we expect an investment plan from Paper Excellence for the Resolute Forest Products facilities?

[John Williams]

Mr. Chairman, if I may, when we purchased Resolute we obviously also purchased their plan, which had some fairly aggressive capital plans over the next three to five years for their asset base.

I saw a red card.

[The Chair, Liberal, John Aldag]

Yes, six minutes goes fast.

[John Williams]

We will implement that plan.

[The Chair, Liberal, John Aldag]

Thank you.

We will next go to Mr. Angus for six minutes.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you so much, Chair.

Thank you so much for coming.

We know our mills are efficient. We know our workers produce the best in the country. That's not why we're here. Our interest here is in trying to find out about ownership.

What we have been able to figure out is that Sinar Mas is a pulp and paper empire based out of Shanghai and Indonesia, which is entirely controlled by the Wijaya family. We know that Asia Pulp & Paper was founded by Eka Wijaya and is under control of Sinar Mas. We know that, when Jackson Wijaya tried to establish his Canadian presence through Paper Excellence, he received a bank loan at the extremely low rate of 0.01% from a Chinese bank controlled by the Wijaya family.

Now we have a situation where one individual, not a Canadian, Mr. Jackson Wijaya, is in control of 22 million hectares of Canadian forest.

Why did he not bother to come and explain his role and his family's roles in the ownership of these natural resources assets of our country?

[John Williams]

There are a number of questions embedded there. I could try to attack them one by one.

I actually have with me, which I'd love to put into the record, a note saying very clearly that we repaid that loan in 2020, so we have no relationship with Chinese banks whatsoever at this point in time.

As I think Mr. Wijaya really expressed in his letter, he's travelling actively, and we are the people who are accountable for this business. I think we're capable of answering in probably a little bit more detail than he is, given the scope of what Paper Excellence has now become. We're here to answer questions and happy to do so.