Natural Resources Committee on Oct. 30th, 2025

[Gaétan Malette, Conservative, Kapuskasing—Timmins—Mushkegowuk, ON]

Which builders focus on equipment modernization and then product diversification and export readiness?

[Glenn Hargrove]

Again, when we're talking about programs under the Canadian Forest Service, in the IFIT program, in terms of export diversification we have the GloFor program on global leadership in forestry, and that is where we will be reinvigorating the offshore market diversification programming.

We fund things like market studies, market development, trade missions and those sorts of things, codes and standards work that allows for Canadian wood products to be used in those target markets and capacity building to actually use the products in those target markets.

[Gaétan Malette, Conservative, Kapuskasing—Timmins—Mushkegowuk, ON]

Thank you.

[The Chair, Liberal, Terry Duguid]

That's your time, Mr. Malette. Thanks so much.

Mr. Guay, you have five minutes.

[Claude Guay, Liberal, LaSalle—Émard—Verdun, QC]

Thank you, Mr. Chair.

Thank you, Mr. Hargrove, for being here, and Mr. Smith. Thank you for the work you do for Canadians and Canadian industry.

You talked about the $500-million program. It's a new $500 million that starts with the budget here on April 1, but you also mentioned that it's a continuation of an existing program.

Since it's a program that already exists, I'm interested to know if you can point to some examples that you would consider best or good practices, or things that you want to highlight for us as the type of work that's beneficial to the industry that has been under that program. If you wouldn't mind, please share a couple of good examples for us to understand.

[Glenn Hargrove]

Sure. I'll turn to my colleague, Greg, for this one.

[Greg Smith]

Thank you for your question.

There are numerous examples being delivered by these programs at this time, and I can give you a few. For example, the green construction through wood program promotes building with wood and pilots buildings using novel wood techniques. There have been investments in various buildings in Vancouver and Winnipeg, across Canada, to support building knowledge and to promote the use of novel wood building techniques through that. There are a number of examples on our website where you can see where this has been done: bridges, buildings and all those types of things.

With regard to the investments in forest industry transformation program, there have been a number of equipment investments across Canada that support using more biofuels, bioenergy, in mills. Again, it's using novel technology to do that. It's trying to deploy more equipment at these mills that can bring in new ideas and innovative approaches to address operating cost challenges they may face. When I say “mills” in this case, it's typically more on the pulp and paper side, and the downstream production side is where they focus.

Through the indigenous forestry initiative, there's support given to a variety of indigenous communities to promote more involvement within the forestry sector. That can be through capacity building, as well as integrating indigenous knowledge into the sector.

Dozens and dozens of examples exist of ways in which these programs have made a difference over the last 12 years that they've been delivered—or as long as 12 years in some cases.

[Glenn Hargrove]

Mr. Guay and Mr. Chair, we'd be happy to send the committee some examples from these programs, as well, after this meeting, if that would be of interest.

[Claude Guay, Liberal, LaSalle—Émard—Verdun, QC]

That would be appreciated.

On a slightly different note but still in terms of innovation, my understanding—which is not as deep as yours—of the industry challenge is that American tariffs target mostly our production of two-by-fours, for example, or traditional wood products, basic wood products. You talk about the diversification of the market as being important, not just the Americans. We do have to address the tariffs, but we also have to diversify our market.

It's my impression that some of the international competition.... Let's say that we want to go in the European market. The producers over there are bigger, more productive and lower cost in many cases. Do we have a product advantage, given the type of wood we have? How can we compete with the volumes of some of those international players? I even heard of cases where European wood ended up on the Canadian market. When I ask our local forestry industry people about that, they tell me that it's because of the volume and the low cost of those operations in Europe.

Can you help me understand the dynamic of the international market and how we can help our own industry diversify?

[The Chair, Liberal, Terry Duguid]

You have 30 seconds.

[Glenn Hargrove]

I guess there are a couple of things.

One is that there are differences in species and the types of wood, so sometimes that confers an advantage. Sometimes there are differences in transportation costs. We might have an advantage, for instance, in shipping off of the west coast.

We've also done a lot of work on codes and standards in places like China and Japan in the past that have allowed for Canadian products to be imported into those markets and used. There's also the market development work. Those have been, historically, areas where we've had success in working with industry and provincial governments in order to grow those markets.

[Claude Guay, Liberal, LaSalle—Émard—Verdun, QC]

Thank you.

[The Chair, Liberal, Terry Duguid]

Thank you.

Mr. Simard, you have two and a half minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you very much, Mr. Chair.

To follow up on Mr. Guay's question, would it be possible to submit to the committee a table with all the different programs, such as investments in forest industry transformation and the initiative for indigenous communities? I would like to see the number of projects funded, but also the number of applications. That would help us understand whether these programs have enough funding to meet the industry's needs. Is it possible to prepare a table that contains two columns and shows us all the initiatives, programs, the number of applications that have been sent to you and the number of applications that have been funded? That could help us in our work.

A little earlier, we were talking about biofuels, the bioeconomy and that whole dynamic. In your opinion, Mr. Hargrove, would all those initiatives not be at risk if carbon pricing was ended? Carbon pricing is the reason we have clean fuels today. Clean fuels are purchased for heavy industrial processes because they have an advantage, even though they are more expensive.

I'd like you to tell us about that aspect.

[Glenn Hargrove]

Certainly, any price on carbon has an economic impact on the relative prices of various fuels and products, but I think whatever that regime is, there are opportunities to continue to drive innovation and drive further use of forest residuals toward those goals. I think a really critical part of the transformation of the industry is to make sure we're maximizing the value of those residues and we're facilitating an efficient flow through the value chain.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Hargrove and Mr. Simard.

[Jonathan Rowe, Conservative, Terra Nova—The Peninsulas, NL]

We heard it.

[The Chair, Liberal, Terry Duguid]

Did you hear it? I didn't hear anything. Maybe it was because my mic was on.

Thank you, Mr. Simard.

Welcome, Mr. Rowe. You have five minutes.

[Jonathan Rowe, Conservative, Terra Nova—The Peninsulas, NL]

Thank you.

My question today for the assistant deputy minister of the Canadian Forest Service at Natural Resources Canada is largely about this agreement the Liberal government has signed with other nations about 30% of Canada's land being protected by 2030 and 50% of Canada's land by 2050.

Has Natural Resources Canada analyzed how much productive forests in Newfoundland and Labrador and throughout the country could be locked up under that plan? What does that mean for provinces' resource communities?

[Glenn Hargrove]

First, that file is an Environment and Climate Change lead. I would say that there are opportunities for conservation and economic development to coexist. Identifying areas that are of high conservation value and areas that are of high economic development value, there are opportunities where those two things can coexist.

[Jonathan Rowe, Conservative, Terra Nova—The Peninsulas, NL]

You mentioned that it's an environmental lead, but it greatly affects the forestry industry. It looks to me like 50% of our forests and our land will be protected, unable to be managed and harvested in 2050. I know that many of you guys may not be in this room in 2050, but I might still be around, and my generation, so I think we need to keep looking at that.

We have a big issue in Newfoundland with forest fires and our forests getting older. With the trees not being harvested here on all this land, do you think that could increase the risk of dead forests and more fires across Canada and my province?

[Glenn Hargrove]

I would say that different management regimes can be applied to forests. Harvesting for manufacturing is not the only way that forests can be managed to reduce wildfire risk. I think a broad tool kit needs to be applied that is specific to the geographic context in which the forest management takes place.

[Jonathan Rowe, Conservative, Terra Nova—The Peninsulas, NL]

Absolutely. I have no doubt there are other forest management opportunities and possibilities. I believe a lot of those we've seen in Newfoundland and Labrador with silviculture are very labour intensive and very expensive, and oftentimes, they're not able to actually harvest the resource from that forested area in a lot of silviculture and conservation areas. It's a very interesting topic.

I'm from Newfoundland and Labrador, on the east coast of Canada. We're talking about having more exports to Europe. We had a German chancellor, I believe it was, and other European leaders come to my province looking for energy, looking for natural gas and other energies, looking for clean energy, specifically. However, I don't see Canada being at the forefront of having biomass energy as the global solution to energy. Would you mind explaining why that is? Why is that not at the forefront of being an energy solution for the world?

[Glenn Hargrove]

Canada does actually export a lot of wood pellets, so it is a major export for Canada. I'll be on a trade mission in a couple of weeks to Japan. That will include Drax, which is a major exporter of wood pellets not only to Europe but also to Asia. I actually think that is a component of our contribution to the world's energy needs.

[Jonathan Rowe, Conservative, Terra Nova—The Peninsulas, NL]

That is so refreshing and good to hear, because we have so much potential in Canada and so much potential in Newfoundland. Our forestry industry in Newfoundland has been in major decline in the past few decades. The Grand Falls pulp and paper mill closed. The pulp and paper mill in Corner Brook has its ups and downs.

I've been talking to people in forestry. Our forest is getting very old, getting very dry. We're seeing more fires, but we're able to make a lot more products in Newfoundland. We're also, I think, able to tap into this biomass energy industry.

I'm curious. Out of that $700 million in loan guarantees and funding, is there anything cut out for Newfoundland and Labrador or for Atlantic Canada to help us navigate from traditional two-by-four markets, lumber markets, into biomass and smaller products? Is there transition funding available through your organization?