Natural Resources Committee on Oct. 30th, 2025

[Mario Simard, Bloc, Jonquière, QC]

Thank you very much, Mr. Chair.

Mr. Hargrove, you clearly demonstrated that the forest sector is a chain. So, if one link in the chain is weakened, the entire sector pays the price with the chip logic. The same is true when wildfires or insect outbreaks occur: If logging contractors aren't able to go into the forest, the entire industry pays the price. So it's an integrated system.

You also did a good job of showing how many jobs are associated with this sector. There are 300 communities that depend on the forest for their livelihood. Thank you for that.

Now, after the flowers, I have some criticism. There's a major problem that industry has not been able to resolve. The dispute with the United States is having an impact not only on the softwood lumber exported there, but also on our ability to financially support the forest sector. I'll explain the situation quickly.

A few years ago, people from a local business came to meet with me. The business, which is involved in social integration, manufactures wood pickets and pallets. Its only customers are in Quebec and Canada, so there are no exports to the United States. Those people are trying to buy machinery to manufacture their pickets and pallets, but they don't have access to any federal granting agencies.

It should be noted that, as soon as you do primary processing in the forest industry, you are instantly referred to Global Affairs Canada for financial support, even if you want to obtain funding from Canada Economic Development or from any other program.

The response is always the same, and I've verified it many times: It's a refusal.

Are you aware that there's a major problem in the sense that the forest sector doesn't even have access to the federal government's traditional funding agencies?

[Glenn Hargrove]

Thank you for your question.

I think there's a bit of a nuance there.

I think there are some programs.... For instance, if we're talking about the recently announced BDC funding, which would not be available to that company, from what I understand you're saying, there are, however, other funding mechanisms within the federal government that would be available, likely.

I think about the regional tariff response initiative that's run by the regional development agencies. A company that's affected by these sorts of trade issues could reach out to CEDQ in this—

[Mario Simard, Bloc, Jonquière, QC]

I understand, but I'm talking about the past, two or three years ago. Let's take this out of the context of the conflict.

It's very difficult for people in the forest sector to get financial support from the federal government. I'm familiar with a lot of programs, including the investments in forest industry transformation program, or IFIT, but they're underfunded. A lot of people could apply, but very few are selected, so much so that the majority of people in the forest sector don't apply for the IFIT program because they think they'll be refused anyway.

I now want to come back to the issue of the tariff war with the United States. The $700-million loan is a good thing. This is the first time I've seen the federal government offer liquidity to the forest sector, but it's not much. Earlier, you said that $10 billion in anti-dumping and countervailing duties is currently sitting in the United States. I was told by people in the sector that we're now at $12 billion. So $12 billion is sitting in the United States, and $700 million is being offered to the industry. A Canadian company like Arbec has $300 million sitting in the United States. So if we want to support them, Arbec would have to swallow up almost half of the $700 million.

People in the forest sector tell us that this is not the type of program they need, as they don't need access to additional funding, they need market access. The best solution for market access may lie in what the forest industry people proposed this week, which is to reimburse them for part of the anti-dumping and countervailing duties. That wouldn't violate our trade agreements and the United States' interpretation of the forest sector, since that already exists. Hedge funds are already able to buy back the countervailing duties of certain companies that are being squeezed at very low prices.

Is the department looking at putting in place that type of program that could absorb some of the anti-dumping and countervailing duties?

[The Chair, Liberal, Terry Duguid]

Respond in 30 seconds, please.

[Glenn Hargrove]

First of all, when you're talking about the trade risk of various options, I would defer to the trade lawyers at Global Affairs.

The government is rolling out right now the $700 million. The idea is it's supplementary to funds that they're able to get from other means, from financial institutions and that sort of thing. It's rolling out this week. We need to see how that serves the industry. This is aligned with conversations and engagement that we had with the industry prior to the announcement and the rollout.

[The Chair, Liberal, Terry Duguid]

Thank you.

[Mario Simard, Bloc, Jonquière, QC]

Thank you.

[The Chair, Liberal, Terry Duguid]

Thank you both.

We're onto our second round, colleagues. I'm going to start with Mr. Malette for five minutes.

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

Thank you.

Mr. Hargrove, I see that you worked for FPInnovations at one point, or you were involved with them.

What are NRCan's priorities for investing in bioeconomy research and development and for transforming the sector to utilize biomass as a renewable energy source?

[Glenn Hargrove]

It's a great question. We do work with FPInnovations. We fund research that they conduct, including research related to bioenergy and bioproducts.

Essentially, what we do through our innovation programming is work with industry and other stakeholders to find the best bets and invest in those novel technologies that are going to create innovative opportunities for the sector. We work across the forest sector value chain. That includes in the areas of bioenergy and bioproducts.

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

Which programs support cogeneration? Which programs support biofuels, bioproducts and biogenetic carbon management? Which programs could be accessed?

[Glenn Hargrove]

If we're looking at programs that are run by the Canadian Forest Service, it would primarily be the IFIT program, the investments in forest industry transformation program, which is looking at novel technologies in whatever the space is, including in the bio space.

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

Going back to the $700 million, you mentioned that some money has recently been given by BDC.

[Glenn Hargrove]

BDC is rolling that out in collaboration with the financial institutions. That's rolling out this week.

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

Would you know where we're at? How much has been rolled out? What's the success rate for people applying?

The information I have is that none has been rolled out yet.

[Glenn Hargrove]

Well, like I said, it's rolling out this week. I don't have those numbers. That would be a question for BDC.

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

It's under the $1.25 billion.

[Glenn Hargrove]

That's correct.

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

Which is under your department?

[Glenn Hargrove]

No. It's being delivered by the Business Development Bank of Canada, not NRCan.

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

Thank you.

What concrete measures is NRCan taking to retool the forestry sector and equip companies with the tools they need to adapt to current market shifts and the Canada-U.S. dispute?

[Glenn Hargrove]

The IFIT program is a critical program. It invests in forest product manufacturing operations to make innovative investments that help them retool for future opportunities—

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

Mr. Chair, I have a point of order.

Could we ask our Conservative friends to continue their discussion outside the room?

[The Chair, Liberal, Terry Duguid]

Thank you.

Colleagues, you were on camera. It's a little disruptive. Please, let's respect our witnesses. If you want to huddle, maybe do it just a bit farther away from the table.

Thank you, Mr. Guay.

[Glenn Hargrove]

Just to finish, the IFIT program is a program in which we invest in those types of projects to help the industry retool. We're often co-funding those projects with provincial governments as well, in order to help de-risk those types of innovative technologies and investments.