Natural Resources Committee on Nov. 3rd, 2025

[John-Paul Danko, Liberal, Hamilton West—Ancaster—Dundas, ON]

Thank you. I think that's a really important context.

Another context that I want to ask you about is that the forestry industry is now a sustainable, renewable resource. How do you see, as part of Canada's climate strategy, shifting some of our carbon-heavy construction methods to sustainable embodied carbon and that kind of thing? Where do you see the forestry industry fitting into our environmental goals?

[Derek Nighbor]

That's a good question.

It was before my time, but we were the first industry in Ottawa, as I understand it, that supported the Kyoto protocol. It was very controversial at that time for FPAC to do that.

When the Paris 2030 commitments came out, we were one of the first industries in the country to have a game plan that includes avoiding wildfire risk by managing more. That includes displacing more carbon-intensive materials in the built environment and using some of what would otherwise be wood waste and turning it into bioenergy. There are a lot of opportunities along and across the spectrum.

I think we're still committed to doing that work today. One of the things I'm very concerned about, too, is that if we see a decline in production and lose more mills, that's foresters. That's boots off the ground and that means more fires. Having been up to Mr. Malette's community, I know there are some parts there where, if we're not actively managing them, we're going to be in a heck of a lot of trouble in the next 10 or 20 years.

Forestry is a tool for meeting climate goals and at the same time driving the economic opportunity that's so important to rural and northern towns.

[The Chair, Liberal, Terry Duguid]

Thank you.

Mr. Simard, you have the floor for six minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

Mr. Nighbor, you correctly noted in your opening remarks that, in recent weeks, when the government spoke about the trade dispute with the United States, it referred to the steel, aluminum and energy sectors, but left out the forestry sector. I understand your disappointment. When we know the dynamics at play, it's quite frustrating.

Quebec aluminum is made in our area, in Saguenay—Lac‑Saint‑Jean. I certainly don't want to downplay the crisis. However, we know that aluminum smelters, with the Midwest premium, can pass on part of the tariff costs to the next player. It's unfortunate and it makes the situation challenging, but they can still keep their operations running. For example, Jérôme Pécresse said over the weekend that the aluminum sector wasn't in dire straits. We can't say the same for the forestry sector.

I really appreciated your comments on the program offered by the Business Development Bank of Canada, or BDC. I may come back to this, but a proposal has been floating around for a few weeks now. This proposal is different from the BDC's proposal. About $12 billion from the forestry sector is currently sitting idle in the United States. For a while, people were talking about buying back some of these debts, along the lines of what happens with hedge funds. I understand that the amounts involved are quite large. The proposal currently floating around is to buy back 50% of the countervailing and anti‑dumping duties prospectively, meaning at the end of each month.

I would like to hear your thoughts on this. I know that you're aware of the situation. I don't want to place you in an awkward position. I know that your members don't all think the same way. However, would this albeit temporary solution help many players in the forestry sector continue their operations?

[Derek Nighbor]

Listen, it's a great comment and question. I appreciate your leadership in bringing this to the fore. I know that you hosted an event here last week that a couple of our members attended.

In principle, I'd say yes. You raise a point that's unique to our sector in this broader trade dispute, and that's that since we started paying duties in 2017, over $10 billion has been sitting in the U.S. Treasury that will be disbursed if and when an agreement is reached.

Where your approach has been prudent—and we're still ground-testing this with our members across the country—is that you're looking at doing this on the payments going forward, not in the past. In principle, we're very aligned with that and are doing some work based on what you started with Unifor—and Unifor as well—to see how we might operationalize that and get support for it more broadly beyond Quebec. That's what we're doing now.

I would say there's an active conversation about whether more could be done with existing dollars. That's probably a bit more challenging, for a lot of reasons. I think now is the time to be very creative and have all options on the table. If this dispute continues to drag out for weeks and months, we're going to have a lot of devastated communities and families.

I appreciate the initiative. I actually talked to Unifor about this earlier today. We will continue to work to see if we can turn this into something more final and robust.

[Mario Simard, Bloc, Jonquière, QC]

Thank you.

In my discussions with stakeholders in the forestry sector, most of them emphasized one point. The forestry sector is a chain. When certain players are lost, such as sawmills or wood chip consumers, part of the chain goes off track. It then becomes difficult to maintain this ecosystem. Many forestry entrepreneurs have told me that they're currently afraid that the major players that export wood to the United States will collapse or enter the Canadian market. This would hurt the small players whose main market is the Canadian market. The forestry sector chain would then be completely disrupted.

I would like to hear your thoughts on this.

[Derek Nighbor]

I think it's an important point. That's why I also think that in the interim we have to make sure supports and the ability for smaller companies to access them are there.

That being said, I am seeing a lot of alignment, with the small and big companies working together. There's always fear in a downturn like this. If it drags out, who is going to survive? Who might not survive? I think that's a business reality, but I am seeing a lot of alignment in values and in what people want to see for both small and large companies.

Again, we get that it's tough, but getting to some kind of agreement sooner so that we can have some stability is the key. That's our number one priority.

In the interim, how do we support small and large companies alike? There's the large enterprise tariff loan program that I mentioned, but also the BDC dollars. If we need to extend that, we should be thinking about what it looks like.

[Mario Simard, Bloc, Jonquière, QC]

To this end, I know that the government wants to launch Build Canada Homes. I'll give you the example of the Chantiers Chibougamau model because I'm quite familiar with it. Before many companies can replicate this model, we must wait a few years to see this transformation, which will generate greater added value. It won't happen in five or six months.

In the meantime, how could the government help generate more added value and more transformation in the forestry sector?

[The Chair, Liberal, Terry Duguid]

You have 30 seconds, Mr. Nighbor.

[Derek Nighbor]

I'll be very quick.

There are a lot of policy...relooking at building codes. Safety, fire and seismic are all critically important. The science and the technical stuff need to rule the day.

There is an opportunity, I think, to expand building codes. Why are five- to six-storey units built with wood more prevalent in B.C. than they are in Ontario and Quebec? I think this is the time to do some navel-gazing domestically to see what's important, understanding that it's going to take a bit of time to get there. It doesn't mean we can't commit to doing that.

You'll hear from Frédéric later today on that.

[The Chair, Liberal, Terry Duguid]

Thank you both so much.

Colleagues, we're going on to our second round. We'll start with Mr. Tochor, and then it's Mr. McKinnon and Monsieur Simard.

Mr. Tochor, you have five minutes.

[Corey Tochor, Conservative, Saskatoon—University, SK]

Thank you.

Mr. Nighbor, how many jobs in forestry have been lost since the April election?

[Derek Nighbor]

We're at about 2,000. That was my last count.

[Corey Tochor, Conservative, Saskatoon—University, SK]

They're on EI right now, I'm assuming.

[Derek Nighbor]

I can't speak to that. There have been some in more recent days. Our hope is that waiting periods will be waived.

I can't comment. Unifor might be able to help you with that later today.

[Corey Tochor, Conservative, Saskatoon—University, SK]

We hear about all of the money the Liberals are throwing at the sector, but of the $1.2 billion they've announced, $700 million is for loan-backed guarantees for companies if they don't survive Carney not getting a softwood deal. There's $700 million in loans, and the $500 million that was supercharged was really just renewed funding from NRCan through the Canadian forest service.

Isn't it safe to say that this $1.2-billion announcement is just a band-aid over what is a serious problem for the industry?

[Derek Nighbor]

Well, we called it a good first step, but you could call it a band-aid. I'll say this: At 45%, if this continues for another one, two or three months, $1.2 billion is not going to be enough.

[Corey Tochor, Conservative, Saskatoon—University, SK]

Who was the last prime minister to get a softwood deal?

[Derek Nighbor]

Prime Minister Harper did.

[Corey Tochor, Conservative, Saskatoon—University, SK]

If Carney does not get a successful deal, we're talking about thousands of jobs lost across Canada. Is that correct?

[Derek Nighbor]

Yes.

[Corey Tochor, Conservative, Saskatoon—University, SK]

We talked about domestic supply and a little about the team Canada approach. You highlighted that steel was one of the strategic industries—not wood—talked about down south. We know the steel industry is pretty upset that the government is underwriting the ferries in B.C. that are coming from China with Chinese steel, which has to be infuriating. For you not to be listed as even a partner in those communications is frustrating.

Then there are reports from the media, such as the BlackRock report. I'm not sure if you've read this one. It talks about some of the buying processes. You talked about it domestically; we have to look at how we can use more Canadian wood.

Have you read this report?

[Derek Nighbor]

I haven't seen it.

[Corey Tochor, Conservative, Saskatoon—University, SK]

On the quality of our Canadian wood, is Brazilian walnut wood better than Canadian softwood?

[Derek Nighbor]

No, not for building a home.