Natural Resources Committee on Nov. 3rd, 2025

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

It's not better for building a home, but I mean in general.

[Derek Nighbor]

It may be better for furniture or something.

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

That's what this report talks about.

We do build some furniture out of softwood. Is that right?

[Derek Nighbor]

Yes, but—

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

Would it be a benefit to use more Canadian wood, then?

[Derek Nighbor]

Yes.

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

I ask because what we found was that the National Research Council's collaboration centre for green energy materials in Ontario, a $58.9-million project completed last year, had a cost overrun of up to $77 million. What wood did they use in their picnic tables or lawn furniture? It was Brazilian walnut, and 290,000 dollars' worth.

As a member of team Canada, you know we're supposed to buy Canadian. How do you square that circle when the government itself is buying furniture made from Brazilian walnut versus a Canadian-made product?

[Derek Nighbor]

I wouldn't mind getting that from you. I hesitate to comment too much on it, but we should be buying more Canadian here. That's where it should start. Hopefully the commitments around the new procurement approaches will do that.

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

They've had 10 years to improve those procedures, and they've failed. I believe this government's default position is to buy anything but Canadian. Right now, we're feeling the pain from their not getting the softwood deal done. We have workers sitting at home wanting to work, but they can't.

For your own reference, and for the people at home watching, this report came out on October 27, 2025—this year—from BlackRock. It's about the cost overruns and the craziness of the federal government claiming to be team Canada and then going overseas for their wood needs. It speaks volumes about their motives.

Going back to one of the—

[The Chair, Liberal, Terry Duguid]

You just have 30 seconds, Mr. Tochor.

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

All right. We'll wrap this up.

Manufactured wood products aren't currently counted under the buy Canadian policy. Would you provide the committee with more information on why they should be included?

[Derek Nighbor]

Yes, I'd be happy to do that. We've been engaging with government on the procurement guidelines, so I'd be happy to share some of our thoughts on that with the committee.

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

Thank you very much. That's great.

[The Chair, Liberal, Terry Duguid]

We'll go to Mr. McKinnon for five minutes.

[Ron McKinnon, Liberal, Coquitlam—Port Coquitlam, BC]

Thank you, Mr. Chair.

Thank you, gentlemen, for being here today.

I first have to respond to Mr. Tochor's questions.

Mr. Nighbor, did Chrystia Freeland not negotiate a softwood lumber deal when we first took office in 2015-16?

[Derek Nighbor]

The new dispute started in 2015, and the duties started kicking in in 2017, so the lumber for the last settlement was done under the previous government.

[Ron McKinnon, Liberal, Coquitlam—Port Coquitlam, BC]

All right.

I'm going to switch over to Mr. Geffros.

I have to confess that you startled me, because when we're thinking of forestry, we're thinking generally of framing. It's a realization that we're dealing with other things such as packaging.

You indicated that you want packaging to be excluded from duties and tariffs when we're talking about exports and so forth. Is it something that's called out separately when we export? How is that done right now?

[Scott Geffros]

Thank you for the question.

Right now, wooden packaging that's moving a consignment under load is considered an instrument of trade. It has been and always should be exempt, for lack of better words.

When we're moving products from Canada into the United States as consignments or when we're selling wood packaging as a commodity, that's when the duty aspect comes up. Under CUSMA or the former NAFTA, wood packaging has been exempt from that and we have not been dutied or tariffed, but there are some rumblings right now that we could be included in scope coming up. I think it's critical for our supply chain and supply networks that we keep this out. We do not need added cost on the items that underpin the supply of retail and consumer goods.

[Ron McKinnon, Liberal, Coquitlam—Port Coquitlam, BC]

If we were to export a boatload of pallets, they would be dutiable, but if we export something that's on a pallet, the pallet would not be dutied.

[Scott Geffros]

Right now, a boatload of pallets going to the United States would be non-dutiable.

I'm not sure about other countries because there's a complete lack of data on any trade that exists in other countries. It's kind of hard to ship assembled packaging because you are shipping mainly air when you're looking at an assembled pallet. Typically, the exported goods ship as components or cut stock, as we call it.

[Ron McKinnon, Liberal, Coquitlam—Port Coquitlam, BC]

With the pallets you deal with, you're shipping all kinds of material. You're shipping lumber, certainly, but you're going to ship stereos, microwaves and so forth as well.

What kind of problem do you have in dimensioning your product? Do you have a standard North American configuration? How would that change if you have to start focusing on Asian trade or European trade?

[Scott Geffros]

Currently in Canada and North America, the 48-inch by 40-inch platform is what drives most of the retail supply chains. Obviously, depending on the type of good that's used, customized products and platforms are available. Different sizes serve different industries.

When we start dealing with European and Asian countries and other supply chains, we're looking at metric sizing. The standard large size in the EU would be 1,200 millimetres by 800 millimetres. That's where our industry will suffer when we look to diversify trade. We're not positioned to build these types of platforms in large volume, nor is our sawmilling industry equipped to provide the metric and very precise size components that we require to build them.

In order for us to supply these different areas and regions, and for our manufacturers to get their goods there, we certainly need a shift here in Canada. We need to make these products available.

To put this into context, I was in Texas about a week and a half ago, and I visited one of the larger pallet producers in the United States. They produce for the petrochemical industry, with 80% of their product going to the European Union. They cannot get the feedstock for their pallets in North America. They rely on nine containers of Brazilian material per day to fuel their machines. That is simply because we do not cut precise enough components.

When we hit the EU and the Asian markets, their distribution networks operate with a lot less tolerances than ours do. Therefore, our 48-by-40 platform built with low-grade softwood is just not going to cut it.

[Ron McKinnon, Liberal, Coquitlam—Port Coquitlam, BC]

What kinds of investments do we need to make to facilitate trade with these other dimension sorts of markets?

[The Chair, Liberal, Terry Duguid]

Give a quick answer, Mr. Geffros.

[Scott Geffros]

Helping small to mid-sized producers automate to produce these platforms is probably key. They're not huge investments by any stretch of the imagination, but they will help facilitate trade.

Resourcing sawmills to cut different dimension would be another way we could help.