Natural Resources Committee on Nov. 3rd, 2025

[Mike Dawson, Conservative, Miramichi—Grand Lake, NB]

What's the message you hear from mill workers, especially in New Brunswick, about the real cost of federal climate policies? Are they seeing investment and jobs flow into the U.S. because of the red tape here at home?

[Daniel Cloutier]

Again, I don't have specific data on that. Are jobs moving to the United States? That remains to be seen. The first step is to cut down the trees, and the trees can't be transported to the United States. It has to be cut here. I have no information to indicate that New Brunswick would be exporting full trees to the U.S. market. In any case, that's not the impression we get.

Mr. Lavigne, would you like to add to my answer?

[Simon Lavigne]

No, but I don't think we're necessarily qualified to talk about the specific situation in New Brunswick. You have to understand that, here, we're speaking for Unifor Quebec in particular. We're more concerned about the situation affecting Unifor members in Quebec. However, as I said, the same situation applies in many places. If you have any questions about New Brunswick, we'll be happy to provide you with the exact figures for that province.

[Mike Dawson, Conservative, Miramichi—Grand Lake, NB]

I appreciate that.

For the last 10 years, this government has failed to properly address the issue of softwood lumber tariffs with the United States. We are facing the repercussions of it now. What do you believe the federal government should be doing to protect the livelihoods of the forestry workers across Canada?

[Daniel Cloutier]

I think that, in the immediate term, the federal government should consider the proposals we're making today.

Now, we understand that the major industrial players in the various regions of Canada have finally agreed on a consensus approach to addressing the softwood lumber dispute. That's certainly a basis for resolving the conflict. The way we see it, we also understand that the Americans are showing a lot of bad faith in applying political pressure to pursue the softwood lumber dispute.

[Mike Dawson, Conservative, Miramichi—Grand Lake, NB]

When the government locks up more land under Bill C-5, do they even consult with the workers in the communities whose livelihoods are dependent on the sustainability of the forestry industry?

[Daniel Cloutier]

At Unifor, we remain convinced that there's absolutely a way to maintain a strong industrial relationship with forestry, while observing sustainable development practices that would allow future generations to continue on this path.

[The Chair, Liberal, Terry Duguid]

Colleagues, moving on, we have Mr. Danko for five minutes, and then on deck we have Mr. Simard for two and a half minutes.

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

Thank you, Mr. Chair.

The focus of today's committee discussion has been mainly on the current crisis with U.S. tariffs and the U.S. government. Of course, Canada is facing a threat from a hostile and unreliable administration—the U.S. Sad and quite revealing is that Donald Trump enjoys the support of about 45% of Conservative members of Parliament, including the current Leader of the Opposition, who personally emulates MAGA America.

Shifting this conversation from the current situation to looking forward to investments in the housing industry, in construction, in manufactured forest products and in the global market with Europe and Asia, the purpose of this committee is to grow this sector and expand employment.

My question is for Mr. Lavigne and Mr. Cloutier from Unifor. What opportunities do you see in employment in the forestry industry and in the evolution of this sector to grow the Canadian market and the one Canadian economy?

[Daniel Cloutier]

I'll answer very quickly, and then I'll ask my colleague to add some details.

Obviously, a building program that favours wood products would be a huge help to our sector. I'm not just talking about a residential construction program; I'm also talking about an institutional construction program.

Mr. Lavigne, can you add your comments?

[Simon Lavigne]

I think it's a very relevant issue. We've put forward a number of proposals. We have to try to work on what we control right now. Currently, one of our trading partners that gets most of our exports is unfortunately unreliable and at war with us.

We want the Canadian government to continue to make it a priority, but we believe in trying to work in the Canadian market. That's where we believe we have the most flexibility to use the most wood, to consolidate the most jobs in forestry and to develop new types of products with high added value that we could also export when we reach a certain maturity and scale. Right now, let's focus more on meeting Canadian demand than on diversifying our markets abroad, because we know that increasing exports is a complex issue.

Earlier, I heard Mr. Nighbor talk about the fact that Russian production was directed to the Chinese market and that this had led to a decrease in our exports. In addition, our machines are calibrated to imperial measures, and the metric system in Europe is complicated. So we can't imagine that we'll be able to redirect our production to Europe or Asia so easily.

However, we believe that there's a lot of potential here at home, particularly if the national building code undergoes a review. I think it's possible to do an exceptional review of that document to maximize the utilization of wood for the construction of institutional, commercial and industrial buildings. A lot of wood is already used in the residential sector, but much less is used in other sectors. More can be done.

We also believe that recognizing embodied carbon is an interesting way to link our climate objectives with wider utilization of wood. All in all, we want the government to make targeted investments that will enable the conversion of certain mills, unionized mills that offer high-quality jobs, where employers provide good working conditions and are reliable partners in collective bargaining. That's what we want to see maintained at this time. I would say that's one of the elements we're putting forward.

We want to pivot strategically. Let's use the crisis as an opportunity to pivot. However, it's no secret that we will still be partially dependent on a large share of exports to the United States. It's a geographic reality and we can't escape it.

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

As a follow-up to that, having a bit of an optimistic and forward-looking view is productive. The goal of this committee is to expand industry and employment.

Speaking from a labour perspective, what investments can we make in the skilled trades and labour in this sector to make sure we have the workers available to expand the industry?

[Simon Lavigne]

I think you're absolutely right. With this transition, pivot or industrial strategy, training will have to be reviewed. So it's very important that we continue to invest in our resources. In Quebec, the Commission des partenaires du marché du travail to a great extent manages this match between industry needs and workforce training needs. We have to keep moving in that direction.

That said, I think that electromechanics specialists, for example, or other people in a skilled trade will be able to do similar work in the context of slightly different or higher added value production. Is there a need for more? The answer is yes. We need more apprenticeship programs. We need to further develop this workforce. We're on exactly the same page when it comes to that.

However, as Mr. Cloutier said earlier, it's important at this time to retain current workers in the sector who are in remote regions. As we know, it's more difficult to attract these people, because they tend to gravitate around the major urban centres. The market is not good right now, but it could improve. If we lose these people because we don't guarantee their income and financial security, but the market is recovering, where are we going to get these people? Where will Mr. Verreault get his workers? It's going to be complicated.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Lavigne.

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

[Mario Simard, Bloc, Jonquière, QC]

Gentlemen, thank you for your very enlightening comments.

The 45% tariff, plus another 10% potentially, would bring the total to 55%, making wood the most heavily tariffed product. Market access is very difficult. If I understood you correctly, even the Europeans are more competitive than we are in the market.

Mr. Verreault, how are things working for you right now in the American market? Also, could you explain to the committee that the possible implementation of a fee buyback program would not be a violation of our trade agreements?

[Frédéric Verreault]

In short, the Europeans do not have to bear a 45% loss of revenue like we do. They are losing just 10%. That we know.

I also want to point out that Europe's timber production ambitions are very clear, as are those of Quebec, where the goal is to produce clean power that serves as the first link in an industrial system. Incidentally, the raw material, cubic metres of lumber, costs about half as much in Europe as it does here to produce the same quantity of end products. Europe therefore benefits from solid support for competitiveness in terms of raw materials upstream and net revenues that are 35% higher than ours downstream. That results in significant pressure that is highly cyclical. We have every reason to believe that this will not be the case forever. That is an extremely important point.

Hardly anyone talks about interprovincial trade. Nobody talks about it nowadays. Some Ontario sawmills are still operating because the woodchips, a by-product of sawmilling, are processed at our facilities in Lebel-sur-Quévillon, Quebec. That kind of interprovincial coordination is part of the value chain. Today, construction is happening in Vancouver using I-beams that are manufactured in the United States, even though similar products are manufactured in Quebec. Access to east-west rail transportation is critical and could be greatly improved. There are many markets to optimize and develop, and Build Canada Homes, the major national construction project, will amplify that. The provinces need to work together in all of our strongest sectors. We have to combine our skill sets.

[The Chair, Liberal, Terry Duguid]

Thank you both.

Mr. Martel, you have the floor for five minutes.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Thank you, Mr. Chair, I didn't realize I would have time.

This is interesting. We got an overview of the situation.

Mr. Verreault, which part of the supply chain is most vulnerable in this crisis?

[Frédéric Verreault]

Contractors, subcontractors and small businesses.

If we make a cautious but unfortunate decision after several months of absorbing the income losses caused by tariffs, we'll survive just fine because we have deep roots.

On the other hand, forestry contractors operating with a backhoe, a harvester and a logging truck to transport wood have only one type of activity and only one customer: us. The worst part is that, in many cases, these businesses have been passed down from one generation to the next so there's a lot of business succession in the country's economy in general. These are entrepreneurs who have taken over the family business, so they're subject to the usual financial obligations associated with succession, which puts them under extreme pressure. They are forgotten in all this.

New regulations, like the ones we're proposing today, are designed to get more commercial and institutional buildings built taking into account embodied carbon, and Build Canada Homes is taking off, so we need these people and their businesses to survive. We need these workers, who will not be incentivized or encouraged to change careers because opportunities are opening up for us. We strongly believe in the sector's vitality and potential.

These smaller companies, which are the most vulnerable, are being forgotten. We absolutely have to talk about them and come up with a collective solution to get them through this crisis. Their situation is a bit like during the COVID‑19 pandemic lockdown because they cannot work.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Okay.

Some people say we should be less dependent on the Americans. That's really tough because of our geography. You asked whether the national building code could be changed for construction purposes. You said that would be extremely helpful. What's your opinion on that? Would that be enough? Would that measure be sufficient to absorb a large part of our supply? I don't imagine it would.

[Frédéric Verreault]

It would be a shot in the arm, it really would.

It wouldn't be preferential treatment given to one building material at the expense of others. Otherwise, the steel sector would want its fair share because it is also under pressure at the moment. The key element here, now, one that is sustainable for generations to come, is embodied carbon, which is measurable. It is a rational and pragmatic fact. California has made the shift to embodied carbon. So have Colorado, British Columbia and the City of Toronto. The phone is ringing because people want our products. People don't care about forestry workers, forestry companies, or forestry regions. They just want the best materials to build the best structures in 2025.

People are talking about overhauling the national building code starting in 2030, but we have the power to take action today. Google wants our products. Amazon, in the United States, is building data centres with products from northern Quebec. These customers want our products because they are concerned about embodied carbon.

The Canadian government can certainly be a customer that specializes in factoring in embodied carbon. Can we start revising the national building code sooner? That is a good question. The critical mass and volume that would be generated by the Canadian government as a customer would be hugely significant. It would immediately give the sector some momentum and improve the situation.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

I know you've talked about a lot of things so far, and we have a better understanding now. Given that the industry is cyclical, what would help it achieve its highest productivity potential?

[Frédéric Verreault]

Interest rates in the United States. People need to know that, in the United States, mortgage interest rates are not fixed for five years as they are in Canada, where you can get a variable rate. In the United States, you sign up for a fixed 30-year term. If you build a house in the United States today, you sign a mortgage, and the interest rate is fixed at 6% or 6.3% for 30 years.

Naturally, despite the housing shortage in the United States, people are holding back. They are waiting for a rate correction. This is where inflation and the U.S. macroeconomic situation come into play. It would be different if borrowing costs in the United States were just half a point or one point lower. This could happen in 12, 24, or 36 months.

Let's look at the shortage in 2021. That should be the baseline we keep in mind as we decide on the best response and establish a normal business environment. It's the perfect storm that we will emerge from with market conditions.

[The Chair, Liberal, Terry Duguid]

Thank you.

We'll wrap up with Mr. St‑Pierre for five minutes.

[Eric St-Pierre, Liberal, Honoré-Mercier, QC]

Thank you, Mr. Chair.

Mr. Cloutier, I find your comments very interesting. Mr. Martel raised the subject of revising the national building code. Would you please elaborate on that? Do you have any specific recommendations for a new version of the code?