Thank you all for allowing me to present here today.
As indicated, I am the CEO of the Canadian Wood Pallet and Container Association, Canada's only national organization representing the wood packaging sector. We've been around for about 60 years and currently represent about 200 members across Canada.
Our members produce the conveyances that move products through the supply chain: pallets, crates, dunnage, cable spools, agricultural bins and boxes. We contribute approximately $1 billion annually to the Canadian economy, but it's really our indirect contribution that is astounding. Our products support about $750 billion in trade of Canadian goods. Whether that's within Canada, within the U.S. or exported around the globe, it's pretty much all moving in or supported by wood packaging.
Strategically, we are the supply chain backbone. Our products are indispensable to our supply chain, and we make sure that our manufacturers can get their goods to market effectively and efficiently.
Our forestry linkage is kind of odd. We get pigeonholed as a forest product sector. Ultimately, we find ourselves as more about supply chain and logistics, but our raw material inputs are primarily lumber.
From a softwood utilization perspective, 80% of Canadian wood packaging manufactured uses Canadian softwood, particularly the low-grade material that is otherwise hard for the mills to move. Therefore, we're a key contributor to mill profitability and efficiency in lumber processing.
I've noted some policy challenges and recommendations that I am going to summarize quickly.
The first one relates to trade duties and softwood tariffs. U.S. trade actions are injurious to Canadian companies. There's absolutely no doubt about that. For our sector, they are directly affecting us or indirectly affecting us. Whether through CVD and AD on Canadian softwood products or through the tariffs associated with section 232, they hurt. They can hurt us directly, but they can also hurt the people we manufacture for.
As to some of the quick and dirty takeaways we have, we would really like to see assembled wood packaging excluded from any future softwood lumber agreement negotiations or as part of the CUSMA negotiations. I think it's critical that packaging that carries our goods around the world can move freely and be located and moved to the places it needs to be to move goods in the supply chain.
We've also been asking various folks throughout government to recognize wood packaging as critical infrastructure. Without our products, goods simply don't make it through the supply chain. There's no need to duty a pallet. It's built with one purpose in mind, and that is to get goods where they need to go. That type of designation would be very helpful to the sector.
Lastly, the promotion of wood packaging in government procurement and supply chains would really help to support domestic manufacturing. It would also go a long way toward reaching our and your environmental goals.
Recently, Prime Minister Carney announced a goal to increase trade with the EU by up to 50% in the next 10 years. It's a great goal. However, for our sector, it poses some very unique and very special challenges.
European supply chains are not the same as North American ones, and they require different sizes of platforms and different types of lumber. There are also much stricter tolerances on production.
Obviously, most of our production is geared towards North American supply networks, and for us as an industry to pivot to support Canadian manufacturers in trade expansion will require significant investment in machinery upgrades. It could be $2 million and a three-year wait time to get a machine. More importantly, the lumber components required are a lot more specific than what we currently utilize here in North America: metric-dimension material with very strict quality tolerances. We definitely need to upgrade our production and capacity to saw in order to make these components, make these platforms viable and make them available to Canadian exporters.
We're looking for support in modernization through targeted funding and incentives, as well as means to facilitate collaboration between our sector and the sawmill sector to make these components available to us so that we're not seeking offshore suppliers, such as Brazil, to support our industry.
The next one I would like to bring up is the ISPM 15 program. This is the phytosanitary program, which enables wood packaging to move globally and enter countries around the world. This is to protect against insect movement.
Our program is recognized around the world; it's very strong. However, we have come to find out after 20 years that it has been designed in a way that is largely unenforceable.
It is a voluntary compliance program to which our members belong. However, there's an awful lot of activity that goes on on the streets that is not policed, and the CFIA, which oversees this program, has admitted that they are unable to enforce it. We are seeking to gain assistance in enabling the CFIA to better undertake their role as overseer of the program in Canada and make sure we have a very strong and robust program that's able to carry and meet the needs of Canadian exporters.
I'm going to jump past the next one, because I am told that I am running over time.
I'm very happy to answer any questions, and I apologize for the overrun on time.
Thank you so much.