Natural Resources Committee on Nov. 6th, 2025

[Mario Simard, Bloc, Jonquière, QC]

Thank you very much, Mr. Chair.

Let’s return to the American market. As one witness who appeared before the committee this week told us, life may become a little easier for the forestry sector when interest rates fall in the United States, which could lead to a resumption of the construction cycle.

However, we are not there yet. At the moment, the combined countervailing and customs duties amount to 45%. If we stretch the situation out over a year, do you think there is a high possibility that we will lose players in the forestry industry, particularly in your province of British Columbia? My goal is to present a clear picture of the situation. I would like to hear your opinion, given the time we have to resolve the critical situation we are in.

The witnesses may answer the question in turn.

You may begin, Mr. Rielly.

[Andrew Rielly]

That's a great question. It goes right to the heart of the situation we're facing right now.

As I said, for companies that are primary producers, that are large—the West Frasers, the Canfors, the Domtars—nobody is enjoying this. Nobody can afford to pay this, but they sell on the market. As I said to you, we had a truck with just one order that went this week. We have to charge that $61,000 to our customer. There is no “We're going to ingest it, and we're going to pay it.” That is going to last only so long.

Two things may happen, Mr. Simard. These tariffs in some cases are going to price Canadian products out of the U.S. market. Customers will start substituting cheaper alternatives. That's a real risk, especially for value-added and produced finished products. They'll price themselves out of the market.

To get to the heart of your question, a year for our 60 companies, I honestly think.... This isn't companies going bankrupt. This is probably people my age, who have had a good run and been in business for 30 years, saying, “You know what? This formula doesn't work anymore.” If established companies that have well-financed balance sheets, supply and customers say that they can't make it, by the end of the first quarter they will start closing. On the timeline, without some kind of support in the form of buying the deposits back, at the end of the first quarter, I would bet you that 20 of our 60 companies will close.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Rielly.

We'll come back to you later, Mr. Simard.

[Mario Simard, Bloc, Jonquière, QC]

Thank you.

[The Chair, Liberal, Terry Duguid]

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

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

Thank you, Mr. Chair.

Mr. St.John, my understanding is that without the Americans, the forestry industry is not viable. Is that correct?

[Bruce St.John]

Yes, of course, the U.S. market is extremely important to the Canadian industry. There's no question about that. Eighty per cent of the volume goes down to the United States today, and to make that kind of a change is an extremely difficult, if not impossible, thing to do.

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

You said earlier that Sweden’s timber production meets 400% of its needs and that it has to export a lot.

What is that percentage for Canada?

[Bruce St.John]

In Canada, we're at 280%. It's the consumption versus self-sufficiency. An additional 180% of Canada's production has to go to other markets.

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

The last softwood lumber agreement was concluded in 2006. I still wonder why renegotiation in this area is so complicated, given that in sectors such as steel, aluminum and energy, we always manage to find common ground and reach an agreement. How is it that no one wants to touch the softwood lumber agreement? It’s complicated. There are certainly reasons for that. What do you think?

It has been almost 20 years since there have been any new negotiations on softwood lumber. So you’ve been living under the terms of the 2006 agreement for a long time. Today, because of the tariffs that have been imposed, there is a sense of urgency. So why is it that this agreement, which has been talked about for ages, is not being renegotiated?

[Andrew Rielly]

Would you like me to—

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

My question is for Mr. St.John or Mr. Rielly. Either one may respond.

[Andrew Rielly]

I will just quickly say that, in 2006, we had a bit of a different situation from the one we have now. We had a strong WTO ruling in our favour. The NAFTA panel was ruling in our favour, and that dispute was going to literally end in a litigation forced by NAFTA and the WTO.

This time, the WTO is pretty much toothless, because nobody has been appointed to the appellate body, and as for the administration in the United States right now, we're not even sure they'd agree to a NAFTA ruling, which is troublesome. That's the difference we have now.

That is why I say that our government has to use the tools we have, with energy and critical minerals, with things the Americans want, and say that this time, we have to lump softwood lumber into it, because, as you guys see, that market is vital to us.

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

Mr. Rielly, I would just like to—

[Bruce St.John]

Would you like my comments?

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

Yes, excuse me. I'm listening, Mr. St.John.

[Bruce St.John]

I'd just like to add that, from our perspective, we continue to work, regardless of what the market conditions are or what duties or tariffs are in place. That's why the industry has continued to invest in offshore market promotion. We have to build a foundation for the long term and take away the risks that we continually have. Just because there's a situation right now with the United States, it doesn't mean that we have to stop when there's no situation with the United States. We have to continue to look at market diversification to get the best possible return for the industry and for the companies.

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

Is the forestry industry consulted by the government?

I think you raise some good points today, Mr. Rielly and Mr. St.John. Have you been consulted by the government?

[Andrew Rielly]

As I said to Mr. Simard, we met with the ministers in July, and we have been consulting. The Canadian Lumber Trade Alliance, the primary group across the country, has tabled three different alternatives that the group could live with, if the federal government wants to engage the Americans and start talking about trade.

Committees like this are important to nudge our federal government along, to remind it how important this file is to so many people, and to say that, while we all would like to pivot to new markets, the vitally important thing is that the biggest, richest market we have is right next door to us.

[The Chair, Liberal, Terry Duguid]

Thank you.

Mr. St.John, we're out of time, but I will give you 30 seconds to respond, if you wish.

[Bruce St.John]

We engage with the government on a regular basis. I was just in Ottawa two weeks ago, meeting with the government, having discussions on potential programming on a go-forward basis, and they reacted positively about funding on a go-forward basis with us.

[The Chair, Liberal, Terry Duguid]

Colleagues, that brings our first panel to a close.

[Mario Simard, Bloc, Jonquière, QC]

I'm sorry to interrupt, Mr. Chair, but I would like to say something. It will only take two seconds.

[The Chair, Liberal, Terry Duguid]

I'm sorry. It's Mr. Guay. I'm going to cut you off there. I'm treating my colleagues worse than I'm treating the opposition.

I'm sorry, Mr. Guay. Pardon me.

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

Thank you, Mr. Chair, and thank you to our distinguished panel.

The government has announced the different programs, and you also talked about the different programs. There's a $700-million liquidity program from BDC. You mentioned that. Also in the budget that was presented yesterday was a $500-million program for innovation and market diversification. I know it means different things to different people. It's a program that would start in the new fiscal year, with the budget. There's one that exists today. It's already subscribed. I want to make sure that I actually understand what it can be used for, how it could be modified, whether it should be modified and how your stakeholders are using it. The question is slightly different for everyone because, if you're in the U.S. market today, it could be diversification, changing products or expanding in the United States. Outside of the U.S., Mr. St.John, it's Asia and the United Kingdom.

Is the program helpful? The question that I would like to submit to each one of you is how your stakeholders view that program and how we could make it better.

Why don't we start with you, Ms. Haakstad?