Natural Resources Committee on Nov. 6th, 2025

[Kim Haakstad]

I think what's really important in the programs that you mentioned is the renewal of funding for Canada Wood Group and the Canadian Wood Council, which do international and domestic market development for the industry. They're partnered with industry because they're programs that are built by industry for industry, to make sure we're doing the right thing. It's really key to getting that funding going.

The other programs that are in that allocation that was in the budget are sort of programs, as you say, to help retool facilities to meet the needs of the future of the industry. Think about taking something that today primarily makes dimensional lumber to make mass timber in order to build tall timber towers. Sometimes companies do need support in order to retool for the future market needs.

Right now it is challenging to get predictable access to economic fibre in order to actually make the products we need. In order to invest in innovation, you have to have certainty. Government programs rightly fund a portion of what you're doing, not all of what you're doing. It's a principle I believe in as a Canadian, but that means it doesn't allow you to invest unless there are good conditions to invest in. We need a softwood lumber deal, and we need to make sure that we're looking at ways to reduce costs in Canada so that companies can be competitive with international markets and not have international products coming into Canada instead of using our own wood products.

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

Mr. Rielly.

[Andrew Rielly]

I think what Kim said is very important. I think programs like that are very valuable. If you're going to support Canada Wood Group, you're going to support Supply-Build Canada and BC Wood. That's important stuff.

As I said to you, our 60 member companies have all been maybe second- or third-generation companies. Just to sort of shed some light on it, I've been in business for 30 years. The first month we've ever broken even, or almost lost money, was October 2025. From the BDC program, we don't really need an inexpensive loan. We're okay, and that's the situation for most of the companies that are manufacturing products in Canada now. They're well-financed companies, so I'm going to side with Ms. Haakstad and say that the most important thing that we do now is really roll up our sleeves and try to get some kind of softwood lumber deal with the U.S., so that we can buy some time, continue to ship our products and then pivot to new markets.

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

Mr. St.John, how is the program being used in terms of market diversification, if it is at all?

[Bruce St.John]

I think it's important, first, that when you talk about market diversification, you don't necessarily think of just new geographic locations. You have to look at existing markets and then diversify within those markets.

For instance, I said earlier that our programs helped to build 3.5 million houses in Japan, but we realized that it has plateaued, so what we're doing now is diversifying within Japan to mid-rise construction. In B.C., as an example, 80% of four-storey to six-storey buildings are built out of wood. In Japan, we've initiated it, and so far we've worked on 156 projects there.

The important thing for us is that, from the industry perspective, a lot of them are on the ropes right now. They're really having a difficult time, so when we ask for funding from the government, what we'd like to see is for the government to increase its funding percentage for programs to help the companies. The companies have been there for good and bad markets, regardless of the situation, but they're on the ropes right now. Their ability to turn around and invest more money into offshore marketing or into anything right now is very difficult. I'd ask that the federal government contribute a higher percentage into the programming we're looking at doing.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Guay and Mr. Rielly. That does finally bring our first panel to a close, and we will be—

[Mario Simard, Bloc, Jonquière, QC]

Excuse me, Mr. Chair.

[The Chair, Liberal, Terry Duguid]

Is it a point of order?

[Mario Simard, Bloc, Jonquière, QC]

No, but it will be very quick.

I think I may have misrepresented the proposal currently circulating on the repurchase of customs duties earlier. The information will be sent to Mr. Rielly by email, and I would like him to respond in writing to the committee.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Simard.

I also advise the panellists that we welcome briefs you may want to send in that amplify some of the points you raised today.

Those were excellent presentations and good questions by my colleagues.

We will now recess for about five minutes while we get ready for the next panel.

[The Chair, Liberal, Terry Duguid]

I call the meeting back to order.

Let me start by making a few comments for the benefit of the witnesses. We have a very fulsome panel. We have six people from different groups.

For those participating by video conference today, please click on the microphone icon to activate your mic, and please mute yourself when you are not speaking. At the bottom of your screen, you can select the appropriate channel for interpretation: floor, English or French. Those in the room can use the earpiece to select the desired channel.

As a reminder to all colleagues, comments should be addressed through the chair.

I'd like to welcome our witnesses on this second panel.

On Zoom, from the Alberta Softwood Lumber Trade Council, we have Jason Krips, co-chair. In the room, from the Canadian Forest Owners, we have Andrew de Vries, chief executive officer, and Vincent Miville, vice-chair. On Zoom, from Domtar Inc., we have Luc Thériault, president of wood products. In the room, from the Ontario Forest Industries Association, we have Ian Dunn, president and chief executive officer. Finally, on Zoom, from Tolko Industries Ltd., we have Brad Thorlakson, executive chairman.

You will each have five minutes or less for your opening remarks. If you could stick as close to the time as possible, we'd appreciate it. I know my colleagues will be anxious to provide comments and ask you questions.

We are going to start with Mr. Krips. You have the floor for five minutes.

[Jason Krips, Co-Chair, Alberta Softwood Lumber Trade Council]

Thank you, Mr. Chair and committee members. It's a pleasure to be here in front of this committee on behalf of the Alberta forestry industry.

The Alberta Softwood Lumber Trade Council represents sawmills in Alberta that export their products to the United States. The council is made up of nine companies, ranging from publicly listed companies to family-run mills. As mentioned by the chair, I am one of two co-chairs. In my other day role, I'm the president and CEO of the Alberta Forest Products Association, or AFPA. AFPA represents 29 forestry companies in Alberta, ranging from publicly listed companies to family businesses that have been passed down through generations. They range throughout the forestry value chain, from sawmills to pulp and paper mills to wood pellets and everything in between.

Our industry in Alberta creates 30,000 jobs and has a $14-billion impact on the province's economy. We're proud to be part of a Canadian forestry industry that stretches from coast to coast—an industry that creates 200,000 jobs nationally and is one of the largest employers of indigenous people in the country. We're equally proud of our environmental record and the fact that we grow three trees for every tree we harvest.

It's a good time to be having a conversation about the health of natural resource sectors like ours. You'll hear themes that are very similar to those you heard this morning from the earlier panel. As you know, we're approaching combined duties and tariffs of approximately 50%. For products that go to market, that takes nearly half of our production. The urgency of the situation cannot be underscored enough. We're beginning to see mills curtail shifts and lay off workers. With the remoteness of many of our communities, there's a risk that once these jobs leave town, they'll be hard to recover. The associated industries supported by forest jobs also will have a challenge to recover.

There are things we can do, both at home and abroad. Job number one, as you heard this morning, is crafting a durable agreement with the Americans. It's not just Canada that will be able to gain from a deal. American consumers are struggling with housing affordability. In fact, Americans already cannot afford to buy their first house until they're an average age of 38 years old. Adding costs through trade barriers exacerbates the situation.

Hundreds of thousands of Americans make their living transporting, retailing and building with our lumber. The confusion and uncertainty caused by tariffs has decimated the U.S. housing market. That's hurting people on both sides of the border. The United States supply 70% of their own lumber, but they need to import 30%. Our species, especially spruce, pine and fir play a unique role in structural building applications.

In making a deal, it's absolutely critical that our industry has a seat at the table and is part of regular two-way communications on the state of play. We have seen government amp up to support other industries, such as steel, aluminum, auto, dairy and energy. We need that similar level of urgency to achieve a deal for forestry, and for forestry to be treated as a priority sector along with these other keystone industries.

On the domestic side, we're starting to see positive signs that competitiveness and certainty are being taken seriously. For too long, our industry has had to navigate a maze of overlapping regulations between the provinces and the federal government, causing unreasonable delays and moratoriums that kick the can down the road. These delays do not achieve environmental objectives. Environmental objectives are already robustly regulated, but we need a system that offers a much quicker go-ahead when legislation is complied with.

In addition, we can and should be using more of our resources at home. That is one sure way to protect from trade barriers. Countries like Sweden, Norway and Austria have taken the lead in wood building. Here in Canada, the Province of British Columbia has taken the lead with legislation on wood building. We should have similar legislation that applies to federally procured projects nationwide. We should also absolutely continue to support market diversification and innovation to create new products for new markets.

We need to realize that we cannot diversify our way out of this problem. We need to work on a solution with our American friends and customers. It's time to roll up our sleeves and get a deal done—a deal that works for both countries.

Thank you very much, Mr. Chair and committee members.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Krips.

We'll go now to Mr. De Vries and Mr. Miville, who will be doing their opening remarks together, in French and English.

You have the floor. You have five minutes between you.

[Andrew de Vries, Chief Executive Officer, Canadian Forest Owners]

Thank you, Mr. Chair and members of the committee.

Thank you for the opportunity to appear before you today and to join our colleagues from across the country. My name is Andrew de Vries. I'm the chief executive officer of Canadian Forest Owners. I'm joined by Vincent Miville.

Canadian Forest Owners is a national association representing 480,000 private Canadian forest owners who own 10% of Canada's managed forests but are responsible for 20% of Canada's forestry production. Our members actively manage their forests to produce timber, conserve biodiversity, sequester carbon, mitigate fire risk and support rural economies. These landowners provide an important local source of timber supply to almost every mill in Canada, yet their contributions are more often than not overlooked in policy discussions.

[Vincent Miville, Vice-Chair, Canadian Forest Owners]

Forest owners are collateral victims of the softwood lumber dispute. Although the duties imposed by the United States are primarily intended to penalize royalties on timber from public forests, they have the effect of creating a depressed price environment for all those who harvest softwood lumber, reducing sawmill revenues and weakening demand for Canadian forest products.

These duties act like a hidden tax on forest producers. When sawmills close or reduce their operations, producers' incomes fall sharply.

Furthermore, these producers are not protected by social safety nets such as employment insurance, and they are even excluded from support programs offered to the forestry industry. This is an injustice that must be corrected if we want to preserve the integrity of the supply chain.

We are therefore calling on the federal government to introduce tax support and private forest development assistance programs. In addition, the Canadian government must negotiate a softwood lumber agreement that provides tax and quota exemptions for all lumber produced from softwood lumber sourced from private forests.

Of course, we support government initiatives to diversify markets, develop value-added products, promote the use of wood in construction, and implement public procurement policies that favour wood. However, these initiatives must be designed to strengthen the entire supply chain, including by creating partnerships with forest producers who supply local softwood lumber.

[Andrew de Vries]

Working with private forest owners is key to unlocking the full potential of Canada’s forestry sector. Crown land forests are pressured by pests, the creation of protected areas, public interest in other uses, and aboriginal rights, while private forests remain largely underexploited. Nonetheless, these landowners are ready to invest in silviculture, fire mitigation, regeneration, carbon capture, habitat management and climate adaptation, but they need the right tools and incentives to be provided by government.

We would like to make four recommendations to the committee, which we believe would strengthen the forestry sector through a better use of the potential of private forests.

First, the Canadian Forest Service must deepen its understanding of private forest ownership and management. This includes recognizing the diversity of ownership models and the economic realities of small-scale producers and the ecological services they provide. With better data and engagement, CFS can develop policies that are relevant, equitable and globally innovative. A current lack of knowledge prevents this.

Second, we agree with our colleagues that resolving the softwood lumber dispute is critical for the government. Exempting private forest lands would be helpful. We should secure an exemption for lumber made from wood harvested from private lands. These woods are not subsidized and should not be penalized under trade agreements that target Crown timber.

Third, ensure the federal government supports private landowner rights when negotiating indigenous claims and enacting federal legislation. We suggest that private lands be explicitly exempt from indigenous land claims and that the federal government continue to support policy measures such as “no expropriation” and “willing buyer, willing seller”.

In terms of federal legislation like the Species at Risk Act, the federal government should work with provinces to ensure that critical habitat measures are found first and foremost on Crown land.

Finally, to stimulate long-term investment in forest management, we recommend the creation of a personal silvicultural savings and investment plan, similar to an RRSP. This fiscal tool would allow forest owners to set aside income from timber sales in a tax-deferred account that is earmarked for future silvicultural work. It would enable greater investments in working private forests that are local to mills, therefore generating a cheap flow of accessible timber.

In conclusion, we call on the federal government to adopt a more inclusive and comprehensive approach to forest policy—one that recognizes the unique role of private forest owners and ensures they are part of the solution.

Thank you.

[The Chair, Liberal, Terry Duguid]

Thank you both.

Mr. Thériault, I believe you are doing the opening remarks for both yourself and Mr. Thorlakson.

You have five minutes or less. Please proceed.

[Luc Thériault, President, Wood Products, Domtar Inc.]

Thank you, Mr. Chair.

Good afternoon, Mr. Chair and members of the committee.

Thank you for the opportunity to appear before you today. I've had the chance to meet with several committee members in recent weeks, and I appreciate the ongoing dialogue about the challenges and opportunities facing Canada's forestry sector.

My name is Luc Thériault. I am the president of the wood products business at Domtar, but I'm here today in my role as co-chair of the Canadian Lumber Trade Alliance. I would like to acknowledge my fellow co-chair, Brad Thorlakson, who is here today as well.

The Canadian Lumber Trade Alliance was formed in 2001 and today includes provincial associations and companies from across Canada, representing nearly 80% of Canada's softwood lumber production that is exported to the U.S. The forestry industry is more aligned than ever before with companies, industry associations, labour and everyone throughout the value chain working together.

Our industry directly supports over 200,000 jobs and sustains more than 300 forest-dependent communities across Canada. The stability of hundreds of rural and northern communities depends on a strong and predictable forestry sector. Our industry generates $87 billion annually, ranking among Canada's top five export industries. Across Canada, the forestry sector employs approximately 11,000 indigenous people, and, as of 2022, an estimated 395 indigenous-affiliated vendors were actively engaged in Canada's forestry sector. The sector is committed to deepening the partnerships with indigenous people throughout the value chain to advance economic reconciliation in a meaningful way.

Beyond economics, the forestry sector is a national asset contributing to housing affordability, indigenous economic opportunities, decarbonization and wildfire resilience. These are national priorities that rely on a healthy, competitive forestry industry.

However, our ability to deliver on these priorities is being constrained on multiple fronts. The ongoing U.S. duties, coupled with the use of section 232 tariffs on Canadian softwood lumber and derivative products, have driven average combined tariffs and duties to over 45%. The reality is straightforward. The American industry produces about 70% of what the U.S. consumes, while Canadian wood products supply roughly 25%. Our products fill a gap in the market, ensuring that the U.S. has the lumber it needs to build homes and communities.

Despite efforts by the federal government to find a resolution, the lack of a deal has persisted for far too long. As a result, companies are being forced to make difficult decisions. They're curtailing production and closing facilities, and it is negatively impacting workers and families across Canada.

Diversifying away from the U.S. market will take decades. We need an environment in which we can compete now. We need a long-lasting softwood lumber trade agreement that brings stability, predictability and confidence back to this critical sector.

Our industry faces one of the most complex regulatory systems in the world. This challenge continues to erode competitiveness, deter investment in Canada and put jobs at risk. It is duplicative, outdated and difficult to navigate. We need a modern and streamlined regulatory framework.

I look forward to discussing other challenges in more detail this afternoon, but I want to highlight one more issue of importance to the sector. Liquidity and investment pressures are growing fast. While we appreciate the support from government announced to date, we need programs and access to liquidity that matches the realities we face. In addition to faster and more flexible programs from government that support our ability to invest in our operations and maintain jobs, we support efforts that would allow the sector to access the over $11 billion Canadian currently held by U.S. Customs.

To ensure a globally competitive Canadian forestry sector that can deliver economic, environmental and social value, we must address these challenges now.

Mr. Chair and members, Canada's forestry sector has the potential to be a cornerstone of a sustainable low-carbon economy. To do so, we need fair access to markets in a modern, efficient regulatory system that enables and does not hinder growth and innovation.

Thank you again for the opportunity to appear before you today. I look forward to your questions.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Thériault.

To finish, Mr. Dunn, you have the floor for five minutes.

[Ian Dunn, President and Chief Executive Officer, Ontario Forest Industries Association]

Thank you, Mr. Chair.

Thank you, committee members.

The OFIA represents 55 member companies that make forestry products and sustainably manage 27 million hectares of public forest in Ontario, contributing $5.4 billion in provincial GDP and supporting 128,000 direct and indirect jobs.

I'm going to leave you with four key messages today. Number one, we continue to experience an evolution and consolidation of the North American pulp and paper sector. In 2005 there were 16 pulp and paper mills in Ontario. There are currently three operating. In the last two years alone, we have seen the closure of a containerboard facility in Trenton, Ontario, affecting 150 jobs; the closure of the Espanola pulp and paper mill, the largest employer in town, affecting 450 jobs; and the continued idling of the Terrace Bay pulp mill, impacting 400 workers. In 2003 there were 103,000 people directly employed in paper manufacturing across Canada, and today that number is 46,000.

Message number two is that lumber producers are facing unprecedented challenges. The forestry sector is highly integrated: Sawdust, woodchips and bark produced at sawmills become the feedstock for pulp and paper mills and bioenergy facilities. With the consolidation of the pulp and paper sector, this market has shrunk dramatically, leading to this material being stockpiled, landfilled or shipped further away, adding additional costs to lumber producers at a time when they simply cannot stand it. In addition, homebuilding markets on both sides of the border—

[Mario Simard, Bloc, Jonquière, QC]

I apologize for interrupting, Mr. Chair, but I would like to ask Mr. Dunn to slow down a little so that the interpreters are still alive at the end of his presentation.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Dunn.

Thank you, Mr. Simard.

[Ian Dunn]

The forestry sector is highly integrated. We've talked about that. In addition, homebuilding markets on both sides of the border remain soft, and pricing is depressed despite pent-up demand and a housing affordability crisis.

In the last month, we have seen sawmills in Gogama, Nairn Centre, Ignace and Atikokan announce curtailments and extended downtime around the Christmas holidays. Two weeks ago, the Ear Falls sawmill announced that it would be indefinitely curtailing its operations, affecting 150 jobs in a community of 1,000 people. That's 15% of that community that has been laid off. If 15% of the people in the city of Toronto were laid off, that would be half a million people. Since 2001, we've seen direct employment in the saw wood sector in Ontario go from 28,000 to 17,000. With a combined 45% duty and tariff rate on lumber and other exports, we anticipate further curtailments will be announced.

That brings me to point number three. There needs to be a settlement of the ongoing lumber dispute, section 232 tariffs, and adequate support measures. There has never been a greater sense of urgency to resolve this dispute for all the workers, families and communities who have paid the price for inaction on this file.

Forestry products cannot be left behind when negotiating with the United States, and we need adequate support measures in place to keep mills open during this crisis. This is a national industry, and I applaud Premier Eby's leadership on the lumber dispute and organizing this week's lumber summit with Minister LeBlanc, but this has to be a united front, with every province and premier at the table. This is a national industry with regional representation, and it deserves a national response.

Finally, point four is that we can be global leaders in making sustainable forest products once again. The U.S. is targeting us because its industry cannot compete with ours. This competitive edge is reflected by massive private sector investments coming into Ontario's forest products sector—$7.6 billion in capital and repair expenditures between 2012 and 2022. Many of these investments come from American companies.

Our industry is also looking at new markets, but, of course, the best customer that we have is ourselves. Ontario has a target of building 1.5 million homes by 2031, and we can supply construction materials, leveraging Ontario's advanced wood products sector. We can also power our economy using wood-based energy systems, be it district heating, transportation fuels, biochar for steelmaking, or forced biomass electrical generation. Ontario needs 75% more electricity by 2050, and forced biomass can provide a sustainable, low-carbon solution while reducing the risk of wildfire.

The unique wood fibre from northern Canada is a premium product, and we can attract multi-billion dollar investments in the pulping and bioeconomy sectors. This is our moment, and we're counting on you. To protect jobs, restore stability and unlock a sustainable future, we need urgent action on trade, on support and on seizing the opportunity right in front of us.

Thank you.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Dunn.

Thanks to all of our witnesses for having painted a very stark picture of not only some of the challenges we face but also some of the opportunities.

We're going to go to our first round of questions.

We are going to start with Mr. Tochor for six minutes.

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

Thank you, Chair.

Thank you to our witnesses today.

It's quite clear that we need a softwood deal. There are thousands of jobs across Canada. It's impacting people's lives and livelihoods.

In the context of the budget that was just released, I understand that the Liberals are cancelling the two billion trees that were to be planted.

To Canadian Forest Owners, you had members who took part in this program. Do you have a rough number? Was it half of your members or a larger number who took part in providing the land for these trees?