Natural Resources Committee on Nov. 6th, 2025

[Andrew de Vries]

It would be a smaller percentage than that.

I can speak specifically to New Brunswick, where we planted over five million trees. We have contracts out to 2027. I think we were less successful in other provinces, given the slow rollout of that package.

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

They are still planting trees into 2027.

[Andrew de Vries]

They are, until 2027, yes.

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

How many trees would be planted in New Brunswick or...?

[Andrew de Vries]

In New Brunswick specifically, the New Brunswick Federation of Woodlot Owners has been successful in planting five million trees. I expect it will be able to get another two million or three million into the ground.

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

It won't ramp up; it will go down.

[Andrew de Vries]

If the program ramps down, it will ramp down.

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

If it ramps down....

There are senior Liberal MPs who didn't know the program was going to be wound down days before the budget. How did you find out it was going to be wound down?

[Andrew de Vries]

It was in the budget announcement.

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

Okay.

Our major dispute is with the States and the unfair tariffs it put on our industry.

Does the federal government in the States plant trees in private forests, similar to that program?

[Andrew de Vries]

That's a good question. I don't know the answer to that. I do know that the States—

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

It doesn't.

When we talk about the Canadian industry, we need that softwood deal to be successful, but here's a way the Canadian government was subsidizing some of those trees that were being planted and that were going to be harvested here, versus in the States. Their federal government doesn't plant trees on private land for production. That is one of the irritants that I suspect is maybe not publicly known, but it's why Mark Carney wound down that promise. It was because of the subsidy going to private industry. Have you heard about that?

[Vincent Miville]

I would like to make a correction. It is true that there may not be any federal tree planting programs in the United States. However, American states have programs, whether property tax rebates or other incentives, to encourage forest owners to invest in silviculture in their forests, including investments in tree planting.

Throughout the western world, states support forestry and forestry activities among forest owners in one way or another. In fact, this is not a program or idea that is unique to Canada.

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

It is a concern, and I would hope that we get that softwood deal. We were promised that by July 21, Mark Carney would have this deal, and here we are today, suffering. We know that the outlook for the next couple of months, if these tariffs continue, is for a whole bunch of Canadians to be unemployed, which is a shame.

I'm going to cede the rest of my time to Mr. Malette.

[Gaétan Malette, Conservative, Kapuskasing—Timmins—Mushkegowuk, ON]

I have a question for you, Mr. Thériault.

First, your message is clear: We need an agreement. We understand that, but what should we do in the meantime?

I would like you to tell us a little about the strategy for buying back cash deposits related to the lumber trade in the United States. Can you explain how that would help your association or your industries?

[Luc Thériault]

As we mentioned earlier, approximately $11 billion is being held up at the border. Every month, companies pay substantial amounts in taxes and customs duties.

There are two sides to this issue: past deposits and future deposits. The suggestion that was recently put forward only addresses future deposits. From what I understand of the proposal that is circulating, it would involve having an amount equivalent to 50% of the deposits so that the repurchase of these deposits would provide companies with liquidity.

As mentioned in other testimonies, there have been situations in the past where these deposits had a certain value. There was a refund of up to 80% of the value of the deposits. Currently, finance companies are buying back these deposits at a rate of about 30% to 40%.

We can therefore easily say that this is an asset that exists. These are amounts that we cannot currently reinvest in our activities. Domtar, for its part, has approximately $1 billion Canadian tied up. For the industry as a whole, the figure is $11 billion Canadian. These are sums that we cannot currently reinvest to diversify our activities, become more competitive and envisage a more prosperous future.

The proposal on future deposits is therefore very interesting, but I think we also need to look at previous deposits.

[Gaétan Malette, Conservative, Kapuskasing—Timmins—Mushkegowuk, ON]

So that could be a solution, in the meantime.

[Luc Thériault]

This solution would provide short-term liquidity. Currently, these deposits are not used as collateral. They are therefore an unused asset. For most companies, the majority of their assets are already used as collateral for loans or other purposes. That is why this idea is interesting.

[Gaétan Malette, Conservative, Kapuskasing—Timmins—Mushkegowuk, ON]

Thank you.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Malette.

We're going to Mr. Guay. I didn't forget about you this time.

Go ahead. You have five minutes.

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

Thank you, Mr. Chair. I am very grateful to you.

I would like to thank our distinguished guests for joining us today.

Mr. Thériault, it is a pleasure to see you again.

I would like to continue a discussion we had together, on behalf of all your members and in light of your knowledge of the activities of Domtar, a company with facilities across America. Indeed, it is present not only across Canada, but also in the United States. You therefore have a significant understanding of the market. You have a shareholder who takes a long-term view of the situation. You think a lot about how the industry will evolve.

I think all the members of the committee agree that we need to reach an agreement with the Americans. It’s nice to want to ensure predictability, but as we’ve seen in the past, the Americans tend to renege on agreements, using all kinds of excuses. So who knows if, in five or seven years, we won’t have another tariff war with the Americans, assuming we settle this one right away.

You must spend time thinking about what the industry should look like in five or ten years. How should we encourage the industry to transform itself? I know we’re doing some specific things right now. For example, Mr. Dunn mentioned biomass, and perhaps he could give us his comments on that later. The budget announced investment tax credits for biomass projects. That said, I’d like to look at the situation a little more broadly.

Mr. Thériault, I would like you to tell me a little about what you see in your crystal ball and what your strategic suggestions would be to help the industry in general, so that we don’t find ourselves in exactly the same position in five or seven years.

[Luc Thériault]

First, there is no magic solution.

We’ve talked about this. I think we’re looking at opportunities for diversification, particularly in secondary and tertiary processing. We want to have products that use a lot more engineered wood. So we want to push diversification or integration further into the system. However, this will still take several years, and it will only consume part of the processing.

In fact, the programs we are currently discussing in Canada, which focus on increased house building, will only occupy a fraction of the market. We have to remember that there is a bit of everything in there. We need to be able to diversify into foreign markets, which will take more time. We need to use our products for many other applications. We are working extensively with organizations such as the Canadian Wood Council to increase the use of wood in construction. I am thinking in particular of certain types of housing for which wood is not currently used. I think we need to push in that direction.

Obviously, the biofuel aspect is also being considered. We are talking here about derivative products such as pallets, for example. There is even talk of sustainable aviation fuel. However, we are still several years away from achieving such things.

I think we should not delude ourselves: the United States needs Canadian wood, and we need them as a customer. This business relationship will continue for a very long time.

On the other hand, we must do everything we can to diversify. If we are able to transfer a certain percentage of what is sent to the United States to other countries, to make other products or other applications, I think that in a few years we will be in a much better position than we are today.

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

Mr. Dunn, may I ask for your comments on investment tax credits for biomass projects?

[Ian Dunn]

I know that was an ask of the Forest Products Association of Canada. That is something it has been working very hard on.

From the Ontario perspective, as I said, forest biomass electricity generation, primarily, is an important outlet for the solid wood producers. It's great that we have the tax credit in place. There are products other than electricity that could be made using forest biomass.

The other part of the equation is that the utility has to buy the electricity that's generated. In Ontario, we have four or five facilities that have a contract with the Independent Electricity System Operator. We probably rank among the worst jurisdictions in terms of biomass-fired electricity in North America and Europe, so we want to do more on electricity generation, but it requires that the utility buy that electricity.

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

Thank you, Mr. Dunn.

I have another question for you, Mr. Thériault. Perhaps Mr. Krips will also be able to answer it afterwards.

You touched on this subject. Through programs such as Build Canada Homes, we want to be proactive and act quickly. If we redirect a few percentage points of production destined for the American market to other countries, whether it be 1%, 2% or 3%, do you think that could prompt a reaction from the Americans and cause prices to rise in the United States?