Natural Resources Committee on Nov. 6th, 2025

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

Thank you, Chair.

My first question is for Mr. Dunn. It's good to have a representative from Ontario here. Of course, Ontario has a long-standing historical forestry industry.

I'm sure you've seen the budget. In the budget are $51 billion for the build communities strong fund for housing and infrastructure, $13 billion for the Build Canada Homes fund to double the pace of homebuilding, and the productivity superdeduction, which allows for immediate tax credits for productivity assets.

We're expecting a significant portion of that investment to be in Ontario, with the Ontario forestry industry having a direct competitive advantage in terms of proximity to that massive Canadian market for high-quality lumber for housing and low-rise, secondary grade for concrete forming and falsework, value-added products, mass timber, LVL, trusses and prefab; and in Ontario, I think, even hardwood for trim, flooring and things like that.

My question for you is, what opportunities do you see for the Ontario forestry industry, specifically with the projected growth and investment in the Ontario housing sector and construction markets?

[Ian Dunn]

In my opening remarks, I talked about a couple of different issues. One of them was the consolidation of the pulp and paper sector. For the Ontario industry, the markets and products that represent the highest value will be the products that consume the largest amount of that material. We see a huge opportunity on the energy side via liquid fuels or electricity, which we talked about earlier, and heating some of those homes and infrastructure projects you're talking about.

You're right. Ontario, I think, is probably the largest homebuilding market in the country. The proximity to that would be beneficial to our members. I have just a couple of cautions, perhaps, about that. Ontario has a homebuilding target of 1.5 million by 2031. That was a 10-year target. That's 150,000 homes a year. That works out to be about 390 million board feet of lumber, if every house was built using lumber and the size was about 1,800 square feet. We produce and export about 1.35 billion board feet of lumber every year, so even if we were to hit that annual homebuilding target of 150,000 each year, it wouldn't solve the issue. It would help, certainly, but the other issue is that we built about 80,000 homes last year—well below the target. I talked to a developer yesterday, and in the GTA, new home sales, a better metric than home starts, are down about 90% year over year.

Absolutely, it is an opportunity, and it is part of the solution, but it is not going to fix the problem.

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

Thank you.

My second question is for the representatives from the Canadian Lumber Trade Alliance. Mr. Thorlakson in particular mentioned the fallacy of the American forestry industry's becoming self-sufficient. That's something we've heard from other witnesses as well: It's actually impossible for the U.S. to meet their demand for forestry products within the U.S.

I wanted to give you an opportunity to expand on that. I think it's important, in the context of the broader discussions, to look at the differences between the Canadian product and the U.S. product and why the U.S. markets rely on Canadian products.

[Brad Thorlakson]

Thank you.

First of all, I want to say that we have operations in Canada and the U.S. We understand how the species are used on both sides of the border.

I would say that for an industry to be successful—I think Ian Dunn mentioned this—you need a pulp mill, and you need the offtakes for all your products. Even though you have trees, you can expand your market if you have the capacity. We need all the hosting conditions to build sawmills. The other thing is the capacity to build these mills. They can maybe build three or four scale mills a year, and they need 55. Clearly, there is an opportunity in America to grow their forestry sector, and we should not stand in the way. We should support that. That's why I'm so passionate about growing the industry and focusing on our competing products, such as steel and concrete.

The hosting conditions aren't there to support 55 mills. Our customers use the SPF for framing and trusses because it's light and strong. The Southern yellow pine, which is currently oversupplied, is used in treating. It's a very, very good treating species. Every species has a specific application for which it's well suited. We don't use Canadian species for treating.

Another issue we see is that we talk about housing, but in the U.S. retail market, such at as Home Depot and Lowe's, business is down due to consumer confidence.

[The Chair, Liberal, Terry Duguid]

Thank you.

[Brad Thorlakson]

If we had more confidence in the North American economy, we'd be using more wood products.

Those would be my comments.

[The Chair, Liberal, Terry Duguid]

Thank you to you both.

Colleagues, we're going to go a little past time. I would ask you all to be on time with your questions. We're going to go a bit past 1:15.

We'll go to Mr. Simard for two and half minutes, then to Mr. Martel, and then we'll wrap up with Mr. Hogan.

Mr. Simard.

[Mario Simard, Bloc, Jonquière, QC]

Thank you very much, Mr. Chair.

The government has already announced a $700‑million liquidity program through the Business Development Bank of Canada, or BDC. That's already a good start.

I'd like to ask Mr. Thériault and Mr. Dunn whether they think that's enough, under the circumstances, or whether it would be better to consider a buyback program, as we discussed earlier.

Mr. Thériault could answer first.

[Luc Thériault]

Yes, the liquidity program that was implemented is a good start. I think it can be more appropriate for smaller players in the industry. It has certain limitations for bigger players, including a cap of $20 million per company, which is quite a significant issue. For companies like mine, $20 million doesn't last two months. However, it can be useful for certain players.

The program was officially launched last week. People are currently reviewing it. We appreciate that.

However, once again, these are loans that will have to be protected and guaranteed. Many companies already have guaranteed assets. That's where the deposit buyback strategy, which you're proposing, becomes useful.

I personally think we have to keep looking at new measures, because the ones that are in place won't be enough.

[Mario Simard, Bloc, Jonquière, QC]

Mr. Dunn, can you quickly give us your opinion?

[Ian Dunn]

Thank you, Mr. Simard.

The program was announced on August 5 by Prime Minister Carney, and it was just this weekend that the program went live. I talked to three of our lumber-producing members this morning, just to see how the experience has been, and it has to be done through the financial institutions, through the banks. So far, our members have not been able to access the loans, but the program and the discussions are continuing.

We are going to keep providing the ministry with feedback on the rollout of that program. Mr. Thériault is entirely correct that the money is going to be fully utilized very quickly across the industry.

[The Chair, Liberal, Terry Duguid]

Thank you. That is the time.

We will move on to Mr. Martel for five minutes.

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

Thank you, Mr. Chair.

Mr. Miville, your members depend on the U.S. market; that's for sure. However, I'd like us to be honest here: Is it really feasible and realistic for them to diversify their products to target other markets such as Europe and Asia?

[Vincent Miville]

In fact, our members supply the forest industry with logs. It is conceivable that it could diversify in order to penetrate other markets, but only to a certain extent. It takes an enormous amount of time to develop those markets, even in Asia. In spite of everything, that's what we've seen at certain times. For example, when British Columbia was producing a lot of softwood lumber, it supplied a lot of lumber to the Asian market, particularly China and Japan.

It would probably be possible to break into the European market through value-added products or certain products of that kind.

However, there's no denying that the Canadian forestry industry will never be able to completely free itself from the American market. I think we're going to have to no choice, and we'll have to put some pressure on the United States and find common ground with them.

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

Mr. Miville, I noticed that forest owners weren't eligible for the $1.2 billion in funding that the federal government proposed to help your sector. Is that correct?

[Vincent Miville]

That's correct.

It's important to understand that there's currently a certain lack of awareness when it comes to private forests and forest owners in Canada, which leads to the adoption of public policies, particularly in the forestry sector, that neglect a whole segment of people and businesses. For example, I'm thinking of all the businesses that are part of the supply chain, including forest owners and forestry entrepreneurs. That means that when those major programs are implemented, it's a good thing in the sense that it helps support our forestry industry clients, but if none of the programs support the owners, the entire supply chain is at risk.

During the last forestry crisis, which took place from 2006 to 2008, forestry producers lost 50% of their market in the span of three years. It took nine years to rebuild that supply chain. At the time of the crisis, the whole forestry sector, including forestry producers, entrepreneurs and truckers, lost the equivalent of $8 billion to $9 billion in revenue in Quebec alone.

I think it's important, then, to support the entire sector, including forest owners.

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

Do you think the government is underestimating the economic and environmental contribution of private forests in Quebec?

[Vincent Miville]

I don't know if it's underestimating that. There could also be a lack of knowledge; we're in a blind spot. We would definitely like more recognition.

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

The government won't be able to offer programs every week. If no agreement is reached with the United States and things drag on for a year, for example, what will that mean for you?

[Vincent Miville]

The current situation is putting a lot of pressure on everyone and causing uncertainty. People are delaying their investments. Even a forest owner is going to wonder whether they should plan a logging operation in three to six months' time, given the current economic situation. It's really very worrying.

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

There won't be any investment, then. When there's uncertainty, there isn't any investment, and the outlook is more pessimistic. If there isn't an agreement, it won't do much to advance the industry. If it drags on, I don't know what the situation will look like in a year's time.

Are you able to quantify what a closure can mean?

[Vincent Miville]

Are you talking about mill closures, for example?

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

Yes.

[Vincent Miville]

No, I don't know.

I can still tell you that, according to the data for Quebec, at this point, eight or nine months after the tariffs were imposed, forestry producers have seen a decrease of about 15% in their volume of harvested wood. The decrease is slightly greater when it comes to revenue. That's quite considerable. If next year is as complicated, it's certain that nearly one‑third of the volume will have disappeared.

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

Do you believe that federal programs apply equally to all provinces? In other words, do the programs offered by the federal government benefit certain provinces more than Quebec?