Natural Resources Committee on Nov. 17th, 2025

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

I'll leave it there and turn it over to my colleagues.

[The Chair, Liberal, Terry Duguid]

Monsieur Guay, you have an extra 10 seconds, if you want.

I'm just kidding. You have six minutes.

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

We will likely be voting on the budget today. I would therefore invite the witnesses to read it and give us feedback. The tax credit measure for biomass is retroactive, and it applies to 2023. I think your company could benefit from that. I invite you to read it.

Mr. St‑Gelais, if I understand correctly, Boisaco was created when outside pressure was causing the value of forest products to drop. Although 2017 was mentioned earlier, we all agree that this type of situation involving the Americans has been going on since the 1980s. This is the fifth or sixth iteration of American pressure. In addition, your co-operative bought the Sacré-Coeur plant in the 1980s.

How are the challenges that the industry and your region have been experiencing for many years similar to the ones you are facing today?

What can the government do to help Boisaco prosper and continue operating?

[Steeve St-Gelais]

You're quite right, Mr. Guay.

Boisaco was established in 1985, after three very tough years at the Sacré-Coeur sawmill. After the plant closed for good in 1982, people in the industry got together and refused to dismantle the facilities, which led to the creation of Boisaco.

At the time, interest rates were exceedingly high. It was not a positive environment. However, the current environment is obviously very challenging too. We recognize that, and we know that it's not always easy to deal with our American neighbours in the current environment.

That said, we need to at least do what we can. Earlier, I was talking about deposit buyback, and I said that the amounts to be repaid were known. Since we know that this money will come back, there is no risk. For example, if the federal government ever decided to buy back residual deposits from the first three years, the risk would be zero. In fact, the amounts paid by businesses during those years exceed the rates that should be applied according to the Americans' calculations. Those are actual American calculations. These amounts will definitely come back one way or another. Making that cash flow available to businesses would be very helpful.

The other part of it is innovation. Measures have been put in place. As I said earlier, we were able to take advantage of some of them. We're waiting to see how that goes.

We need to find a way to promote innovation, because the future definitely depends on it, as Mr. Cormier, the Rémabec representative, said earlier. Good things have been done at Port-Cartier, but we have to find a way to continue to promote more and more by-products, as well as secondary and tertiary softwood lumber processing.

For example, modular construction needs to be taken further. The housing shortage crisis is a fundamental challenge. We really need to encourage modular construction and adopt bold enough measures to build more. That would really be very helpful for our sector, and it would help us better meet housing needs.

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

You talked about an innovation program that you applied for.

Is this the $500‑million innovation program that was announced in the budget?

[Steeve St-Gelais]

I assume so, yes. The program falls under Economic Development Canada.

I'm pretty sure it's that program because it's recent.

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

Thank you.

Mr. Cormier and Mr. Lampron, you temporarily closed a number of plants, I believe, in Lac-Saint-Jean, Mauricie and Port-Cartier.

Earlier, you mentioned that the Port-Cartier plants were closed indefinitely.

What does each of these plants do? Is it processing or diversification?

[Pierre Cormier]

On the Port-Cartier site, we currently have a sawmill, a biofuel plant and a biochar plant. We call it an integrated complex, and that's kind of our vision for the new forest economy.

It gives us a tool box for forest management. Through the integrated complex, we can recover all the by-products, bring high-quality, high-value lumber to the market, recover all the biomass from primary processing and salvage wood affected by forest fires or budworm. We can also salvage unclaimed wood at harvesting sites.

We need to be able to adapt the integrated supply of these three plants into a single operation so that the cost of the fibre delivered to the plants makes them profitable.

[The Chair, Liberal, Terry Duguid]

Thank you.

Mr. Simard, you have the floor for six minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

Gentlemen, we've had many conversations. For the benefit of the committee and so that it appears in the report to be drafted, we can safely say that the forestry sector is currently going through an unprecedented crisis. Given the events of the past few years, including forest fires, what happened with the boreal caribou and the explosion of American tariffs, the industry is not doing very well. I think you will agree with that.

The best short-term solution for keeping a significant number of players in the forestry sector in business is to help them access liquid assets by opting for a buyback program.

Is everyone in favour of that? Does everyone agree that we should reflect all of that in our report?

[Julien Lampron]

Yes, we absolutely agree.

[Mario Simard, Bloc, Jonquière, QC]

Two proposals have been circulated. One was to implement a buyback measure for all amounts currently withheld in the United States. We can imagine that it would have been a big deal for the government if it had had to pay out $11 billion for all of Canada, including $2 billion for Quebec. If we'd had to buy back 70% or 80% of that amount, the bill would have been very high.

A compromise was put forward by a group of players in the forestry sector, including Mr. Lampron. They proposed that the government prospectively buy back the countervailing duties paid by the forestry sector to the tune of 50% at the end of each month. That would enable industry players to stay in business and access some of the cash flow that the United States has deprived them of.

I would like to hear your comments on this compromise.

Just to be clear, can you let the committee know if you support that proposal and that measure?

[Julien Lampron]

We do support the industry's proposal. Given our current ability to pay, we think this is a worthwhile measure that, as you mentioned, would not cost the government anything.

It would also help us get liquid assets immediately and, in some cases, continue diversifying or simply do business in other regions.

At the moment, we feel that there is an immediate response that is relatively simple to put in place and is very respectful of taxpayers.

[Mario Simard, Bloc, Jonquière, QC]

Do you agree with that, Mr. St‑Gelais?

[Steeve St-Gelais]

Yes, and I think that's a solution that makes sense.

There is a dispute between our two countries, and companies are paying the price for it. Restoring as much access to the U.S. market as possible would be beneficial for everyone involved. When products are not sold in the United States, they are sold in Canada. As a result, there is too much supply to meet demand, which penalizes everyone.

[Mario Simard, Bloc, Jonquière, QC]

If I understand correctly, even companies that don't export to American markets are penalized, because the biggest players come and sell their products on the Canadian market, which destabilizes the ecosystem.

Mr. Cormier, you spoke at length about Rémabec's integrated complex, which produces biofuel and biochar. You had to make investments over a number of years to get to this point.

For other players in the forestry sector, going in this direction would involve fairly considerable investments. Making investments on that scale may not be realistic in the near term.

What is your take?

It's a good solution for you, but it may be difficult to apply to other businesses.

[Pierre Cormier]

It took 10 years to develop the expertise needed to produce biofuel on the Côte‑Nord. It was a long and difficult journey that took a lot of perseverance, but above all a vision. We always had to keep our eye on the ball.

Today, the model we have in place in Port-Cartier can be reproduced, because we have the teams to build and the engineering teams to support the technology. The same type of complex can be replicated at different scales.

In fact, if we had predictability in terms of procurement and the associated funding, and if all the conditions were in place, we could build a new complex in 24 months. We know how to do it. That's what's exciting.

Rémabec is a group of business owners who handle all operations, from forestry to the sale of products. We are very good at biofuel technology. We can replicate that.

We sincerely believe that it is possible to help, and we want to do so. Those are two important things to understand.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Cormier.

Mr. Martel, you have five minutes.

You're on deck, Mr. Danko.

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

Thank you, Mr. Chair.

I'll be sharing my time with my colleague.

I'll start with you, Mr. St‑Gelais.

We are hearing good things about the forestry industry here today.

You talked about recognition, but why don't you get the recognition you deserve?

How is it that the forestry industry is not recognized and respected?

[Steeve St-Gelais]

I highlighted the fact that we need to recognize the importance of forestry. There has probably been a lack of good communication of what's been going well in the industry over the last 25 or 30 years.

However, as I said at the outset, the one thing that is certain is that our governments need to recognize the importance of the forestry sector. Once we get that recognition, we may then be in a better position to work on highlighting what the forestry sector is all about.

The forestry sector is one of the most promising sectors for the future. Wood is a renewable resource, and it is one of the most environmentally friendly products out there. When we use wood to make construction materials, most of them sequester carbon. I'm thinking in particular of softwood lumber, panels and cabinet components.

We really have all the ingredients that enable us to build a sustainable future by producing wood. Wood is part of the solution, and we are fortunate to be able to contribute to the fight against climate change.

We have all the ingredients we need, but it is essential to find a way to collectively become aware of them. We have to make that clear and put in place the necessary measures or the right environment to make our sector more prosperous in the future.

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

Mr. Cormier, do you want to add anything?

[Pierre Cormier]

It is important to understand that, strictly speaking, forestry takes up a lot of land. Forestry isn't rational, it is emotional. We have a special connection to our forests.

When we harvest trees in the forest, called the final harvest, we immediately become the centre of attention. This activity paints a negative picture. We are then on social media, and this image circulates everywhere. However, it's only a snapshot. We know that instant communication can be quite harsh. You may agree. However, that's the reality of forestry. For those unfamiliar with this industry, this image portrays a disaster. It's the end in itself. It's as if we just killed the forest.

It is important to understand what forest management entails. The dynamics of the forest over time must be taken into consideration. The final harvest is just one stage of forest management. This activity allows the forest to continue to develop and fulfill its role. If people were invited to come and see the state of the forest ten years after the final harvest, they would realize that it wasn't an end in itself. It was the beginning of something new.

Forestry techniques are improving. The tools used in forestry work are becoming increasingly sophisticated. We are moving toward a different image of forestry, which will lead to greater social acceptance.

We are seeing more and more forests that were returned to production, reforested, and managed. Having an overview will lead to greater social acceptance. We are already beginning to see this in some provinces. We can see that harvesting is cyclical. There is an initial thinning, referred to as commercial thinning, followed by a second thinning. Understanding this will help people realize that we are gardening and taking much better care of our forests than we do during the final harvest.

When people see the final harvest, they think we haven't taken care of the forest, that we have destroyed it. We need to raise awareness. We need to take the time to explain things.

All this will be possible, in my opinion, if we have a vision of what we want to do with our forest heritage. Having a vision is important, because we need to know what we want to do with this national treasure we have in our hands.

[The Chair, Liberal, Terry Duguid]

Thank you to you both.

Mr. Danko, you have five minutes.

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

Thank you, Chair.

I want to continue the discussion on the role of the forestry industry in achieving Canada's climate goals.

Again, you heard today that the Prime Minister reiterated that Canada is committed to meeting our Paris Agreement for net zero carbon by the second half of the century. Some of the tools the government is using to achieve that are, of course, the industrial price on carbon, biofuel requirements and embodied carbon requirements as part of efficiency standards in building codes. I think all responsible governments are working towards that goal; however, I don't think it's a stretch to say that, if you're anti-climate, you're also anti-forestry. We have a Leader of the Opposition who seems to share Donald Trump's views that climate change is some sort of global hoax.

In terms of the broader role of the forestry industry and the forestry sector towards reaching Canada's climate goals, what responsible, pragmatic certainty do you need from the government to make sure those incentives remain in place?

[An hon. member]

[Inaudible—Editor]