Natural Resources Committee on Nov. 27th, 2025

[Jonathan Rowe, Conservative, Terra Nova—The Peninsulas, NL]

In Newfoundland and Labrador, we've had decades of the fishing industry, where Newfoundlanders have felt that our fishing industry has been used as a trading chip for other industries. Does your industry feel, when it comes to the tariffs, that it's being used as a trading chip to get better tariffs for other industries within Canada?

[Steven Rustja]

In the last few months, in the discussion around aluminum, steel, automobiles and lumber, those four, the priorities sometimes seem to shift.

Yes, we would love lumber to be the main priority. That was in my opening statement. We need Canada to do that so that we do have stability and we do have an agreement and we can make investments going forward.

[Jonathan Rowe, Conservative, Terra Nova—The Peninsulas, NL]

The tariffs are just a huge blindside to Canada's economy. I remember hearing that Mark Carney doesn't care about the tariffs. I thought that almost sounded out of context, but I saw the video of Mark Carney being asked if he had a conversation with Donald Trump and he said, “Who cares? I don't care. It's not a burning issue of ours.” I thought that was very concerning. A lot of times, the model now is, “We don't care about tariffs or the States. We want to sell to Europe and Asian markets.”

Why can't you sell to Europe and other Asian markets and just divert to that?

[Steven Rustja]

You can't do that tomorrow. That's number one.

Two, those relationships take time.

Three, the world's a global economy. Just because there are people who buy wood in Europe doesn't mean that someone in Ontario who's 2,000 kilometres from a coast can access that market.

While it's true that you could develop that market over time—and, actually, in one of the committees, I did suggest that the Government of Canada help with freight to get us to that marketplace—it's not something that can happen tomorrow.

[Jonathan Rowe, Conservative, Terra Nova—The Peninsulas, NL]

I agree with you. We're having the same issue with a refinery in Newfoundland. They want to transition to Europe and other markets, but it takes time.

With this new government, are you seeing things happening faster and at speeds we've never seen before, or is it the same old same old?

[Steven Rustja]

I would say that since this current administration in the U.S. has raised the CVD and ADD to 35% and the section 232 tariffs to 10%, there's been a greater sense of urgency on the lumber file specifically than there may have been over the past nine years.

[Jonathan Rowe, Conservative, Terra Nova—The Peninsulas, NL]

It's good to see that urgency. It's like we woke up one day in Canada and realized that we need to be more independent and more dependent on ourselves.

On the other side of that, things weren't all that great before the tariffs. You mentioned that it's seven times more labour-intensive in your industry. There's the huge tax burden that industries in Canada have on the workers and on the hourly wage, with the income tax and all those other taxes we pay in Canada. That probably doesn't happen on the other side of the border.

Do you think that in a way, even before the American tariffs, we were tariffing our own economy with the amount of taxes we have?

[Steven Rustja]

I'm never going to say that high taxes are a good thing in any scenario.

[Jonathan Rowe, Conservative, Terra Nova—The Peninsulas, NL]

It's one of those things. We had the carbon tax before. We had many years of the carbon tax. I just think that every tree that came down had to have a chainsaw, a harvester, all this equipment, all that fuel to get it out. That was a huge cost. We've taken that away now, but it's gone into the industrial carbon tax, which is still another cost that Canada has that other countries don't have.

I just see it as we've been tariffing ourselves for years when we could have been using that time, that lost decade, to actually get ahead, to invest, have modernized equipment. When you're in feast, it's time to save for the famine, and we didn't do that. I think now we're hitting rock bottom, and—

[The Chair, Liberal, Terry Duguid]

Please finish quickly, and we'll allow Mr. Rustja a response.

[Jonathan Rowe, Conservative, Terra Nova—The Peninsulas, NL]

You mentioned the 35% retroactive duties and you wanted to elaborate on that, I think. Would you quickly be able to elaborate on that, or does it need more time?

[The Chair, Liberal, Terry Duguid]

Please answer quickly.

[Steven Rustja]

What happens when they do these administrative reviews, and I'm talking quickly, is that they don't just set the deposit rates going forward. In August, the review set the deposit rates at 35% going forward, but it also retroactively changed all the shipments that were done in 2023 when we shipped at 8%. As an exporter, you have no idea what your tariffs and your duties are going to be until two years later. There's a huge burden on exporters coming if and when this deal is ever done, like triple.

[The Chair, Liberal, Terry Duguid]

Wrapping up this round is Mr. Danko for five minutes.

Mr. Danko, go ahead.

[Jonathan Rowe, Conservative, Terra Nova—The Peninsulas, NL]

I'm certain.

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

Thank you, Chair.

In this role, sometimes it feels like you're in a bit of an alternative reality, and I think some of the things that Conservative members say give you some insight into what they actually think on some issues. Half of Conservative voters actually support Donald Trump, according to a recent poll, so it's fascinating to hear that the Conservative intention is to further align Canada with the Trump White House.

I think Canadians are wondering, and have been wondering for some time, how aligned the Conservative Party is with the Trump White House. I think we're learning now, unfortunately, that that Venn diagram is actually a circle.

[The Chair, Liberal, Terry Duguid]

I'd relate it to forestry.

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

Thank you, Chair.

We also heard, in some discussion on climate change, that the Conservative solution to climate change is to cut down Canada's forests. I'd say that the basic chemistry of photosynthesis would disagree with that assertion.

My question is for Mr. Renou.

You spoke specifically about the need for further investment in the forestry industry, and you also spoke about transportation. Two current initiatives of this government are the productivity superdeduction that was in budget 2025 and the current supports for the forestry industry, including a 50% deduction on rail shipping costs for lumber.

Would you like to comment on those?

[Stéphane Renou]

I think we are back into an important piece of the puzzle. I think the transportation rebate that has been proposed recently is going to be helpful, especially if it's extended across the supply chain to more than lumber, to the entire forestry system. There's no doubt that these pieces help.

I think you mentioned global warming in your earlier remarks. I'll go back there for a second, if you'll allow me.

This is the biggest difficulty. Going forward, the uncertainty on policy as it relates to global warming inhibits a lot of investment today in one direction of change or the other and has locked up all investments.

That's a global thing. It's not just a Canada thing, by the way, and I don't think it's a Trump thing. I think it's a global thing. People realize that going to new technology is going to cost money out of their pockets if they want to go there.

It's a policy thing, and I'm not going to comment on the policy thing. I will just make the following comment.

When we look at global warming, we look at a lot of technology solutions. None seem to be cheaper than using oil, typically. As long as we at least realize that, all of us, then it's a political choice and a social choice. As a scientist, I will tell you that it costs me more money to make things from wood than with oil and chemistry, but the rest is up to you.

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

Thank you.

I want to get back to your initial opening statement as well. You talked about the need for modernization and diversification in the forestry industry and specifically about investing in mills that are globally competitive.

What would that look like five or 10 years from now, if we were to do that?

[Stéphane Renou]

I will go on the pulp side and divert from the lumber side to give you a sense of how deep the crisis is.

On the pulp side, our older mills still operate on older technology. About 10 years ago, the Finns and the Swedes reinvested massively in their mills. They actually closed them completely and started with the new greenfield ones. It wasn't with advanced technology, but with modern technology like heat transfer and water management, which was different. They got a lot more competitive than us. Brazil is doing even better now, to the point that the Finns are getting non-competitive versus the Brazilians. Canada still hasn't moved. It's moving and moving.

If you look at all the mills in the world, Canadian mills are at the bottom of the pile. If we don't move up the pile, we're going to get in trouble. We constantly hide behind the fact that our fibre is better. That is a fact, but if I have the choice as a packaging customer to buy the good stuff or a lot of the average stuff to do the same function, I'll go there. That's the equation we're missing right now.

It's a global market. The eucalyptus plantations in Brazil and China are ravaging the pulp market to a point where we may end up with pulp mills that are not competitive. That will have a domino effect across the forest sector, for my colleague here upstream and the rest going downstream.

[The Chair, Liberal, Terry Duguid]

Thank you both. It's been a great exchange this morning among members with great responses by you—

[Mario Simard, Bloc, Jonquière, QC]

Mr. Chair, I would like to quickly ask a favour of Mr. Renou.

We talked about the famous chain and the regional issue. I think I’ve seen a presentation from FPInnovations where you can see each element of the chain.

[The Chair, Liberal, Terry Duguid]

You have 10 seconds.

[Mario Simard, Bloc, Jonquière, QC]

If you could submit that to us, Mr. Renou, that would be great.