Natural Resources Committee on Dec. 1st, 2025

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

I would assume that you'd say that the previous two decades were better than the last decade.

[Susan Yurkovich]

I mean, duties are not the only thinSusan Yurkovichg that makes the business good or difficult. We had a lumber agreement between 2006 and 2016 that created some stability. I would say we had very good years during the COVID years. Then we had challenging markets and a lot of uncertainty, with very high duties currently.

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

All right.

I'll switch gears now and go to our witness in the room today.

Mr. Hughes, thank you so much for being here. We talked about this last decade, the lost decade, under the Liberals. What was your experience with the workers who have experienced these two decades? This is along the same vein of comparing those two decades.

[Scott Hughes]

That's a very difficult to answer to give. The industry I'm in, which is the wood packaging industry, fluctuates depending on demand. Most of our clients cater to the U.S. market. It's hard to say whether or not things were better under Harper or better under Trudeau. I mean, we had good years under Trudeau and we had good years under Harper, but this latest round has resulted in almost an 80% loss in business for me. That's significant.

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

Did you have any years like that under the Conservative government?

[Scott Hughes]

If I recall correctly, I believe it was around 2010, give or take, when we had that real crisis with the economy worldwide—

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

We came through—

[Scott Hughes]

—but we managed to get through it without too much of an impact.

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

Right. How would you characterize it when you heard Mark Carney promise a deal by July 21? Was it encouraging news when you heard the Prime Minister say that?

[Scott Hughes]

I was encouraging news, but what I was seeing from my customers was a decline in orders. This started before the promise that was made.

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

And not kept.

[The Chair, Liberal, Terry Duguid]

Thank you both.

We are going to go to Mr. Danko for six minutes.

Mr. Danko.

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

Thank you, Chair. My first question is for Mr. Cape.

You spoke in your opening remarks about “buy Canadian”. Of course the federal government is committed to a buy Canadian policy, and we're also expecting provincial governments to follow suit. Really, a lot of construction happens at the municipal level, whether it's rec centres or housing projects, private sector or institutional.

I'm interested in what recommendations you would have to ensure that private sector, institutional and municipal projects are also using primarily Canadian products.

[Geoff Cape]

There's no doubt that right now the industry is struggling with demand-side problems. A substantial push will come with the federal commitment—the Build Canada Homes initiative, under the Carney government. I expect it will catalyze the industry and begin to create some forward momentum. The showcasing of both modular and wood housing under this new approach to fabricated off-site construction, I think, should create confidence and create the momentum in the private sector to move in this direction.

Typically, the private sector is slow in this regard. They're governed under heavy banking relationships and contract structures that inhibit them in a strange way, more so than, say, government has the opportunity to operate in. I think the federal policy around procurement should catalyze and prime the pump, so to speak, for private markets to then follow suit.

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

Thank you. The second question is for Ms. Yurkovich.

Canfor is known to have a very diversified market share. In particular, I heard in your opening remarks that you have facilities in Sweden, so you're selling to a global market, including Sweden, which is of course a world leader. You spoke about support programs for retooling facilities so that Canadian producers can be more competitive on mass timber and engineered wood products on the global stage.

I want to give you an opportunity to expand on what that framework would look like and what you need from the federal government to make that happen.

[Susan Yurkovich]

What we would like to be able to do is to go higher up the value chain. We are dimension lumber producers. We have a lot of dimension lumber. We also have specialty lumber, but there are opportunities for us to go further up the value chain and look for market opportunities that would be duty exempt or would apply to markets that don't have tariffs or duties.

The challenge for us, as you can imagine, is that when you have a billion dollars on deposit, that's money that's not being spent on plant and equipment. That's sitting over in the U.S. Treasury or wherever it sits. It's not able.... We don't have access to invest it in a plant, equipment or our people. Capital, as you can imagine, is extremely constrained. As we look at these opportunities, at a time to diversify some of our production away from the U.S., it's a time when we don't have a lot of capital to spend. In fact, we are looking at every single dime, as many other companies are, of course.

Having some kind of matching fund, grant or forgivable loan that allows us to retool some of our operations to be able to meet, go into those additional product areas or diversify further away from the United States would be really helpful and would, I think, be a way for us to transition.

We talk about Build Canada Homes. These are other things that allow us to find different markets and to move our product to areas that are duty-free.

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

Thank you. As a follow-up on that, I'm sure you've done detailed market sector evaluations. I'm curious if you would like to share what markets you see as having the most potential, and what products in those markets you see as preferable.

[Susan Yurkovich]

It's challenging, and it moves a lot. We used to send a lot of our product to China when we had more low-grade, beetle-impacted wood.

That's changed, obviously, and we have moved through the beetle-impacted or salvaged wood. We are now into more green stands. Those are higher-value stands. We want to take that fibre and maximize the value we can derive from it.

Also, of course, geopolitical shifts have occurred. There are sanctions on Russian wood and Belarusian wood. The avenues for them are closed. That wood does flow into China and, of course, that creates a challenge for us in terms of moving in there, because it's a very price-sensitive market. When they have access to that wood, it can change things.

There are other opportunities. There are more opportunities even with the declining population in Japan. We're switching more from traditional post-and-beam construction to two-by-four construction. Someone mentioned schools and rec centres. We think that's an area, along with seniors homes and institutional buildings. We build homes with wood, but there are more opportunities to do it in that space.

Those are the things that we are pursuing, as well as some other higher-value products that are used in decorative applications, etc.

[The Chair, Liberal, Terry Duguid]

That's your time, Mr. Danko.

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

Okay.

Thank you.

[The Chair, Liberal, Terry Duguid]

It is now Mr. Simard's turn.

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

[Mario Simard, Bloc, Jonquière, QC]

Thank you very much, Mr. Chair.

I'd like to give the witnesses a little time to put on their earpieces so that they can hear the sweet voices of our interpreters.

Before I begin, there's something I'd like to clarify. The English word “pellets” should be translated as “granules”. I wanted to point that out to my analyst friends, because the word “pellets” was translated as “pallets” earlier, but it's not the same thing.

Ms. Yurkovich, you spoke about the need to retool the forestry sector and expand into new markets. All of these things take a lot of time. The reason that I'm bringing this up is because I want to talk to you about a proposal, and then I'll come back to the idea of retooling the sector and expanding into new markets.

A number of players from Quebec's forestry sector and unions have made a proposal, and the idea is fairly simple. At the end of each month, they're asking that the government buy back 50% of the countervailing and anti-dumping duties given to the United States. That way, once the dispute is resolved, the government can pay itself back. We're not asking the government to buy back all of the debt being held captive. If we follow this logic, it currently amounts to about $11 billion.

I'd like to know whether you and all the other witnesses would support this kind of measure. Let me repeat, this is a 50% buyback of anti-dumping and countervailing duties at the end of each month. I'll start with you, Ms. Yurkovich.

[Susan Yurkovich]

Thanks for that.

Yes, I did read through the transcripts, and I understand that it is an idea that has been floated. We consider it. We've looked at all kinds of things and are looking at things that balance trade risk with meaningful assistance for the industry. I totally agree with you, sir, that it takes time to develop markets and build houses, etc.

From our perspective, we think that there is a variety of different programs that are going to be appropriate for companies. Our industry is very diverse. We have big companies, medium companies and small companies. It's an ecosystem. We all live and coexist and need each other. Each company is going to have things that are better suited to them.

From our perspective, that would not be something we would pursue, particularly, but we understand that some companies are pursuing that. The things we are looking at are things that are going to allow us to transform and to thrive, going forward. Our focus is not on transitioning away from the forest sector. We have to transition—and we are—and that's going to take some time. Supporting some workers while we do this transition and helping us do these retoolings are the things that we would prefer, being a company of our scale and scope.

[Mario Simard, Bloc, Jonquière, QC]

If the other witnesses would like to give us their responses, I ask that they please do so in writing, because my speaking time is limited.

Ms. Yurkovich, I'd like to pick up on something you said earlier. You spoke about some rather interesting measures. They could be of interest to the government, because they don't cost anything. That's what the government likes: something that doesn't cost anything. One of the things you propose is to fast-track tax refunds by the Canada Revenue Agency. How much do these refunds amount to? I guess that it's one way to access liquidity that would make your life easier.

[Susan Yurkovich]

It's actually very significant. For us, it's about $65 million, which then levers some provincial returns as well. In total, it would be about $80 million for us. When you think about what we're paying in duties, that's very significant. That would help us. I agree with you. It doesn't cost money. It's due back to us through our properly filed returns, so I would be grateful if the government could take a look at that.