Natural Resources Committee on Dec. 1st, 2025

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

Thank you.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Hughes.

Thank you to all of our—

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

Mr. Chair, I'm sorry to interrupt.

[The Chair, Liberal, Terry Duguid]

I'm sorry.

Go ahead, Mr. Martel.

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

Mr. Chair, I asked Ms. Yurkovich how long it takes to receive a tax refund, and she told me that she could send us that information. I want to make sure that she sends that to us, along with the letter she sent to the minister.

[The Chair, Liberal, Terry Duguid]

Ms. Yurkovich can send that to the clerk, and we'll respond to the best of our ability.

You have my apologies, Mr. Noormohamed. It's a pleasure to have you on the committee this afternoon. This isn't the first time that I've had a lapse, but the committee members are so forgiving. I hope you will be too.

[Taleeb Noormohamed, Liberal, Vancouver Granville, BC]

Absolutely.

[The Chair, Liberal, Terry Duguid]

You have five minutes, sir.

[Taleeb Noormohamed, Liberal, Vancouver Granville, BC]

Thank you, Mr. Chair.

Thank you to the witnesses for being here.

Ms. Yurkovich, it's good to see you. I haven't seen you since your BC Hydro days. It's nice to see you.

I want to start with Mr. Cape.

You talked about the work that's being done in modular housing. I just want to talk a bit about that, because my friend opposite seemed quite condescending in respect of the modular homes you are building. I want to point out that Premier Ford in Ontario, Premier Moe in Saskatchewan, my friend's home province, Premier Houston, Premier Smith and Premier Lantz—these are all Conservative premiers—have put, between them, over $50 million or $60 million in recent months into building modular housing. It's a big part of the housing strategy for their regions.

In fact, there are companies like Tru-North homes, Prairie Castle, Laser homes and Grandeur homes, all of which are from Saskatchewan.

Mr. Cape, when you hear that type of misinformation or the denigration of the modular homes that are being built to create homes quickly for Canadians, what concerns does this pose for companies like yours that are doing this work, when the entire industry and the work you're doing is somehow misrepresented or is seen to be less than other types of housing?

[Geoff Cape]

It is misinformation. It's unfortunate because it kind of hearkens back to the portable classroom in a schoolyard or these kinds of tin-can trailer-park homes. The reality is that I would prefer to live in a manufactured home. They are the preferred choice in Sweden because they're of higher quality. I'm in a 120-year-old house that leaks a lot, and I have little breezes in virtually every corner, especially on cold days.

The building envelope, the R-value and the energy efficiency for a passive light house we build is a superior product in every regard. This is the preferred solution for most people. Quite frankly, that is one of the stigmas we need to move beyond as quickly as we can. We need to establish the high quality of these units.

[Taleeb Noormohamed, Liberal, Vancouver Granville, BC]

I want to give you a bit more time to respond to this, because a number of these companies are based in Saskatchewan, the home province of my friend opposite who made some of these comments.

What would you say to Canadians who are watching this—apart from what you've already said—about the importance of supporting these Canadian companies that are doing great work in this space?

[Geoff Cape]

I'd say that Canadians used to build housing by chopping down logs in a forest and squaring off the logs. Then we learned about two-by-fours and dimensional lumber. All we're talking about is taking the next level of completion into a factory, into a predictable space, and making a higher-quality product.

It's economic development. It's productivity that the country needs. We, as a nation, are known to be good-quality house builders. This is just taking the next step to be global leaders.

[Taleeb Noormohamed, Liberal, Vancouver Granville, BC]

Thank you, sir.

Ms. Yurkovich, if I could just switch to you now—

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

I have a point of order, Chair. This is almost an advertisement for portable homes from Brookfield, and this is not—

[The Chair, Liberal, Terry Duguid]

That's debate, Mr. Tochor, as you know.

We'll go back to Mr. Noormohamed.

You have one minute and 48 seconds.

[Taleeb Noormohamed, Liberal, Vancouver Granville, BC]

Thank you, Mr. Chair.

I'm going to take those four seconds back as well, if I may.

Ms. Yurkovich, I wanted to lean a bit into some of the challenges, of course, we're facing in British Columbia. As you pointed out, and as we all know, there are a lot of dollars—billions of dollars—now sitting in abeyance as a result of duties and tariffs.

Can you perhaps walk some of the members of the committee—who may not be as familiar with this—through some of of the issues that are provincial in nature and have to be dealt with in respect to supporting the industry more substantially? Where can provinces be doing more to ensure they are making it easier for your industry and the workers you employ?

[Susan Yurkovich]

Sure.

I think we have an opportunity to address the hosting conditions. It's a very competitive marketplace, and I think we could have a focus on regulatory regimes. We want to have good, strong regulation. That's what we want as Canadians. We want to have good sustainable forest practices, which we do, but I think there's an opportunity for us to streamline permitting to reduce the duplication of some of the regulations we have and to create more hosting conditions that allow us to compete on the global marketplace.

Of course, as I mentioned in my remarks, the most important thing is access to fibre. We have a cut that stands at about...based on the chief forester's.... The chief forester sets the allowable annual cut. We are not cutting up to that level. We're at about half of that right now. That's putting a real strain on having secure access to fibre. I think there's more work we have to do there.

[The Chair, Liberal, Terry Duguid]

Thank you both. That does bring our time to an end with this panel.

Once again, thank you to our witnesses. It was very informative testimony. Also, as we do at every meeting, we invite you to submit briefs for things that you didn't get a chance to say today. The committee would welcome them. Once again, thank you so much.

Colleagues, we'll take a five-minute break and then we're back with the second panel.

[The Chair, Liberal, Terry Duguid]

Colleagues, I call the meeting to order for the second panel.

We're about to hear from our witnesses. On your behalf, let me welcome our guests on Zoom.

I will make a few comments for the benefit of the witnesses.

For those participating by video conference, and there are a number, click on the microphone icon to activate your mic, and please mute yourself when you are not speaking. Also, at the bottom of your screen, you can select the appropriate channel for interpretation: floor, English or French. This is a reminder that all comments should be addressed through the chair.

We have with us this afternoon, from the PowerWood Corporation, Jake Power, managing director. We have Dr. Martin Luckert, professor emeritus, forest economics and policy, from the University of Alberta. We have Jeff Bromley, chair of the wood council, United Steelworkers.

Welcome, everyone. Thank you for being here. You will each have five minutes or less for your opening remarks.

We're going to start with you, Mr. Power. You have the floor for five minutes or less.

[Jake Power, Managing Director, PowerWood Corporation]

Thank you for the opportunity to appear.

My name, as you mentioned, is Jake Power, and I am the director of PowerWood. We're a value-added manufacturer employing 60 British Columbians.

I want to focus my remarks on three themes that matter to the questions this committee is studying.

First, speaking to the reality of our export markets, because of our costs, the characteristics of our forest logistics and our limited domestic market, the U.S. will remain Canada's number one customer for forest products, especially high-value products. No amount of market diversification will change that, and trade certainty with the U.S. should be our number one priority. Any effort that diverts government resources or messaging away from the U.S. market for political optics ultimately devalues our resource.

Our competitive leverage in softwood lumber negotiations comes from a simple fact: U.S. consumers are willing to pay top-of-market prices for Canadian products, even with duties. We are seeing that today. In many of our wood products, the U.S. consumer is paying the lion's share of the duties.

Second is policy that can strengthen value added. I would urge leadership to apply government power where it moves the needle: cost reduction and traceability. There are practical things the government can do that would improve competitiveness at home and support the committee's objectives. The federal and provincial programs that have lowered the cost of capital for companies like ours have made a real difference. When capital becomes affordable, value-added manufacturing has opportunities to grow. I want to acknowledge that support and encourage refining these programs so the money flows to companies that manufacture here in Canada.

One major area to address is traceability and data that will bring us all in line with the EU's new requirements and provide value at home. Europe's EUDR rules will soon require full traceability back to the stump. Large companies can absorb the cost of tracing. Small and medium-sized value-added manufacturers cannot. Right now, blockchain tracking services are being sold to SMEs at prohibitive prices. In my company, it costs us over $1,000 per container just to meet the tracing obligations.

The simplest solution would be for Canada to own the national forest products tracking system and provide access to all businesses. That would level the playing field with large producers, keeping SMEs in the EU market.

Finally, give Canada visibility into what happens after the sawmill. Governments already have strong data from forest to mill, but after that, the visibility is not so strong. I understand that this work is in part under way in Quebec through QWEB, and I encourage further development of that so it can get to the offices of all our entrepreneurial forest products companies.

Third, policy choices at home can either support value-added manufacturing or drive them out. There are clear recent examples that have impacted my business that I want to speak about.

First, it's not a huge one, but removing the carbon tax on natural gas immediately freed enough cash for our company to hire another skilled worker. It had no impact on our emissions. Those emissions are driven by production realities, not by tax rates.

[Mario Simard, Bloc, Jonquière, QC]

I'm sorry, Mr. Chair, but the sound quality isn't good.

[The Chair, Liberal, Terry Duguid]

Yes, I think we're having trouble with your microphone, Mr. Power.

Let's suspend for just a moment.

Mr. Power, we'll be right back with you.

[The Chair, Liberal, Terry Duguid]

We're good.

We stopped your time, Mr. Power, so please continue.

[Jake Power]

The removal of the carbon tax, as I mentioned, did allow us to hire another worker. At the same time, the previous government's public health messaging about coming to work only when feeling a hundred per cent really has hammered our industrial attendance, as an unpredictable workforce is simply less productive. Those cultural signals matter, and they've impacted our business in a real way.

Finally, I'd like to caution about putting rose-coloured glasses on all trade diversification. In our sector, it often means commoditization of wood products that can otherwise support much more productivity here at home. In my career, I've seen how policies meant to diversify markets or encourage innovation sometimes create the opposite effect. In the early 2000s, the push toward China resulted in manufacturing equipment being unplugged in British Columbia and restarted offshore. Today, the same dynamic exists, just with different countries.

Our biggest competitor in the U.S. northeast is not another Canadian mill; it's Canadian old-growth fibre shipped to New Zealand, manufactured there and shipped back into the U.S. 100% duty-free. Our second biggest competitor is Canadian wood routed through U.S. value-added facilities using pricing structures designed to minimize duties. It's leakage. It drains value away from Canadian workers and Canadian manufacturers, and we need federal policy that focuses on defending against it.

I just want to leave you with two points in closing. Canada must become relentless about reducing costs for input materials and manufacturing. Productivity should be rewarded, not penalized. Second, Canada must safeguard our market access, especially to the U.S. When government steps too far into the marketing, we can oftentimes create commodities out of specialty products.

Canada's forest products are exceptional. When we combine them with competitive costs, direct market access and real support for value-added investment, our industry can compete anywhere in the world.

Thank you. I look forward to your questions.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Power.

We're going to Dr. Luckert.

You have five minutes or less.