Natural Resources Committee on Dec. 1st, 2025

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

That has been our point for the last 10 years that we've been fighting against the consumer carbon tax. It hurt companies like yours and your ability to hire more Canadians and pay better wages. They've shifted now, though, to the industrial carbon tax, which is more of a hidden tax that would affect different manufacturers.

Have you been looking into what an industrial carbon tax, once implemented at $150 a tonne, would mean? If the carbon tax was removed at $50 on the consumer side and if you were able to hire one person, what would happen when they jack up the industrial carbon tax to $150?

[Jake Power]

I haven't done any research on that specifically. I would expect that it would hurt our cash flow. It would reduce our available money to invest here in Canada.

The biggest thing I pay attention to is just the policy asymmetry. If we are paying a carbon tax here and if there's an opportunity for our competitors to ship wood to an offshore location where there's no carbon tax, then that hurts our workers and the environment. I don't have any figures for you, but I can tell you that's where I come down on it. Policy asymmetry hurts Canadian manufacturers.

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

We've heard for weeks now that the tariffs—taxes being applied to Canadian goods—hurt our industry and our workers, similar to how the carbon tax has. For over a decade, the Liberals have implemented a tax on the consumer side that has hurt workers and paycheques throughout Canada, and policy does matter.

In talking about policies in government and picking winners and losers, you would say that the government shouldn't be making decisions on who succeeds in business. Would that be fair?

[Jake Power]

I didn't say that, so I'd rather not.

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

I said that, though. It's the idea that policy does matter, and when governments pick winners and losers, more times than not, they pick losers.

[Jake Power]

I would rather look at it as a metaphor. Using policy to pick winners and losers becomes a game of whack-a-mole. Unfortunately, if you try to pick one winner, it hurts someone else; you have to whack somewhere else.

The softwood lumber dispute is a great example of that. They're picking winners and losers in the U.S., using the softwood lumber dispute. My example would be how the wood gets shipped to New Zealand and then all the way back around through the Panama Canal. That just adds tons of costs. They don't get any tax money from that, but they get a winner of a company in New Zealand. That is totally different from the original intention of it.

I would just say that when government gets too deep in the weeds in policy, it creates that whack-a-mole.

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

That's not to mention that it's worse for the planet. We heard the example of the Liberals pushing production offshore. Those ships are burning diesel to bring the same products that we used to make back to Canada, and the net result is no reduction in emissions—

[The Chair, Liberal, Terry Duguid]

Mr. Power seems to be frozen on the screen. We'll suspend for a second. We'll freeze your time.

[The Chair, Liberal, Terry Duguid]

We're back.

Mr. Power's back. We'll start the time again.

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

You mentioned how it's a folly to think that Europe is going to backfill our products. You said that focusing away from the States would not be the right choice. Can we unpack that?

[Jake Power]

I don't want to say that the efforts to focus on other markets are a bad decision. There's certainly opportunity in other markets, but stealing resources that help add value or increase the price we can command in the U.S. would be an unintended consequence. We want to be seen to be supporting other markets that aren't attacking us.

Some of our marketing and product expertise organizations that rely on government funding have started to lose funding, which goes toward the U.S. market, drives the value up in the U.S. and tries to have it pushed to other markets. I would caution against this type of behaviour.

One of our strongest pieces of leverage in the negotiation with the U.S. is that our products get some of the highest value out of any product in the U.S. market, and the consumers want them. We want to continue to market to those U.S. consumers so that they want those products and it gives our negotiator the leverage to say, “Look, your consumers are paying the duty, so you need to come to the table.”

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

Thank you very much.

Mr. Bromley, I'll go back to you. I want to hear a little more about these jobs in the sector. These are powerful paycheques. People can raise a family and have a comfortable life.

Can you unpack how the lives of those workers have been for the last 10 years in the forestry sector? Are we on a decline of quality of life for those individuals?

[The Chair, Liberal, Terry Duguid]

That will have to be a quick response, Mr. Bromley.

[Jeff Bromley]

My quick response is that, yes, I believe it has been impacted. As I said, most of these $100,000-a-year jobs are in small, rural communities. It's not like you can go down the street in Vancouver, Montreal or Toronto and find another job. It's harder to do. Many of them have to work away, fly into camps and into mines, or find other work elsewhere. It has a major impact.

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

Thank you for your public service.

[The Chair, Liberal, Terry Duguid]

Thank you, both.

We are going to Mr. McKinnon. You have six minutes.

[Ron McKinnon, Liberal, Coquitlam—Port Coquitlam, BC]

Thank you, Mr. Chair.

Mr. Power, I've been poking around on your website, and I see that you do a lot of work with Alaska yellow cedar, western red cedar and other fibres, including from salvage and recovery operations.

What are the main challenges you face in securing a predictable, high-quality fibre supply? What changes in forest management permitting or incentive programs would best support fuller utilization of wood, while still protecting biodiversity and working respectfully with indigenous rights and title?

[Jake Power]

I'm not a forester. I don't spend time logging or creating forest management plans, so I want to make it clear that I'm not an expert on that side.

The one thing that is consistent is that our partners up the value chain see the costs continue to escalate, and the costs that escalate oftentimes come from long and complicated permitting processes. The number one driver of cost in fibre procurement is probably being able to get a logging plan that is acceptable and approved and to get fibre out to facilities like ours. That would be my number one answer.

With all of these things we do that drive costs up, we have to remember that there's policy asymmetry. It's great that we want to be the world leader in all of these different areas, but as we pursue that, it drives our costs up, and competing regions don't necessarily have those same costs. With all of these things we do and all of these policy initiatives we take on, we need to ask ourselves if our competitors are doing the same thing. If not, will it hurt our cost structure?

[Ron McKinnon, Liberal, Coquitlam—Port Coquitlam, BC]

You were speaking with Mr. Tochor about softwood lumber disputes and tariffs. Of course, there's climate change and policy uncertainty.

How do trade disputes and shifting climate and environmental policies affect your willingness to invest in new equipment, people and products? What should we, as the Government of Canada, focus on to give companies like yours the confidence to invest long term in low-carbon, wood-based products?

[Jake Power]

I would say that in this climate, the disincentive to invest cannot be understated. There is such a strong disincentive to invest in Canada due to the softwood lumber dispute. That becomes a stronger incentive to move existing assets into the United States or offshore. We're seeing it happen. This isn't a new problem.

I've been in the industry for 20 years. It was going on long before I joined and it's continued now because of this continued pressure from the U.S. coalition. Any time a manufacturer sees the opportunity to move its value-added process across the line to the United States, it takes it. It's as simple as that. Right now, it could not be stronger.

There are things the government is already doing. Programs for creating more access to capital for companies like ours, as I mentioned in my talk, are important and they do help. The amount they help is very small compared to the amount that trade certainty would help. We know we can get access to capital that's well-priced through loan programs and things like that and that's great. However, now I need to take that loan, put in equipment and know that the equipment will make a profit. Under these trade conditions, oftentimes, if I'm given the equipment for free, I still can't make a profit on it compared to my competitors in different jurisdictions.

That software lumber dispute is a major disincentive to value-added investment.

[Ron McKinnon, Liberal, Coquitlam—Port Coquitlam, BC]

The software lumber dispute has been going on since at least 1982. Of course, Mr. Trump said just a few months ago that they have no need for Canadian lumber; they have lots of trees and they don't want to buy our lumber, which puts us at a disadvantage in negotiating with them.

What would you like to see in a softwood lumber agreement? What would help you?

[Jake Power]

We are value added. Look at our website. We work on high-value products. It is a very different sector of the industry than the commodity, big mill, two-by-four, two-by-six world. What I would really like to see is some bifurcation of the way the agreement looks at different products. Right now, if it's softwood lumber it gets lumped in and we're paying 45% duties and tariffs.

The products I make come from species that they don't have in the U.S., so if the consumer wants the product, they have to pay for it. Selfishly speaking, for businesses like ours, some type of separation of the high value from the commodity to at least isolate the commodity.... That's the issue.

For the duty rate we're paying, they take CanFor, West Fraser and a number of major producers and they average the dumping they've done. They say they're going to average it and then PowerWood, which is this little company that does specialty products that go into architectural homes, is paying an average of those. It doesn't make any sense. We're just caught up in the drain, so to speak.

Selfishly speaking, for my business and businesses like mine, it would be to have some way to separate us from that commodity piece and then allow a conversation about the commodities and have a separate conversation about specialty lumber.

[Ron McKinnon, Liberal, Coquitlam—Port Coquitlam, BC]

Is that a differentiation of the kind of fibre, or is that a differentiation of the kinds of products you produce with that fibre?

[Jake Power]

It could be a little bit of both. It could certainly be the type of fibre, or it could be the types of products as well.

[The Chair, Liberal, Terry Duguid]

That's your time, Mr. McKinnon.

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