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.