Natural Resources Committee on June 16th, 2026

[Frédéric Verreault]

We have indeed recommended a number of measures to stabilize things, but it's important not to get into wishful thinking. Newsprint gains are at an extraordinarily high risk over the next 6, 12, 24 or 36 months. Naturally, I won't speak for colleagues who have such mills, but, collectively, in public policy, we can't remain in denial: the newsprint sector is coming to an end.

Still, I'll give you some very concrete examples. In Ontario, there are projects to replace newsprint in the consumption of forest biomass and forest residues that have reached a certain maturity. Access to these funds could give these projects a quick boost to replace newsprint mills. The situation varies across the country.

The key is to make the tool box actually available. That's where I think the Canadian government has a role to play. That's why we recommend taking action by the end of 2026 for such an investment fund.

[Mario Simard, Bloc, Jonquière, QC]

Thank you.

[The Chair, Liberal, Terry Duguid]

Thank you.

Mr. Hogan, you have five minutes. I understand you want to share your time.

[A voice]

[Inaudible—Editor]

[The Chair, Liberal, Terry Duguid]

My apologies.

Mr. Martel, please go ahead.

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

Thank you, Mr. Chair.

Witnesses, this is very interesting. What's more, I think it's clear.

Mr. Verreault, I would like to know one thing. I think the report is interesting, but it seems to me that it discusses land use planning and the management of our forests. I know this is a provincial jurisdiction, but if nothing is defined in that regard, productivity is going to take a hit.

How can we move forward? If I'm off base, let me know. However, that seems to be where it starts. There's currently an issue there.

[Frédéric Verreault]

It's interesting to refer to both land use planning and forest management in the question. That's what we quickly realized in the course of the work, which was conducted mainly in English. In English, it's called “forest management”. There's no ambiguity. It's a matter of managing hectares of forest. However, in Quebec, we talk about “aménagement forestier”, which is one aspect of managing a hectare of forest. We don't have a 360-degree perspective on forest management.

As we're reflecting on this, the risks of forest fires are no longer theoretical. Our task force watched the documentary B.C. is Burning. We had a disturbing meeting with the authorities of the State of California, where people have died because of the forest fires. The idea of complete classical conservation, in the form of a bell jar, doesn't allow for forest management. Timber harvesting also makes it possible to remove fuel that would increase the risk of forest fires and their potential range. That's a consensus among the first nations representatives, provincial representatives and territorial representatives we met with during the course of our work. Without telling, for example, SOPFEU in Quebec what to do and how to do it, there's potential to facilitate a conversation on actual best management practices in the country, which we recommend in the report. In English, it's a “working forest”, a forest that is already alive and forest land management that is just as alive, whose pillars are timber productivity, respect for communities and populations, biodiversity and the reduction of forest fire risks.

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

Regulation gets talked about all the time. I think it's important to address it, because the report states that the federal government's regulatory burden is one of the main barriers to competitiveness. How can it improve that without changing everything? It keeps getting discussed, but nothing seems to change in terms of regulation. I would also like to know to what extent these delays and the overlap, if I can put it that way, increase your operating costs.

[Frédéric Verreault]

I don't have a specific estimate of how they affect our costs. Still, in appendix A of the report, we really took an inventory of the very specific aspects of the regulatory framework that we felt would be easiest to address. According to the powers of the Government of Canada, under the mandate that Minister Hodgson gave us, there is already scope for action, which is based on a decision and in no way compromises the integrity of the framework for our industrial practices.

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

The Europeans are getting somewhat involved. You talked earlier about the United States, Canada and North America. We were almost alone in this before the Europeans arrived.

The report compares Canada unfavourably with Finland. What do you think are the main differences in public policy between Canada and Quebec, on the one hand, and Scandinavian countries, on the other?

[Frédéric Verreault]

There are basically three. The first is the stability of access to the raw materials that are seen and understood as such, as well as the capital that naturally comes with it, to be able to exploit the potential of the bioeconomy, biofuel and bioenergy.

The second is forest land production. There's an important caveat here in the nuances of our recommendations. In Finland, planting takes place on 80% of forest land. At a threshold of 80%, that's no longer a forest ecosystem, a guarantee of biodiversity; it's agriculture. Our recommendation here is to increase the land currently under forest management from 5% to 10%. That would mean maintaining a perfectly reasonable threshold so as not to compromise biodiversity, but to double wood production in Canada.

Third, the Finnish population understands the logging and processing of a tree, how it's done and why it's done. Canada can certainly have a similar forestry culture.

[The Chair, Liberal, Terry Duguid]

Thank you.

Finally, it's over to you, Mr. Hogan.

[Corey Hogan, Liberal, Calgary Confederation, AB]

Thank you, Chair.

Thank you to both of you. It's great to see you both.

I'm only going to hold this floor for a few seconds, but I did want to take the time to express my sincere gratitude for your work and the work of the task force and to say, for the benefit of my colleagues, that, at the meeting of Canadian Council of Forest Ministers two weeks ago, there was, across provinces and across political stripes, very positive reception and great appreciation for your work.

The forest sector and communities and workers who rely on it are core to our Canadian identity. They all need us. In that spirit, I would like to share my time with a passionate advocate for forest communities. I give my time to my colleague from Courtenay—Alberni, Gord Johns.

[The Chair, Liberal, Terry Duguid]

Mr. Johns, welcome to the committee.

You have four minutes and 30 seconds.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Thank you, Mr. Chair.

I want to thank the parliamentary secretary, Mr. Hogan, for giving me this time and this opportunity.

I was at the all-party forestry caucus this morning, and it was great to see all of us working collectively. This shouldn't be a partisan issue, but there are some things that need to happen and some issues that can be rectified.

We heard from the Forest Products Association of Canada. They talked about, obviously, the uncertainty that the U.S. tariffs and trade disputes are causing on the forest sector, but they did highlight that Canada should be putting more emphasis on creating domestic demand for Canadian wood products rather than relying so heavily on export markets.

I shared a story about IGV Housing in my riding. They're a company that we're so proud of. They had PacifiCan funding. They're ready to go, but they're running into the problem that CMHC can't finance off-site modular housing, but Build Canada Homes says you have to have modular housing. This is the same minister. The minister could direct CMHC to fix their financing allowability, but they haven't, and this is holding up projects that could use Canadian wood.

I'm going to go, obviously, to my fellow British Columbian, Mr. Kalesnikoff, so he can speak about how some of these gaps and barriers need to be addressed immediately and can help create jobs in our communities.

[Ken Kalesnikoff]

Thank you for that. This point was very much in a conversation I had recently.

It is a very tough thing to work through because, as much as we want to see modular building—we've now transitioned to modular building—the financing of that is very difficult. The system does not allow.... Generally, money is released upon certain levels of completion of a project, whereas modular is completed inside the factory. We definitely need to get past that type of use.

We also have a hang-up about using modular. We've been working with the provincial government on many different projects trying to convince them that we should be building schools not just from modular but also from mass timber. They need to be repetitive. If we build them in a factory and build them repetitively, we can save a lot of money. The premier recently cancelled five assisted-living homes because the cost per bed was so high. I truly believe that if we were given the opportunity, as a mass timber supplier, we'd be able to save a lot of money on those types of things.

There's definitely a gap here.

[Gord Johns, NDP, Courtenay—Alberni, BC]

I think you're touching on how important it is that we use Canadian wood for all infrastructure.

The forest sector action plan requires federal partnerships in key areas, as you know, to implement the strategy. We've heard from stakeholders that we need to scale up regional forest manufacturing hubs and integrated value chains; to accelerate investment in modernization, innovation and value-added production; to reduce, obviously, regulatory friction and align policy frameworks with provinces; and to support workforce transition and community resilience. I'm thinking about the workers in Crofton and the need for a bridge to retirement.

I'll go back to you, Mr. Kalesnikoff, given that you're from my home province.

Do you want to touch on some of those issues?

You have about a minute left. I want to give you my time.

[Ken Kalesnikoff]

At the end of the day, there's a real opportunity here for the forest industry. We're sitting on the cusp of being able to be very transformative.

This $10-billion fund the task force asked for is to do that. Our expectation is that whenever it gets approved—hopefully, it will be in the fall—the money will be used to promote the use and creation of new, innovative-type industries, and that we will end up being able to employ more people and secure those who are in rural communities across Canada. They are at such risk because the forest industry reaches so many of them. It is absolutely paramount for us to recognize this. That's really hard to do in a province like British Columbia, where the electoral population is basically in one corner of the province and doesn't really understand how important this is.

To be honest, right now, I'm sitting in 100 Mile House. I came here to help them talk about what they can do, because they just lost a sawmill here. They have no sawmills left in 100 Mile House. What are these people going to do? They're sitting here with fantastic fibre, but we have so many overlapping rules and regulations stopping them from doing what they know they can do.

Last week, I was in Burns Lake, dealing with wildfire issues.

There is an answer here, but we have to work together. This is not a partisan issue. This is a bipartisan issue. We're really hoping that this report will transition through different election cycles, because this is very important. As I said in Langford, we are truly in the hands of the different provincial and federal governments here.

[The Chair, Liberal, Terry Duguid]

Thank you.

Mr. Simard, you have the floor for two and a half minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

Mr. Verreault, in your opening statement, you emphasized the fact that we need to think about the forestry sector as if it were a manufacturing sector. I couldn't agree more.

I have a quick question that is not meant to be annoying, but here goes. I've often heard people in the forestry sector say that they had a somewhat conservative culture, where people settled for just producing commodities. With an investment fund of $10 billion over 10 years, we may have to change attitudes.

Do you think there's work to be done on that? Could government financial support programs include incentives for more value-added manufacturing? Is the need to shift to value added a message that is understood by people in the industry?

[Frédéric Verreault]

We don't actually claim to know what the entire industry thinks today, of course. However, according to a number of colleagues and associations, there is a high degree of receptiveness to the report and the recommendations we have tabled. Generally speaking, I think there's good collective alignment.

Since you're talking about the industry's path forward, it would be important to mention to parliamentarians that we also didn't want to be complacent about the industry and its direction. There is a segment of the report where we are also very critical of leaders who have not been able to be agile and bold enough to develop more resilient business models.

At the end of the day, the goal is not to have added value or integrated groups. Integration must be done as it is in a number of companies, through clusters, hubs or whatever technical terminology we use. Nevertheless, it must be done, because it is an ingredient of the resilience we want to see reflected in all the aspects mentioned in our report and recommendations.

Resilience in the industry will ensure that it remains cyclical in terms of commodities. There will still be lows within the cycles. Today, as we see, business models that foster integration and are part of integrated, interconnected and optimized clusters are what show the resilience we collectively need in this country. The communities need it, as do the workers. We feel that is the angle that must be taken into account as we move forward.

[The Chair, Liberal, Terry Duguid]

Thank you.

Mr. Malette, I didn't forget about you this time. You have five minutes.

[Gaétan Malette, Conservative, Kapuskasing—Timmins—Mushkegowuk, ON]

Thank you.

Mr. Kalesnikoff, you were talking about 100 Mile House. We often forget why we're involved in this report and this task force. In the end, it's to protect jobs and it's to save communities. There are 300 communities across this country that live from the forest industry. It's probably more than that, because then there are the neighbouring communities who have contractors and logging contractors. It's the one industry that goes from one end of the country to the other.

Speaking of British Columbia, you've talked about it, but could you expand a little bit more on the biggest challenges in British Columbia to maintain a healthy sawmill industry? In the end, it's to continue with the other products and the other industries and to save jobs.

[Ken Kalesnikoff]

To follow up on what Frédéric mentioned earlier, we did have a presentation from New Brunswick. New Brunswick seems to really have accepted the fact that our forests are an asset, not a liability.

I discussed this with our premier and I hoped to make an impact. We need to look at our forests as an asset. It starts there. We need a cost-competitive fibre supply. If we create the hosting conditions that are very much needed, then we will see the industry expand. We will see jobs secured. Right now we have lost a lot of companies that have fled the province or have shut down because of the hosting conditions. We also need to promote understanding. We mentioned Finland in our report. The culture, the understanding of the forest industry and the social licence are amazing. You need all these things to be firing on all cylinders.

The previous gentleman mentioned value added. Value added is not a silver bullet. Value added is a spoke in the wheel. To make the wheel run smoothly, we need all the spokes in the wheel. We need to really create an environment where we appreciate what the forest industry brings to this country, right across the country, as you said. It will create the jobs that we need and it will secure the jobs that we need. At this point in time, if somebody doesn't know that they have a cost-competitive fibre supply, whether you want to spend $1 million or $100 million, you can't do it, because you don't know if you're going to have that supply. That supply would secure the jobs in the communities in this country.

[Gaétan Malette, Conservative, Kapuskasing—Timmins—Mushkegowuk, ON]

Thank you.

Monsieur Verreault, in the report there's an interesting section on doubling our consumption of the lumber, mass timber, OSB and MDF that we utilize in this country. Could you expand on that a little bit? To us, it doesn't seem like a large amount of lumber. What percentage would it take away from the U.S. markets? How critical could that be?