Mr. Chair, our government is there and will continue to be there to help the Canadian softwood lumber industry. The forestry sector is core to our economy and our Canadian identity.
My own family's story has been interwoven with Canadian forestry for centuries. My father David Hogan grew up in mill towns and worked summers at the newsprint mill. My grandfather John Hogan was a career pulp worker who worked at mills in Baie-Comeau, Masson-Angers, Chandler and Port Hawkesbury. His father spent his career in forestry. While it was not an unbroken line, as it was sometimes uncles, brothers or cousins, that is the way it was for generations in my family, back to when Antoine Bouchard married Marie-Madeleine Simard in Saguenay in the early 1700s.
It is true, the member for Jonquière and I are eighth cousins.
My family owes an enormous debt to the good jobs that the forestry sector provided then, provides now, and will provide well into the future. In fact, this entire country owes that debt. To make good on it, we must secure and protect this industry, and ensure for it and those who work within it a growing and prosperous future.
This is a moral obligation, but it also makes sound economic and environmental sense. The sector is increasingly recognized as a key aspect of greener construction and a more sustainable lifestyle. Lumber is a renewable resource, a carbon sink and a competitive advantage.
Canada has more forests than almost any other country in the world, and the quality of the wood we produce is exceptional thanks to the natural advantages of our climate and our forestry industry's role as a global leader in forest stewardship. High quality creates high demand, especially from the United States.
However, the industry is going through a period of crisis. Our long-standing softwood lumber trade dispute with the Americans has reached a point where combined tariffs and duties now average 45%. The United States is not just our number one export market. At 85%, it basically is the market.
The market is one we built and earned based on the quality and accessibility of our products. Now, however, we are being shut out of that market because of protectionist policies. The situation is bad for American consumers and American builders and bad for the Canadian forestry sector. It is bad for forestry towns and bad for forestry workers and their families.
The American action only harms; it does not help. It harms the Americans, of course. They do not have the lumber production to meet their domestic demand. They do not have the foresters, the mill workers or the supply chains. There is no reasonable time frame in which the United States will become self-sufficient in lumber. Instead, it will pay more to buy from us, the Europeans or the South Americans, and it will get less: lower-quality timber and smaller lumber.
Of course, the American action also badly harms Canada. We do not have another market of the U.S.'s size or as close. As good as our product is and as talented as our forestry workers are, diversifying away from a market that was built up over centuries will take time.
Both we and the Americans need a softwood lumber deal. We realize this, and they will. We will work at every level to get this deal. In the meantime, we must support our forestry communities: the companies, the workers, the families and the businesses that rely on the mills being open.
Many mills are closing or curtailing. As good as the Canadian product is and as much as American demand remains, having 45% combined tariffs and duties is very difficult.
As I said, combatting this decline is not only a moral imperative; it is an economic one. When workers and their families leave these communities, they do not always come back. Expertise is lost that takes decades to rebuild. Forest roads that support mining exploration are not built. Unharvested timber rots in tenures, and that can create fire risk. Rural hubs lose the vital services that are no longer able to be sustained.
We have discussed these measures to support the forestry sector several times in the House. I will briefly review them. First, there is $50 million for workers. However, even though this is necessary and important, forestry workers do not want employment insurance benefits. They want to work. They want a future for their industry.
That is why we are also providing $700 million in liquidity supports, $500 million to increase local processing and value-added production, as well as strict rules under the buy Canadian policy that require the use of Canadian lumber in general and for the Build Canada Homes program in particular. We are strengthening our domestic and export markets.
These investments and policies are in addition to a $5-billion strategic fund that will help companies affected by tariffs pivot, adapt and innovate.
We have also expanded eligibility for the existing investment tax credits to include systems that generate electricity, heat or both from waste biomass through budget 2025. This helps sawmills struggling with tariffs and duties by incentivizing new clean energy uses for residuals.
I want to thank the member for Courtenay—Alberni for his advocacy on this file. It supports meaningful investment in our forestry sector.
There is more to do, and this government will do more. It is my sincere hope that we will use tonight's take-note debate to elevate a conversation and to talk about other ways to support the softwood lumber industry in Canada in the short term, as we look to get a deal and as we look to reorient in the long term.
Therefore, I ask, what other supports could be considered for workers in mill communities to keep workers employed if possible and financially supported when necessary, and to keep communities vibrant? What other supports could be considered for companies in the sector to keep balance sheets strong, to keep mills open and to support diversification?
On that note, I would like to talk about our future, the future of Canada's forestry sector. It would be naive to believe that a softwood lumber agreement will solve all our problems once and for all. We have had softwood lumber agreements before. If we do not want to be at the mercy of some future junior senator from Oregon, we must diversify our forestry sector. We must diversify our markets and we must diversify our products.
I want to be clear: We cannot replace U.S. demand in any reasonable time frame. It is our largest market, and the U.S. already builds houses out of wood. Our mills are tooled to their products and our continent and existing infrastructure make north-south transportation easy and cheap, but the U.S. market needs us too. We used to provide 32% of its softwood lumber, and after all the hostile policy we still provide 25% of its softwood lumber, but the share of its domestic production that has increased over time is negligible. The share is made up by new imports. The U.S. simply does not have the wood.
In this lose-lose scenario, our hundreds of forestry communities are feeling it more. If we want to increase our leverage, we need to shift exports away from the United States. We do not need to shift all or even most; even a few percentage points of diversification increases our leverage relative to that of the U.S. and makes sustaining a deal, a good deal that benefits both sides, more likely in the future.
As I close, I want to say that a healthy forestry sector requires four things. First is access to economic inputs, timber or residuals, depending on the part of the business. Second is access to the capital required to be competitive in this sophisticated and mechanized business. Third is access to markets, product lines and geographies, much of which require the right infrastructure. Fourth is the talent, and we have centuries of talent spread across hundreds of forest communities. Canada, working with all jurisdictions and indigenous peoples, needs to consciously build and maintain our capacity in all four.
The Canadian forestry industry will ultimately succeed because of our strong foundations. We have high-quality wood, we have trade relationships around the world and we have the talent. With the support of this government and the House, we can succeed faster. We can get through this period and lay the groundwork for a forestry sector that can thrive for countless generations.
Let us get all ideas on the table, maybe beyond “we should just try harder”, and work collaboratively to support an industry that means so much to so many of us and is so integral to the story of Canada.
