Natural Resources committee  Thank you, Mr. Chair and members of the committee. Copies of my remarks are available for committee members. Bonjour. My name is Derek Nighbor, and I'm the chief executive officer at Forest Products Association of Canada. I'm pleased to be here today to discuss Mr. Cannings' Bill C-354 and to talk about why it's important that wood be given every consideration as part of the federal government's procurement strategy.

International Trade committee  Thanks, Mr. Chair. I think you're going to see some common themes among the business groups. I'm going to do a set-up here in terms of our industry and its importance. I want to assure you that, because of the robust legislative and regulatory framework we have, we will not be losing our forests in Canada.

Finance committee  Thank you. I wish my comms guy was here. I appreciate that, and you're right, it's something we talk about internally in the membership. One of the things I'm proudest about—and I don't think people really understand it—is just how involved the planning process is to manage the harvest.

Finance committee  So much of what Brock talked about.... We are seeing the coming to life of a number of things out of budget 2017, so I think there is an element of process on the infrastructure side for us. About a third of our overall costs are related to transportation, getting the goods from the forest to the mill—which in some communities could be 500 kilometres apart—then to market, Port of Vancouver, China, or whatnot.

Finance committee  Thank you, members of the committee and my colleagues, for being here today. On behalf of my team at FPAC, I'd like to thank you for this opportunity. Just to level set everyone, we are the voice of Canada's wood, pulp, and paper producers nationally and internationally, and increasingly of companies that are getting into the bioeconomy game and getting into power production as well.

International Trade committee  It's a great question. We do. I think Canada has two advantages. The environmental reputation I talked about is a big selling point for us. It's going to be a huge opportunity for us in places like Malaysia, Vietnam, and Japan. The quality of our products is the other key driver for us.

International Trade committee  Yes. We have looked at the numbers and it's about a 2% increase in Japan. It's going to be about $37 million a year. Right now, we haven't crunched the job numbers, but it's safe to say this is going to be a critical opportunity for us to sustain and to grow jobs. The bigger driver, and I talked about it yesterday at the finance committee, is that we really need the government to continue to support innovation in the sector.

International Trade committee  Yes. There's no doubt, given the geography, that the western-based industry will benefit more than companies will in the east. That said, I think the key for companies in Quebec is.... There is going to be some opportunity. I think there's going to be more opportunity with CETA.

International Trade committee  Yes, I think for us the deal is only as strong or going to be as successful as Canada's ability to defend it and stand up for it. We see non-tariff trade issues from time to time, not only in our sector but in other sectors, whereby a material is not safe, is not approved for use, or we question whether or not it meets our high standards.

International Trade committee  We see this opportunity especially in a country like Japan where those kinds of standards are critical and highly valued. The beauty of the Japanese market is the high-value products that Japanese customers want. I mentioned the trade offices, the trade commissioners...basically, the promotion of the Canada story, the Canada brand, the environmental leadership in Canada.

International Trade committee  Yes, I think we need to go forward. The other thing is we have to control what we can control, so our recommendation is to keep pushing forward on this. We think it's absolutely critical. The other thing, Mr. Ritz, that we need to continue to do—and I mentioned this to the finance committee yesterday—is the support for ongoing innovation in the sector to build more with tall wood, to do more on the biospace.

International Trade committee  Mr. Chair, thank you for the opportunity to appear on behalf of the FPAC, Canada's voice for the forest products industry. I’ll start with a quick commercial for the sector. Our industry remains a cornerstone of the Canadian economy, representing 12% of Canada’s manufacturing GDP, employing directly about 230,000 Canadians and indirectly about a million Canadians, and supporting over 200 rural communities where these good jobs are very important.

Finance committee  Yes, there's definitely an export strategy with the U.S., but we're also looking to diversify those markets. Back in 2002, we had about 86% of total forest product exports going to the U.S. It's about 67% to 70% today, so we've definitely diversified already but there's huge opportunity.

Finance committee  That's an excellent question. FPAC is the national voice of the industry across Canada. As this committee knows, there are different regions of the country that have had different opinions on what a deal should or should not look like. Our board made a conscious decision to say that, for the benefit of the industry, FPAC is going to step back during the negotiation time and is going to allow the regions, Quebec, B.C., Alberta, Atlantic Canada, and others across the country, to partake in the negotiations at a regional level.

Finance committee  That's a good question, thank you. We've long been on the carbon, climate change-fighting train, if you will. We're one of the few sectors that lent our support to the Kyoto Protocol many years ago. As I said, we're one of the few sectors that has launched a comprehensive plan.