RNNR Committee Meeting

     I call the meeting to order.

    Thank you, everybody, for joining us today. We are on meeting number 10 of the House of Commons Standing Committee on Natural Resources. I'm glad everybody could make it. It's our first meeting back since Parliament resumed sitting last month; it's February 1 today.

    We are proceeding on Zoom, as everybody knows, with the exception of Mr. McLean, our analysts and our clerk, who are in the room there today. We need to be patient with everybody in terms of how the process works electronically. I know everybody is good at it now, so thank you for that.

    We are going to start with our three groups of witnesses. Each witness will be given up to—

    I have a point of order, Mr. Chair.

    Yes.

    Mr. Chair, I submitted a notice of motion on—

    I can't hear you, Greg.

    Is there something wrong with the microphones in the room?

    I can hear you faintly, but not clearly.

    An hon. member: We can hear you clearly on Zoom.

    The Chair: Try again.

    Test, test, test.

    There, now I can hear you.

    Mr. Chair, I submitted a notice of motion to the committee last week—

    An hon. member: We lost him again.

    Mr. Greg McLean: Okay. Technicians are looking at it here.

    The volume gets soft, that's all.

    Why don't I go ahead with what I was saying.

     You can hear us okay, can't you?

    Yes, I can.

    I was explaining to our witnesses the process for today.

    First of all, thank you for joining us today. This is our 10th meeting on this study, and your evidence is going to be helpful to us as we approach the end of this topic. We're grateful for your taking the time to be here.

    The process is this: Each group of witnesses, whether you're individual or two, as in the case of Unifor, will be given up to five minutes to make an initial presentation, following which, after all three of you have presented, we'll open the floor to questions from around the table.

    You are welcome and encouraged to speak in either official language. Translation services are available to everybody. At the bottom of your screen, if you haven't already done it, you can designate your preferred language for audio purposes. There shouldn't be a problem, and if there is, please feel free to let us know.

    Why don't we start at the top. I'll start with Vice-Chancellor Lahey—

    Mr. Chair, is this working yet?

    Yes, now I can hear you.

    I submitted a notice of motion last week about—

    No, it's gone quiet again. It's fine when you start, and then it sort of fades away.

    Maybe I have to just really focus on putting my mouth close to the microphone.

    Does that work there?

    No, it's still not working.

    It's working fine for me. I can hear it great.

    Am I the only one having a problem?

    No, I don't hear anything.

    It seems to be fine when you start, and then a few words into what you're saying, it gets quiet.

    On Zoom, it's perfect. There's no fluctuation or change at all.

    Let me try a different chair.

    Okay.

    How is this?

    It's fine for now.

    Okay, let me know when it cuts out, if you can.

    Okay, so now it's faint again.

    Okay.

    IT, anything?

    That's worse. Now I can't hear you at all.

    Is anyone having problems besides James? Mine is perfect on this end.

    Is anybody else having problems, other than me?

    I'm having problems.

    I'm seeing at least two heads nodding.

    I can hear everybody else. It just seems to be the room that I'm having problems with.

    Is there any adjustment we could make in the IT here, or is this just endemic?

    Madam Clerk, can you try speaking to see if I have the same problem with you?

    Yes, certainly.

    This is Hilary Powell, clerk of the committee. We are going to look into—

     You're fine.

    Mr. Chair, it's Bryan here. I don't know if you can hear me.

    I would suggest we suspend until we can figure this out.

    It's probably not a bad idea, although I'd hate to.... You can hear okay in the room, can't you?

    Yes. I can hear perfectly in the room.

    Okay.

    I don't know what it is you're trying to introduce, but can we wait to deal with this after we hear from the witnesses?

    That's exactly what I'd like to move, Mr. Chair.

    Can we set aside 10 minutes at the end of the public meeting today to discuss the motion that I introduced on Friday?

    Okay.

    We have committee business after the public session.

    No, this would be part of the public session, Mr. Chair.

    Okay.

    Let's carry on with the witnesses and we'll cross that bridge later on. As long as you can hear them, that allows us a chance to go ahead now.

    I was just about to turn the—

    One second, please. IT has some input.

    Mr. Chair, I'm told you have to have your audio set to floor.

    Can you hear that?

    Madam Clerk, can you explain that to him in case it's broken up?

    Yes, certainly.

    Mr. Maloney, can I ask you to put your audio on the floor audio as opposed to interpretation? We're going to check that out and see if that helps with the issue.

    It's odd that he's the only one I'm having the problem with.

    Madam Clerk, your voice is coming in and out for me as well.

    I turned off the interpretation and I can hear just fine.

    Will that affect our interpretation? That is the question.

    It's only doing it for me now that I've switched it to English. I had interpretation off and it was fine before.

    Okay.

    Try it now, Greg.

    Test, test.

    Okay, it's fine now.

    But then we don't have interpretation.

    Can you hear well now, Mr. Simard?

    I can hear him now.

    The interpretation works very well. I can hear very well, Mr. McLean, as long as I'm on the French channel.

    Okay.

    I can hear the translation when Mario is speaking French. I just can't hear Greg when he's speaking English unless I turn it to “off”.

    Okay.

    Perhaps I will defer to IT here if there's a solution.

    Let's suspend for a few minutes to see if we can get this worked out.

    The meeting is suspended.

     Our meeting has resumed. Thank you, everybody, for your patience. Technical problems occur from time to time. It's a good way to start the year, I suppose.

    Thanks, Mr. McLean, for relocating so we can proceed. Did you want to continue saying what you were attempting to say before, when I couldn't hear you, or do you want to carry on with the witnesses?

    Thanks, Mr. Chair.

    I would like you to set aside 10 minutes at the end of this public part of the meeting and deal with something you may have wanted to deal with in the in camera session, about the notice of motion that was put on the table at the end of last week concerning the Keystone XL pipeline.

    I can read the motion, but I think everybody on the committee has received it. If we could deal with that at the end of this meeting as a point on the agenda, I think that would be the way we could handle it best.

    I think the proper process for that is.... We have an agenda, which includes committee business at the end. The rules don't allow members to introduce motions on a point of order, as far as I'm aware, but they are permitted to do so when their time comes to ask questions.

    On that basis, why don't we go to our witnesses and get the meeting started?

    It's 11:26 now. We have a little over an hour. I'd prefer not to lose any more time if we can avoid it. These witnesses have been kind enough to take their time to join us today.

    Vice-Chancellor Lahey, let's try this one more time. You have the floor for five minutes.

     Thank you, Mr. Chair, and good afternoon, everybody.

    I was asked to speak for a little bit about an independent review I conducted on forestry practices in Nova Scotia between August 2017 and August 2018.

     Just for a little context, Nova Scotia is about 30% Crown land and 70% private land. The issue instigating the review was the percentage of harvesting by clear-cutting on private land in Nova Scotia, where pretty close to 90% of the harvesting is clear-cutting. On Crown land, about 65% of the harvesting is clear-cutting. The percentage of harvesting overall breaks down pretty consistently with the two land tenure types. About 30% of harvesting is on Crown land and about 70% is on private land.

    The essential issue in Nova Scotia is that the majority of our forests are called Acadian forests, meaning they're constituted by forests that are multispecies and multi-age forests. They only get to be that way if they are left relatively undisturbed over long periods of time, because it's a successional dynamic. The trees that grow in first create the conditions that the trees that grow in next require to grow, and they tend to become the big, gorgeous, valuable trees.

    Clear-cutting is inimical to those kinds of forests because it cuts all of the trees. If it's perpetuated over time, it means that the forests' natural succession dynamics essentially don't get the opportunity to operate. Ecologically and from a biodiversity point of view, this is serious, because our ecosystems and biodiversity have evolved over time to operate or live with these Acadian forest types, as opposed to forests that tend in their nature to be more single-species forests—in particular, spruce forests. We have some of those in Nova Scotia as well.

    At a very high level, my foundational conclusion—and the government here has said that it embraces this conclusion—is that forestry practices shouldn't balance environment, social and economic objectives as if they are of equal value. We need to give priority to ecological and biodiversity health, because this is foundational to everything else we want to accomplish, including having a healthy forest in the long term. If we don't have healthy ecosystems and biodiversity, in the long term we'll have degraded forests.

    There are many recommendations. I can't possibly review them all in five minutes. At a very high level, I proposed the adoption of a new paradigm, which I called “ecological forestry”. I proposed the recommendation of something called the “ecological triad”. The triad means that as much of the forest as possible is managed in one of three categories, hence the triad.

     One leg of the triad is purely for conservation: parks, wilderness areas, nature reserves and things of that sort. Another leg is forestry, either in its natural condition or actually created through plantations to be amenable to intensive forestry, including clear-cutting.

     In the middle is the next or middle leg. It's not very elegantly named. We called it the “matrix”. The idea there is that the only kind of forestry that would happen would be forestry that replicates what is called the “natural disturbance regimes” that affect Acadian forests. Those disturbance regimes are things like wind, pests and other kinds of things that bluntly kill trees naturally. In the Acadian forests, those natural factors tend not to flatten whole stands of trees. They knock down specific trees or small groups of trees. In that matrix area for Acadian forests, the recommendation is that we only use selective forest techniques—something called shelterwood harvesting—and basically little or no clear-cutting in that matrix part of the triad.

    I'm conscious of my time, so the last thing I'll say is that a key recommendation was that this triad be implemented comprehensively and as soon as possible on Crown land, so that two legs of the triad would result in Crown land being significantly dedicated to ecological and biodiversity protection. There would also be some intensive forestry on Crown land. The government would work with private landowners to implement the triad over time on private land by encouraging education and supporting the choices that landowners themselves want to make in terms of which category of the triad they would like to manage their land with.

    An overriding concern in Nova Scotia is the finding that our forests are not as productive as neighbouring forests in places like New Brunswick, Maine or other places that have the Acadian forest type. While this triad model and the emphasis on ecology could be seen as limiting the industry, it's ultimately about having higher tree productivity—trees that grow faster and more diversity of tree types—so we can be well positioned to have a forest industry not only in the short term, but in the long term. We would also have a forest that is amenable to whatever that future industry might look like, because of the diversity of tree types that would be at our disposal.

    I'm going to talk until I'm cut off, but—

    I'm going to cut you off. I was waiting for a time to do it that was least disruptive. That would be it, so thank you very much. I appreciate your concern about the time limits.

    We'll go to Mr. Connors on behalf of Gitxsan Development Corporation.

    Sir, you have the floor for five minutes.

     Thank you, Mr. Chair.

    I'm Rick Connors, president and CEO of Gitxsan Development Corporation. We're a first nations for-profit company out on the west coast, in northwestern B.C.

    There are four areas that we've identified, and we've been working with these four areas for a great number of years now. I have a little over 40 years of experience in forest products since I worked for Canadian Pacific Forest Products up in Thunder Bay, back in the 1980s.

    One of the areas is easing log export restrictions. A lot of these are very specific to the west coast, but they're endemic from the perspective of what we're dealing with on a continuous basis here. Ninety per cent of the logs harvested in B.C. are milled domestically, with the remaining 10% exported in their raw form. The primary reason is that for certain grades of logs, the economics do not support their being sold domestically.

    Due to log export rules, companies are forced to make deals with local sawmills whereby mills will not block their log export applications, but only if the logging companies agree to sell to them at discounted rates. Generally, there is a significant loss here. They put up a bid on the logs and we must sell those to them at a loss. This results in all kinds of detrimental effects to the logging company, including, obviously, losing money.

    Easing log export restrictions would provide greater certainty to log producers and licensees, giving them a greater incentive to increase investment and stimulate growth in the industry. It's one of the areas we're very passionate about out on the coast.

    The second area is stumpage reform. Timber is a Crown resource, and forestry companies must pay the government stumpage based on the volume of timber harvested. It's also important in the context of the ongoing Canada-U.S. softwood lumber dispute to prove Canadian companies are not subsidized versus their U.S. counterparts, who operate primarily on private lands.

    Stumpage is meant to be reflective of the value of the timber and the operating costs for the area, but unfortunately in many areas of our province the stumpage amounts being charged are much too high and sometimes exceed 50% of the total delivered cost. That's without taking into consideration the appraisal areas. We require some appraisal reform in that area, which is like moving a mountain.

    By reducing stumpage rates, companies would be able to harvest more timber, stimulate growth in the industry and carry on a very healthy stimulus from silviculture programs and reforestation.

    The next area is the need for streamlined and clear first nations consultation. Even though we're a 100% first nations-owned corporation, we manage a 386,000 cubic metre forest licence. In terms of getting permits, each permit for logging must go through the first nations consultation process.

    Unfortunately, the consultation process is a moving goalpost. It's not fair for either the first nations or the logging companies, because it simply is not strict and defined enough to clarify all the fuzzy areas around the permitting process, and there's no defined context in terms of how long it will take to get a logging permit—a cutting permit—approved. As a direct result, you cannot put down timelines for this and it's hard for a company to lay that down. It's not fair to either party.

    The government needs to resolve these issues to provide licensees with the certainty they need regarding permit issuance, so that they can make further investments and stimulate growth.

    Last but not least is the pulp and the low-value timber. There is a presence of high quantities of pulp and other low-value waste fibre. In the past, it was utilized by the pulp mills, but with the demise of pulp mills in the local area here, it's a constant challenge for many of the licensees. Each year, millions of cubic metres of material is burned in waste piles, so there's a wildfire and forest fire management aspect to this, not to mention the positive implications in terms of utilizing that fibre for alternative resources.

    The government needs to invest more money in this, into next-gen technologies like torrefied pellets and bioheat for rural and remote communities, because that's literally where it rests.

     These types of initiatives not only reduce the use of fossil fuels in Canada, but they also begin to optimize the utilization of our forests, making better use of what has been considered waste stream product, turning one man's garbage into another man's gold. It's critical so we can turn the forestry waste stream into a revenue stream for licensees.

    I appreciate the opportunity to speak today. There's much more information. We have white papers on each of the subject matters if requested.

    Thank you, Mr. Connors.

    What stood out to me was that you worked in Thunder Bay. I was born in Thunder Bay, and many generations ago my uncle worked at Great Lakes Paper and both my brothers at times worked at Great Lakes and Abitibi earlier in their lives.

    That's where I started, Great Lakes Paper, as a process engineer. I'm a chemical engineer by profession.

    I know it well. Thanks very much.

    We'll go to our third and final group. From Unifor, we have Mr. Doherty and Mr. Hollin.

    I don't know who's going to start us off.

     Thanks, Chair. It's Scott Doherty. I'm the executive assistant to the national president of Unifor.

    As you know, Unifor is the largest private sector union in the country, with over 315,000 members. I'm responsible for the forestry sector for our union. I worked at Elk Falls pulp mill as a process engineer, the same as our other witness, in Campbell River for 16 years prior to starting on staff with the former CEP in 2008.

    We have almost 22,000 members in the sector, with 250 units spread across 10 provinces. Unifor is well positioned to talk about every aspect of the forest sector. Members of this committee are well versed in the forestry sector, and I know that previous witnesses probably have shared information on the state of Canada's forestry sector and the contributions it makes nationally, regionally and to local economies in terms of the economic production, taxes and so forth.

    It's Unifor's position that we will not create an effective COVID recovery plan without also addressing the challenges facing this sector prior to the pandemic, which are, as some have already said, low pulp prices, ever-growing fibre supply issues, obviously the ongoing softwood lumber dispute, volatile unpredictable global trade situations with China and the Trump administration, and obviously natural events such as pine beetle and forest fires.

    All these factors have caused serious liquidity issues for many of our employers. Amidst all of these pre-existing challenges, the pandemic struck, worsening some of the problems and creating serious new ones. For example, pulp and paper producers across the country have made capacity adjustments in response to the impact of COVID-19. We've seen the number of layoffs across the country caused by temporary shutdowns or permanent shutdowns of pulp mills. For many of our members, the pandemic has deepened the sense of uncertainty and employment insecurity that they felt prior to 2020.

    Unifor, however, is optimistic about the future of Canada's forest industry. We believe there are a number of concrete, pragmatic steps we can take to build a more sustainable, competitive and innovative sector as we plan for our recovery.

    First, we believe we need urgent action to help producers weather the COVID storm. In the short term, we need support, and we support the call for producers' financial support and liquidity measures from the federal government, including loan guarantees and other measures. In the mid- and long term, we need to continue to work to build a comprehensive, coordinated and sustainable forest sector at the federal and provincial levels.

    We support the call for a focus on new products and emerging markets, with an emphasis on sustainability and renewability for the industry. This must include incentives from government for investment and research. New developments in timber frame construction, along with biofuel development, are just a few areas of great opportunity as we continue to build the capacity to develop personal protective equipment, which is needed more than ever.

    Finally, there is also hope that the Biden election will lead to less volatility with the U.S., our biggest trader. Simply put, the time has come for a fair and reasonable solution to the softwood lumber dispute. For years, people have referred to this industry as a sunset industry. Unifor will never agree to such a comment. It's a ridiculous assessment. The industry is a sunrise industry, with enormous opportunity for transformational change and growth. When governments, employers and labour work together, there is opportunity to invest in our future and build a more green, sustainable, inclusive and stable sector.

    Thank you.

    Thank you, Mr. Doherty.

    Mr. Hollin, do you have anything to add?

     No, those were our opening statements.

    Okay, that's perfect. Thank you. We're always grateful when people not only stay within the time limits but come in under them, so that's great. Thank you.

    Now we'll open the floor to questions. First up is Mr. Zimmer for six minutes.

    Thank you, Mr. Chair.

    It's interesting how we have forestry backgrounds. My first real job was working at a pulp mill and in construction here in Taylor, B.C. It's amazing how forestry affects all our lives. My son works as a heavy-duty mechanic for a logging company up in oil and gas central, up here in northern B.C. It's still a very big industry. In fact, it's a lot of our economy and our jobs, the food on our tables and the roofs over our heads.

    I just want to ask a question of Rick from the Gitxsan. You're my neighbour, just to the west. We're up in northeastern B.C. I have friends and colleagues up in Fort Nelson, B.C. They just started the new pellet mill out there. I don't know if you know Brian Fehr, but he has just started that operation up again, which we're very glad to see. It makes a huge impact on a community like Fort Nelson.

    You mentioned the discount rate for exporting logs. What was that rate? What does that look like? We've seen discount rates for our oil and gas sector. Also, frankly, to the comments from Unifor, the Biden administration cancelling Keystone is not a positive first step by our friends to the south, for a new president to the south of us.

    Anyway, can you just speak to that discount rate, please, and give us a framework of how much of an impact that would really have on our industry in Canada?

    Certainly. Thank you very much, Mr. Zimmer.

    In terms of the blocking and how that works for us here, we have a requisite percentage of our allowable annual cut that we can export. This is not typically felt when we're dealing with the West Frasers or CanFors because we're very co-operative with all sawmills in the region. However, sometimes we come across profiles such that, let's say on a 100,000-cubic metre cut, the export component could potentially be, in our area, at least 45% of export quality. That would be a wonderfully high percentage. I know that sounds a bit crazy, but that's the highest that we ever find in our area as it's a very decadent area for fibre.

    The problem is that the export percentage is actually lower. What happens is that the sawmill will then put in an offer. It has to go to bid to get the saw log onto the market. The sawmill will put in a bid, for example, of $65 a cubic metre. Well, in this particular area, we have those big rock structures called mountains. We do a lot of cable yarding. Our cost to bring logs out of the bush is not as simple and as uncomplicated as they are in the interior. There's a coastal rate. However, our appraisal area says that we're interior, which is very unfair.

    Our cost to bring that log out of the bush was somewhere over $80 per cubic metre—$83 as a matter of fact—to bring that out of there. Stumpage was another significant factor in that $83. We were forced to actually sell production to that sawmill at $65, at a loss. That sawmill actually has its own licence, and it never utilized its own licence because it knew that it could not bring logs out of the bush at a rate that was conducive to making a profit for the sawmill. So they wait and they block other loggers who are just trying to make a living out there.

    I know the stumpage issue is a big one. Again, I'm from B.C. and we used to see the beetle kill. We were seeing the pine beetle and now it's the spruce beetle. There has to be a way to get that wood down before it becomes unusable. To me, there are some ways that we can do that and reduce stumpage rates.

    But let me move on. You represent a very large indigenous community in our province of B.C. I have many indigenous groups in my riding. In terms of the impact, we've already spoken about the impact of the forest industry on some of our personal lives. We see that about 205,000 people, according to Natural Resources Canada, were employed, and we see that about 12,000 jobs were held by indigenous people, representing about 7% of the sector's workforce. Of course, you understand how significant it is to have good jobs in the community and how much that really impacts that community.

    In terms of the Gitxsan specifically, you've seen the impacts personally and how it matters to the community. Maybe just speak to the positive aspects of forestry in indigenous communities.

     Absolutely, modern forest practices use a feller buncher to harvest trees, as opposed to the traditional chainsaw approach to it. That may reduce the number of people. However, offering these opportunities—and we're about 85% indigenous company; 85% of our employees are indigenous—has allowed them to go back to the bush now.

    You cannot believe the amount of forestry equipment that sits waylaid just at the side because Skeena pulp mill closed, and there's no more market for the pulp log up here. When you have a decadent forest of 65% in some areas, it's impossible to go in there and high-grade the forests, and then you're paying for all the silviculture work, and all that has to be burdened into one.

    We have to focus on those issues so that we can bring more of the indigenous people into forestry. Quite frankly, the idea and the concept of reconciliation is born in that area because of the fact that they're the stewards of the land. It brings them closer to it, and they really want to participate. They just do not have that financial, structural wherewithal to make it happen.

    Thanks, Mr. Connors and Mr. Zimmer. That's unfortunately all the time we have.

    Ms. Jones, you are next for six minutes, please.

    Thank you very much, Mr. Chair.

    I want thank all of our guests today. It's “Good afternoon” where I am, maybe “Good morning” where you guys are. I'm in Labrador, the northeastern section of Atlantic Canada.

    Mr. Lahey, I'm going to start my questions with you today, on the research that you've been doing. I know that it's mostly connected to the work you've been doing in Nova Scotia, but we all know that forestry, for the most part, falls under provincial or territorial jurisdiction, and there are certain examples of it that do fall under the federal government and the role that we have to play.

    I want to ask you this morning if you could highlight some of the research you've done and outline some of the recommendations that focus more exclusively on federal jurisdiction. Maybe you can make some recommendations in terms of how we should be moving forward as a Parliament in doing some of that work that recognizes more fully the need within the forest sector of Canada.

     I have to acknowledge at the beginning that my work was commissioned by a provincial government. It is very much focused on matters within the jurisdiction of the provincial government. The other limitation is that I was not asked to look at forestry policy writ large, but specifically at forestry practices. Even within a provincial scope, my focus was somewhat limited.

    A couple of comments come to mind. One of the issues I really stressed in my report was the need for research that was actively commissioned by governments in partnership with industry, if that seemed appropriate. There would be research on the impact of different forestry practices that was specific to forestry conditions in Nova Scotia. There would also be research programs on the alternative to existing forestry practices, to close the gap we currently have—at least in Nova Scotia—between the forestry practices that are perceived to be more cost-effective, more intensive forestry, and the practices that might be considered partial or selective or alternatives to intensive forestry, including clear-cutting, that aren't seen to be viable from an operational and profitability point of view. At least in Nova Scotia, my recommendation to the government is not to deny the existence of this gap, but to actively try to close it, to do more experimentation in different forestry types.

    I have two other comments really quickly. In every province in the country, the conservation end of the spectrum is not solely provincial conservation. National parks play a hugely important role in all provinces. They certainly do in Nova Scotia.

    The last thing I would comment on—and this is where I stopped when the chairman said to stop—is the concept of resiliency. In an age of increasing climate change, we need resilient forests that can have a better chance of survival in all the various threats that forests face that are accentuated by climate change. Again, I think that's an area of interest, but it also should be of interest to the federal government generally, about how well prepared our forests are across the country to withstand the stresses they are coming under relative to climate change.

    Thank you very much for your response and for your insight into that.

     Mr. Doherty, regarding Unifor, I know you talked about the crunch that workers are coming under in the forest industry and how they have been impacted by the pandemic. I know you guys have advocated hard for forest workers. I know that as a government we certainly responded through this pandemic in terms of providing for PPE and many other services and resources they needed.

    I'm wondering if you could share with the committee some of the best practices that were taken on by the forestry sector to help them avoid falling behind as much as they possibly could. How were you able to continue to meet some of your scheduled work, like that around tree planting, over the last few months?

    We're going to have to do this very quickly, too.

    I will try to answer quickly.

    Some of the best practices have been doing what we were doing prior to the pandemic, which was finding cost-saving measures with the employers, finding ways to ensure that people got to work. Obviously it was needed. Some of the places shut down for a short period of time. Obviously we had health and safety experts at every one of these mills to make sure the personal protective equipment was in place and people were safe going to work, for sure.

     Thanks very much Ms. Jones and witnesses.

    Mr. Simard, you are up next for six minutes.

     Thank you, Mr. Chair.

    I'll ask Mr. Connors a quick question.

     I would like to know if the export restrictions he was talking about are mainly aimed—at least in Quebec—at commodities, especially the famous two-by-four.

    Yes, mainly commodity products, that's correct.

    This has been pointed out by several stakeholders. Therefore, should a secondary or tertiary processing strategy not be developed in Canada?

    You also talked about the low value of the pulp and what we call pulpwood. Sometimes the tops of the trees can't be used, but there is processing that can be done in this area.

    It seems to me that the major problem is that we don't have a strategy to support the pulp and paper mills, among others, that will have to go through this transformation. We know that the costs are very high.

     In my region, a cellulose pulp project has received federal government support, but many other paper mills could benefit from this type of measure, if a concerted effort were made. If we did that, we might be less dependent on the U.S. market. That's my opinion; you can tell me what you think.

    Is the situation the same in British Columbia?

    Thank you, Mr. Simard.

    Absolutely. On the coast here, we have several projects with the Gitxsan that are focused on trying to support the local industry in terms of the optimization, because we believe in the rising tide approach to this.

    When you take a look at pulp specifically, if we can find a better use for pulp than simply burning it up right now because it doesn't make sense to ship it all the way down to a pulp mill somewhere, then we're going to be basically offloading some of the regular costs, so we can afford to provide these sawmills and the reman mills with better uses of the products in terms of a lower-cost supply.

    In terms of looking at the lower-end fibre sources as being just dead weights out there, they should be reviewed and respected as value added to the process itself. If we can take care of road-building costs, we can sell that pulp to a low-end producer who might be producing things like torrefied pellets and white pellets.

    We're looking right now at a special project where we would take hemlock, which is plentiful in our region, hemlock and balsam, so Hem-Bal, and turn it into a very high-end cedar replacement. We harvest all the good cedar now, whether it be for cedar poles...and it's all sent down to Vancouver. It's not for export, that's for sure. However, if we could take the hemlock—it's a process we've been working on with UBC—and convert that into a value-add, that's tremendous. That helps everybody. It helps the loggers, and those other value-add people.

    Thank you, Mr. Connors.

    I get the impression that, for people in the industry, the development of these products does not represent any significant competitive advantage. We know that the use of biomass, of the bioproducts, is expensive, but very promising.

    My question is for you, Mr. Connors, but also for Mr. Doherty.

    If the government agreed to implement a carbon footprint standard, perhaps we could add value to biomass products and develop these markets, which will be essential if we want to develop the forestry sector in secondary and tertiary processing.

    Do you support the idea of imposing a carbon footprint standard in federal government public tenders?

     Mr. Doherty, would you like me to take a stab at this one initially? Okay, thank you.

    I believe products like bioethanol, bio-coal, or bio-anything, whatever you'd like to look at as end products and value-added products out of forestry, are very good ideas. In fact, the biggest barrier to entry on such projects is basically the capex required.

     Often it's a “build it and they will come” approach right now, because things like torrefied pellets that have been sitting out there for 10 or 15 years.... I've visited every torrefied wannabe across the planet, from Austria, Switzerland, up in Finland, Germany, and they're much more advanced there. However, that was the mother of necessity. Their power costs are extremely high over there.

    Over here, in what I'll call “God's country”, where our power prices are so low, we don't have that pressure. Canada lags behind these types of initiatives. We don't put the money into the places that would be really good—for instance, into a bioplant that would take the waste streams of forestry, which are typically burnt up right now either in a forest fire or just simply in a burn pile. We convert that to value-added product on an ongoing, long-term basis.

    I absolutely agree, Mr. Doherty.

    Thank you, Mr. Connors.

    Do you have something to add quickly, Mr. Doherty? Otherwise, we're going to have to move on.

    I'll try to be quick.

    I agree with Mr. Connors. There are also opportunities in those pulp mills to do a lot of those things. The government should be looking for ways to take some of the pressure off the capex that Mr. Connors was talking about.

    I wouldn't agree with any of the easing of the exports or some of the things you said around forest management. I agree that there are a lot of pulp logs out there. There are also a lot of pulp mills out there that are starving for fibre to run. The government needs to find a way, both provincially and federally, to ensure that fibre gets to the pulp mills and to those places so that we can continue to operate those mills and find the way to transform the industry.

    Thank you.

    Thank you, Mr. Simard.

    Mr. Cannings, it's over to you.

    Thank you very much to all the witnesses for being here today.

    I'd like to start with Dr. Lahey, about the study that he produced in Nova Scotia. I'm from British Columbia, as are Mr. Zimmer and Mr. Weiler and others. As you know, I'm an ecologist by trade, and I know things are very different across the country in different forests. Also, of course, there's a difference in terms of tenure and things like that. I think our forest tenures are almost 90% Crown, with very little in the way of private, except perhaps on Vancouver Island.

    I'm just wondering if you could comment on how applicable your findings would be across the country. Some of the forests in my riding may have pretty high species diversity—10 species of trees. In others there may be only two or three. However, they do exhibit the same things you were talking about. When you let them proceed naturally, you get that very diverse stand, age and mix of species. When, of course, we clear-cut, we basically just get lodgepole pine here, pure and simple.

    I'm just wondering if you could comment on how applicable those findings are across the country and whether you've had a lot of interaction with other colleagues from across the country on what the best way forward would be for forestry across Canada.

     I'm afraid I haven't had much conversation with people across the country, which would help me answer that. I could say that my advisory team included people from Nova Scotia, Maine, Ontario and British Columbia—all of whom knew more about forestry than I did. I'll make that very clear from the beginning.

    In response to your question, and relying very heavily on that expertise, the mechanisms might be different and in fact would have to be different, based on things like forest type, tenure regimes and economic conditions. The basic objective is that we need more forestry that's designed to, at a minimum, maintain, if not enhance, the resiliency and the health of ecosystems and biodiversity. In my opinion, it needs to become an imperative right across the country if we want healthy ecosystems, biodiversity, forests and forest products, not just 20 or 30 years from now, but hundreds of years from now.

    I firmly believe that this is increasingly the case as our forests come under more and more stress, including from climate change, but all kinds of other stresses as well.

    The last thing I'll say is that, at least in Nova Scotia, we have a history, since the introduction of pulp mills, of having a one-size-fits-all forest management strategy. Nature, everywhere, is more complex than a one-size-fits-all forest management strategy. Whether it's a triad model, as I recommended in Nova Scotia, or some other model, I think we need to fit our management approaches more to what the forests are capable of giving us and capable of absorbing.

    I'll just end by saying that the Mi'kmaq foresters I met with said that it all comes down to listening to the forests. The forests will tell you what they can give if you take care of them. That was a very important underlying theme of the work that I did.

    How have your recommendations been received? Have they been listened to? Has it changed the way forestry is being done or is conceived of being done in Nova Scotia?

    I know it hasn't perhaps been more than one or two years.

    The simple answer is, not yet, although we have a government that has said it embraces the new paradigm I recommended.

    I'm in a unique position, because when the government responded to my report, saying they were going to implement it, they also said that I was going to evaluate their implementation. That's the exercise that I am currently engaged with in Nova Scotia, with the help of lots of forestry experts.

    Okay. Thank you.

    How am I doing for time, Mr. Chair?

    You have a minute exactly.

    I'll move to Mr. Connors.

    I'm sure many of us on this committee have indigenous forestry operations in our ridings. I know that every first nation group in my riding has a forestry company attached to it.

    How you would say those indigenous forestry companies are doing, at least in British Columbia? Do they need more tenure? How does that work when they're coming up against the Interforests, the Canfors and the West Frasers?

    I don't believe the answer there is more tenure, because you need to be an expert in the area to really make a forestry operation work. You need to have those partnerships with a West Fraser or a Canfor.

    I think the most beneficial issue that could ever come to the traditional territories of various first nations is to have a champion like West Fraser to basically employ—as they do in many different areas—and provide the training programs and that stepping stone into forestry for the first nations, so that meaningful relationships are developed with the community, as opposed to just believing that any first nation company can be a forestry company. It's not that simple, and it needs to be melded with what exists.

    We need to have support and a good relationship between local industry and the first nations themselves.

     Thanks, Mr. Connors and Mr. Cannings.

    Thank you.

    Now we're moving into a second round of five minutes each, starting with Mr. Patzer.

    Thank you very much, Mr. Chair.

    Greg, do you want to jump in here?

    No, go ahead.

    Okay.

    Thank you very much, everybody, for joining us. I'm going to start off with Mr. Connors.

     Mr. Connors, I saw on the website that there are congratulations in order for you on your retirement at the end of the year, so congratulations on that.

    Thank you.

    We were talking about access to mills from unceded territory and from different tenures. What kinds of issues are being faced by foresters in northern B.C., and across the country in general, with access to mills?

    That's a great question.

    The band system and the hereditary system never meld, because you have an elected chief in one area, and then you have the hereditary system. We saw this with the Wet'suwet'en and the Coastal GasLink project, where the duty to consult is to the Crown, which they did halfway, but they didn't consult with the hereditary chief, and that created lots of problems.

    That's exacerbated in particular when you have a first nation the size of the Gitxsan, where I have 65 hereditary chiefs and 33,000 square kilometres of traditional territory that's claimed, and the hereditary system is matriarchal in our case. The actual hereditary chief is responsible for the management and the well-being of the wilp group, and has that chief name that adheres to a certain tract of land, which although they may all agree upon.... It's still difficult for me—I've been dealing with them for 13 years now—to understand how we can put together our Canadian government with their self-governing nature on the traditional territory.

    Forestry is one of the industries that suffer every time, because you may have the wilp group of, let's say, 300 members and the hereditary chief says that it's okay to go cut and gives a blessing—because the consultation was done; the accommodation is done; there's some meaningful employment; perhaps they have some environmental stewards there on the property in the territory watching, overseeing the operation—but yet there are two individuals who decide they're going to blockade, and they're going to shut it down because they don't agree with the hereditary chief. There is no simple answer to any of these issues; really there isn't.

    I've seen it operate very smoothly where the house group is harmonious, and if the hereditary chief says that in fact this is going to be part of the operation and they're going to harvest some trees there, it goes fantastic and the wilp group benefits because they get a stipend on a per cubic metre basis typically. They do some meaningful things, and there are people who get employment from that.

    Again, there's not really an easy answer to that one, but it is one that needs to be explored because that uncertainty is what causes so much uncertainty for business and whether they choose to do all the recce work, spend the money, put an application in, only to be blockaded. That's not fair to either group of people.

    Thank you. I appreciate the answer.

    Mr. Chair, that's all I really had for this round. Thank you very much.

    Thank you.

    Mr. Weiler, it's over to you.

    Thank you, Mr. Chair.

     Thank you to the witnesses for joining our committee meeting today.

    I want to pick up that really interesting discussion that Mr. Connors was engaged in here. I can imagine it's a very challenging thing to balance all these different concerns.

    As one of the four areas you've identified, you mentioned that streamlining and consultation are a priority. I'm curious about what role you see with the federal government to assist in some of the streamlining.

    One of the areas that I know some of the nations within my riding are quite advanced on is working together with different orders of government on land use planning throughout. It's a subject matter that's also quite common in environmental assessment, that is, to do a strategic environmental assessment where you're looking at the whole land base, and then using that as a starting point rather than individual areas.

    I'm curious if this is something that the Gitxsan are exploring, and if you see that fitting into some of your priority areas to identify with geomining consultation.

     Mr. Weiler, again the answer is not simple. Land use planning is definitely part of what we're doing right now with the new governance model, where they've broken up the entire 33,000 square kilometres into nine watersheds, and the nine watersheds are responsible for their own governance. This streamlines the process of what happens when a proponent comes into the territory and says they want to harvest in this particular area. They talk to the hereditary chief; they get the recce work done; they do the consultation, the accommodation. Then the government sends the consultation package, as it were, saying that if they don't hear anything in 30 days, then it's okay and the permit is approved.

    Typically, what happens is that somebody sends a terse email that says they don't agree; they just don't know what they're not agreeing to. What we've done—and I believe it would be prudent for the government to do the same sort of thing—is make sure the first nation has experts at its disposal to interpret this documentation. It's like giving me a manual on my car and saying, fix A, B, C. I open the engine and ay-ay-ay. That's exactly what they do when they open these things. We need to have an expert to provide that guidance to the first nations so they can interpret it. Often it's an easy answer; they just don't understand it.

    I appreciate that answer. As someone who has worked for a lot of first nations in my legal practice across the province, I know that the number of referrals some first nations get from natural resource companies can be very overwhelming. A lot of times that ends up going to lawyers, so having that local capacity is key.

    I would like to switch gears a little. As part of these committee meetings, we've been looking at some of the federal government programs through NRCan that have been supporting the forestry sector. We've heard some really positive news stories about the indigenous forestry initiative. I'm wondering if you can elaborate on how the IFI has supported the Gitxsan in making investments, and whether you have any suggestions on how this program could be improved to be even more effective for the community.

    Yes, the IFI has been instrumental for us, as have a number of other programs. Specifically, we've been focusing on what I'm going to call the development of a bioheat industry within the Gitxsan traditional territory and a bit beyond, too. We have the highest concentration of bioheat devices in Canada. We have just installed 10 big commercial units within Hazelton itself, doing an arena, a recreation centre, a car wash, a gas bar, an office building, a college—as a direct call because we ran out of pellets last year.

    One of the plants down towards Houston had a problem, and they decided not to bag pellets anymore. So through IFI funding and the support of IFI and others, we purchased a pellet delivery truck—the only pellet delivery truck in B.C., actually. We've done deliveries from Kitimat all the way down to Houston. All along the Highway 37 corridor, we have residential clients and commercial clients. The only thing we don't do is bag pellets. We're trying to do that efficiently. We provide people with a 300-pound plastic reusable drum. Those aren't easy to get around. We do need to figure out this part. But business is booming from a pellet perspective. We'd love to enhance that operation, too, but the bioheat is really critical.

    Thanks very much, Mr. Weiler and Mr. Cannings.

    We'll move on to Mr. Simard for two and a half minutes, please.

    My question is for Mr. Connors and Mr. Doherty. I would like to quickly return to the softwood lumber dispute with the United States.

    I am familiar with the Quebec forestry regime, which has been modified to make way for the auctioning of wood. There is therefore no longer any reason to believe that we are contradicting American claims. Even though the WTO has ruled in our favour, the United States is dragging the conflict out at length. The problem has gone on for too long.

    Let's take the example of Resolute Forest Products in Quebec. It is subject to tariff measures that result in nearly $200 million being retained by the Americans. Last time, this was settled by a ransom, so to speak, as the Americans kept almost $1 billion that should have gone to forest producers.

    Mr. Connors, I would like to understand the situation in British Columbia. I'm not very familiar with the forestry regime in British Columbia, but I'd like to hear about it from you.

    Is the mid-market guarantee and financing program suitable for you in its current form?

     Thanks very much, Mr. Simard.

    Perhaps I should defer to Mr. Doherty on this, because Unifor has more operations than we do. We're actually not in the manufacturing of softwood lumber. We just get impacted because we're specifically in the forest management and logging aspect of it.

     Would that be appropriate?

    Sure. Thanks, Mr. Connors.

     I'll answer the second question first. The liquidity program is working. It has provided some relief, obviously. As you indicated, every time we've gone in front of the tribunal on the softwood lumber, we've won. There is absolutely no merit to this. This is a trade dispute. Basically, a number of forest companies and producers in the United States have been able to convince the trade commission in the United States to put these duties in place, but there's no merit to it whatsoever.

     I do believe that we addressed the dispute much better than we did last go-round, and the government's liquidity program helped. We've seen a number of forest producers.... You mentioned one. I think you were talking about Resolute, with the $200 million. A number of forest companies were able to survive through this without having to take curtailments just simply because of that, but it certainly will help to get that dispute resolved and, hopefully, in a much better way this time around, so that we're not actually giving more money back than what's supposed to be coming to us.

    Thanks, Mr. Doherty, and thank you, Mr. Simard. That's all your time.

    Mr. Cannings, we'll go over to you for two and a half minutes, and then we're going to have to end this portion of the meeting and move into the in camera session.

    Mr. Cannings, the floor is yours.

    Thank you.

    I'm going to stay with Mr. Connors for now. He talked a lot about trying to use some of the less profitable wood or the waste wood. That's something that we've been talking a lot about here in committee. I know that it's a big issue in my riding. People don't like the process of burning slash, for instance. In British Columbia, that produces as much carbon in the atmosphere as all of our cars put together.

    I have a project going ahead in my riding. A company is going to be producing renewable natural gas through the processing of forest waste. I'm wondering if you can comment on that. I'll ask a question about pellets later, but can you comment on programs that are happening in your area around using that forest waste?

    Thanks very much for the question, Mr. Cannings.

    Primarily, the programs in our area are not of the biofuel or the processed bio-type of industry, let's call it. We're mainly focused on pellets in this region. In particular, in our case, we've been seeking funding for what will be the world's first 100,000-tonne torrefied pellet plant, which will be utilizing technology out of Montreal. There's actually a plant in Bécancour. We're trying to develop this 100,000-tonne pellet plant there to basically prove...because it does rain in B.C., contrary to public opinion.

     Not much in my area.

    No, not much.

    However, it's a big concern. I don't mean to say that this would utilize all the pulp. We realize that we're talking about a very small amount, in particular in our area, where you're talking probably $18 to $20 worth of transportation costs per cubic metre to get it to the coast to tidewater. That makes the price of pulp absolutely.... You can't do it. The pulp mills can't afford to pay the price it costs us to take pulp out of these very difficult areas and appraisal areas to remove it.

    We need to look for those. Utilizing slash piles, making sure that the deck pulp.... Because they can't afford to take it out of the bush, sometimes they deck it. Then it's there forever, creating all kinds of wildfire management problems if forest fires were to get into those areas. We do need to continue that. Our focus has typically been in the area of the production of pellets, to utilize that waste stream. Torrefied allows us to use even more of the forest floor, because we don't have to have the quality of wood going into the process as you would on a white pellet basis.

    Thank you, Mr. Connors.

    I'm sorry, Mr. Cannings. I'd [Inaudible—Editor], as you know, but that's all the time we have.

    Okay. Thank you very much.

    It's actually after 12:30 now, so we're going to have to stop this portion of the meeting and suspend.

    Mr. Greg McLean: Mr. Chair—

    The Chair: One second, Greg.

    Then we will move into the in camera session.

    I do want to say thank you to all of our witnesses for taking the time to join us. As you can see, we never have enough time, but your evidence is particularly helpful to us as we are wrapping up this study.

    I have a point of order, Mr. Chair.

    Hold on, Mr. Zimmer. I just want to thank the witnesses.

    It's just that we had a whole bunch of time taken at the start for technical issues. Is there a way to add some time?

    Well, we can't, because we have to wrap up at one o'clock. We are going to have a discussion on committee business once the witnesses are gone.

    Go ahead, Mr. McLean.

    On a point of order, Mr. Chair, we have been patient here. We restructured it in respect of the committee members who were here and in respect of the witnesses as well.

    It was my time to speak, Mr. Chair. If I could just take those few minutes to introduce the motion that we talked about, I think it would be appropriate.

    Mr. McLean, I'm not trying to be difficult. I hope you appreciate that. But it is after 12:30, and we don't have.... Everybody's being a little bit shortchanged here because of the time constraints. That is not uncommon, as we all know.

    Perhaps we can have a discussion in our next segment. If we don't have the people to resolve things, then we can deal with it at a future meeting, but I think for the time being we should stick to the schedule and suspend the meeting.

    Again, I want to say thank you to all our witnesses. I appreciate your taking the time.

    Mr. Connors, that goes to you in particular. Enjoy your retirement, sir.

    Mr. Chair, please. We've had all kinds of interruptions in this meeting, and we've tried to get through this, but we put it late in the agenda so that we could actually raise it at this meeting, in the public part of this meeting, in complete deference to all the witnesses who are here.

    Mr. Chair, I think it is incumbent upon you to entertain this at this point in time.

    Mr. McLean, honestly, I understand where you're coming from. You know, if you have questions for the witness, but I mean, understand.... We all know what the discussion is that we're having here. We're about to go in camera and talk about future meetings and the like. Then—

    Yes, I think this would be quick, Mr. Chair. We just have to raise it as something we want to have on the agenda here, as part of this meeting. If it slides into this meeting, you can take it out of the other part of the meeting. That's fine with us as well. But if you wouldn't mind, we'd like to get this motion very clearly on the record, please.

    Why don't we let the witnesses go so they don't have to sit here and listen to this not-so-interesting discussion?

    I have a point of order, Mr. Chair.

    Go ahead, Mr. May.

    I'm a little confused. Did we not carve out time for committee business for this purpose? We're talking about committee business. We're not talking about more discussions with the witnesses. Am I correct on that?

    You are correct on that. Yes, we are going to committee business.

     I suggest we adjourn the meeting and come back in camera.

    I have a point of order, Mr. Chair.

    Mr. Zimmer, go ahead.

    By that logic, it's not going to take up any more time whether we do it in the public portion of the meeting or in camera. It's still the same envelope of overall time. I'm not sure why you want to push it in camera so urgently. Mr. McLean has asked very nicely to put his motion forward, as was typically the practice of the committee. I would say, let's get on with it and—

    I have a point of order, Mr. Chair.

    Typically, the practice of committee is to do committee business in camera.

    We are suspending. We are going to go in camera.

    Mr. Chair, we have been very respectful of the witnesses here in making sure that they were heard effectively before raising this motion, in the clear understanding that it would be raised here today. We could have done it earlier and actually wasted the witnesses' time with something they're not going to be dealing with here, but we'd like to have this as part of our committee. That could have happened at any point here. That would have been fair for this committee, but in order to continue this public meeting for five minutes—it's all we're asking for here, Mr. Chair—

    I have a point of order, Mr. Chair.

    Mr. May can have his point of order all he wants, but nevertheless we want this meeting to continue as is.

    I have a point of order, Mr. Chair.

     Let's go to a vote on that, Mr. Chair.

    I have a point of order, Mr. Chair.

    Go ahead, Mr. May.

    You cannot move a motion on a point of order.

    I'm aware of that. I'm just trying to—

    I'm not sure that Mr. McLean is. I want to make sure he understands what we're doing. We want to deal with the issue at hand, but there is a process here. We're just wasting everyone's time at this point.

    I think we are going to suspend now and move into committee business—

    I have a point of order.

    Go ahead, Ms. Harder.

    Mr. Chair, the request on the table is not to present a motion. The request on the table is that time be extended for this meeting.

    We started late, so it is appropriate to extend the time we have for this meeting and to grant another round of questions.

    I appreciate your comments, Ms. Harder.

    Mr. Simard, do you have a point of order? I see your hand up.

    We do not understand Ms. Harder's point of order because she does not have her headphones on, and the interpreter cannot translate what she said.

     If Ms. Harder makes a point of order, she needs to put on her headphones for the interpreters.

    We have another technical glitch, apparently. I am going to suspend the meeting. Thanks to our witnesses again. We're going to move in camera. I would be grateful if everybody could log off and then log back on.

    [Proceedings continue in camera]