NRGO Committee Meeting

STANDING COMMITTEE ON NATURAL RESOURCES AND GOVERNMENT OPERATIONS

COMITÉ PERMANENT DES RESSOURCES NATURELLES ET DES OPÉRATIONS GOUVERNEMENTALES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, February 22, 2000

• 1106

[English]

The Chair (Mr. Joseph Volpe (Eglinton—Lawrence, Lib.)): Thank you, ladies and gentlemen, for your patience. The order of the day, pursuant to Standing Order 108(2), is a study of Canadian forest management practices as an international trade issue.

We have with us today witnesses from the Canadian Pulp and Paper Association. Even though I haven't been courteous enough to come over and personally say good morning to each and every one of you, I'll at least come over and say goodbye personally.

We have with us Fiona Cook, vice-president, international trade and government relations. Good morning, Ms. Cook. We have Joel Neuheimer, director, international affairs, international trade and government relations. Good morning to you too, sir. And we have Tony Rotherham, director of forests. Good morning to you as well.

Our witnesses this morning have a brief that's unilingual, and as per our agreement it will not be circulated. However, it will be available to those who want it.

Mr. Werner Schmidt (Kelowna, Ref.): When will it be available?

The Chair: You can go over there and pick it up.

The witnesses have explained why it's only in one language. The clerk has undertaken, as per usual, to ensure that these are translated. They weren't available for this session, but they'll be available to you as soon as they are available.

As is our practice, our committee doesn't circulate unilingual pieces, but they're made available to everybody.

Ms. Cook.

[Translation]

Just one moment.

Guy.

Mr. Guy St-Julien (Abitibi—James Bay—Nunavik, Lib.): On a point of order.

I am extremely disappointed that the Canadian Pulp and Paper Association which represents members in all provinces and regions of the country, including Quebec, has not submitted a brief in both official languages. The Association's submission is in English only and we need to relay on the interpreters. It's deplorable and shows a lack of respect toward francophone MPs from Quebec.

In order to respect both official languages, the Canadian Pulp and Paper Association must provide members with a translation of its documents. Otherwise, it takes us a full day to have them translated. I am very disappointed that we weren't provided with a translation immediately. Thank you.

[English]

The Chair: Thank you, Monsieur St-Julien. The point has been made and we've expressed the view already to the Canadian Pulp and Paper Association. They have expressed the appropriate contrition, and we will proceed notwithstanding that. But I'm sure they've heard the statement and for subsequent meetings they'll keep that in mind.

Ms. Cook, without further adieu, the mike is yours. You'll go for about 10 minutes and then we'll go into questions and answers. Thank you. Go ahead.

• 1110

Sorry, Ms. Cook, you're going to be interrupted all morning. We've started off poorly, but we do have a series of votes that are coming up. We had anticipated that the first of those would have been held at 10.30 a.m. The bell you're hearing is one that's calling members back to the House.

We can proceed in a couple of ways, Madam. One I might suggest, and I leave it to you, is that you make your presentation and we'll come back here and go through the questions and answers. Otherwise, since it's a 30-minute bell, if time does not permit you, what we'll do is go for 25 minutes. You'll have to cut short your presentation and we'll cut our questions short. Which do you prefer?

Ms. Fiona Cook (Vice-President, International Trade and Government Relations, Canadian Pulp and Paper Association): I think we'll go with the second option. We'll just lay out our presentation now.

The Chair: See how much we can cope with? Go ahead. Away you go.

Ms. Fiona Cook: Yes, and we're hoping this will be an interactive dialogue as well. I'm sure we'll have plenty of time.

The Chair: Then just make a very brief presentation and we'll go immediately into questions and answers.

Ms. Fiona Cook: That I think will be the best approach.

The Chair: Go ahead.

Ms. Fiona Cook: I'll start with a bit of background. But first of all, thank you very much for the opportunity to appear before this committee today.

Founded in 1913, the Canadian Pulp and Paper Association represents companies that produce the majority of pulp and paper in Canada as well as most of the solid wood products produced in Canada. As you have learned through your study, I'm sure, you are aware that the forest products industry is undoubtedly one of Canada's most important industries and has historically been a major contributor to Canada's relatively high standard of living, that it is the single largest contributor to Canada's balance of trade by a wide margin, that it generates annual sales in excess of $50 billion, that it sustains over one million direct and indirect jobs, and that it supports over 300 rural communities across Canada.

Given that the industry exports three quarters of its production to over 80 countries around the world, the trade-related aspects of sustainable forest management are a preoccupation for this industry, as I'm sure you have learned through your research.

We have had the opportunity to review the committee's interim report and we would like to comment on how impressed we are with the scope and the grasp of the issues that were presented. What we would like to do today is really touch and perhaps expand further on some of the content in that presentation and really emphasize that this issue is very Canadian in nature. We would like to describe some of the recent developments that support this, and we would like to then take a look at the role of government and the role of industry in resolving this issue. And we'll describe some of the tools that are being used by industry and some of the progress that we feel needs to be communicated right now to the international marketplace.

First of all, I think it's probably important to touch on some basic definitions. The idea of sustainable forest management and how that can translate into a marketplace acceptance of our products is an extremely complex issue. Market acceptance is a definition that is, we believe, important to understand. It deals with the softer aspects of how our products are viewed in the marketplace, essentially influenced by environmental performance both in the forest as well as at the mill, and the more traditional factors such as product quality, price, and delivery. The interface for these market acceptance issues are really directly between forest product suppliers and their customers, who, in the majority of cases, are not the ultimate end-users. They're not the person who buys the newspaper on the street, but they're the publisher who produces the newspaper, or the converter who converts liner board into a packaging product, or a home renovation company that sells converted wood products for home building. Again, here the role of government is quite limited in market acceptance, which is really an issue that has to be dealt with between supplier and customer.

Market access includes those issues that are linked with government policy and/or regulation, and this can include tariffs or non-tariff barriers that may be based on discriminatory environmental measures. The issues affecting market access are controlled by governments and they must be resolved through government-to-government processes. I'll offer some examples of these, but I think it's important to tie down the definitions first.

• 1115

As I mentioned before, we are an industry that is extremely dependent on exports. Misconceptions about Canadian forestry practices and environmental performance have the potential to render Canadian forest products less environmentally acceptable in the marketplace and translate directly into lost sales. We have seen this already in B.C.

As you noted in the report, much of the controversy has centred on B.C., but we have been of the view for a long time that this is not an issue that's unique to British Columbia or the solid wood side of the industry. It is an issue that has a national impact, and it's also linked to pulp and paper products, not just solid wood, as we're seeing right now.

If we look back over the past summer, with the release of L'Erreur boréale in Quebec, much controversy was generated around that film, as I'm sure most people picked up from the press. We expect that to continue. We have been notified that film shortly will be translated into English, if that has not already been done, and will be targeted for the international marketplace.

As you know, Europe has been a hotbed of controversy on forestry practices in Canada in particular for many years. Back in 1993 we actually set up a permanent office in Brussels in order to provide some balance to the debate in Europe around Canadian forestry practices. As part of that program, we have been conducting annual tours across Canada for buyers and journalists from Europe. We emphasize “across Canada”. We do not take them just to B.C. We start on the east coast and bring them right across Canada. I know that the Government of Canada has also been doing this through its international forestry partnerships program. We have a good link with that program, and we're very supportive of it.

One recent development that I think is important to emphasize is in the German marketplace. The German publisher and producer associations have issued a number of letters on a joint letterhead stating their extreme concern with forestry practices and land use decisions in British Columbia. I think those two terms, “forestry practices” and “land use”, have to be elaborated on further, and I'll leave that to Tony Rotherham a little bit later in the presentation.

What I would like to really drive home here is that there's now material evidence that there is a concrete threat in the marketplace. There was a letter from these two German groups at the end of last year stating that unless changes were made or unless they were given a greater comfort level that forestry was being conducted in a sustainable manner, they would no longer be able to buy forestry products from Canada. I have to emphasize that although they source a lot of their product from B.C., they see this as a Canadian issue. That has long been the case in Europe.

Also, we're seeing a lot more activism in the U.S. In the report you duly noted groups such as the Rainforest Action Network and the Coastal Rainforest Coalition, which have been very active.

The difference between the perceptions in those two marketplaces, Europe versus the U.S., is that in Europe, particularly in Germany, the customer is very preoccupied with and willing to spend time learning about the details of forestry practices. That is not the case in the U.S.

That is why we feel the threat is more pervasive in the U.S. and could be a lot more damaging, because a customer there is not willing to learn about different certification systems, different forestry practices, different provincial standards, etc. They just want to have a certain comfort level when they buy Canadian forest products, and right now, because of pressure tactics from various environmental groups, they see Canadian forest products as having a certain nuisance factor, if you will, associated with them. So that is an issue that needs to be resolved through, we believe, a communications exercise and a demonstration of progress through certification.

I think at this point I'll turn it over to Tony Rotherham to talk about what the industry has done to date in those areas.

The Chair: Okay. But as I said earlier on, if you want to engage us in dialogue, you're going to have to be very brief.

Ms. Fiona Cook: We're going to have to be more brief. Okay.

The Chair: Not more, just brief.

• 1120

Mr. Tony Rotherham (Director, Forests, Canadian Pulp and Paper Association): I'll be brief, Chairman.

First of all, I too would like to commend the committee for the clear understanding of a difficult and complex subject as laid out in the report.

I'd like to state quickly a few points.

First of all, what have we done to date in the whole business of certification and standards? The Canadian industry has been very active in the development of standards, both the Canadian Standards Association SFM standard, and also we've been working actively with the international committee that is responsible for the development of ISO 14001, the environmental management system, and the preparation of a guidance report for its application to forestry. We've been doing this since 1994, so we've spent a lot of time and effort on it.

As far as standards development or implementation in Canada is concerned, at the back of our brief there is a table showing what companies and what areas have been certified to ISO and CSA and the FSC standard in Canada. The total on the sheet is 11.9 million hectares under certified management systems, and a total of about 18.6 million cubic metres of wood in annual harvest. You can add to that another 1 million hectares that have been certified but not yet announced. This was done about two weeks ago in Alberta on the operations of Weldwood, near Hinton. So we're moving ahead very rapidly on the implementation of standards and the certification to those standards.

One of the things that has been touched on in your report is the business of standards development implementation around the world—the fact that many standards are being used and there's the risk of confusion in the marketplace. This whole business of the implementation of management standards in forestry is a new idea, and it's important to test various approaches to determine their value and their efficiency, because it's early days in the development of these systems.

The diversity of standards is a natural follow-on to the diversity of forests, of cultures, of land ownership patterns, and of forest legislation in various countries around the world. A terrific variety of things, as you can well imagine, is going on in various places in the world. Canada in fact is rather different. We're sort of out of step with the rest of the world in that most of our forest land is in public ownership, whereas in the majority of countries the forest land tends to be in private ownership.

There have been questions about possible confusion in the marketplace as a result of many standards. One could use a variety of approaches to resolve that. One is to have one standard worldwide and have in effect a monopoly. I believe it's far too early for that, despite the apparent advantages of it. We have to continue the testing process.

Another possibility is integration, which is a word that was used in the interim report. This implies to me a gradual coming together of standards to one standard. It's possible that will be the case in the future.

But we believe the best way to proceed at present is through mutual recognition programs. There are two mutual recognition programs in the world now. One is the Pan-European Forest Certification Council, which provides a mutual recognition framework for European systems. The other is one that's just starting up through the International Forestry Industry Round Table, where a more global approach to mutual recognition will be established. We're not finished with the process of developing that yet.

If I may continue just for an instant, the committee has touched on two questions in the interim report. One of course is forest practices, a value-laden theme. By this we mean clear-cutting versus a variety of partial cuts, planting versus natural regeneration. These are forest practices.

The other thing is land use planning, and that really is where and how much Canadians will decide to put into parks and reserves, and where those parks and reserves will be. There is, as we all know, a notional target of about 12% across Canada.

The other thing is where and how much we will put in multiple-use forest. Canadians have in each province a variety of democratic processes to develop the plans for land use allocation. This should be done by Canadians rather than through pressure from organizations in other countries. We feel it's a matter of sovereignty and a matter of self-determination, to say nothing of national pride, that we should be relying on our own systems rather than being pushed around by other people.

• 1125

Thank you.

The Chair: Did you want to have Joel Neuheimer say anything? No?

All right, we'll go quickly into questions. I'm going to ask colleagues to keep in mind that if we want to get everybody around the table in, it's two minutes apiece. How's that?

Mr. Schmidt, lead by example.

Mr. Werner Schmidt: Thank you very much, Mr. Chairman.

First, I want to thank you for coming. Also, I really want to commend you for the conciseness of the report. I want to refer specifically to pages 5 and 6, the credibility criteria for evaluating the various certification standard systems. I'd like to ask questions with regard to characteristics 3, 10, and 11.

On number 3, what is the science that you would recognize or put in there?

With 10, who is the third party who should verify the competent auditors?

And on 11, with whom and where should the registration take place?

Mr. Tony Rotherham: With respect to “Be based on sound science”, number 3, there's a lot of science available to guide decisions in forest management.

Mr. Werner Schmidt: I want to know what “sound” means.

Mr. Tony Rotherham: It refers to something that is well established, agreed upon—how should I say this?—stated and professed by people with the right scientific credentials, based on research results.

Mr. Werner Schmidt: I think it would be very useful...I don't disagree at all that it should be sound science, but I would suggest that you clarify exactly what that means. What is the accrediting body that declares whether the science is sound or not? We have physics degrees, for example, from all around the world. Some of them are good ones and some of them are poor ones, so there should be some accreditation process for this science.

Mr. Tony Rotherham: One thing I would suggest as one of the first qualifications for that would be whether or not the research has been done by the research arm of the Canadian Forest Service—that is the main centre of excellence in forest research in Canada—and then you can add to that a variety of universities and some provincial government efforts.

Mr. Werner Schmidt: With all due respect, though, this is demand-driven, and it better be recognized outside of Canada. There's no point in having sound science that we think is sound science. If Germany doesn't accept it or if the United States doesn't accept it, it's worthless. That's the point.

The Chair: Mr. Reed.

Mr. Julian Reed (Halton, Lib.): Do we have a situation in which Europe is coming down on us because they have another agenda, an economic agenda? Because they have some forest somewhere else in Europe that they want to be harvesting?

Ms. Fiona Cook: As you may know, as part of the last successful round of trade negotiations, known as the Uruguay Round, Europe agreed to eliminate tariffs on pulp and paper products by the year 2004. If you take that line of thinking, you could argue that perhaps this is a potential non-tariff barrier and that there is another agenda behind this. I'm sure that for some of the producers and some of our traditional competing jurisdictions, that may very well be the case.

Mr. Julian Reed: Thank you.

That was my question, Mr. Chairman.

[Translation]

The Chair: Mr. Godin.

Mr. Yvon Godin (Acadie—Bathurst, NDP): First of all, I agree with my colleague that it is unfortunate indeed that the brief is not available in both languages. It's not just Quebec members that benefit from a translation, because I'm not from Quebec.

On now to my question. Does the Canadian Pulp and Paper Association study the forestry practices of other countries, for example, Sweden and Norway? Could we not adopt similar practices here in Canada for the sake of consistency? Others are the buyers while we are the exporters. Therefore, we are the ones who need to adapt our practices. Going it alone, or self-determination, is all well and good, but if other countries aren't buying, then we're the one with the problem.

[English]

Mr. Tony Rotherham: The forest practices used in some of those countries are different from the ones we use in Canada, sir, and there are a couple of reasons for that. The forests in Finland, Sweden, Norway, and indeed most of Europe, are not natural forests; they are managed forests. There's hardly a tree in Sweden that has not been planted. The stands tend to be young and managed.

• 1130

In Canada most of the forests we are operating in are natural forests. Many of them have resulted from natural regeneration after fire. Many of the forests or stands we're operating in are old and decadent, and the stand condition requires certain approaches simply because the trees are no longer sound and healthy.

The other thing is that one of the practices we use in Canada quite a lot is clear-cutting, as you are aware. It is a very controversial subject, but if we intend to regenerate what we call pioneer species—those species that demand a lot of light to grow, like jack pine, lodgepole pine, aspen, and Douglas fir, to name some well-known examples—we are going to have to provide those trees with full light in order to grow properly. That's the nature of those trees. Those trees have as honourable a place in the mosaic of ecosystems in this country as do the shade-tolerant trees. We want to keep them as part of our forest stands, so clear-cutting is essential. It's also true that there's a lot of clear-cutting done in countries like Sweden and Finland, but generally on a smaller scale than what we do here.

[Translation]

The Chair: Thank you.

Mr. St. Denis.

[English]

Mr. Brent St. Denis (Algoma—Manitoulin, Lib.): Thank you, Mr. Chairman.

The Chair: You have the last question.

Mr. Brent St. Denis: I'll be very brief.

You did note the committee's interim recommendation that the federal government assist the industry in terms of trying to bring together the various forest standards. You touched on it a little bit, but can you tell me if the industry is at some point where there is an international association of pulp and paper companies? Is there any international effort being made on the industry side to try to bring this together, notwithstanding that the Canadian industry has its critics from industry in, say, the Scandinavian countries. That aside, is there any international, industry-led effort to try to pull this together?

Mr. Tony Rotherham: Yes, there is. It's being done under the International Forestry Industry Round Table, or IFIR to its friends. They established a working committee on this at a meeting that took place in Finland last August. There have been two meetings, one in Brussels in November and the other one in New York a couple of weeks ago. I am an active participant on that working group.

The list of credibility criteria in this brief is sort of the first rough cut, with a lot of the detail taken out of it, that will comprise the credibility criteria that will be used for determining whether a standard in use somewhere should be part of a mutual recognition framework. We're doing our best to try to help the marketplace to recognize credible and rigorous standards where they are used.

There will be some third-party involvement in this. It will not be an industry club. There will be some outside parties involved in it in order also to build some credibility into the process.

Mr. Brent St. Denis: There's some optimism, then, that you can assist with this.

Mr. Tony Rotherham: Yes, and I think we should probably have the system that we're building ready for operation sometime around October of this year.

Mr. Brent St. Denis: Good.

The Chair: Did you want to add something?

Mr. Joel Neuheimer (Director, International Affairs, International Trade and Government Relations, Canadian Pulp and Paper Association): Yes, I'll just quickly add something in response to Mr. St. Denis' question, and also Mr. Godin's question.

As you'll see in the submission, when it's available in both official languages, at the back of it there are two types of tools, two types of approaches that we have tried to identify for the committee to contemplate in whatever recommendation it's going to make. There are two tracks. First, there's the certification work that's going on, and it's very much a cooperative effort around the world to try to work from a core set of principles that everyone's going to agree to. You're then going to see some flexibility from country to country to basically respect regional differences and such. And the other side is that what we're really after here are some rules for the road. We don't have any, so you know we're also after a rules-based approach to sustainable forest management. The Government of Canada is working very hard to achieve that within the UN framework, and has recently enjoyed a little bit of success on it.

So those are the ways in which we're going forward. We're certainly interested in having the Government of Canada on board as a partner, and I'll leave it at that.

The Chair: Thank you, Mr. Neuheimer, Madam Cook, Mr. Rotherham. I apologize that we have to cut this short. We have about a hundred seconds to go before we get to the vote, so I don't want to keep these members behind.

• 1135

Thank you very much for coming. I'm sure we'll talk again.

A witness: Thank you for having us.

The Chair: The meeting is adjourned to the call of the chair.