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I call this meeting to order.
The first thing I would like to do is welcome our new clerk. We have two clerks today, Grant McLaughlin, and Hilary Powell, who you see on the screen. She will be our clerk on a permanent basis going forward. I'd like to thank and welcome you both. We look forward to working with you.
This is the fifth meeting of the Standing Committee on Natural Resources. We're continuing our study on the economic recovery in the forestry sector. We're doing meetings virtually, although there are a number of you in the room.
Those of you in the room, because I can't see you, please bear with me when I'm asking people to speak. Wait until I call your name before starting to speak. I would appreciate that. That would make things go a little more smoothly on my end. I have a speaking list that our clerk has provided for all parties, whose names I believe have been submitted by all of you. Thank you for that.
To our witnesses, welcome, and thank you for coming. You are welcome and encouraged to address us in either official language. Translation services are available. Because we're doing this remotely, I would ask you to speak slowly and wait until other people are finished speaking. You each have up to five minutes per group to make your opening remarks and once all of you have addressed the committee, we will then open the floor to rounds of questions from all members.
Members, we're not doing this an hour at a time. So we have lots of time to ask questions and everybody should be able to get their questions in today.
Thank you all very much for coming. Why don't we proceed in the order you appear on the witness list?
Mr. Kalesnikoff, from Kalesnikoff Lumber, perhaps you would like to start us off?
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I'd like to thank you for giving us the opportunity to speak today. I've got Ryan Marshall on the call as well. He is our finance manager.
I'll give you a bit of a history of Kalesnikoff Lumber. We started in 1939. The company was started by my grandfather and two brothers. In those days, you built roads by hand, logged with a horse and cut lumber with a single-cylinder headrig. My dad started in 1950 and was our second generation. I started in 1977. I'm the third generation, and my two children are now involved. My daughter is CFO and my son is COO.
I will speak first about our journey into value added and secondary manufacturing.
As a company, we've always been innovative and focused on extracting maximum value from every log. That is the only way we could survive against larger publicly traded multinational companies that focus on volume and dimensional products.
We started a value-added facility in back in 2000 called Kootenay Innovative Wood. We started by making guitar tops and piano sound-boards. Unfortunately, that market got captured by the Chinese.
We had been focused on lineal products like siding and panelling of late, but the SLA has really made it difficult to compete in the U.S. market with that product.
Getting a value-added venture up and running in Canada is not easy, and to be honest. It's not very well supported.
We started looking at a mass timber facility about six years ago and as a family, decided to make a $35 million investment in a new state-of-the-art, multi-species integrated facility. We will create 50 new jobs. The people running the equipment will probably get paid around $60,000 a year. They will make up about 20% of the new hires. The trades will make up 10% and will probably be paid in the $85,000 to $90,000 range.
The balance is staff, which includes junior designers making $60,000, project managers and senior designers making more than $100,000, and sales and senior staff making $125,000 a year.
This was a big decision for our family but we felt it was a necessary one for us to secure our business for the fifth generation.
We have received no outside funding of any kind from government, neither federal nor provincial. We do see the mass timber industry having a great future, but getting it established is challenging.
The larger developers are hesitating to get into mass timber as their focus up until now has been concrete and steel, and they're very familiar with them.
Developers also find that new business ventures like our own an added risk. Until we have a portfolio, we will be challenged to secure these larger developers.
Without a track record or portfolio of completed jobs, we are forced to underbid on jobs to secure work, which reduces profitability and strains our financial viability in the start-up phase.
The interest is tremendous, but follow-through is lacking.
We are spending a lot of time and money educating architects, engineers and developers. In the last 12 months, we've quoted over 500 jobs, from $5,000 to $15,000,000. Over 75% of those are just looky-loos, so to speak. We've landed about 15% of the 25% of the legitimate jobs that we've quoted.
We had a couple of jobs that we were hoping to do towards the end of this year, but they've gotten postponed into 2021. That's put a bit of a crunch on us, and it could be COVID-related.
Government needs to ensure that mass timber doesn't fall into the SLA, as I mentioned before. It has really hampered our value-added facility. The U.S. has a record of just expanding their net, and if the mass timber products end up in the SLA, that's going to be terrible.
The last thing I'll talk about is how government could help. Government needs to support the advancement of the mass timber industry by creating an environment of promotion, support and education with respect to building with wood and mass timber.
Using more mass timber will help set the stage for economic recovery and the government's climate change initiatives.
Moving forward, how much of the government's own building infrastructure in low- to mid-rise buildings, given the latest climate change initiative, is going to produce and utilize mass timber and move away from using concrete and steel?
Along with NRCan and the IFIT programs for the whole forest industry, there needs to be a category of grant funding specifically allocated for the value-added secondary industry.
The major industry has access to large resources to build impressive proposals that smaller players in the value-added industry just don't have.
We've made a bunch of submissions to NRCan and IFIT and have been unsuccessful to this point. We don't have staff that specifically spend time just on writing proposals.
That's where I'll end it for now.
Thank you very much.
Ladies and gentlemen, members of the committee, thank you for welcoming me here today and giving me the opportunity to engage in this conversation about the potential of the forestry sector in Canada and, of course, in Quebec to further support a low-carbon Canadian economy.
I was intrigued by the original question and the committee's mandate today.
Before I do anything else, I will quickly introduce the Chantiers Chibougamau organization to you. Much like Mr. Kalesnikoff's business, we are a family forestry company founded in 1961. So, in just a few weeks, we will be celebrating our 60th anniversary.
Back then in Chibougamau, which is in northern Quebec, the company's mission was to manufacture large pieces of wood for the mines, which drove economic activity and helped develop the surrounding area. This was all new for Quebec at the time.
We have grown from five employees in 1961 to over 1,100 employees today, with 600 at the Chibougamau manufacturing complex, 200 at our Landrienne sawmill in Abitibi-Témiscamingue, more than 250 already at our Kraft pulp mill in Lebel-sur-Quévillon, which we are reopening at the moment, and more than 60 at our technical services and engineering office. That office is the construction partner in all of our solid wood projects right across North America, and even in an increasingly profitable foray into the European market.
So 1,100 people make a living from our efforts to tap the full potential of trees. Our organization alone is currently completing a 10-year investment phase of nearly half a billion dollars. We are injecting close to $500 million in investments of all kinds to increase our production capacity, diversify and reopen a co-product plant to make Kraft pulp for a low-carbon global economy. So, I appear before you this morning with all these perspective in mind.
The committee asked what can be done to secure economic recovery in the forestry sector. Let me put it another way. Is there a real need for recovery in the forestry sector, or does it have the potential to do more and be reoriented?
In terms of recovery, in very concrete terms for the Quebec industry to which we belong, our exports of wood construction products increased by 60% from August to September of this year. In spite of the unprecedented context of COVID-19 that we are experiencing, the forestry sector alone accounted for more than $4 billion in exports. That's not our contribution to GDP; it refers to exports from the Quebec forestry sector. That means our sector is one of the five most profitable and relevant sectors supporting the Quebec economy and, inevitably, the Canadian economy as a whole.
In light of this, and of the many initiatives to which I've had the opportunity and privilege of contributing over the past 15 years or so, we are constantly thinking about what more we can do from a political perspective, while being mindful of the regions and their forestry economies?
These issues, which are possibly policy-related, can now be taken to a whole new level of policy development. Forgive me for drawing on contemporary politics, but I'm going to paraphrase John F. Kennedy. Ask not what the House, the government and the country can do for the forestry sector. Using market-driven logic, let's turn the question around: ask what the forestry sector can do for the House, the government and the country.
When you turn the question around, you see that the forestry sector can do much more for this country than it does today. Canada aims to achieve carbon neutrality by 2050. It's no longer simply a subjective question of preferring one material over another. It's understood that we need to build with wood if we want to achieve a shared objective like that.
We always want more jobs, sustainable jobs, well-paying jobs and jobs that rely on knowledge and technology, on Industry 4.0, on artificial intelligence. The forestry sector has the potential to drive job creation of that kind.
We want construction sites that pollute less, leave a smaller carbon footprint and are quicker to set up. Above all, we want economical and competitive construction, and that is why wood is the natural choice.
We are always looking for ways to up our contribution to GDP, and better contribute to the trade balance. We also strive to ensure that Canada exports products that help the whole world meet the global challenge of climate change. Wood exports well; wood is the best material to meet that need.
So we are ready and the market is ready. Today, we are getting calls from developers in Colorado, California and New York State.
Thank you, Mr. Chair, and committee members for inviting me to speak today and making time on your agenda for this very important issue.
As noted, my name is Brian Fehr. I am speaking to you today in my capacity as chairman of Peak Renewables.
I would like to introduce you to the CEO of Peak Renewables, Mr. Brian Baarda, who is also on the line with us today and will assist me in answering your questions.
My opening remarks will be short and to the point.
First, I applaud the fact that this committee is examining the critically important idea of innovation in Canada's forest sector. The forest sectors have been an immense contributor to the prosperity of Canada for many decades. That is especially true in rural Canada, where good-paying jobs in harvesting, milling, pulp and paper, etc., have been the mainstays of rural communities for generations. But it is also true that those days are past. The industry is under immense stress from those who would prefer that all trees be left standing; from competitors in other countries who try to impose trade restrictions, rather than just compete; and from environmental and other changes that are affecting the profitability of traditional forest practices and fibre use. The days of easy access to cheap fibre destined for high-paying stable markets are done. This can be a problem or it can be an opportunity.
We created Peak Renewables and other companies in the value-added wood space, for example, cross-laminated timber for construction of green buildings, because I believe in opportunity. Peak Renewables will take distressed forest liabilities and turn them into assets that not only switch on the economic engine of rural communities by creating local jobs and investment, but also utilize the fibre in new and innovative ways. For example, our new mill that's under construction in Fort Nelson, British Columbia, will take an old OSB plywood site that has been idle for 12 years and turn it into a modern, renewable, biomass pellet mill. The pellets from that site will facilitate the renewal of the infrastructure for the entire area, which creates other economic growth opportunities for the region.
We are doing this in full partnership with the local Fort Nelson First Nation. They are partners in every sense of the word. The pellets will be part of an important and growing clean, renewable energy export business for Canada that is helping other countries meet their climate goals. Peak Renewables is also planning to develop other renewable energy products made from wood biomass like RNG, liquid biofuels, hydrogen, etc., all of which will be essential to helping governments meet their climate goals and targets for things like clean fuel standards.
Canada has done a credible job of creating the right plans. For example, the Pan-Canadian framework on clean growth and climate change recognizing—
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I didn't know you had translators. Sorry. I'll speak more slowly.
Canada has done a credible job of creating the right plans. For example, the pan-Canadian framework on clean growth and climate change recognizes the importance of forest management and innovation for things like using forests as a carbon sink or using much more wood in construction, as well as the important role for wood in generating bioenergy and bioproducts. But plans are not actions. We need to close the gap between plans and research and commercialization.
The government's expert panel on sustainable finance has identified the need to link access to capital with government policy-making around climate. Peak Renewables supports that work and urges government to think of small businesses and start-ups like us as they do the important work of incentivizing investments in companies that are striving to be part of the solution.
In closing, I would like to thank this committee again for inviting us here today. The forest sector will be an important part of Canada's post-COVID economic recovery, an important driver of innovation, an important partner in helping governments meet their clean energy and emissions target and a living example of how to do all of that in partnership with our indigenous peoples and rural communities.
Thanks again for your time. Brian and I will answer any questions you might have.
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Thank you for the opportunity to speak about Kruger today. I'm corporate VP for sustainability, biomaterials and fibre at Kruger. I'm glad to be in front of all of you today.
As probably many of you know, Kruger is a fourth-generation, family-owned company. The third generation is still at the helm with Joseph Kruger II. His kids are in now as well, with Gene and Sarah being active on the board. Clearly, we believe we can be part of the whole decarbonization of the economy.
The problem we're facing today is that we're accelerating the development of bioproducts, but at the same time some of our main sources of revenue are declining at a rapid pace, much more rapidly than we anticipated, because of COVID-19.
While newsprint and coated paper were declining at a rate of 15%, roughly on a yearly basis, we've seen drops of over 40% since COVID hit us back in March. We're facing short-term challenges while we also need to work on longer-term challenges with the bioeconomy and bioproducts.
We've been very glad of the support we've had from different programs in the past, namely IFIT, and we believe this can be a very good vehicle for bigger projects moving forward. The size of the envelope right now makes it difficult to bring transformative projects into declining mills, and for which sales are not there anymore, to support the growth and transformation of the mill.
One of the main problems we have also seen in the past is a shift from plastic to paper in various different applications, one of the key ones being grocery bags and shopping bags where they want to phase out plastic. The fibre is there, the capacity to transform paper into recycled low-carbon footprint for those bags is there, but there is a big bottleneck in the converting capacity because back in the early 1990s, most of the paper bag manufacturers shut down their operations.
Today, we would also like to see this committee and the government try to support the converters further down the supply chain, which would then be positioned to take the product that companies like Kruger can put onto the market and transform it into low-carbon solutions.
Obviously, certain locations are more at risk. As probably most of you know, Corner Brook Pulp and Paper is the last operating mill in Newfoundland and Labrador. The situation right now, being a newsprint producer with COVID having hit, is that it's very difficult to continue at that pace. We need to get support from both the provincial and federal governments so we can keep those 500 plus high-paying jobs alive and keep a future for that mill.
We also believe that you have a very good mechanism. It's probably not the time—because we believe time is of the essence—to to try to develop and engineer new programs. We believe programs such as IFIT are the right vehicles again, but they need to have more funds and also be able to support higher capex projects for the future.
Finally, we believe that the forestry industry can be one of the main players to achieve that target of a carbon neutral country by 2050.
Thank you for your time today.
I will be glad to answer any questions you may have.
I have a question for Mr. Fehr. Thank you, Brian, again, for coming.
We've met before, and he's doing some great things.
I guess what I've heard you talk about is carbon sinks. I've heard you talk about opportunity in B.C. and using fibre for new purposes that provide an opportunity for British Columbians and for work, not to mention forestry, which grows a whole bunch of trees in British Columbia on a regular basis and has a really great story for the environment. Sometimes we don't hear about the positives about forestry. We often hear about what you have mentioned, where it seems like every group wants to shut you down at every turn.
You still chose to be in B.C., and I know you still have a lot of your business in British Columbia. You mentioned getting jobs for rural British Columbians. Can you just speak about why you're in B.C.? I have a question to ask you after that, too, about Peak. Why are you in B.C.?
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To broaden the answer then, I've heard from some of my colleagues in other parts of the industry that they are having issues. I actually just joined the standing committee with BC Wood in talking about a plan on how we're going to put in training for different types of roles throughout the province. It is not an easy thing to add to a very complex business when it comes to value added. It's not easy to get them up and running and working when there are so many challenges that come with it. But I do believe there's going to be a need for supporting training.
What, unfortunately, I have also seen is that when we are focused on that, we need to make sure that we're hitting the mark. A lot of times I've been on other committees where we formed an educational product that really doesn't hit the mark with industry. The people who work in government or work in that side of the industry, really want to see it succeed. If industry doesn't participate, that's what they need to look at to make sure they are hitting the mark. We have to hit the mark with the industry, so we're hitting the right people.
I will give you an example. When I mentioned our value-added facility—we put in a moulder back in 2000—there still isn't in my opinion enough expertise around moulders. We can get to the 80% level where we can run a moulder, which is very important in any finishing products. We can run a moulder up to the 80% level, but we hired a guy hired who, when he walked out of the filing room, could hear that there was something wrong with that machine. That expertise we do not have.
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I thank the witnesses for taking part in this committee meeting.
I'd like to welcome our new clerk.
I have a quick question for Mr. Verreault.
In your presentation, you spoke about what the forestry industry could do for Canada. Based on what we heard from witnesses last week, it is now pretty clear that the forestry industry could be the sector leading the fight against GHGs.
On all my trips to Europe, I've been amazed to see large wooden structures, like bridges. That's not the case here. In France in particular, you can see large structures built of wood, even though France does not have a great deal of forest resources. You also stated in your testimony that you have many customers abroad.
I'd like to know what you think is causing Canada to lag behind in the construction of large wooden structures.
I will tie this in with what Mr. Kalesnikoff said, as Nordic Structures is an integral part of our organization. What Mr. Kalesnikoff said he experiences daily out West we consistently experience in Quebec and in every corner of Canada.
To answer your question, generally speaking, there are no half measures in Europe on the issue of fighting climate change. There is a will in all sectors of activity. That will extends not only to transportation using electric or hybrid vehicles, but also to all spheres of human activity.
Europe has taken action to improve its carbon footprint. It's not a question of measures to help the forestry industry, or promotion, or education. These decisions are made to build better with the pragmatic aim of generating better buildings and infrastructure. People are not asking themselves if wood is good for this or that, they are not making comparisons. No. People are choosing wood outright. As a material, it has proven itself and has been shown to perform better structurally, financially, and in terms of climate change.
If I may, let me use the city of Paris as an example. France is not a country with a forestry past or future, unlike Quebec and Canada. However, Paris mayor Ms. Hidalgo has announced that all the infrastructure needed for the 2024 Paris Olympic Games will be made of solid wood. That is because wood is a perfect match for the ambitions and objectives of the fight against climate change.
In Europe, people are unequivocally making a statement. They are leaving behind the chicken-and-egg dynamic in education, training and industrial supply. They have paved the way and are moving forward on that basis.
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My comment about IFIT and NRCan was basically about the fact that a lot of money is given out to different jurisdictions and companies. I think if they looked at their record—and I'm just guessing, as I have no idea if this is real or not because I haven't investigated it—I would have to guess that a vast percentage of the money is handed out to the larger multinational corporations because they have staff who write proposals. We don't have that ability.
We run very lean and mean, so we don't have a specific person who does that, and I think that's what I'm referring to. If government really looked at what's happening, you're going to see that companies like Brian Fehr's company, our company, the gentleman from Quebec's company, family companies, are the ones who really push hard. We're the innovators. We're the ones who are always looking at creating opportunities.
I'm not picking on the larger corporations; they are necessary. They are good to have in the role. We need a healthy forest industry for all of us to be successful; however, it is skewed to one side. We find it very difficult for how many proposals we have put in that we have never been recognized and have never gotten anything. It's very frustrating to the point where we won't do it because it take a lot of time and energy to do.
Government needs to understand their audience and needs to hit the cross-section of size of companies. We have companies here in the Kootenays that are employing six people with 3,000 metres a year of volume. Those are extraordinary numbers, and I will guarantee you that that gentleman has never even heard of IFIT or NRCan. That's the sad part of the state of affairs when it comes to me from the government's perspective of what government needs to do to promote that, and maybe government needs to recognize that there needs to be an advocate for these smaller companies, because it is so difficult for them to access funding that is out there, and then the funding gets swallowed up by the big corporations because they have people already writing the proposals that are put together.
I hope I answered the question.
Thank you to all of the witnesses today. It's all very interesting. We always learn so much when we hear from people across the country.
I'm going to start with Ken Kalesnikoff.
It's good to see you, Ken. You mentioned Thrums, and I just have to put it on the record what a tremendous asset to the community Kalesnikoff Lumber is. I stopped in at a Thrums market last week, and they said that you had bought 300 jars of borscht as Christmas presents. That is going to keep that very valuable market going. Thank you for that.
Getting back to the topic at hand, you mentioned government procurement and what the government could do to help innovators in this space, in particular in mass timber engineered wood. I'm just wondering if you could expand on that.
As everybody here probably knows, I have a private member's bill that spoke to that in the last Parliament. It's in the Senate right now, coming back the other way. That mass timber construction would have value for this country and for the environment. How could the government help out in that manner with procurement to build better buildings and really support the forest industry?
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Thank you, Richard. I appreciate it.
I think I'll start by saying that the mass timber push right now really does hit all of the boxes. It ticks all the boxes. It creates jobs. It creates high-paying jobs. These are not minimum-wage jobs. It creates opportunity for young people to be excited about the forest industry. We have some young folks working with us right now, doing the drawing and engineering work, and it's amazing to me when I go and look at it. It's very exciting.
I think the opportunity around the better utilization of our resources is tremendous. I think we can create so many more jobs by using forest fibre in that manner. I'm probably biased, but I can't help but give it very, very high marks as an industry, as a future for Canada and for British Columbia especially. However, we are struggling constantly about promoting it. We're always battling.
We made an announcement in our community of Thrums, which you mentioned, Richard. We have 200 people in Thrums. We're a metropolis, right? In Nelson and Castlegar, either side of us, there are 8,000 to 10,000 people.
We made the announcement of a $35-million investment in our community. We could have very easily put it on the other side of the border, but because of our commitment, as Brian said, to Canada and British Columbia, and as a family, we want to stay in Canada. This is where we've lived and have loved being involved. However, one of the first responses we got when we made the announcement was from someone on social media. My daughter said I shouldn't get excited about it, but it's a culture. It's the culture of, “You guys are just going to clear-cut more trees”.
I'm not an expert in the carbon equation, but I will say that it's very frustrating not to be able to have a specific explanation and understanding. In my mind, when we cut trees down, the new trees that are growing are the ones that use carbon. As the trees get older, they sequester carbon. We take those older trees and we turn them into lumber. We take that lumber and we put it into homes, or in this case mass timber, so we are sequestering that carbon. Then we are planting three trees for every tree that we cut down. Those trees again use carbon. The cycle is pretty simple for me, yet I got a presentation about the pellet industry and how bad it is from the carbon side.
Richard, if I'm digressing, I'm sorry, but there is so much confusion around how the carbon issue needs to be packaged for Canada and for the world.
We have all these scientists saying different things. All it is doing is confusing the issue. We need a leadership role. That leadership needs to happen from the government, and it needs to happen from the side of being able to promote mass timber. We need that promotion and support from government so that when people say they don't like cutting trees down, we understand why. When we want to start putting more forests aside for parks or species at risk like caribou, that's more stress on the industry. On the one hand we want to promote the industry and get it going, and on the other hand we're shutting the forest land base down and we're not able to take it out. We really need government to promote and support the industry by doing things that will celebrate the fact that we're using lumber for mass timber and creating a mass timber industry.
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This is a subject that's a bit dear to my heart. Growing up having the ability to work with my grandfather and his brothers, my uncle Koozma gave us a mantra: take care of the land, and the land will take of you.
We are farmers of the land, in the forest industry. We are no longer what we were painted with back in the sixties and seventies, as some kind of neanderthals. The amount of work we go through, the technology that is used to put out a cutting permit, is unbelievable.
My grandfather would never believe what we're doing to cut a tree down, the amount of work and effort. We are all environmentalists. We all work really hard at doing the right thing in the forest industry, and that's true right across Canada, I believe. We need to be celebrating this. I have challenged the B.C. government to put out commercials to celebrate it and to promote it and to tell people that we are actually planting trees.
That's the most critical thing for me: we need the forest industry healthy, we need the forests healthy and we need to manage them.
I'm starting to sound like Donald Trump when I throw things out here as ideas, but when we think about the pine beetle epidemic that happened in central British Columbia—it started in Tweedsmuir Park—I have to believe that had we dealt with it in the park, it wouldn't have come out of the park and exponentially grown to the point that it actually ended up in Alberta. We need to manage the forests as we can, as the experts that we have.
Natural Resources Canada does indeed play an active role in supporting the development of this emerging sector.
In this case, since the beginning of this meeting, people have been talking a great deal about the investments in the forest industry transformation program, or IFIT. The IFIT program has never been tailored to our needs because of its administrative delays and the step-by-step system that takes months. The market can change between the time we submit a project for analysis and the time we get a response. The IFIT program has too many long steps involving all sectors across the country, and no clear vision. With regard to Natural Resources Canada, of course, the amounts that IFIT can provide are much lower for large-scale industrial projects.
In contrast, around 2015, Natural Resources Canada played a pioneering role in the construction of medium- and high-rise solid wood buildings. An example is the Origine project, a 13-storey solid wood condo that we built in Quebec City. Natural Resources Canada had a program to support the technology demonstration and showcase component. That kind of highly targeted, highly effective support made a difference.
Today, we have delivered tens of millions of dollars' worth of solid wood structures for medium- and high-rise buildings, all as a result of the $1.1 million in initial financing. It was a small amount at the time, but it made a big difference.
All indigenous projects are relevant. We're involved as partners in one indigenous project, but these are smaller initiatives compared to the potential market that could exist. I can tell you that the most efficient and cost-effective way for Natural Resources Canada to support innovation is through its ongoing financial support to FPInnovations. FPInnovations can rely on stable funding from Natural Resources Canada.
FPInnovations is a bit like penicillin, a drug that can help many patients with many symptoms. FPInnovations is recognized for its innovation across the industry, whether it be in building codes and standards, process development, productivity gains, environmental footprint reduction and all related logistics, biofuels or construction. In any event, FPInnovations is like penicillin, which helps us all on many fronts. So, obviously, that is an indication of what may be relevant.
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Actually, demand is still growing at a fairly sluggish rate. The critical factor is with the National Building Code; it is not so much the demand for growth as the removal of a hurdle with respect to solid wood construction. The 6, 8, 10 or 12-storey solid wood projects we have done have been for private developers, who make business decisions based on sound technical and financial answers.
In addition to the boldness they must show, those who choose to build better in the 21st century face the red tape that comes with a prescriptive building code, rather than a code based on a philosophy of achieving objectives. That puts all materials on an equal footing in achieving the objectives, where the shift has been under way since 2015.
It is one thing to allow it, it's another to say that you can build with wood, steel, concrete or aluminum and that the important thing is to achieve objectives of fire and earthquake safety.
This evolution in philosophy is the most legitimate and the fairest way to go for all materials, but it's also the most efficient way for a developer who, by choosing wood, would have no additional expenses to add to the project.
I'd like to ask Mr. Fehr a question. I was interested to hear that you're in Whitefish, Montana, where you said you had a CLT plant. Mr. Kalesnikoff mentioned in passing that he could have opened his mass timber plant across the border. Vaagen, who has a dimensional lumber mill in Midway in my riding also has a CLT plant in Colville where their family is based.
I'm wondering if you could expand on what the American market for mass timber is, what the fibre supply is like and how competition across the border with Canadian companies, like Chantiers Chibougamau and Structurlam, can shape our markets.
There are all sorts of things going on there, but if you could expand on that in a couple of minutes.
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I think I'd like to start by going back to what I said earlier.
I think government really needs to take a leading role in nailing down the truth and a direction. If our focus is to do something by 2050, what is the exact path we're going on? Also, quit listening to the very vocal 20% who are out there sometimes.
This needs to be real. Every one of us wants to do the right thing, so what is it? Every time we say one thing, the opposite side will say the other. That's healthy and good for debate, and it's up to government to come up with the plan as to what is the right approach. What does government want to be able to make it right? We need a balance and we need to make it work.
Again, I'll just use the same example I used before. From what I understand—and I am not an expert—it's the young trees that use carbon, it's the old trees that sequester it, and it's a natural cycle. We need to really verify that, if that is the case.
Mr. Verreault, I have one question here, if I have the time.
You talked about replacing buildings with wood, and I think we all agree with that. The construction that will be replaced, for instance, cement and steel—industries that are supposedly making carbon justifications about how they're reducing their footprint, are obviously going to have less of the economy going forward here.
How do you talk to those industries about the jobs, particularly cement, if you will, if you think about how we've allowed cement plants to be built in Canada without environmental assessments? How do you compare the two?
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Again, it is a subject that I believe is real. I've heard enough times that it is actually happening, and it is very frustrating. When you look at just the election, you could see that their ability to manipulate things is pretty significant.
I guess what I would ask is that we have a way of just telling the real story. I think that's so important, so as not to have the people of Canada swayed by an influence that has an agenda.
As I said, I'm trying to remember her name and I can't remember it, but she did a presentation that I listened to, and she did a fantastic job and was able to connect those dots.
I don't know what a government could do to prevent that. I don't know if you could stop funding from outside sources, or if we should be taking the high road and just spending a lot of time, energy and money promoting the industry the other way, which is just the truth. What do we actually do? What are the things that we do very well? That's what I would rather see us doing, if it were possible.
To that end, you mentioned that right now you're seeing is a lack of leadership. You said it's an issue of leadership in response to the misperceptions and misinformation being propagated about the forest sector. You also mentioned the fact that the government has a key role to play in making sure that people have accurate information at their fingertips.
Now, the following words are mine. I understand that they're not yours, but I would say that the current government has participated in perpetuating that misinformation, basically targeting certain organizations, particularly those within natural resource sectors, in order to prop up its agenda for climate change, etc.
Now what you're saying is that the forest industry is very helpful when it comes to taking care of the environment, sequestering carbon and taking out greenhouse gases. Can you just comment on that a little bit more? What exactly is the government's role in making sure that an accurate understanding is being put out there for the general public?
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Let me start by saying that I'm not getting into a political discussion about who has done what the right way or the wrong way.
Locally here, we're not a big company, so I don't tend to get to Ottawa often and don't work so much at the federal level, but provincially I've worked with three types of governments—the NDP, the Liberals and the Social Credit—and to be really honest, they're all the same.
I haven't seen anyone take a particular leadership role that would promote the forest industry. I know that is a big undertaking because for every positive, there is an equal and opposite reaction, and so as much as I will sit here and tell you how good the forest industry is, because that's my love and what I've been brought up in, you will get a preservationist saying.... And I won't even give them the opportunity to be called “environmentalists” because, as far as I'm concerned, the guys who log for us up in the bush look after things so well, they're environmentalists.
The preservationists only have one agenda and that's to stop...and on whether the governments listen to them, and whether or not it sways their opinion or direction, I can't comment. I'm not that closely involved in it, but it needs to stop.
We just need to come down to the truth. My uncle Koozma's words haunt me every time I get into these conversations: “Take care of the land and the land will take care of you”. It's as simple as that.
We have the opportunity. We are not dumb people; we have the expertise. I think we've got a real opportunity here to have the forest industry play a vital role in both recovery in carbon, in climate change, and all of it.
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Thank you, Mr. Chair, and hello, everyone.
I'm very pleased to be here. There a lot of great information.
I have the honour of being the Parliamentary Secretary to the .
By way of background, I'm from Kapuskasing, a pulp and paper town up in northern Ontario. My dad was a welder there and my grandfather helped build the mill back in the 1920s and 1930s, and my uncles and cousins all worked there, so I was able to afford an education. They're good-paying jobs, great middle-class jobs there, so I'm a big champion of the forestry industry.
I've seen it first-hand where it is: the people planting trees and cutting those trees, and the innovation in that sector. I have a lot of questions and very little time.
[Translation]
I do not have a lot of time. I am first going to turn to Mr. Cossette.
At the beginning, you spoke about the challenges facing the pulp and paper industry. What steps do you think you will be taking to adapt to the changes that are coming? How do you see the future of the pulp and paper industry? How will it go about innovation?
You have about one minute.
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I am pleased to see you again, Mr. Lefebvre.
Generally, the demand is taking shape. It's somewhat of a paradox, because, in a lot of economic sectors, the need is for diversification, investments and jobs, but there is no market. In this case, there is a market, and it is mature and receptive.
Our little challenge is about skills in engineering and designing structures. We have to turn to solutions like immigration, which is lengthy and complicated. We have no quick way to meet our needs. That is the first challenge.
There is another. No engineering faculty specializes in the material in Quebec or in Canada. The market is certainly showing strong growth, but it is still too small to give engineering and architecture throughout the entire university family a shot in the arm.
For example, if, as government clients in Europe or the United States are doing, the Government of Canada were to recognize that wood does a good and effective job, if it stopped moving forward one project at a time, always comparing and choosing one over the other, firm assumptions could be made and it could be the change of course that engineering faculties need to really raise their game. At the moment, that is one of the obstacles to the growth of the business.
What we're seeing, particularly in Asia, are pretty significant increases in the demand for wood pellets as they try to get rid of coal, to eliminate the use of coal. We would love to see a similar type of action taken in Canada, for example, at coal-fired plants in places like Alberta and so on. It would be nice to see similar types of policies encouraging that type of action in Canada as well.
Of course, I think a lot of us would like to see the next phase of wood pellets, which would be black pellets or some sort of bioenergy such as LNG or hydrogen, but what I would say at this stage is that most of those types of products are in the very early stages of development, and for the clean energy types of programs, those types of products are what we need to deliver on for the Clean Canada and CleanBC types of initiatives.
Mr. Verreault, you wounded my pride a little because I am a former instructor at the Université du Québec à Chicoutimi. Among our number was Sylvain Ménard, one of the leading experts in wood infrastructure. But, in terms of skills, it is true that perhaps not enough structural engineers specialize in this issue. That's just my friendly comment to you.
I want to go back to what we were saying just now. You talked about a contract you had in the United States where some rules had been established that made wood easier to qualify. We talked about that here a few weeks ago, and it was a proposal that we made.
If the Government of Canada were to establish carbon footprint as a criterion for awarding contracts as part of its procurement policy, would that help, in your opinion? We know that there might be a little squabble if we tried to establish something similar to the Charte du bois. I know there is also a similar standard in British Columbia.
Does that solution seem helpful to you?
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To help heal your pride, Mr. Simard, as you mentioned, the Université du Québec à Chicoutimi does indeed offer a perfectly fine graduate program in wood construction. However, it's really intended for very specialized, dedicated and focused professionals, whereas we need it to be normal to learn about wood, just as it is normal to learn about steel or concrete. We need your example to create a ripple effect.
In terms of the decision-making processes leading to construction using wood, as long as partial criteria are established—as we tiptoe around the issue—things become complex, lengthy, onerous and costly. It works well when private clients realize that wood does a better job and they dispense with all other comparisons. They have to specify at the outset that they want wood. Then competitors in the wood market will submit competitive bids.
Those are the circumstances that make projects quick, effective and completed within budget. That's where the Government of Canada clearly has the potential to make a difference. If it wants specific results, it must take specific action.
The education about the suitability of the material that my colleague Mr. Kalesnikoff was referring to will no longer be a debate or a rhetorical argument. We will have facts and figures. At that point, we will be able to move forward and build on a solid base.
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Chair, maybe we'll address the motion first.
In that regard, I have no problem with the members of the minister's office appearing to speak to that particular motion. I have no problem with that, so if you want to.... I don't know if it's necessary to add an amendment for that to occur. I don't see that, but again I have no problem with officials appearing with the minister.
I would like to speak to Mr. Baarda again. You spoke about McBride and about Fort Nelson. One thing that folks on this call, who are at this committee meeting today, don't often see but that I see every day when I drive through the Pine Pass is all of the standing red deadwood and the standing yellow wood. Now, it's really a new thing, and it actually looks quite beautiful. My wife pointed it out to me and I thought they were just deciduous trees, leaf trees, that we normally see losing their leaves in the fall. But these are all evergreen trees that are turning yellow, and it's from the new spruce beetle kill, instead of just the pine beetle kill.
This is where I see the real opportunity, and you spoke about it, to deal with this wood in a productive way rather than just literally adding fuel to the fire by not addressing it. I see that our American counterparts to the south have really carried out some initiatives to clean up their parks and forests, with all of this fuel that is just on the forest floor. To me, when you see opportunities like you and Brian have obviously seen, to use some of this wood, pull that fuel out of there, not only does that help prevent forest fires, but it's also used for something positive as well.
That's really the message. We talked about some of the negatives, the groups that want to shut forestry down in B.C. I've heard about different groups that want to shut down all of forestry, but here's a really positive message all around for the environment and forestry.
Can you just speak to what I highlighted there, Mr. Baarda?
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Thank you very much, Mr. Chair.
Thank you to all our panellists for very informed presentations and good responses.
I'm in Labrador. My riding is in Labrador, in the province of Newfoundland and Labrador. I have certainly seen lots of transition in the forest industry here. As Kruger will know very well, we were very much a supplier to the pulp and paper industry in the province. With the decline in those mills, we have seen the whole industry evaporate from under us, because without the by-product for pulp at the time, there wasn't a developed market.
My question is to Mr. Cossette. In the province right now, Kruger still has their pulp and paper operations at Corner Brook. First, how has the decline for pulp and paper products affected your operation overall, particularly in that area? Also, have you looked at diversifying some of the work you are doing in the industry within the province of Newfoundland and Labrador?