Interventions in Committee
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View Pat Perkins Profile
Thank you very much, Mr. Chairman.
I think the first question I'll ask is of Iain Macdonald.
You made the statement, with respect to HR and skills, that you very much required to have a properly trained workforce and that you're finding deficiencies in that area moving forward. What do you see the government's role being in this? Is this something you're asking us to consider assisting with, or is there something under way? Would you like to explain what that comment meant?
Iain Macdonald
View Iain Macdonald Profile
Iain Macdonald
2015-05-12 16:56
Sure. Thank you.
I think the role is to continue to fund the labour market studies, which have been very beneficial for understanding, as Ms. Block said, the transitions in the industry and responding to them. We have had very positive results with pre-employment training for disadvantaged groups and equity groups, as I mentioned. A major issue for companies is finding skilled employees and entry-level workers.
In terms of other roles, I think there's a potential for greater coordination between the various post-secondary institutions and industry in Canada so that there is some kind of laddering system for people to progress from high school education through various kinds of post-secondary training, and then possibly continue it through professional programs as they continue to work.
The fluid nature of technology and today's markets is such that it's no longer enough to have a four-year degree to serve you for your career. You're going to need at various times to take upgrading in your training. We're trying to do that in some ways through e-learning, for example, and blended learning, which combines e-learning with face-to-face training for shorter periods. But those kinds of programs are difficult to make sustainable, sometimes.
Ben Voss
View Ben Voss Profile
Ben Voss
2015-05-07 15:33
Thank you very much. Good afternoon and thanks to the committee for the invitation to come forward today as a witness.
Forest renewal and the future of one of Canada's oldest industries is of great interest to the group I'm here representing today, MLTC Resource Development. MLTC stands for the Meadow Lake Tribal Council, as the chair mentioned, which is owned by nine first nations communities in northwest Saskatchewan. MLTC Resource Development is a private equity investment partnership that owns several businesses in Saskatchewan and Alberta. Our largest investments are in forestry, and we also own real estate, hotels, fertilizer distribution, trucking companies, and telecommunications services.
The chiefs and councils of the nine first nations have developed a very positive reputation for having strong governance and clear separation of business and politics. I'm proud to say that as a non-first nations person, it's very humbling to work for an organization that is helping Canada's indigenous peoples make a contribution and earn a stake in the economy and work towards prosperity. There is a key reason why MLTC has been so successful in forestry, and it's because we're owners. We own the mill. We own the forest management company. We own the harvesting, the trucking, and the value-added processing. As owners, we control the natural resource development, the planning, the infrastructure, and we control how the benefits are retained in the region.
At the heart of our business is NorSask Forest Products, a state-of-the art high throughput and technologically advanced studmill facility. We produce 135 million board feet annually and are on track to increase that with ongoing investments in technology and innovation. Our high quality two by four and two by six studs are sold across North America and sought after by our customers due to our exceptional quality, customer service, and reputation.
NorSask was one of the few sawmills to remain open in the downturn and has remained a viable and successful sawmill under some of the most difficult conditions. NorSask directly employs nearly 200 people and 75% are aboriginal, almost half of whom are first nations people and most quite young.
The regional jobs that are maintained in the planning, harvesting, transportation and maintenance, and use of the timber are well in excess of 1,000 people and many of these are also first nations members. All of these jobs are linked to NorSask and MLTC's role in forest management.
Despite our success and resilience, we face unprecedented pressures due to limited market access, infrastructure deficits, no rail service, low quota levels, high labour cost, shortages of skilled trades, and competition for government resources from foreign-owned multinational companies.
ln 2007 we could see that forestry had to change. Lumber markets were collapsing. The traditional model where a sawmill and pulp mill operate hand in hand was just not sustainable. The pulp mills depend on low-cost pulp chips, produced as a byproduct of sawmills, as well as large government subsidies for capital and electricity rates, to stay viable. Pulp markets were shrinking. Pulp mills were closing and the future was uncertain. Pulp mills are also supposed to use hardwood species to allow access to the softwood for a sawmill.
Good lumber depends on good fibre and Saskatchewan has some of the best in the world. We are not yet impacted by the mountain pine beetle and the market knows that. Yet, we are still dependent on pulp mills, typically foreign owned, to utilize hardwood and to buy pulp chips, unless we change our model.
Since 2013, we have invested more than $20 million into modernization, expansion, and recapitalization of our sawmill. As a result, we have put our money where our mouth is towards innovation and the confidence that lumber will always be a product in high demand, despite market cycles.
ln our view, the future depends on finding better value from our timber resources instead of just lumber and pulp. We need to ensure total fibre utilization, including the value-added use of our wastes. Our focus turned to bioenergy and in particular electricity generation and wood pellets. Wood pellets are simple enough as long as you can find markets. Electricity, on the other hand, is very hard to get into without cooperation from local utilities. ln our case, SaskPower is the provincial-owned crown corporation and holds a monopoly in the regulated market. ln 2013, we successfully signed a power purchase agreement to construct a 36 megawatt biomass fired power plant, the first in Saskatchewan.
ln 2014, we started construction on Saskatchewan's first wood pellet manufacturing facility with a design output of 10,000 tonnes per year of premium wood pellets for use in residential heating and environmental spill cleanup. We are very optimistic that this plant can be expanded as we continue to develop more markets across North America.
A key issue worth mentioning is that first nations-owned sawmills do not qualify for many federal or provincial funding programs. So all of this is done with private investment. We can't use the accelerated capital cost allowance, SR and ED, IRAP, or any other innovation funding programs, and the softwood lumber agreement usually prevents direct government funding to sawmills. So our investments in innovation have been internally and privately financed, which is a huge disadvantage compared to the rest of the forest sector and hampers innovation investing.
I can't leave here today without mentioning the softwood lumber agreement. Saskatchewan is often overlooked in the Canadian negotiations. We haven't got enough quota. Today we have three saw mills operating and enough quota for one. Other provinces, such as B.C.... I won't go through the list, but several of them have excess quotas. Negotiators seem unwilling to try to help Saskatchewan because of the fear that changing the agreement would jeopardize the fragile consensus and that we're better just to renew the status quo.
We are strongly recommending that the SLA be structured to give Saskatchewan it's fair share. Moving quota does not cost the other provinces any jobs, but if Saskatchewan doesn't increase it's quota, it could cost a thousand jobs.
In summary my recommendations to the committee are as follows: develop financial support programs and investment incentives for diversified forest products that first nations-owned companies are eligible to received; focus on continued skills trade program funding such as Northern Career Quest, which we feel is very successful; develop a new domestic focus on ensuring that community ownership models are supported, including loan guarantees or other financing programs; rebalance the SLA quotas to support the Saskatchewan saw mill industry without harming other provinces who have surplus quotas; and expand and enhance federal funding programs for innovative new technology investments to encourage domestic investment and newer leading edge technologies.
I want to thank you for your time today, and I'll do my best to answer any questions you may have.
I hope that our story has been a benefit to your committee's work and we can offer some proof that forestry innovation is alive and well in Canada.
Ben Voss
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Ben Voss
2015-05-07 16:20
We have gone through a bit of an occurrence that's common in Saskatchewan now where there is a labour shortage. We have a lot of skilled trades shortages, and there is also this extremely high unemployment rate with aboriginal people, which we're also familiar with.
The Meadow Lake region has an abundance of aboriginal people, young people in particular, so the average age among the population is 17. The Meadow Lake Tribal Council has 13 members, half of whom live on-reserve, and the other half are off-reserve. There are big distances between the communities.
We've been working closely with the regional colleges and the professional and technical colleges to implement as many skilled trades training programs as we can. There were some federal programs we partnered with, one in particular called Northern Career Quest. I mentioned in my notes that it has been very successful. We would love to see it return and be rejuvenated because it's had the best outcomes of any program we've seen, largely because it's extremely flexible. It's able to address the immediate needs that are usually not compatible with typical funding programs, so that's been fantastic.
When we went back to the market looking for employees, we found that aboriginal people were the primary applicants, so we just had to make sure that our workplace was really embracing them in terms of their unique youth-oriented needs, which is not really an aboriginal issue but it happens to be just something that's part of the new generation, but we also had to—
View Joan Crockatt Profile
Could you maybe be specific on one or two points that you think have actually made that difference for you so that the committee can be a little bit more knowledgeable about some best practices?
Ben Voss
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Ben Voss
2015-05-07 16:22
If you compare us to other forest companies in Saskatchewan, we have by far the highest aboriginal employment. The normal would be perhaps 5% or 10% whereas we're at 75%. We're owned by first nations so there is going to be some strong policy around making sure we put emphasis on promoting job creation among our membership. There are a lot of stakeholders who want to see that happen. Federal government departments want to see it happen. They want to see people moving off social assistance and moving into the workforce, so there is a lot of support.
The Meadow Lake Tribal Council has a number of very successful health and social programs that are active in getting people through graduating from grade 12, getting them into post-secondary training, and getting them into pre-qualification in trades, and that's led to a large number of candidates who are able to come forward to apply for jobs. We don't really have a temporary foreign worker program. We have an abundance of applicants, generally from the region, so it's a bit of a good news story that way.
We would like to see a lot more emphasis on life skills development and helping people integrate when they move from a very remote rural community into Meadow Lake, which is not that urban, 5,000 people, but it's still a big shock for a lot of people.
Ben Voss
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Ben Voss
2015-05-07 16:24
What is it like to rent an apartment, build a lifestyle, get a family established, and put down roots? That's not really common for a lot of young people so we need to help them understand those things. When we strengthen those things they become long-term, stable employees and commit themselves to the company.
We have a lot of strong candidates right now, a lot of shining stars. We're using them as examples to help recruit more like them, and it's going well.
View Joan Crockatt Profile
If you had a recommendation for government, of the programs you've accessed, which would you say you want to see us strengthen and continue? What do you think is a best model that's worked for you?
Ben Voss
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Ben Voss
2015-05-07 16:24
Yes, it's a Saskatchewan-specific program. I know that other provinces have looked at it. It's been very successful.
There are some models in Alberta and B.C. that we're looking at as well that are specific to forestry, but we really like Northern Career quest. It's great.
Susan Dodd
View Susan Dodd Profile
Susan Dodd
2013-12-09 15:57
Thank you.
I am actually a professor in the foundation year program at the University of King's College, in Halifax. My field of study is social and political philosophy.
I am the author of a book on the aftermath of the Ocean Ranger disaster. At the moment, I'm collaborating with Dr. Mélanie Frappier, from the history of science and technology program at King's, on a textbook for Oxford University Press. That book is called Engineering in Canada: Results, Risks, and Responsibilities. We're using Canadian case studies to provide engineering students with an introduction to their professional code of ethics.
My work on occupational health and safety developed by accident, quite literally. My oldest brother, Jim, was one of the 84 men who died on the Ocean Ranger. It still gets to me, it's amazing.
Anyway, as you know, in the wake of that disaster, the Government of Canada and the Province of Newfoundland conducted a long inquiry, first, into the causes of the loss, and second, into the appropriate regulatory organization for the Canada-Newfoundland offshore.
In those days, one of the biggest problems was turf wars between Ottawa and St. John's. Chief Justice Hickman's decision to house the permit-granting function with the occupational health and safety regulatory function was deliberate. When I interviewed him for the book on the Ocean Ranger, he was really clear that he thought those groups should be under the same organization in order to prevent what he saw as one of the main political causes of the Ocean Ranger disaster, and that was fragmentation among bureaucracies, among the power holders.
More importantly, and I often need to reiterate this point, the cause of the Ocean Ranger disaster was not the weather. It was a lack of political will to regulate in 1982.
Both Newfoundland and Canada wrongly assumed that the oil companies would self-regulate, that they would comply with the rules that covered them when they operated in American jurisdictions, and those companies did not.
The lesson of the Ocean Ranger disaster is that the kind of regulatory regime in place is less important than the government's expression of political will. If there is no will to enforce regulations, then we risk setting up our people and our environment for deadly exploitation. This is definitely what we learned at Westray, as well, because if the existing legislation had been enforced at Westray, that explosion and those deaths would not have happened.
Within companies, the first priority, the raison d'être of the organization, is to maximize pay for shareholders. This is not hostility or antipathy; it's a matter of priorities. Government's job is to ensure that the collective goods of the electorate are enhanced by, not just protected from, corporate activity. The regulatory needs of the offshore in Canada changed with time, obviously.
In 1982, one of the most pressing problems was a combination of thoughtlessness about occupational health and safety, a combative relationship between federal and provincial authorities, and a deadly naïveté about the professionalism of rig operators.
The New Orleans-based operator of the Ocean Ranger, Ocean Drilling and Exploration Company, was one of the most experienced rig operators in the world in 1982. Even the most cursory glance at Chief Justice Hickman's report will show you that ODECO was negligent by any common-sense use of that term.
ODECO's deadly mismanagement of the Ocean Ranger was possible only because the Province of Newfoundland and the Government of Canada were preoccupied with fighting over anticipated revenues, and they were naively confident that the so-called experts in the industry would perform professionally.
This dynamic will certainly repeat itself if government is once again complacent about its regulatory responsibility. It is worth remembering that although ODECO no longer exists, it and its fleet were purchased by Diamond Offshore Drilling, which still uses the name “Ocean” in the names of their vessels.
The well owner was Mobil Oil, so I'm glad to see how clearly Bill C-5 points to the responsibility of the owners to ensure that the rig operator behaves professionally in relation to safety.
Today, one of the central problems that this bill seems to address is clarity around functions and the need to keep regulations up to date in the changing industry.
I have given a lot of thought to what I could add to your discussion that...[Technical difficulty—Editor]
First, the regulatory structure will be exactly as effective as the political will that supports it. Where there is no political will, that is, where it is assumed that corporations are best left to their own expert judgment, there can be no effective regulation. That is where disaster begins.
The fact that this bill does not implement recommendation 29 from the Wells commission seems to me to be potentially a red herring. If the political will to regulate is communicated, safety will be respected. A stand-alone safety division would be effective only if it had resources and a commitment from government to prosecute when appropriate. Simply creating the office will not do the trick. It would require an investment.
Second, failure to regulate leads not only to loss of life and destruction of the environment, but also to the public's losing confidence in the legitimacy of government. This happened to an extent after the Ocean Ranger loss, certainly after the Westray disaster, in the States after the Deepwater Horizon disaster and the oil spill, and we're seeing the same kind of dynamic after the Lac-Mégantic disaster. These events are also political disasters.
Third, I would like to see a fines system that earmarks revenues for research and development. When I interviewed John Crosbie for the book, he said, “We still don't know how to get those men off those rigs.” That was a sort of typically gendered statement, but anyway....
Industry does not have an internal motivation to study evacuation systems. Government needs to take that on, and in this case I would say in partnership with Memorial and Dalhousie engineering schools. We can't leave research and development simply to industry. They have different priorities than the good of the public. We need independent researchers working on evacuation and rescue technologies.
Fourth, the advisory council might, in cooperation with governments, business, and universities, convene a conference on regulation every three years. Having a regularized conference would help Canada keep up with changing industry and international standards. We could invite regulation experts from Europe as well as from the U.S.A. We might use Hickman's conference that he conducted after the Ocean Ranger as a model for that.
I would love to see governments consider local, by which I mean provincial, hiring and training requirements. The training would have to go with it, right? Otherwise things like the Ocean Ranger disaster happen.
My sixth and final point is a question. It goes back, I think, to the spirit of the recommendation on the Wells commission around the independence of safety regulators. The question is this: Does Bill C-5's clarification of the roles of the various officers entail an increase in the number of government officers responsible for regulating work on the rigs? It seems to me that investment in regulatory personnel would be a real expression of political will to regulate safety in the offshore.
Thank you.
View Linda Duncan Profile
Actually, Ms. Pike, that is a good point. A five-year review does not preclude the governments and the regulatory authorities and so forth from reopening and seeking amendments. Good for you for raising that.
Professor Dodd, you raised my favourite topic. I used to be an environmental enforcer. I'm a broken record on this: it's fine to have good legislation, but if you don't have a commitment and a strategy for effective enforcement, then it's of little value. It wasn't me who first said that. It was a former Conservative member of Parliament in the Mulroney regime which actually tabled the first enforcement compliance policy. In their environmental legislation, they required that the provinces, if they wanted to claim equivalency, had to have equivalent enforcement compliance policies.
I want to thank you for raising that issue.
Perhaps I could have a comment from all three of you. Do you think that even if it wasn't added into the legislation, it could be a topic for consideration, if there is a five-year review and every five years thereafter, of the requirement for an audit now before the legislation is even in effect, of the capacity for staffing and skills? This is to be sure that we can implement the legislation to the level that you hope.
Barbara Pike
View Barbara Pike Profile
Barbara Pike
2013-12-09 17:02
It sounds interesting, and I'm sure it's something that the boards can probably provide to you quite readily.
The Chair: Ms. Payne, go ahead.
Lana Payne
View Lana Payne Profile
Lana Payne
2013-12-09 17:02
To add to that, I was just reading about the aforementioned international regulator conference. The latest one was in June of this year, when the CEO of the Australian regulator spoke. She was very strong about the need to have training expertise and properly resourced regulators. I suggest all of you have a look at her remarks. They were very good. Equating worker safety with the environment is quite worthwhile if we're looking at trying to advance what we have here in Canada.
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