Thank you for invitation. Merci beaucoup. I will do my presentation in French as I think it will be much easier for the translators. I'm very happy and proud to be here.
I would like to congratulate the new MP for the riding of Lac-Saint-Jean, Mr. Hébert, who is here with us today, as I just heard you say, Mr. Chair.
I am here to speak to you today as the president of the Quebec Forest Industry Council. I am responding to your invitation to discuss the economic aspect, among others, of the Canadian forestry sector. Our topic is the supply of secondary supply chain products in the forestry sector, but it is impossible to discuss the secondary supply chain or secondary forest product processing without first talking about the primary function. Before we get to the second and third processing of wood products, we have to ensure that we can first harvest the wood. I want to say a few words about the challenge this represents.
This is a big challenge today throughout Canada. As you know, the importance of the forest industry varies in various regions of the country. Mr. Hébert knows very well that 75% to 80% of the economy of a riding like that of Lac-Saint-Jean depends on the forestry industry. That is the case for several other regions of Quebec. And so the predictability of the wood fibre supply is important, and that depends on the provinces.
In 2012, the Province of Quebec changed the way in which it awards forestry contracts. A part of the wood is now auctioned off. This is a very important aspect. At the time this was done to respond to American demand, among other things. The Quebec market is extremely dependent on the American market.
We know that 56% of Canadian wood exported to the United States comes from British Columbia, and approximately 20% comes from Quebec. However, 96% of Quebec's exports go to the United States, whereas Asia is an important market for British Columbia's wood exports. And so it is extremely important for the province of Quebec to remember the importance of wood processing, and to keep its markets open in the United States.
One of the major problems we face regarding wood supply is the workforce we need to harvest that wood. From the time the tree is cut down until the wood leaves the plant, you need workers. This is a very important issue at this time. I know that you are fully aware of the fact that there is currently a labour shortage throughout Canada. The regions of Quebec are not an exception. In Quebec, we often say that we are going to run out of workers to process the wood before we run out of wood. Consequently this is an extremely important aspect for us.
I am repeating things you already know, but with close to 1.3 million projects starting up every year, the Americans need to import at least 30% of their wood to meet the demand. Why is it so difficult to make them understand that they should choose to buy wood from their neighbour Canada, their biggest economic partner, rather than wood from other countries? We know that that is currently creating a large price increase for American consumers. The number of new projects continues to grow, but that raises the risk of cost increases in home construction.
When we signed this agreement in 2006, Canada's market share was set at a maximum of 34%. Historically we know that Canada's annual market share in providing wood to meet American needs has never been more than 32%. Here we are talking about negotiating 28%. According to the econometric figures we have in Quebec, the drop of this rate to 28% will lead to the closure of about a dozen plants in eastern Canada, several of them in Quebec. And so it is extremely important that we follow this issue very closely.
I want to talk about the forest itself. From an environmental point of view, the forest is seen as a very promising solution for the future. That is one of the main reasons I decided to work for the forest industry.
I commend the initiative of California and British Columbia, who recognize the forest industry as an important component in their plans to fight climate change. They have integrated the forest into their plans, and have set the contribution of the forest to reaching their greenhouse gas emission reduction targets at 30%.
It is extremely important to see the forest as a carbon sink. We have to be able to regenerate our forests to go further still.
Of course, we have to be able to face natural disasters like forest fires and insect infestations like the mountain pine beetle or the spruce budworm in Quebec.
It is also important that we continue to reforest and replant our wood to capture and store carbon. You all know that the trees in a forest that reach maturity become windthrow, and will be knocked over by high winds or destroyed by forest fires. Not only do we lose their economic value, but they also emit carbon dioxide. Environmentally speaking, that is less interesting for society as a whole. Conversely, a young growing forest provides more food for animals, contributes more life and is more promising for the future. It's extremely important that we see the big picture.
I would like to make an aside here on the famous issue of the woodland caribou. When I was minister, I worked in cooperation with all of the opposition parties and tried to avoid getting into personalities or partisanship. We concluded that more scientific research on the woodland caribou was needed. In parks like the ones in Jasper or Banff, the woodland caribou populations are declining, whereas they are increasing in Quebec regions where there is a lot of forestry.
According to the Quebec forest industry, we have to know a lot more about the woodland caribou. Of course we want to protect ecosystems and ensure the sustainability of our forests, and the government of Quebec is helping us, but it is also important that we know more about the woodland caribou.
The vision we have of development, and of protecting our environment in connection with the use that is made of the forest, is extremely important. People say that we have to limit costs and reduce CO2 emissions. The reduction of a ton of CO2 emissions in public transit will cost between $400 and $500. Of course public transit is important; I am not saying that it is not important. All I am saying is that if we plant more trees and use more wood in residential construction, we will store even more carbon. Thanks to the savings that will generate, we can pay a part of the cost of public transit throughout Canada.
The future of the forestry industry and of the forest itself must be integral components of the federal government's environmental strategy.
Over the past few years, in its negotiations with the Americans, Quebec has always maintained its three-point position. First, we insist on the recognition of the new Quebec forestry regime, which includes auctions, which means that wood is sold at market value. Secondly, we try to hold on to the market share we have had, historically. Thirdly, we are counting on the recognition of border sawmills; 50% of their wood supply comes from the United States, mostly from Maine. These are aspects upon which we must continue to focus.
We must also see the forest as a source of energy for the future. In several regions of Quebec and Canada, there is progress in that area. Several forest biomass projects are ongoing, or completed, which provides good opportunities for the forest industry.
Of course this always leads to comparisons between the cost of new energy sources and the cost of other sources of energy. In Quebec the comparison is with hydroelectricity. In light of the lower cost of hydroelectricity, certain new energy projects may sometimes be less profitable, but I would rather see them as promising projects for the future.
The same thing applies to biofuels. In Quebec, several projects to create energy from resin or wood fibre are being pursued on the North Shore, in the Mauricie Region and elsewhere in the province. Soon we will be able to produce biofuel using wood fibre, which is clearly a promising avenue for the future.
Since my time is almost up, I will conclude by pointing out that we need to recognize the enormous environmental potential of the forestry industry and of the forest everywhere in Canada. The construction of houses, residences and multi-story buildings will be important to the future of the forestry industry in Quebec and the rest of Canada.