Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue 3 - Evidence - Meeting of May 14, 2009
OTTAWA, Thursday, May 14, 2009
The Standing Senate Committee on Agriculture and Forestry met this day at 8:09 a.m. to study on the current state and future of Canada's forest sector.
Senator Percy Mockler (Chair) in the chair.
[English]
The Chair: Good morning and thank you. I declare the meeting in session.
[Translation]
On behalf of all the senators, I would like to welcome the witnesses to this meeting of the Standing Senate Committee on Agriculture and Forestry.
[English]
I am Senator Mockler, from New Brunswick. I would like to ask the honourable senators to introduce themselves, starting to my left.
Senator Cordy: I am Senator Cordy, and I am from Nova Scotia.
Senator Fairbairn: I am Senator Fairbairn, from Lethbridge, Alberta.
Senator Mahovlich: I am Senator Mahovlich, originally from Timmins, Ontario.
[Translation]
Senator Poulin: I am Senator Poulin. I have represented Northern Ontario in the Senate since 1995. Welcome to our committee. We are anxious to hear your presentations and talk to you.
Senator Eaton: I am Senator Eaton. I am from Ontario.
Senator Rivard: I am Senator Rivard. I am from Quebec City.
[English]
Senator Campbell: I am Senator Campbell, from Vancouver.
The Chair: The meeting today is the committee's seventh meeting for its special study on the current state and future of Canada's forest sector.
[Translation]
We are pleased to have with us today from Solidarité rurale du Québec, Claire Bolduc, President, and Cherkaoui Ferdous, Corporate Secretary. As well, Charles Provost, director of La Grappe agroénergétique des Coteaux.
[English]
We have Joseph LeBlanc from the Northern Ontario Community Economic Development Network. From the Rural Ontario Municipal Association, we have Mr. Eric Rutherford, Member and President of the Ontario Good Roads Association.
Witnesses, the committee thanks you all for being with us this morning. I would like you to make your presentation, which will be followed by questions and answers from the senators.
[Translation]
Please begin your presentation, Ms. Bolduc.
Claire Bolduc, President, Solidarité rurale du Québec: Mr. Chair, I would like to thank the Senate committee for asking us to share our thoughts on the future and development of forestry.
I am the president of Solidarité rurale du Québec, a coalition that has been a central part of rural life for 18 years and is active on many issues. The Government of Quebec has recognized the credibility of the organization by making it an advisory body on rural affairs for the entire government.
I will be making a presentation that contains a number of observations and concludes with recommendations and aspirations.
Yesterday's world is gone. We are facing a completely new world, a world where our forests are no longer what they were, where our collective heritage has sorely deteriorated. Also a world in which our biggest customer's economy is crumbling. A world where other countries are beginning to exploit their forests. And that new world, whether we want to hear it or not, is here to stay. So we have to change how our public forests are managed, learn to do more with less and, in particular, value all of its products without exception.
Remember that wood is just one of hundreds of resources in our forests. The development model advocated by Solidarité rurale du Québec is based on the contents of the final declaration of the rural Estates General. It focuses on rural Quebec's unique characteristics, which are evident in its natural environment and its social and cultural structure. We are at a historic moment in time, a moment when entire segments of our communities' economies need a radical overhaul. And that is as true for forestry as it is for agriculture.
So we have to talk about the future, imagine what will become of our forests in a topsy-turvy world. But most of all, we have to convince ourselves that tomorrow's world will not look like the world of the past, because the unprecedented changes we are experiencing are forcing us to break with that past. That demands imagination, boldness, courage and determination on our part.
But first we need to learn lessons from that not-so-distant past. History tells us that efforts have always been made to reconcile the interests of communities and industrialists and to entrench that balance in a forest management plan in each province. Quebec's plan is now shop-worn and outdated. We no longer have the industrial diversity we once had, as the sawmills were mostly taken over by pulp and paper mills, a vertical integration process that became part of a wave of mergers and acquisitions. The same phenomenon occurred elsewhere in Canada. The result was a concentration of ownership, a distancing of our communities and our territories from the centres of decision-making. With each succeeding crisis, the same recipe was used: consolidate a bit more, close mills, and concentrate operations to boost quantity. And in the current crisis, there is a strong temptation to use the same mechanisms.
Consolidating mills is a futile endeavour. We will not develop a strong forest industry by sticking to the status quo. The path to recovery does not lie in defending yesterday's assets or structures, but in making profound changes in our way of doing things. This reform must be built around a comprehensive vision of tomorrow's forestry and not around short-term solutions that preserve the assets of some and demand sacrifices of others. Centralized management of the public forests has shown its limitations. As we have seen, the trickle-down effects have been overwhelmed by the waves of company mergers and acquisitions or successive consolidations.
We must not shut our eyes and imagine that we will remain competitive in mass product markets against countries like China and Brazil. And those who believe that the crisis will solve itself, that the recovery will come from without, those who hope that the value of the dollar and the price of oil will return to their previous levels are deluding themselves.
We are in a world where convenience products and mass-market goods are less expensive to process and produce in other countries, in a world where our natural market — the United States — is in recession and China now plays a prominent role as a supplier.
So we have to learn to do things differently. Do things differently in the forests, do things differently in factories and do things differently in markets. The forestry of tomorrow will cultivate knowledge and culture, put young people and the next generation back to work, promote skilled trades and develop a relationship with its community. We will forge a new link between forest and community. Within that relationship, the forest will contribute to and benefit its community, of course, but it will also be a broader, more complete relationship, because a revitalized community, with services and schools, will make an inviting environment to attract and retain the new skills and workers needed for the renewed forest. The communities that on a daily basis help develop and tame the forest as an invaluable resource will also be a guarantee for the future, for the forest's survival. They will be the first to defend this type of forestry based in their territory, particularly against waste and overexploitation.
The forestry of the future will be innovative, will not be limited to one kind of product, will be agile and able to seize new opportunities, and will be able to bring in new players. We need to create more value and not simply make more quantity. More value in the forests, more value in the factories, more value in the markets.
You will understand if I go very quickly over the value added in the forest and in mills and focus on a broader Canadian mandate, namely markets. We have to rethink our markets. We are currently too dependent on the U.S. market. Think of the independent small businesses that export to the European market, Chantiers Chibougamau, for example: they are not suffering from the value of the dollar or shrinking demand. But to influence that redeployment to other markets from our territories, we need to make a firm commitment to diversification, because diversifying means giving a chance to different business models, to new players, to new processes, to innovation.
The tools that we have at our disposal, such as local development centres and chambers of commerce, and all the economic actors need to take action and attract talent, skills and investments in order to use the resource differently. A strong message from the Government of Canada on the subject of market diversification would be of great benefit.
The challenge, then, is not simply to create value, but to do so while promoting variety. Variety in our territories, because our territories are different, and the nearby or inhabited forest cannot be treated the same as the northern forest.
To be an engine of growth for its communities, forestry must be adapted to its environment, its dynamic and its actors, whether they are cooperatives, private companies, NFPOs or other organizations.
That presupposes a system that is capable of incorporating diversity and above all is based on real decentralization. We must realize now and convince ourselves that the future of our society, both economically and socially or environmentally, cannot be achieved without bringing the residents of every community on board. The government alone cannot manage things in place of communities; it needs to learn to coach, motivate and trust instead of steering and controlling everything. Communities need to have real power to influence their development and utilize their resources rather than wait for a multinational to announce the creation of hundreds of jobs.
In every area we will need to show ingenuity and vision to attract men and women who can make the difference. Sooner or later, communities will have to have the powers they need to take advantage of opportunities.
In conclusion, Solidarité rurale du Québec has tirelessly lobbied the federal government to establish a global framework to deal with rural issues. Without a comprehensive rural policy, we will continue to weaken rural Canada with ill-suited sectoral programs, deregulation that reduces access to services and across-the-board standards that leave us weaker.
For that reason, we again call for a comprehensive rural policy that is not just sums of money but first and foremost a cross-sectional approach that leads to more cohesion and more synergies between sectors, between government departments and between the various levels of government. Thank you.
The Chair: Thank you very much, Ms. Bolduc.
Charles Provost, Director, La Grappe agroénergétique des Coteaux: Mr. Chair, thank you for giving me the opportunity to speak to you today about options for solving the crisis in the forest industry.
Basically, I would like to address two points: the need for rural forestry communities to have access to Crown forests, and the need for federal government programs to financially support the value of nearby land in order to permit the emergence and deployment of innovative rural projects like the one being spearheaded by La Grappe agroénergétique des Coteaux, the organization I represent.
I am a manager who has spent the past three decades working as a director and consultant with various companies, many of them in the community-based sector of the economy. For the last three years, however, I have coordinated a renewal and diversification committee for single-industry forestry communities hard hit by the crisis.
The committee's work led to the creation of the project I am representing today. I come from a place somewhere between Amos and Lebel-sur-Quévillon in the Abitibi region, smack in the middle of Quebec forestland. My grandfather was from Field, Ontario. Senator Poulin knew him, and he might not agree with everything I've said because he used to own a small sawmill. I'm fine with small sawmills, however. It's the big ones that are the problem.
I should begin by saying that we have to face the fact that for 200 years, we have collectively favoured support for industry over support for forestry communities in terms of both national policy and programs. The current economic crisis highlights the problems in the forestry sector and clearly illustrates the excesses and the consequences of improper use of high-risk financial tools to facilitate corporate mergers and concentration of the industry and especially to facilitate the concentration of logging rights in order to create bigger, more consolidated companies. CAF is the system used in Quebec. Other systems are used elsewhere in Canada. These companies are currently being crushed by debt that has essentially made it possible to pay the previous owners a healthy dividend.
The current concentration of the industry is the product of a very long process that has not had the desired effect of ensuring the sustainability of our economy. Canada's forest industry should be able to rely on a variety of players and approaches that would enable it to react swiftly to crisis, but is instead dependent on decisions made by a handful of American bankers who plan their moves based on strategies that are continent-wide rather than national and certainly not regional or local.
We have collectively latched on to companies which ought to have taken innovative measures to increase local and regional benefits and have neither encouraged nor discouraged access to the forest for new players with new ideas and have drained our resources through a business model that is past its prime.
The entire planet has embraced computer technology in recent decades, yet these companies have opted to devote their energy to continue transforming our resources into products the demand for which is plummeting. It did not take a genius to figure out that that was going to happen. All anyone needed to do was look in their kid's backpack and see that there were fewer books and more electronic gadgets for using the Internet to search and save information.
We as a country love our forests and view them as part of our collective heritage. Yet we do not have the right to oversee the decisions made by corporate executives who have the power to decide which community will survive and which will not. That has to change.
The forest industry in Quebec is currently undergoing a major overhaul, and everyone hopes that this will bring significant change, more specifically that it will enable rural communities to become players in the management of local forests. That goal is being pursued in many parts of Canada, and several years ago, British Columbia enacted legislation on the subject.
To prevent the crisis in forestry from blossoming into a crisis in forestry communities, we all have to agree that our forestry initiatives need to foster the creation of wealth and the sustainable development of communities, not ensure a return on private investment. The forestry jobs we all want to see must be the primary target, not just random fallout from the quest for financial gain.
Legislation on the management of natural resources is a matter of provincial jurisdiction, but the Government of Canada is in a position to send strong signals by setting the parameters for federally controlled programs and budgets in such areas as research and regional and economic development. The Government of Canada can and must contribute to the renewal and diversification of the forestry sector by giving priority to support for the development of rural forestry communities, especially those that are putting forward innovative plans that have the potential to help develop a new economy based on a smaller carbon footprint.
Government initiatives cannot be aimed solely at mitigating measures, which are necessary, of course, but do not challenge the status quo. They must also foster sweeping changes in the very structure of the sector. We cannot afford half-hearted measures any longer. Elected officials in the small farming and forestry municipalities I represent, namely Champneuf, La Morandière and Rochebaucourt in the Des Coteaux area of the Abitibi region, have stood their ground and put their stock in innovation in order to reinvent their local economy, which recently lost its last active sawmill, by turning their attention to other local resources.
Their determination resulted in the Government of Quebec granting them rural laboratory status. La Grappe agroénergétique is a multi-partner project whose primary goal is to put in place the conditions for success needed to bring on stream a complete range of agriculture- and forestry-based biomass production and processing in Abitibi. The partners in the project are from the agriculture, logging, energy production and distribution, and research sectors.
They chose to join forces with a local organization spearheaded by three small municipalities to implement the project. It is a relatively simple matter of establishing within a 30-kilometre radius of a recently closed sawmill energy plantations as big as 10,000 hectares consisting primarily of fast-growing willows. This biomass will be used to develop processing and production of heating pellets and, eventually, cellulose ethanol. But to ensure the success of this and other similar projects, there has to be substantial investment in farmland and forests.
In Europe, the development of energy plantations is support by subsidy programs ($2,000 per hectare, for example). There are no similar programs in Quebec or other parts of Canada. We therefore have thousands of hectares of unused fertile land that was abandoned by settlers in the 1930s and 1940s that simply needs to be put back into production. However, government officials do not consider the production of raw material to be very ``sexy,'' if you'll pardon the expression.
Most existing federal regional support programs are aimed at secondary processing. Programs have to permit local investment, the development of new raw materials and primary processing in order to generate a new cycle that will make it possible to create new added value. A new economy means a new outlook.
I am talking about a specific project, but the situation we are in is similar to the situation of many rural farming and forestry communities, whether the initiative is to produce more blueberries for export to Asia, to invest in community logging in order to produce something other than 2 X 4s, or to build recreational tourism infrastructures in order to attract new visitors and new residents. Projects developed by innovative communities are unfortunately still considered marginal because they are viewed in the light of a dying paradigm and not as precursors of renewed entrepreneurship based on local development.
I believe the Government of Canada is in a position to send two important signals to support this rekindling of entrepreneurship. The government recently announced substantial funding to stimulate the development of regions and communities affected by the natural resources crisis. The funds are intended to support local innovation. For example, La Grappe agroénergétique des Coteaux plans to set up a trust to purchase abandoned land in order to prevent speculation and invest in the establishment of energy plantations. A contribution to the trust from the Government of Canada would be very helpful in attracting substantial private investment. The Government of Canada would thus be promoting a new rural development option.
Second, the Government of Canada currently provides considerable support for the production of corn-based ethanol. For a variety of reasons, including the ethical question of using land that historically was used to grow food for humans, Quebec has decided not to pursue that avenue and is opting instead for cellulose ethanol. Federal ethanol programs have to adjust quickly and support the development of large-scale energy plantations on ``marginal'' land and increase support for research in the fields of plant biology and technologies and processes for producing bioenergy from renewable sources.
In times of crisis, we are more inclined to challenge the status quo and entertain fundamental change. Now is the time to act. But as Einstein said, we have to seek solutions outside the body in which the problems occurred.
[English]
Joseph LeBlanc, Student, Northern Ontario Community Economic Development Network: I am pleased to have this opportunity to speak about the state and meaning of the forest sector. I am Joseph LeBlanc, a PhD candidate in forest sciences at Lakehead University in Thunder Bay. I am also the forest foods research and development coordinator at the Food Security Research Network and a member of the Northern Ontario Sustainable Communities Partnership.
The Food Security Research Network is a member of the Northern Ontario Community Economic Development Network, and we believe that the problems facing communities must be addressed in a holistic and participatory way. In order to be effective, solutions must be rooted in local knowledge and led by community members.
The questions before you are of extreme importance to the people of Northern Ontario, and I am honoured to share our views on the state of the forest sector. In forest-dependent communities the impacts of the current state of the forest sector go far beyond the loss of jobs. The vulnerabilities extend into food security and security of place. We see a resilient future for the forest sector in Northern Ontario if emphasis is put on restructuring so that communities have the opportunity to develop a local vision for their forests and realize social, economic and ecological benefits from the land around them.
In Northern Ontario, we have developed a level of comfort with transnational companies in our communities. However, the traditional forest industry has demonstrated a substantial lack of viability which requires us to envision a different future for the forest sector.
We share the Canadian Council of Forest Ministers' vision for forests, which focuses on forest transformation while mitigating and adapting to climate change; the two go hand in hand. Through diversified production, transformed management practices and greater community control, we can achieve the vision set forth by the Canadian Council of Forest Ministers.
In March of this year the Northern Ontario Sustainable Communities Partnership hosted a forum with many representatives from forest-based companies, provincial governments, First Nations and municipalities in Northern Ontario. The goal of the two-day workshop was to explore community forestry as a tenure reform option for Northern Ontario. Participants shared a strong sentiment in recognition of our relationship as treaty partners and the need to acknowledge this as we move forward together. There were also many discussions surrounding the causes and origins of the current state of the forest industry in our region.
A lack of diversity in the forest sector is the major cause of the current vulnerabilities. Natural resource management policies and practices that focus on primary producers have created a dependency relationship between communities, industry and government.
Communities are dependent on the existence of production facilities for jobs and municipal taxes. In addition, as a result of declining markets, the forest industry is dependent on various levels of government to remain viable. The traditional market is simply not there. Therefore, revitalizing the traditional forest sector will not provide the same support for forest-dependent communities that it once had.
The need for a community-based, comprehensive planning process that takes into account all forest uses is needed in order to reach our vision of a diversified and resilient forest sector. The current economic, social and ecological demands require a transformation of this sector. The needs of forest-dependent communities will not be met by a continuation of the singularly focused forest sector.
In short, we do not want to go forward with the same vulnerabilities that led to the current state of the forest industry. Our focus is on improving the well-being of communities and the diversity of the forest and not on revitalizing the traditional forest industry. The barriers to diversification, adaptation and transformation must be addressed, and community-based management planning can provide a tenure option capable of dealing with these barriers.
As I mentioned, we agree with the national vision of the future forest sector put forward by the Canadian Council of Forest Ministers. I would like to explore the role the federal government can play in making this a reality for forest- dependent communities.
First and most important for Northern Ontario is support for tenure reform that will allow for community- controlled forests. This will allow local communities to set a vision for their forests and realize the diverse benefits that exist in their local environment. Through community-based tenure, we can separate forest planners from production facilities, and allow both to focus on what is important to them.
In Northern Ontario, we would like to see a more explicit mandate for FedNor to assist communities to build relationships that facilitate diverse uses of the forest, as well as building capacity for community-based management.
Second, we are suggesting a restructuring of the existing forest sector. Clearly, it is not enough to develop programs that create short-term jobs or that buffer the impacts of economic downturns, such as Employment Insurance. Instead, we are looking for programs that allow communities to manage their forests in order to sustain life in place.
Last but not least, we need to redefine the forest industry. While, in the past, Canada has been able to use the forest productively for wood products, all indications are suggesting that this market will never return to the previous levels of consumer demand. We need to prepare for a total restructuring that puts the health of communities first and places them in a less vulnerable position.
There is a great need for research and development for diversification that is not focused solely on wood products. Non-timber forest products, including bio-chemicals, forest foods, and ecological services, will play a significant role in the future forest sector. The federal government can play a role in promoting the development of these products and educating the public on the future of the forest sector.
There is commitment, passion and drive in Northern Ontario to work with you and with the federal government to shape a new forest sector that will embrace community control and diversification of forest uses.
Thank you for your keen interest in this topic. Again, thank you for the opportunity to speak.
Eric Rutherford, Member, Rural Ontario Municipal Association, President of the Ontario Good Roads Association: Mr. Chair, Madam Deputy Chair and honourable members of the Senate committee, first, thank you very much for the opportunity to address you on the vital issue of the Canadian forestry sector.
I am a Member of Council with the Municipality of Greenstone, in Northwest Ontario. For 25 years, I served at mayor and reeve for the Township of Beardmore. I am a retired elementary school principal. Currently, I am CAO of Beardmore Forest Products, President of the Ontario Good Roads Association, OGRA, and a representative of the Rural Ontario Municipal Association, ROMA.
That just outlines why I am sitting here in ROMA's seat today; I am here today speaking on behalf of OGRA and ROMA.
The OGRA represents the infrastructure interests of municipalities and Ontario First Nations through advocacy, consultation, training and the delivery of identified services. Just about every municipality in the province of Ontario is a member of our association as are 24 First Nation communities.
As you may know, ROMA is the rural municipal voice of the province. The association is an integral part of the Association of Municipalities of Ontario, AMO, and a number of ROMA board members serve on the AMO board of directors. Policy and research activities are undertaken by ROMA through the staff at AMO.
Further details of these organizations are provided in an appendix to the hardcopy of my presentation. I would like to point out that OGRA and ROMA work closely to address the infrastructure, economic growth, taxation, and service needs of the people, communities and businesses of rural Ontario.
I am here today to address the topic of the forest industry in rural Ontario, specifically about the very difficult times facing the industry and the numerous rural communities it affects.
Both OGRA and ROMA wish to support the efforts of this Senate committee and, hopefully, contribute to finding ways to return this vital industry to renewed profitability and global competitiveness.
For many of our rural communities, forestry and forest products manufacturing are their lifeblood. For some, it is their only source of economic growth. A weak and unprofitable forest industry means not only a weaker rural economy in Ontario but it saps at the very heart of the provincial economy and what Ontario is and stands for; namely, the freedom of people to live and make a living in an environmentally safe and economically-prosperous rural Ontario.
I realize that the committee has a lot to listen to and a tight schedule. I would like to make a few brief points about the forest industry. Also, on behalf of OGRA and ROMA, I have a request: We would like to be included as an active participant in your process as you move forward.
We do not have extensive technical research facilities or many spare managerial resources, but we have a voice that for many years has successfully represented the people and businesses throughout rural Ontario. These people and businesses drive a large part of the province's economy. Therefore, we would like a place at the table.
We believe we can offer unique insights into a wide range of issues that cannot adequately be covered in 10 minutes here today before the committee.
In the hardcopy of my presentation, I have provided a brief overview of some of these issues. OGRA and ROMA would like to come back to make specific recommendations about potential solutions. We would like to come back not too far into the future because these matters are very urgent.
The key points I would like to make are as follows. First, Ontario's forest industry contributes significantly to the province's economy and to Canada's merchandise exports. In 2008, Ontario's forest products exports were $5.3 billion, which was down 41 per cent from their 2004 peak. Even so, this was 18 per cent of the Canadian total. We have some graphs to outline those points.
Second, contrary to many peoples' view — and possibly the view of members of the committee — the forest industry is not a sunset industry. In fact, globally, it is one of the fastest growing industries. Food and Agriculture Organization, FAO, data indicate that world forest products exports have grown by 8.5 per cent per year, every year on average, for the past 60 years or more.
Third, Canada's problem is that for many years, it has not been participating fully in this global growth. About 77 per cent of our exports go to one market region, which is the United States. A large part of our commodity product mix is not suited for participation in offshore trade. There are many related issues that concern us at OGRA and ROMA.
Fourth, high global energy prices have generated an opportunity for Canada's forest industry to become a major producer of biofuels, generating low-to-zero levels of greenhouse gases and reducing the GHG footprint of fossil fuel energy sources, including conventional thermal coal used here in Ontario. However, the right investment conditions must be created for this opportunity to be fully realized.
Fifth, a wonderful future faces Canada — and its rural communities, in particular — in the business of growing trees. We can sequester and turn into forest products a massive volume of globally created GHGs, but outside-the-box policy thinking is needed to achieve this goal. I refer to a previous speaker who also brought this point forward.
Sixth, we are convinced that the ``same old, same old,'' will not work for the forest industry in Canada and rural Ontario in the post-2009 global recession era.
I ask you to leaf forward to page 4, to the graphs in my presentation. That graph is self-explanatory, showing the Quebec and Ontario situation as compared to Canada, and the fact that we had a 2004 market peak and a dramatic reduction in our forest products exports in 2008.
The graph on page 5 indicates the world forest products exports and the rapid growth that has occurred over the past 50 years, to indicate where we stood up to 2007.
On page 6, we see a break in the graph, with the current global recession occurring in 2008-09. Advisers have indicated that there will be an increase in need and, therefore, production in the trend of development that will occur in 2014 to 2020.
On page 7, we indicate that for the past 60 years, since 1950, Canada and Ontario have gone from being one of a few global suppliers to becoming one of many suppliers to global markets. That is the real world out there and we must be competitive.
Page 8 of my presentation states that understanding and addressing some fundamental issues is key to Canada's and Ontario's strategic positioning. First, why have the traditional big two export supply regions, Scandinavia and Canada, consistently lost market share over the past 50 years? That is something we must examine in order to establish how we will attack that issue. Second, how have countries within the emerging three regions gained market share? We face that worldwide competition.
Third, will these trends continue, and are new supply areas about to emerge? You can read through the rest of those points on your own, but it is some thinking we must do.
At the end of the presentation, there is some history of how my representation is coming together here with OGRA and ROMA and the Municipality of Greenstone.
In closing, I refer you to the map that I have distributed. The Xs on this map show the mills that are not functioning in our region. Greenstone is aggressively looking at how to quick start these mills that are directly within our municipal boundaries. You see the boundaries of our community stretch for quite a distance. We are small in numbers but great in space.
To show you the diverse opportunities here, as we look at Marathon, their mill is down and it has been said it probably will not reopen. We go to Terrace Bay, where that mill is sitting heated, lit, with watchmen on duty and a yard full of fibre, but facing a financial challenge with their banking situation. They are good to go if they can move their previous stock, which they are trying to do — the warehouse is full. We have a ``good-to-go'' situation there.
We slide across the north shore to Nipigon. Their mill is gone. It burned down. It was a plywood plant producing an excellent quality product. The expertise is there but the building is not.
Across the bay, in Red Rock, that paper mill has been given up by the Domtar group and is in the process of final dismantling. There is a community-based group trying to possibly reopen a plywood opportunity to bring the Nipigon operation over there.
Slide up to the north to Longlac. We have two Xs there, two mills. One is a Kruger plant that is down, but the municipality is working with the staff there to come up with perhaps a pelletizing process to deal with 30 years of waste and also the available wood fibre.
There is a sawmill in that community currently down, manned and staffed 80 per cent by the First Nation communities, the Ginoogaming in Long Lake Reserve 58. They are good to go and there is wood in their yard; the economy must switch around and then they can fit into the picture.
Up in Nakina, there is a similar mill there. It is still heated and lit, with a yard full of wood. We have some good to go's and some not good to go's. That is probably the same picture across Canada.
That is an update from where I come from and I thank you for your time this morning.
[Translation]
Senator Poulin: The witnesses from the four associations have made outstanding presentations. I would like to thank them for taking the time to be here and giving thought to the issue. Their input is helpful as we study the challenges that Canada's forest industry is facing.
The credibility of witnesses is a very important factor in the judicial process. Whenever I sit on this committee, I pay close attention to the credibility of the witnesses. I am struck by the fact that, for completely different reasons, the credibility of the four witnesses here today is impeccable.
The primary objective of our study is to examine the causes and roots of the current forestry crisis. You touched on this briefly at the beginning, but I would like us to take a look, with wisdom and hindsight, at where we are today compared with 20 years ago. Ms. Bolduc, what is your take on the causes of the current forestry crisis?
Ms. Bolduc: I will let Mr. Ferdous answer that question.
Cherkaoui Ferdous, Corporate Secretary, Solidarité rurale du Québec: This is a very broad question, but I will try to respond.
As Mr. Provost said, as far as forestry is concerned, we can go back 15 years or 200 years. If we look only at the last 15 to 20 years, there are factors in Quebec rooted more in the industrial structure, factors that at first may have been significant and a source of competitiveness, because in the beginning, the industry was diversified and based on a system in which there were players who maintained a number of commercial relationships and brought competition and intrinsic competitiveness to the sector.
What I mean by that is that there was a sawmill industry that was separate from paper mills and there were log producers. In other words, the chain of value was split into segments, which made the creation of added value more efficient.
Market situations and changes in the industrial structure initially led to a wave of upward integration in which paper mills acquired a portion of the sawmill industry. In that context, more synergy and efficiency were needed, and that may have been justified at the time. The result is that 70 per cent of the sawmills in Quebec today are owned by paper mills.
This established a firm link between the resource — the forest — and paper, a product that is rapidly losing market ground. The model was set, especially since access to forest resources was controlled by the end beneficiaries, that is, the paper mills. This means that a connection was made between forest and mills, and mills were in a mature market which had no more room for growth and in which there was growing competition from new players. It was a relatively comfortable situation that generated huge profits which could have been reinvested in modernization, taking advantage of our dominant market position, in order to realize productivity gains that would take us much farther, but we failed in that respect.
This cozy situation which generated huge profits did not translate into reinvestment. One of the sources is the industrial structure. The other, and the one everything is tied up in, the factors cannot be discussed separately, is the status of the resource today. It can be attributed to overharvesting. It is a responsibility shared by industry and governments, by our ability to monitor and control what is done in the forest and so on. It is a question of making the players accountable. The resource is in a very weakened state today. This brings us to a point where we have to talk about lowering the cost of timber. We can lower the cost of timber, the cost of royalties, on the backs of workers and continue to cut costs, but the Government of Quebec will not get surplus royalties any more; the fact is that we will pay for logging companies' access to forests. So there is a limit. If we want to address the cost of timber, we have to redesign the forest industry. This is a very long-haul process that communities can be part of.
Senator Poulin: Thank you. You made the analysis of the issue much clearer.
Mr. Provost, do you have anything you would like to add? I'm sorry, that would be you, Ms. Bolduc.
Ms. Bolduc: One consequence of this major crisis stems from the fact that the companies have done more for their shareholders than they have for the companies themselves. And that comes down to the development model. Mr. Ferdous provided an apt explanation of the problem in forestry. Our forests are poorly managed; all over Canada, they are in a bad way.
Someone came up with a business model that put shareholders far head of the security of resources and communities. And that calls into serious questions the models used in the industrial world.
Senator Poulin: Is there anything you would like to add, Mr. Provost?
Mr. Provost: Yes. Mr. Ferdous spoke very well. One important factor, forestry in Canada is based on natural forests. The big multinational companies have for 1020 years started to invest more in the south, in the United States and Latin America. It is no longer possible to ``compete'' with that. I was in Minnesota last summer, 150 kilometres from the Canadian border, and the poplar plantations had already been harvested, the trees were almost a foot in diameter after eight or ten years. Canada's natural forest cannot ``compete'' with that. These industries are getting ready to move out of Canada in order to be closer to the markets. Half of the timber supplied to American paper mills is starting to come from plantations. The mills lease land that was once cornfields but is now used to grow hybrid poplar. Poplar from Abitibi, Témiscamingue or northern Ontario cannot ``compete'' with those products.
We have to start thinking differently. We cannot get cheap local timber from the forest any more, we no longer have that benefit. The crisis is severely weakening our position. This shows that the concentration of the industry was based on very high risk financing instruments. AbitibiBowater is up to its teeth in debt and teetering on the brink of bankruptcy. When it gets to the point where the cost can't be passed along, the model is at its limit. It is important that we as a nation stay away from that and avoid a bailout that would benefit no one except shareholders and bankers.
[English]
Senator Poulin: Mr. LeBlanc, please give the committee your analysis of what has been going on for the last 20 years and why we are where we are today.
Mr. LeBlanc: I think the speakers before me covered it very well. In addition to what they stated, I would like to address the accessibility issues that exist under the current management structure. The licensing of all timber resources and has resulted in a barrier for local start-ups to get in and get wood supply. Wood supplies are tied to these large mills. We saw a map that showed the closed mills. They still retain access rights, even though those mills are closed. This barrier prevents the development of the value-added industry.
In my studies, we are working with several First Nations communities on marketing forest foods, blueberries in particular. In addition to accessibility management practices, such as the problem of the application of herbicides, the consideration of food values in management planning is non-existent. It is a fight to secure access to foods in that there is no mechanism in the management planning for anything other than trees, and silvicultural practices aimed at promoting the growth of trees are killing blueberry plants.
Senator Poulin: We know that Northern Ontario blueberries are the best.
Mr. LeBlanc: They are. On that note, there is a substantial industry in Eastern Canada, where there is no recognized industry in Northern Ontario. We are working to build that industry, and we need policies that support that development.
Senator Poulin: Mr. Rutherford, your experience is extremely valuable to us as a committee. Would you like to add or comment on your colleagues' analysis?
Mr. Rutherford: I will add one point right now about blueberries. A number of First Nation communities have tried to go ahead on that, but they run up against the wall of a plant where they would bottle or can their product and the rigid rules and regulations. There is an area to be looked at there, because there are opportunities with things like birch sap, which is used in cooking, and there is a host of other opportunities.
If I might reflect on some of the points that we are looking at here, the high cost of energy is a killer in north-western Ontario. We are producing it very cheaply, but we are carrying that debt of Ontario Hydro, which is jacking the price up high. I dare say that every mill that is ready to go in north-western Ontario could go with a break in their energy costs. The other side of the coin is that they would need to have someplace to sell their product too, and that is the nightmare we are facing there. Energy has to be an important headline. We are looking at ways to skirt around that, such as producing energy on site with waste material.
I have a story to relate to the committee. I keep track of a mill in Niagara Falls, New York. If you ever want to visit a paper mill, that is one to look at. This particular mill runs entirely on waste products. There are 90 trucks on the road picking up cardboard from Hamilton, St. Catharines, the Niagara Peninsula and upstate New York, feeding this mill. This mill is the most profitable; it is doing well. However, they are also tied in to a garbage plant, which burns all of the garbage from that particular area. It is next door to them. They, in turn, are generating electricity with this plant.
Now they have combined into a cluster. The paper or cardboard plant buys their steam from the garbage plant next door and that saves them a cost and they have a lower energy cost, a lower steam cost. They are also tidying up waste material.
Who is competing with them for this cardboard or waste? China is competing because they are buying the cardboard and taking it to New York City to load it onto empty ships returning to China where they make paper products.
I share that idea because sometimes we have not thought outside of the box. Perhaps that is what we need to look at. If we are to do something new with our paper mills in Northern Ontario — we will burn wood waste and other products — perhaps we could address our landfill challenges, which are a nightmare of their own.
There are energy costs and operating costs. Global competition is important. I think we have been focusing on our market, which has consisted of, ``Get it on the truck or train and get it to the United States, over the border.'' We have not thought about other places we should be trying to move our product. I think that will come out of your thinking here in this committee.
We have aging plants, too. The plants have been running constantly and they have not looked at modernizing them. There are state-of-the-art plants in places like Austria and Germany and aggressive companies have been looking overseas to Europe in terms of how they should modernize. One company I have been talking to has been looking at putting a new line in. If you put in new equipment and operating motors that burn less electricity, it should be better.
There are solutions that this committee and we can suggest.
[Translation]
Senator Poulin: I think that our four witnesses have given us an excellent analysis of the causes of the current crisis.
[English]
Senator Eaton: Mr. Rutherford, I think you should get in touch with Mayor David Miller. Garbage is an ongoing problem in Toronto. It would be wonderful to do something with our garbage.
Ms. Bolduc and Mr. LeBlanc, in your presentations were you both advocating smaller operations? I think you talked about large conglomerates. Are you talking more about bringing it back to a very rural, small-community-based manufacturing entity?
[Translation]
Ms. Bolduc: We advocate a variety of models. In the forest industry, there was a single big company model. The companies consolidated and ``over consolidated'' We advocate a variety of models.
Senator Eaton: For each region, a different model.
Mr. Provost: No, not necessarily. There could be several models, small companies and big companies in the same area, but there is room for several models. This will depend on access to different markets and the availability of resources.
I will give some examples of what the problem is right now. One company, Chantier Chibougamau, has high-tech wood products. It has access to markets, but not to timber. We explained this business model: timber is allocated to only one type of company. This limits the development of other business models. Another example is a relatively big company, Boissaco, that uses a cooperative model and operates in Sacré-Cœur and on the North Shore. Its cooperative model ensures that its priority is to create jobs in communities, not to serve shareholders and generate huge profits. The goal is create jobs and promote business in the community. The objective is to have firmly established local businesses of different sizes that use different models. That is going to serve Canadians better, starting with communities close to the resources.
[English]
Mr. LeBlanc: We are talking about community-based planning and decision-making. As I mentioned in my presentation, we envision separation of planning from manufacturing facilities, and this is the tie that Ms. Bolduc has been referring to. These large corporations that are dealing —
Senator Eaton: Where do you get your investors from? I am sympathetic to what you are saying. I am trying to think practically. If it were community-based planning, where would you find your investors?
Mr. LeBlanc: In the separation of planning from industry, I think we are talking about local decision making as to the access to the resources. The traditional forest industry, as well as value-added manufacturers and local producers, would seek access from community planning boards. There would be value generated. We see it as a more diverse value and localized production. It supports local peoples and start-ups.
In this sort of larger scale, companies are able to close production facilities and move wood supply out of forest management units into another. We referred to Buchanan Forest Products where they are able to close a facility, move the wood supply out of the community — out of the forest management unit — and left the community with little or no benefit other than harvesting the trees themselves. Therefore, in the creation of community-based planning, we are able to decide who has access and how the resources are utilized.
Senator Eaton: Does Lakehead University have a program for First Nations forestry? We had a First Nations presentation here a couple of meetings ago and they said that there is tremendous interest in First Nations in developing their treaty lands. Does Lakehead University have any bridge programming in forestry for First Nations?
Mr. LeBlanc: Not specifically. I am an Aboriginal person. There is very little Aboriginal enrolment forestry. Lakehead does have a large Aboriginal student body.
Getting to the point I made about redefining the forestry industry: I think there is perception from First Nations people that the forestry industry is contrary to our interests and destructive to our access to traditional products. There is an interest in developing, on our terms.
Senator Eaton: Yes, that is what we heard from those witnesses. Did you find a huge culture gap when you moved into the forestry program at Lakehead University?
Mr. LeBlanc: Definitely. It is often said that post-secondary Aboriginal education is a violent experience. This is that culture clash. You have to bring a critical view into education; and that exists because you are not speaking from our world.
I think this is the value in doing post-secondary education. My project is focused on Aboriginal perspectives on natural resource management and we are hoping to bridge that gap.
Senator Campbell: We have not talked about NAFTA. I want to assure you that I am totally non-partisan. No government, I do not care which government it is, has done a proper job and every time the elephant rolls over in the United States we get it.
How has that affected the mills in Ontario? In British Columbia it was devastating.
Mr. Rutherford: The dilemma facing us is that there is an outstanding bill because of a miscalculation in the dollars that were supposed to change hands.
My understanding is that whoever fires up and starts producing softwood to ship over the border, whether they created that bill in the past or not, if they are the new guy on the block, they will be charged to pay that bill down.
That is something I do not have a handle on yet, but that is my understanding. Anybody new that fires up will be faced with that wall before they get going.
Senator Campbell: Mr. Provost, you were talking about buying the land. Who owns the land right now?
Mr. Provost: In our particular area, non-residents own up to 50 per cent of the land. A hunter who spends two weeks a year there owns some of it. Middle Easterners own some of the land, some of which was purchased on the internet. In some instances, the broker who sold the land acquired the land from a dying person. Some of the land is held by people who live on the land and who could not make a go of it in traditional agriculture. These people are still hoping for a new crop that could be grown there.
Senator Campbell: I ask that question because for the most part, the value of a company is in the land — the cutting rights, the water rights, the energy rights. In Newfoundland, we saw that with AbitibiBowater, where the premier said that they did not maintain those rights after they left.
When you shut down the mill, you still retain the cutting rights, is that correct?
Mr. Provost: Yes, and what is pernicious these days is that the cutting right has become a quota. The value of a mill is the volume of its cutting rights. In Quebec, a law passed about two years ago that limited the maintaining of those rights to about 18 months after the closing of a mill.
All of that is under negotiation in the backrooms between bankers and new buyers. When the deal is on the table, business people have a chance; but communities do not have a chance to bid or propose a project for another use of the land.
Senator Campbell: In British Columbia, we see large forest companies turning into real estate companies. These large companies go in and cut up all of the forest. Once they have taken all of the good out of the forest, they try to subdivide the land. The land becomes real estate and the lumber company a real estate company.
The last thing I want to talk about is biofuels. For some reason, I got the sense that in doing biofuels, it was feed or cellulose. Why could not it be feed and cellulose? There seems to be a push that we should not be growing corn for this; we should be using the cellular from the trees. Could it not be both?
Mr. Provost: It depends. In Quebec, for instance, in the St. Lawrence Valley, you are in the best land to grow food. It is very different if you are in Northern Quebec, where traditional crops do not grow that well. You can use wood; you can use the straw from some types of grain, like the one that is being developed in Western Canada, or use a new type of energy crop, whether it is hybrid poplar or a short rotation crop with willow. Those are new avenues.
In Southern Quebec or in Southern Ontario, the straw from the grain, whatever grain, can be used for cellulosic ethanol or other biofuels. Part of it is there, but these communities have more options in terms of what they can do with the land where the trees have been harvested. However, in rural areas farther north, those options are not available.
Mr. Rutherford: The pellet industry is something that is probably just broadening out and we are becoming more aware of its possibilities. A few days ago, I was chatting with a northern development officer who was talking about a pellet that they have combined with waste plastic. They have come up with a very solid pellet that is not subject to wet weather. It can be stored in the elements because the mixture that they are putting into it allows it to do so.
Senator Campbell: What about the emissions from plastic?
Mr. Rutherford: I made that point to him as well. You do not want that product for overseas sales. However, if we are looking at it going into one of the hydro plants in Ontario, perhaps it will work. I share that thought, but the point you make is valid as well.
There are combinations that can take place to get that BTU level up. It would be great to get rid of some of our residue waste. In some cases, there is up to 40 years of waste that could be used.
Senator Campbell: Does Ontario Hydro set the price — for instance, on the garbage burning — to the plant? If I was burning garbage and creating electricity, can I sell it at any price I want to whomever I want, or do I have to sell it into the Ontario Hydro grid and they charge the price?
Mr. Rutherford: If you are not using it directly, you have to go into their grid and they will set the price they will pay you for it.
Senator Campbell: I could not set up my waste disposal plant beside your mill and generate electricity that goes straight into your mill for your use at whatever price I want to charge.
Mr. Rutherford: I think that would be in-house and that would be your business, if you had one or two in a cluster that wanted to do that.
The Chair: Under co-generation, I believe.
Senator Eaton: Is it true that cellulose-based ethanol not does not require the water that corn-based ethanol does?
Mr. Rutherford: I cannot answer that question. I would have to get that information for you.
Senator Mahovlich: Mr. LeBlanc, can you farm the wild blueberries you are talking about in Northern Ontario? They grow on the rocks, in the forest, and in sandpits up in Timmins. I can never get the blueberries I want in wintertime. I get those big tasteless blueberries from Chile. Those are farmed.
Mr. LeBlanc: There are farmed blueberries. Those are high-bush blueberries. It is possible to grow the low-bush varieties in agricultural settings. There is a lot of that being done in Eastern Canada. It is a blend. It is agroforestry, really; it is training wild blueberries on to your land. We are exploring that. We have 10 acres in a forest plantation into which we are introducing blueberries. There are currently 30 acres in production in Ontario, so our 10 acres will add significantly to that. That is a long process. It is estimated at about five years from establishment to production.
Senator Mahovlich: It is just the growing process?
Mr. LeBlanc: It is the growing process. The establishment of woody plants takes a while. It is not a crop that you can put in one year and harvest the same year. It takes five years before you are into production. This is where we look to public lands for this purpose.
Senator Mahovlich: Is there some way we can hurry this process up? I am running out of time.
Mr. LeBlanc: We are working on that. We are trying several methods to do that.
Senator Mahovlich: Ms. Bolduc, I was interested in the template for the community that you mentioned. About 30 years ago, I was in Sweden for two weeks, in the northern part near the Arctic Circle, in a pulp and paper community. They had a private club. If we wanted to use it, for $1, we would get a towel and could use the sauna bath, tennis courts and swimming pool. It was like the Granite Club in Toronto. They had a hockey rink. If you wanted to go fishing, they had a lake and could take you fishing. It was self-serving. Are we looking at this type of community?
[Translation]
Ms. Bolduc: I come from Baie-Comeau, and the city's development has to some extent been patterned after the model of the Swedish community you are talking about. In the early twentieth century, a company set up shop in a particular area, developed all the services available to the public and made those services accessible for the people who worked in the mills or in the forest. That model worked well at the time. It was an interesting community-based model, a closed circle, if you will. Baie-Comeau had and still has its own power plant. The financial and industrial models were the source of the problems.
Once companies were consolidated, acquired or merged, the community spirit that launched the municipality of Baie-Comeau was lost. So went a model that might have been valuable. The community grew under that model, and the community benefits brought by the mill were lost. When you look at the progression, once the companies lost sight of the fact that a community had built up around the mill, the link with the community was lost and the system was truly corrupted.
If you were to ask me if this is an appropriate model, I would say what Mr. Leblanc said: the forest, ``timber'' and other resources do not have a single owner; they belong to the community. And that is how we have to view future models for the forest industry. If the community as a whole wants to put its faith in one company and the company reinvests in the community, it may be a winning solution all around.
It is important to remember, however, that the forest belongs to the community, not a mill or a single owner. I believe that in that sense, the model should not be cast aside, but we have to keep in mind that the resource must always be the property of the entire community. When Solidarité rurale du Québec calls for a comprehensive rural policy, that is the kind of direction we mean. The real message is that resources are not resources to be given or assigned to a proponent that will reap all the benefits, go away with the profits and put the money in tax havens, but that the benefits will stay in the communities for the good of communities and regions.
Senator Rivard: Well, we have people making some very interesting comments. That brings me to questions that were not raised in the briefs.
We know that the Prime Minister of Canada is currently negotiating a free trade agreement with the European Community. Do you think that that might be good for your industry?
Mr. Provost: Access to a large number of markets with fewer constraints is always very appealing. We were talking about community-based projects, but there are entrepreneurs, as Ms. Bolduc was saying, the community can control access to the resource. But the company has to bring it to market. These companies have to get involved in international trade, for those which make products that are sold elsewhere.
In our case, the production of heating pellets, one of the big markets where the demand is high is Europe. Making it easier to top access those markets will therefore be good for us.
Senator Rivard: Are there any current statistics on the value of exports to the United States and Europe? For example, do Americans make up 90 per cent of your export market?
Mr. Provost: We are more in a start-up phase and do not have that information, but markets, for example, for heating pellets, Europe is far ahead of North America because electricity is cheap in Canada and the northeastern United States. The demand is therefore greater on that side.
Senator Rivard: In your brief, you used energy plantations as an example. You said that plantations are subsidized in Europe and you would like the Canadian government to contribute through a trust that would give you almost the same benefits. Have you calculated how much it would cost the Government of Canada to match the European program?
Mr. Provost: In Europe, it's equivalent. Countries that have a well-established program provide $2,000 per hectare for start-up. On plantations that turn over quickly, especially if they are on land that has been fallow for 10 or 20 years, the subsidy is $5,000 over the first five years. There is a period of return on the initial investment of 10 years, and the plantation is good for 25 years. The $2,000 covers the risk portion; the rest can be financed through somewhat more conventional means, such as loans at mortgage-like rates.
Senator Rivard: I have a question for Ms. Bolduc, to enlighten me about forestry. You mention waste in forests. Can you explain to us how anything can be wasted in a forest?
Ms. Bolduc: I go back to what Solidarité rurale du Québec said: the timber we get from the forest is only one of the forest's hundreds of riches. Mr. Leblanc mentioned berries. The forest offers an array of edible products and products that can be used in the pharmaceuticals industry. The way the forest is currently used, it is generally a question of mass harvesting. Big equipment is brought in. The most profitable timber is harvested; the rest is left behind, and that in itself is waste. And land that could still be used as a source of food or other resources is, for want of a better word, pillaged.
People involved in logging told me a story. I live in Abitibi-Témiscamingue.
The forest industry is everywhere. The people who cut down the forest in the beginning of the last century, in the 1930s or 1940s, when the region was opened up, harvested the timber but had no machinery. They took the parts of the trees they were able to get out. They left all the trunks and tops. When they came into the forest with equipment, the machines often broke because the trunks were too big and prevented the equipment from making progress. They therefore had to come up with other ways to find valuable timber. They discovered previously unknown resources: products used to make herbal tea, blueberries, raspberries and medicinal plants. Some of the natural resources were saved because heavy equipment could not be brought in.
If you look at what has happened in the boreal forest, it has been stripped bare but not just by us; it's now almost barren. It is devastating, because even replanting is hard. The fact is that logging techniques are catastrophic. There are resources other than timber in the forest, and we need to pay attention to them. There are fisheries resources and hunting. People forget that the forest is a very complex environment. It is important to keep that in mind.
Senator Rivard: I have a better grasp of the concept of waste; it's what is not harvested, like blueberries and wild or selective cutting.
When people think of logging, they often think in terms of ``two by fours.'' You mentioned that several times. You could give a long list of other forest products. Can you name some export products other than ``two by fours''?
Ms. Bolduc: There are high-tech products, and Mr. Provost can elaborate on that. There are beams, laminate; Chantier Chibougamau makes a state-of-the-art building product. Secondary and tertiary processing is where the interest lies.
Mr. Provost: I was at Goodfellow's in La Prairie last year, and they were making 150-foot telephone poles using glue-laminated wood. They were very big at the base. There are American states that now require hydro poles to be made of wood. They buy those poles in Canada. We do not do that here. All forms of ``laminating,'' gluing and ``jointing'' can be used to produce structural wood for industrial, commercial and institutional applications.
There are no policies in Quebec or other parts of Canada requiring the use of wood as a structural element in public buildings. Europe has policies of that sort. It makes for beautiful buildings. They start with two by fours, but the two by fours are enhanced and combined to create strong and visually appealing products.
Senator Rivard: We all know there are plans for a new sports complex in Quebec City, a new Colisée. Guy Chevrette floated the idea that the complex be made of wood. I assume you are not opposed to that idea.
Mr. Provost: No.
[English]
Senator Cordy: You have been excellent witnesses and have given us a lot of material to think over when we start to write our report and collect our background material.
You all gave us indications that the industry must change. Ms. Bolduc, you said that yesterday's world no longer exists in the forestry industry.
Mr. LeBlanc and Mr. Rutherford, you talked about educating the public on the future of the forest sector. We know that the forest industry within Canada has changed dramatically. We depended substantially on the U.S. market and the downturn in housing in the U.S. has had a major effect on the forest industry. Someone today made mention of the number of wood products that we are importing from China, in particular; when we go to buy furniture, much of it is made in China. We heard last week from a witness about kitchen cabinetry. A lot of our cabinetry is made in China. That situation is affecting our wood industry here in Canada, too.
When you talk about educating the public on the future of the forest sector, what are you talking about? Are you talking about ``buy Canadian?'' Are you talking about non-traditional uses of wood? What, exactly, are you talking about?
I am looking at the kinds of things where the federal government, in particular, has a role. ``Buy Canadian'' would be an area where the federal government would have a role.
Mr. LeBlanc: ``Buy Canadian'' is part of. In envisioning that future, the Canadian Council of Forest Ministers, in their vision piece, provided a list of products that would represent a transformed industry. I encourage you to look at that list.
The promotion of those products and the promotion of people producing those products in spinning the public's view on forestry as not destructive — though that view is rightfully held, in some respects — on the land, it is a destructive practice.
However, providing, for example, scholarship opportunities to graduate and undergraduate students to develop those products and to look at alternative management practices is a role that the federal government can play, as well as providing research and development monies towards the development of those products, so that we can realize those transformed industries.
Mr. Rutherford: I wish to share a few thoughts with you on this particular area.
Some of the people we have been dealing with in my municipality who are looking at the future feel there has been an overharvest in Russia and, perhaps, in China. We might see a diminishing effect in terms of what they are able to put forward. I believe cutbacks are taking place overseas. I do not know whether these cheaper furniture products will still come into our country because transportation costs are rising.
We had a fantastic industry throughout Canada and in different parts of the country where good-quality furniture was manufactured here. We still see the Mennonite groups, for example, putting together an excellent product. Perhaps your committee could look at that area; that is, trying to reinvigorate that area or fire it up again. That excellent, small, community-based opportunity existed.
I will share with you an example of an Ontario organization called Wood Works, out of North Bay. They talked at a number of our municipal seminars and conferences about putting wood into our buildings. Often, if we build a municipal building, we go to an architectural firm that designs something with all the straight angles and latest materials, down to the metal 2-by-4s and concrete block. We are saying, No, let us put some wood in this building. We have wonderful examples coming forward: the Thunder Bay Regional Health Sciences Centre, as an example.
Senator Rivard, I watched a program on television about a new soccer stadium being built in Montreal. It will have wood trusses, and I thought that was something. Maybe the government of the day, whether it is federal, municipal or provincial, can ask to work wood into these projects because it would be beneficial. I am thinking of the skill set we provide for young people entering fine carpentry. That is something we must try to put forward at all levels of government.
We were talking about access to the forest by, say, entrepreneurs who want to start something, whether it is a log- cabin building business or something with cedar. In Ontario, we have started to move towards cooperative forestry science labs, FSLs. This is where the forest in a particular area is managed by a group of individuals who are taking product out of it.
I believe Timiskaming has a cooperative based in Englehart that is working out fairly well. We have one in our forest, but it depends on a big operator having the money to keep this thing afloat.
There is a direction that we are going in. We have not reached it yet, but we are thinking that way so that others with other ideas have the opportunity to obtain the fibre they need to carry their plan forward.
[Translation]
Mr. Ferdous: There is an important distinction to be made: buy Canadian and make it natural to use Canadian wood products. That is certainly part of the solution. But it will take more than promotion and buying incentives for Canadians. Confidence in the forestry model has been shattered. It is therefore important to remember that it will take more than promotional messages. People have to be made to feel they are personally involved in the process of change. The way people think of change today is that we have a model and we do not want to change the markets or the products; we are just going to make the units bigger and beat the competition. It does not work like that. We have to come up with a new model in which communities are part of the solution; only then will we have a forestry culture. We have to take back the forest. The public does not have access to the forest; access is limited to those who reap the commercial benefits. Developing a forestry culture means that the communities that have access to the forest need to look at the forest differently. It has to become second nature. Municipal councillors will say: we're going to build a school, but we are going to build it with wood and we're going to heat it using local biomass energy. That is the most socially beneficial outcome of forest industry reform. Communities have to be factored into the equation; they cannot simply be consumers that have to be convinced through advertising.
[English]
Senator Cordy: That is an excellent point because when we look at the cost of some of the imports, unfortunately, it is tempting for people, particularly in this economy.
I was in Vancouver a couple of weeks ago, and Senator Campbell took a group of us to see the new Olympic Oval that is made of wood. It is spectacular. A building that size normally would be concrete and steel. The warmth provided by the wood makes it incredible.
Senator Campbell: Beetle wood, I might add.
Senator Cordy: That is right; pine beetle wood. It makes a wonderful building. It is a showcase for what can be done with wood.
Ms. Bolduc, looking at what we can do from the federal perspective, you talked about a global rural policy to be developed by the federal government. Can you expand on that policy? You mentioned government departments working together, instead of in silos, for rural areas. Can you expand on that notion a bit?
[Translation]
Ms. Bolduc: Quebec has a rural policy. In fact, the second version of the policy is in place. The policy provides a comprehensive vision of the development of rural communities and is making a mark in each of the departments concerned. That sends a message. The policy also gives local communities and regions means to specifically develop what the communities and regions, the people who live there, view as sound local values or special needs.
When we call on the federal government to adopt a comprehensive rural policy, what we want to see is an overall vision of rural land in Canada, a vision that broadly addresses the need to populate rural areas, to have vibrant regions, active communities, not people biding their time until they leave those communities, but people who are true residents.
The policy will also have an impact on all aspects of services. The federal government provides many of the services that are used by all Canadians, such as the post office, Transport Canada, regional and local airport weather stations, the CRTC and energy policy. We need that overall vision. And it is completely lacking today. We see it in agricultural policies; even those that have an inkling of rural affairs do not reach the communities. We see it in CRTC decisions. We see it in all measures.
A comprehensive rural policy would clear the way for decisions that take a broader view and benefit all communities. This would ensure a better understanding of specific needs or changes in government initiatives because there would be greater realization that a region is not homogeneous, that different areas have different characteristics.
Mr. Ferdous: That is central to everything Solidarité rurale is calling for, because you can start your analysis from any point, but you always end up with that same need. If we do not look beyond the total of the sectors, that is, forestry and agriculture, only 12 per cent of the Quebec population is rural. That is why it is important to think regionally and not sector by sector.
To give a very specific example, in June 2006 or 2007, I believe the government deregulated telecommunications by removing the caps on telecommunications fees. It was a very good thing for municipalities, for urban communities, because there is competition, there are multiple carriers.
On the rural side, however, there is no competition and only one player; this creates two classes of Canadians. It means that governments have to look hard where there are policies to determine the impact on rural communities, because solutions that work for Canadians living in urban areas are not necessarily the best solutions for Canadians living in rural communities. The basic principle is one of equity and access to government services.
[English]
Senator Fairbairn: Having listened to all the presenters today, I wish they were on our committee. You have brought exactly the kind of reason that we are using in the committee to study these issues. What the two of you have said is on point. I wish you would stay with us because that is exactly what we want to do.
Rather than ask a question, I want to thank all of you. You have brought to us the kind of information that we do not find in a book or anything else. What you have told us, from your various parts of Canada, is exactly what we need to hear to try, as much as we can and as you wish we can, to make the national government listen to the words you are saying, and what will lift up and support what you are doing in this important part of the economy of our country.
In the last two years, we have been working on an issue of rural poverty. Everywhere we went across this country, in Quebec, in Ontario, and in the West — my home province is Alberta, and we are all tied up with the pine beetle right now — we heard much that a national government needs to know. You are telling us how this situation affects your communities. We too often hear about the forestry industry being more like a battle between two countries or something like that. We need to know, and through our committee, to tell the Parliament of Canada and the people in it, hopefully, that your part of Canada and the work that you are doing changes lives in every corner of this country. We, in Ottawa, need to know the kind of things that you have been saying to us today about what is needed on the ground.
I know that the chair agrees that if you have any other thoughts, as you go away, feel free to come back to us. We hope that when we finish our report, it will reflect the suggestions you have made, in the hope that they will be responded to. We appreciate the difficulties you are having and the energy you are expending to try to deal with them, and we will try to help you.
This has been a great morning, and I thank you for coming and being so honest and real in telling us what we need to know.
[Translation]
I would like to thank the witnesses for being here this morning. I am absolutely certain that you are going to follow the remainder of our committee's proceedings, and if you have anything to add, feel free to do so.
[English]
I know that you will follow our work into the future towards our interim and final report. If you feel that you need to enlighten us further, please feel free to do so. On behalf of the committee, thank you very much.
Our next meeting, honourable senators, will be on May 26.
(The committee adjourned.)