Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue 4 - Evidence - Meeting of May 26, 2009
OTTAWA, Tuesday, May 26, 2009
The Standing Senate Committee on Agriculture and Forestry met this day at
5:05 p.m. to study on the current state and future of Canada's forest sector.
Senator Percy Mockler (Chair) in the chair.
The Chair: I welcome you all to this meeting of the Standing Senate
Committee on Agriculture and Forestry.
I am Senator Percy Mockler from New Brunswick, chair of the committee. I wish
to begin by asking members of the committee who are here today to introduce
themselves. I would ask the deputy chair to introduce herself.
Senator Fairbairn: Senator Joyce Fairbairn, Lethbridge, Alberta.
Senator Callbeck: Senator Catherine Callbeck, Prince Edward Island. I
am not a committee member.
Senator Fairbairn: You used to be.
Senator Baker: Senator George Baker, Newfoundland and Labrador.
Senator Rivard: Senator Michel Rivard, from Quebec.
Senator Housakos: Senator Leo Housakos, from Montreal, Quebec.
Senator Eaton: Senator Nicole Eaton, from Ontario.
Senator Carstairs: Senator Sharon Carstairs, from Manitoba. I am
replacing Senator Cordy from Nova Scotia.
Senator Meighen: Senator Michael Meighen, from Ontario. I am replacing
The Chair: Thank you very much. Today is the committee's eighth
meeting for its study of the current state and future of Canada's forest sector.
I wish to thank the witnesses who are appearing today for accepting our
invitation on behalf of the committee. We decided at the outset that this
committee would invite all stakeholders of the forest industry. You are very
We have with us today Tom Beckley, University of New Brunswick, Faculty of
Forestry and Environmental Management, Don Floyd, Chair, Canadian Institute for
Forest Policy and Communications, University of New Brunswick, and Jeremy
Williams, Forestry consultant, Registered Professional Forester in Ontario.
I would invite you to make your presentations, following which there will be
a question and answer period. Since we agreed that presentations would be made
in alphabetical order by name, I would invite Mr. Beckley to please commence.
Tom Beckley, University of New Brunswick, Faculty of Forestry and
Environmental Management, as an individual: I am very excited to present
testimony to the honourable members of the committee this evening. For
approximately 16 years, I have worked in various facets of the forest sector in
Canada — as a federal employee with the Canadian Forest Service in Alberta, as a
research assistant at the University of Alberta and now as professor at the
University of New Brunswick.
I have worked in the west and in the east, and I have conducted research in
eight provinces and one territory. Therefore, I have a fair amount of experience
with the scope of forestry across the country.
My training is as a sociologist, not as a forester. That means my research
and expertise is focused on the human dimensions of forest management, including
some policy aspects. Forest-dependent communities have been a particular
interest of mine as well as social values that Canadians hold with their forests
and how our relationship with our forests is evolving.
I should like to answer all the questions that were posed, but I wish to
start with the observation that I think the scope of the questions is too
narrow. In essence, that has been a problem with forest management in this
country as long as I have been a student in it. The questions always seem to be
about the competitiveness of the industry, not the extent or the degree to which
we should have such an industry, or at what cost, or what realistic alternatives
might be. It is also important to grapple with these larger questions.
Currently, there is much evidence that the general public is not satisfied with
the status quo, that they are not supportive of the forest industry and that
they do not agree with the way provincial governments have tended to view
forests as a cash cow rather than a treasured source of environmental quality.
I believe the main cause of the existing crisis is the fact that we have not
adapted quickly to the new economic realities of the global economy. This
industry in Canada was born under a colonial model, and we have maintained that
colonial model, first as a colony of Britain and more recently as an economic
colony to the United States. By "colonial model," I mean that we ship a vast
majority of our products, which are relatively low value, either raw or lightly
processed, to a single customer or single country. I believe we have been lazy
about that. We have not invested in research and development to the degree that
other countries have, and we have lived off the largess of abundant natural
resources and relatively low population density. We have not tried very hard to
diversify out of our low-value, commodity-based products. We simply have not set
our sights very high.
Now, due to technological advances and the development of new fibre sources
in other regions of the world, particularly the global south, our industry and
the communities that depend upon it are in trouble. Other nations have taken a
different approach. Finland and Sweden, and I visited both recently, have worked
their way up the value chain. They are diversified. They are forest dependent,
but they create high-value products and services related to forestry that they
sell all around the world. Taiwan is a different example. Since World War II, it
exploited its natural resource base and reinvested that capital in manufacturing
sectors. Its GDP from agriculture and forestry declined from 32 per cent to 2
per cent from the end of World War II to the beginning of the 21st century.
People there are well off, but they no longer depend upon the fickle commodity
markets for their economic well-being.
As for the federal government's role in the crisis, I believe there are two
major points. One has to do with the institutional relationships between the
main public-sector forestry institutions, and the second has to do with the
federal government's role in relief and retraining as we make an orderly and
planned retreat from some of the most remote and desperate single forestry
industry towns. First, I would like to speak briefly about the institutional
I have worked for the federal government in the Canadian Forest Service, so I
know its mandate well. I have also studied and experienced the tenuous relations
between federal and provincial forestry departments, and now I am in a
My sociological analysis of the public institution side of the forest sector
in Canada is as follows. There are three major institutional players: faculties
of forestry at the universities and the federal and provincial government
departments. There are three elements: wealth, status and power. These are
things sociologists tend to study. In my experience, the university faculties of
forestry have had the status. Universities seem to be the most desired and
prestigious place for forestry professionals to work. The provincial
governments, with the mandate to manage Crown land, have the power. They decide
what happens on the ground. The federal government has had the wealth,
essentially the best facilities, the most money for research and, in the era of
federal-provincial agreements in the 1990s, the funding to drive some policies
in particular directions.
This division of wealth, status and power across these three different
institutions is interesting because everybody seems to be a bit jealous of what
the others have. This jealousy triangle, for lack of a better term, has made
collaboration extremely difficult. There is a lot of competition and backbiting
between these three groups.
Collaboration is exactly what we need to move forward with a common agenda,
and I think the federal government could play an important role here. The common
agenda should entail quickly cutting our losses regarding the existing industry
and reinvesting in new products and new opportunities. We need to rebrand
forestry in Canada. This process of cutting our losses will be painful and will
not occur without significant social dislocation.
A wide swath of remote northern communities, particularly across the boreal
belt in the centre of the country, will not be viable communities moving
forward. Not all of them will survive, and those that do reinvent themselves
will likely do so on some sort of reduced scale. The days of hundreds or even
thousands of well-paying union paid jobs in the Far North are over in the forest
sector. The federal government has a role to step in to retrain people — the
announcements made yesterday are a good step forward in that regard — and also
provide some financial relief for people whose entire asset bases are tied up in
homes and businesses in these communities, where, if they do go down, they may
soon be worthless.
There are some lessons. We had a very similar experience in the mining sector
a few decades ago. We do have experience in how to help manage that transition
and help ease that pain.
As for the vision for the long-term positioning and competitiveness of the
forest industry, and more broadly the forest sector in Canada, we need to take a
completely different approach here. We are currently competing largely with
developing nations with lower production costs and more lax environmental
regulations in order to supply fibre to developed nations that, in turn, make
When I worked in Alberta, they had just opened two large mills there to make
pulp to ship to Japan, where value- added paper is made. In New Brunswick, we
have a similar situation. One of our major companies is from India, and we are
shipping out pulp again. In the past, Canada has been branded as rapacious
exploiters of the forest by outsiders. The "Brazil of the North" campaign
against B.C. in the 1990s comes to mind. We need to rebrand Canada as a green
forest-products producer. We cannot do this just as a marketing ploy. We need to
be the most environmentally conscious forest managers in the world.
Companies are getting on board with forest certification, and this should be
encouraged, but we also need to invest in new products and technologies and work
our way up the value-added end of the production chain. There is a lot of talk
about a biofuel revolution. Everyone is anticipating in that, but, in my view,
it is a bit of a race to the bottom. It may be a necessary piece of the future
of forestry, but I do not believe it should be the centrepiece. We need to set
our sights higher and figure out how to produce more value out of smaller
volumes of wood, as well as more value from the whole forest, not just from the
fibre it contains. Doing this will leave more forests available for all the
other values — such as ecological services and habitat — that people continually
tell us are more important to them than growing fibre for industry. I have been
involved in some survey research that has basically demonstrated this.
The forest industry continues to lobby for bailouts, cheaper energy rates,
cheaper stumpage prices and labour concessions in order to stay competitive.
These are short-term, stopgap measures and a desperate attempt to prop up the
status quo. They do not offer long-term solutions. We have a distinct lack of
vision in terms of products, our potential markets and how we use our forests to
generate value in the future. For example, I believe the value of forests in
regulating water quality and water supply may far outstrip its value for fibre
in the future.
The federal government could help supply that needed vision. It could also
fund a process whereby existing industry and emerging industries, forest
certification bodies, universities and provincial government employees are all
brought together to forge a common agenda and to engage in some strategic
thinking about transitioning our sector out of this colonial, commodity-based
thinking. That is one specific recommendation.
Other potential roles and recommendations for the federal government are to
retrain forest workers, particularly millworkers, who have some of the best
technical and mechanical skills in our workforce, to work outside the forest
sector. Even when things come back around, there will be more capacity but fewer
There is a responsibility perhaps to ease the transition for residents of
forest-dependent communities, but not just forest-sector workers. They often get
most of the focus and program money, but teachers and small business owners and
insurance agents in places like Kapuskasing, Ontario, or Mackenzie, B.C., or
Dalhousie, New Brunswick, are likely more vulnerable actually than the
forest-sector workers there.
The federal government should look at the investment in the economic
transition strategies of countries that have diversified within the forest
sector, such as Sweden or Finland, and moved up the value chain, or who, like
Taiwan, have invested and moved out of the forest sector into manufacturing of
Finally, I believe that the federal government could foster better
collaboration between the competing federal, provincial and university
institutional players by making funding available for collaborative research
projects that focus on what the next forest economy will look like rather than
propping up the existing forest economy.
I appreciate the opportunity to present these perspectives to the committee,
and I would be happy to elaborate on any of these points or answer any questions
when the time comes.
Don Floyd, Chair, Canadian Institute for Forest Policy and Communications,
University of New Brunswick, Faculty of Forestry and Environmental Management,
as an individual: Mr. Chairman, senators, thank you for the opportunity to
appear before the committee today. My name is Don Floyd. I am a professor of
forest policy and chair of the Canadian Institute for Forest Policy and
Communications at University of New Brunswick.
Canada's forests will continue to increase in value as sustainability becomes
an imperative. The long-term outlook for Canada's forests and forest economy is
therefore strong, but navigating the shoals of the short to medium term will
require coordinated policy choices and targeted investments.
The most serious challenges confronting the Canadian forest sector are driven
by global forces. They include global climate change, the globalization of the
forest industry and a global financial recession. Within the context of the
federal government's role in forest policy, there are important steps that can
be taken to address these issues.
Perhaps, above all else, we need to find ways to diversify the products and
services that we derive from the forest. The more valuable our forests become,
the more likely we are to invest in their protection, conservation and
It is entirely possible that the value of the water, the carbon-neutral
energy and the other bioproducts that are produced from Canada's forests now
equal or exceed the value of the fibre. The problem is obviously that we do not
have markets for all of those things. If you think for a minute about what it
would take to replace the drinking water that comes from Canada's forests, I
think you can make a good argument that the value of the water may be as high as
or higher than the value of all the pulp, paper and lumber we produce.
This committee has already heard testimony that outlines the fundamental
issues surrounding the globalization of the forest-products industry. Mr. Lazar
was here and you have heard from others. Mr. Farrell, from CFS, did a good job
of presenting the broad picture.
The long-term outlook for the Canadian newsprint industry is not strong. My
children and my students do not read newspapers that are printed on newsprint,
and your kids probably do not either. Ask any of your clerks who are in their
20s or 30s here when the last time was that they bought a newspaper. We know,
especially by what has happened to Bowater as a newsprint producer, that things
are serious in the newsprint business.
Putting that aside, if you look at the FAO, the United Nations' Food and
Agriculture Organization that does the global statistics, they say the demand
for wood and paper is increasing across the globe. That demand is greatest in
the developing economies of South America and South Asia.
The problem is it is now possible to build a large, efficient pulp mill in
Argentina or Uruguay, and then plant a forest next to that new mill and have a
cheaper source of fibre and more profit for the global companies that operate
those facilities. We cannot match that in Canada, largely because of the nature
of the climate we work in.
The global financial recession is largely tied to housing bubbles in the
United States and Europe. We just looked at the data for U.S. annual housing
starts. It surprised me. I thought it was down about one third but it is less
than one quarter of what it was in 2006.
We have historically, at least in the Maritimes and Atlantic Canada, exported
90 per cent of our lumber into the U.S. market. When the U.S. market pulls back
that way, the only thing that can happen is that we lose our market. Mr. Beckley
made the point earlier about diversification of markets, and clearly that has
happened to us here.
That change is cyclical — the change in the newsprint business is probably
secular — which means that housing will come back at some point. The problem
lies in the fact that, when it comes back, the technology for stick-built
housing that we have typically seen, where people take two-by-fours and
two-by-sixes to build single-family houses, will change. It will be replaced by
panelized construction, laminated veneer lumber and all kinds of new products
and technologies. When that transition comes, it is important for us as
Canadians to have positioned ourselves as masters of that technology so we are
not simply trying to export two-by-fours and two-by-sixes again.
What is the upshot for all these global drivers? The first point I wish to
make is that commodity producers like sawmills survive by being the lowest-cost
producer. It is hard to distinguish between two-by-fours. The way to do that is
to ensure that you are the lowest-cost producer.
The other way sawmills ensure that they are the lowest cost-producer is to
reduce their labour costs. What these mills will continue to do is to substitute
high-tech equipment and capital for labour. The upshot of that, as Mr. Beckley
mentioned already, is that the jobs will not come back. Forestry will not be the
engine of rural development that it has historically been in Canada. Things have
changed. I do not think it is realistic to think that, five or ten years from
now, you will see those high-paying jobs come back in the mill towns.
Having said that, paradoxically, the second point I would make is that the
forest itself will continue to grow in value. We have already seen that in
Canada, where we have private forest lands, and in the United States. The amount
of money that timber-investment companies are willing to pay for forested land
has increased dramatically in the last five to ten years.
There is a reason for that. It is not the fibre; it is all of the other
values associated with the forests. Part of it is real estate value. Part of it
is the fact that you may be able to do carbon-neutral forestry there. You may
have carbon credits that come online at some point. It may be because those
forests are the best source of high-quality drinking water or for irrigation in
the western states.
Agriculture, as we know it in North America, would be impossible without
irrigation. In California and in Alberta, it is a fact. The most valuable thing
we produce from our forests in the Rocky Mountains is the water resource.
What is the appropriate federal role? In the medium to long term, growing
jobs and growing value in the forest sector depends on growing forest science
and technology. The federal government has increased funding for research
through FPInnovations — and we think that is a good thing. What the federal
government has not done is looked at the rest of the research chain.
FPInnovations works from the point where the tree is harvested to when it is
processed and made into different products. The work that needs to be done in
terms of research for forest management gets done at CFS or in the university
systems. When we are thinking about insect and disease control, we are thinking
about how to manage for biodiversity, for watershed quality and protection.
Those are all functions that mostly get done either at CFS or in the university
In Atlantic Canada, as I said, this is done mostly through CFS and the
university. In our region, CFS has lost scientist positions. It is actually down
positions from where it was five to ten years ago. Several federal-funding
initiatives — for example, the Sustainable Forest Management Program and a
CFS/NSERC program — have expired without renewal.
In addition to funding traditional research programs — and I think this is an
interesting idea, something we have been talking a lot about in New Brunswick
lately — is the idea of establishing a federal-, provincial- and industry
supported network of forest research and technology development clusters.
The success of combining research centres with innovative businesses is well
established. If you look at what has happened at Waterloo, people recognize that
that has been a very successful model. We would like to do that with forestry,
and with forest science and technology.
A national network of forest research centres that combine all aspects of
forestry, from on-the-ground management to nanoproducts, would increase Canada's
chances to reclaim its reputation as the global leader in innovative forest
research and technology.
Although education is not a traditional role for the federal government, we
are facing important shortages of forest scientists, forest managers and highly
skilled forest technicians. We understand that the future of forest science and
management is critical for sustainability, but it is very difficult right now
for parents and students to see life beyond the obituaries that they hear on the
As our forests grow in value, the demand for skilled natural-resource
managers will also grow. Canada — and not just Canada, but the developing world
as well — will need men and women who understand ecological processes, can
predict the effects of manipulating natural resources and can communicate their
passion for stewardship with an increasingly concerned public. Most of the major
undergraduate natural-resource management programs in North America are
experiencing decreasing enrolments — that is especially true in forest
management — and I think we need a coordinated federal and provincial initiative
to reverse that trend.
Finally, one of the most impressive features of Canadian forest policy is
that it had established a mechanism for civic dialogue among all Canadians
through the National Forest Strategy Coalition and the National Forest Strategy
Canada's forest strategy for 2008 and beyond de-emphasized the role of the
coalition. One effect of this change is the loss of a continuing forum where all
Canadians can come together to promote sustainable forest management. Although a
coalition of citizen groups may not be the most efficient way to deliver
measurable results, it is important that we encourage civic engagement and
democratic processes as part of our commitment to sustainable forest management.
Thank you for the opportunity to be here today. I am grateful for your
interest in forests and our rural communities. I would be pleased to answer your
questions or assist you in any way that I can.
The Chair: Thank you. Mr. Williams, please proceed.
Jeremy Williams, Forestry Consultant, Registered Professional Forester in
Ontario, as an individual: Honourable senators, I am honoured to have been
asked to present my opinions on how the Canadian forest industry got to the
state it is, on some of the measures that will be required to regenerate the
sector and to put it on a stronger and more sustainable footing going forward.
The industry, as many of you know, has long been a mainstay in Canada. We are
known as hewers of wood and drawers of water. The industry has been good to us
over the years. It remained generally healthy through the 1970s, but clouds
began to form on the horizon in the 1980s. The 1980s began with a severe
recession that was characterized by very high interest rates, the culmination of
a decade of increasing inflation. High interest rates are never good for a
Also at this time, the push to include more recycled content in paper
necessitated a round of investment in de-inking facilities. This tended to tilt
the balance of power in favour of mills closer to urban centres and closer to
supply sources of old newspaper and other recycled content.
The demand in North America for paper began to level off at the same time.
During this period, the rate of return on capital investment was near zero or
negative in most years. Many of the tenure arrangements that forest licensees
had prevented them from rationalizing production. It is a terrible thing when
the only mill in town closes and provincial governments put a lot of pressure on
the sector to avoid making this happen, but this only forestalled the
inevitable. Tenure also provided no incentive to invest in the forest other than
what was needed to meet regulatory requirements. Therefore, there was
underinvestment in both the mills and in the forests.
As my two colleagues have mentioned, emerging competitors in Latin America,
Australia and Asia began to come forward. Investments there earned a higher rate
of return and attracted much of the global capital that went to the forest
sector. Our response in Canada was to try to reduce costs, to merge within
Canada and to move to value-added products.
However, we made very little investment in any of the emerging supply areas
and we remained critically dependent on exports to the U.S. Countervailing
action against softwood lumber began to gain traction during the 1980s and it
became effective in sapping the vitality of the Canadian sector.
The industry began to develop a very poor public image as it denied the
negative environmental impacts of its activities. I remember visiting Carmanah
Valley shortly after it had been set aside. You had to drive to it through miles
of clear-cut. You could see the roads that the timber company had cut into the
reserve as it raced against the B.C. government to cut as much timber as it
could before the government protected it.
Activities like this made a terrible impression with people. Although the
industry has improved dramatically in terms of its practice, its negative image
is retained by most people.
By the 1990s, the industry was facing a lot of challenges. It was a
high-cost, low-return industry. It was highly regulated. It was heavily
dependent on U.S. markets where it was facing increasingly effective trade
action. The demand for its paper products was shrinking. It was facing a
resource of declining quality and increasing cost. It had a negative public
image and was being overtaken by competitors.
Neither industry nor government had an effective response to this situation.
During the beginning of this decade, the boom in U.S. housing and the low
Canadian dollar helped paper over these weaknesses. However, when these factors
reversed, the weaknesses were exposed and the result has been a systemic
Why did industry not act more determinately when it had more options? In the
1970s, and even the 1980s, it had the capital, leadership and technological
prowess to go forward and provide a stronger foundation for itself, but it did
not do this. Part of the reason is that many of the CEOs and the boards were
comfortable in Canada. They had a domestically oriented perspective and they
were reluctant to go outside of the country.
In retrospect, it appears that their assessment of risk and reward of various
investment alternatives was flawed because they were heavily dependent on Canada
and on the U.S. market. There was also some complacency because the industry had
been dominant for so long and they had it so good that they did not see that
things had fundamentally changed.
The question is whether Canada can once again support a viable forest
industry going forward. I believe it can because Canada still has a number of
competitive advantages. Rebuilding will take time because it took a long time to
get to this situation.
The federal government has an important role in this. Probably the major
contribution the federal government can make is to provide leadership. There are
many stakeholders involved that have not cooperated particularly well
historically. The government needs to take a leadership role in helping to
develop a vision on where the sector can go in the future and to ensure that the
actions required to get there are put in place and implemented.
Some areas where I think the federal government can provide leadership
specifically include trade and market access. It is essential for the industry
to get out from underneath the U.S. countervail restrictions. It is time to re-
examine the conventional wisdom that we cannot have a market in Canada for
standing timber. Since chips and logs are shipped hundreds of kilometres to
different mills, it seems implausible to me that we cannot have a market for
standing timber in at least most of the country. If we could establish that, it
would diffuse a lot of the U.S. complaint.
There is also a need to diversify our markets. While the U.S. will always be
a critical market, we should not be as heavily reliant on it. The federal
government can assist through negotiation of trade agreements, by helping to
eliminate unnecessary phytosanitary barriers or helping the industry surmount
them where they are legitimate and by supporting international standards that
play to Canada's strengths.
Canada has very little illegal harvesting, whereas in the eastern part of
Russia, anywhere from one third to two thirds of the harvest is illegal. Large
amounts of the harvest in parts of Asia and Africa are illegal as well. For
example, an international standard that would mitigate against the export of
illegally harvested wood would be good for the globe and the Canadian forest
The federal government also can play a critical role in supporting
productivity. Avrim Lazar of the Forest Products Association of Canada has
probably spoken to you much more authoritatively about these issues than I can.
There is a role for the government to help foster Aboriginal
entrepreneurship. The Aboriginal people and the communities want to participate.
There are a lot of barriers to their participation. However, they live in or
near the forests. They have always been there and it makes strategic sense that
they should be more heavily involved in the sector than they are now.
Finally, the federal government can also play a leadership role in its
support of emerging technologies and dealing with emerging issues. Again, there
is a role for leadership within the federal government because many of the
emerging issues or challenges facing the industry involve inputs from a number
of different departments. It is important to coordinate the responses of
different departments within the government and partnerships with other
stakeholders. Helping to build the national knowledge infrastructure related to
forestry would also be helpful.
I will give you the example of the National Forest Inventory, or NFI. I just
finished doing an NFI business case for the CFS, and even though the first
measurement has been completed and the inventory is viewed as a necessary thing,
the governments still have not provided secure funding for this, and the program
seems to be in continual jeopardy.
There is also a role for the government to play in supporting research and
development for new products. As both of my colleagues have indicated, the
portfolio of products that the forest sector of the future will likely produce
will be quite different and much broader than the current portfolio. It will
include biofuels and chemicals, and there will also be a role for increased
energy efficiency within the sector, and, again, more R&D would be useful.
Another part of the portfolio will be carbon credits and possibly
biodiversity credits and water credits. Carbon is particularly important because
North America is on the verge of moving into a new phase in the development of a
carbon market. In Canada, we have missed an opportunity to take more of a
leadership role in terms of developing an offset system and expertise related to
carbon management. The federal government could provide a strong signal that it
recognizes the issue and is supportive of it by committing to become carbon
neutral over a certain time period. The federal government could also change its
procurement policy to favour the procurement of certified paper and forest
products, for example, and that would also support the efforts of many of the
Canadian companies and companies in other parts of world that are
environmentally progressive and manage forests at a very high standard.
I would close by emphasizing that I believe it is important for there to be a
coherent strategy. A series of piecemeal measures will not be effective in
reversing the situation. The federal government has a very good opportunity to
play a leadership role here in helping to restore the sector and regenerate it
to whatever it will be in the future.
The Chair: Thank you, Mr. Williams.
Senator Baker: I welcome the guests here. I notice that each one of
you has a PhD after your name, so I will address you each as "Dr." I have
specific questions for each one of you, so perhaps I will can the questions
together and let each of you answer the question, if you so wish.
Each one of the witnesses has a high profile in regard to the forest industry
and its activities — Dr. Beckley, from the point of view of the community
forest, Dr. Williams from the model forest, and Dr. Floyd for being critical of
the government for not putting enough money into research and saying that the
money that was being directed toward the companies would be perhaps better
spent. To use his words, "A better long-term investment may be applied research
and technology transferred to promote the new ideas, processes and products
necessary to secure the long-term sustainability of the forest sector." I have
three simple questions.
First, Dr. Beckley, on the community forest idea and public participation,
what are your thoughts now after going through the entire process of public
hearings and so on concerning this matter?
Dr. Williams, what are your conclusions after being involved with model
forests in other parts of world and in Russia specifically?
Dr. Floyd, I was interested in the speech that you gave wherein you mentioned
that, in Nova Scotia, there is actually a pellet operation that exports wood to
the European Union for electrical purposes. I am also interested in your ideas
on green electricity and why you advocate putting vast resources specifically
into the University of New Brunswick.
Mr. Beckley: I appreciate the question. It was something that I did
want to speak to. I have been an advocate of the idea of experimenting with
community forests for about a decade in New Brunswick, in particular, and that
is about how long I have lived there. The provincial government has been
extremely reluctant to engage. We did a pilot project about 10 years ago, where
it was sort of a different idea of a community forest, but we were suggesting
that we take some scattered parcels of Crown land and put them in the hands of
small private contractors, thinking they might be able to combine them with
private land and operate them more efficiently. Through the royal secretariat,
we were able to obtain funding for a feasibility study, and we had a second year
of funding to implement the program. We went to the provincial government, who
had been a partner, to ask if we could have 6,000 hectares of Crown land to run
a pilot program. They said, "No, thank you." I had to basically send the money
back to the federal government, which is the only time I have ever done that
after getting a research grant.
There is a tremendous opportunity right now in New Brunswick. We conducted a
public survey in 2007 that showed that there is tremendous support for the idea
of experimenting with new tenures. One of the questions that we asked on that
survey was something we called the plan B question. What if some of these large
licensees basically folded their tents and walked away and we are left with a
large Crown licence that we are able to reallocate? Who would the public like to
see take over management of those? They listed local communities, local
watershed associations, local forestry contractors, people who have some
capacity and expertise to do it. Big industry was well down the list.
The provincial government has come back. Right now, Licence 5, which used to
be a Weyerhaeuser licence, is being run on an interim basis by the Department of
Natural Resources until they can find another large industrial licensee to take
it over. People in that community would love to take over management. They
cannot do it entirely alone. They need government support to help them do that.
There is a tremendous public will to try to do some experimentation with
different tenure and management regimes. These local communities are not so
wedded to the past models of what the products have been and who the customers
have been, so they might be much more nimble in order to take advantage of some
of the opportunities to generate wealth and value from our forests that are not
from these traditional modes.
There is a big barrier in convincing the provincial government departments,
who basically have the say-so on Crown land, and getting them to buy into any
kind of experimentation. I have always recommended that this be done with all
sorts of oversight in an adaptive management framework, adhering to all the
existing environmental rules. They have it in their mind that it is just giving
over land in a fee simple manner, so it becomes like a community woodlot with
the same rights that a private woodlot owner has, as opposed to having just as
much control and oversight by government that the current Crown land management
I have made the point that, in New Brunswick, we have three large licensees
now. They have a tremendous amount of political clout. If that same land base
were divided into 50 community forests, DNR would be back in the position of
really being able to steer the ship. For whatever reason, there is tremendous
reluctance to engage in the concept. Quebec has done much more. It is too bad
that Luc Bouthillier is not here to speak to that as well, because I am sure he
Mr. Williams: There are three main points. One is that the Russian
forest sector is experiencing many of the same problems as the Canadian one.
There are lots of opportunities to cooperate and collaborate with the Russians
on a whole range of different forestry-related aspects, ranging from science to
industrial development perhaps. That is one thing. There are a lot of
commonalities, and Canadians are well received in Russia, which leads me to
further think that there should be more opportunities for collaboration.
I feel there are also very good market opportunities there. Our planning
software that has been developed in Canada should be used in Russia, but it is
not. It is a lack of a spark or lack of an opportunity to make an inroad that
prevents that from being so.
Another thought is that because the boreal forest in Russia is similar to the
boreal forest in Canada, it would seem to me that that would be one logical area
for many of the forest companies in Canada to be active in. The Scandinavians
are very active in western Russia. There are obviously cultural differences, but
in terms of the actual resource and the issues associated with that, there are
probably fewer differences in the Russian boreal than any other forest types in
the world where Canadians could invest. That is another point.
The final point is one of the reasons I am involved with the Komi model
forest is that it has been very successful. One of the reasons I ascribe to that
is that it has very strong support from the state forestry department and the
state government in general.
When I think of the Canadian model forest program, one of the unfortunate
things was that, with the exception of perhaps Alberta, New Brunswick,
Newfoundland and Manitoba, the provincial governments did not take advantage of
the opportunity to the extent they should have to participate and to look at
different ways of doing things. It is an unfortunate example of the tendency
that my colleagues have referred to, where there is not always a lot of
cooperation between the federal and provincial governments. Unfortunately, that
was the case in some of the model forests.
Senator Baker: Mr. Floyd, why should everything be done at the
University of New Brunswick?
Mr. Floyd: There are some things that we are very good at doing, but I
would not say we should do everything.
The point I want to make about research is that I really am supportive of
what this government has done with regard to FPInnovations. FPInnovations plays
an important role here. They are doing outstanding research.
As most of you probably know, they are split into three or four different
divisions. One deals with the engineering of harvesting and roads and transport
and equipment. The second part of it looks at the pulp and paper industry, and
the third part looks at the lumber side. The focus there is always on what we do
after we have harvested the fibre.
The point I want to make here is that the research we need to do about how we
control insects and diseases, how we manage for biodiversity and water
resources, does not get done within FPInnovations, but within the Canadian
Forest Service or in the university system. We have had good support, for
example, from the Sustainable Forest Management Network. There was also a
combined CFS/NSERC program that existed for several years.
The difficulty there is that those programs come and go, so there is not the
same consistent funding formula for the research that gets done on the forest
management side of things as there is on the forest product side of things. It
is not that it all should be done at UNB, but I think we can make a pretty good
argument that we need a more stable and consistent funding stream for the forest
management part of the research question, not just for the forest products part.
The second question you asked was about green energy, specifically about
pellets. In Eastern Canada, where we have a significant amount of private forest
land, one of our major problems is a lack of markets for those private woodlot
owners, especially for low-grade material such as low-grade hardwoods. That is
very useful in terms of the pellet market.
In New Brunswick, to this point, the provincial government has really
discouraged pellet production. Nova Scotia has been a little more supportive of
it. Basically, what we are doing is that there are firms in New Brunswick and
Nova Scotia that are producing pellets and bulk shipping them out of Halifax to
Rotterdam. Because the Europeans have adopted green energy policies that regard
this as green energy and that give them green energy credits for it, they are
able to make a significant amount of money doing that.
Senator Eaton: I wish to follow up on Senator Baker's questioning and
one of Mr. Beckley's comments. We had witnesses last week from Quebec and
Lakehead University who were talking about community-based lots and the
community running those lots and what they could get out of the forests. It was
an excellent presentation; it was interesting to see the agreement coming from
two different places.
Something that came up last week — and I do not know whether it was Mr.
Williams or Mr. Floyd that brought this up — was Aboriginals and the forests. We
have had several presentations. One of the points they make — and I think this
applies to all three of you, being university gentlemen — is there does not seem
to be much of a bridge in universities between the way the Aboriginals or First
Nations see the forests and the way we have traditionally seen the forests.
There are very few programs. Do you have thoughts on how to pull them in and
encourage them and help them a little bit?
Mr. Beckley: Mr. Floyd and I are on a PhD committee of an Aboriginal
person who works for CFS. He is all about that traditional knowledge and trying
to integrate traditional knowledge into current forest management.
We have had a variety of recruitment efforts to try to recruit First Nations
people into our faculty of forestry. I totally agree with Mr. Williams.
Particularly when I was with CFS and working in the West, I did a lot of work in
Aboriginal communities and it seemed like that sort of federal-provincial divide
was so dysfunctional to the Aboriginal communities. They are surrounded by this
forest resource that has the potential to create wealth for them — even as
participants, just as labourers in that economy — and yet for cultural and
jurisdictional reasons, where the province has responsibility for land
management and the federal government has responsibility for the welfare of
Aboriginal people, that bridge was not made.
There are significant hurdles in also bridging that gap between the standard
average education for Aboriginal people at perhaps grade 8 or 9 and the leap
from there all the way to succeeding, particularly in forest management, in a
math/ science-based type of degree program. Maybe there are some interim
measures to try to help people upgrade their skills. Also, at the technical
school level, community college and forest technicians programs, there may be
more possibility for success there in getting an Aboriginal workforce.
Senator Eaton: Yes, because we were discussing the point that you do
not want to create a parallel system. You want to try to find a bridge or an
outreach program of some kind that could bring in and encourage First Nations,
either at the college level or technical level or whatever.
Mr. Beckley: There is a bit of reluctance, too, on the part of some
Aboriginal people, because of the industrial mindset and the industrial
dominance and the degree to which that does not entirely square with their
vision of the forest and how to live with it. That has also been a barrier to
attracting Aboriginal people into those types of programs. Perhaps we need more
friendliness to a broader perspective, whether it is a wider variety of
products, including ecological services and habitat and so forth, rather than
just saying, "You are an Aboriginal person; help us get the wood out."
Senator Eaton: When you talk about community-based programs, you talk
about things like wild blueberries, mushrooms and medicinal products. If pulp
and paper is on a downward curve, should we be thinking about a different mix of
trees when we reforest and are we reforesting enough?
Mr. Williams: One of the fundamental rules is that you plant species
that are suited to the site.
Senator Eaton: Yes, obviously.
Mr. Williams: Bearing that in mind, I do not think we should be
changing the mix particularly because I think that many of the forest companies
now manage with a fairly natural paradigm. They at least try to regenerate the
type of stand that was there. If what they cut was something off-site or
degraded due to past harvest practices, they try to put back what should be
there or what is appropriate.
The management approach possibly should be changing. We have been going
further afield for timber where there are sites close to mills that are very
productive in many cases that have not been managed well. They have a kind of
jungle growing on them. This is as a result possibly of being cut several times
during the past 50 or 60 years. What is there is not really merchantable.
However, it is expensive to remove what is there and replace it with a proper
forest. Therefore, those sites do not get managed or harvested. Instead, you
have companies going 300 or 400 kilometres farther north to cut timber, often of
small sizes and very high cost.
Senator Eaton: Leaving the mess?
Mr. Williams: Yes. I alluded to that when I mentioned that the
investment in the forests was not substantial and that the tenure arrangements
did not provide incentive for companies to invest in the forests. The location
of investments is one area that could be reviewed and changed.
Both climate change and carbon affect things dramatically as well. Harvesting
on spruce bogs that contain vast amounts of carbon and yield very little timber
should be a thing of the past. I do not think the value is there anymore.
To come back to your previous question about a program geared toward
Aboriginal people and formal education, I would also like to see a mentoring
program of some sort. I have seen examples where laid off forestry company
executives work for Aboriginal bands. They have been able to accomplish a great
deal. It helps the whole community. If a system were put in place such as CUSO
working with Aboriginal communities, that could be effective.
Senator Eaton: Could you educate me: When you talk about
tenure-limited firms, is that the number of years a firm has cutting rights?
Mr. Williams: It is that, but it is also the terms of the licence it
has more broadly.
Senator Eaton: Is there an average length of licence?
Mr. Williams: There are different types of licences. The larger
licences generally are 20 to 25 years in Canada. Many of them are reviewed every
five to ten years; if the licensee has met the conditions of licence, the
licence is renewed to its original length.
Senator Eaton: Are licences automatically renewed?
Mr. Williams: Yes, that is right.
Senator Meighen: Gentlemen, one of my frustrations in life is that I
always wanted to be a forestry engineer graduate from the University of New
Brunswick. Among many other things, I was not successful in that.
Mr. Floyd: We are looking for students. We would be happy to recruit
Senator Meighen: I will need a double major.
This question pertains to the whole country — however, I asked the question
in British Columbia a number of years ago and was told that clear-cutting had
significant advantages in terms of forest regeneration. Do any of you feel that
argument holds water?
Mr. Floyd: Yes, absolutely. It is very appropriate in some
Senator Meighen: Could you describe some of those circumstances?
Mr. Floyd: Different species have different requirements in how they
regenerate. If you have a tree species like the Douglas fir on the West Coast
that regenerates well in bright sunlight, but not particularly well in dense
shade, one objective you have is to open up the stand to get the regeneration
We do a lot in the Maritimes. We do less clear-cutting that we used to do,
but we still do a fair amount of clear- cutting and replanting as our dominant
silviculture model. It obviously has economic benefits, but ecological costs as
It is very difficult to say that it is never right or that it is always
wrong. It depends on the site and the species that you are working with.
Senator Meighen: Where are we across the country generally in terms of
sensitive regulation to permit clear-cutting where it would be advantageous and
to prohibit it where it would not?
Mr. Floyd: That obviously varies from province to province, in terms
of each province's regulatory standards. My impression is that Canada generally
has very high standards in terms of harvesting, protection and regeneration. We
do a good job for the most part. That is not to say that people do not like
clear-cuts, because many do not.
Mr. Beckley: That is one of the things that came through clearly in
our survey research. People are very against clear-cutting. Getting by and
getting support for the forestry industry in general, it will be incumbent on
the industry to try harder and to do a better job in a sense.
We flew over other Maine this morning and it is absolutely visible that they
are doing much less clear-cutting and that their forestry sector is
well-positioned. In examples from Scandinavia, the largest clear-cut opening
allowed in Finland is four hectares. It is at least 10-times that in most
jurisdictions in Canada. Scandinavia is competitive and competing in similar
markets to us and doing quite well. It is possible to do it.
The overall theme of some of my comments is that we have done things the
cheap and easy way, without a lot of vision or applying ourselves too hard. This
is another example where it could be done with a little more intelligence,
foresight and planning. We could still have a high-value forest products
industry and less clear-cutting.
The leading edge of this is through forest certification. I am not sure the
regulatory approach is the best stick, as opposed to the carrot, but I think we
could do with less regulation.
Mr. Williams: Many of the provinces have merchantability requirements
that require companies to harvest everything except their residual trees.
Provincial regulations force clear-cutting in many situations.
Senator Meighen: Many people have private woodlots in the Maritimes.
Are programs available to teach people how to selectively harvest from their
woodlot and how to manage their woodlot? Are those programs readily available to
people, to your knowledge?
Mr. Floyd: For example, Nova Scotia does a much better job of outreach
to its private woodlot owners than New Brunswick does. New Brunswick made the
decision several years ago effectively to eliminate its outreach and extension
program, which I think was a serious mistake.
Having said that, the University of New Brunswick certainly teaches our
students about managing smaller parcels, uneven age management and alternative
management techniques. The Nova Scotia Department of Natural Resources extension
program is successful. Some of the model forests have done well with that
If you were to ask me about a priority for private woodlots in New Brunswick,
I would say we need to do a much better job of outreach and technical support
for woodlot owners.
Senator Meighen: From my personal observation in Charlotte County,
every tree standing was a potential victim when the American housing market was
going well; everything was being cut.
Finally, what is the prognosis for wood housing construction in Asia? We have
put a lot of effort into that over the years, explaining how it is advantageous
for many reasons, including earthquake zones and whatnot. I do not get the
feeling that we have made serious penetration in that market.
Mr. Floyd: I read the transcripts of your questions of Mr. Farrell,
and I am sure he knows a great deal more about this than I do. That is a
difficult question in terms of building standards, which vary not just from
country to country but, as you know, from province to province, and, in the
U.S., from county to county. It is a tough question. I cannot really say that we
have made as much headway as we would like to. We think there is some potential
there. We have shown real growth in terms of green building and green building
standards and beginning to use more wood products in light commercial structures
here in Canada as well as in the U.S. There is a good story to be told there.
Senator Fairbairn: Mr. Williams, near the end of your comments, you
mentioned mentoring programs to the Aboriginal communities and how we should be
trying to pull them in. It is an important issue. Could you go a little deeper
on that and let us know exactly what you are thinking and where in Canada that
would find the most collective? If anyone else has comments on this, I would be
glad to hear them as well.
Mr. Williams: Senator Fairbairn, I have seen it work very effectively
with a small native community just outside of White River in Ontario. They hired
someone who was laid off from AbitibiBowater, and he has helped them develop a
forest strategy, which is something they had been trying to develop for some
time. He has the ability to help them develop a strategy. He knows the sector
and the policies. He knows how to get things done.
It strikes me that a number of such people are available, probably more day
by day. Perhaps there could be a program where they could somehow act like CUSO
volunteers and work with communities for a given period of time to help them
develop an understanding of what opportunities there might be in the forest
sector, not just in terms of timber harvesting but in other areas as well, and
help them put in place a plan to begin to achieve that and perhaps work with
them to implement the plan. That could be very useful. It is not a substitute
for higher education, but it would be an additional component that could very
well complement such measures.
Senator Fairbairn: As you may know, I am from southwestern Alberta,
very close to the Aboriginal people, the mountains, forests and all the flat
land as well. I would be interested in anyone else's thoughts.
Mr. Beckley: One of the first projects I had with Canadian Forest
Service was looking at two communities in Northwest Territories, Fort Laird and
Nahanni Butte. There was a very active bush culture there, and the territorial
government was interested in developing a forest industry, but they wanted to
assess how the forest was being used first. We did what is called a traditional
land use and occupancy study and determined that about one third of the local
economy was still based on the bush, such as trapping, firewood and medicines.
It seemed to me that there was an excellent opportunity to create a small-scale
forest economy that complemented and valued the bush lifestyle that people still
enjoyed and wanted to continue to be part of the culture. I could envision a
mill that would not run all the time but that would run when the price is right,
maybe selling a specialty project of green certified wood to rich people in
California, to get the maximum dollar for a smaller amount of fibre. It could be
seasonally complemented, and they could work in town in the mill at those times
that they were not out in the bush living on the land. I was right out of grad
school and quite idealistic and naive about how the world worked.
The typical approach, and what was eventually done, was to go out and measure
how much wood was there and to try to build a mill that could handle exactly
that amount of wood and develop that side of the resource without any thought to
what the community impacts would be and how it may not be compatible with an
existing forest use. There is very low-population density there, and the forest
was beautiful, or what I saw of it. It was not until I got up in a plane that I
realized that the forest only existed in the river valleys. That was the
transportation corridor for community residents. It was where any tourism
happened, and it was where all the big timber was. Even though it seemed like
there was a lot of forest to go around, that really was not the case. Any
significant amount of harvesting would have had a dramatic impact on that.
To try to tailor the forest industry or a product-based forest economy in an
Aboriginal context, you may need a different model that is sensitive to other
Aboriginal values for forest that exist there.
Mr. Floyd: There is a National Aboriginal Forestry Association. You
might want to invite them as a witness. CFS also has an Aboriginal forestry
program as well. There are difficulties in terms of formal higher education and
the recruiting question that Senator Eaton asked. Some programs in the United
States have been very successful in working with First Nations Americans.
Northern Arizona University and University of Montana have been particularly
successful, but both of them have invested a long time and established strong
relationships with the tribes. It has taken them 20 or 25 years to yield the
benefits from that. It is something I would like to see us do at UNB, and I
think some of the other universities would be interested in it as well. It is a
Senator Fairbairn: Thank you very much. In Alberta and British
Columbia, where we have the trees and different tribes of people, it strikes me
as an opportunity, if done properly, that could open a door on some of the
difficulties that are always at play there.
Senator Carstairs: I represent Manitoba, but I was actually born and
raised in Halifax. I went to Dalhousie at a time when we thought the University
of New Brunswick was a forestry school and nothing else.
Having said that, I think there is a real disconnect between governments and
people in terms of the respect that the people of Canada have for their forests
and for their trees. That came home to me in spades after visiting Halifax
shortly after Juan. I grew up almost on top of Point Pleasant Park, so it was
difficult to see Point Pleasant Park after the devastation and loss of trees.
More important, though, in talking to Haligonians about how they felt about that
park, they felt their city had been totally devastated because of what had
happened in the park.
The same thing happened in Vancouver when you had the terrible storms in
Stanley Park, and the ice storms in Quebec and in Ottawa. Canadians value the
forests, but I am not sure that governments value the forests for anything
except their economic wealth, as they see it, not for the kinds of things you
were addressing earlier, which is the watershed issues, the environmental
issues, the basic connect between a Canadian and a tree. We are tree huggers,
even if we are not great environmentalists; we are, for the most part, tree
huggers in that we love our trees.
That leads me to my question, which is with respect to Aboriginal people. I
come from a province where there are large numbers of Aboriginal people. We have
had a number of successful pulp mills, Pine Falls, for example, which employed
very few Aboriginal people. We had a major pulp mill in The Pas, Manitoba, in
which their major residents were Aboriginal people but where very few of them
How many Aboriginal people can you tell me, Mr. Floyd, are attending forestry
at the University of New Brunswick or other forestry schools across this
Mr. Floyd: Very few.
Senator Carstairs: Are there any particular scholarships or
initiatives by the federal government to encourage Aboriginal people to come to
Mr. Floyd: Yes, there are. I have never had difficulty finding
scholarship money for Aboriginal people.
Senator Carstairs: What is the problem, then?
Mr. Floyd: Your question would be better answered by an Aboriginal
person, but since you asked me, I will give you my view. I think there is a
In my experience, going back to my own undergraduate experience, it was very
difficult for native people to leave their communities, to come to university,
to a different culture where they were often isolated, and to succeed at
university according to our vision of what success is. As a result of that, I
knew several students when I started out in northern California who came to
Humboldt State where I was and left the program before they graduated.
We still see a fair amount of attrition. I do not have the data on that from
UNB, and I am still fairly new there, but that is my impression of what is
Senator Carstairs: I think that was true. That was even true at the
high school level, where I taught. We would get them into grade 10 but not
through to grade 12. We are seeing some differences and changes. They are now
graduating from law schools, medical schools and nursing schools, but not
Mr. Floyd: I am reluctant to say I can think of two or three folks who
have. We had a wonderful student two years ago who graduated and is now working
for CFS in Fredericton. I met a couple of gentlemen, when I was working on the
National Forest Strategy, from British Columbia who are Aboriginal people
employed by their own bands as professional foresters. It is not that it does
not happen, but it does not happen often enough.
Senator Carstairs: There are, I think, federal-provincial relations
problems in many areas of the Canadian economy. What are the real problems
between the provincial and the federal governments with respect to getting them
to work together — whether it is on a model forest or whether it is a small
development program that perhaps is an Aboriginal development program? Where is
Is it a power struggle only, where the provinces are saying, "This is my
bailiwick; go away, we do not want you here"? Is it a funding issue? Or is it a
dictatorial attitude on the part of the federal government, saying that if we
are going to give you dollars, we will also tell you how to run your program?
Mr. Floyd: I have just become a permanent resident. I am grateful for
the opportunity to be able to live here and work here, and I am really enjoying
what I have learned in the last few years. My reading of Canadian history
suggests that this goes back to Confederation. It has always been a power
struggle between the provincial governments and the federal government as to
which rights and responsibilities will be distributed to which places. I do not
think that has changed any.
Senator Carstairs: It has not changed any, but I think we have to make
it change. What I am looking for is this: Where are some of those problems and
how can they be resolved?
Mr. Floyd: I think there are a lot of opportunities for joint
provincial-federal initiatives. I mentioned this research cluster idea, for
example. That is one. The Canadian Council of Forestry Ministers works
reasonably well together — although there are still turf wars there from time to
time. We have good examples in the Canadian Council of Environmental Ministers.
We have established mechanisms for those broad, upper-level dialogues. Where
we break down, obviously, is when we start talking about particular programs —
which government will put what amount of funding into which areas and how we
will share that. Obviously, any time you talk about budget, that will be an
For the most part, for the federal government and the provincial governments,
at least at the highest level, everyone is on board in terms of the goals for
forest sustainability and the forest industry, but we break down when we get to
individual program levels and who is responsible for which funding commitments.
Mr. Williams: I would generally agree with what Mr. Floyd has said.
Somehow, it is an inability to see the larger picture and the larger benefits
I was having lunch with a former CFS director and we were talking about the
National Forest Inventory. He told me that provincial deputy ministers told
people that when they walked into a federal-provincial meeting they do not bring
any money with them, that they try to bring some back with them — that is the
name of the game.
The case of the inventory is a very good example because we need a national
inventory for a lot of reasons, not just to tell us how much timber is there. It
helps us with our carbon accounting; it helps us gain access to markets; it
benefits us nationally, as well as benefiting the provinces. Nevertheless, there
is an inability to find a funding solution that would put it on a secure
long-term funding basis. It is not a lot of money, but it is a lack of
leadership and a lack of ability to see the broader picture and participate in
Senator Carstairs: A lack of political will.
Mr. Williams: Yes.
Mr. Beckley: I came to Canada and the Canadian Forest Service in the
early 1990s when the federal-provincial agreements in forestry were still in
existence. They were phasing out at that point, but they seemed to be an
effective partnership. Maybe it was because the dollar amounts were fairly high
and there was enough for the federal side to say they want this to happen and
the provincial side to say they want that to happen and a lot went on.
With respect to Mr. Williams' observations about the Model Forest Program, I
was involved in the one in Alberta and a bit in the ones in Manitoba and New
Brunswick as well. For whatever reason, the provincial governments did not seem
to want to play.
I think a lot of good research happened and a lot of good programs were
developed, but oftentimes, when it came to implementation, particularly in areas
where Crown land was at play, the research did not get implemented on the
ground. There was reluctance there.
Mr. Williams' description at the director level is very much in play. I have
been involved in a number of collaborations at the grassroots level of these
institutions. The survey I mentioned was funded by DNR. However, my own
colleague from Université de Moncton in Edmundston and two CFS employees who
were lower-level researchers took a long time to hammer out the data sharing and
intellectual property rights. We worked at a high level and the collaboration
was very effective. When the survey results came out and the government did not
like what we said, all hell broke loose at that point.
However, it worked at a grassroots level, which is the best way I can
describe it. It would be challenging to figure out ways to funnel money. Often,
money is not accessible unless there are federal, provincial and university
personnel involved. Changing that might make some of those types of projects
happen, if there are other ways to offer money. Then maybe we can work up the
chain and convince directors that it is a good thing to do.
Senator Callbeck: You have all talked about the federal role in
providing leadership and developing a vision. You have given many ideas. One
idea came out of a study done by this Committee on Agriculture when senator
Fairbairn was chair that looked at rural poverty. Mr. Floyd, were you a witness
on that study?
Mr. Floyd: No.
Senator Callbeck: One recommendation was that the federal government
immediately convene a national summit with all the relevant stakeholders with
the aim of developing a national strategy. I would like to get your comments on
whether you agree with that.
Mr. Floyd: I would agree with that.
I made reference to this National Forest Strategy process that Canada has had
now almost 30 years. The basic idea was that we would find ways to bring all of
the stakeholders together. We would set goals in terms of sustainable forest
management and forest policy. Jointly, we would create that vision and find a
way to implement it.
That role is largely now within the purview of the Canadian Council of Forest
Ministers. I think there would be strong support in some parts of the
environmental community. Many different stakeholders would appreciate an
opportunity to do that.
Mr. Williams: I think it would be a very good thing to do.
In 1998, the Norwegian government embarked on a similar program chaired by
the prime minister of the country at the time. It was one of the examples I had
in mind, and I believe both my colleagues mentioned the success of Scandinavian
countries that have forest resources similar to ours. Four of the top 10 forest
companies in the world by sales are based in Scandinavia. Canada has none.
A strategic approach that has the buy-in of all partners and that has a
well-thought-out and debated articulation of where the country wants to go would
be beneficial. One of the questions would be this: How much of a forest sector
do we want? Significant parts of the population would like to see very little or
no forestry. Many do not have an opinion. However, it is fair game to ask the
question. It would be a very good national debate.
Mr. Beckley: If something like that had been done 15 years ago, it
would have been extremely contentious and everyone would have stormed away angry
and upset. The climate is very different now, partly because of the crisis and
partly because of the successes of forest certification that has brought
together the environmental community and more progressive elements of the forest
It used to be that environmentalists lined up on one side and forestry on the
other. People can now see some bifurcation in the industrial sector. You have
interesting partnerships between environmental NGOs and more progressive forest
industries. Environmental communities use those groups to shame lower-level
performers into doing a better job.
There is much more common ground. The culture of dialogue around forestry has
evolved. People who could not be in the same room 10 or 15 years ago routinely
sit down together and try to figure out what they have in common.
Mr. Floyd and I have been involved in an initiative started by J.D. Irving
Limited in New Brunswick. They hired a high-priced outside facilitator and
invited academics and all of the environmental NGOs in New Brunswick to sit down
for five meetings and decide whether there was anything they agree on. If so,
was there anything they could do to advance that agenda, even if it were only 5
per cent or 6 per cent of the total package? Some very good things came out of
The climate is much riper for something like that to succeed currently.
Senator Callbeck: It is good to hear that you agree with that
I want to ask you about another recommendation made by the committee,
specifically, that the federal government provide initiatives for sustainable
forestry management in private woodlots through the income tax system. Do you
all agree with that?
Mr. Beckley: I think Peter deMarsh of the Canadian Federation of
Woodlot Owners made a presentation here earlier. I know him well. I am also a
woodlot owner. I own 160 acres outside of Fredericton, where I live.
Mr. deMarsh and the New Brunswick Federation of Woodlot Owners have been
advocates for getting someone to write woodlot owners a cheque for maintaining
aesthetic quality, water quality, providing habitat, et cetera. They do not care
if it is the federal or provincial government. Mr. Williams made the point that
much of the public does not have opinion. I think much of the public does not
understand the degree of subsidies already provided to woodlot owners for
basically growing fibre through silviculture, planting and tending stands of
I have suggested in the past that the amount of money that flows to woodlot
owners currently might be socially acceptable, not for growing fibre to supply
industry, but for protecting environmental amenities. There are no programs like
that in Canada. They do have programs like that in places like Costa Rica, where
they have payment for environmental services. Private landowners are paid to
maintain environmental quality.
This notion of positioning ourselves as the most green forest managers in the
world will ultimately have a payoff in trying to sell our products elsewhere. I
think there is lots of room for innovation in that area.
Mr. Williams: The quid pro quo for that should be a requirement that
private woodlot owners manage to high environmental standards. For example, they
cannot cut to the edge of streams and cannot do whatever they want.
Mr. Floyd: It was not only a matter of income tax — Mr. deMarsh also
made the point when he appeared before the committee that there is an issue with
inheritance tax as well. Forest owners have the typical problem of having income
in one in 20 years or one in 25 years. It becomes a matter of how you treat that
in terms of taxes.
Senator Callbeck: Mr. Beckley spoke about Sweden and Finland doing a
good job of working up the value chain. Mr. Williams mentioned Canada trying
that. Why have Sweden and Finland been successful but not Canada?
Mr. Beckley: I do not know. I am going to Sweden in three weeks. Maybe
I will ask around and discover a little more. I have a research project there
that I will be doing for two weeks.
I think they had a lot of foresight in terms of buying equipment from Germany
or somewhere else — rather, they decided to make their own. My chainsaw is a
Jonsered from Sweden; my thinning saw is a Husqvarna. These are household names
for people who have woodlots or are in the forest sector. We buy services from
them as well. As Mr. Williams said, they have some of the largest manufacturing
firms and have spread out around the world.
I do not really know the answer; but, in the back of my mind, I am thinking
they must have had a much more coordinated investment strategy and a real
commitment to doing the R&D so that they were ahead of the curve, not playing
Mr. Williams: It is a good question. I am not sure of the answer
either, but in part it is due to research and development. Several years ago
there was a concerted effort to reorganize forest research in Scandinavia in
order to capture efficiencies. They devote 3 per cent to 4 per cent of their GDP
to research, which is much greater than ours.
Mr. Floyd: Mr. Beckley made the point a few minutes ago that if you
think about our markets, we have largely depended upon commodity-grade lumber,
so two-by-fours and two-by-sixes for the housing market, and we really did not
need to innovate because that was a fairly easy market for us to capture and to
export to. We were never forced to be innovative and to put more money into R&D,
specifically development into advanced value-added wood products. If you look at
the value-added wood-products sector in Canada compared to other forested
countries, you would see that in Scandinavia they have done a better job of
developing those higher-value and innovative products than we have here.
The Chair: With the indulgence of the senators, I would like to ask a
I certainly do not want to engage in the debate that Senator Carstairs linked
to federal-provincial relationships. I think the witnesses are right. We have a
crisis and challenge in the forestry sector. With all due respect, some of the
comments we heard today would not have been possible going back 10 or 15 years
ago. Now we are at the table because of a crisis and the challenges in one of
the most important sectors of Canada and North America, forestry, and we can
To follow up on Senator Carstairs' point, without opening a constitutional
debate on the responsibilities of the provinces versus the federal government,
suppose I were to say to you that you were the federal government. What would
you do immediately, with your experience as important stakeholders, as
university researchers, dealing with the training of employees, working with
employees at the silviculture level as well as the people working in the mills
and those so-called leaders of the industry and the big mill operations — what
would you recommend?
Mr. Williams: I would convene the major stakeholders and participants
and start to develop a process for developing a vision and a strategic plan. A
coherent, strategic plan is necessary. Not only does there have to be a plan,
but the process in getting there has to be developed and well-thought-out.
For example, we need to be looking to the future, and we need to bear in mind
that the plan we develop has to deal with what we anticipate future conditions
to be and not necessarily trying to rebuild the industry the way it was or
recreate the past. There is a need for a lot of discussion, and there is
probably also the need for some significant integrative studies. The issues are
highly integrated, and it is not so common to find the governments or partners
or participants whose input is required to solve a problem all working together.
A good example could be climate change, and invasive species is another
example, which of course has links to climate change. Anything to do with water
would be another integrative example as well. It is those sorts of things that I
would embark on at first.
Mr. Beckley: Much of it may come down to basic human social skills. It
is almost a matter of attitude and approach. As Senator Carstairs said,
sometimes the feeling from the federal government is, "Well, it is our money.
This is what you are going to do," as opposed to, "How can we help?" You
could go to the provinces and ask, "What are the problems?" Have the
conversation, "Can we agree on the problem? What are our appropriate roles?
What can you do? What can we do?" It would be sort of a scaled-up version of
the process that Dr. Floyd and I are involved in with J.D. Irving and NGOs. Part
of that has worked by getting an external, trained, consensus-building institute
facilitator to manage that process. That will not happen overnight. That kind of
relationship building has to evolve and trust has to emerge. The depth of the
crisis now and the necessity to move and to change some things might make the
partners more willing to engage in that sort of dialogue.
Mr. Floyd: I can think of several things along a different line in
terms of what I would do right now. There is a real need for demonstration and
development projects, and the federal government has a role in cooperating with
the provincial governments to do a couple of these things. We keep talking about
biofuels, for example. Whether it is biochemicals like acetic acid or whether we
are talking about alcohol production from cellulose, it is time to put some of
those facilities in place.
The U.S. has done that successfully through their Department of Energy by
offering a series of competitive grants to companies, often in cooperation with
universities, to actually build these demonstration pilot projects. The first
large wood ethyl-alcohol project is going online in Georgia next year. The
University of Maine received a $26-million grant from the Department of Energy
to build a biotechnology centre at Orno. Those are the kinds of things we have
yet to do in Canada, and there is room for that.
I mentioned briefly in my testimony that there is a role for the federal
government and the provinces to play together in terms of offering the
scholarships and other financial support that we need, not just at the
university level but at the community college level, and then you suggested
silviculture and other sorts of field skills. We have a real labour- recruiting
problem that will occur soon. It will be harder and harder to find people who
want to work in the bush. It is also getting difficult to recruit students at
the community college level and at the university level. There is a role for the
federal government and the provinces to play together to resolve that.
The Chair: There is another element. In order to find solutions that
will sustain the viability of our forests and better jobs and the economy in the
forest industry, another player has to come to the table, and that is the
community, the local service districts or municipal governments.
Mr. Beckley, I know you had research and you had to return the funds. Maybe
now is the time to go back.
I will share with you the impact we had in north-western New Brunswick, and I
know it had an impact also in Nova Scotia and Quebec, especially with
AbitibiBowater in Dalhousie. I sat at a table and we said, no, we just cannot
have the presence of the federal government or the provincial government; we
need to also involve the community, where the towns, villages and cities could
be part of the discussion table. I would hope that what I have heard from you
tonight, when we talk about managing our forests, also includes hardwood
Mr. Floyd: Yes.
The Chair: Therefore, there is one comment that I would like to have
clarification or comments on. With what you have seen with the senators asking
questions, if you would like to add something, please feel free to send in
writing your additional comments to the committee.
Being a next door neighbour to the state of Maine, Mr. Williams, you talked
about getting out from under U.S. countervailing conditions. I would like to
hear more comments on that.
Mr. Williams: Since at least 1986, when the Mulroney government made
an agreement with the U.S. government to put an export tax on softwood lumber,
there has always been a tax or some kind of duty on lumber. There have always
been limits on how much can be exported into the U.S.
Part of the profit that should have gone to the firms producing the lumber
ended up going to one or another of the governments. In some cases, it was
eventually returned. I believe, under the export tax, it was returned; but after
that, it was a duty that was put on by the U.S. and that was lost money. It
actually went to their competitors in the U.S.
The other thing is that there were restrictions on market share as well,
which enabled other competitors to enter into the U.S. market and gain a larger
The effect of the export tax is that it has sapped away a portion of what
should have been the profit of the Canadian companies, and it has also weakened
their ability to maintain their markets in the U.S. It has been one of the
factors that, over time, have been detrimental to the industry.
The Chair: Does anyone else have any comments on that?
Mr. Floyd: You are well aware of the wars that go back to 1840 or
something like that. This dispute has been ongoing for 150 years. It will
probably not go away any time soon.
Mr. Williams is right; it is detrimental. The point that he raised is an
interesting one, whether or not we can create auction markets for our standing
timber. That is a really interesting question. Is there a way to do that?
As you well know, the recent auditor general's report in New Brunswick has
suggested that the pricing system that we have is not really a fair-market
pricing system. The better way to do that would be if we could find a way to
ensure we had a number of different firms that were competing to purchase either
standing timber or purchase the lumber. That does not always happen.
Mr. Beckley: If I could comment first on your notion of what is the
community role, the community is a critical player, and I feel they have felt
A colleague of mine from the University of Alberta, John Parkins, and I have
a project where we are looking at these forest industries in crisis and trying
to determine what are the variables whereby some are able to pull themselves up
by their bootstraps and reinvent a new future for themselves and others
As part of that process last summer, we went around to mayors and councillors
in Nackawick, Dalhousie, Bathurst and Miramichi. To a person, they were
extremely frustrated, not with the federal-provincial division, but within the
If a new wood user wanted to open up a facility in a community, that
individual was dealing with Business New Brunswick, but the land was tied up and
administered by the Department of Natural Resources. There were petty jealousies
between those departments. The labour issues were all handled by Human Social
The mayors just wanted something better for their community and they were
getting the run-around from these different provincial agencies. In some
respects, I think this notion of community forestry models, and giving them
something to be able to try something on their own, might be a solution; but
again, they cannot be cast adrift and told to go and make this happen, because
some serious capacity building will need to go along with that effort.
To tie this issue in with the issue of more open markets for timber, some of
those community forests might be in a good position to find market niches and to
compete and be able to pay a higher price for that timber if it were made
available. They could attract private-sector partners to come in if they knew
they could get certain volumes of wood that have been traditionally tied up with
the larger players.
It would create a more diverse and robust forest sector altogether. It would
be more nimble, able to take advantage of opportunities as they arise. I am not
exactly sure what the government role would be in helping to make that happen,
but it is an important direction to strive for.
The Chair: We have a time factor, and I would like to ask the last
question. If you could send an answer in writing, I would appreciate it.
Regarding the comments you have made on carbon management, what would you
recommend to governments? Here I want to share with you that when I talk about
governments, it is municipal, provincial, and federal governments.
Witnesses, on behalf of the committee, we want to thank you for accepting our
invitation to be here and share your professionalism with us. As I said to you
before we commenced the meeting, you are an important stakeholder. As you said
so precisely regarding some of the conversations and the sharing of information
here today in 2009, on May 26, we could certainly not have that conversation 10
or 15 years ago.
On behalf of the committee, I wish to thank you for appearing today. It was
Senators, we will meet on Thursday, at the usual time, and we will be hearing
witnesses from Ontario. I declare the meeting adjourned.
Senator Fairbairn: I would like to make a final comment. I am from
southern Alberta. We have a problem there in the forestry world in our
mountains, with the mountain pine beetle starting to come across. On two
occasions in flying out, I was sitting by two different young fellows and an
older person. They were all coming out from New Brunswick to go into Crowsnest
Pass. They had been working in the forestry industry and they were bringing
their stuff with them, leaving their families and coming to give a hand for what
is in the process of happening in that difficult place.
Mr. Beckley: Our young people are one of our biggest exports from the
(The committee adjourned.)