Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue 9 - Evidence - October 21, 2010
OTTAWA, Thursday, October 21, 2010
The Standing Senate Committee on Agriculture and Forestry meets this day at 8:04 a.m. to study the current state and future of Canada's forest sector.
The Honourable Percy Mockler (Chair) in the chair.
[Translation]
The Chair: Honourable Senators, I see that we have quorum. I call this meeting to order.
[English]
This morning, I welcome our witnesses to the Standing Senate Committee on Agriculture and Forestry. My name is Senator Percy Mockler. I am Chair of the committee and a senator from New Brunswick.
[Translation]
This morning, we have the honour and pleasure to welcome witnesses from three different organizations. First, President and CEO of ArboraNano Inc., Dr. Ron Crotogino; second, President of Athena Sustainable Materials Institute, Mr. Wayne Trusty.
[English]
Before I officially introduce the other witnesses, I would like to take the opportunity to thank you, Mr. Innes, for the great hospitality you gave us at UBC. With that introduction, we have from the University of British Columbia, Dr. John Innes, dean of the Faculty of Forestry.
The committee is continuing its study on the current state and future of Canada's forest sector, looking particularly at efforts in research and development and innovation.
Before I ask the witnesses to make their presentations, I would like to ask the honourable senators to introduce themselves, starting to my left.
Senator Mercer: I am Senator Mercer, from Nova Scotia.
[Translation]
Senator Robichaud: Fernand Robichaud from New Brunswick.
[English]
Senator Fairbairn: Joyce Fairbairn, from Alberta.
Senator Mahovlich: Frank Mahovlich, Ontario.
Senator Braley: David Braley, Ontario.
Senator Ogilvie: Kelvin Ogilvie, Nova Scotia.
Senator Runciman: Bob Runciman, Ontario.
Senator Raine: Nancy Greene Raine, British Columbia.
The Chair: Before we ask the witnesses to make their presentations, I would like to start by asking the senators to adopt and accept that our witnesses today have handed the clerk copies of their presentations in one of the official languages.
Do honourable senators permit that the presentation be distributed now and that the translation be sent once it is available? Can I have agreement?
Hon. Senators: Agreed.
[Translation]
Senator Robichaud: Mr. Chairman, were these documents received in advance or only this morning?
The Chair: No, yesterday evening.
Senator Robichaud: There was no time to have the documents translated; I therefore accept.
The Chair: Thank you, Senator Robichaud.
[English]
Witnesses, thank you again for accepting our invitation. I now invite you to make your presentations.
Ron Crotogino, President and CEO, ArboraNano Inc.: Honourable senators, thank you for the invitation to appear before this committee. I have prepared a handout, which I see is coming around the table. As you will see, it is somewhat longer than the time permits. Therefore, in my presentation, I will be skimming over some of the material rather quickly.
I represent ArboraNano, which is a business-led Network of Centres of Excellence. This is a new program established about two years ago. Our mission is to foster cross industry collaboration to promote the use of new forest nano-materials in the manufacture of a wide range of high-value products. Our motivation is to help the Canadian forest products industry and other manufacturing sectors to derive greater value from the forest resource and thus create high-quality employment in those sectors.
The use of polymer composites is growing rapidly in a wide range of industry sectors, as is the use of nano-materials to enhance the properties of these polymer composites. The polymer composites are defined to some extent in the slides 9 to 11.
Our focus is on renewable and sustainable forest nano-materials, such as nano-crystalline cellulose, where Canada is a leader, and another material called cellulose nanofibrils. We wish to promote these as an alternative to the available petroleum-based materials that are out there now to make polymer composites.
Let us do a business reality check. Currently, the majority of polymer composites are made from petroleum products; I believe it is 99 per cent. In order to displace petroleum-based materials with bio-materials, the bio-materials must be cost competitive and they must exhibit equivalent or better performance characteristics. We believe this is possible. The superior environmental performance, which we like to talk about so much — the green thing —, will tip the scale, but by itself it is not enough. However, it will be a very important issue the closer our products get to the consumer.
We see many promising applications for bio-polymer composites, particularly in the transportation sector. Polymers are used increasingly to replace metal components to reduce the vehicle weight. Bell Helicopter now produces a helicopter that is 80 per cent plastic — a frightening thought, but they do. Boeing produces the 787, which is 50 per cent polymer composites. This is happening. This is a reality.
Why do they do this? They use polymers to reduce vehicle weight. Reducing vehicle weight, on automobiles, trains or planes, will reduce fuel consumption and in any flying vehicle, it will certainly increase the payload capacity.
We can substantially reduce the weight of our buildings by replacing the glass windows with polymers. Product performance and safety are the primary concerns and must be satisfied with any of these new materials. This is particularly important when the airplane is built out of polymer composites.
Cost is a major influence in the automobile sector. For the aeronautics sector, cost is the last thing they look at; they want the stuff to work and be safe. The automobile industry wants it to be safe and work, but they also need to reduce the cost substantially.
We also see promising applications in packaging, building materials, medical devices such as prostheses and sporting goods. Imagine a hockey stick made entirely from a renewable, sustainable forest bio-material.
Innovations at the research phase are well supported in Canadian universities and in some industrial laboratories. However, every good idea must pass through the developed and demonstration phase, seen by innovators as the "valley of Death." This is illustrated in figure 19. That is where ArboraNano is operating. It takes a strong entrepreneurial vision and money to pull innovation through this phase. It is here that the government programs can be amazingly effective.
A good example is NCC, which is passing through this phase very rapidly. The NRCan Transformative Technology Program helped pull this development from a university lab, where it was produced in three to five grams per week. That program pulled NCC through the pilot plant phase and into a demonstration plant, which will start operation at the end of next year and produce 1 tonne of NCC a day. From grams per week to 1 tonne a day, in about three or four years is an amazing feat. That happened because there was good support from the federal funding programs to make this happen. ArboraNano wishes to score similar successes with targeted product development, using this material.
Canada has a head start in the development of industrial production of NCC, the nano-crystalline cellulose. However, our global competitors are hot on our heels; they are not asleep. Sweden, Finland and the Japanese are all into this in business as well, but we have a head start of at least two years.
If we want to stay ahead of the pack, we must develop strong leadership and product development or we will slide back into the position of a commodity producer of NCC and let our competitors make the money with this material. Our manufacturing industries have the vision and they have the market understanding. The forest products industry understands the material, its potential and how to make it.
Let us keep our development activities close to home, particularly in that "valley of Death." That is where the hot competition is. Let us focus on Canadian production facilities. When we have gone through this and have the product, then we start marketing internationally.
Government funding, or government-industry risk sharing, is an essential catalyst to accelerate the innovation process and bridge that gap between invention and innovation. Let us continue to build this strength, as we already have with programs that have been demonstrated to be successful.
I would be happy to answer any questions.
Wayne Trusty, President, Athena Sustainable Materials Institute: Good morning, honourable senators. Thank you for the invitation to be here today.
Let me explain that the Athena Sustainable Materials Institute is headquartered here in the Ottawa area. We are a very small not-for-profit organization. We have an affiliated institute in the United States called Athena Institute International.
Since about 1991, we have been working in the field of life cycle assessment. If you are not familiar with life cycle assessment, it is a methodology for which there are international standards for tracing the environmental flows, from nature and back to nature, associated with the production of products and materials. It can be applied even at a process level.
Our focus has been very much on buildings. We have developed a lot of data in this country. In fact, to some extent, we are world leaders in how we went about developing data.
Then we put that data into software that allows architects, engineers and design teams for buildings to focus on their design, put information about their design into the software and immediately get back an environmental profile. Then literally, in a meeting, we are able to say: What if? What if we change from concrete columns and beams to glulam columns and beams? What does that do to the environmental footprint of our building?
We have been doing this work for quite a long time. We have also developed a free tool, which was given an award by the American Institute of Architects and by some other organizations in the United States that allows a simpler approach to this same issue, but not at the whole building level. Rather, it deals with building assemblies — an exterior wall, for example, from the outside cladding on the wall to the inside gypsum support.
When we do that kind of work, we find that wood products perform very well relative to competitive products, especially when you look at measures like energy use — fossil fuel use, in particular — global warming potential, which is one of the measures that we apply, and other measures. Wood does very well in this kind of area.
I wanted to start by emphasizing that point, which connects directly to some of the objectives of this committee.
In various jurisdictions, there is a tendency to try to promote wood first policies or regulations for buildings. I will recommend against that. I think we should be pushing the use of a method like life cycle assessment to do environmental assessments of alternatives. When we do that, wood will have its fair share of the market.
To give you a sense of where this is going, in the United States, in the International Green Construction Code, which is currently under development and will be released in 2012, whole building life cycle assessment is there as an elective. A jurisdiction can elect to insist on it in their building codes or that a design team can elect to use and get away from some of the rather misleading prescriptive attribute-oriented approaches that are out there right now for making decisions about products. It is coming in codes. There is no question about that.
The American Society of Heating, Refrigerating and Air-Conditioning Engineers, ASHRAE, has it in a standard they have released. Life cycle assessment is being piloted in the United States in the U.S. Green Building Council's LEED rating system. It also exists in the Green Globe's rating system, which in the United States is an American national standard.
This is coming. It is a way for wood products to shine and show what they can do when it comes down to full environmental impacts.
The other point I will mention, without too much detail, is that in the world today there are approximately 500 so- called green labels. Some of them are very realistic, well done and third party certified, while others are simply self- declarations by industries or manufacturers and, therefore, very confusing. There is a kind of type 3 label under the International Standards Organization called an Environmental Product Declaration. An EPD is based on life cycle assessment. There is a clearly defined process for generating such labels, and they are being adopted worldwide. Sadly, Canada is lagging in this area.
France is in the process of initiating this program in 2011. If a country requires such labels of its domestic producers, then it can be required of any import and, therefore, becomes a legal non-tariff trade barrier. For an exporting industry, it is absolutely critical. In this country, we have not put into place the infrastructure to support this kind of development. That infrastructure is a national database, which we badly need so that small- and medium-sized companies do not have to chase data all through their supply chain. Rather, they can go somewhere, get good quality, critically reviewed data, bring it in, focus on what they do in their plant, and generate this kind of label. This is critical.
We have developed a paper that outlines all of this in collaboration with Canadian Manufacturers and Exporters. Currently, that paper is circulating somewhere in the federal government, but I am not sure where at this time. It explains all of this and advocates strongly for the development of a national database. I might say that as an institute, we, in cooperation with the United States Department of Energy, initiated their database, which is housed in a federal Department of Energy laboratory in the United States. We have been through this process once in the U.S. It is absolutely critical.
I note that some countries, such as Japan, have been spending enormous amounts of money to develop these databases to support the things I have been talking about. Korea, Taiwan, Australia and most every country in the EU have been doing so as well at the full government level.
John Innes, Dean, Faculty of Forestry, University of British Columbia: Good morning, honourable senators. Thank you for the opportunity to speak to you again after your visit to British Columbia. When you came to British Columbia, I was a newly appointed dean. I was not really familiar with my subject area. I have been on a rapid learning curve since. I felt it would be a good opportunity to pick up on some of the points that were raised at that meeting.
I would like to focus on the research development innovation process and emphasize that this is a continuum going from the generation of knowledge all the way through to innovation. One of the problems that we have been facing has been that there have been attempts to try to divide up that continuum. Organizations have tried to pigeonhole other groups and say, for example that universities only deal with one section of this; industry only deals with a particular section; and the provinces and territories with their research only deal with a particular section. I believe that is the wrong approach. We need to have everyone working all the way through that continuum so that, for example, a young graduate student starting out research actually has a good feel for what is needed by industry as an end product.
One of the major problems that we have had is the attempt to pigeonhole universities as doing either teaching, which is simply untrue, or teaching and basic research. Faculties of medicine, applied science, such as engineering, architecture or computing, and faculties of forestry would strongly object to that type of pigeonholing.
I would like to give some examples of the work we have been doing at the University of British Columbia, which demonstrates the extent to which we are embedded with industry and trying to generate innovation and new products. For example, we have been working on the development and commercialization of a woods dielectric drying system for small- and large dimension timber. We have developed kiln dried machine stress grades for hemlock, spruce, pine and fir for the Asia-Pacific and Europe zones, which have been adopted. In collaboration with Ainsworth, we recently developed and launched commercially the pointSix OSB Flooring product. We are working with BASF in Germany of the Belmadur chemically modified wood product. Our Centre for Advanced Wood Processing has been working through the business innovation partnership on developing, designing, engineering, prototyping and testing new products. That is an example of where you can take the entire continuum. They have been working with is the design and prototyping of a mechanical press for a new kind of engineered timber that is coming on the market. They have also been designing modular room pods for prefabricated laneway homes.
We are working with the Haida First Nation on a scanning and cutting system to produce masks and poles. This is something that can now be automated. They can produce limited editions, for example, of particular masks or poles.
There is a range of different things that we can work on. Other examples would include life-cycle assessment of the environmental impacts of wood, aluminum and fibreglass windows — a project we were doing with Loewen Windows, EuroLine Windows, Inline Fibreglass windows and the Athena Institute — or work that we are doing with the Ecobuild consortium in Europe, which includes IKEA and Exxon Mobil to look at wood protection systems.
The idea that universities do only applied research is completely wrong. We need to emphasize that if we are to have successful innovation, we need to bring the universities in and have them work all the way through that chain. Why are we not doing so? First, there is a lack of accessible funds for business and for industry. Cost reductions in the industry are preventing them from successfully engaging in research. Some of the companies that could use innovation are without the people who have the time or the expertise to interact with the universities. There is a conservative culture that is resistant to change, which I am sure you have come across in your investigations.
Where would we go from here? Currently within the forestry sector, we have quite a lot of money available for forest product development but much less for upstream, in particular with the closure of the National Centres of Excellence, the Sustainable Forest Management Network.
We need to ensure that business expenditures in research and development can be linked to the universities. Canada has very generous systems, but they have not worked well and we need to understand why that is the case. We need to use business start-up and commercialization programs more effectively, linking those with universities. There are some recent examples from southern Ontario that are working quite well, such as the Investing in Business Innovation program or the Scientists and Engineers in Business initiative.
We need to build on some of the recommendations coming out of studies such as the Canadian Council of Chief Executives report An Action Plan for Prosperity. They specifically recommend that we need to build and encourage links between business and academia, which I would wholly endorse. They also recommend that we should be looking outside of Canada to recruit some of the best and brightest students. We have started doing that within Canada, but it has not penetrated through to the forest sector. Many of the innovation things that we are seeing are being practised across industry in general, but very few of them seem to actually come through to the forest sector. That is where I hope this committee can help to ensure that some of the techniques being used come through to forestry.
Senator Eaton: Thank you, gentlemen, for your fascinating presentations. Starting with the last witness, Mr. Innes, did you reach out to business? At the beginning of your presentation, you spoke about doing research with business. Did you reach out to business or did business come to you?
Mr. Innes: When the University of British Columbia started forestry in the 1920s, it was envisaged that there would be very strong business links. Both the University of Toronto and the University of British Columbia were involved. The people at the University of Toronto were the thinkers and the people at UBC were the doers. We were seen as a forest engineering school with a long tradition of working closely with industry.
Senator Eaton: You had entrepreneurship in your department?
Mr. Innes: Yes.
Senator Eaton: Toward the end of your presentation you said that Canada is very generous but the systems do not seem to be working well. Could you elaborate?
Mr. Innes: Yes, Canada gives substantial tax credits for research and development, but they are not being utilized very effectively by the forest industry, and I do not know the reason for that.
Senator Eaton: That is very much along the lines of what we have been hearing for many years; that they were not as aggressive as they could have been when things were good.
Could those tax credits be changed? Mr. Crotogino and Mr. Innes said that they are good at research and innovation, but then Mr. Crotogino talked about the "valley of Death." Are there financial incentives such as tax credits to take a company through the "valley of Death," or is that where you come up against a wall?
Mr. Crotogino: I am not sure that tax credits on their own would necessarily be the right approach. In the "valley of Death," there must be a clear idea of what you want at the other end. The programs need to address this gulf between invention, innovation and commercialization. Tax credits help. I have worked for Paprican for many years, and tax credits have been extremely helpful in encouraging industry to participate in research, but it is not enough.
Senator Eaton: We have heard from several people who get it to a certain point. We even have a market, but there is, as you said, the "valley of Death." What do you think it takes? Is it more venture capital? Are Canadians not business competitive enough? Are we risk adverse? Are the banks not helpful? What do you think we need? How do you think you should be able to access capital and under what conditions?
Mr. Crotogino: I am trying to raise industry matching funding for my network. It is difficult to do because all the industries we deal with, particularly the smaller companies, have their backs up against the wall. They quite often will provide "in kind." They cannot provide cash, because when they provide cash to support something like this, they have to lay off a person to make the money available.
The programs that look at the end product very critically with regard to what they really want to do have to be supported. We have to develop a process whereby we look at the innovation and development cycle starting at the end to decide what we want to do, where we want to go and how we can get there. We must then support backwards through the organization all the way to the university to make that happen. The Transformative Technologies Program of NRCan is an example of where this happened. They came to FPInnovations and asked what we would do with money if they gave it to us.
Senator Eaton: They knew exactly what to do with it.
Mr. Crotogino: They knew what to do with it. The program was very carefully scrutinized as to whether, if successful, it would help the industry. The answer was yes. Programs have to look at what will come out the other end of the pipeline.
Senator Eaton: Why can other companies not follow that same route? Why can they not go to FPInnovations and say, "We have the market; this is our product; this is our financial plan"?
Mr. Crotogino: They do that. We are slowly building this connection between the manufacturing industries, like the automobile industry. We are working with the Ontario BioAuto Council, Woodbridge, Magna and Canadian General Tower. These organizations deliver valuable products into the international industry. They are always on the hunt for new ideas, but there are many new ideas out there and they have to sort them out.
This initial mating dance around whether this will happen is something like the business-led NCEs and will be very helpful. They certainly are helping us establish these links right now. That is very difficult to do, because the automobile, aeronautics and forest products industries are entirely different cultures. It is difficult to get them to talk to each other and create these links.
The program that I am working with right now is a pilot program in a sense. We are making it work. We are trying to find the ways to make it work. I do not have the answers, but I hope to have them by the end of this program in two years.
Senator Ogilvie: I have a question for each of the presenters. I first want to say that you have all covered a range of very important areas this morning. It would be fascinating to be able to delve into some of them more deeply, but I will ask questions that I think can be answered quickly.
Mr. Crotogino, my question for you is on the issue of the source of cellulose for nano-crystalline development, whether crystals or fibre, taking away the existing processes that are set up to deal with wood in the current industries from which cellulose is derived. Is there an optimum quality of wood essential to being the source of the cellulose to be converted into the micro-crystalline or microfibre form or a species of wood? Are there issues of optimization with regard to species and quality of wood? When I say "quality," I mean the beautiful huge log type versus the pile that has been sitting on the side of the road for some time partially decaying.
Mr. Crotogino: Nano-crystalline cellulose is an item that Mother Nature distributed very democratically. It is in all of the cellulose, and cellulose is the most abundant natural polymer. It is actually a polymer composite. It does not matter whether it is a fir, a spruce or whatever. Once you get down to the nano-crystal, they are all about the same dimension. They are pure cellulose with some chemical hooks attached.
No, the source is not important. I would not go as far as you suggest and remove all of the processing up front because the industry is trying to take a waste stream from that and convert it into something very valuable, and pre- processing in the industry is an extremely important step, because it eliminates a lot of work downstream.
Senator Ogilvie: Thank you. I understand that. I just wanted to know from a fundamental point of view. I understand exactly why you would want to fit it into an existing process, but from the fundamental perspective I thought the answer would be the one you gave. Thank you very much.
Mr. Trusty, I want to clarify my understanding of the database to which you referred. Did I understand correctly, that this would be an almost certified evaluation of the life cycle impact of individual materials and processes that might be used in an industry?
Mr. Trusty: Yes, senator, that is part of it. Life cycle assessment can be a very complex process and there is specialized software that people use and so on, and to do it you need data modules, energy production in various forms, transportation, how much energy is being used per tonne kilometre and so on.
Within that are basic products, so the basic aluminum ingot or, indeed, SPFs on timber materials, OSB, plywood. Those all become modules, so now somebody making these tables can go there and get those modules. I often liken it to a LEGO set for doing life cycle assessment, where you have all these modules and it is very critical to have the pieces, otherwise people who are trying to develop those labels will grab data wherever they can and it may be quite misleading and inaccurate.
Senator Ogilvie: That is what I thought I understood that you were referring to, and it sounds like an important database to have as we move into the competitive era that you have all been referring to as to where we are going. Is this something that you and others have approached Industry Canada on with regard to support for developing such a database that would have some certifiable characteristic?
Mr. Trusty: Yes, we have, and I will mention two things. First and with foresight, the Government of Quebec has already initiated this process by taking a major European data set and starting the process through an organization called CIRAIG, which is associated with one of the universities in Montreal to "Quebecize" it, if I can use that term. That may very well be a first step toward a broader Canadian database.
Second, if such a database is formed and housed in a federal agency, not some university or private entity, then we will donate all the data that we have to that agency. I think this is just a very critical step. It needs to be housed. It needs to have the credibility that comes by being housed somewhere like the National Research Council.
Senator Ogilvie: Dr. Innes, I really appreciated everything you said this morning in terms of the issues of academia interfacing. I want to come back to where you started because, first, I agree with your comment that the voice is rarely heard; that the focused research is as important and valuable and as fundamental as any of the so-called pure — it is in fact pure — approaches to fundamental and applied problems.
However, you said your voice was rarely heard. I would put the onus on you and perhaps challenge you back. When government is castigated for even hinting at the possibility that a granting agency should include a portion of their funds for applied or directed or area-specific research, the voices in support of that are rarely heard, unlike those who are totally opposed to any infringement at all with regard to the direction.
I do not want to get into the issue that you and I would understand in terms of applied versus pure research, but what I simply want to challenge you on is that I believe the voice you referred to needs to be heard. It has been around for a long time in the disciplines you referred to, indeed in many of the so-called pure areas, including chemistry and physics that have done tremendous work in developing applications through pure and basic research.
It is not really a question to you but a challenge to say when those situations arise we need to hear from those of you who are making such an enormous contribution through the academic areas that you have described and indeed the related areas.
Mr. Innes: Forestry has not been very good at getting its voice heard. It has not been very good doing that within the university systems. It has not been very good at doing that within the entire international policy arena. It is only very recently with climate change that forestry even sort of started to hit the news.
We are doing a lot and we need to improve our means of communication within the universities. I fully accept the point you are making Senator Ogilvie. We are a relatively small faculty within a large university. Our voice is not always heard. We need to convince the representatives of the universities who sit on committees such as NSERC and SSHRC of the importance of the work we do and of the need for them to have a substantial component of their research funds put to applied, directed research.
Senator Ogilvie: I understand entirely what you are saying there, but you did refer to a number of other faculties that have equal opportunity and I would challenge you to get your groups together and provide us with assistance in this very important area.
Mr. Innes: I will do that, sir.
Senator Mercer: To follow on one of Senator Ogilvie's questions, Dr. Innes, you responded that forestry has not been heard. Many people have not been heard. We have had some tremendous successes in research, and taking research and turning it into viable enterprises. You talk about the development of insulin, the industry that came with that, something as simple as the development of Pablum at the Hospital for Sick Children in Toronto. There is probably a need for someone to catalogue those successes. The public needs to be aware that we have had some tremendous successes in this country. All Canadians, including this committee that is conducting this study, need to know that innovative, intelligent Canadians have been able to take research from a university lab and turn it into a very successful industry. Many of those industries are helping people and have now spread worldwide, with insulin an easy example.
Mr. Trusty, you talked about a green code. Would you give a little more background on that? I believe you said it comes from the EU.
As well, you discussed a number of times about the database. The one thing I am interested in knowing is the cost of that database. What will it cost industry, government or whoever to develop this database? It would be nice to have a handle on what that might cost.
Mr. Trusty: Your first question was with respect to the codes. The International Codes Council is the developer of the International Building Code, the IBC. That code is in many jurisdictions, including jurisdictions in this country; the root code, if you like, that a jurisdiction adapts or uses as it is. That organization, the ICC, has now launched an International Green Construction Code with the idea to bring sustainability.
Codes have always been about health and safety. Now it is broadening out to be about environmental sustainability and social impacts will come into play eventually, but they are not as firmly there yet.
That is in process. A few weeks ago, there were hearings in Chicago, public hearings, votes taken on what stays and what moves out. A new draft of that will be released on November 3. The final hearings will occur at the end of 2011 and it will be promulgated in 2012.
Any jurisdiction, including jurisdictions in Canada, because this has an international tone to it, can adopt that code. The State of California, which tends to lead in that country, has a green construction code that is already out there and on the street and being used, so it is coming there. I believe that gives a sense of it. This is a very definite step forward.
The Province of Ontario also did some work on their building code to bring some sustainability elements into that code.
We are seeing this, and it is coming. A very important part of that is this method called life cycle assessment. I hope that answers the part of your question in terms of the codes.
Senator Mercer: I asked about the cost of the database.
Mr. Trusty: The cost can vary.
I want to refer to Japan for a second. There are two different numbers that I hear kicked around. One is that Japan launched a $2 million per year 10-year program. Another is that they have spent U.S. $60 million. I do not know which is correct, so I will not go there, except to say that many countries are spending a lot of money on databases, especially those that have export industries.
In the United States, the database has worked as very much a public-private partnership. The document that I mentioned that is circulating has some figures in it. I do not quite remember them, but the Government of the United States spent a little under $2 million. Industry has come forward with the data, so they are contributing in kind. The American Chemistry Council, as an example, put $250,000 worth of data just on a few basic resins, so the manufacturer of that carpet gets that resin data.
A public-private partnership is the approach. It is certainly the approach I would advocate. I think if we are looking at $1 million a year over a five-year program, basically what government has to do is build a good database, house it, ensure that critical reviews are done and that it is good, transparent data. That is the job of government and the database home, if you like. However, the data itself can come from industry.
Statistics Canada cannot do that because, by mandate, they cannot post data that they do not collect directly. This kind of data really must come from industry. It is not something you just send out a simple questionnaire about.
Mr. Innes: If I understand correctly, you were asking why we cannot publicize our stories more widely. Some countries do. Australia has a widely available book about the forest sector, and within it there are two-page case studies of innovation in forestry; the application of research and development, whether by government or by universities; and the successful outcomes. I am not aware of any similar publication in Canada. I use the Australian examples in my lectures because I have not seen such examples for Canada.
Part of the problem in Canada is that some of the best innovation is coming from not the largest companies who are very good at doing what they are doing, which is producing commodity products for the American market, it is coming from much smaller companies that are much more dispersed and are not represented by the Forest Products Association of Canada or other organizations. It is in the companies that have less than 100 employees where we are seeing some of the most exciting developments. Maybe my colleagues can confirm that.
If we could compile the stories of those companies, I think we would have actually a very different picture of the Canadian forest sector to what we have today.
Mr. Crotogino: If you are looking for success stories, I suggest you have a look at the NSERC Synergy Awards for Innovation. That is just one example of where they actually document an award and the collaboration between industry and university. There is some excellent stuff there. I have served on some of the committees. A similar committee I served on was on the Ontario Premier's award that looks at exactly these things.
You are correct that these accomplishments have not been compiled. I have seen something similar coming out of Finland, a country of 5 million people. It is a book put out by their academy of engineering called High Tech Finland. We should have such a book on Canadian successes in high technology. Perhaps it would be useful for the academy of sciences or the Canadian Academy of Engineering to get involved in this kind of thing because they are in a very good position to have that kind of overview.
Senator Raine: Mr. Crotogino, if NSERC is giving out the Synergy Awards for Innovation, they must consider many of the top innovators. That might be a good place to start with a compilation of our successes. I think that is a good idea.
Today it is nice because you do not need to print it up. Printing is not an expensive process because it can all be done electronically and you can print one or two off as you need them. I hope that would happen. That would obviously require collaboration across all the different sectors.
Mr. Trusty I have a question about the National Building Code of Canada. I think our code is stuck in the past, especially with engineered wood products and the limits on construction over four floors and things like that. Is there a task force of some kind working on updating our building code and possibly using life cycle assessment as part of our code?
Mr. Trusty: I am not an expert on codes. I have been involved in the green code work, but in Canada, I am not that directly involved. I will say that I believe that of British Columbia is working on higher construction up to nine storeys being examined with respect to the use of wood. Certainly six storeys is in the ballpark. I think work like that has been going on in Quebec. I do not want to go too far here because I am not an expert, and I see the chair wrinkling his brow, so I do not want to overstep.
FPInnovations has been doing some work in this area. They are a good source, and then the people at the National Research Council, who are central to the code's process, are an excellent source of information on this.
Senator Raine: When you referred to other countries adopting databases to support these labels, I can see this being a barrier to trade if we do not get active soon. How do you envision moving forward on a national database? Is this likely to happen in the next couple of years?
Mr. Trusty: I certainly hope so. This document that we have put forward in association with the Canadian Manufacturers & Exporters is certainly promoting that.
How can that happen? There first needs to be a selection of an agency like NRC to be the home. This almost happened a few years ago, and the concern from very senior people at NRC was, "We go down this path and then there is no funding to keep it going," and that is a very legitimate concern. The one in the U.S. almost died for that reason. Now with the stimulus package and so on, there has been a resurgence in that.
What it takes to build that database is available. We helped develop that in the United States. It is available. They are happy to share it. They would love to see a database in this country because these databases need to talk to each other, and that can be done with proper structure. Data can then start to move with products.
At the international level, the United Nations Environment Programme has a life cycle initiative that has been going on for some years, and its whole aim is to do that, to standardize this work across the world, basically, so that data can start to be consistent, databases can share information and so on. That is happening.
We are not even at the starting line in this country, and that is my concern. We are just not there, and we are a major exporting nation. We need to have this kind of data available, especially for our small- and medium-sized industries.
The first thing is decide to do it and then find the appropriate home for it, and I strongly advocate a federal agency. Then the initial steps are $500,000 to $1 million towards building the database. It is a website. It is pulling in the information and packaging it, and then it starts to move forward with some sort of a routine budget.
Industry will submit data. They are all anxious because they know what is coming. Work is going on in this country and in the United States on basic data by all the industries. All the major producers are doing this, knowing that these labels are coming. They want their data posted, because now they realize it is better that I put my data up there than have someone grab data over here that might be inaccurate, out of date or whatever.
It is not a huge job, but someone has to step forward and say, "Yes, let us do it."
I will add one other thing. Environment Canada and Natural Resources Canada have been involved in looking at this. Industry Canada is there. DFAIT, I believe, has an interest in this because of the trade implications and federal ministries that are looking at this. The question is that it needs that push, that step over the line, if you like.
Senator Raine: If Quebec has already adopted a European database and are Quebecizing it, as you said, does it make sense for that to become the national database?
Mr. Trusty: That can certainly be part of it. We in fact have a memorandum of understanding with CIRAIG, the organization who will do this in Quebec. Please understand; this is relatively new. Quebec put $1.5 million on the table this spring in their budget to move this forward. The work is just starting. We have an MOU with CIRAIG asking how we can Canadianize this. The idea is to use that Canadianized data as a stopgap to fill holes until true Canadian data comes forward. Adjusting foreign data is not a trivial exercise. You want to be sure that energy and transportation and all those things are properly taken into account. Eventually, that data gets pushed aside and the gaps are filled by data from Canadian industries.
Senator Robichaud: Following on this database, you just said we are not even at the starting line. Did I hear that correctly?
Mr. Trusty: Yes. We are not even really at the starting line.
Senator Robichaud: Who initiates the need? There has to be a need for it. Would architects and engineers use that data?
Mr. Trusty: Yes.
Senator Robichaud: They would only use it if there is a policy in place that says we need life-cycle analysis or data for whatever type of construction we use.
Mr. Trusty: Yes.
Senator Robichaud: Where is the chicken and where is the egg?
Mr. Trusty: First, the life-cycle assessment has been done on many buildings by this government. Public Works and the Department of Defence have been doing it for years. We have been involved in that over the years. If my memory is right, when the RCMP built a building in Halifax, they required that this be done. I know it was applied for a development at the navy base in Halifax as well.
That has been going on, but it has always been a departmental or ministerial thing out of Public Works, people in the bureaucracy who see the value and do it. There has never been a policy that it must be done on federal buildings. That kind of policy can be introduced where you say, "You will do this. You will do life cycle assessment of federal buildings so that we understand the environmental footprint of the choices we make."
How that kind of policy is put forward, I do not know. I do not know which ministry should be in the lead on that. I know that Natural Resources Canada and Environment Canada have been central in moving this forward. We have done another document that is in their hands, explaining some of these things and how to proceed. I believe there will be a presentation to the ADMs on this at some point, but it has not been scheduled yet.
It needs a concerted, senior-level focus, and it is important. The decisions can then be made on who sets the policy. Right now, it is haphazard and spotty.
I am not sure I am answering your question.
Senator Robichaud: I believe we are past the starting line.
Mr. Trusty: We are past the starting line in some sense, but not in understanding these environmental product declaration labels. I do not think that is well understood yet. There are some who understand it, but I am not sure it is understood at the senior levels, where it needs to be understood.
There was a database developed with funding from Environment Canada some years ago called the Canadian Raw Materials Database. Five industries participated at a high level, including the forest industry. Then there was no funding to keep it going, so it is dead. It has been dead now for two or three years. It sat on a website at the University of Waterloo. The website does not even get turned on anymore because there is no funding for it. This has to be a line item in a budget. That is my point. Frankly, if it is, the amount of money involved is a rounding error. It is not huge, but it has to be ensconced. It has to have ongoing funding that carries it forward. Otherwise, these things get started and they die.
Senator Robichaud: If we were to make a recommendation in our report in relation to who and where, could we have numbers? Usually, the first thing is how much it will cost. If you cannot supply the numbers, no one wants to go near it, because they do not want to be caught starting something that they cannot finish.
Mr. Trusty: There are numbers in the document I referenced. I have no problem tabling it with this committee. I can provide the document today through the clerk. The numbers in there are the database itself and an education program so our industry starts to understand what is going on. That might be done through CME or some other organization. I will provide that document, and there are numbers in there.
The Chair: We would appreciate it if you would.
Senator Robichaud: Mr. Crotogino, you say replacing glass with polymers also reduces vehicle weight. There are all kinds of applications where we can use polymers, but where are we? Are we in the "valley of Death" with those products right now?
Mr. Crotogino: It depends on who you define as "we." If you ever have a chance, visit a place like the Bell Mirabel facility.
Senator Robichaud: I go by there every week.
Mr. Crotogino: It is a fascinating organization, where they have everything from the first idea through to it being installed in a helicopter. There are a lot of polymer composites being used. My problem with that is that they are all petroleum-based. Where I want to come in with our organization is to stick my foot in with the forest-based materials. There is a lot of activity going on. By the way, in terms of databases, companies that size, with that kind of complexity of operation and the regulatory process that they have to pass through, they have those databases.
Where the forest products industry has a problem is that there are many small companies, none of which have that drive to get that database. A company like Bell Helicopter has that database. They developed this material. They have to. They live on it. I concur with Mr. Trusty that a database for building materials would be wonderful to have. If we look at companies like Bell, who use materials of construction in a different way and see what they are doing, this might be a good starting point to do collectively for that industry.
Senator Robichaud: What about in relation to forest products, polymer composites?
Mr. Crotogino: We are entering the "valley of Death." We have gone through it quite a way with the production of NCC. Actually incorporating this into materials now, we are at the very beginning. NCC has only been available in quantities large enough to do development work for the last two years. You cannot do very much development work with five grams per week. This push to get that material out in large quantities has been the starting shot for the development of polymer composites, and that is where we are right now. We have the starting shot. There is a lot of activity going on with FPInnovations; for example, they have chosen some specific partnerships. ArboraNano is looking for the same kind of partnerships with different partners. We are working closely together. We are entering that valley. The program I am involved in is a handy bridge to try to pull us through this. I think it is the right way to go.
Senator Robichaud: You say "bridge." How long is the time frame?
Mr. Crotogino: It depends. If you want to make a new varnish for floors that is three times as strong, we can have that out of door before the end of my mandate. Let us say in 2012 or 2013, that product will be on the market. If we talk about a material to put into a helicopter, that will take 15 years. If we talk about automobiles, we can get that out in probably five years on non-critical applications. It varies all over the map, particularly with the registration process and the certification process.
We will have things coming out of that valley within the mandate of ArboraNano, which ends on March 31, 2013.
Senator Robichaud: Mr. Innes, you mentioned that we have to recruit bright minds from outside the country if we have to. I was under the impression that we had bright minds here and we could not keep them here. Am I correct?
Mr. Innes: My impression is that Canada is doing quite well in recruiting the best people from around the world. Some people certainly come here and then leave. Many people are coming here, though, and a variety of federal initiatives has been successful in attracting some top scientists from around the world.
One of the big issues is bringing in young people and then keeping them because those young people see opportunities elsewhere. We need to remember the types of salaries that we pay are trained graduate students. Those students have done four, six, seven years or more of higher education training and then we pay them $12,000 or $14,000 a year for the average student. There are some valuable scholarships, like Trudeau and Vanier scholarships. For a student coming here as a young scientist to do a PhD and who might have a young family with him and might be spending three or four years earning $15,000, $14,000 a year, are you surprised if he then goes to the United States, where he may be offered $70,000 or $80,000?
If we are to be successful in bringing in students from elsewhere or in encouraging our own domestic students to enter research, we have to be a little more generous through the NSERC and SSHRC programs.
Senator Raine: Mr. Trusty, did you say that if all the other countries are going down this road of having a national database and being able to do the kind of life cycle assessment on the products, that if you mandate life cycle assessment as being required in your country, then everything you do will be exportable? In fact, if other countries are introducing life cycle assessment and we do not, then it could be a trade barrier for our products. Our glulams, for instance, would not be accepted because the life cycle assessment would not have been done?
Mr. Trusty: That is correct. Several years ago, an organization in British Columbia wanted to send out a test shipment of pellets to a country in Europe. They wanted to send out pellets that are used in stoves. They called me and said: "They will not let us in if we do not have a life cycle assessment." They were quite taken aback. That is now becoming enshrined in these environmental product declarations. That then was a kind of one-off situation. Sweden has been one of the leaders in this area in Europe. It is now becoming enshrined. As I mentioned earlier, France is starting a pilot program this coming spring, in 2011, where certain industries will be required to have these environmental product declarations, construction products being one. They can then say: "No. Anyone coming in must have this label."
Think of it like a food label, because that is almost exactly what it is, except it runs to three, four, or five pages. You have a label on the product that has a website to which you go to get the details and the label on the product has a synopsis, if you like, of that information. It is very much in the nature of a food label. You do not see food in any part of the world, I do not think, that is manufactured food that does not have a label. That is what is coming.
Senator Raine: I am not involved in putting the report together, but this is kind of a no-brainer, for the amount of money we are talking about here, to have the potential trade barriers does not make any sense at all not to do it.
Mr. Trusty: That is explained in the document that I will share.
Senator Eaton: Mr. Crotogino, in your opening remarks you said that bio-materials have to be cost competitive, but also they have to perform better. Why? Is this is there prejudice against bio-materials because they are new?
Mr. Crotogino: There is always a prejudice against anything that tries to get into the market. I am saying that it must perform as well as or better. What is better? Certainly it has to perform the functions. You do not want to go up in a helicopter that is made of green material and have it fall apart.
Senator Eaton: I picked up the part where you said they have to perform better. I wanted to know how you were going to combat that.
Can you explain to me how your organization works?
Mr. Crotogino: The business-led NCE is a program that started less than two years ago. We receive funding from NCE, which is the funding organization and we have to bring in matching funding from the industry. We are trying to establish a network that is driven by industry, with development of products, and then engage those research organizations, including the research in-house in these companies, to accomplish that work.
Our job is to try to bring these parties together and also to bring to the table, let us say the aerospace industry with the automobile industry, and focus on areas where there is some synergy.
Senator Eaton: Do you work before you get to a place like FPInnovations? In other words, are you the meeting place?
Mr. Crotogino: We are working in partnership with FPInnovations. I was actually employed by FPInnovations to write the proposal. When we got the funding, I then moved from FPInnovations to ArboraNano. FPInnovations is a member of this organization, as is Bell Helicopter, as is the Ontario BioAuto Council, a small company called Nanoledge, which is a compounder of materials. It is an organization that brings these together and tries to find common development goals. We then generate projects to carry out and bring products to that "valley of Death."
Senator Eaton: If you are at the beginning of the stream, FPInnovations would be the mouth of the river?
Mr. Crotogino: FPInnovations is doing some of this work as well. We are more in parallel, and FPInnovations is using ArboraNano as one of the irons it has in this fire.
The Chair: If you would permit me, honourable senators, I would like to ask a few questions of our witnesses. We are doing this study because we are still facing a crisis in the traditional lumber market, and pulp and paper. Some witnesses have shared with us some solutions, and I would like to have your comments.
We have heard the idea of moving from the traditional building codes to what you mentioned, Mr. Trusty — the green construction code. A bill in the House of Commons encourages government to use more wood in non-residential construction. I would like to have your opinion on this subject.
Do you think it is a step in the right direction to encourage that green code, knowing that Canadians are the highest per capita consumers of wood products? Are we on the right track in encouraging wood construction in industrial and commercial buildings?
Mr. Trusty: As I said in my presentation, I recommend against a nice, simple wood first policy. Why? This creates an enormous push-back from the competitive industries. What seems like a good idea to further the prospects of one industry ends up being a political football. I am told that is happening in British Columbia.
I have been involved in some aspects of the development of that green code in the United States around the materials and so on. I can tell you that competitive industries fight even having LCA in there because they know they do not stack up as well. I will not go into which industries, but that clearly is the case.
I am a strong advocate of saying let us push for requiring an environmental analysis and life cycle assessment is the accepted international way to do this in the world, and let the chips fall where they may. The chips will definitely fall in favour of wood in certain applications. All buildings are made up of a mix of materials. As an institute, we have always advocated using every material to its best advantage in a building. I am not an advocate for wood specifically here but rather for proper analysis and an approach to this. That is, to me, the key thing.
The second step goes to the codes. Allow me one anecdote. Years ago, I was working with the building research establishment. We had a memorandum of understanding with them in the U.K. They have a huge old dirigible hangar north of London on the coast. In that hangar, they built a several-storey steel building and a several-storey wood building — you can imagine how big this hangar is — and then they set them on fire. The wood building lasted quite a long time and could be safely entered. The steel sagged and pulled the walls in.
When we look at our codes, fire has been a major factor, as I understand it. I am not a code expert. However, simply because wood is combustible does not mean that the wood-constructed building falls down faster. There has been an example in this country of ICF, which is foam construction concrete with a formwork on both sides of the concrete. In a fire, I believe in Montreal, concrete blew 60 feet when the fire reached it because the foam melted so fast, and moisture in the concrete had nowhere to go and it blew it apart. Our industry in this country is fixing that by using polymers so they will melt too and create airspaces.
My point here is that we have to advance on these issues on codes on the health and safety side. When we do that, then we have a much more open path to looking at a nine-storey building with timber structural systems, for example, or a six-storey building. Those things have to be dealt with, and we have to get past the mentality that goes back too many years, in my view. Again, I am not a codes expert. I am just giving you a sense of what I see and hear.
The Chair: That is well said, Mr. Trusty. Do other witnesses have comments?
Mr. Innes: British Columbia is pushing the construction of six-storey buildings in China, very successfully. It has the codes in place in China to do that, using B.C. wood. There are nine-storey buildings under construction in London, and there are even 12-storey wooden buildings now being constructed. There is a lot of potential for multi-storey wood buildings.
Mr. Crotogino: I agree with the starting remark about the traditional industries. There is a tremendous opportunity to innovate new construction materials based on wood. Again, I will toot the horn of polymer composites. Parallam is an interesting composite made from wood and polymer adhesives. To strengthen these you can then slim down the columns. You can create structures that have previously not been possible. Then, of course, once you have innovated these, you can go into the code area. The industry must innovate in that area and develop exciting, new construction products that no one else in the world can make.
The Chair: Mr. Crotogino, on page 16, under the title "Target Automotive Parts for Bio-Transformation-Today," you itemize car parts. Where is the Canadian industry? Where is Magna? Where are we when we look at nanotechnology to supply these types of automobile parts in this type of a range of one to five years?
Mr. Crotogino: There is a strong push by the automobile parts manufacturers, like Magna Woodbridge to develop components from lightweight polymer composites. The use of nano-materials will enhance the strength of these composites and therefore enable them to reduce the weight further. We are at the beginning of this. Nano-materials such as carbon nano-tubes are expensive and generally come from a petroleum base.
Our objective is to try to bring into these composites things like nano-crystalline cellulose and replace fibreglass with natural fibres or natural products. That is a big push in the industry both in Canada and south of the border. There is a lot of activity going on in the United States. They do not publicize it until it gets out into a vehicle. I must say that when I first started to work with the automobile industry, I was pleasantly surprised to see the level of innovation, particularly in the parts area, in Canada. They are very receptive to our approach. We are looking forward to working with them vigorously through the Ontario BioAuto Council to make this happen. It has not happened yet.
Senator Braley: What type of parts?
Mr. Crotogino: The obvious place to start is in the inside of a car where the performance is not critical to the life of the driver — headliners, for example, car seats. Right now, they are using soy extensively as a natural material to make the foam. We want to work with them to strengthen that foam using nano-crystalline cellulose. Load-bearing floors in the trunk, for example, are being made out of paper.
Senator Braley: I have the idea. How cost effective are you in the material price?
Mr. Crotogino: They are competitive because they cannot put them in unless they are competitive.
Senator Braley: Are they competitive now? They are only making a tonne.
Mr. Crotogino: No, the polymer composite materials that they are putting into cars are cost-competitive. We need to bring our material into this process.
Senator Braley: Is it close to being cost-effective?
Mr. Crotogino: Certainly the NCC will be cost-competitive. If you look at the effectiveness versus cost, it will be better than carbon nano-tubes.
Senator Braley: Have you used it in areas of aluminum and what have you where you want layers as fillers, and what have you done to try to strengthen the profile?
Mr. Crotogino: FPInnovations has done some initial work to test the strengthening of polymers. The results I have seen in some areas are that 2 per cent of this material can increase the strength threefold.
Senator Braley: Then the real question is, is it machinable after?
Mr. Crotogino: Yes, it is, inasmuch as polymers are machinable.
Senator Mahovlich: Eventually it comes down to the fact that you cannot have a car that is too light. It has to make a certain turn at a certain weight, so you cannot have it too light. Is there a code that says you cannot have a car or a helicopter lighter than 500 pounds? A helicopter has to deal with wind, hurricanes and all the safety that goes on. It needs a certain amount of weight, so you cannot get it too light.
Mr. Crotogino: I do not think we are anything close to that yet.
Senator Mahovlich: You will get there.
Mr. Crotogino: When you talk about helicopters, they carry loads. The less weight you have in the helicopter itself, the bigger the load it can carry.
If you look at Formula 1 racing, they are constantly trying to reduce the weight there, and they are going very fast. I do not think we are anywhere close to a minimum weight that will be an issue.
Senator Mahovlich: When I am driving a car, I feel safer for some reason if it is heavier.
Senator Robichaud: You are carrying a big load.
Senator Mahovlich: I am a big guy.
Senator Raine: Senator Braley asked whether it is machinable and you said "inasmuch as polymers are machinable." Is that right?
Mr. Crotogino: Yes.
Senator Raine: My understanding of nano-particles is that they are made up of minute, supersmall bits. Say, for instance, you are making a tennis racket out of a nano-material and then you have to saw the end off; it creates dust. Will this dust become a danger to the people working on the assembly line?
Mr. Crotogino: The desk in front of you is made of a material that is composed of at least 40 per cent nano- crystalline cellulose. We saw this material all the time. Yes, if we do not wear masks, the dust will hurt us.
The answer to your question really comes down to how we incorporate these materials in the polymer matrix. Mother Nature has done a magnificent job of doing that with wood. To get those particles out is very difficult. This is why it has taken us so long to manufacture this material. What we need to do in the products is to ensure that it is equally well incorporated so those problems that you allude to do not happen. The regulatory process certainly in these health and safety areas will be followed for every product. NCC is currently being certified as a product. It has to pass a tremendous battery of environmental tests. Incidentally, it is passing them with flying colours.
Once that material is incorporated in a product, the product has to be tested as well. There are regulatory processes all the way down the line. There is inertia to overcome in introducing new materials, and that is why I said it has to be better.
The Chair: We had the chair of the Toronto-Dominion Bank, Mr. Thompson, earlier this week. He said that here we are crossing many lines when we look at pioneering in nano, in changing the traditional codes to footprint analysis and green analysis. He said that we have quite a challenge with venture capital.
Compared to the experience that you have going forward, we will need venture capitalists. Do you have any comments on that?
Mr. Crotogino: The answer is, yes, we will need them. We will have to create the opportunities and demonstrate the opportunities for them. We have to put together an attractive business proposition. That is why we have to start from the product end, from the vision, and use that together with the research to make a convincing business case and capture their imagination. That is the only way to attract venture funds into this business.
Mr. Trusty: I do not know a lot about venture capital, but if I were a venture capitalist, I would be concerned because — we are talking about forestry — this is an industry to which the public has a kind of an affiliation, the idea of cutting down trees. People will buy a plastic Christmas tree instead of one that was grown like corn to be a Christmas tree, and we all know this. It is about public perception and education.
This country has more forest cover now, I believe, than it had in 1900. Is that a fair statement? Does the public understand that? No, I do not think they do. They think of this as a destructive industry. Concerning the message on global warming, there is much evidence around the world, and including in this country, that the sequestration of carbon in building products and other products that use wood is a huge global warming asset to slow this process. Does the public understand that? Do the media understand that? I do not believe they do, not really.
With that perception of an industry that is destructive instead of one that is constructive, is a venture capitalist going to put his money there instead of into some new plastic thingy that will have a big market? My guess is no. We need that education. That is a very important step that is missing, to get this message out about what is really going on.
Mr. Innes: I believe venture capitalists could play a major role in helping start-up companies, particularly the start- up companies that are spin-offs from research projects that are being done in all the different agencies that undertake research, not just the universities. The venture capitalists could play a more significant role than government in that respect. There is aid to help start-up companies. The venture capitalists could probably provide not only the aid but also the advice in taking the product that is being developed all the way through to the market and ensuring that the marketing is done.
The Chair: I equate it to the wood basket. If we are to increase the quality of the wood basket, we certainly need to go back to the forests for better seedlings, better forest management practices, better certification, and the list goes on.
Dr. Innes, can you expand on a sustainable forestry management network? Who should be or who would be the players?
Mr. Innes: I am not sure I completely understand your question, but the sustainable forestry management network or centres of excellence ran for two consecutive periods. It is now closed.
You referred earlier to tree improvement. One of the things that Canada has always prided itself on is on its natural forests. That is why there has been much less emphasis on major tree improvement. British Columbia does require the use of improved seedlings in its regeneration patterns. Some other provinces may also; I am not familiar with the regulations in the other provinces.
The large gains that you get through tree breeding are generally aimed at plantation forestry. That is something that is not practiced so much in the West. There is much more practiced over here in New Brunswick in particular, Quebec and Ontario as well. It is there that you could see large gains in productivity.
I think a network of centres of excellence on the intensification of forestry would have a lot of value. One that encouraged the greater use of improved trees in the entire forestry sector would be of value.
Mr. Trusty: Senator, were you suggesting that we do not have sufficient forest certification?
The Chair: No, I think we do when you look at the markets, be it Loblaws or Home Depots across North America. They require their suppliers' forest certification. I agree with certification.
Mr. Trusty: Good. I believe I am correct to say that this country has the most certified forest in the world through the three systems: FSC, SFI and CSA. They are all operating at a high level in this country.
The Chair: For my last comment and question, if you can answer then you can send us comments.
As we look at what we call genetically modified seeds, we need to be mindful that when we sell to our North American markets, as well as when we penetrate the EU markets, that our certification must ensure that we can demonstrate that we have the best and the best-managed forests.
However, when we look at genetically modified seedlings, the Agriculture and Forestry Committee has seen that if we do have genetically modified seeds, it has an impact on the market. We saw that with McDonalds when they came out with their french fries. We have seen the McCain Group demonstrating what they were doing in their labs. They confirmed to the extent that they did not have genetically modified seeds.
When we look at the forestry sector, could we not have the same challenges if we try to manage it? Furthermore, if we look at the silviculture program, would it have an impact on our market share or the emerging markets that we want to tap into?
Mr. Innes: The whole issue of genetically modified seedlings and trees is one that is obviously controversial. There is a moratorium at present on their use in most countries around the world. It is important to distinguish the difference between transgenic trees, where genes are taken from another species and inserted into a tree species, for example, to make it more drought resistant or more pest resistant or more frost resistant as opposed to improved trees, which are simply ones that have been selected through normal processes, much in the same way as we would breed dogs and cats, or cows.
In terms of the use of genetically modified transgenic trees, the only country that I am aware of that is using them is China. They are not being used on a commercial basis, as far as I am aware, anywhere else. Some trials have been undertaken with a lot of resistance.
Talking to the geneticists that I work with, they say the biggest criticism against their use is the potential dangers. However, they are not allowed to test those dangers. They are in a bit of a conundrum as to how to proceed because there is so much resistance to even the idea at the moment. If we were to start using transgenic trees in Canada, there would be some genuine concerns raised and probably a lot of trade barriers or barriers put up to their use. They are certainly not endorsed by the certification schemes, for example.
The Chair: Thank you, Dr. Innes. Are there any other comments from the other witnesses?
Mr. Crotogino: I think that Canada has a huge advantage in the diversity of its trees. I think that the forest products industry, from the point of view of exploiting that diversity and focusing on the best that is available, is somewhere at the same spot that our wheat industry was about 100 years ago. In choosing the right kind of wheat to increase productivity and quality, we made tremendous progress in that industry. I believe that potential is still in our forests by selecting the right trees to propagate and pushing aside those that are not as good. We do not need genetic modification to do that. I think proper selection is important, and there is a strong program at FPInnovations to identify the factors in the wood that we should favour and where we should direct the forestry.
The Chair: On behalf of honourable senators, I wish to thank you very much for accepting our invitation to appear here this morning. Your presentations have been both informative and educational.
(The committee adjourned.)