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THE STANDING SENATE COMMITTEE ON AGRICULTURE AND FORESTRY

EVIDENCE


OTTAWA, Thursday, September 28, 2017

The Standing Senate Committee on Agriculture and Forestry met this day at 8 a.m. to continue its study on the potential impact of the effects of climate change on the agriculture, agrifood and forestry sectors.

Senator Ghislain Maltais (Chair) in the chair.

[Translation]

The Chair: I welcome all of you to the Standing Senate Committee on Agriculture and Forestry. Today the committee is continuing its study on the potential impact of the effects of climate change on the agriculture, agri-food and forestry sectors.

I am Senator Ghislain Maltais from Quebec, and the chair of the committee.

We have with us today from the Agricultural Institute of Canada, Mr. Serge Buy, Chief Executive Officer, and Ms. Kristin Baldwin, Director, Stakeholder Relations.

Before we begin, I would like to ask the senators to introduce themselves.

Senator Tardif: Claudette Tardif, from Alberta.

Senator Pratte: André Pratte, senator from Quebec.

[English]

Senator Bernard: Wanda Thomas Bernard, Nova Scotia.

[Translation]

Senator Petitclerc: Chantal Petitclerc, senator from Quebec.

[English]

Senator Oh: Victor Oh, Ontario.

Senator Doyle: Norman Doyle, Newfoundland.

[Translation]

Senator Dagenais: Jean-Guy Dagenais, from Quebec.

The Chair: Mr. Buy, you have the floor.

Serge Buy, Chief Executive Officer, Agricultural Institute of Canada: I am happy to be here with you today. I had the opportunity of working in the Senate when I was much younger, from 1993 to 2000. I have profound respect for this institution and the work you do here. I will make my presentation in English, but do not hesitate to put questions to me in French. I will be pleased to reply in the language of your choice.

[English]

Climate change is certainly an important topic of discussion among various groups, especially in the agricultural sector. Often, however, it has some difficulty getting noticed between what’s happening south of the border with Mr. Trump and various news media completely ignoring the issue, which makes it very difficult, but if you want to see the impact of climate change, you can see what just recently happened with the three hurricanes that devastated the Caribbean and parts of the U.S. If you want to see climate change, you can go to Newfoundland, as I was a few days ago, and witness the beautiful temperatures. It was amazing. I was at Cape St. Mary’s, and it was a completely clear day and 25 degrees on Sunday. It was amazing.

Climate change is a little bit more of an issue as it touches agriculture. Climate changes cause major uncertainties, and the agricultural sector is particularly vulnerable, as you have heard in past testimony.

Our future capacity to produce food, feed, fibre and fuel is at risk. The time to adapt is actually now.

Canada’s agricultural innovation is transforming this challenge into an opportunity. The agri-food sector was specifically identified by the federal government’s Advisory Council on Economic Growth, led by Dominic Barton, in a report called the Barton report as one of the most promising in terms of economic development, employment and innovation capacity. This is why we must match innovation and the opportunities created by this new situation.

Our agricultural sector provides one in eight jobs in Canada and employs over 2.3 million people. With a rapidly growing world population and favourable global market trends, demand for Canadian agri-food products is expected to rise to at least $75 billion by 2025.

Since 1920, the Agricultural Institute of Canada has been the voice of agricultural research and innovation. Our members include scientists and researchers, community groups, science and research institutes, universities and other groups in Canada that are interested and have a clear stake in the agricultural sector, mainly on the research side.

Our intention is to make the agricultural sector more efficient while taking steps to mitigate climate change. Whether it is developing carbon sequestration initiatives using biochar or using plant genomics to develop crops resistant to a broad spectrum of stresses, including climate change, drought, floods, et cetera, agricultural research is at the forefront.

Canola is a prime example of agricultural innovation in Canada, and I think you heard from canola groups a few weeks ago. It was developed by agricultural scientists in the 1970s, using traditional breeding techniques. Canola has grown to be one of the world’s most important oilseed crop and the most profitable commodity for Canadian farmers.

Technological advancements and new innovations do not happen overnight. If Canada is to be prepared to address future challenges, steps must be put in place now. The Agricultural Institute of Canada has developed a number of areas where government leadership would help spur Canada’s agricultural science and innovation sector and ensure that new technologies developed are used to the fullest extent possible.

This includes establishing a national innovation strategy. This initiative would bring all stakeholders together toward a common goal: minimizing the agricultural and food sectors contribution to climate change while fulfilling one the government’s key roles to foster and nurture innovation here in Canada.

Agricultural innovation has the potential to be a key engine of economic growth, job creation and productivity. We must take steps to take advantage of Canada’s strong innovation potential, and a comprehensive national innovation strategy is a good first start.

After taking into account various stakeholder strengths, and existing expertise and opportunities on the broader scale, the strategy should identify specific tangible priorities by sector. Care should be taken to ensure that areas of cross-sectoral collaboration are identified. This will ensure that Canada’s research capacity is fully realized and that our scientists and researchers have the tools they need to succeed. Ultimately, this strategy will pave the way for Canada to become a global leader in innovation.

Canada is now the fifth largest global exporter of agri-food products, generating export sales of $55 billion, approximately 5.7per cent of the total value of world food and agricultural exports. A rapidly growing world population, rising income in developing countries and favourable global market trends are expected to raise demand for agricultural products worldwide. This will contribute an estimated 2 per cent annual growth in Canada’s agricultural trade by 2025. Capitalizing on our strong innovation potential will ensure that Canada’s agricultural production will help meet future market demand.

Sometimes the research and development of the technology isn’t enough. Special efforts need to be taken to ensure that innovation and new technologies that can help minimize the effects on agriculture of climate change are adopted or implemented. The government has a role to play in this respect. Incentivizing the adoption of those technologies or creating favourable conditions for new technologies to be utilized will ensure the benefits of new innovation can be felt on a broader scale.

Earlier this year, in the spring, AIC brought together government officials, industry representatives and other agricultural research stakeholders to discuss agricultural innovation in a changing environment. I believe this was the first conference where we really brought together the government, producers, scientists and everybody in the same room to talk about major opportunities.

During this conference, agricultural researchers and other experts discussed how innovation can minimize agriculture’s contributions to climate change. One theme echoed through many of the presenters and sessions was the government’s role in creating incentives to encourage the development, deployment and adoption of green technologies. There are countless examples of agricultural innovation that will positively affect the impact agriculture has on the environment, specifically greenhouse gas emissions, and yet most are not utilized to their full potential.

Our recent conference heard from a representative from the Prairie Climate Centre, an initiative of the International Institute for Sustainable Development and the University of Winnipeg. He explained how new technologies, especially precision agriculture, have the potential to have a significant and lasting impact on the agricultural sector. However, in many cases, the infrastructure does not fully exist, meaning that producers are not able to take advantage of this new technology.

In the early phases of technology, called development, there is always a stage where the cost of adoption heavily outweighs the benefits. It is vital that steps be taken to bridge this gap. An example of one incentive might be to encourage farms and producers to adopt new technologies at earlier stages. This could be done in a number of ways, including a broader range of taxation benefits.

History has shown us that collaboration can benefit all parties involved, and agricultural research is no different. Without collaboration on research, both academic and applied innovation and new technologies may never be fully realized. This government has taken some steps to facilitate this for super clusters. This is a good start. But steps should also be taken to create a more favourable climate for private investment in the development of climate change-related innovations and technology.

The main goal of super clusters is to encourage cross-sectorial collaboration and bring stakeholders together toward a common goal. This is similar to a key recommendation from AIC’s national agricultural research policy. We believe that the government should take further steps to incentivize collaboration and research, and an important first step should bring all stakeholders together to set medium- and long-term goals and priorities.

The government does consult various organizations and does bring, on a one-on-one basis, discussions on setting objectives and priorities, but at no point in time does the government bring everyone together so there can be cross-sectorial discussions, and I think that certainly is lacking. It used to happen, but the cuts a few years ago changed that, and we think that should be brought back. We’re hearing that from all of our stakeholders.

Government investment in agricultural innovation has been steadily declining over the last three decades. In 2015, budgetary expenditures specifically financing the Canadian agricultural innovation system represented less than one tenth of a per cent — or 0.046 per cent — of Canada’s total. This is a worrying trend. However, evidence suggests that agricultural research has a high benefit-cost ratio and that the value of research and development is worth many times the value of its expenditure, and yet decline continues. We need to reverse this trend and create positive conditions for private investment in research capacity, as well as increased public commitments.

Rather than being an unavoidable challenge, carbon pricing has the ability to become a key driver of innovation in Canada’s agricultural sector. Ultimately, it could make it the most cost-effective to innovate. By working with key industry stakeholders, researchers and other interested parties, the government could reinvest the additional tax revenue collected as a result of the carbon pricing in green innovation for the agricultural sector. This means that carbon pricing could positively impact Canada in many ways, including spurring creation of the new technologies, encouraging the adoption of those innovations and ultimately reducing our carbon footprint.

In conclusion, Canada’s agricultural sector is particularly vulnerable to climate change, but the expertise to mitigate the effects, lessen our impact, and adapt our production lies with our agricultural researchers. Biochar is a prime example of this. Researchers took a relatively old idea and revolutionized it to be used in a way to minimize agriculture’s impact on the environment while helping increase productivity goals. This innovation has the potential to transform our prairie soils and increase output while on the cutting edge of carbon sequestration.

Unless we capitalize on our strong innovative potential, Canada’s agricultural productivity gains will be unable to sustain momentum in today’s changing global trade environment.

Canada’s Minister of Environment and Climate Change, the Honourable Catherine McKenna, recently noted the following:

Acting now to deal with current and future climate change impacts will help protect Canadians from climate change risks and reduce their costs from climate-related damage and health issues. By developing made-in-Canada adaptation expertise and technology to deal with the effects of climate change, we will create good middle-class jobs and spur innovation.

AIC echoes those sentiments and believes that the strategic investments in Canada’s agricultural innovation will help us to mitigate the effects of climate change and allow our agricultural sector to adapt to the new reality.

Thank you.

[Translation]

The Chair: Thank you very much, Mr. Buy. We will now have the first round of questions.

[English]

Senator Doyle: Thank you for your presentation. It was very interesting. Could you talk a little bit more about the impact on the consumer of reducing the carbon footprint? It’s very important, of course, to adapt to practices and technologies to reduce the carbon footprint. Is the consumer willing to pay a premium for a product that is not only green but costs a whole lot more to produce in a greener way? Do we have any idea of the impact on the consumer and how the consumer is going to react? The industry will obviously have to pay a price for reducing the carbon footprint. It will be taxed and, as for how much tax, we don’t know what’s coming, but I don’t think the consumer is fully aware or has fully engaged themselves to try and determine what effect it’s going to have upon the wallet, the pocketbook. I wonder if you have any thoughts on that.

Mr. Buy: The question, senator, is whether the consumer is willing to pay now for increased costs or willing to pay later for much more increased costs. If we are going to be, for various measures, encouraging certain agricultural research and innovation and that has an impact on cost for the consumers now, this is one thing. The fact of the matter is that if we don’t deal with the issue today, prices will increase in the future and there will be no choices for them to pay much more in the future.

It is probably safer and wiser to deal with this now rather than later. Are the consumers going to be happy? Probably not. Will the consumers be happy later if we don’t deal with this? They certainly won’t be happy. We have the responsibility to be forward-looking, and we have the responsibility to be good stewards of our economy, our environment and our resources. And agriculture is a resource. To not deal with this issue now would be, I think, very negative for consumers.

Certainly, the early adoption of those innovations will help mitigate the cost. There is absolutely no doubt about that. So the earlier we move forward with adoption of some of those technologies and innovations, the better it will be.

Senator Doyle: We hear very little about what impact it’s going to have upon the consumer. Are you aware of any research that’s been done officially to try and get a handle on it and to pinpoint exactly what’s going to happen there, or is it let’s wait and see? As Mr. Trump would say, “We’ll see.”

Mr. Buy: Mr. Trump is quoted in a number of ways that I don’t want to be quoted with. I am not aware of any research, senator. That doesn’t mean it hasn’t taken place, and I can certainly ask my staff to dig into this more. If we find something, we can certainly come back to you. We have a good network through our membership and stakeholders as well, so we can certainly distribute your question and come back to you.

Senator Doyle: Thank you very much.

Senator Bernard: I thank my colleague for that question. Mine was very similar, so I’ll build on that.Are consumers considered stakeholders? When you’re bringing stakeholders together, are consumers considered part of that overall group?

Mr. Buy: Absolutely, senator. Consumers are probably one of the most important stakeholders. Clearly, we can devise new technologies and products, but if the consumers are not willing to adopt and purchase them, that will be all for nothing, and that’s not a good idea. So consumers are definitely an important part of the discussion.

Senator Bernard: In the presentation, that doesn’t come across. It may be useful to state that more specifically.

Mr. Buy: Absolutely.

Senator Bernard: With many consumers who are marginalized, who are dependent on food banks or living in food deserts, for example, it’s not a matter of being willing; it’s a question of being able. How are those realities being taken into consideration in looking at the number of options you’re considering?

Mr. Buy: We’re not an economic development think tank, senator. That question is an important one, but I think that question is geared more towards government organizations that are dealing with low-income Canadians and how we are going to be assisting them in the future with rising prices.

You probably saw, senator, the impact of rising prices of rice in countries such as India recently. There were riots and people that died as a result of those things. Clearly, climate change and changes in our environment have had impacts already on consumers, and the poorest members of our society are feeling the impact already, whether or not it’s in developing countries or whether or not it’s in Canada.

Your question is extremely valid and should be taken into consideration; whether or not we are the best organization to respond to it, I’m not sure.

Senator Bernard: Not to engage in a debate but, while it may not appear to have direct influence, when you’re looking at the multi-sectorial, that needs to be a part of it because it is so important. You would have a lot to contribute to those discussions as those discussions would have a lot to contribute to the overall message you’re putting forward.

Mr. Buy: Far be it for me to engage in a debate with you, senator. My intention is to engage in a discussion with you. My intention is to make sure that we do have all the voices in place. I think the government will have to take a leading role in those discussions to ensure that people are protected and how to move forward.

So I do agree with you. It doesn’t come across in my presentation that consumers are front and centre. That wasn’t the intention of the presentation. The presentation was to talk more about what should be done and what can be done. Clearly, everything has to be done with the consumer in mind. Thank you, senator.

Senator Tardif: Thank you very much for being here this morning. You have put a lot of emphasis on research and innovation as a way of going forward. We heard from a group on Tuesday, USC Canada, that are very much involved in ecological agriculture and organic farming practices. They indicated that they receive less than 1 per cent of funding for that type of research as compared to more conventional types of research projects that were being funded. What importance are you giving to that type of farming practice?

Mr. Buy: Every type of farming practice needs to be taken into consideration and be looked at for the benefit it provides our country. I think, senator, part of my answer lies in the presentation when I mentioned that we need to bring people together, and we need to have a thorough discussion on the priorities for our research and innovation.

The government has had discussions individually with organizations or silos of organizations, but it hasn’t done an adequate job, in my mind, of bringing all the sectors together to have a thorough discussion on what should be the priorities for research and innovation that the government is actually funding. Governments, both provincial and federal, are the key funders for that type of research.

I will avoid specifically targeting that organization or organizations like that. I think we have to stop trying to pick up favourites on an individual basis. We have to bring the research community, community groups and even consumers to have real discussions on where we want to go in five years, twenty years, and start looking at those objectives and creating a long-term plan.

Sadly, I don’t think we have a long-term plan in the present case. I know we have had a whole bunch of consultations in the last couple of years, and that’s fantastic. However, we have yet to see the result of those consultations. We have potentially what John Manley called consultation constipation. We need to come back to results and strong messages.

We need to bring the stakeholders together to have a real discussion and then finalize our research objectives. Whether or not it’s organic farming or biofarming, I’m not entirely sure whether or not this is the main thing.

We also need to be a bit careful in terms of what is said by certain people. I remember not long ago the new president of the United States was debating whether or not climate change was real. It’s a bit of a concern to us when the words and the research done by scientists are put down by people who are saying no, this is the next best idea. You’re seeing those discussions right now on the use of antibiotics and the use of various things in livestock.

We need to come back to reality and we need to come back to what people who have been independently hired have provided in terms of opinions on the use of those new technologies and new science and whether or not we trust them. Scientists work on facts. I know that this government prides itself on evidence-based decision-making. However, when the evidence is there, we need to make decisions and support it. Whether or not we move forward and suddenly adopt one type of bio or organic farming, it needs to be supported by science whether or not it is really the best thing to do. I’m not debating whether or not it is. I’m just saying that when we make decisions on funding, we need to make sure that it is supported by strong science.

Senator Tardif: I would agree with you on the importance on making decisions based on facts and science.

The Government of Canada has put forward the sustainable development technology fund. How does that fund fit in with your suggestion that we need a national innovation plan?

Mr. Buy: We have yet to see a strong impact on agricultural research from that fund and at this point we’re not seeing much of an impact.

We are somewhat disappointed about the fact that when we’re looking at a lot of the appointments by the federal government related to science and innovation, agriculture is put aside and discounted. When we are looking at the leaders that governments are appointing to discuss the science strategy, we’re not seeing any of the leaders that function in agricultural research. It is hard to look at what seems to be, from a finance perspective, one of the highest level priorities, namely agriculture. When you’re talking about the Barton report, Finance Canada’s impact and the super clusters that are being developed, it’s hard to reconcile that those seem to be strong and high priorities. However, when it comes to appointing people in terms of science, we’re not seeing many agricultural leaders.

To come back to your initial question, the direction of the fund is not entirely clear to us right now, but I’m not seeing a huge impact on agriculture yet.

Senator Tardif: That is very interesting. Thank you for sharing that comment with us.

[Translation]

Senator Pratte: I have two questions. On the one hand, your organization is advocating for increased funding for agricultural innovation and research. We are here to talk about the fight against climate change. Regarding research on agricultural innovation, in your opinion what part should be specifically devoted to climate change?

Mr. Buy: I really enjoyed reading your work, Senator, when you were a journalist, and I am happy to be at this table with you.

I have always refused to say that we should obtain this many billions or millions dollars more for research, or which percentage. I think that this goes back to the discussions I had a bit earlier with another senator, to whom I said that we need to get people together so that they themselves may make these decisions. There has to be a bigger discussion table that can bring together the various agricultural producers, governments, universities and even consumer groups, and we must hold that discussion. It would not be reasonable to say that we should have, say, 12 or 12.6 per cent. That debate needs to take place.

One of my main recommendations would be to gather people together so that we get an overall view of the matter. We may believe that these discussions are taking place, but in my opinion they should have happened long ago. Unfortunately, no one thought to assemble governments, the universities and consumer groups. These discussions would serve to define the orientations and objectives in terms of percentage of financing to be allocated to research or innovation in agriculture, in order to counter climate change.

Senator Pratte: On the issue of setting a carbon price, either through a tax or a quota to limit COemissions, you are in favour of that, and stated that we must reinvest the sums generated by that carbon pricing system into research and new technologies.

The producers and farmers’ groups we met with, among others those who export, think as you do. They say they are worried that this tax will make them less competitive with regard to their foreign competitors, particularly in the United States. They would prefer that there be no tax on carbon or quotas on CO2 emissions. Is that something you keep in mind?

Mr. Buy: Absolutely, senator. I share that concern. We can try to fight this idea, but the commitment remains and will go forward. It would be better to try to find solutions to decrease the impact that this may have on our producers, rather than trying to fight something that is, in my opinion, inevitable.

I don’t usually recommend that we tilt at windmills. That is why I think it is preferable that we fight for something that is more attainable. What would be more attainable is access to subsidies to support producers, or solutions to fight other impacts, either by more funding for research, or adopting research for farmers.

The cost of labour in Canada is high. The workers themselves are increasingly hard to come by, especially in the agricultural sector. We will not be able to compete effectively in such a context. We could if our technology was more advanced, and if innovation were at a higher level. That is what will allow us to go forward.

It is important to ensure that we can go forward with the help of our best elements, and these are the implementation of the research that already exists and offers a lot of possibilities, and support for adopting the research that is already ongoing. That is my main concern.

Senator Dagenais: I thank our witnesses for their presentation. My first question is for Mr. Buy.

You spoke about the positive effects of innovation and the adoption of a national strategy. Practical experience shows that in a country as vast as Canada, it is not always easy to rally everyone to set objectives. What are the main challenges your organization is facing, and what recommendations could we include in our report to help you?

Mr. Buy: Senator, you are quite right when you say that obtaining a consensus in a country as vast as ours can sometimes be difficult. I took part in several discussions in the Senate long ago, and when we prepared our agricultural research policy, the main recommendation was precisely that we get people together. That is the recommendation that had the most success with various organizations. Over 75 organizations signed it and stated that they would support our agricultural research policy, including among others the recommendation that discussions be held at the national level to set objectives.

The organizations that supported us were universities and various commodity groups, producer groups and agricultural research organizations. I can tell you that we obtained a consensus on the fact that this discussion was necessary in order to determine those policies. I don’t know if we will obtain a consensus for the policies put forward subsequently, but I think that we at least have to talk about things; that is the first step.

Regarding agricultural research, you should recommend that people get together to discuss things. For the moment, people will say that that is already being done and that talks are being held with agricultural research groups, but this is mostly done in silos, individually, and that is not necessarily beneficial.

All of these organizations that benefit from government support will say that they are satisfied in that regard. However, if you go to see them and say: “Don’t you think we should establish national, multidisciplinary research objectives?” The answer will certainly be: “Yes, we think that should be done”. The best way of setting those objectives is to hold these discussions.

The other recommendation needed for regulation is certainly the adoption of measures allowing for the use of new technologies. At this time, we are doing research, and new technologies are developed, but the time that elapses between the development of research and innovation and the adoption of new methods by producers is very long. The measures are not there to support them, and I think that they should be.

Senator Dagenais: I can’t stop myself from speaking about the potential funds collected through a carbon tax. We know that the word “tax” frightens everyone, but in your opinion, what proportion of those funds should be allocated to research, as compared to monetary assistance granted to producers in the field? I understand that you don’t like percentages, but I think that this tax should be used to help producers.

Mr. Buy: I understand your view point senator, and I will refer you to what I said. I am not the person who will suggest such or such a percentage.

In my opinion, trying to establish percentages individually is something that will never be accepted and never adopted. You have to rally people to hold that discussion, and arrive at recommendations from the industry and the research sector. I think it is preferable that this come from those who are going to have to pay this tax and will benefit from these subsidies. I think it will be better if it comes from them and not from me. In any case, they have more credibility than I do.

[English]

Senator Oh: Thank you for your presentation. In July 2015, the agriculture stakeholders gathered in Ottawa for the AIC 2015 Conference to provide the input to help shape the national policy for agriculture research innovation.Now two years have passed since the policy was put in place. Can you give us a quick update on the progress of the agricultural research and innovation sector to reduce the carbon footprint? What have they done, two years after?

Mr. Buy: The policy was ours, senator. As I indicated, it has been supported by over 75 organizations. Does that mean that the Government of Canada turns around and says, “We will implement every recommendation”? That would be really nice, but that never happens.

Our policy recommendations were exactly that; they were recommendations. The fact that I’m still talking two years after about bringing stakeholders together to have the discussion worries me a little bit. It means to me that the government may not have listened as much as it should have.

We were pleased to see some of the recommendations implemented in various budgets in terms of increased support for research and innovation in the last couple of budgets. We were also pleased to see that in the last federal election all three major parties actually talked about agricultural research in their platforms or addendums to their platforms. It was the first time since 1984 — and I promise I didn’t go beyond 1984 — that the three major political parties talked about agricultural research. For me, that was fairly relevant.

Where are we today, senator? We’re still talking about things. We’re still consulting. We’re not there yet, I would say, and that concerns me a little bit. When I talk about maybe too much consultation and not enough action, I stand by those comments. I think it’s time to actually put in place various proposals.

It was interesting to see that the Dominic Barton report came earlier this spring and almost immediately we had the recommendation of a super cluster and now we have funding for the super cluster and have a decision on the super cluster. I think this is a very good thing, to be clear. I think more can be done in various other sectors as well.

Senator Oh: I thought our government had put headlines and a lot of news on the international stage about how concerned we are about climate change. So nothing has been done?

Mr. Buy: I don’t want to say that nothing has been done, senator. Indeed, Minister Duncan right now is at the G7 making a number of statements. I wouldn’t say nothing has been done. I think at least we moved discussions and we were getting probably a little more collaboration within the different stakeholders on various issues.So I wouldn’t want to give the impression that nothing has been done. Could more be done and more implemented? Probably. I think it is time now to maybe stop the consultations and actually start looking at concrete measures.

Senator Oh: Thank you.

[Translation]

The Chair: Mr. Buy, there are two topics I would like to discuss with you.

I believe it was in 2014 that the Senate produced a report on innovation in agriculture. We had invited the majority of Canadian universities that do agricultural research, from one end of the country to the other. We had invited large agricultural enterprises and farmers. There seemed to be a consensus about research. Obviously researchers feel that they never have enough money. I never met a researcher who said he or she had too much money, that’s normal. Research is done step by step. When one step is finished, we go to the next. That is how important research that moves things forward in areas that interest people is done.

Is the Agricultural Institute of Canada in agreement with universities and agricultural enterprises with regard to research?

Mr. Buy: Absolutely. Some of the members of the agricultural institute are universities. I am also very happy to say that when we hold conferences, the majority of universities that do agricultural research take part in them. We have several representatives from various universities on our board of directors. The universities are well represented.

As for the private sector, let’s take one of the nice examples of what is going on in agricultural research, at the Vineland Research and Innovation Centre close to Niagara. I’m sure you’ve heard of it. They do excellent work and are one of our members, and one of their representatives is a member of our board. Obviously, we listen to all of our members and not just to them, but also to the people who take part in our conferences. When we finish a conference we prepare a policy. We also seek the support of organizations that have not taken part in our conferences but may want to express an opinion.

When we established our agricultural research policy, we consulted over 475 agricultural organizations. It was an enormous consultation, and we continue to consult organizations on different topics. And so the short answer is yes, senator.

The Chair: I would have one last point, Mr. Buy. You are no doubt aware that the European Community imposes a carbon tax which it redistributes to the member countries of the community. Can we compare that approach to that of Quebec and to the one being proposed by Ontario?

Mr. Buy: I am not an expert, and so I would prefer not to express an opinion on this. I apologize.

The Chair: The European Community redistributes income from the tax it collects from its member countries. The only problem is that there is no accountability. We don’t know what the countries do with the income from that tax, and a lot of them are grumpy. Some of them really allocate that money to research and to the reduction of carbon emissions. Quebec does it well, because it invests in research with the enterprises. Whether we like it or not, the carbon tax is going to be imposed throughout the country. We met a lot of stakeholders, and contrary to what people might think, the majority of enterprises are not against it, far from it. However, they are concerned about whether that tax will really be used for research to eliminate the effects of carbon emissions, as much as possible.

Mr. Buy: Senator, that is a very good question. What is happening in Europe concerning the lack of clarity on how the money is spent happens in any federal or confederate system, or any other entity of that type, and we have had the same problem in Canada. Whenever you establish a national program where the money is redistributed, there are always questions about that.

We saw the same situation in Canada recently in the health sector, or in another one, where the federal government was asking the provinces to account for the amounts provided. The provinces are not very pleased to have to provide accounts. In a system like ours, this is normal. It is important that the profits from the carbon tax be redistributed intelligently, to further agricultural research and innovation. Talking strictly about research is not enough; we need research and innovation.

In addition, we have to prepare envelopes to create mechanisms to help producers adopt the results of that research and innovation, so that we can provide more support there.

So I agree with you 100 per cent Senator; we must follow up to see where the money will be distributed and redistributed, and it is important that there be effective accountability as to the distribution of this money in future.

The Chair: Thank you.

Senator Petitclerc: Thank you for being here. I’ve been listening to what you have been saying, and the point I want to make is that before we can have solutions, before even setting objectives, we have to have all of the documentation and scientific proof in hand, and that is why research is necessary. You spoke a lot about people working in silos, and for the need to get all of the actors together.

Regarding the impact of climate change on agriculture, I’m trying to understand how things are organized, and if we are well equipped and up to date from the perspective of science and data. If we look at the past and the present, do we have enough data? Are we well equipped? Are we doing our homework well so that we can make projections and eventually make decisions?

Mr. Buy: A lot of research has been done in this area. We have done enough research to enable us to make decisions based on good science. From that perspective, we are properly equipped.

You heard me say two things. On the one hand, there is too much consultation. On the other, I still maintain that we have to get people together to discuss things. That may seem contradictory, but I think that consultation is ongoing. We’ve seen consultations happen on Facebook, and that’s all very nice, but at a certain point, you have to get people together. Now that we have done all of these individual consultations on different topics and in silos, we have to see what the sector as a whole, the sector that is concerned with agricultural research, and also consumers, think, in order to chart our course. That is the last step before making intelligent decisions, and everyone has to get together.

And so my point is that we need fewer consultations, but at the same time I am saying that there is one step that is missing. Sometimes it is easier for the government to say that it has consulted individually, rather than to get people together and understand that together they can communicate better and have different visions as to the sector in general.

[English]

Senator Oh: I’d like to follow up with our chair’s earlier question. Do you think governments should spend revenue collected from carbon tax in Canada itself on research and innovation instead of taking the money on the international stage where we don’t know where the money will be properly spent? That is important revenue that comes in from the agricultural sector.

Mr. Buy: People talk about “buy in the U.S.” or “buy in Canada” policies. I’m not going to start a “research in Canada” policy. What I would say, senator, is that we certainly have the capacity to undertake the research and innovation. We are second to none in our ability to have research done in Canada. The reports and studies that come out of our researchers are fantastic, so my strong preference would be that Canada has an important stake in this and that the Canadian research community leads this.

However, I would be wrong not to say that we also have a lot of international linkages, and it is by bringing researchers from various countries that, on occasion, we increase our capacity to move ahead. I look at one of our board members, who is a doctor from the University of Guelph, who has a lot of contacts and communications with researchers in Brazil. That has enabled both Brazil and Canada to move ahead. Cross-sectoral collaboration is essential. Canadian focus is essential, but let’s not limit it to that; let’s also involve the international community.

I’m not saying we should send all of our money internationally, but I’m trying to say we shouldn’t limit it to just Canada because it is important. Climate change is global, senator. Agricultural technology that we’re using here has on occasion been developed elsewhere and vice versa. Having international cooperation is essential.

Having accountability is essential as well. I’m with you on making sure we have accountability for all the dollars spent. The agricultural community would be much more at ease to see strong accountability given regarding that.

Senator Oh: Thank you.

Mr. Buy: If I might mention something, senator, on November 28,actually — you may have already received this — the AIC is meeting in Ottawa, and we will have some discussions with a number of people in Ottawa. We will have a number of our stakeholders who do research and innovation in Ottawa meeting with you. That will be an important day on the Hill for our community to explain agricultural research and the developments we’re doing. If I may, almost like a commercial, regarding this, we do need to have a presence of senators.

I am immensely concerned that agriculture and agricultural research is often a footnote in the discussions in our Parliament. I look at the parliamentary media, which has absolutely no idea what agriculture contributes to Canada. You have a role, senators, to educate them. You have a role, senators, to let them know about that. We’re going to try our best on November 28, and we will continue this on a regular basis, but education of the importance of agriculture and climate change is essential. That’s a key role that you have as well.

[Translation]

The Chair: We will be waiting for your invitation with great attention. Thank you for your brief and for the discussion we have had with you. We are preparing a report that will be issued during the year, and we want to collect the opinions of all of the stakeholders in the agriculture and forestry fields. Canada is a country with a promising future in agriculture and forestry, and we want this to continue for many centuries.

Our second group of witnesses this morning is, first, Mr. Robert Larocque, Senior Vice-President of the Forest Products Association of Canada, and Ms. Kate Lindsay, Vice-President of Sustainability and Environmental Partnerships.

Thank you for accepting our invitation, and welcome to our committee.

[English]

Robert Larocque, Senior Vice-President, Forest Products Association of Canada: Thank you Mr. Chair and members of the committee. I do have copies of my remarks that I made available for committee members.

I’m very pleased to be here today during National Forest Week to represent the Forest Products Association of Canada as part of your study on the potential impacts of the effects of climate change on the agriculture, agri-food and forestry sectors.

I would also like to introduce Kate Lindsay, our Vice-President of Sustainability and Environmental Partnerships. If there are any questions relating to the forestry side of our sector, she will be able to answer them.

[Translation]

The Forest Products Association of Canada, FPAC, is the voice, in Canada and abroad, of Canadian wood and pulp and paper producers, for issues that involve the government, trade, the environment, and the topic we are discussing today, the impact of climate change on our sector.

[English]

Let me give you a quick snapshot of how important the forest products sector is to Canada’s economy. It is a $67 billion a year industry that represents 12per cent of Canada’s manufacturing GDP. The industry is one of Canada’s largest employers, operating in 600 forest-dependent communities from coast to coast, mostly in rural areas. We directly employ about 230,000 Canadians across the country.

The sector is also important when it comes to the Canadian environment. As custodians of almost 10per cent of world’s forests, we take our responsibilities as environment stewards very seriously. Canada has the most independently certified forest in the world, with 166 million hectares, or about 43per cent of all the certified forests. In fact, repeated surveys of international customers have shown that the Canadian forest products industry has the best environmental reputation in the world.

Climate change is emerging as the signature issue of our time. Forest product companies have been ahead of the curve by aggressively reducing their carbon footprint and running more efficient facilities. In fact, pulp and paper mills have cut their greenhouse gas emissions by an impressive 66per cent since 1990, an equivalent of 9 megatonnes of CO2 per year. We don’t use coal anymore and we barely use oil — less than 1 per cent. We now have more than 30 facilities that generate green electricity from biomass residues at mill sites.

Following Canada’s commitment under the Paris Agreement, the forest products industry pledged last May to remove 30 megatonnes of greenhouse gas emissions a year by 2030. That’s about 13 per cent of the government’s emission reduction target. We call this initiative the “30 by 30” Climate Change Challenge and I provided pamphlets for the committee. We are proud to be part of the solution, and there is no question that the Canadian forest products industry is an environmental leader.

[Translation]

The effects of climate change will impact our sector either negatively, through forest fires or insect infestations, or positively, such as by accelerating the transformation of the sector to produce biofuels, biomaterials and tall buildings.

Today, I would like to focus my comments on forest management, potential innovation linked to the use of new products, and the positive and negative impacts on our plants.

[English]

Canada’s forests are truly an astonishing resource. They represent 348 million hectares of forest land. The forest absorbs a tremendous amount of carbon dioxide and, by doing so, helps regulate the world’s climate systems. Therefore, as Canada faces the challenge of transitioning to a low carbon economy, we were very pleased that the Pan-Canadian Framework on Clean Growth and Climate Change mentioned the need to increase the carbon sinks from forests, wetlands and agricultural lands.

There is a great opportunity for the federal, provincial and territorial governments to work with industry on the acceleration of reforestation, like the recent British Columbia program; continue to improve and innovate on sustainable management practices; increase utilization of wood and residue that is left in the forest; and plant trees that grow quicker and absorb more carbon.

The forest sector is also collaborating with academics, governments and groups such as Ducks Unlimited Canada to better measure and conserve carbon stored in wetlands and peat land complexes. These areas hold enormous amount of carbon sequestration potential.

Climate change impacts of increased forest fires and pest infestation have a significant impact on Canadians, our communities and the forest industry. We all saw what happened two summers ago in Fort McMurray and this summer in British Columbia. We also believe that more can be done to our forests to make them more resilient and ensure long-term sustainability. We must continue research on the long-term potential climate change impacts, such as modelling — we need to know what the impact will be in 30 or 40 years on trees that we’re planting today; implement climate resilient solutions, such as fire smart communities; and work with our provincial counterparts to modify our forest management activities to allow for selecting and planting trees based on future climate conditions.

[Translation]

The use of new forest bioproducts such as wood-fibre composite to replace plastic, in the console of a Ford Lincoln, for example, contributes to a low-carbon economy in two ways. We are replacing plastic, which comes from fossil fuels, and we are reducing vehicle weight, which reduces fuel consumption.

The forest sector will also make be able to make biocrude — as recently announced par Canfor and Licella, in British Columbia — to replace oil from non-renewable sources.

Moreover, let us not forget that, in the long term, wood stores carbon in our homes and our buildings. Canada has an opportunity to make changes to the building code to allow the construction of high-rise buildings such as the new 18-storey residence at the University of British Columbia. Each cubic meter of wood used represents close to a tonne of carbon withdrawn from the atmosphere.

[English]

As I mentioned earlier, the forests products industry has already reduced its GHG emissions at the mill site by 66 per cent since 1990. It will be challenging to reduce the carbon footprint at the facilities, but the sector believes we can reduce our emissions further. We can continue to improve on our energy efficiency by improving our mill operations; fuel switch using mill waste to displace fossil fuel, like using biogas from our wastewater system to replace natural gas; and reduce our transportation emissions by bringing the trees to the mills or shipping our products to customers by increasing the use of rail instead of trucks.

These opportunities will require capital investment at the facility site. While the sector does support a price on carbon, it is very important that carbon pricing revenue generated by government should be revenue neutral and returned to industry in some form, like a technology fund, for example.

I would also like to highlight that our sector is a significant exporter of goods. Seventy per cent of what we produce is exported at a value of $37 billion. Our main competition for wood products is Russia and the United States, and for pulp and paper it is the United States, Asia and South America. This globally competitive landscape makes it imperative that the carbon pricing scheme — either a carbon tax or fuel standard that includes some sort of price — considers competitiveness.

As a trade-exposed industry, our suppliers — the chemicals, fuels, electricity and transportation — pass on the cost that our sector must absorb, while our products are based on international commodity prices so we can’t pass on the cost to our customers.

[Translation]

In conclusion, addressing climate change and reducing carbon emissions is an urgent challenge facing the entire world. We will have to work together, develop new ideas, and adopt effective policies and programs. Canada’s forest products industry is determined and willing to contribute to the shift towards a low-carbon emissions economy by working with governments to achieve the objectives of the Paris agreement.

Thank you very much for your attention. I will be pleased to answer your questions.

The Chair: Thank you very much, Mr. Larocque. Before I give the senators the floor, I would like to say something about the Forest Products Association of Canada.

Since the 1980s, it appears that the forest industry, unlike other industries, has been very forward-looking in modernizing its equipment and reducing carbon emissions, and it continues to do so.

According to the evidence the committee has heard, there is one sector in which major research is needed, the transport sector. We know the sector is doing research, but it is not easy. Products are collected from the forests and the mountains, and are then directed to distribution centres in big cities and sea ports. I think research in this area will be very important for the industry in the coming years. I am convinced that the forestry industry is a leader in research on carbon emissions, and I think it has achieved the objectives it set for itself.

I have to congratulate the forest industries for their outstanding work in this regard. They have invested billions of dollars at a time. Paper mills and large sawmills, for instance, have invested huge sums in their equipment, which is something we do not see in other industries.

The media in Canada all report that other industries invest up to $25 million, while the forest industry invests not millions, but billions from shareholder profits. The forest industry has made us a promise and I would like to congratulate you on that. On that note, Senator Doyle has the floor.

[English]

Senator Doyle: Thank you for your presentation. You’ve partially answered my question, but we had people in this week who said that according to Natural Resources Canada, wood-based construction products are generally considered to be very good environmental alternatives to steel and concrete.

You said to me when we spoke privately that you had spoken about this in Toronto. Do you know if there are changes coming in the National Building Code that might make the construction of buildings over four storeys a possibility in the future? What is your opinion on that?

Mr. Larocque: We’re pleased there was some investment in Budget 2017 into the building code. We are on track by 2020 to go to tall wood buildings and even higher, to 12 storeys, by 2025. The modification that we need to continue to work on is the concept of net zero energy. It’s an interesting concept and definitions need to be defined, but as of right now we’re focusing only on the energy in a building that is being used to heat it if you’re using natural gas or something like that.

What we need to include to make a full carbon lifecycle is to make sure the materials you’re putting into your building also have to be low carbon. If wood is great, that’s great if we can get a combination of cement and wood, but that’s where we need to go and that’s the embodied carbon. On that one, we’re a little bit behind compared to countries in Europe, but we’re working on it.

Senator Doyle: If it should come to pass that we’re going to get into taller buildings made of wood, are there any worries about the forest industry itself? Can the industry in Canada sustain itself sufficiently well as to be able to respond to these kinds of changes? It will certainly mean a big increase in forest products being used.

Mr. Larocque: Our calculation is that there may be a 10 per cent increase compared to what we currently use in Canada by 2030, and that will represent three to four megatonnes, which is almost all of our sector’s emissions in pulp and paper.

Senator Doyle: So the forest industry would have no problem in responding to it?

Mr. Larocque: No. We also believe that we want to create new and innovative products like oriented strand board and cross-laminated timber. Those use different types of trees in the forest so there will need to be some forest management changes compared to how we’re doing it today, but we feel this is all achievable by 2030.

Senator Doyle: You made a comment about what I guess you would call reforestation. You talked about planting trees to grow more quickly, and it really struck a chord. I was wondering what you were talking about there. Can you talk a little bit about that?

Kate Lindsay, Vice-President of Sustainability and Environmental Partnerships, Forest Products Association of Canada: There are lots of programs and research underway currently around planting the right tree in the right place. As Bob mentioned, we want to make sure that the seed stock we’re planting now is adapted to the climate of the future, so there are a number of research projects.

Actually, I just heard from Dr. Sally Aitken from the University of British Columbia yesterday about assisted migration and what trees to plant where. British Columbia is probably the most progressive jurisdiction in looking at and doing a number of seed trials. They’re planting a diversity of seed stock outside of where we traditionally plant them to see how they may do better with the changing climate projected for that particular local area. That’s a way we can adapt. Also, ideally, we can start to hopefully grow forests that are more resistant or resilient to things like fire, pests and drought conditions.

The program Bob mentioned as well in B.C. is the Forest Enhancement Society of BC. They’ve invested some money in looking at restocking areas post-fire and post-pest infestation to get those areas growing and sequestering carbon faster. That’s a challenge in B.C., obviously, because of the fire and the pests they’ve been inundated with of late. There is an opportunity to use innovative, adapted technologies to ensure we have resilient forests moving forward.

[Translation]

The Chair: Ms. Lindsay, I do not know if you have information about the rate of growth. In 1986, Irving, in New Brunswick, used research to create a hybrid tree that matures after 22 years. I visited Irving as a member of the provincial legislative assembly to plant some, and I went to harvest them as a senator 22 years later. The trees had reached maturity and they are outstanding. The forestry industry has been doing research in this area for many years. Thank you.

[English]

Senator Oh: My question for you is going to follow up on the question of Senator Doyletalking about building codes. To export, to have the market to develop building codes, is there anything going on with an international building code? I know, for Canada, you talked about earlier that we could be changing the National Building Code of Canada. What about in the international sector? That will bring our wood products to the international market, and exports will increase.

Mr. Larocque: I should have mentioned that. By changing Canada’s building code, we can become world leaders and do demonstration projects in other countries. We have already started some of that work in China and Japan, but I believe we can do more.It’s a carbon benefit, but it’s also a trade benefit. With the United States and softwood lumber, we were able to increase our trade export to Asia by about 30 per cent. Continuing in that vein in the future is a benefit for carbon and the economic prosperity of our sector.

[Translation]

Senator Gagné: There is a page in your pamphlet entitled “Innovation is in our nature”, and I certainly agree with that. As a member of the Standing Senate Committee on Agriculture and Forestry, I know that the agriculture and forestry sectors each have a strategic plan to reduce carbon emissions. I wonder if the two sectors work together to share knowledge and best practices, or whether they work in silos for the most part. If so, would it not be beneficial to work together? I would like to hear your thoughts on that.

Mr. Larocque: That is a very good question. I can tell you that we do not work in silos, but there is always room for improvement. As part of the Industry Canada innovation program, we work with the agriculture sector to create new products, biomaterials, such as biofuel. Agriculture can produce bioethanol and we can make biocrude. We work with about 42 industry partners in the agriculture sector and with consumers, such as WestJet, CN, Danone and Nestlé.

Interprovincial groups and Natural Resources Canada made an announcement recently about the forest bioeconomy. We intend to adopt a bioeconomy strategy for forestry and agriculture. As to the renewable biomass, we need to work together to optimize research and investment in order to accelerate the bioeconomy. We have been working together for two or three years and we have a lot of work to do with Natural Resources Canada and Agriculture and Agri-Food Canada.

Senator Gagné: Do you have any recommendations for the coming years as regards...

Mr. Larocque: We just announced a forest bioeconomy strategy and I would like it to become a national forest and agriculture strategy by December 2018.

Senator Gagné: Thank you.

Senator Pratte: Many of the groups we have met thus far, that is, farmers’ groups whose industry is focused on exports, have raised various concerns about a carbon tax system because they are afraid of losing their competitiveness against their main competitor in the United States. Your industry is focused on exports, especially to the United States. You said that you accept the carbon tax, but perhaps not enthusiastically. Why do you accept it even though you are facing the same competitiveness issues with our main competitor?

Mr. Larocque: We accept the carbon tax because it is important. There are negative impacts related to climate change. So we have to take action, and we think the carbon tax is one way of making a difference by adopting prescriptive rules. This provides an opportunity with respect to investment, because the money from the tax could be directed into innovation.

One of the problems is that a number of federal policies apply to the same fuel. That is what is happening now. There is the carbon tax, but there will also be a new carbon tax with standards applicable to low-carbon fuels. Regulations will be established for the production of electricity using natural gas. All these regulations apply to the same fossil fuel. That is why we have to work together to carefully review these policies. The price keeps climbing and that is becoming a problem.

In short, we must remember that the carbon tax can offer good opportunities for the forest sector as regards biomaterials. We think that imposing a carbon tax is a good thing.

Senator Pratte: In your “30 by 30” challenge, you offer some general ideas. Without giving a 50-minute presentation, how do you intend to achieve that objective?

Mr. Larocque: First, if changes are made in the forests, that would amount to 15 megatonnes. That is half of 30. We will absorb more carbon. So the federal government could use that in pursuing its objectives under the Paris agreement. Second, we must use bioproducts, high-rise buildings, to replace fossil fuels, which represents about 10 megatonnes. Finally, the last five megatonnes would be from rail transportation, our factories, and eliminating natural gas as an energy source by creating more efficient energy.

Senator Pratte: When you say changes in forests, that means reforestation, faster growth, and so forth.

Mr. Larocque: Exactly. That can include slash burning, for example. This method is used more in the West than in the East. The trees are cut down and the remaining forest products are burned, immediately releasing methane gas into the atmosphere. If those forest products could be converted into biocrude, into wood chips, and products such as oriented strand board, that would eliminate those sources. It is a combination of things, but we thing they add up to half.

Over the next two years, all federal policies will focus exclusively on energy. Greater emphasis must be placed on forests. Fifteen megatonnes are two to three times the total emissions of the forest products sector. This is a good opportunity, but things are not moving forward as quickly as we would like.

Senator Pratte: So you need financial assistance from the federal government?

Mr. Larocque: Some financial assistance and better cooperation between the federal and provincial governments. You mentioned Irving, but 70% of forest products come from provincial land. We have to work with the provinces and not just with the federal government to make sure these changes happen in the forests. The federal government can help with investments, as it does for the energy sector, but we also have to work with the provinces. Irving has private land, so it is has greater flexibility to explore other types of wood than the provinces do.

Senator Tardif: I would like to congratulate you on this very attractive and informative pamphlet. In it, you state that Canada has the largest certified forest area in the world.

What criteria are used to obtain that certification and what does it really mean?

Mr. Larocque: I will ask Ms. Lindsay to take that question.

[English]

Ms. Lindsay: To be a member of FPAC, you have to be certified to one of three standards. They’re internationally recognized. The three standards that we promote are the Canadian Standards Association, the Sustainable Forestry Initiative and the Forest Stewardship Council. FSC is an internationally derived standard that’s adapted to Canada. CSA is obviously a Canadian standard. It’s a very rigorous progress. CSA has standards for many things in Canada, but for also the forest management side of things. Sustainable Forestry Initiative is a North American standard, but also recognized globally under the PEFC standard.

These are very rigorous. They’re third party audited, so each forest company certified to these standards is visited by a third party auditor once a year, but a full compliance audit every three years. Those certification standards also go through a revision every five years, so new information, new innovation, new technologies and new ways of doing things are implemented into those standards moving forward. It’s also continued improvement.

They also have opportunities for anyone to feed into those standards. For instance, FSC has four different chambers in Canada: economic, social, environmental and indigenous. The other standards are made up of very diverse boards and public advisory groups that feed into those standards. It’s very transparent. You can go online and see who is certified to each standard and what they’re doing to maintain those credentials.

[Translation]

Senator Tardif: Thank you for that explanation.

You mentioned the Forest Stewardship Council of Canada. I believe it uses environmental labels. Do consumers require those environmental labels? Do you think they help you achieve your greenhouse gas reduction objectives?

[English]

Ms. Lindsay: I do think there’s room for improvement within the standards to incorporate climate-friendly practices. All three standards have started that process, so there is mention in the guidance around how you would manage your forests to both mitigate and adapt moving forward, but I believe with the next revision of those standards you’ll see more criterion indicators specific to climate change. CSA and SFI have both changed some of their guidance to talk about conducting vulnerability assessments, understanding where your risks might be in the forest industry, where you are located in Canada and taking steps to mitigate those. I do believe all three standards will move towards more normative text around indicators of climate change moving forward.

[Translation]

Mr. Larocque: I would like to add that consumers want our products to be certified. That is why we have one of the best reputations in the world for forestry management.

Senator Dagenais: Since we are offering congratulations, better than congratulations, I would like to talk about compensation. Since you have to pay a carbon tax, that will certainly affect your prices as compared to our neighbours south of the border. What do you expect from the government? With a carbon tax, the government will have to help you eventually and offer some compensation. Do you have any idea how the government could compensate you?

Mr. Larocque: We conducted an analysis and found that the carbon tax will cost the forest sector about $275 million per year in 2022, assuming a price of $50 per tonne.

We are looking for financial assistance to support advances in technology. Receiving assistance to create biocrude, biomaterials, or to conduct research to create products for the construction of buildings is not compensation. There is another receipt and you get half of what you paid for. We need to adopt a technology system that will help our sector move forward.

My vision is that, in 2030, our forests will be managed sustainably as regards climate change, endangered species, and so forth. We will use wood products to obtain added value in timber or in large buildings. Then we will use residues to make pulp and bioproducts, and to produce energy. So there will be diversification. We will not be making just pulp and newsprint, and we will not be grappling with trade problems with the United States or other countries. That is the kind of compensation we would like or hope to receive from the federal government. The government supports us right now, but the money is not necessarily from the carbon tax. There is money for innovation, but a carbon tax could provide more.

Senator Dagenais: Next week, we will be in the Montreal area and will be visiting an affordable, wood-construction housing project. You are no doubt aware that the inside of the Maison Symphonique de Montréal is made of wood. This is a fine example of the use of wood.

Are there other projects on a similar scale in Canada? We know there are high-rise construction projects using wood. Do the forestry companies have plans for other projects?

Mr. Larocque: In terms of wood construction, it is mostly high-rises. In Quebec City or Trois-Rivières, there will be a condo building with 12 or 14 floors. Wood construction will be mostly in that sector.

We would like more financial assistance from the federal government in the form of technical support to change building codes. For example, there could be competitions for architects offering $1 billion to design a 16-storey wood-construction building. That would encourage them to work with municipalities. It would be beneficial to the forest products sector, whether it is to build an airport, high rises or a shopping centre.

We are considering investing in the use of wood and forests, not just in energy.

Senator Dagenais: Last year, we went on a mission to China, where we visited wood-construction buildings. I imagine you are considering carrying out projects with China?

Mr. Larocque: Yes, we will be carrying out some projects with China. Prime Minister Trudeau might visit. We greatly appreciate the federal government’s support. We need this to continue. We received assistance after the recession from 2010 to 2014. Having continuity and working with Asia is very important to us.

[English]

Senator Doyle: I have a short question I didn’t get in last time to the forestry part.How difficult is it for a company going into the forest to harvest timber? How difficult is it for a company to engage in truly environmentally sound ways of harvesting the timber? Any company going in is interested in getting mature trees, right, because that’s what you’re harvesting or whatever?

You hear quite a great deal over the years — I know I have — on clear-cutting. How prevalent is clear-cutting today? How environmentally sound is that? Obviously, it’s not environmentally sound at all to clear-cut to get mature timber. Is it prevalent? I know back in the “old days,” I’ll call them, people were always concerned about that. We had three paper mills in the province, and there was always talk about and criticism of clear-cutting in order to harvest timber for the paper mills. A lot of destruction of trees went on. Is that prevalent today in the forest? Is it a problem with the CSA you talked about and that kind of thing?

Ms. Lindsay: I’d be happy to answer that question. Definitely in the 1980s and 1990s, that was a big war in the woods — a lot of controversy about forestry practices. You’ll find now, though, that practices have significantly improved. As Bob mentioned, now, compared to all of our competitors, we have the most stringent forestry regulations in provinces to comply with, as well as the certification that kind of goes above and beyond what the regulatory context is.

Clear-cutting is still a term that’s used in how we kind of go through a particular forest area, but clear-cutting is not what it used to be. There are high amounts of retention that are left on the block. There are a number of different biodiversity indicators, wildlife indicators and watershed health indicators that we must comply with. There are large setbacks around water bodies. There are trees left on the block for seed for wildlife species. There are a lot of different considerations we make when we go out to plan an area.

Most jurisdictions in Canada also do what’s called a strategic plan, which is looking 150 to 200 years into the future, as well as a 10- to 20-year plan and then an annual plan. There are three different levels of plans that are developed and implemented to look at the entire landscape. How do we maintain ecological function over space and time while still getting the wood to feed our mills and make those products that are important to Canadians?

It’s a very comprehensive, thorough planning process. A lot has changed, and it’s probably due to some of those early conflicts we had to say, “Okay, we need to look at these practices and make improvements.”

Also, I’ll give you a figure: Over the managed forests in Canada, it’s only half a per cent of the forests that are harvested each year of what we manage. It’s a very small amount.

Something that we’re also looking at doing is emulating natural disturbance moving forward, which means we may harvest areas that are larger in some areas, but it’s really to mimic natural disturbance patterns. If those areas are part of a natural fire-driven ecosystem, typically a fire would come through every 80 to 100 years, so then we’ll match those rotation ages and match those fire patterns. We hope we operate within that natural range, not above it.

Senator Doyle: How involved is the forest industry in the prevention of destruction, like fire? How involved can you be? Are there any techniques you employ? It seems to be one of the big destructive forces at play today in the forests. How involved can you be in the prevention of fire and that kind of thing?I know you have to clean up, clean your dry wood and that kind of thing, but are there any other techniques that you employ to manage that kind of thing?

Ms. Lindsay: The Canadian Council of Forest Ministers has a strategy in place around wildfire. There are many elements we can implement further. Work is under way right now to have a comprehensive wildfire plan. There are regulated practices to reduce the amount of fuel, which is residue that’s left in the forest, to prevent that.

But I believe there’s more we can do, particularly around communities. There are programs called FireSmart. This also takes a lot of public outreach and communication so that communities understand that having a fire break, an area without trees, around their communities will actually benefit them in the case of fires in the future. It’s a lot of public outreach and more work that we need to do to implement it more widely, but there are a number of strategies that are being worked on currently.

Mr. Larocque: I just want to add that the same applies to pests. We’ve learned a lot from the pine beetle. If you think about it, most of these trees were damaged or dead and we were able to salvage some of them but some were not used. From a carbon perspective, that’s where we’re saying we need to spend more time in the forest. We need to try to do whatever we can to prevent those forest fires or pest infestations and use that wood to sequester the carbon and replant new seedlings that will absorb more carbon. That’s part of the 50 megatonnes we’re talking about.

[Translation]

The Chair: I would like to add something. I think the forestry regime in each of the provinces has this responsibility. Right now, two provinces have a strict forestry regime: Quebec and British Columbia. In New Brunswick, as said, the forests are 75% private. Ontario has an acceptable forestry regime. There is no more clearcutting and there never will be. As to reforestation, most provinces follow the cut one tree, plant one tree policy. That is part of the reconstruction of our forests.

I have a brief point regarding research. I travel every Monday and Friday. On the Quebec City—Ottawa route, there are lot of lumber trucks with wood wrapped in plastic. In terms of research on fibres, could we not find a substitute for that plastic, which is derived from petroleum products? It reminds me of supermarkets that charge 5 cents at the cash for a bag. In the bag, there are about three pounds of plastic in packaging on the products purchased. That is just ridiculous when it comes to food. In your sector, however, could you not do some quick research to find a better product to wrap the lumber during shipping?

Mr. Larocque: The good news is that we will find such a product in a year or two. The plastic from fossil fuels comes from carbon. We can do the same thing with a tree trunk. We will not make plastic, but we will give you a molecule that is similar to a molecule in fossil products. A pulp mill will become a biorefinery. The sticky lignin will be used to replace all the glues from fossil fuels that are used in timber and panels. Then we will use the remaining chemical products. Cellulose will be made into pulp, and the remaining chemical products will be used to make bioplastic products. There is much talk about succinic acid in this regard.

We will become biorefineries. There is one in Europe, but it would cost from $2 billion to $3 billion to convert a traditional pulp and paper mill.

In Canada, we are beginning this transition in stages. There are plants that make biomethanol, another one that uses bioplastics, and another that uses lignin. We hope this research will lead to the creation of one or two new refineries in Canada by 2025 or 2030.

The Chair: Thank you for your testimony. It has been most informative. Thank you for your work and keep it up, because it is very useful for our report. I also hope you get good carbon exchanges that pay off.

Mr. Larocque: I would like to thank you for the invitation because we still have a lot of people to convince in urban areas as regards cutting trees in the forests. We have to talk to as many Canadians as possible to explain that a forest that is productive, that offers carbon benefits, contributes to job creation and trade, which is ultimately positive. That is why we were pleased to receive your call to appear before the committee.

The Chair: Thank you and happy National Forest Week, which is being celebrated across the country.

(The committee adjourned.)