Proceedings of the Standing Senate Committee on
Agriculture and Forestry

Issue 10 - Evidence - November 2, 2010


OTTAWA, Tuesday, November 2, 2010

The Standing Senate Committee on Agriculture and Forestry met this day at 5:05 p.m. to study the current state and future of Canada's forest sector.

Senator Percy Mockler (Chair) in the chair.

[Translation]

The Chair: Honourable senators, we have quorum. I declare the meeting in session.

[English]

I welcome the witnesses to this meeting of the Standing Senate Committee on Agriculture and Forestry. We have three witnesses today in the first part of the presentation of the meeting. I would like to share with the witnesses that I am Percy Mockler, a senator from New Brunswick and chair of the committee.

The meeting will be in two parts.

[Translation]

We will hear from the first panel of witnesses during the first hour of the meeting, and the second panel of witnesses during the second hour.

[English]

We have three representatives from the Canadian Food Inspection Agency in our first panel.

[Translation]

Tony Ritchie is the Executive Director of the Plant Health and Biosecurity Directorate, and Greg Stubbings is the Director of the Plant Program Integration Division. We also have with us Professor Yves Gagnon, K.C. Irving Chair in Sustainable Development at the Université de Moncton.

I want to thank the witnesses for being here.

[English]

The committee is continuing its study on the current state and future of Canada's forest sector and looking at the health of our forests in particular.

Before I ask the witnesses to make their presentation, I will ask senators to introduce themselves.

[Translation]

Senator Robichaud: Good afternoon. I am Senator Fernand Robichaud, from New Brunswick.

[English]

Senator Fairbairn: Joyce Fairbairn from, Lethbridge, Alberta.

Senator Mahovlich: Frank Mahovlich, Ontario.

Senator Duffy: Mike Duffy, Prince Edward Island.

Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.

Senator Ogilvie: Kelvin Ogilvie, Nova Scotia.

Senator Eaton: Nicky Eaton, Ontario.

Senator Housakos: Leo Housakos, from Quebec.

The Chair: Thank you, honourable senators.

Before we ask the witnesses to make their presentations, I would like to bring to the attention of senators that the clerk received a brief in one official language only.

[Translation]

Honourable senators, do I have permission to hand out the document? The translation will follow when it is available for the honourable senators.

Senator Robichaud: Mr. Chair, would it be possible to ask department officials to provide their presentations in both official languages? That may be harder to do with other witnesses. But it would make things a lot easier for us, starting with the clerk. Mr. Ritchie's brief, which I have here, is in both official languages. As for the other witnesses, I do not have a problem, but we can still make the request.

The Chair: Thank you, Senator Robichaud. I will ask the clerk to take note of that suggestion and to inform the witnesses when they appear before the committee.

[English]

Forestry is an important sector, and we all have a role to play, regardless of the departments or the stakeholders.

[Translation]

Tony Ritchie, Executive Director, Plant Health and Biosecurity Directorate, Canadian Food Inspection Agency: Thank you, Mr. Chair.

[English]

It is a pleasure to be here today. I will make my comments in both official languages and try to keep them to five minutes so we have an opportunity for questions at the end.

Under the Plant Protection Act, the Canadian Food Inspection Agency manages policies and programs aimed at achieving two overriding objectives. The first is the prevention or preventing the introduction of pests or pest risks into Canada; the second objective is, should those pest risks find themselves present in Canada, we aim to limit the spread of those pests.

At the same time, the agency maintains or enhances Canada's reputation for being free of certain insects, pathogens and pest plants. This supports Canada's ability to meet international standards and guidelines, which sustains the marketability of Canadian plants and plant products worldwide.

[Translation]

The Canadian Food Inspection Agency (CFIA) is largely responsible for administering and enforcing federal acts and regulations that protect Canada's plant resource base.

[English]

The CFIA is also responsible for developing import policies and standards, issuing import permits, approving shipments for release and conducting import inspections.

We also work with our provincial partners in industry to limit the spread domestically, should those diseased pests find themselves in Canada.

The agency shares information with our trading partners when threats are discovered. We also work with the international community, through the International Plant Protection Convention, to establish science-based standards to mitigate such threats.

In 2004, the Government of Canada introduced An Invasive Alien Species Strategy for Canada. It has four broad strategic objectives: first, prevent the harmful introduction, whether intentional or otherwise, of plant pests; second, detect and identify new invaders in a timely manner; third, respond rapidly to new invaders; and fourth, manage established and spreading invaders through eradication, containment and control, when appropriate.

[Translation]

The CFIA's role in managing invasive species is to provide leadership among federal and provincial partners to implement the National Invasive Alien Species Strategy.

[English]

The advances made in our ability to detect, evaluate and respond to invasive plant pests over the previous five years will be further supported with the Government of Canada's allocation of $12 million a year to the CFIA in Budget 2010 to continue with invasive alien species activities.

We have recently introduced a draft policy to address the risks associated with invasive plants in the same way as other plant pests. The Canada's Least Wanted Invasive Plants pilot project was initiated in 2009. That project saw the drafting of 27 risk management documents for a group of invasive plants that could pose serious threats to Canada. These plants have the potential to be regulated as pests in Canada under the ongoing invasive plants policy stakeholder consultations.

[Translation]

The agency strives to protect farmers, producers and industry from the potential economic effects of invasive alien species through many different programs.

[English]

One such program prevents the movement of firewood out of regulated areas to prevent or slow the spread of pests from areas already infected to areas that are currently pest free.

As well, because many people do not realize that there are multiple pathways for plant threats to enter Canada. We have instituted the Be Aware and Declare! program, which informs travellers about the types of risks that can come from bringing items into Canada and that there are serious penalties for doing so.

In terms of forest protection activities, the CFIA continues to work with other organizations to identify and implement pest eradication, containment and control strategies to limit the introduction and spread of invasive alien species to Canada. We work cooperatively with the Department of Agriculture and Agri-Food, the Canadian Forest Service, Health Canada's Pest Management Regulatory Agency, the Canada Border Services Agency and others.

We have responded to a number of introduced invasive alien forest pests that threaten Canada's forests, both urban and commercial. For more than 10 years the agency has been actively engaged in eradication or ``slow the spread'' programs for the brown spruce longhorn beetle, the emerald ash borer and the Asian long-horned beetle.

The agency has also enhanced import programs for wood packaging and marine dunnage to reduce risks associated with this pathway. Similarly, Canada has worked closely with our U.S. colleagues to address risks associated with ships and containers that may carry the Asian gypsy moth from Russia to Asia.

The CFIA is also engaged with the U.S. in developing a number of activities that would see us align our regulatory practices.

[Translation]

With respect to lumber exports, the CFIA is responsible for the development of forest policies and certification programs to prevent the spread of regulated pests from Canada abroad. The agency oversees export programs for Canadian forestry products so that they meet importing countries' import requirements.

[English]

One example of such a program is the Canadian Heat Treated Wood Products Certification Program. Heat treatment reduces the presence of the pest. This program provides official certification for the export of wood products to countries that require heat treatment as a condition of entry. The European Union, New Zealand and the Republic of Korea are some of the countries that require this type of treatment. Export certification activities are critical to support the Canadian industry's interests, competitiveness and economic perchance.

Canadian wood products that do not adhere to importing countries' phytosanitary requirements may be refused entry, or the product may be destroyed. In other circumstances, the product may be treated at the port of entry or detained for extensive periods while under quarantine.

[Translation]

For example, the CFIA is negotiating with foreign trading partners on their acceptance of industry-based certification programs for commodities such as firewood, cut Christmas trees and logs in an effort to facilitate trade in these commodities.

[English]

The agency takes appropriate actions to ensure that Canadian products move without undue hindrance. As such, it is important that the integrity of the certifying programs be maintained and that we adhere to the highest standards. These programs provide foreign market access for Canadian lumber and contribute greatly to the current and future prosperity of the Canadian forest industry.

Yves Gagnon, Professor, K.C. Irving Chair in Sustainable Development, Moncton University: Good afternoon, honourable senators. Thank you for the invitation to talk to you today. It is an honour and a privilege to be part of this important exercise for the wood sector in Canada. I am here as a researcher in sustainable development and energy, but after talking about that I will speak about how that is linked to forestry. I will use the PowerPoint presentation of which you have received paper copies.

I am not here to talk about climate change, but I do want to say a few words about it to position the recommendation that I will be making to you this afternoon.

The science of climate change is relatively simple. Through human activities we generate greenhouse gas which accumulates in the atmosphere and traps energy such that the amount of energy coming from the sun and trapped in the atmosphere is larger than the amount of energy leaving the atmosphere. The result is an increase in temperature.

At the top of page 2 are graphs from the Intergovernmental Panel on Climate Change. These graphs show the evolution of carbon dioxide, methane and nitrous oxide, the three main greenhouse gases. The time scale of those graphs on the horizontal axis is 10,000 years, so it shows the evolution of greenhouse gases in the atmosphere over that time. We call this type of curve a hockey stick curve. It is quite flat and increases rapidly.

The arrow at the bottom of the graph points to about 2,000 years ago, which is the time that Jesus Christ was on this planet. That shows the scale.

On the small graph at the top, we see that there was a great increase in the concentration of carbon dioxide and greenhouse gases in general in the atmosphere at the time of the industrial revolution when we started to burn fossil fuels in particular, which accumulate in the atmosphere.

The light blue curve on the bottom graph on page 2 shows the concentration of CO2 in the atmosphere. The yellow curve represents the global temperature. The time scale on this graph is 200,000 years, so much longer than the top graph. Without going into detail, it shows that there is a strong correlation between concentration of CO2 in the atmosphere and the global temperature of the atmosphere. We can pinpoint on those graphs the glacial periods over the last 200,000 years.

We can see that the concentration of CO2 in the atmosphere is increasing drastically, and there is an expectation that there will be a consequential increase in global temperature.

On the top graph on page 3 we see various forecasts of atmospheric temperature based on different models. The light blue curve is based on a model with only natural effects, while the pink shading represents natural forcing as well as anthropogenic forcing, that is, human activities affecting the atmosphere. The dark line represents the observed temperature at various locations on the planet.

In summary, we see that the global temperature is changing, and there is strong indication that this is due to our emission of greenhouse gases into the atmosphere.

At the bottom of page 3 we see where the greenhouse gases are coming from. A lot of them come from CO2 emissions, which is represented by the pink colour on the bar chart and the first pie chart. I want to point out that much of the greenhouse gas that we put into the atmosphere is due to our method of generating electricity. About one quarter of greenhouse gases is due to the electricity sector.

Considering that the forestry sector is in a period of transformational change, is there a role for the wood biomass in Canada to help us reduce our greenhouse gas emissions in the electricity sector? That is essentially the question I am asking.

Page 4 contains anecdotal evidence, but it shows a trend in terms of carbon emissions. You will see on this page a bag of what the Scots call ``crisps.'' The bag of what we call ``chips'' has a graph on it to indicate how much carbon was used to produce the bag. The top graph represents the bag of chips in 2007. What is interesting, if you look on the right part of the image, is the back of the bag of chips. On the top right corner, we see the usual information of fat content, saturated fat content, sodium content, et cetera. Why do manufacturers provide this information in the food industry? It is because these have become indicators for consumers. Do I buy this bag of chips or that one? We all look at fat and sodium content — most of us, Senator Robichaud.

What was the consequence? Manufacturers said if it is an indicator, then we need to reduce our fat content. Globally, fat content has been reduced in products.

In 2007, this company in Scotland indicated — you cannot see it in the circle but you will have to believe me — the CO2 that was put into the atmosphere to create this bag of chips. In 2007, 104 grams of CO2 was put into the atmosphere to generate this bag of chips.

Why did they put that information on the bag? It is a competitive advantage for this company to disclose this information because it is becoming an indicator for consumers — do I buy this bag of chips or this one? CO2 will become an indicator of choice. Industry needs to adapt to that.

When I started to present this graph in 2007 in various conferences, people would ask me is 104 grams a lot? My answer was it is not important; the importance is that you disclose the information. As a result, it will be reduced; you will have to reduce it because others will try to reduce it.

In 2010, the same bag of chips generated 80 grams of CO2 into the atmosphere. You can see the trend of reducing CO2 emissions. This trend is in Europe, but I think it will reach us here. We need to be serious about how we manage our CO2 emissions. Again, to reinforce my message, the electricity sector — how we generate electricity — is an important source of CO2.

On page 5, the top graph represents the waves of innovation. This is not from our research work but it is interesting. It shows the various waves of innovation over the last 200 years — the high-tech sector of the period. About 200 years ago, the whiz kids were working on water power, mechanization and textiles. As we move along, then came the railroads and steam power. At the beginning of the century, it was electricity, chemicals and the internal combustion engine. The next wave shows the innovators of that period: the petrochemical industry, electronics and aerospace — going to the moon, rockets and NASA. We are in the period of digital networks, biotechnology, IT and software.

Many think that the next wave of innovation will be around sustainability, around renewable energy, green chemistry and industrial ecology. I think the forestry sector should position itself to be part of this next wave of innovation as society will change.

In this context of innovation, we see that the forest companies, mostly in the pulp and paper sector, are adapting through innovation. One example is a company that has repositioned itself by converting its plant to produce rayon. We are also seeing some value-added paper. Cascades is a leader in that innovation. That manufacturer recently came out with an antibacterial paper towel with a chlorine compound in the paper. When it comes in contact with water when you dry your hands, this compound becomes an antibacterial solution for your protection.

[Translation]

Groupe Savoie, in New Brunswick, is a very good example.

[English]

This is a family-owned hardwood sawmill. Essentially, the innovation there is that every piece of wood that goes into that plant comes out as a product. Innovation is part of the solution.

I want to talk to you about energy. At the top of page 6 is a map of Europe with distributed power generation. Traditionally in the energy sector, we have large-scale electricity generation sites, whether it is on coal, nuclear, oil, hydro, et cetera. They are large-scale sites of generation localized in various regions.

There is a trend toward distributed power generation. You have a much smaller generation site, usually tied to a renewable source, whether it is wind energy, small micro-hydro systems or a biomass plant. We see that some of the countries have close to 30 per cent of their electricity coming from such small systems — biomass based systems, wind based systems — instead of going to large-scale units, as we traditionally have. They are quite efficient.

I have a few examples to finish this presentation and go to my conclusion. One is the PEI District Energy System, which is in Charlottetown — Senator Duffy knows this. In Charlottetown, right next to the downtown area, is a clean and efficient site where they burn municipal and sawmill waste on the Island, along with a little bit of oil, from which they generate electricity and heat.

It is owned by the PEI Energy Corporation, which is a Crown corporation; therefore, it is owned by the people of Prince Edward Island. At last count, this plant heats 84 buildings in Charlottetown. The hospital, all government buildings, the University of Prince Edward Island, et cetera, are all heated by this small plant in Charlottetown. The electricity is sold to Maritime Electric. It is very efficient, fully optimized and truly sustainable.

Another example is from my hometown of Edmundston, New Brunswick, near the hometown of Senator Mockler. It is a cogeneration site that was built in the 1990s. Many people, including the people at the mill, which is now called Twin Rivers Paper, think that the survival of this mill is because they have built this cogeneration plant. They generate electricity that they sell to New Brunswick Power and they generate heat for their processes instead of burning traditional oil.

The last example is a recent project by Nova Scotia Power and NewPage Corporation. They will build a 60 megawatt cogeneration plant to generate electricity that they will sell to consumers in Nova Scotia, but they will also generate heat for their processes inside the plant. They will harvest some of the biomass, but they will also use some waste biomass for the sawmills and paper mills in the region. Essentially, they will have full use of the available biomass.

Can wood biomass be a sustainable and viable large-scale source of renewable energy in the various regions of Canada?

We have biomass. For the traditional wood industry, whether it is pulp and paper — and lumber is facing some challenges — should we look at community based, distributed power generation based type of cogeneration systems where we generate heat and electricity for the use of industry, municipalities, schools, hospitals, et cetera? That is another way of looking at the energy sector and the forestry sector, all in line with sustainable development principles.

There are some issues, for example, supply. We need to have better knowledge in terms of the resource — how much power we can generate from the resource by having sustainable harvesting of biomass to do that. Having a low carbon footprint on the generation of that biomass is important.

There is also social acceptance. When we talk about cutting wood, with that comes issues of clear cutting and the ecological services of a forest. It is not a given solution; there are various challenges. However, it should be looked at seriously in Canada to see if biomass can become a source of large-scale energy in line with the sustainable development of communities in various regions of this country.

The Chair: Thank you, witnesses.

[Translation]

I will ask Senator Eaton to begin the questioning. She will be followed by Senator Robichaud.

[English]

Senator Eaton: I do not know where to start; you are both so interesting.

Professor Gagnon, we have heard many witnesses over the last nine months. It seems that clear-cutting is an aesthetic issue; an issue that resolves itself as the forest regrows.

What worries me a little about your presentation is that you talk a lot about innovations in Europe, but Spain is a disaster with its green movement and windmills. Spain's energy policy has not proven to be efficient.

What I find to be more intriguing is the innovation the Canadian forest industry has been able to do with things like the nano-crystalline cellulose, NCC, and the production of new products to replace plastics. I am interested in using waste products to make fuel and energy.

I hope that we move toward innovation rather than to systems that have not proven to be very efficient, such as windmills or solar panels that, in the end, cost a lot and do not produce that much power. Do you have anything to say to that?

Mr. Gagnon: I agree with you that innovation is essential in the forestry sector. It will be a long time before we will be able to compete with the Chinese or Brazilian manufacturers.

Senator Eaton: We can compete in the area of nano-crystalline cellulose. Are they ahead of us?

Mr. Gagnon: This is innovation. Canada should be involved in this trend. We should go toward innovative products, higher productivity, value-added products, rather than competing in paper with those countries. I did not touch on wind and solar energy in my presentation.

I showed you three examples of small-scale systems in Canada, but there are many others. There are many other many other commercial based or community based biomass systems that are part of the energy portfolios of their jurisdictions or regions.

Senator Eaton: Are those the examples you gave us?

Mr. Gagnon: Yes.

Senator Eaton: That is largely waste?

Mr. Gagnon: Most of them are waste, but the last one I presented, one-half of its biomass will be harvested specifically to generate electricity. Those are two models.

Senator Eaton: Do you think we can afford to do that on a large scale?

Mr. Gagnon: Wood biomass is an actual resource and it is renewable. As with all resources, there is a lack of knowledge with regard to the assessment of that resource in the context of energy generation in Canada. Hopefully, in New Brunswick in the near future we will be able to quantify the wood biomass in the context of energy generation. Once we quantify that, then governments will be better positioned to identify whether this is a viable source and a long- term source of energy.

As a vision for this committee, I recommend to you that you seriously consider using wood biomass as a potential source of large-scale energy for Canada.

Senator Eaton: When you say ``wood biomass,'' do you mean the wood pellets?

Mr. Gagnon: It is all forms of biomass, whether it is waste from biomass or the tops of trees or branches that have no economic value. You need to balance that with the ecological services that are brought by the biomass that you leave within the forest. I am not saying it is an easy solution, but I hope that we will look at biomass as a potential source for large-scale energy generation while respecting the sustainable development properties of the biomass itself. The harvesting of the biomass should also be considered.

Senator Eaton: We heard a bit about that in British Columbia. They are beginning to do that and finding out whether it is economical.

Mr. Ritchie, you said that some countries to whom we send wood demand heat treatment to ensure we are not exporting our bugs along with our wood. Do we demand, in return, heat treatment from certain countries to protect us from insects?

Mr. Ritchie: Yes, we do. We have worked with the international community, through the fora that exist there, to ensure that whatever other countries require from us, we require in return. All products coming into Canada have to be heat treated, including those products used as packaging material around other components.

Senator Eaton: Do we have people on site in countries inspecting what will be shipped to us before it has left the country, or does it get here and then we inspect it?

Mr. Ritchie: I think it is a combination of both. We certainly do have inspections here in Canada. Our framework kicks in at the border. Once the product arrives here, we work collectively with our colleagues at the Canada Border Services Agency to ensure that products are inspected. We look for the stamp. A stamp indicates the wood has been heat-treated.

Senator Eaton: What recommendation would like to see that would make it easier for you to keep this country free of foreign pests?

Mr. Ritchie: There is an international framework. There is a process that countries can use to ensure that we collectively develop processes and procedures that apply across the countries. I would ask that the process be supported. That is where we need to go. The integrity has to begin in the international forum. I would ask all countries to actively participate in those particular forums and adhere to the requirements and standards that come out of those forums.

It is important that we work on a regional basis with some of our larger trading partners. The U.S. is a big trading partner for us in terms of plant and forest products. The closer we can align ourselves with the U.S. and we can work across that border in a seamless way, the more beneficial it is for us. If we can use the U.S. as an ally against other international trading partners, it is beneficial.

Senator Eaton: We have learned that, more and more, our trade in forestry will be with the Far East.

Mr. Ritchie: That is correct.

Senator Eaton: Will that present other problems?

Mr. Ritchie: Yes, it will present problems in terms of the pest control strategies that they apply domestically, and that is where we need to go to the international community to say there are international standards on how we should be treating certain pests. All countries need to adhere to those standards. It will be a challenge. Again, that is where again working with our collective allies we can intervene in these international environments to promote better worldwide sanitary practices.

[Translation]

Senator Robichaud: In your conclusion, Mr. Gagnon, you asked all the questions we have been trying to answer. The Standing Senate Committee on Banking, Trade and Commerce. Who should we be turning to for those answers? I know the industry has a role, on one hand. But, on the other, a research centre such as yours should be able to put forward answers rather than questions, should it not?

Mr. Gagnon: Going back to the last line in my conclusion, which I may have rattled off a bit too quickly because of time constraints, as they say, the question answers itself. To my mind, the answer to the question —Can wood biomass become a major source of large-scale energy? —is self-evident.

Given that Canada's forestry sector is going through a major transformation, the energy sector is an avenue that is really worth exploring in order to figure out how to turn wood biomass into a sustainable and viable source of large- scale energy in Canada. To do that, the energy sector has to shift from its traditional method of operation, based on large power-generating stations that use many transmission lines, towards a distributed power-generating model, based on small power stations located closer to consumers, consumption centres, businesses, residences and so forth.

That approach would require fewer transmission lines, which would cut costs. Biomass is used locally, which is better for the environment because less transportation is required. At the end of the day, it would strengthen our energy security. The more power-generating points we have, the more we use native resources, rather than imported ones such as oil and coal, and the more energy security we have.

Traditionally, the forestry sector has not seen the energy sector as a potential user of its resource. We should be moving in that direction not just because of the changing climate, but also because of Canada's changing forestry sector.

Senator Robichaud: Do you think we missed the boat, given the head start that wind energy has? New Brunswick has already set up I do not know how many wind turbines in Caribou near Bathurst and in Kent Hills. The province has gone to extraordinary lengths to pursue that type of energy production, but no one has talked about the untapped potential of our forests. And so far, governments have not shown much interest in it either.

Mr. Gagnon: I want to mention something that Nicholas Stern, a former senior vice-president of the World Bank, said in his 2007 report. He was an advisor at the time in Great Britain's government. His was a cutting-edge report. It was the first report written by such a credible stakeholder in the economic and financial realm. He showed that climate change was going to have a huge impact on the economies of both industrialized nations and developing ones, and that it was imperative to act immediately on numerous fronts. There is no single solution to climate change.

If you apply that logic to the energy sector, coupled with energy security concerns, the more varied a country's sources of power are, the more plentiful its sources of distributed generation, and the more energy security it has.

With that in mind, there is definitely plenty of room for wind energy and eventually tidal energy, when the technology is sophisticated enough, as well as solar energy, when the technology is more affordable. But given Canada's situation, the availability of the resource and the challenges in the forestry sector in terms of adding value to wood biomass, we should be looking seriously at wood biomass as a large-scale source of energy in Canada.

Senator Robichaud: I agree that we need to look at that much more closely, but would you say that the government would not have to contribute as much financially to the production of wood biomass-based energy as it did to the production of wind energy?

Mr. Gagnon: The first step should be to determine where things stand around the country, beginning with provincial pilot projects. A nation-wide assessment should then be conducted to determine whether the wood biomass resource is abundant enough to produce energy on a large scale. That includes assessing the availability of the resource as a sustainable source of energy, in other words, the regeneration of the resource, and the impact on the ecological functions of forests. We need to ensure that we can maintain those functions as we harvest wood biomass. We also need to ensure that harvesting wood biomass results in as few carbon emissions as possible. Finally, it is necessary to identify which power generation models based on wood biomass produce lasting economic benefits for those communities where forestry is the cornerstone of the local economy.

Senator Robichaud: We have a big job ahead of us.

Mr. Gagnon: Yes, but you have to start. You mentioned wind energy. I will give you a meaningful example. Twenty- five years ago, governments in Denmark funded the development and installation of wind turbines with a view to turning wind into an economically viable source of energy. Today, the wind turbines being used around the world come from Denmark or were manufactured under licence from Denmark.

About two years ago, we studied Denmark's models. Wind turbine manufacturing generated more than 20,000 jobs, resulting in tremendous economic benefits for the country.

It is important to consider not only the resource, but also the biomass cogeneration systems, electricity and heat. Canada has an opportunity to become a world leader in these technologies, as well as logging practices, allowing us to further expand the forestry sector in a sustainable manner, while giving us a new way to add value to forest products and to generate economic benefits for the forestry sector in communities across Canada.

[English]

Senator Marshall: Mr. Ritchie, in your opening remarks, you referred to several policies and strategies, such as the Invasive Alien Species Strategy and the Invasive Plants Policy. You spoke about the Be Aware and Declare! campaign. In your briefing notes, you referred to the Don't Move Firewood campaign. How does the agency evaluate such policies? Do you know that these policies are effective?

Mr. Ritchie: That is a very good question. The policies play in on different levels. Some create a greater awareness of these invasive pests and what we can do to stop them. For instance, the Don't Move Firewood campaign is critical, because firewood can move pests from one area to another. For instance, we may come up with a policy that says science tells us we need to limit the movement, and now we will work with our provincial colleagues to ensure that they have appropriate procedures in place to limit the movement of firewood.

We also utilize permits. If we go into an area that has a pest invasion, our act enables us to quarantine that particular area, and it also enables us to issue permits for movements in and out of those particular areas. We have a certain control on the way the products move.

Firewood is a little more difficult because individuals can go into the woods, cut firewood and throw it in their truck and drive away. In those areas, it is hard for us to determine whether it is working. We hope that through greater awareness, through the provinces and provincial parks posting these kinds of activities, and limiting the way in which firewood is distributed in the park environment, we will get good adherence.

We also do surveillance on the pest itself. That provides somewhat of an indication as to whether we are successful in limiting the spread of that pest through some of our programs and policies.

Senator Marshall: You spoke about the awareness and mentioned specifically the Don't Move Firewood policy. I am from Newfoundland and Labrador, where many people cut their own wood and the wood is moved all over the place. I have never heard of this policy. Is it that there are no pests in Newfoundland and Labrador, or is it that the awareness of this policy is not there?

Mr. Ritchie: You make a good point Senator Marshall. Where there is an active pest incursion, the promotion is certainly more active because the pathway to the movement of that pest could well be through firewood. There is a particular pest we are dealing with in New Brunswick, the brown spruce longhorn beetle, and we are active in promoting that kind of policy in New Brunswick because we are actively dealing with in that province.

Senator Marshall: Has that policy been effective in New Brunswick?

Mr. Ritchie: That pest was in Nova Scotia, not New Brunswick; that is my mistake. My colleague corrected me.

Mr. Gagnon: We have no pests in P.E.I.

Mr. Ritchie: Potato pests, maybe. I misunderstood the question.

Senator Marshall: I am familiar with the Be Aware and Declare! campaign because it is heavily advertised, but I am not aware of some of the other campaigns. It makes me wonder about the effectiveness of these policies. If the Auditor General were to perform an audit, she would ask how you determine the effectiveness of your policies.

Mr. Ritchie: You are right. With respect to some of the other policies, for example, the Invasive Alien Species Strategy, the benefit was that it enabled a number of departments that had an interest in controlling invasive alien species to come together and understand their respective roles and responsibilities and to collectively plan. Some of those documents are broader framework documents that provide an opportunity for those departments to work collaboratively. It is tremendous just to understand the roles and responsibilities of each department. The role we play is quite different from the role of the Canadian Forest Service and Environment Canada. Achieving that clarity is tremendous. It is hard to measure, but the documents themselves may do nothing more than enable those departments to understand each other.

Senator Marshall: Professor Gagnon, on page 2 of your presentation, you spoke about the concentrations in the atmosphere of these three chemicals over a 10,000-year period.

How do you determine the concentrations in the atmosphere 10,000 years ago? It spiked a couple of years ago. Is it possible that the recordkeeping is better?

Mr. Gagnon: No. Essentially, this data comes from the ice shelf in Antarctica. There are many kilometres of ice in Antarctica. The ice was formed by snow falling on top of snow, compacting and becoming ice. The ice at the bottom is snow that fell hundreds of thousands of years ago. By doing a sampling of this ice core, it is possible to determine the concentration of the atmosphere at that period of time.

Dr. Ogilvie will agree with me that we see error bars on those graphs, which indicate the uncertainty of the measurements. We see that the third one is higher than the first two. That type of data is not contested; it is credible data.

Senator Marshall: On page 3, do you say that one quarter of the greenhouse gases are attributed to electric generation?

Mr. Gagnon: Energy supply, yes. That is on a global scale. In Canada, it is roughly the same.

Senator Marshall: Does that depend on how the electricity is generated?

Mr. Gagnon: Yes, it does.

Senator Marshall: Which would have the lesser impact?

Mr. Gagnon: The principle is we need to move from electricity generation using fossil fuel, coal, oil or gas. There are various options. As Senator Robichaud, mentioned, wind energy, which is economically viable, is a great example on P.E.I. and elsewhere in Canada. The more diversified an energy portfolio we have, the better it is in terms of energy security and supply of energy. Wood biomass could become a large-scale source of energy for Canada.

Senator Marshall: What about hydrogen?

Mr. Gagnon: Hydrogen is what we call an ``energy vector.'' Hydrogen is only a way to store energy so we can use it at other times. If we have intermittent sources of energy, for example, from wind, tidal power or solar energy, we could use hydrogen as a way to store that energy and reuse that hydrogen to regenerate electricity when we need it. Hydrogen is not an energy source; it is a process to store energy. In the long term, it could become an efficient way of storing energy, and therefore able to integrate a more intermittent source of energy that you cannot control, like wind, tidal, or solar energy.

Senator Mercer: First, I want to thank everyone for the presentations.

Professor Gagnon, you brought to our attention the labelling of the crisps in Scotland. How did that start? Did the company just say, ``This is a good idea,'' or did someone push them to do it? Is there a regulation that forces British companies to do it? It seems to me a heck of an angle. I am on a low-salt diet, so I always look at the labels to see the sodium content, and I cut out buying certain things because of the sodium content.

Mr. Gagnon: We did not study this company in particular in terms of the rationale to put the CO2 emissions on the bag of chips. In Scotland, there are no regulations yet in terms of controlling CO2 emissions. They are positioning themselves in a trend where we will probably see restrictions on carbon emissions, and it could take various forms, whether a tax or cap and trade or whatever.

What is clear with this company is that disclosing and then reducing the CO2 gave them a competitive advantage. It is part of their value proposition to tell the consumers ``Buy my bag of chips instead of the competitors'.''

Senator Mercer: Perhaps there should be a regulation that says that. Perhaps the food inspection people could take that message back.

I want to continue, Professor Gagnon, with your description of the PEI District Energy. I also related to the other plants you spoke about, but the Charlottetown plant in particular because of its burning of municipal waste and the sawmill waste, et cetera. I come from Nova Scotia where we burn dirty coal to generate electricity. We are not doing the environment any good at all because of that.

What is the ash that is coming out of the stack? Most of our plants, other than one, are in rural areas, and this plant is in downtown Charlottetown.

Mr. Gagnon: I do not have off the top of my head that data, but typically, in Canada there has been a large reduction in the last few decades of particulate emission because of technology development called ``scrubbers.'' There is low particulate emission from burning fossil fuels in Canada.

The main emission is CO2, carbon dioxide. We know now that carbon dioxide has an effect on the environment and the atmosphere, but in terms of particulate emission it is relatively low.

The plant in Charlottetown is right between downtown and the hospital. It is quite clean. I have many pictures that I use in my presentations. If it is well made, it is not intrusive. It is a clean environment.

Senator Duffy: Is there any odour?

Mr. Gagnon: There is no odour. The municipal waste and the biomass are stored in enclosures. It can be done quite efficiently.

Senator Mercer: Mr. Gagnon, in your presentation you talked about many things, but you did not talk about any direct relationship with silviculture or reforestation. I know that you are from New Brunswick where some of the best silviculture reforestation plants are underway. We visited some of the reforestation sites and several of us planted trees to reduce our own carbon footprint. You did not speak about that aspect of the industry.

Mr. Gagnon: As I mentioned earlier, we work in the sustainable and renewable energy sector. We do not work in forestry, so I did not address those issues. However, if we move toward using wood biomass as a viable large-scale source of energy, there will be some adjustments to be made in the forestry sector in the way we harvest trees.

Senator Mercer: Mr. Ritchie, I heat my home in Nova Scotia partially with wood. I do not have a woodlot of my own and have to purchase the wood. In Nova Scotia, certain woods are not supposed to be moved from one place to another, but I have no idea of where they are. I buy my wood from the same supplier every year. I do not know where the supplier gets the wood, so I am not sure of the source.

Is there a website, department, phone number et cetera that we can contact to find out about any restrictions? Many people across this country, myself included, use wood to warm their homes. I not want to break any of these rules.

Mr. Ritchie: Your question is a good one, Senator Mercer. We have been wrestling with this for a while because we do not have a list of certified firewood suppliers. It is a difficult thing to regulate and we do not want to overburden the industry. We try to increase the awareness. It depends upon where the wood is being moved. If you are moving the wood into your fireplace, that is fine; it will kill the bugs. How many stops it makes along the way and where it goes is more difficult for us to control. You have put your finger on something on which we need to continue to work with our provincial colleagues.

Senator Mercer: You must bear in mind that most of the suppliers are small business people. In Atlantic Canada, this is a value-added business for farmers. It is a cash crop. We cannot put too big a burden on this industry. If firewood suppliers have to be certified, the certification must be easily obtained and at no cost. I do not want to make this difficult for suppliers who, in most cases, are people with a chain saw and a splitter. They may move in and out of the business as they need cash.

Mr. Ritchie: You are absolutely right.

The Chair: We have time constraints and the next witnesses are waiting. We also have questions on life cycle analysis, green building codes and LEED, Leadership in Energy and Environmental Design. We will send those questions to you in writing for your response in kind.

Senator Duffy: Mr. Ritchie, we have heard about the international arrangements that are made to protect Canada from pests. One of our earlier witnesses spoke about kitchen cabinet components being imported into this country and off- gasing, that is, chemicals that were used in the creation of the product overseas are released into the atmosphere here in Canada.

Is this an aspect of your work in terms of keeping wood safe? If it is not, should it be? Maybe it is something you want to think about and write to us about. It strikes me as another aspect of wood and heat treatment.

Professor Gagnon, I was fascinated by the projects that you spoke of. As you know, the Charlottetown plant has been expanded. Do you know if these plants economically viable? If so, when do you expect that we will see other utilities getting into this kind of business?

Mr. Gagnon: We do not have access to the specific financials of those units. However, when companies like NewPage and Nova Scotia Power decide to build such plants we know that it is economically viable for them to do so.

Senator Mahovlich: Mr. Ritchie, about 50 years ago we had Dutch elm disease in Toronto. Have the forests been replenished with elm trees? I do not see the number of elm trees that I saw 50 years ago.

Mr. Gagnon, when will the earth start to cool, or will we ever see that again?

Mr. Gagnon: We know the lifetime of greenhouse gases in the atmosphere. For example, CO2, has a life span of between 50 and 200 years. The Intergovernmental Panel on Climate Change has developed some scenarios on the evolution of the global temperature of the atmosphere as a function of time depending on how much carbon, CO2 and greenhouse gas we put into the atmosphere. This is well documented.

If we want to see a reduction in temperature in the next few hundred years, we will need to reduce our carbon emissions drastically.

At the last meeting in Copenhagen, there was a trend toward accepting increases in the global temperature of the atmosphere, to a degree. This will bring us to the 450 scenario, which is 450 parts per million of CO2 in the atmosphere. Most probably, that will become the global objective — to limit the CO2 content to 450 ppm.

Senator Mahovlich: You must remember that the population increases each year. We will need more energy. Therefore, you will have a more difficult time trying to control the CO2.

Mr. Gagnon: Yes.

Mr. Ritchie: On the Dutch elm question, the disease is still a quarantine disease. However, that does not stop cities from planting elm trees. They can plant domestic elm, but we cannot import elm products into Canada.

There is still a considerable amount of planting going on to try to replace the Dutch elm. There is active science on to try to breed a disease-resistant elm. Some things are happening to continue the planting of elm trees in our communities.

The Chair: Witnesses, we are ready for our second panel. We will send you questions in writing and, hopefully, you will take the time to reply to us.

Thank you very much for accepting our offer to present to us today. You have been informative, educational and interesting.

Honourable senators, I now wish to take the opportunity to present to you the second panel.

From the Canadian Federation of Woodlot Owners, we have Mr. Bob Austman, First Vice-President.

[Translation]

From the Fédération des producteurs de bois du Québec, we have Assistant Director Daniel Roy.

[English]

From the New Brunswick Federation of Woodlot Owners, we have Mr. Andrew Clark, President; and with us from the Private Forest Landowners Association (BC) is Rod Bealing, Executive Director.

We will begin with Mr. Austman, to be followed by Mr. Roy, Mr. Clark and Mr. Bealing.

Bob Austman, First Vice-President, Canadian Federation of Woodlot Owners: It is an honour to be here tonight. Thank you for inviting me.

We represent Canada's private forest owners. Most of the forests in Canada are Crown-owned and managed on behalf of Canadians, but we are private forest owners. We own 8.6 per cent of Canada's forestland, as you can see in the pie graph attached to the handout. We represent nearly 500,000 families. That makes more than 2 million Canadians who own family woodlots. About 25 per cent of rural Canadians have a direct association with a family woodlot in their neighbourhood in rural Canada. We own 19 million hectares of forest out of a total of approximately 430 million hectares. If we were a separate country on our own, we would be eighth on the list, between Finland and France, in terms of forest cover. It is a substantial portion of the forest, and among the most productive in Canada.

In the table at the bottom of page 1, you see that the output of timber from private land generally exceeds that from Crown-managed forests, simply because they are better managed by families who have owned them for multiple generations. They have kept their eye on the trees and have monitored for insects and fire. They have cleaned up after windstorms and other disturbances in the forests. Generally, they are found in the southern part of Canada where the soil is more conducive to growing healthy forests.

Besides providing timber and wood fibre, private woodlot owners supply ecological goods and services for most settled areas, including carbon uptake, as the professor on the earlier panel alluded to, oxygen production, wildlife habitat, soil and water conservation and landscape beautification.

Until the downturn in the forest industry several years ago, private woodlots supplied up to 17 per cent of the pulp logs and saw logs needed by industry, and they generated sales of approximately $1.5 billion. These dollars were put in the hands of rural people as a supplement to their income, whether it was farming, fishing or other endeavours off the land. It is and always has been an important financial asset to families.

Allow me tell you a bit about our organization. We have seven provincial organizations including British Columbia, Alberta, Manitoba, Ontario, New Brunswick, Nova Scotia and Quebec. We represent a wide array of woodlots and forest types, from the Douglas fir on the West Coast to the beautiful hardwoods in the Eastern provinces and everything in between.

We share common interests and views. The Canadian Federation of Woodlot Owners is represented on the American National Standards Institute and the Canadian Standards Association. We are currently working on the technical committee to produce standards and protocols to measure forest carbon offsets, which one day will be reviewed and possibly put into cap-and-trade programs for carbon emissions control.

In part 3, I summarize the current status of woodlot economics. Traditional markets have collapsed right across Canada due to a number of factors: the declining demand for newsprint; a rising Canadian dollar, which hurts our exports, increasing global competition from offshore plantations; forest oversupply of wood in British Columbia due to the mountain pine beetle; and the collapse of the U.S. house construction industry. It is, as you have read in the media, the perfect storm. It has hit rural Canada hard. In Western Canada, the only market that exists is for firewood. Firewood is the last remaining good market for wood in Eastern Canada where sales from some private woodlots has declined 60 per cent. The situation is even worse in Western Canadian provinces.

For example, in Alberta right now, because of the mountain pine beetle, large companies are purchasing wood for 54 cents a cubic metre. That is mostly coming off Crown land because private landowners cannot afford to sell for that bargain basement price.

Turning to part 4, assistance for woodlot owners is necessary to ensure that woodlot owners can continue to carry out best management practices and do the right thing to manage their family forests and keep that tradition alive generation after generation.

The forest industry is undergoing huge adjustments, mergers, plant closures and downsizing. The industry has a smaller profile and it means that fewer Canadians in urban areas will even be aware of the struggles faced by rural communities that are dependent on forestry. Nearly 600 communities across Canada have been deemed forestry- dependent and they have been hard hit. Woodlot owners will face reduced market opportunities and few will have the capacity to undertake the best management practices necessary for healthy, productive forests. For example, to undertake a thinning program will cost several hundred dollars per hectare and it is difficult to spend that kind of money when the revenue side of the ledger is low.

We need to encourage smaller value-added companies to serve smaller regional markets. This could create a market for wood fibre from smaller, family forests. This would create a similar situation to the 100-mile diet that many Canadians have bought into. Many Canadians are buying their produce from small neighbourhood producers only. That has been shown to be a sustainable way of purchasing necessities.

We also need to review our forest tenure system that ensures that Crown forests are allocated to smaller forest holdings managed by communities and community-based forests. This will provide more jobs and better value-added opportunities.

We need to encourage the development of small- and medium-sized community-based forest businesses in addition to new forest-based industries, such as energy and biofuels, wood pellets and non-timber forest products such as forest medicinals, and food such as mushrooms, berries, maple syrup, et cetera.

As a national organization, we have put together a shopping list. It is getting close to Christmas; we can call it our Christmas wish list.

Turning to recommendation 1, there is an emerging market for carbon offsets and other ecological goods and services coming from private land. Many countries, such as Germany, Costa Rica and the United States, reward landowners directly with cash incentives to manage their private woodlots, although there may be other ways to compensate family forests financially for carrying out these best management practices. The Canadian Federation of Woodlot Owners is collaborating with the Canadian Federation of Agriculture and the Canadian Model Forest Network to do a pilot project. I have circulated the final proposal for that project, which is currently awaiting funding support from Agriculture and Agri-Food Canada. We are ready to launch this program to measure the goods and services produced by private woodlots and to set a value on them so that in the long term, woodlot owners can look at some form of compensation for providing these services to all Canadians.

We need federal government departments such as Agriculture and Agri-Food Canada, Environment Canada and the Canadian Forest Service to work with us as participants in this program, and then we need to discuss how private woodlot owners can be rewarded for their hard work. It need not be cash; it might be something like property tax forgiveness et cetera.

Recommendation 2 is driven by shrinking oil supplies. There is a rapid expansion of interest in renewable wood energy, as the professor alluded to earlier. District heat and power companies in Northern Europe and Scandinavia are using wood in many forms — pellets, chips, stumps, even the bark from private woodlots — to supply their heating and energy needs. The federal government can play a key role, as we see it, in the research and development of technologies that will lead to cost-effective community-based plants using locally grown wood fibre as biofuel. Wood supplied by sustainably managed private woodlots will create jobs. It is sustainable and renewable. The trees will grow again. It would create valuable jobs in remote, rural areas.

Recommendation 3 is transitional assistance. Manitoba communities, where I come from, such as Pine Falls have been grateful for the assistance they have had from the Community Adjustment Fund to cope with the downturn in the forest industry. We have lost our only mill in our region of Eastern Manitoba. These funds can help build capacity by encouraging development of more value-added businesses and industries that source their wood from private woodlots.

Funds can also be used to help communities diversify their economies by promoting forest-based ecotourism. We have what all Canadians and all world citizens want: clean, healthy forests, clean water and clean air. This could be an opportunity to diversify our economies with hunting and guiding opportunities, and with small sawmills and kilns and provide local wood products for flooring and siding and so on. Non-timber forest products are currently being produced in a number of regions, such as the blueberry plantations in Lac St. Jean Model Forest, or the maple syrup producers in the Eastern Ontario Model Forest program. The Community Adjustment Fund can assist in the development of these and other local industries.

Recommendation 4 concerns access to capital. Small- and medium-sized businesses require start-up capital. Federal grants and loan guarantees are needed since banks and investment institutions look at new forest businesses as high- risk ventures.

Recommendation 5 concerns certification. Family forests need assistance to achieve certification standards such as those set out in the FSC, Forest Stewardship Council, the SFI, Sustainable Forest Institute, and the Canadian Standards Association. There are substantial costs associated with achieving certification. In some provinces, government provides assistance with the cost of certifying wood from public lands. The same needs to be done for family forests. A key component of certification is the development of a management plan. These can cost anywhere from $1,000 to $1,500 when written by a registered professional forester. We would ask the federal government to provide technical and financial assistance to help contribute to the cost of developing these management plans.

Finally, it was noted earlier in the last panel that education and awareness are important when it comes to educating Canadians about forest pests and so on, and we are on the same page there. The federal government perhaps can play a role by assisting with education, training and capacity building, specifically for family forest owners, similar to the role that Agriculture Canada plays for Canadian farmers who educate farmers about all kinds of stewardship issues, for example, writing manure management plans on the Prairies. This is done with assistance from Agriculture and Agri-food Canada. No one in the Canadian Forest Service right now is responsible for private woodlots, even though we own 8.6 per cent of the Canadian forests. Creating a research and development team specifically dedicated to small-scale family forests would help ensure their sustainability. It would help people do the right thing and support sustainability and best management practices. Providing a training budget could go a long way to help provincial associations actually do the training on the ground and technology transfer, and again help forest landowners properly manage their forests, which is such a precious resource on the Canadian landscape.

[Translation]

Daniel Roy, Assistant Director, Fédération des producteurs de bois du Québec: Mr. Chair, I would like to thank the members of the committee for allowing us to take part in these deliberations.

My presentation will focus on three parts. I will begin with a brief overview of our organization and the private forest sector in Quebec. Then I will provide an update on the forestry sector and how it is dealing with the current crisis, and I will end with some recommendations to help Quebec's private woodlot owners through these tough times.

So here is a brief overview of family-owned private woodlots in Quebec. There are about 130,000 woodlot owners throughout Quebec. Private woodlots account for approximately 15 per cent of the province's entire productive forest land base. In any given year, private woodlots supply about 20 per cent of the forest industry's needs.

It is important to understand that the percentage is not quite as high today because of the crisis, but under normal circumstances, before the crisis, very close to 20 per cent of the timber supply came from private woodlots. Keep in mind that 15 per cent of the land produced 20 per cent of the supply.

This productive land adjacent to plants has considerable potential for our industry. Setting aside the current crisis, what these producers normally contribute to the economy is between $300 million and $400 million annually, mostly to economies in Quebec's rural communities. This sector of forest production is extremely important to many communities.

For 40 years, Quebec has been working to improve the condition of its forests through a variety of forest management programs. Today, Quebec has a large network of owners who are committed to forest management and development practices. Obviously, all that land generates economic benefits, but it is also important to bear in mind the environmental and social benefits that it offers. There is a great deal of focus on the economy, which is certainly an important consideration in a family's quality of life, but given the challenges involving air quality and global warming, the environment is becoming increasingly important, as well. Another area of concern is water quality, because forests are instrumental in maintaining water quality.

The Fédération des producteurs de bois du Québec, which brings together 14 producers' associations, works primarily to protect the interests of private woodlot owners and producers. Our associations manage joint marketing plans, which means that the act respecting the marketing of agricultural products gives them negotiating and marketing powers with respect to lumber derived from private producers. Our associations negotiate the sale of timber from thousands of producers with nearly a hundred sawmills, pulp and paper mills and panel mills.

Quebec has a network of forest consultants, who provide support to forest owners, helping them to manage and develop their land. Professionals put together forest plans to help owners identify the various activities that need to be undertaken and intervene in order to improve future forest quality.

I would like to touch on the causes of the current forestry crisis. Through its work, I believe the committee has properly diagnosed the current situation facing the forestry industry. In its December 2009 report, the committee correctly pinpointed two factors, which are still applicable today, unfortunately: the collapse of the residential construction sector in the United States and the structural decline in the demand for newsprint.

I can tell you that, in Quebec, these factors are still at work and continue to have a tremendous impact on wood producers. As you know, the excess that marked the real estate boom in the United States has slowed the recovery of the construction sector. In Canada, like the United States, the construction industry had a tendency to go through downward cycles, but the current downward cycle is lasting even longer than usual, holding up the industry's recovery.

Wood producers have been dealing with the fallout of this crisis since 2006, and it is hard to see any signs of recovery in the construction sector and sawmill industry in Quebec.

Housing starts in the United States are expected to approach 600,000 in 2010, a far cry from the peak of 2.2 million housing starts in the 2000s. Under normal conditions, nearly 60 per cent of timber derived from private woodlots is used by the sawmill industry. That is a huge market for our producers. What's more, the housing crisis, which has affected many sawmills in the U.S., has led to a significant reduction in the market share of our wood producers.

Where newsprint is concerned, there has been a considerable decline in demand. This is not a cyclical issue, but a structural one. The advent of the Internet and electronic media has meant that newsprint has become much less important.

In Quebec as elsewhere in Canada, all of this has meant the closure of several pulp and paper plants, and also the need to convert machines. Certain plants have not closed down, but converted their equipment in order to be able to make other products. This has meant that wood has been used in other ways.

Producers are now being asked to provide wood chips rather than timber like before. Another market has seen a sharp decline because of this factor.

According to experts, this trend involving the closure of pulp and paper plants, or the conversion of equipment, should continue until 2012. It will take that much time to achieve a better balance between the real demands of the market — that are declining, but will eventually stabilize — and the offer, which also has been declining, naturally, because of these closures.

Some markets have been lost. They were particularly precious markets for producers because the pulp and paper sector uses what we call pulpwood, that is to say lower quality wood that is used to manufacture newsprint pulp. When development is being done in private woodlots, that type of wood is often generated because we are attempting to improve our forests. The lower quality wood is taken out in order to keep higher quality wood that has better growth perspectives and a more interesting development horizon. So the loss of that market is currently a serious problem.

As to the effects of the crisis on Quebec forestry producers, you have here three graphs that illustrate rather well the impacts on producers since 2005. It would be more interesting if the curve were going in the other direction, but we are witnessing a sharp decline in terms of the volumes of product being sold. Normally, we had a market of close to six million cubic metres of wood per year. In 2009, we closed the year with less than three million cubic metres. That is a drop of over 50 per cent in marketed volumes.

Because of this drop in demand, of course prices have been following the same curve. There was a serious average decline in wood prices in Quebec and all of that translated into a loss of income. We went from close to $300 million in 2005 to $120 million in 2009. From 2006 to 2010, we estimate that the gross loss of income was greater than $500 million for our producers. The producers who derive an important part of their family income from wood production were forced in many cases to sell certain forest properties they had or to sell equipment in order to survive the crisis. In some cases, they simply shut down all of their operations. They changed sectors because it was too difficult to survive.

A lot of private forest producers in Quebec do this work on a part-time basis. For many of them this represents supplementary income. However, that extra income for many was important income in terms of their total family business income. These sorts of things can destabilize their business. I am thinking of certain farmers, among others — a lot of our producers are farmers — who derive a part of their income from agriculture but round things out with their forestry activities. Their family business was made more precarious by these developments.

My last point is perhaps the most important and concerns the expectations of the Fédération des producteurs de bois du Québec.

In the past the federal government intervened to encourage forestry producers to develop their forest. In the mid-90s there were federal-provincial agreements that allowed the federal government to support forest owners in carrying out silvicultural projects through various programs. More recently the federal government came to the assistance of producers who were grappling with the current forestry crisis. Through the community adjustment fund there was an injection of $10 million in 2009 into Quebec silvicultural programs for our forest owners, and $5 million was provided in 2010. Normally, this financial assistance is to come to an end on March 31. For the organization and for our woodlot owners, this assistance was precious. In this period where producers are selling less wood, the possibility of going to work in their forest nevertheless, to improve its quality through various silvicultural projects thanks to these programs, allowed them to generate a certain amount of income. This income replaced the loss of income they suffered due to the decline in the wood sales. So this has been an important mechanism to help the communities get through this crisis that is ongoing at the current time.

As an organization, we would like to see this program extended for at least two years, which would give us time to assess the crisis. As we speak, producers expect that they will receive assistance to get through the current crisis.

The other advantage of these programs, in addition to providing employment and allowing people to draw an income, is that they contribute to improving forests for the future. That is an important element — you also highlighted this in your work previously. We have to work on improving the quality of our forests and trees in order to better position our industry for the future. The private forest has great potential. It is close to the mills, and the ground these trees are planted in constitutes a very productive environment. And so there is a potential there, and it will be to everyone's benefit to develop it and invest in it.

The other measure we would like to see — and this is more audacious — is a fiscal incentive to assist owners in developing their forest. Over the past few years, what has been called a silvicultural savings and investment plan has been developed. This is a proposal which urges the federal and provincial governments to put in place an investment regime where the owner of a forest could put the income derived from the sale of his wood in a tax-protected account in order to be able to use it subsequently for the development of his woodlots. It is comparable to a forestry RRSP. These sums would become taxable upon withdrawal, but the advantage is that the owner could have a source of income at the precise time he wishes to spend to develop his woodlot. From the fiscal point of view, this would be more advantageous for the producer than the current situation which is that he is taxed when he sells wood. He does not always have expenditures that arise at the same time as he is cutting down the trees. The investment and development expenses may occur in the three or four subsequent years but then he no longer has the income to balance his expenditures and income from the fiscal point of view.

Such a plan was detailed in another document we distributed which is entitled Stimulating the development of rural communities through the creation of a personal silvicultural savings and investment plan. The document is very detailed, I am not going to go through all of its contents but I invite you to acquaint yourselves with it. It answers a lot of questions. We would like the government to consider this plan seriously for the next budget.

[English]

Andrew Clark, President, New Brunswick Federation of Woodlot Owners: The New Brunswick Federation of Woodlot Owners wishes to thank you for your interest in our sector. As part of the Canadian federation, we endorse the recommendations that the federation has made.

I would like to address a few comments from New Brunswick's perspective. The markets for private woodlot wood in New Brunswick have fallen by 60 per cent in the last two years, due to mill closures and shutdowns. There is an initiative to correct our lack of market opportunity under way in New Brunswick; however, we need to develop new uses for wood. Some of our members have actually taken the initiative to develop some new industries.

The problem we have in common is a lack of available and reasonably priced capital. The Farm Credit Canada has been helpful, but there is a need for a larger pool of capital willing to take some risk in order to develop wood, as I believe we are capable of doing, and to use more of it.

There are some new markets that are asking for certified wood. There are standards, as Mr. Austman alluded to, out there now, and they are rather costly, anywhere from $1,000 to $1,500 per woodlot to get developed.

In the past, the federal government did support programs that helped with some of these costs. The federal government could play a role, either in new federal-provincial agreements or by using tax credits in the reform of refundable tax credits. There is also a need for a national coordinator to see that the maximum benefit is derived from the efforts now taking place in Nova Scotia to use the CSA Z804 standard that is being tried. It is also being worked at in Northumberland in New Brunswick, and there are initiatives in Quebec and Ontario on the Forest Stewardship Council.

My belief is that there is much overlay in preparing woodlot owners for certification, whether it is carbon credits or environmental goods and services. There is a need for a national coordinator or secretariat to help in the sharing of this information so that we do not continue to reinvent the wheel.

I would like to make two points on tax policy as it affects private woodlot owners. First, the Canadian federation asked for the creation of a registered silviculture investment plan. Such a plan would help owners deal with cases where ice storms, insect infestations, tornadoes et cetera should strike a woodlot that would require a great deal of money to repair. It would allow owners to park some of this money to use later to re-invest in woodlots for planting or reforestation efforts.

Another thing in tax policy is income supports for senior citizens as they now exist are in all too many cases a deterrent to sensible use in the management of woodlots. The guiding principle for income support should be for the care of the resource, not for maximum tax collection. That is a change in mindset, I would say. If you talk to the people at the Finance Department, as I have had the privilege of doing a couple of times, they focus on ensuring the taxpayer pays. I am telling you to start focusing on seeing how the resource is being used.

Resources for industry and jobs for workers are sometimes lost. In the New Brunswick context, a few years ago rules that affected how seniors made their contributions to special care homes were changed when the government realized that they were working against good forest management, that people were not doing what they needed to be doing. In analyzing the situation, they changed that. My point is that all of our tax initiatives and policies need to be examined carefully, not only for their intended purposes but also for their unintended consequences, because there is always the other side to things.

The Canadian federation worked for many years to get a principal established where private woodlots could be rolled over to the next generation the same way farms are with deferred capital gains. That is an example of good work that has been done and we need to do more of that.

The invitation asked for ideas to promote good forest management. What do you mean by good management? Clear- cutting, planting, and thinning are all forest management techniques, but it is even-aged forest management. I think what you were referring to could be called uneven-aged forest management.

In that, you would be working to keep at least partial cover over your forested land. You would be working with naturally occurring species on the landscape. You would be working to protect water sources, not just watercourses, and there is a difference. You would also have within your plans protecting species at risk and things like that, and you could go on and on in defining this. I simply want to make the point here that if we are to talk about policies to encourage good forest management, we first need to define good forest management.

In New Brunswick, from 1978 to 1996 we had federal-provincial agreements that allowed for support not only for the thinning and planting that was taking place and still takes place there under provincial programs, but we were allowed some flexibility to use some of the money for planning as well. We need those agreements again in the effort to renew our forests for the future.

The federal stimulus money that New Brunswick received from 2009 to 2010 has helped to maintain employment for hundreds of our people and continued support is needed. For forestry in New Brunswick, the recession is not over. We still need that support.

In closing, senators, I urge you to use your influence to guide the federal government to take a leadership role by good tax and incentive policies, by again helping woodlot owners directly, by supporting silviculture, management plans and creating a common pool of information, to help woodlot owners make good decisions. Why? The answer is because water and air flow across provincial boundaries and international boundaries. Next to food and shelter, water and air are absolutely essential for our survival as a species and for the world.

Watercourses that start on private woodlots become drinking water for many villages, towns and cities. The air improved by the trees on private woodlots adjacent to most towns and cities, or close by, purify and take away some of the pollution that has been generated within your towns and cities. How they are being handled is important to society, not just to the woodlot owners. Whether they realize it or not, everyone has a stake in supporting good forest management practices.

The Chair: Mr. Clark, thank you very much. As always, you are precise and to the point.

Rod Bealing, Executive Director, Private Forest Landowners Association (BC): Good evening and thank you for the opportunity to speak with you today. The Private Forest Landowners Association represents private forest owners in British Columbia. We endorse the recommendations of the federation here today. There are many common goals and observations from the four of us.

I have provided a presentation. Rather than grind us all through it, I would like you to enjoy it in your own time and use it as a reference for some of the points I am trying to make. It has some statistical information in it.

I would like to talk a little bit about your interim report. I took the time to read it and I was encouraged. I have been involved with many processes like this over the years, and I was encouraged indeed. This is a committee that gets it.

Senator Eaton: Flattery will get you everywhere.

Mr. Bealing: That is what I am hoping, but it is only part of my strategy. There is more to come.

I noticed on four separate occasions your recognition that it is important to encourage competition for fibre; that it is not all about getting delivered log costs down, which is not the solution to Canada's ills. It is a bit like a sugar high, so convenient just after Halloween. You give the kids candy. They run around and next thing you know they are falling over and screaming and you wonder why you did it.

On pages 6, 25, 35 and 46 the report recognizes that it is important to ensure there is a good return of value to the forest, that the person who has taken all the risk, and Lord knows we know who they are, paying the property taxes, putting out the fires, dealing with the blowdown, the trespass, all these challenges we have, we need some return for our risk. A policy that restricts log prices, that makes it difficult to get good value for our logs, makes it difficult for us to sustain our businesses.

This is where we get into best management practice and what government can do. We need to send a signal — the government needs to send a signal — if Canada believes that forestry is an important thing and something we should encourage. What kind of signal do you want to send the landowners? What kind of signal do we need?

I am a forest owner, and from time to time, when I see an opportunity in the market, I will harvest some trees. A number of times I have sat down with my family and discussed the fact that we will get some revenue for some logs now. Do we replant? Let us think about that for a minute. What kind of assurance do we have that if we put trees in the ground now that we will actually be able to go back and harvest them when the time comes? Maybe if we do nothing, we will get more support. Maybe we will get a better property tax treatment. Every forest owning family goes through this process each time the family thinks about whether they should replant after they harvest.

It is important that we be remembered as farmers that happen to have crops that take a long time to grow. We need to think about some of the things that government does to support farmers. It is a no-brainer. Look at how farmers are supported.

Without going through a tremendous amount of detail and putting you through my entire presentation, although it is entertaining and I encourage you to look at it; my requests today are straightforward. I like to think of them as quite easy, low-hanging fruit for the committee to recommend.

First, maintain some distinction for private land. This is through policy development. I am trying to focus on Canada rather than the work we do in British Columbia. When Canada is developing new policy, particularly Environment Canada or Fisheries and Oceans Canada, I want everyone involved to remember that there is a difference between public and private land. These private owners are taking a tremendous amount of risk. We have shown across the country that we recognize that we need some balance. This is an exercise that we have done in our association since 1997. It is our Best Management Practices program. I only brought one handbook today, but I will leave it with you and I can provide more; I promise.

As owners, we realized that there are environmental values on our land that the public is interested in, and we need to demonstrate that we take those things seriously, that we understand that our neighbours have needs in terms of water quality, fish habitat, critical wildlife habitat, et cetera. As independent and keen we are on private property rights on our land, we recognize that there is a public interest in what we do on our land. The question then becomes more about finding some balance, namely, balancing our investment and our private property rights with the interests of our neighbours and our communities. Balancing environment, community and commerce is the juggling act we all must do on private forest land. That is something that we need staff in the ministries to understand. We get it. We are not an unregulated bunch of pirates out there not thinking about our land. We have an interest in our land. We care deeply about our land.

The second thing I would like to strongly recommend — and this is exclusively a British Columbia thing — is that we need open access to international log markets in British Columbia. Currently, the federal government restricts our ability to access those markets. It is the only province in Canada where the federal government restricts market access, and it has a huge impact on our business.

I return to the question about what Canada can do to help best management practices and sustainable forest management. Here is an example where, by taking away this restriction or even modifying the way it is administered, would have the effect of taking a foot off our throats. There is revenue out there; we have overseas customers that are prepared to pay a better dollar for our wood, yet we are restricted by this policy that no longer serves anyone or has any value at all. I go into detail about that in my presentation. I would welcome the opportunity to talk to the committee further on that subject, which is huge for us.

Third on my list is engage and involve owners. Again, this goes to what some of my colleagues are saying. Through education and communication, it is about that two-way traffic. I do not know how many generations we are now removed from the farms and the forests in the cities. It is probably five or six; I have lost count. However, policy is made in the cities, and forest owners and farmers tend to keep to ourselves. If we do not bridge that gap both ways by making an effort to communicate, we will get more policy that does not work for anyone. That is something that we believe strongly, namely, keep that communication going. That is one of the reasons I am here today.

Finally, my fourth recommendation you already have in my report. Encourage that a fair portion of the value goes back to the land. If we do not respect the land, and if we ignore the forest, we will not have an industry. We will not be able to attract processing plants or mills or things that add value to wood because people will not be able to afford to take care of their forests.

Senator Mercer: Gentlemen, thank you very much for the interesting presentations.

Several of you have talked about certification. Our previous panel talked about certification with respect to the cutting and marketing of firewood, which is a concern. Why does it cost $1,000 to $1,500 per woodlot to do? Where does the cost come in? Who gets the $1,000 to $1,500?

Mr. Clark: I am a forest technician. If you want a proper plan, it requires you to go out in the forest and walk along in a predetermined pattern, taking samples to determine the standing volume and the age and health of the forest. You then draw that up and create a map of it, delineate the different stands on the properties, do up a proper report and produce it for the owner. It takes quite a bit of time to go out and do a good forest management plan because a forest management plan looks at everything, for example, the type of soil you have and the drainage aspect. Many things need to go into it to do it properly.

Senator Mercer: If I wanted to certify my woodlot, I would bear that cost of $1,000 to $1,500 myself. Is there no tax advantage? Obviously, it is a business expense but are there any business programs across the country that offer incentives to get this done, possibly as a direct subsidy from a provincial government? Of course, we cannot say that dirty word ``subsidy'' because some American might be watching us, and I just got the entire industry in trouble. Is there no program that helps get us to this point?

Mr. Austman: The short answer is no. The forest management plan for $1,500 is just step one. For certification, we are looking at regional certification where a number of woodlot owners would be certified as a group. In some areas, we are looking at hundreds of thousands of dollars. The scale is ramped up to a much larger scale when you want to get the certification from FSC, SFI or CSA. For an individual woodlot owner, it would be out of the question to have one family forest certified. We are talking about a regional basis, and everyone would chip in. The standard would be audited from time to time to ensure that you are doing the right thing on the land. If you do not, you will lose your certification and lose your market access.

Senator Mercer: Is Crown land certified?

Mr. Austman: Bits and pieces of Crown land are certified. Right across the country, I think about 30 per cent of our Crown land is under FSC. That is the number one certifying body in Canada.

[Translation]

Mr. Roy: In Quebec, within the context of the development programs I was referring to earlier, the financial assistance measures for silvicultural work allows private forest owners to partly finance their development plans. Those programs are also used to fund development plans, which is the first step in the development of a woodlot if you are going to come to the assistance of an owner. And so, indirectly, this helps with certification as the development plan is a crucial tool at the very heart of any forest certification process. And so access to this type of financial assistance is one way of helping forest owners obtain forest certification.

[English]

Senator Mercer: Senator Fairbairn, Senator Segal and I have heard many times when doing various studies on the agricultural industry about the need for improved succession planning and making it as easy as possible for a farm to be passed down to a family member without a huge tax burden.

If we were to duplicate what is currently in place for the transfer of farm land, although we know that is not perfect, for the passing down of woodlots, would that be sufficient, or is there something more we need to do to provide for succession planning?

Mr. Clark: As I said in my remarks, we currently have that in large measure. In order to qualify for that you must have a management plan to demonstrate that the land you are passing on will be used properly. It is called intergenerational change.

Senator Mercer: Is it the same in agriculture?

Mr. Roy: It is similar.

Mr. Clark: To your point on costs for management plans, I was thinking of that when I talked about refundable tax credits. A private woodlot owner without a large income might be able to claim it as an expense, but if you do not have enough tax payable it is not really a benefit to you. A refundable tax credit is a benefit and would encourage you to go ahead.

Senator Segal: I want to probe something that came up in the work that Senator Mercer referenced on agriculture. When we looked at our European competitors, we saw that in many European countries stewardship fees were paid to the farming community as part of the environmental maintenance process, which supplemented other income from the farms.

I have heard this afternoon from some of you the suggestion that there should be some compensation beyond what is now in place for private woodlot owners who are maintaining an important part of our environmental heritage by virtue of the work they are doing thinning and maintaining their woodlots to protect them from fire and infestation.

Have you thought about the kind of structure you would like to see for that kind of stewardship fee? Would it be tied to acreage under ownership? One suggestion was an enhanced refundable tax credit. That is a mix of federal and provincial jurisdiction, by definition, because of who has control over land and natural resources in the provincial area.

I would be interested in any advice you might give the committee on specific recommendations we could make in that area to provide a base income for woodlot owners to help defray costs in thin times so that they are able to survive until better times.

Mr. Clark: In some provinces there is a move toward conservation easements under which payments are made so that owners will not clear-cut property that is protecting some water, for example.

Senator Segal: An environmental right of way?

Mr. Clark: Yes, the City of Moncton interacts with nearby woodlot owners in that way. New York City pays woodlot and other landowners in upstate New York quite a lot of money to protect their water supply.

I alluded to that principle. There is a societal interest in having this done, but currently all the cost and responsibility for that rests with woodlot owners. Mechanisms need to be developed to recognize that and transfer money for the benefit provided.

Senator Segal: Will some things work better in British Columbia, for example, and others in Quebec? Are there nuances of which we need to be aware?

Mr. Bealing: Possibly. A challenge we have in British Columbia is that there is not much private land. As you go further west, there is much less private land. Although we tend to be in people's back yards, we are in the lower-lying lands. There are non-timber uses for forest land such as camping, hunting and fishing, but there is so much of that available on Crown land that it would be very difficult to compete.

The government could provide payment for those goods and services, but ownership of the resource drives the matter more than anything else. I cannot imagine that the committee wants to go there, but in European countries and the U.S., owners have the ability to sell fishing or hunting rights. Those things are huge income generators for forest owners. In Canada we have our hands tied behind our back in that regard.

Mr. Austman: In Manitoba, we have the Alternative Land Use Services pilot project north of Brandon. Land owners are paid $75 per acre per year for water stewardship, for not bulldozing little woodlots to raise cattle, for leaving grass waterways that reduce erosion, for planting trees, et cetera. There is a management plan involved. No one will get rich on that amount of money, but it is an incentive for those who are thinking about bulldozing down a 10-acre woodlot to use the land for fattening steers for market.

The $75 is the tipping point to get people in on the program, and it has been very successful.

Senator Robichaud: Mr. Clark, you have a Federation of Woodlot Owners in New Brunswick, do you not?

Mr. Clark: Yes. Seven regional marketing boards are members of the federation.

Senator Robichaud: Is the board the authority on certification that will help woodlot owners go through the process?

Mr. Clark: There have been a number of different tries at this. The former industry in the Miramichi was offering woodlot owners a bonus payment for their wood if they followed programs. They wanted their owners to become certified because Time Warner wanted to buy only certified wood. The driver for that was coming from the marketplace. That marketing board was actively supporting that and providing information to their owners to get them up to speed with the program.

We have worked at this in different areas at different times. Northumberland is working to develop a new industry, a pellet mill, with a Dutch partner that wants the wood to be certified. The Dutch government is willing to spend money to ensure that the wood that they are getting is certified. They want it to be sustainable because they want to switch their coal plants to wood, so there is an interest.

There is a connection between markets. The price of carbon is starting to affect the interplay. I recently hosted a university class on my woodlot for a few hours and I was asked about certification. I told them that it will be market driven in the end. That may be through carbon credits, environmental goods and services or simply customer demand. Once the push is there the steps will be taken to make it happen on a large scale.

Senator Robichaud: Do you feel that we are near?

Mr. Clark: Yes, I do. At the last federation board meeting the manager of the North Shore board reported to me that he wants to sell wood to the Shaw factory that is producing pellets. They told him they needed certified wood because they were selling to a European market. That is another demand coming in there.

We are starting to see this interplay and the demand is coming from Europe largely, where they have a functioning carbon cap-and-trade system. It becomes in the interest of operators of utilities to ensure that they become carbon neutral, if they can.

Senator Robichaud: The cost of certification is at the woodlot owners' expense, is it not?

Mr. Clark: Yes, unless one of the industries is willing to put some money in to support it.

Senator Robichaud: What is an average lot size of a woodlot owner in New Brunswick by hundreds of acres?

Mr. Clark: They are about 100 acres, on average. They range anywhere from 20 acres up to 1,000 or 2,000 acres. The average is 100 acres.

Another thing about society's interest in this, with good management and intergenerational change, the average woodlot stays in one person's ownership for about 20 years. That is a short time in the life of a forest.

If we think in the life of a forest being in 80-year cycles, at least in the New Brunswick context, then you need to be thinking in the longer- term with policies that support long-term thinking and that rewards the practices that you want.

Senator Robichaud: Whatever wood is produced in the province or is extracted from the forest, a certain percentage of that must come from private woodlot owners, does it not?

Mr. Clark: We had rules in place that said, basically, the annual allowable cut at one time from the private woodlot sector had to be purchased before industry's access to Crown wood. In the last few years, that has become reversed. In the 1982 act, it was envisioned that the Crown would become the residual supplier. Now it is the private woodlot owners that are becoming the residual suppliers; they are cutting all of their Crown land, and we are working diligently to try to get that corrected.

There is an initiative under way. Last year, we harvested only 600,000 cubic metres out of 2.5 million available cubic feet, and this year we have a target of 1.1 cubic meters, which the provincial government is supporting by cutting back some Crown availability. Yes, we do have a problem there that needs to be corrected.

The Chair: I have a quick question to complete remarkable presentations. Would that wording be ``primary source of supply?''

Mr. Clark: Yes. That was the doctrine when Bud Bird first introduced that act. He wrote to the executive director of the Forest Products Association of Canada of the time, and said, ``The private woodlot owner must perceive their future with optimism.'' Basically, he was telling the industry, ``I know you do not like this deal, but that is the way it is, so live with it.''

Senator Duffy: Is the same wood certification process in place right across the country?

Mr. Clark: It is available.

Mr. Bealing: Actually, there are a number competing for increasingly similar processes for forest certification. Canada has more certified forests than any other nation on the planet. It is way up there. However, there are a number of certification systems in place. They are very similar.

Senator Duffy: How detailed does it become? We have had witnesses from the softwood lumber industry who say it is now down to the point where every what they call stick of lumber that is harvested has a unique number and they know it. Are small woodlot owners now expected to meet that level of detail?

Mr. Bealing: From the British Columbia perspective, we have a timber marking system required by law, so you cannot send logs off your property unless you have marked them. That is a good fit with a chain of custody process.

This is a customer-driven process. The customers demand some assurance that their two-by-fours or paper comes from a sustainably managed source. There has to be some connection there right back to the stump. It is pretty impressive stuff.

[Translation]

Mr. Roy: In Quebec, we have in the course of the past few years developed certification processes for forest owners' practices. This work is ongoing. The process is more advanced in certain regions of the province of Quebec. These systems provide for wood traceability, they allow us to follow the wood. This function is included in the owners' certification process. Thus, we will be able to follow the wood from the stump, from the forest to the mill, for the purpose of meeting buyers' eventual requirements. This capacity has been integrated into these systems.

[English]

Senator Duffy: How big of an impact did that have or is this having on your members? We hear about $1,500 per woodlot. Are we finding people simply unable to raise that kind of money?

Mr. Clark: My answer to the forestry class was, until someone is in my particular area, no one is asking me for certified wood. Until someone comes along and says to me, ``I need certified wood if you want to keep selling me wood,'' why would I, as a woodlot owner, spend the money? I do not have to change any practices on my woodlot. It is my woodlot, and I know it is managed to a good standard. I do not have to change anything, but in order to go to the expense or bother writing a management plan, give me a reason.

Senator Duffy: Do we have inspectors who go around checking this?

Mr. Clark: If you enter into this, as Mr. Austman was referring to, individual owners need a management plan, then you will need them in groups, and the Forest Stewardship Council will do an audit. You will have to pay for the cost of the audit. That is where the big money comes in. You know what it is like to get an audit on your taxes? We get auditors in on these management plans for a large area, and they are very expensive.

The Forest Stewardship Council is international environmental group driven and has stringent standards, for the most part. The Z804 is a CSA standard that has been developed with the cooperation and help of the private woodlot owners in Canada as trying to find a standard that is more reasonable to work with yet meets international requirements. We are in the process of having that tested in Europe to see whether it suits them.

We do not yet have that answer, I guess. If we get it approved in Europe so they will accept the Z804 CSA standard as being good enough, then we will have one that we can more easily work with in private woodlot sectors.

Senator Duffy: Do the Americans have the same obstacle?

Mr. Austman: Yes. They have the American Tree Farm System, which they got from us and they hung the American name in front of it. Essentially, they are using our system, we brought it back, dusted it off, revised and tweaked it and that formulated the framework for the CSA Z804 Standard.

Senator Duffy: In comparative and competitive terms, they are in the same boat.

Mr. Clark: Yes.

Senator Segal: Except for the absence of Crown land.

Senator Duffy: In terms of the costs of managing a woodlot —

[Translation]

Mr. Roy: Insofar as the cost of certification is concerned, in Quebec we have chosen a collective approach. Rather than letting producers shoulder the whole cost, we have included a larger number of owners in the process so as to reduce the costs related to planning and administration, among other things. This has allowed us to reduce the burden for each individual involved. However, this approach has its limits, and they are related to the financial capacity of the organization, in spite of involving all of the owners in the financing. It is a very costly process. Without some form of support from the state to develop this certification process further, we will not be able to move forward quickly.

[English]

The Chair: We have gone far beyond our allocated time. We will have, no doubt, other questions that will follow. We will submit them in writing to you and you can send your answer back to us.

We want to thank you for your informative answers.

(The committee adjourned.)