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Proceedings of the Standing Senate Committee on
Agriculture and Forestry

Issue 10 - Evidence - November 4, 2010


OTTAWA, Thursday, November 4, 2010

The Standing Senate Committee on Agriculture and Forestry met this day at 8:05 a.m. to study the current state and future of Canada's forest sector.

Senator Percy Mockler (Chair) in the chair.

[English]

The Chair: Honourable senators and witnesses, good morning. I see that we have a quorum and I declare the meeting in session.

[Translation]

Welcome to this meeting of the Standing Senate Committee on Agriculture and Forestry.

[English]

Witnesses, we welcome you this morning to the Standing Senate Committee on Agriculture and Forestry. My name is Percy Mockler. I am a senator from New Brunswick and the chair of the committee.

Today, honourable senators, we welcome witnesses from different organizations. From the Forest Stewardship Council of Canada, we have Maia Becker, Vice-President, and from the Sustainable Forestry Initiative, Peter Johnson, Consultant.

[Translation]

From the Quebec Wood Export Bureau, Mr. Jacques Gauvin, Director, Traceability Program for Wood Products.

[English]

The committee is continuing its study on the current state of the future of Canada's forestry. We are particularly looking at eco-certification and traceability.

Before I ask the witnesses to make their presentations, I would like to ask honourable senators to introduce themselves.

Senator Mercer: I am Senator Terry Mercer, from Nova Scotia.

[Translation]

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

[English]

Senator Fairbairn: Joyce Fairbairn, from Lethbridge, Alberta.

Senator Mahovlich: Frank Mahovlich, from Toronto, Ontario.

Senator Plett: Don Plett, from the centre of Canada, Manitoba.

Senator Ogilvie: Kelvin Ogilvie, from Nova Scotia.

Senator Meighen: Michael Meighen, from Ontario.

The Chair: Witnesses, again, on behalf of the Standing Senate Committee on Agriculture and Forestry, we thank you for accepting our invitation to share your knowledge with the committee so we will be in a position to make recommendations to government in order to be partners to find solutions, and recommend solutions, to the forestry challenges and crisis that we have.

That said, I am informed by the clerk that we will start the presentation with Ms. Becker, to be followed by Mr. Johnson and Mr. Gauvin.

Ms. Becker, after presentations are made, we will be asking questions to our witnesses.

Maia Becker, Vice-President, Forest Stewardship Council of Canada: First, I would like to apologize for the slides not being in both English and French, but thank you very much for inviting the Forest Stewardship Council, FSC, of Canada to appear before you today.

I would like to discuss how FSC and forest certification presents an opportunity for our forests, our communities, Aboriginal peoples and the forest industry. FSC is an international certification and labelling system for forests and forest products that was founded in Canada in 1993 by forest managers, producers, conservation groups and labour, indigenous and social interests. FSC provides a guarantee for consumers or buyers of products that the wood and paper products they are purchasing come from healthy forests and strong communities.

As interest and understanding of the value of our forests has grown, so has the demand for FSC-certified products. Today, FSC is the fastest growing forest certification system in the world, with 135 million hectares of forests certified, 18,000 manufacturers and a global market with more than US$5 billion.

Like many other certification systems, forest certification is a market-based mechanism, which means that consumer demand for certified products drives the incentive for companies and forests to become FSC-certified. Under FSC certification, forests are independently evaluated against a strict set of environmental and social standards, and fibre from those forests is tracked all the way to the consumer through the chain of custody certification process. This means that, for a product such as paper to carry the FSC label, not only must the forest be FSC-certified, but the pulp mill, the paper mill, the paper merchant and the printer must all be certified as well for an envelope, book or any product to then carry that FSC label on it.

The purpose of FSC certification is for forests to be managed in an environmentally appropriate, socially beneficial and economically viable manner. Since its founding 17 years ago in Canada, we now have 39 million hectares of FSC- certified forest. That represents approximately 25 per cent of our harvested or managed forest lands in Canada.

We have an additional 7.6 million hectares that are currently in the process of becoming certified. This means that Canada is the world leader when it comes to FSC certification; 30 per cent of the world's FSC-certified forests are in Canada today.

FSC certification is only able to benefit our forest communities and businesses if consumers in the marketplace have the ability to identify FSC-certified products, and then are able to preferentially purchase them. This is why that supply chain tracking and labelling system is so important.

In the last five years, there has been an 800 per cent increase in the number of FSC-certified manufacturers and producers here in Canada. The largest growth has been in the pulp and paper and printing sector, with the wood products sector showing a very strong and steady growth as well.

The growth in FSC certification that has taken place over the last five years has taken place despite the challenges facing the forest industry — in many cases, in fact, because of these challenges as companies look to add value, diversify products, earn the loyalty of customers and access new markets that are developing. This growth in demand for FSC products is a result of large international, national and local companies not only purchasing FSC products, many of which come from Canada, but also putting in place purchasing policies and specifying FSC products in those.

On the slide are some examples of companies that purchase and support FSC by buying FSC products. Some examples would be that, in 2008, Rona, the Quebec-based, do-it-yourself store, put in place a wood purchasing policy in which they stated a preference for wood products certified to FSC standards. Since then they have had 13 of their locations across Canada FSC-certified to meet the needs of their customers.

As an example, Scotiabank in 2008 put in place a paper policy requiring that 50 per cent of their paper be FSC- certified and/or -recycled.

In 2009, Indigo and Chapters, the largest book retailer in Canada, put in place a paper policy giving preference to FSC and now communicate in their stores to their customers which of their books and products are FSC-certified.

The demand for Canadian FSC-certified products is being driven not only by these companies but also by government procurement policies and purchasing decisions. The federal government, provincial governments and agencies purchase FSC products. For example, in 2008, the Province of Ontario put in place a paper purchasing policy through which they required that 30 per cent of the paper purchased by Ontario ministries be FSC-certified, and they required that all printers supplying the Ontario government be FSC-certified by 2012.

As another example, in April 2010, the Nova Scotia Department of Energy, as part of their renewable electricity plan, put in place a requirement that forest biomass vendors be FSC-certified as well.

I will get to the opportunities that FSC and forest certification present to the forest industry but, first, it is important to put into context why companies, organizations and individuals are choosing certified products and Canadian FSC- certified products.

To begin, FSC is a credible, internationally recognized product label. FSC-certified forests protect waterways and wildlife habitat. They serve biodiversity, minimize the impact of harvesting and respect the rights of indigenous peoples and workers. FSC also has a strict tracking and labelling system for customers to be assured and to have a guarantee of what the label means and the source of the products. FSC is also the only forest certification system that is supported by major environmental, social and Aboriginal groups, such as WWF, World Wildlife Fund, CPAWS, Canadian Parks and Wilderness Society, the David Suzuki Foundation, Sierra Club of Canada and many others.

FSC is also supported by Aboriginal groups, and in Canada that is particularly important because of their role and their importance in our forest context. I believe, as Mr. Bombay said in his address to this committee in May of 2009, NAFA, the National Aboriginal Forestry Association, supports FSC because it is the only forest certification system that addresses indigenous rights as part of its principles and criteria, and that is a core part of FSC.

Having given that background and that context, I will talk about some of the opportunities that FSC certification and forest certification can provide to the forest sector. These opportunities are the competitive advantage that FSC provides to certified companies in winning the loyalty and business of their customers. It is also the opportunity of access to rapidly growing international markets for FSC-certified products, as markets for many traditional products contract or decrease. There is also the opportunity to diversify and to grow the value-added forest products sector through FSC certification of the supply chain. There is a particular opportunity to focus on supporting the certification of small and medium-sized businesses across Canada within that supply chain.

Another opportunity that comes from FSC certification is the growth in the green building sector, through programs such as the Canada Green Building Council and the LEED, Leadership in Energy and Environmental Design, green building rating system. The opportunity lies in providing and supporting the use of FSC-certified wood products as a key component of green buildings, as a green building sector continues to grow.

Another opportunity is the potential use of FSC certification as a verification mechanism for carbon offset projects, biomass projects and other such initiatives.

While I do not have time to go into detail about all these opportunities today, I do want to highlight three of them for you.

The first is the competitive advantage that FSC provides to companies. As an example, Tembec, a Canadian- integrated forest products company with $2 billion in sales, 6,000 employees and over 30 manufacturing facilities, credits the success and survival of their company through the current forest crisis to the fact they are FSC-certified, and that their customers have maintained their loyalty because of that FSC certification. I want to read a quote from James Lopez, President and CEO of Tembec about that. He said the following:

Some of Tembec's best customers are married to FSC-certified products . . .

We are the preferred supplier to Home Depot, the biggest buyer of lumber in North America, only because of our FSC certification . . .

Other major pulp customers, ''household names'' that don't want to be identified, became customers and hung on because of the certification.

Another example of a Canadian-based integrated forest company is Domtar, which has over $5 billion in sales, 10,000 employees and 37 manufacturing facilities. They credit the success of their EarthChoice line of 27 papers to the fact that it is FSC-certified. To give an example of the impact of that certification for their product line on the company, I will read a short quotation from Lewis Fix, their vice-president of branding and sustainable development.

He said that FSC brought credibility to the EarthChoice initiative — the reception was great and what was kind of a sidebar initiative has now become a strategic pillar for the entire company.

So the competitive advantage FSC provides to Canadian forest products companies is a significant opportunity for the sector as a whole.

Another opportunity is the certification of the supply chain in providing greater access to FSC markets for small and medium-sized businesses. That not only positively affects our communities but also contributes to diversifying and growing the value-added product sector.

A few provincially led initiatives are now taking a step in this direction. One such initiative is a partnership between the community development trust and the Nova Scotia Landowners and Forest Fibre Producers Association, whereby the association has been provided with $850,000 to support the certification of private woodlot owners in the province, thereby assuring a fibre supply for local producers.

Another initiative that must be mentioned is the Quebec Wood Export Bureau, QWEB, traceability program for wood products, and I know Jacques Gauvin will be addressing you today. I will not go into detail about it, but I want to take the opportunity to congratulate Mr. Gauvin for the incredibly efficient management of this program and the high quality reporting we have seen from it.

In brief, the QWEB traceability program for wood products provides financial support to wood product suppliers for them to become certified by a forest certification system of their choosing. In the most recent report of QWEB, October 29 of this year, we saw that 111 companies have become certified. One hundred per cent of those have been certified to the FSC certification system, and 92 of them chose FSC exclusively as the certification program they felt would give them the best access to the marketplace.

The last opportunity that I would like to talk about is the opportunity for Canadian FSC-certified companies to access the global marketplace. On these slides, I would like to show you the growth in FSC-certified forests by region over time, as well as a chart showing the growth in FSC-certified producers and manufacturers by region over time. They show that Canada is without a doubt a world leader in the FSC certification of our forests, but we lag behind other regions such as Europe, Asia and the U.S. when it comes to our ability to provide the international marketplace with Canadian FSC-certified products. That is where the opportunity lies. Canadian companies have the ability to provide that marketplace with those FSC-certified products, but we need to support that certification of the supply chain. We need to support the industry to assist them in accessing that market, and we must ensure that our own purchasing and our own policies support the initiative that the industry has already taken in becoming certified. We must also ensure that we are also giving preference to those certified products.

I will stop here now. I welcome any questions or comments you might have.

Peter Johnson, Consultant, Sustainable Forestry Initiative: Good morning. Speaking as a professional forester and a representative of SFI, Sustainable Forestry Initiative, I want to thank you for the opportunity to meet with you this morning to talk about forest certification, and about the SFI program in particular.

The Sustainable Forestry Initiative is the single largest forest certification standard in the world. It works consistently to improve forest management across Canada, through forest management standards, which are audited and certified through independently accredited third-party certification bodies using independently certified auditors. Currently, there are 50 million hectares of Canadian forests that are certified to the SFI standard, making it the largest certification of forests across Canada.

Another objective of the Sustainable Forestry Initiative is that it strengthens the procurement of forest products globally through chain-of-custody certification, meaning product traceability and responsible fibre sourcing. Currently, under the SFI program, there are over 875 chain-of-custody certifications, covering over 2,100 locations.

The SFI program was launched in 1994 with the first SFI national standard backed by third-party audits, which were launched in 1998. I personally conducted some of the first SFI audits which were delivered in Canada. SFI as an organization is an independent, non-profit organization responsible for overseeing, managing and improving the internationally recognized sustainable forest management and chain-of-custody program. It is governed by an 18-member board of directors representing environmental, social and economic interests equally, and they govern all aspects of the sustainable forest management initiative.

In talking about forest certification and traceability, we talk about the certifying of the forest lands themselves, whether it be large forest management areas across Western and Central Canada, or the certification of private woodlots and small family woodlots in Eastern Canada, which are a critical part of the economy. We also then talk about chain of custody, which is the traceability of fibre from the forest stand itself that has been certified right through the transformation, transportation and coming out with the final product.

I thought one of the best ways to demonstrate this would be through an illustration. Halloween night I was unpacking the Halloween candy, and here is a Nestlé box of the candy, which probably was in each of your homes, or something similar. If you look along this, you will see there is a SFI product logo that demonstrates and communicates to a consumer that the fibre that was used in the packaging of this product came from a certified forest, that there is traceability that takes it right from Shoppers Drug Mart, where I bought it, all the way back to the forest itself.

That is a demonstration of how the chain of custody works in a tangible product, and how this carries right back to the forest of origin, where it was created.

The concepts and principles of forest certification are very consistent across Canada, and I think I would like to build on probably one of the best news pieces around the Canadian forest sector that we have right now. There has been a lot of gloom and doom about the forest sector, about the forest industry, the state of the industry itself, but one of the most promising aspects about the industry, the sector, the communities in which they operate, is the fact that Canada has the largest amount of independently certified, audited forests through a range of the forest certification standards, putting Canada in a very significant position to be able to provide, to the global marketplace, certified forest products for a range of uses, both nationally and internationally.

The fundamental basic is that the forests themselves will not go away. The forest sector will change as it evolves, and it will emerge into some different areas into the future — there will be new products, new uses and new technologies, but the core being a sustainable resource that can support natural ecosystems obviously, the nations that are using this, the communities in which they operate, that these are sustainably managed and utilized for us. Forest certification demonstrates, through third-party processes, through the range of certification schemes that are available in Canada, and we have a very good news story.

Moving forward, one of the most important things that the Government of Canada and the provincial governments can help with is promoting Canada's forest certification, certified forest products, as being the best choice in the marketplace for consumers, and that we have a good news story about forest certification in Canada. Our forests are reliably, independently, third-party certified, and they can have confidence when purchasing forest products from certified forests in Canada that they are making an informed, wise choice and decision.

We need to stand up for our forest resources in Canada. We need to be able to make decisions in Canada within our local communities that have an effect and impact. It should not be external campaigns, external factors or forces, such as the media, that shape these decisions. It should be decisions that are influenced and shaped by the right questions being asked by the right people, coming together with the right answers.

There are also questions about how we can link this into the corporate responsibility, drive and initiatives that are being undertaken by corporate Canada and corporate globally. There was reference to purchasing and procurement policies made earlier by Ms. Becker, and those are important, powerful tools. Asking companies to specify certified forest products from Canadian forests will help stimulate that demand, supply and drive, in growing the Canadian industry and supporting local communities.

Building our forests into the fabric of corporate responsibility across Canada and around the world is a strong opportunity to move this forward.

This sector should be a priority within the provincial governments and the federal government. If I hear one more person say that this is a ``sunset'' industry, I will throttle them. This is not a sunset industry. It is going through a period of transition. It is going through a period of change. Thankfully, we have folks like you who are taking the time to listen, to understand, and to shape some ideas and opportunity and move these forward. We are confident and hoping that the good news piece of forest certification and certified forest products will be one of the messages you carry forward.

[Translation]

The Chair: I will now ask Mr. Jacques Gauvin, from the Quebec Wood Export Bureau, to make his presentation.

Jacques Gauvin, Director, Traceability Program for Wood Products, Quebec Wood Export Bureau: Mr. Chair, I would also like to thank the committee for giving me the opportunity to speak about a program I have been in charge of for almost a year as part of the Quebec Wood Export Bureau's work.

Our country's governments have been looking to provide assistance to the Quebec and Canadian forest industry, which has been struggling for several years. This task has not always been an easy one, owing to not only the fact that transactions with our neighbours to the south are difficult, but also to the fact that dealing with the forest industry is not easy. However, research has provided us with a solution for at least part of the problem. The Chain-of-Custody Certification Program for Wood Products is funded in equal parts by the Government of Canada and the Government of Quebec. The program's purpose is to support producers so that they can gain a certain competitive edge on the markets by being able to label and demonstrate the environmental characteristics of their products through one of the certifications that were talked about earlier, issued by the either FSC, SFI or CSA, PEFC. The program's objective was to help companies. The program has other components, which I will go over before I go back to the chain of custody and explain the process involved in more detail.

A certain number of companies already have chains of custody. We did not want to ignore these proactive companies by making the program available only to companies wishing to become proactive. A component of this program makes it possible for us to provide funding for the mandatory annual audit for companies that already have a chain of custody.

As requested by the industry, phytosanitary standards have also been included in the program's framework.

As you probably know, Canadian companies cannot export wood products without complying with certain standards, to avoid transporting certain insects abroad, insects that will always be present in wood. Wood products must be heat treated, and that process cannot be undertaken in a haphazard way. Rules set out by the Canadian Food Inspection Agency must be followed.

Companies that want to get involved in exporting could use the program to acquire and develop a procedure manual that would enable them to treat their wood products properly and to be able to export their products if they were not already doing so.

To assist companies that already have what we call the procedures manual for phytosanitary standards, a significant update has been in the works, as part of the Canadian Heat Treatment Wood Products Certification Program. We have integrated this element into the Chain-of-Custody Certification Program for Wood Products, and those companies wishing to update their procedures are supported by the latter program.

Although the most important component is implementation, we have tied it in with elements that could be of interest to producers whose main activities consist in exporting. Our main objective is to help the industry without creating any further rifts between our forest industry and our American friends.

Implementation is the program's most important component. So, how does it work? It is very simple. The management committee's initial concern was to make the implementation process uncomplicated, accessible and transparent. Rigorous monitoring is necessary because public funds are involved.

A company that wants to implement a chain of custody, regardless of which one, signs up for the program on line by completing a very short form of just over a page in length. Approval is granted automatically on line. If approved, the person going through the process must choose an accredited consultant. Why? Because we do not pay out funds directly to the company and say: ``Do what you must to set up your chain of custody.'' That is not how the process works.

We have accredited a certain number of consultants to help people implement chains of custody. There is a list of consultants also found on QWEB's website. We do not decide which consultant a company should deal with. The company itself chooses its consultant as well as one of the three chain-of-custody certificates I mentioned earlier.

Once that step is completed, a contractual agreement covering the mutual obligations is signed. The company's most important obligation is certifying its chain of custody once the process is completed. Our ultimate goal is to enable as many companies as possible to get on the market and offer products with a label recognizing their environmental value.

Obviously, the accredited consultants and the QWEB representatives, who have access to company information, are bound by a confidentiality agreement. The information is not shared with third parties.

The first step consists in making a diagnosis of the company's situation. You probably understand that we cannot leave it to the accredited consultant to determine the amount of work needed to help the company because that would create a conflict-of-interest situation, which would be unacceptable. As a result, we hired a prominent business firm that specializes in this area. We signed a long-term agreement with the firm, which will not be doing any implementation work but will only make the diagnoses. Therefore, the firm would be working independently.

It will diagnose the situation of a given company and will state, for instance: ``We anticipate 10 days of work for the implementation of the chain of custody in this company.'' It goes without saying that, once the independent assessment is completed, both the company and I are informed of the results. Following this step, I sign a 10-day agreement with the accredited consultant, based on the program's economic parameters. By signing the agreement, the accredited consultant commits to completing the remaining work involved. I pay the consultant directly; the company itself is not involved in the transaction.

Once the accredited consultant's involvement is nearing an end, a quality control process is undertaken. Our objective is not for the company to enjoy the process, but rather for the process to be successful. We want the end result to be a registration audit, a new chain of custody for wood products. We want to make sure that the work is well done.

Once the accredited consultant's work is almost completed, the independent firm I talked about earlier gets involved. It conducts a pre-audit, at no cost to the company. The company is responsible for ensuring that it is ready to undergo a registration audit in due time. Quality control is thus ensured.

The next step is the most important one. I am talking about the scheduling of an appointment with the registrar responsible for the standard in question and, of course, for the registration audit. To date, few companies have completed the whole process. Many of them are currently going through the process, but, to date, all the companies that have followed the steps I just outlined have successfully scheduled their registration audits.

I have some figures for you before I wrap up my presentation. The program began in November 2009 and will end in 2013. For almost three years, the program's objective has been to assist about 350 companies because we needed to set an initial objective that would allow us to see if the program was effective. Setting objectives is always interesting. As we mentioned earlier, there are now 221 companies or plants that are already registered for the program. So, we are not doing too badly.

Out of these 221 companies or plants, 111 have begun the process of implementing a chain of custody. Since the forest industry is still struggling and is recovering extremely slowly, we had originally thought that the process would be much slower than it has been. So, we are very satisfied with the number of companies on board and are very confident that, by 2013, we will have reached our objective of 350 additional companies, since some companies were already registered prior to the program's launch.

The fact that an additional 350 companies in Quebec will be able to sell their products with a guarantee for the consumer and that these products will have recognized environmental values demonstrated by the logos mentioned earlier is a positive sign. This concludes my overview of the Chain-of-Custody Certification Program for Wood Products.

The Chair: Thank you very much, Mr. Gauvin.

[English]

We will move to questions from the senators, starting with Senator Plett.

Senator Plett: Thank you for your interesting presentations. I am looking at the map of all the different certifications, and there are a number of them. CSA, Canadian Standards Association, is something that I have always understood because it is there in many other industries. Are FSC and SFI mandatory, or are they voluntary programs? Where does that start? It starts in the forests and works all the way down to the stores, I assume.

Ms. Becker: FSC certification is completely voluntary. Forest managers and companies within the supply chain voluntarily choose to become certified in order to meet the needs or demands of their customers. It is not mandated by government or anybody else right now.

Mr. Johnson: All forest certification is voluntary. Whether it is the CSA standard, SFI or FSC, they are all voluntary standards.

Senator Plett: I thought that would be the case. Mr. Johnson, you had the cardboard thing from Nestlé. I gather from your presentation that you were not buying the Nestlé product because they were certified, or were you?

Mr. Johnson: It definitely had an influence on my purchasing.

Senator Plett: You saw the certification before you purchased?

Mr. Johnson: Correct.

Senator Plett: I have never asked for any of these when I have bought a product, whether it is a box of Nestlé or anything else. I would not have thought of asking is it SFI- or FSC-certified; how many people would?

What would drive Rona? What would drive any store to say we need to be certified because someone might come in and buy a package of stationery — although I am not sure whether that product is certified; what would cause me to ask for a certified product? What advantage would my Home Depot or anybody else have in being certified?

Ms. Becker: The advantage they have is customer growth in green products and the interest consumers have. It is like the growth of the organic sector in agriculture and the growth in the demand for fair trade products.

Green products' sustainability is something that is increasingly important to customers. Whether they are asking specifically for a product because it has an FSC label or an SFI label, they are looking for a guarantee and assurance about the sourcing of their products. It is not all customers out there or everyone, but there is a significant and growing portion of both consumers — and corporate buyers as well — who are recognizing the importance of that.

Senator Plett: Would it not do everything you want it to do, or we want it to do, with the green product by us simply working with the forest industry itself? That is where the green is supposed to start, correct? It is sustaining our forest.

If we work with the Irvings of the world or any other forestry people — while I am not the biggest one for mandating, if we were to mandate something at that level and we would have the same colour right across here; we have many different colours in this map and I am not sure why they would not adhere to the same standard of certification — would that not do what you want to do and have it created across the country?

Mr. Johnson: If I could answer with two analogies, Canada is the most highly regulated country in the world when it comes to forest management. There are very stringent provincial legal requirements for forest management planning and activities. It has not been good enough to keep up with critics, academics and those who believe regulation is not strong enough.

We just have to go back to the 1980s and look at activities like Clayoquot Sound where people made it clear that the regulations were not good enough. There was the start of the building of forest certification that goes above and beyond the legal requirements.

To look at this from a labelling perspective, when you walk into a store and you purchase a piece of electronics — a light bulb, a toaster, Christmas tree lights — you expect it to work, that it will not overheat, catch fire or burn your house down. There is now a growing expectation that the forest products you purchase have not harmed the environment, and that they are coming from sustainably managed sources.

People may not be walking in and specifically looking for a label on their forest product, but it is becoming more of an expectation that, for this product I am buying in this day and age in this advantaged society, we should be able to have the ability to demonstrate that the products are coming from a sustainably managed forest.

The labelling process is the chain of custody. It is a way of demonstrating it, the same way that you have product certification stamps on a toaster or light bulb from Underwriters Laboratories or the Canadian Standards Association.

Ms. Becker: The other aspect of certification is that label and that ability for companies' forests which are certified to have recognition to get that additional customers' access to new markets in the marketplace because it is a global marketplace. Canada exports the majority of our products, and Canadian companies have to be able to compete in that international marketplace. That is where the recognition of a label, a logo, in that international marketplace is so important for the viability of the industry.

Senator Plett: Are the FSC and the SFI competing forces? You both want certification.

Ms. Becker: As voluntary certification systems, it is companies who choose which certification system their customers are interested in and looking for. Both SFI and FSC are market-based mechanisms. The customers choose what product provides them with an assurance.

There are companies that are certified to both FSC and SFI standards. There are many companies that are certified exclusively to FSC because they feel that will give them the benefit in the marketplace.

Senator Plett: I do not want to beat this to death, Mr. Chair, but to me, it would make more sense if you would join forces. I think we are overregulated in our country and we are creating more and more regulations. I support green; I support us making sure we have a forest industry.

We have spent some time touring the forests in the last couple of years, and I have gained a new appreciation for the industry. Not wanting to plug the Irvings too much here, but we spent some time in their forests and they are doing a wonderful job, in my opinion, of maintaining and taking care of the future.

I believe we are regulated to death. If you guys would all get together and create one standard, would you not be able to work better and have a bigger impact on Canadians if there was one standard? Would that not be better than me checking to see if the product has CSA, SFI or FSC, or do they have all three, and if they have all three, then that is the product I will buy?

I will likely look and see what the price of the item is. That is likely what I will do, along with most Canadians, I think.

Ms. Becker: You are definitely right that people would like to see one standard. To clarify how the standards are created, it is not from FSC sitting in our office and writing a standard. Our forest standards and all of our standards are written by local stakeholders. The forest industry, environmental, Aboriginal and social interests sit down and write our standards.

If SFI would like to have their standards at the same acceptance level as FSC standards, we would be happy to see that happen. To date, our stakeholders have not felt that is the case.

Senator Plett: Let me ask the question; you are sitting closely to each other. Is your standard better than his standard?

Ms. Becker: In my opinion, yes.

Senator Plett: Let me close by saying I really appreciate, Mr. Johnson, that the forest industry is not a sunset industry. I appreciate that.

Senator Mercer: Senator Plett, do not get involved in labour negotiations.

Thank you very much, witnesses. I am very interested and somewhat confused, as Senator Plett has so ably explained or tried to explain.

All politics are local so I want to go back to something Ms. Becker said about the $850,000 for private woodlot owners in Nova Scotia to get certification. Obviously, one of my prime concerns is the forests of Nova Scotia.

Whose money is that, how is it distributed and how does someone apply for that?

Ms. Becker: My understanding is the community development trust is a fund funded by federal and provincial interests. I cannot speak in detail as to how that is distributed and how companies apply for those funds, but I could get you that information if you would like.

Senator Mercer: A few days ago we heard from private woodlot owners. They explained to us that one of the difficulties was the cost of certification.

If I recall correctly, the number they used was between $1,000 and $1,500. That was just the initial cost to start with having someone come in to help develop a sustainable plan, making sure the forests were being properly managed at the local level. To many people in the industry, this is definitely not a sunset industry or a new industry but one in transition. One of the major transitions is that we are starting to look for some regulations and standards that we never looked for before. You used to go to the lumberyard to buy the cheapest two-by-four that meets your needs, and now you have to look for a logo on it to ensure it is sustainable. It is confusing.

Are we headed in the direction of labelling as undesirable forest products that are not certified? It may be an extreme example, but in the diamond business, we distinguish between diamonds mined in a humane way and diamonds that are not mined in a humane way where the funds are used to promote war and child soldiers, et cetera. Will we have ``clean wood'' and ``dirty wood''? Is that where we will end up?

Ms. Becker: Things are certainly heading in that direction globally. Outside Canada, many forestry practices in Asia and in the tropics are causing concern as the awareness continues to grow about the impacts of climate change and the role forests place in mitigating climate change. Ensuring that our forests are being sustainably managed in a way that maintains carbon resources is a way of meeting climate change.

We are heading in a direction where there will be increasing recognition that there is good wood and wood products that are questionable of origin. That does not mean necessarily they are bad wood, but it means we do not know. As we move forward, people will want greater certainty.

You used the analogy of diamonds. Canadian diamonds that are certified with the polar bear recognizes that those are diamonds you can trust, and it is that trust that the marketplace is looking for.

Looking at many of the recalls of children's toys made in China because of concerns about lead in paint, it is the same issue of people looking for assurance and trust in the products they are purchasing. I believe most definitely that that will be the case for forest products as well.

Mr. Johnson: It is already clear that the premise of forest certification was to keep the good wood good and get the dirty wood out. There is already dirty wood in the marketplace, for example, wood that is illegally logged or sourced from unacceptable areas or by unacceptable means. Globally, forest certification has a long way to go. Only 10 per cent of the world's forests are certified. In North America, we are doing well but globally, especially in developing countries, forest certification has a long way to go. We are already on a path toward segregating certified ``good wood'' and ``not good wood.''

Mr. Gauvin: Maybe you know about the Lacey Act in the United States — it was an existing act that they changed in 2008 to include all the forest products and all wood in forest products. The products should be sourced legally. It is not a requirement but just a declaration at this point. However, everybody expects it will go further and will ask companies to have a system of traceability, not necessarily linked to a forest certification scheme that already exists, but one that provides a paper trail to prove that the wood has been cut legally.

It is the same thing in Europe. You probably know that either now or in the near future the European community will adopt a regulation that will go further than the Lacey Act. We expect that it will happen in Japan next year. Everywhere in the world, we are looking at it, and it is in part because of the climate change discussions around deforestation. We see that wood cut illegally in Indonesia and other parts of the world will have to disappear because people are more aware of that.

Of course, in Canada, in Quebec and other provinces, illegally cut wood is not a big problem. However, some companies, for example, in the furniture sector, have parts of their furniture coming from other parts of the world. If you are at the frontier with the U.S. and are selling furniture, you will have to be sure because you have a declaration stating that you do not have illegal wood in your furniture. However, you have to be sure to have all the information about the sources as the supply could be from places where you are not sure that it is legal wood.

It is on the market, and you are right about that question. It is there and it will stay there.

Senator Mercer: Mr. Gauvin, again, the issue of traceability is not foreign to members of this committee. We go back to our work on beef in the BSE crisis where we talked about traceability from conception to consumption, or from the ``thrill to the grill'' as we called it. Will we need to do that now with all wood products, namely, be able to say that the wood used in this pencil came from this forest at a certain point in time and was harvested in a sustainable manner?

Mr. Gauvin: I am not a specialist on that kind of question, but with respect to complex products, I gave the example of furniture. With paper products, wood panels and so forth, it is more complicated, and I know it is a challenge for certain companies, but it is possible. I know of at least one company that contemplated the Lacey Act and decided to act on it more quickly than others did. They invested some money to get all the information, the paper trails, information from the suppliers and so forth, and they got it. It cost some money, of course, but now they have the system to prove that. Eventually, it will come to that, I suppose.

Senator Mercer: Mr. Johnson, you said Canadian forests are the most regulated in the world, but you then said we cannot keep up with the critics. Who are the critics, and what motivates them?

Mr. Johnson: The critics are interest groups. They are within Canada, they are groups that have special interests, and they are outside of Canada. They are foundations or special interest groups that are out for a specific reason, cause or motive to have their views or their opinions cast upon a practice or an area.

We have seen examples of that with the oil sands in Alberta where local groups and national and international groups exert pressure. We have seen that in the forest sector in Canada as well. There is a range of critics. Some are valid; some are, perhaps, questionable, and their science is, perhaps, questionable.

Senator Mercer: Would it be safe to say that some of these critics do not have the best interests of the people in the forestry industry at heart, and that we probably cannot ever, ever meet their ever-rising expectations?

Mr. Johnson: That is a very true statement. I would agree with that.

Senator Eaton: To follow on Senator Mercer's question, I am leading an inquiry in the Senate about the economic benefits of the oil sands project because I feel so much is not science-based, and we have been unfairly criticized by people who have much to look at in themselves, including the U.S. and Asian countries. The same goes for the rest of the world in terms of our forests.

We are the most forested country in the world. We are a carbon sink, or carbon neutral, in some cases, and we do not stick up for ourselves. We are constantly self-criticizing, letting the world criticize us and not correcting the facts. That drives me crazy.

When you talk about old-growth forests, clear-cutting and GM, genetically modified, seeds, does that make a forest ``ungreen''? Can you certify a forest that has been grown or uses GM trees, for instance?

Mr. Johnson: There are no genetically modified forests or trees being used outside of laboratories and testing in Canada, in North America.

Senator Eaton: Once they leave the labs and go into forests, will you be able to certify them?

Mr. Johnson: If genetically modified ever got outside of the laboratory and the testing, that topic and issue would have to be reviewed by the entire SFI board and the participants from around the world to come to a consensus and agreement on how it will be looked at.

There are different variations of GMOs, genetically modified organisms, as well. Some are genetic modifications, some are just trial modifications as well, so there is a whole range. GMO is a very broad category.

Once it gets out, SFI will have to look at that topic specifically.

Senator Eaton: We have heard witnesses here talking about how the carbon of trees sinks, but once they reach the end of their growth cycle they start releasing carbon. What about things like clear-cutting and old growth? Aesthetically, old-growth forests are beautiful, clear-cutting, aesthetically is ugly, but does that fall into your range of things that make a forest unsustainable or not certifiable?

Mr. Johnson: The vision of a clear-cut, and a vision of old growth, and a definition of old-growth forest, there are old-growth forests where the trees are very small.

Senator Eaton: I live on Georgian Bay, and I know how small they get.

Mr. Johnson: Perfect. There is a provision. There is a maximum size for a harvest in the SFI standard, and you cannot exceed that size for a clear-cut. I will let FSC respond to your points about clear-cutting, but there is a maximum clear-cut size within the SFI standard.

Senator Eaton: Why is that? Is it due to aesthetics or a concern for wildlife habitat?

Mr. Johnson: There are aesthetics. Compositions that have to go into forest management planning have a specific principle around aesthetics. There are specific requirements around forest habitat and wildlife habitat planning as well. It can get quite complicated because some animal species would like a very large opening, some would like a very narrow opening and some would like to have trees scattered in it. That is not a black-and-white response about whether clear-cut should be permitted or not. It is also species dependent as well.

Senator Eaton: Even though it will be reforested?

Mr. Johnson: Correct. Again, regeneration is also a mandatory part of the standard, post-harvesting and cutting.

You can have a certified forest that has been cut. The cuts cannot exceed the requirements of the standard. You also have to take in the provision for wildlife planning, regeneration and the visual aspects of the forest as well.

Senator Eaton: Water tables and other things?

Mr. Johnson: Water tables and all those attributes must be accounted for in the forest management plan in order for it to be certified.

Ms. Becker: The FSC national boreal standard does allow for clear-cutting to take place, and that is really within the Canadian context. The only forest region where it is an issue in the other regions of Canada is where we have regional forest management standards where clear-cutting is not acceptable. The reason our stakeholders found that it was acceptable in the boreal forest is because of how the boreal forest regenerates.

It is a disturbance ecosystem in that fires going through the boreal, traditionally cleared, large areas and the trees are adapted to grow within large, cleared openings. No hard limit is set within the FSC national boreal standard for a maximum size or average size of a clearing because it was felt that any number you set would be arbitrary. Is it 10,000 hectares, 5 hectares? Where do you put the mark? Our stakeholders also felt it was much more important to look at landscape level impacts of the harvesting that has taken place.

In Northern Ontario, for example, the Gordon Cosens Forest is over 2 million hectares, a very large area. In working with local stakeholders, what they decided would be best for that region was not to have smaller, cleared areas throughout that region. That would have had negative impacts on caribou populations because it has been shown that caribou is very sensitive to any disturbance. If you take out small areas throughout the entire 2 million hectares, caribou will move away from there completely. Therefore, they decided to focus harvesting in one part of their forest and leave the rest untouched.

FSC looks at those landscape level impacts and looks to local stakeholders, the companies themselves, and then working with scientists and academics to decide what is best for that specific region.

Senator Eaton: Thank you. Do the three of you feel that part of your mandate is to educate the Canadian public in terms of what is good science and what is bad science? In other words, standing up for our practices in this country so people, perhaps when they go to Rona or Home Depot, will not buy the Chinese kitchen cabinets made in China, but would perhaps buy Canadian? Is that something you do?

Ms. Becker: Most definitely.

Mr. Gauvin: I would very much like to do that because, in former jobs, I worked with the Quebec forestry association. The main mandate of that association was to inform the population about forests and all the things going on in the forest. It is not part of my work now.

Senator Eaton: Do you feel that we are at a disadvantage in this country? We heard from some witnesses from Quebec who build kitchen cabinets. Our forests are certified, as you two have explained to me, but when we import kitchen cabinets from China, from overseas, do we demand that their wood be certified?

Mr. Gauvin: Not that I know of.

Senator Eaton: It is an unequal trade, in effect.

Mr. Johnson: Correct. This is one area we continue to work on, to have the preference for certified products at the retail level, the people specifying these products — whether it be a retailer, home builder, contractor, architect or designer, the person who has the ability to specify forest products — specify Canadian forest products, and certified forest products would be our desire. That is what we spend a lot of our time asking for.

Senator Eaton: People demand of us certain standards, but the Canadian government does not demand the same standards back again?

Mr. Johnson: Correct.

[Translation]

Senator Robichaud: First, I would like to say that the preliminary presentations were very interesting.

Is it difficult for a small or a medium-sized company to get certified? Ms. Becker, you mentioned an association, in Nova Scotia, which had received $850,000, and you said that this amount will only be enough to begin the certification process.

[English]

Ms. Becker: You are talking about forest certification costs, I presume, versus the chain-of-custody certification. The cost for certification depends on a few factors. They depend on the size of the forest that is looking to get certified, the current forest practices of that forest, and then there is the actual cost of the certification audit. That means having an auditor come into the forest, do the initial evaluation and, hopefully, pass the forest for certification. There is also an annual audit where the auditors will come back and do an annual surveillance audit of the forest.

There are four smaller forests. In Nova Scotia and New Brunswick, where there are many private woodlots of smaller size, the way FSC has been operating there is we have what is called group certification. It is like a cooperative, where smaller forests and smaller woodlot owners can come together under an association — like the Nova Scotia Landowners and Forest Fibre Producers Association — and get a group certification. That group certification then allows numerous members to be part of it, the benefit being that it reduces the cost per individual.

It still requires, however, that for that group there be an evaluation of the members of the group, the various woodlot owners, their current forestry practices, if they are harvesting, what their forest management plans look like, what the gap is between what they are currently doing and what is required by FSC, and then looking at some of those landscape levels. That is really what we are looking at, what the landscape is of our forest and how these private woodlot owners fit within that. That is where those costs come in as well.

[Translation]

Senator Robichaud: In New Brunswick, there is an association of private woodlot owners. Witnesses who appeared last Tuesday told us that the average size of the woodlots is 100 acres.

Your organization brings together a lot of people. The certification can be rather costly, right?

[English]

Ms. Becker: It can be, yes. In Canada right now, in terms of group certifications for forests, there is group certification in British Columbia for smaller, private woodlot owners along the coast and the interior, and then in the Maritimes and Southern Ontario where you also have a high number of private woodlot owners. One of the challenges is not only for small, private woodlot owners, but also for the wood products producers who are smaller or medium- sized. There will be a fixed cost to certification regardless of whether they are big or little. That cost has a much bigger impact if you are a small company. That is where trying to encourage the group certification as a beneficial strategy. As an example, on the printing side, I am sure much of the mail you get has a FSC label or logo on it. The pulp, paper and print sector has had a lot of demand for FSC. For the small print shop, a ma-and-pa shop down the street, there is a cost to it that may be prohibitive to them. In Ontario, for example, the Ontario Printing and Imaging Association has a group chain of custody certificate so that their members can become certified for a reduced cost all under one certificate. Those types of initiatives make it easier for the small and medium-sized companies or forests to become certified, but we need more of that. There is not enough right now.

[Translation]

Senator Robichaud: I fear that small companies will be left behind in this whole process.

[English]

Ms. Becker: That is why we need to make sure that they are not. In Canada, many of those cooperatives in terms of licence holders and others exist, and support is being provided to them, but we definitely need more support to them to help them be able to access those markets. The program Mr. Gauvin is working with is so innovative and important because it is targeting those companies that would not have the resources on their own, perhaps, because of their size.

Mr. Johnson: One strength of the SFI system is the scalability of the standard and its application. It can be equally applied with strength and rigour at a small woodlot level the same way it can be applied for a large-scale forest management area of Western Canada. The SFI standard is used in the United States where the vast majority of forests are private, family-held small woodlots, and so that standard applies in the United States as it does in Canada. There has been a lot of uptake of the SFI standard in Atlantic Canada, including the woodlot owners' associations within New Brunswick and Nova Scotia and Quebec, and the parallel in the United States through the American tree farm system being recognized under the SFI program as well.

There is scalability, and I do not think that there is a fear about the applicability of the standards. The financial accessibility is definitely a different topic, but an important one. The standards will work in that landscape. It is the various means and tools that are available for financing that are being built and will continue to be built as well.

[Translation]

Senator Robichaud: Mr. Gauvin, would you like to add anything further?

Mr. Gauvin: Obviously, this issue affects us indirectly. Forest certification is the starting-off point for a forest owner. As it has been pointed out, the program I am in charge of deals with chain-of-custody certification. Once the forest certification is obtained, chain-of-custody certification is next on the list for those involved in the steps that follow, from wood processing to the market. We do not get involved with the actual owners.

Senator Robichaud: How does your certification affect recyclable fibres?

[English]

Ms. Becker: FSC certification is a verification of virgin forest fibre, but it is also a verification of recycled fibre. As part of the FSC chain-of-custody certification process, auditors go in and verify at recycling mills and pulp mills that make recycled pulp that it is, in fact, post-consumer recycled pulp. You can have a product that is FSC-certified 100 per cent recycled and that exists. FSC verifies the validity of claims regarding recycled fibre content.

FSC embarked upon this, realizing the Möbius loop, the three arrows we all recognize as the symbol for recycling, is actually in the public domain, so no one owns that symbol. Anyone can put the recycled symbol on a product. Most consumers presume that it means it is recycled, but there is no verification of that. That is why FSC thought it was important, in addition to verifying the source of virgin forest fibre, to also be verifying the source of recycled forest fibres as well. As an example, in Quebec, the Cascades Mills produce 100 per cent post-consumer, recycled paper that is also FSC-certified.

Mr. Johnson: It is a similar approach in terms of the auditing and verification of the percentage of the recycled content. The recycled aspect of paper in the forest products going forward will continue to grow. There certainly is a growing demand for higher and higher recycled fibre content. There are also great opportunities for additional fibre utilization. If you can get a truck taking product into the Eastern United States that is fully loaded and can start to backhaul some of that waste paper and bring it into recycling facilities in Canada, you will add value to that whole fibre chain. We will also see a continued demand for the recycled content which is, again, very similar to the FSC, why we have that declaration, and an audit to demonstrate the recycled content.

Senator Meighen: I will be very brief, so perhaps Senator Robichaud could take up the balance of my time. Senator Eaton asked my question about clear-cutting. Analogous to that, perhaps I could ask you about cutting close to watercourses that could be improper if not illegal. How does that affect, if it does, the certification process? Suppose the cutting itself is done according to the practices that are certifiable but the location of the cutting is not appropriate or legal. What do you do about certifying then? Can you certify illegally cut wood?

Ms. Becker: For FSC, the answer is no. FSC does not just look at what trees you are taking out and how you are cutting them. It looks at the entire landscape that those trees are being cut within. Within all of the FSC regional standards, there are requirements for how far away from waterways you must be in your harvesting.

Senator Meighen: Are they your standards or provincial government standards?

Ms. Becker: These are FSC standards. There are also, within the FSC standards, requirements about how you build roads because, of course, roads affect waterways as well — so how you build them, where you build them and what you do with the roads afterwards, if you are allowed to buy provincial to close them up and move out of those regions. The FSC standards look at the impact of the harvesting on soil and soil erosion, on waterways, on wildlife habitat, and then also of course on the local communities and the Aboriginal peoples who work in and near the forests as well. It really is a holistic look at the forest management and not simply about cutting a tree and getting it out of there.

Mr. Johnson: You cannot be certified if you are not cutting according to the legal requirements or to the requirements of the forestry standard, which does set specific distances for how far you can be from a water body.

Senator Meighen: It is not always observed, is it?

Mr. Johnson: No, not always, but that has to be identified during the audit process. Sometimes legitimate, honest mistakes happen. I have audited forest operators who are operating their machinery 24 hours a day, and sometimes you think that flagging tape in the tree is right there, but it is pitch black out and you only have the headlights on your harvester going and you are off by about 15 feet. They recognize that that is a mistake and they go against the map. These things happen, but it is the corrective actions that have to be taken as well. If you are practicing illegal forestry activities, you cannot be certified, no.

[Translation]

Senator Meighen: I would like Mr. Gauvin to clarify something for me. You talked about the objective to assist 350 companies by 2013. If companies that are already registered for the program are added to that number, what percentage of the Quebec total would be registered?

Mr. Gauvin: It would have been of interest to provide you with some sales figures, but we have not done the calculations. Before I was even involved in the program, an assessment of the number of new chains of custody was conducted. We cannot launch a program and simply hope it will work. We must establish objectives and set our sights on achieving tangible results. I think it is safe to say that 350 companies is an objective that, if reached, would be considered a positive outcome.

For what it is worth, I will give you my estimate. If I take into account all the companies that already had a chain of custody in the Quebec forest industry, including the pulp and paper industry, I add everything up and it brings me to March 2013. I think that, at that point, 75 per cent and more of the wood product industry will be selling their products on the export markets and will be able to have a chain of custody for those products. So the percentage will be a significant one.

Let us forget about the 75 per cent that I mentioned, but let us just say that the figure will be significant. I think that we will thrive, and that was our goal. We hope to stand out on the markets thanks to our certification program.

Senator Meighen: What are the main reasons why companies decide not to register for the program?

Mr. Gauvin: I will answer your question backwards. You will perhaps be surprised to learn that many companies have contacted me over the last year to find out about the program. Do not take this at face value, but the first thing I realize is that people are not interested in the certification, it means nothing to them. They do not want to pay for it, but the customers want companies to get certified.

[English]

Senator Meighen: The customer is always right.

[Translation]

Mr. Gauvin: How would you react if you were in business and your customers asked you which standards they should adopt? When this happens, I do not say anything, I try to get our program to work for the customer's company. That is how I do things, and I believe that, with time, more and more companies are becoming part of the program.

Some people call me and tell me that they are not prepared to pay the annual fees. We have to keep in mind that even though the annual cost of a chain of custody is perhaps lower than the whole forest certification process we were talking about earlier, for small companies, that amount is still $4,000 annually. Meanwhile, the issues in the forest sector have still not been resolved.

People ask me if I will still be here in 2011. I tell them that I hope so. They ask me if I will still be here in 2012, and I say, yes, absolutely.

I anticipate that all companies will eventually be part of the program.

[English]

Senator Fairbairn: At the beginning, when you were discussing how this all works, Ms. Becker, you mentioned our native people at one point, which made me think it was a very good part of what you are doing. I completely agree with both of you who immediately popped up and talked about Mr. Suzuki's organization. If you have Mr. Suzuki's good idea behind you, I agree with you completely that there is no one who does it better.

I am from Alberta, and we have a great number of trees, as well as a great number of native people. Could you give me an idea of how this fits in?

I think what you are doing is a very important thing to do for the people who are working with it, but also for ordinary people who are very interested in what you are doing. Could you give me an idea about how this works with the Aboriginal people across the country? I am from Alberta so we have a great deal of interest in that. Could you fill that out a little bit for me?

Ms. Becker: I will answer that in a few parts. First, I will explain how Aboriginal people fit within the FSC standards. FSC governances, the way our standards are developed, as I said, is by our stakeholders. We have four chambers or representative groups who come together to develop our standards, based on consensus. Those four chambers are Aboriginal peoples, economic interests, environmental interests and social interests. We bring all of those chambers or representatives around the table and they have to agree on what is a responsibly managed forest in their region.

As you can imagine, they are not always easy conversations or quick conversations. However, the result is that the standard they develop is strong and it is supported by all of them, because they all feel it is the best choice for their communities and forests. That is at the level of developing the standards.

All of FSC's forest management standards are based on our 10 principles, and within each principle there are criteria. One of those 10 principles is dedicated specifically to the rights of indigenous peoples. Every FSC-certified forest in the world and Canada must not only go out and consult with indigenous peoples on a specific set of items, they have to also actively involve them in the process. They have to go out to the communities, talk to them, invite them to look at the forest management plans and help identify what areas are of cultural or traditional value to them. For example, is there a hunting ground or a place where they harvest berries?

Then the forest company must work with them to find a mechanism for respecting that — perhaps not going into those areas — and they have to work collaboratively. It is on a company-by-company basis, how they have created the arrangements and partnerships with the local communities. Tembec, for example, in their FSC-certified forests in Quebec, employs a great number of the Aboriginal youth in their forestry operations. They have a training program to train and then employ them in the forests, as well as in their manufacturing mills and facilities.

As we all know, the demographic of Aboriginal youth is growing, but there is a huge issue of how to train and involve these youth in their communities. That is what a lot of the companies are doing to help engage them and work with them. There are examples like that across Canada.

There are also a number of forests that are FSC-certified and are managed by Aboriginal peoples. On Vancouver Island, in Clayoquot Sound, ESAC, Environmental Studies Association of Canada, forest management manages a portion of the forest in the Clayoquot Sound area, and it is FSC-certified and operating according to FSC principles and standards.

The Aboriginal peoples are involved not only in the governance of FSC as an organization, but in the development of our standards, and then as a very engaged and involved member of the decision making about how forestry happens on lands within which they live or next to where they live.

Does that answer your question?

Senator Fairbairn: Yes. That would probably be done in different ways, too, in the southwest part of Alberta, where we are very much together with the mountains and with the native people around.

Ms. Becker: Tembec has FSC-certified forests in Southern Alberta, as well, where they have a very good relationship with the First Nations.

Senator Fairbairn: I am glad to hear that.

Ms. Becker: My family is from Alberta as well. You probably would be proud to know the largest FSC-certified forest in the world is in Alberta. A 5.5-million-hectare forest by Alberta-Pacific Forest Industries is FSC-certified and they work very closely with the Aboriginal communities there.

Senator Fairbairn: Would that be in the Southwest corner?

Ms. Becker: No, it is in North Central Alberta.

Senator Fairbairn: It is very close to where I live.

Ms. Becker: If you are ever interested in going to visit the Alberta-Pacific Forest Industries, an FSC-certified forest, we could arrange it.

Senator Fairbairn: I would.

Mr. Johnson: There are First Nations requirements and consultations for all the certification programs.

There are three ways to look at it for the First Nations. Each of the provinces that has responsibility for forest management will have a provision for First Nation consultation. Usually, it is a parallel consultation that is part of the forest management planning process, where there is a separate consultation with the First Nations to talk about their interests, expectations and participation, generally conducted in the language of their choice.

That is a legal framework set out by the provincial governments.

Senator Fairbairn: Does the Kainai (Blood Tribe) Nation ever involve itself in that? It is right in the foothills of the Rockies.

Mr. Johnson: I would have to check specifically on that First Nation. I imagine there would be the opportunity and the invitation to participate in the processes. There is the legal framework, and the certification programs have their requirements for First Nation consultation and participation in the process. Then the companies themselves will go further beyond the legal requirements embedded in the certification and either hire a specific coordinator for First Nation consultation, or bring in Aboriginal staff or training programs. It is a dynamic process.

Senator Fairbairn: Thank you. I appreciate that.

Senator Mahovlich: The Olympic Oval in Vancouver was built out of pine beetle wood that was from a very sick forest up in Northern Alberta, I believe, and British Columbia. Would you have certified this wood?

Ms. Becker: I do not believe that wood, specifically, was FSC-certified but pine-beetle-damaged wood can be certified if it came from a forest that has been FSC-certified. In B.C. and in Alberta, where most of this wood comes from, in the forest management standards FSC has in those regions, they set requirements for how much wood can be taken off an FSC-certified forest. When many trees are killed because of the pine beetle, companies would like to take a higher volume of wood, but FSC does not allow a higher volume to be taken off those forests than has been identified within forest management plans as ecologically and scientifically appropriate. If there is pine-beetle-killed wood in an FSC forest, it can be taken out and certified but, according to FSC standards, the company cannot overharvest just because it is pine-beetle-killed wood.

Senator Mahovlich: Are there other uses for that wood?

Ms. Becker: Yes, there are many uses for that wood. As long as it is cut in time, it can be used in furniture. I have seen it in hardwood flooring, and it is quite beautiful. It can be used structurally. The wood itself is sound if it is cut prior to the tree dying, but it has a purple-blue tinge to it.

Mr. Johnson: You have a year to get it off the stump, from what I understand, and after that, it is very limited.

Senator Mahovlich: Many plants and mills have closed throughout Canada, and in Northern Ontario, in particular. When these companies leave, do the provinces look after and manage the forests on those properties?

Ms. Becker: Do you mean when the mills leave?

Senator Mahovlich: Yes, I do.

Mr. Johnson: Every province has always owned the forest resource. The mill has received a licence to extract or harvest a certain percentage of wood, according to government guidelines, provided the mill has met all the government criteria. A mill is a lessee, and it is leasing the wood. When a mill shuts down, the government still owns and holds that wood, and it will hang on to it until either the mill is able to restart or another mill in another jurisdiction is able to open or expand its capacity and take it on. However, when a mill closes, the wood is still standing, viable, ready to go to market and be used, but it is sort of in limbo until there is there is another user of the wood. However, the owner of the wood, namely, the provincial government, is looking after it.

The Chair: We are mindful that consumer culture has changed, and I think it is evident that consumers 40 years and younger are mindful of the impact of products on the environment. Am I right in making that statement?

Ms. Becker: I think that is, increasingly, the case. I do not think that it is everybody. I do not think it is all youth, but it is a rapidly growing segment. As governments start taking more action toward climate change, as will be required, that awareness will grow. Youth growing up today are learning about climate change. They are learning about the impacts that the industrial age has had on the earth, and they are much more aware and knowledgeable about it than we were when I was growing up even. That will continue as those youth now in school reach the workforce and the stage at which they are able to start consuming products.

Mr. Johnson: I would say that they are very aware and very conscious of the impact they are having on the environment. It is increasing, growing and building. If I do not put something in the recycling bin, my children just about go crazy on me. At the same time, our society and youth dispose a great deal in other ways. For example, they go through material products quickly, and things are not being fixed any more. When the VCR or DVD breaks, it is out, and we get a new one. There is a need to be able to demonstrate the environmental impact in the life cycle of a product, from the point of origin to the point of disposal. That is for all consumer products, I would propose. The youth in the future will have to manage and deal with the life cycle of all products, from the point of origin to the point of disposal.

[Translation]

Mr. Gauvin: You are right in believing that younger generations will worry about the environment more than we did in the past when we had the impression that the planet would provide us with resources forever. However, the forest sector involves a particular risk. Whether we are talking about forest certification or about recycling, a large majority of young people see cutting down a tree as something negative. Young people do not differentiate between a logged uncertified forest and certified wood, or sustainable forest management and just plain management. I have visited elementary schools, I have spoken with professors and other people, and this is the perception out there. Some advertisements by forest companies that will remain unnamed even broadcast the message that we must save our trees. They say that our trees need to be saved. However, this message mobilizes young people. They have expressed some concerns, and I can understand that. They even recycle.

In a country like Canada, the education system should focus on the forestry issue and on forest management. You talked about this earlier and you are completely right. Cutting down trees has become almost unacceptable. We should address this perception.

[English]

The Chair: With respect to the mandate of our committee, utilization of more wood, previous witnesses have shared their opinion with us about non-residential construction. One of the senators on the committee asked earlier whether the two organizations should merge.

No doubt you are aware of LEED, Leadership in Energy and Environmental Design. Do you have any comments?

I personally support certification. We see it at Rona, it will be at Home Depot, and it will be at Lowe's, which is now penetrating Canada. They are big in the U.S. I stopped in at Lowe's last Saturday to see their wood products. A lot of their supply is from Canada. When I asked the general manager if he could give me the traceability of his wood, plus the certification of that wood, because I want to buy certified wood, it was evident they had these information kits and it is precise and reliable.

Coming back to LEED, we are looking at a mandate that would help industry increase wood consumption. Do you have any comments? With your organizations, could LEED be an activator to increase utilization of wood throughout world and global markets?

Ms. Becker: The LEED green building rating system has been a great initiative for raising awareness of what is green building and what elements, technologies and materials within a building help make that building more energy efficient, water efficient, fewer VOCs — volatile organic compounds — better air quality and more sustainable. In terms of awareness, providing markets for new technologies and materials, the green building initiatives such as LEED or BREEAM out of the U.K. are incredibly important for doing that. They are creating markets for products for which there may not have been a robust market previously.

The LEED green building rating system has one of their credits or points that a building can earn dedicated to the use of FSC-certified wood products. However, it is one point within a total of seventy possible points. The weighting of the rating system does not recognize the larger value of using wood within the building. I would like to see all of the rating systems have a greater recognition of the value of wood products, and also providing greater access for Canadian forest companies by recognizing FSC-certified wood products, because Canada is a world leader in that certification realm. All of those green building systems, increasing the recognition of wood and increasing the recognition of certified wood, helps our industry as well.

The Chair: I also want to recognize that you are an accredited professional with LEED.

Ms. Becker: Yes, I am a LEED accredited professional.

Mr. Johnson: From the green building perspective, I share the view that, whether LEED or BREEAM or the other green building certifications, the directions they use and support for certified wood products from all certification programs greatly enhances the Canadian forest industry. Unfortunately, with LEED, for a number of years they have been asked, lobbied, proposed to open up their wood credit system. Currently, it only accepts FSC, and they have not been able to provide a strong valid opinion as to why it is only FSC that they are able to accept. They have been lobbied by industry, by politicians, by U.S. governors, by many, and there is a very long list, but the LEED program, the U.S. Green Building Council, will not change that LEED credit and acceptance of FSC. We continue to believe that the LEED program should open up beyond FSC and look at other certification programs.

[Translation]

Mr. Gauvin: We may think that green building implies the use of wood products, but, unfortunately, that is not the case. We have talked about the LEED standard, which is the best known green building rating system. In 2010, the British Columbian agency FII, which stands for Forestry Innovation Investment, conducted a study on the 18 leading environmental product certification standards in the world. The study confirmed that wood is taken into consideration very little or not at all. In people's minds, green building means energy conservation. Too much emphasis is placed on the materials used. Wood could play an important role. The industry has a lot of work ahead if it wants to change prevalent attitudes regarding wood use.

Senator Robichaud: When you are in the process of certifying a company, do you take into account the biomass that remains unused in certain production processes? Does that consideration play a part in your decision?

[English]

Ms. Becker: Right now, within FSC's forest management standards, there are requirements, for ecological reasons, for what you leave back on the ground in the forest, such as woody debris in order to regenerate and increase the health of that forest. There is biomass coming from forests that is FSC-certified, and it is being used as a mechanism for that. There is not a specific element within the standards addressing biomass, but that is something that FSC is looking at. All of our regional forest management standards have to be revised every five years to take into account new topics, initiatives and concerns that have been raised, and biomass is one of the things we will be looking at specifically when we start revision of our standards next year.

Senator Robichaud: You say that will be looked at, so it is not being looked at now.

Ms. Becker: Right now, biomass is fibre coming out of a forest. It can be FSC-certified as going into mills being used for energy, but there is not a specific element within the FSC forest management standard that says what you must do if you are managing a forest specifically for biomass. The FSC standard would apply regardless, but when we do our revisions of our forest management standards, we will likely have a technical committee looking specifically at whether there is anything we need to change in our forest management standards in order to address that issue better.

Mr. Johnson: The non-commercial aspects of the forest products coming out, the pieces of the trees that are left in the woods to maintain the nutrient capacity of the woods, are being left in there. That is part of it. As we emerge into new markets and new opportunities for forest products, many products are being pelletized and used in energy or biodiesel and bioenergy creation. These types of areas are being looked at now within SFI to have certified pellets to be coming out, or certified raw material going into biodiesel refinery types of activity. It is being looked at, it is current, and it will be a major piece going forward into the future.

Senator Robichaud: Will this take into account the percentage that has to be left on the ground to ensure that it is sustainable?

Ms. Becker: For FSC, most definitively.

Mr. Johnson: The nutrient capacities have to be respected.

[Translation]

Senator Robichaud: Do you have a comment, Mr. Gauvin?

Mr. Gauvin: Not on this topic.

Senator Robichaud: Could certification have an adverse effect on Canadian industries? Are all products entering Canada checked for certification? If products are not certified, who stops them from entering and where is this done? Meanwhile, we are pushing our producers to become certified. Is this an issue to be looked into?

Mr. Gauvin: You say we, but customers are the ones demanding certification. Customers are the ones being pressured on the markets by their own clients, the consumers of the end products. The consumers are the ones applying pressure. The governments are not involved in this.

The Government of Canada is monitoring certain activities, but only when it comes to things like phytosanitary standards, and so on. I am talking about standards that have been implemented for products entering Canada. However, the government is not monitoring forest certification. It was said in the introduction earlier that, until further notice, forest certification and chain-of-custody certification are the private sector's responsibility. These are initiatives undertaken by companies in response to what is happening on the markets.

Senator Robichaud: Thank you.

[English]

Mr. Johnson: It is a voluntary marketplace. There are no regulatory requirements.

Ms. Becker: I will echo that and say Canadian companies have a benefit. The strong regulation in provincial requirements for forest management has made it easier for the Canadian forest industry to become FSC-certified, than in some of the tropical regions where lower forestry standards mean there is a much bigger gap that companies must reach in order to become FSC-certified. The Canadian industry has already had a step ahead and that has given them an advantage, which is one of the reasons we are a world leader.

Senator Eaton: To carry on with what Senator Robichaud started, do you not think that there is such a lack of education?

[Translation]

Mr. Gauvin, you talked about young people not wanting to cut down trees.

[English]

We went to plastic bags. You are all old enough to remember when you went to the supermarket you got paper bags and then using paper was a concern. We are cutting down trees, how terrible, let us have plastic bags.

Do you not agree that, along with certification, one of the best things you can do — and I remember asking the representatives from Greenpeace when they were here — is educate Canadian consumers that buying Canadian wood products is a good thing? You all have your three different marks on wood products. Do you not think you should try to go into schools and start educating young people that wood is a good thing, to look for the mark you saw on the box you showed us?

I am sure to pick up on Senator Plett's question to you, Mr. Johnson. I did not know that. I am a big promoter of wood products. I did not know to look for that on a package. Yes, we are used to looking at recycled paper, we know that, but I believe from all facets of the forest industry, from listening to all of you over the last nine months, there seems to be a lack of educating Canadians. For too long it was too easy, we would just cut, sell, cut, sell, build, but I think we have to become as smart as the concrete and steel industries have over the years in selling. I think personally, and I do not know how you feel about it, you should be out there not only certifying forests but educating the next consumers.

Mr. Johnson: It is educating the next consumers, but it is also educating the resource managers in the future because there is a vast amount of knowledge that needs to be shared with the consumer so that they are able to make these choices. Cutting down a forest that is being regenerated is okay. We have been doing it for hundreds of years. The forest industry has built our hospitals, it has built our highways, it has built our infrastructure in this country, and we shy away from it. We are almost embarrassed of our forest past.

When you talk to people in Southern Ontario and tell them you are a forester, they are shocked. Where are the forest managers of the future going to be regardless of what the forest sector will look like? The forestry enrolment at our colleges and universities is very much on the downhill slide because people are just terrified to go into that type of a sector, that type of profession.

Senator Eaton: Do you think your certification would have more value if more people were educated as to what it meant? If you look at the oil sands right now, they have 30-second spots. Why are you not doing 30-second spots saying this is a well-maintained forest, this is how they do it in other countries, buy our products and look for our certification?

Mr. Johnson: We are trying. You probably have been through Toronto in the path system underground, under all of the towers. We have posters there. It is passing tens of thousands of people communicating this is what sustainable forestry is, this is what our logos are, look at them. These types of advertisements are happening, they are going on out there, but it is a large population to try and change and, unfortunately, because of the impact of some powerful movements, some powerful campaigns, it is a large-viewed opinion that has to be changed and moved. It is a big mountain to move because there has been a lot of serious damage done about Canada's forest industry by external forces.

Ms. Becker: I most definitely agree with you and say that, one of our major challenges and something we definitely need to do, is educate people about the importance of our forests and the value of the Canadian forest industry to Canada as a whole. One of the challenges we face is that, as a national organization for FSC, the country with the largest FSC certification in the world, our annual budget is less than $400,000 a year. We are a non-profit charity. We barely have the resources to even embark upon such an initiative.

I would turn the question around and say we need to look at our education system, and look at the education streams within elementary schools and high schools, and ask why in Ontario, for example, in the 1990s we took out the environmental stream. Just as our environmental concerns were growing and the impact of them was going to be more important, we removed the focus on that. We need to look at the educational materials, we need to look at our curriculums and ask where does talking about our forests come into the history of Canada and the wars that happen? Why are we not talking about our industries and look at that as well? It is something that most certainly the certification systems need to be embarking upon, but we need to be building that into the fabric of what we teach Canadians about what Canada is.

Senator Plett: I want to echo, first, what Senator Eaton said. I believe education is the consumer — the consumer needs to be educated. What the concrete and steel industries have done is educated consumers, because if consumers drive it then it will happen.

Senator Fairbairn talked about David Suzuki. Everybody has their own opinions of David Suzuki, but one thing David Suzuki has done, or is capable of doing, is many of the people who have been doing the protesting listen to David Suzuki. He should be out there telling people it is okay to cut down trees.

One of the organizations that supports you is WWF; who is that?

Ms. Becker: The World Wildlife Fund of Canada.

Senator Plett: We talked about cutting close to waterways. You talked about the fact that there are regulations about building roads into the forest, and so on and so forth, in order to be certified. Roads are a provincial jurisdiction. Do you have conflicts with provinces? Do they sometimes build roads in such a manner that would prohibit you from certifying the forest because of the way the road has been built; would that ever happen?

Ms. Becker: We have had situations in Quebec, I believe, where the company builds a road in order to go in and harvest the lands, but in provincial requirements, once a road is built it must be maintained and kept open, whereas the FSC standards require that, if you have gone in for harvesting in order to facilitate the regeneration and for ecological reasons, you should close that road and get out of that area in order to allow it to regenerate. There have been those conflicts that have come into play, yes.

Senator Plett: If the province does not close the road or does not demand the road be closed, would you then not certify that forest?

Ms. Becker: When those situations come up, a conflict between the FSC standards and government regulations or something outside the control of the company that is looking to be certified, each of those is looked at on a case-by- case basis. In this situation I am talking about, what was decided was that it was something the company could not control. They could not close their roads if they were required to by law by the owner of those forests and they did become certified anyways.

One of the main principles of FSC is also that you have to abide by the laws of the country or the province within which you work.

Senator Plett: Would SFI be similar?

Mr. Johnson: It would be similar. Fifteen years ago when the standards started, there were a few disconnects around water crossings, around road construction and around visual aspects, but over time those differences have been reconciled so there is good consistency now between provincial and federal requirements and the requirements of the standards. We do not see nearly as often that disconnect or misalignment.

Senator Plett: As a closing comment, Ms. Becker talked about the issues she has with funding. FSC is a non-profit organization. I again want to reiterate one of the comments I made earlier: If we all joined forces and became one certification group, we might have enough funds to do the education we need.

Thank you for your presentations.

The Chair: In closing, witnesses, thank you very much for sharing your knowledge and also your professionalism with us. The committee is very appreciative and, on this, I declare the meeting adjourned.

(The committee adjourned.)