The Canadian Home Builders' Association appreciates the opportunity to present to the standing committee with information and perspectives on the evolving and critical role of wood and wood products in our industry and in the homes of Canadians. My comments this afternoon will focus on the overall dimensions of our industry and the role that wood products play in the homes that our members both make and renovate across the country.
I also want to highlight a number of important and innovative trends that may support the increased future use of value-added wood components, including both engineered wood and secondary wood products.
Home building and renovation are obviously an important source of demand for Canada's forest sector and a major end market for a wide range of Canadian-produced wood products. Based on Statistics Canada input-output data, our industry's consumption of forest products amounts to over $8 billion annually, providing a major domestic base for the forest products industry.
The residential home construction industy consists of two primary segments, new home construction and home renovation. In totality, it represents one of the largest industrial sectors of our economy. Last year, our industry generated some $138 billion in economic activity, $67 billion in new construction and $71 billion on the renovation side of things. In 2016, residential construction supported just over one million jobs across Canada, both directly and indirectly, and this employment generated just under $60 billion in wages.
In relation to new homes, we're seeing a significant shift in the product mix that our members are building. Simply put, the traditional Canadian home is changing as our cities become more densely developed and absorb an ever-growing number of Canadians per square kilometre.
In 1996, 60% of all the housing units in Canada were single detached homes. By 2016, single detached homes represented only 32% of all the new homes we built in a year, while about 50% of new homes were apartments of all types, whether condominiums or for rent. The remainder were made up of low-rise multi-family units like townhomes and row homes.
The way we build homes is also evolving and will continue to do so in the coming years. This will have a direct bearing on the products and the materials used in construction, including a wide range of wood-based products. The environmental performance of homes, particularly their energy efficiency, has evolved tremendously over the past few decades. This evolution will continue and in fact accelerate in the years ahead.
A new home built today uses a fraction of the heating energy required in an older home. Half of the homes in Canada today were built before 1985, and that older half of the housing stock uses twice as much energy as the homes built since 1985. As well, a new home built right today here in Ottawa would use 20% or 30% less energy than one built just five years ago.
This trend towards improved energy efficiency is far from over. Based on the policy direction set by government for future building codes, by 2030 all new homes will require an additional improvement of more than 50% in energy performance, reaching “Net Zero Ready” standards.
This is an ambitious goal and one that will challenge our industry. It will also challenge society unless affordable means for reaching these levels of energy efficiency can be found, and as an association we continue to be concerned about affordability for younger Canadians looking to become homeowners.
Changes in how we build homes will impact the role that wood products and other materials play in the construction process. Today a typical 2,400-square-foot single detached home requires about 16,000 board feet of dimensional framing lumber. Its construction also consumes about 14,000 square feet of other wood products, including plywood, oriented strand board, glulam beams, and laminated veneer lumber.
Each new home also requires a range of secondary wood products, including flooring, cabinetry, siding, decking, and millwork. As well, wood components are incorporated into windows and doors.
To put this in value terms, dimensional framing lumber represents only about 14% of the value of all wood products used by our industry. Secondary wood products, including millwork, windows, doors, and prefabricated wood assemblies, represent about 60% of the total value of wood we consume each year. As we look to the future, secondary wood component use is less likely to be impacted by changing codes; however, the structural elements certainly will be affected.
There is a long-standing trend in residential construction towards ever-greater use of value-added engineered structural components. In the future, this may tend to blur the lines between engineered and secondary wood products. We're seeing this happen in some markets, where traditional site-building home builders are switching over to the use of factory-built wall systems, traditionally viewed as a secondary product. It's also reflected in the structure of our association. The two national organizations representing factory-built home builders merged with CHBA last year, creating our new factory-built Modular Construction Council. This simply reflected the increasing integration of building practices across all segments of our industry.
In addition to this trend of increased industrialization, we're seeing engineered wood products leading the way towards new forms of wood construction. Six-storey wood frame buildings are now referenced in the National Building Code and are being constructed in a number of provinces. We're also watching, with great interest, research and demonstration of wood structures of between six and 12 storeys based on innovative technology like cross-laminated timber.
Our industry's interest in such emerging and innovative technologies is very straightforward: we need to provide Canadians with great homes that meet ever-higher performance requirements and consumer expectations. At the same time, housing affordability is a central preoccupation, as it directly impacts the capacity of younger Canadians, new Canadians, and those with young families to become homeowners.
As an association, we feel it's incumbent on all of us, including government, to ensure that more demanding codes don't impact affordability, which means we need to find technologies and techniques to do this at the same cost or less. This is a real challenge.
From our industry's perspective, a key aspect of any new building technology, whether wood-based or not, is its capacity to help us address the affordability challenge. Diminished affordability serves as a growing barrier to home ownership, and we're seeing the effects of this problem. The latest census data, released quite recently, showed that for the first time in our history, Canada's overall home ownership rate has declined, from a peak of 69% in 2011 down to 67.8% in 2016.
Perhaps more significantly, the ownership rate has declined for all age groups under 65, but especially for younger Canadians. As we move forward, knowing that future building codes are going to demand performance that currently means much higher house prices, we're looking at new, innovative technologies and materials to help us preserve and enhance affordability. Innovative wood products can and should be part of this mix. Most importantly, as Canadians, we know how to make this happen.
Over the last 70 years, there has been tremendous collaboration between our industry, the forest products industry, and the federal government to advance the science of home building. This has led to a wide range of innovations, from roof trusses in the 1950s to the 12-storey cross-laminated timber buildings being pioneered today. It has allowed us to build net-zero energy homes and to begin to find ways to reduce the cost premium involved. While we still have a distance to go in getting these costs down far enough, we are on the right path.
We therefore need to see more of this research and development activity, and we need to ensure that it's focused in areas that can enhance both the quality of housing and its affordability. Our association works with Natural Resources Canada, the National Research Council, and Canada Mortgage and Housing Corporation on a wide range of housing-related research. Such collaboration is what gave Canada housing technology like R-2000, which put us at the leading edge internationally, and our voluntary CHBA net-zero home labelling program, which is reasserting our international leadership today.
The homes our industry will build in 2030 must deliver the high levels of comfort, quality, and value that Canadians demand at a price they can afford. They must also contribute to more sustainable and resilient communities that provide housing options for all Canadians. These future homes must also make more efficient use of our natural resources. This is a tall order and a real challenge, but the potential rewards are significant: a stronger residential construction industry; stronger resource industries, including the forest products sector; great homes for Canadians; financial well-being for a new generation of homeowners; and enhanced opportunities to share our innovations and products with the world.
These are outcomes worth working hard to get. Our industry looks forward to partnering with the forest products sector and government to make it happen.
Thank you.
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Thank you very much for the invitation to contribute to your hearings regarding the secondary supply chain products in the forest sector in Canada. It is my pleasure to speak to you today on behalf of the BC First Nations Forestry Council. We are a non-profit society here in B.C. supporting 203 first nations communities—approximately 200,000 first nations citizens—in this part of the country.
We also understand your interest to consider more specifically the employment and economic impacts, the environmental aspects of these industries, and the development of energy-efficient technologies. You will hear aspects of all three themes in our presentation to you today.
Our first reaction to this important work is that it is extremely timely, and we are keen to see participation by first nations. The forest sector is moving through tremendous transition, as you know, and we feel that recent efforts towards revitalization and innovation have missed the mark. Instead of innovation, we seem to be on a continued path of liquidating timber resources for primary manufacturing only, and in some cases, in the west here, we are now even seeing a move backwards, towards increased export of raw logs.
With regard to employment and economic impacts, we wish to express to you that the opportunity of aboriginal participation in the forest sector is an urgent opportunity. We are very aware of the changing demographic for the existing forest sector. As you are aware, hopefully, there is a significant aboriginal youth demographic in our communities. Utilizing and maximizing aboriginal people in the forest sector represents a great opportunity to access local labour resources, to bridge socio-economic challenges in first nations communities, and to build political and corporate relationships, including cultural awareness. Tremendous benefits can be gained, now and in the future, from such strategies being implemented by Canada, regional governments, and forest sector partners.
In our efforts to collaborate and work with B.C. and Canada on transitions in the forest sector, including adapting to climate change conditions, we've maintained that the value-added sector or secondary manufacturing is required. Raw resource extraction and primary manufacturing will not provide enough employment and benefit to Canada as the change in the sector unfolds; secondary and value-added manufacturing are going to be required.
First nations communities were very active in prioritizing the mitigation of the mountain pine beetle epidemic that began 15 years ago in B.C. One of the top three priority goals was participation in the new bioenergy or other bioeconomy business that would utilize the dead pine trees. Bioenergy became a buzzword for B.C. and a mitigation strategy for the pine beetle infestation. Although there were some pellet plants and multiple bioenergy proposals and pilots, the full implementation and utilization are yet to be developed.
One area of focus we looked into was bioenergy solutions for the replacement of diesel-generated power. An obvious business model exists to convert over 65 first nations communities in British Columbia from diesel generators to bioenergy plants. However, jurisdictional power supply issues and policies have challenged this type of investment.
An important part of the transition we are facing in the west is that the mid-term and long-term supply of timber resources is diminishing. As a result of well-known long-term timber supply analysis and recent shorter-term climate change impacts, we've known for some time that we must learn to do more with less. The annual harvest levels in British Columbia are expected to drop from 75 million to 55 million cubic metres per year, and we will have significant challenges in that transition as a result of climate change impacts, the pine beetle, and wildfires.
Unfortunately, from our perspective we see an economic and corporate tragedy unfolding in the common situation. Various forest sector components are fighting to hold on to previous economic opportunities and continue to seek increased revenue and new markets for the same primary supply chain products, seeking reduced costs of production, although it is well known that we are at the most expensive part of the timber harvesting cycle in the west as we move from old-growth to second-growth stands.
When it comes to piloting new value-added products or manufacturing, we wish to raise to your attention that we have seen examples of new business being granted support for pilot projects with inadequate environmental standards to ensure health and safety in communities. We are very aware of the opportunities; however, we wish to raise the concern that rigorous environmental frameworks need to be in place for the protection of the environment and communities. Although we believe in and support the development of a value-added forest sector and the development of new and innovative forest products, we wish to emphasize this point.
We can't move too quickly into this space without ensuring.... In our case, as first nations, working towards having our title and rights recognized is important at the local community level. We wish to remind the committee that the rights and title of first nations people are at the forefront of natural resource management decisions and projects in Canada, and that first nations should be priority partners and decision-makers in the process of considering investment in secondary supply chain products.
First nations communities are largely in poverty and continue to have to fight for the recognition of their title and rights, including recognition of pre-existing title rights. With this in mind, I bring to the committee's attention the Supreme Court of Canada decision on the Tsilhqot'in in 2014. This most recent decision has been discussed as a game-changer, in that it has brought clear definition of title as it relates to first nations lands. How it relates to first nations lands is clearly important to a renewed forest sector and the balance between investment in some of these new manufacturing regimes and with first nations.
In addition, the Truth and Reconciliation Commission has recently completed its work and published its calls to action, providing guidance for all in terms of implementing reconciliation. The committee should also be reminded that Canada is now implementing the United Nations Declaration on the Rights of Indigenous Peoples.
These high-level mandates towards reconciliation and your committee's work towards innovation in the forest sector represent tremendous advancement potential for previous federal commitments towards reconciliation, policy transformation, and meaningful transformation of the relationship with Canada's aboriginal peoples. However, after 10 years of commitments to this high-level engagement and participation, and clearly good intentions being described on paper, we are suffering a shortfall on the realization of these goals. We suffer the same risk of all talk and no investment for aboriginal engagement and participation going forward.
As we have previously described, a renewed manufacturing sector or a stimulated value-added sector is almost out of reach for first nations communities due to lack of access to capital and jurisdictional or policy barriers. For those of us who wish to see a renewed forest sector for Canada—and we are certainly part of this group—a forest sector that is inclusive and respectful of aboriginal peoples in Canada is imperative. Strong relationships with first nations can lead to globally certified wood products or other value-added products that make our sector stronger. We want to emphasize the interest in partnership in moving forward in this type of work.
First nations are eager to be part of a new forest sector. It requires investment in these communities for stewardship and planning; operational and management support; targeted workforce programs; access to capital for local investment in the new manufacturing and value-added facilities, including bioenergy; and of course a policy framework that will accommodate this work.
Let's move past denying the title and rights that aboriginal peoples hold, and past the shallow commitments that look nice in reports but have inadequate scale when financial resources are called for. We feel that a strong and healthy relationship with our communities will bring prosperity for all in a renewed forest sector for Canada, so I wanted to share those priority mandates of our organization, our chiefs and leaders in the west, in support of your committee's work moving forward.
Thank you very much.
My thanks also go to the members and the parliamentary secretary for their invitation to appear before the committee. Today, we open the dialogue to fuel your work and your thoughts. I especially look forward to hearing your questions about our activities. I hope my comments will inspire your own work.
Chantiers Chibougamau is a family business that began operations in 1961 in Chibougamau, in northern Quebec. Chibougamau is approximately 700 kilometres north of Montreal, Quebec. Right now, our company operates two main plants, one in Landrienne, near Amos in Abitibi, and the other in Chibougamau, in northern Quebec. In total, Chantiers Chibougamau processes about 8% of Quebec's public forests. We have a major engineering wood production complex that French Professor Pascal Triboulot describes as the world's largest glulam production complex. He has visited almost all existing complexes, and he thinks ours is the one with the largest installed capacity.
In total, almost 900 people work in the company, with about 800 in all the forestry and plant processing operations, and more than 50 in technical development, the development of construction projects, and administration.
We are here to talk about wood processing, wood construction, and the impact on jobs and climate change. In that sense, there are a few things that motivate us on a daily basis.
Here is the first one. Today, beyond the beneficial effect of diversifying our business, softwood continues to form a major part of our revenue—we are still active in the traditional softwood markets. The fact is that diversification allows us to grow. The family business's sales exceed $250 million, which is largely due to the wide range of wood construction products we have developed.
When it comes to strictly solid wood used in the construction of non-residential buildings, such as institutional, commercial or multi-unit buildings using wood, about 150 jobs in our company depend on those activities, which started 15 years ago.
So it is all about energy and environmental performance. A number of key aspects related to those wood construction products must be considered in order to be recognized for their proper value. Of course, our products use a renewable resource. From the outset, this gives us a guarantee of indisputable sustainability and differentiation.
In addition, manufacturing our products requires very little energy. Throughout the assembly process, we consume significantly less energy than we produce for equivalent products and even for equivalent products elsewhere in the world.
Let me give you a concrete example of the importance of wood in buildings, in France or in Europe, for example. In light of the life-cycle analysis of our products from more than seven years ago now, we were surprised to see that our products had a carbon balance that was twice as satisfactory as the equivalent solid wood products and glulam products manufactured in Europe. This is a result of our processing procedures being integrated from the forest to the plant. It is also a result of the use of hydroelectricity and, of course, of very energy-efficient processes to assemble columns that will be a substitute for equivalent columns made out of other materials, such as steel and concrete.
From the forest to the delivery on site, the process uses an incomparable amount of energy. Of course, all of this means significant benefits that contribute to environmentally-friendly buildings. It is also important to point out the intrinsic properties of the materials, such as heat conduction in the energy performance of the buildings. We rarely hear that wood conducts 350 times less energy than steel. Wood conducts 30 times less energy than concrete. As a result, in summer, outdoor heat will be conducted inside the building 350 times less than it is with steel and 30 times less than with concrete, which is a major performance for the energy consumption, but also for the operating costs of the building.
In addition, still on the environmental front, in solid wood constructions, the structure will often remain exposed. Clearly, an exposed structure means savings in finishing materials. Again, we can recognize wood solutions at their proper value for their economic performance, but also for their environmental performance, because the intrinsic reduction in the consumption of materials has a direct impact.
In terms of the market, I talked about jobs. Frankly, the market is stagnant in Canada. We have seen projects emerge one at a time over the past 15 years. We have reached a certain plateau with a certain volume. The volume is there; we have inspiring examples.
For example, in our case alone, we have completed more than 2,000 solid wood construction projects to date, mainly in Quebec and Canada, but also in the United States. We are therefore far from being the exception, the oddity or the extraordinary, and this is what our industry wants to achieve. We want it to become normal for the country to build with wood.
In addition, we have built 125 bridges out of wood, bridges with long spans over forest or public roads.
Some of these solutions allow structures to be delivered before the deadline and under budget. We had that experience during a project with the Stornoway mine in northern Quebec. We delivered the 17 wooden bridge structures several weeks before the deadline and the costs were 10% under budget. Those were the most competitive solutions.
I would now like to talk about government construction.
Once again, I candidly and respectfully submit that government clients for projects are quite rare, both in Quebec, in our province, and across Canada. Still, there are some extremely interesting sources of inspiration.
For example, we at Chantiers Chibougamau provided the structure for the new U.S. defence buildings in Alabama. No one there was at all keen on supporting the Canadian forestry industry; they simply wanted to have the best possible construction that meets the highest current standards and the most ambitious environmental footprint standards. Naturally, all that pointed to our solid wood products made in Chibougamau. So the potential is there.
This year, in the cross-laminated timber construction sector, our company's sales in the U.S. market will be higher than those in the Canadian market. The good news is that it's very good news for Canada's trade balance and for Canada's exports. The other good news, which is actually a challenge, is that we can do much better here in Canada. The use of wood should not be approached as help for the forestry industry; it does not help us. It does not help us at all when we say we want to build with wood to help the forestry industry. The use of wood can be a natural choice, an ambitious choice, a competent choice, a choice made simply with a view to better building.
To that end, let us be inspired by our German friends, who promote wood construction. In Germany, they use 30 times more wood than we do here in Canada in non-residential construction. It is all driven by the ambition to achieve energy efficiency and environmental performance.
We therefore have a multitude of extremely inspiring and compelling examples of what should drive us.
I was talking about energy efficiency. Our product is carbon negative and allows us to deliver carbon-neutral buildings. We have built a few. Developers make that business decision, as with the Arbora project in Montreal: 450 wood condominium units in Griffintown. It is the largest multi-residential solid wood project in the world, and it is done in Montreal. It is a business decision made by developers. They did not want to help the forestry industry in Quebec and Canada; they made a business decision that results in such a conclusive result.
To sum up, we want the product to be considered for its benefits, its performance, its competitiveness and its profitability. Let's make sure that using solid wood for modern construction is not something extraordinary or special, but something normal in this country.
Thank you.
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So far, there is very little or no interest in low-carbon products in Canada. Strangely, the interest in these products is on the American side. People call us about the availability of our products because they want a more energy-efficient and environmentally-friendly solution. There are also signs of interest in China. We have already conducted two missions to that country, and the Chinese have come to our plant in Chibougamau. However, there is no such interest in Canada.
Some factors may explain this lack of interest or curiosity.
The first factor is the competitiveness of the products available. There is a sort of contradiction. There has been a lot of talk about wood construction to help the Canadian forestry industry, which is quite traditional. However, if I am helping someone by buying a product from him, clearly, I expect to pay more for it. Let me draw the following parallel: if I buy a chocolate bar at the local store and pay $1, I will have a certain amount of chocolate. However, if my neighbour is selling chocolate bars to raise funds for his swim club, I will not pay $1, but $2, since I'm helping him. The whole rhetoric of helping the Canadian forestry industry is sending the message to the market that it must be more expensive since it is being helped. However, that is not the case.
The first factor is therefore competitiveness. We have no complex about it and we are not asking for any special treatment for the cost of our products.
The second factor is simplicity and speed. If there are regulatory barriers or very cumbersome administrative processes, clearly, developers and professionals will be discouraged from engaging in the exercise. For example, I'm referring to the high-rise construction guide developed by the Government of Quebec, which is now used by many other jurisdictions. It costs the Government of Quebec nothing, and so far, it is yielding the best results in stimulating demand.
In a nutshell, the determining factors are the promoters, the competitiveness and the simplicity. At this point, this is not being perceived positively. Yet it is positive. The evidence is our successful projects.
By way of introduction, I'm an architect in Vancouver. I have my own practice of about 25 employees. We build around the world in wood and in advanced wood products, for the most part.
At this point, our firm is fairly well recognized as one of the most advanced wood design firms. Certainly in Europe we're seen that way, and in the North American context. We have had the privilege of being at the forefront of our industry in the use of wood products, and that has given us some insight that we're really pleased to share with you.
In addition to my firm, I run a not-for-profit school that specifically teaches designers how to build with wood, as well as a not-for-profit program called Timber Online Education, or TOE for short. This is a global program to advance the understanding of wood construction across all aspects of the construction industry. It's something that we are in the process of building, but it will certainly champion the advancement of the use of wood in building and of safety around it, which is specifically, but not only, for architects and designers. It is also for the construction industry, fabricators making wood products, policy-makers, city officials, and code officials, as well as environmentalists and the general public. Our interest is in expanding knowledge in all of those areas through this global online program, which has been translated into the world's languages, thus giving us a very wide reach.
Why I say all this is that we see wood products at a very interesting crossroads. It's clear that in the architectural realm, for the most part my focus is on structural products and advanced structural products. I wrote a book called The Case for Tall Wood Buildings, and then later I gave a TED talk that became the founding principles for moving us toward increasingly taller buildings in wood. We've had the good fortune of being able to do that.
Unfortunately, the commercial market here in Canada has not kept pace with the fact that in Canada we not only have enormously good products from forestry, obviously, but also enormous expertise within our industry. We have some of the finest engineers, builders, and fabricators working in wood. For some reason, we're not seeing those buildings advance as quickly as we could, whereas in countries like France, we have five different projects. The majority of buildings that we're seeing proposed across France right now are moving towards wood, which is quite interesting. Equally, we're very involved in the United States. They were very late to come to the game of talking about these advanced wood buildings, but they now have entered the race and are starting to build a lot of them.
Why that matters to all of us around the secondary wood product market specifically and in advancing the cause for Canada is that there are two organizations currently in the world looking to move the construction industry, which is largely a craft-based industry, from a craft into a sophisticated manufacturing process. It is the intention to dramatically change the cost of buildings in society by dramatically making buildings more affordable, reducing waste, and making them more sustainable by basically moving into a factory environment.
The state of the construction industry is such that you cannot factory-build in concrete because it's too heavy to transport. You can't do it in steel because again it's too heavy. However, mass timber panels and predominantly CLT, cross-laminated timber, are very robust materials that are also lightweight enough to allow manufacture in factories. These are very sophisticated factories using robotics, much like the car industry, allowing significant amounts of automation and customization.
This means that buildings can be unique but affordable, because they are built in a controlled environment. This is the revolution I see that is similar to the way Uber has impacted the taxi industry and Airbnb has impacted the hotel industry and Amazon has transformed the way products are bought.
We're working with one company in the United States, called Katerra, which has raised a little bit more than $1 billion in their first 18 months to develop it. It's a Silicon Valley-based company that is building the largest CLT plant in the world in Washington state and has plans for two more factories in the United States. This obviously has a huge impact not only on our construction industry but also on our forest products and where these panels are going to be built and how they're going to be used.
By the way, there's a similar company. It's enormous. It's called Legal & General. It's the insurance company in the U.K. that's doing this exact same thing in the U.K. Having never built a house before, L&G expects their system of factory-built housing to make them, in the next five years, the largest housing producer in the U.K., all based on using wood products, and specifically cross-laminated timber.
It is a a very significant change coming to our industry that the industry is very unaware of, frankly, and it requires a much more integrated model of understanding how wood products reach the market and how they're not simply a commodity we buy at the stores, but part of a systems approach to the future of building.
With regard to Katerra, they are Silicon Valley-based. With them, we're starting to work with Google. We're also starting to talk to Facebook with them to build huge campuses of housing, specifically in Silicon Valley, but obviously this is what we want to see happen here.
We expect this model to mean housing that will be about 30% less expensive than the current housing in California, which has a market similar to that of British Columbia. Therefore, if this company is as successful as I expect them to be—and certainly they're funded to be successful—we're going to see them having a huge impact on the use of wood products, as well as the affordability of buildings.
This same company is interested in investing in China and is partnered with a very large $180-billion-a-year company in the electronics market to expand construction using the CLT spot as their backbone into the Chinese markets. I'm certainly speaking to them about coming to Canada. I'm trying to encourage them to do so. I think they're open to it, to access not only our forestry products but also our design expertise industry here, but there are gaps in the system in terms of making that happen.
China obviously is of particular interest to all of us. I live on the west coast. It matters. Again, it's not about just shipping raw products, raw logs, or CLT panels; it's about shipping entire systems of building. The Chinese markets are open for it. I'm not sure if somebody has spoken to you yet, but until recently there were almost no wood buildings being built in China. On October 2, the codes in China were changed to allow buildings up to 18 storeys tall to be made of wood, specifically because of the leadership of what's happened here in western Canada, and yet unfortunately we don't have a market ready to go to access what could be a major transformation in the way they build in China.
I think the Katerra model is exceptional. It's something that I certainly want to see happen in Canada. Unfortunately, it definitely requires significant kinds of investment. The Silicon Valley folks are used to the scale of investment. The construction industry and the forest products industry are not used to that scale of investment, so obviously, as a matter of public policy, I believe there are opportunities to incentivize these companies to keep us at the forefront of the construction industry; therefore, in kind, we will be at the forefront of the forest products industry, as we should be.
There are several components to how I see that success happening that I'm happy to speak to. Certainly one is globalizing the education system around how to build in wood.
I am working with folks in Turkey and in Brazil, and have worked in the past with China, where there's interest in building this way but simply no knowledge about how to do it or how to use these wood products. For too long, certainly in British Columbia and I think in Canada, we have thought to export our wood products to places such as China by assuming they will adapt our building culture, meaning lightweight wood frame construction. That simply doesn't work, because building cultures take centuries to evolve. It doesn't happen overnight.
Instead, with the CLT market we're working with a system that can be adapted to their building culture and therefore will be much more marketable within countries such as China and India, and emerging markets, including Brazil. Places such as Turkey and Brazil have enormous interest in moving toward wood construction but simply don't have the experience. Again, I think this is an opportunity for foreign investment for our companies, for them to think not just about our own forests but about opportunities elsewhere.
I realize that I'm introducing concepts on a macro scale. I'm happy to speak to the details scale.
My experience has been that as I travel the world lecturing and speaking, I've realized that we are at the forefront. Every country is interested in this. We need to maintain some global leadership on this for our industry to benefit, but we need to think globally and of course act locally.
Investing in the forest sector is a global opportunity for us in terms of the investments made into companies like Structurlam or BC Passive House, and there have been various investments by government to encourage fabrication plants. Unfortunately, although we have very good companies, we are a mom-and-pop industry here in Canada for these wood products.
If you visit Switzerland or Austria, as I do often, you'll see that there are literally hundreds of companies making these products in fully automated, fully closed-loop energy systems. They're products of exceptional quality from, let's face it, a very small forestry market compared to ours, yet their products and their investment in innovation are far more significant. That's meant that as an architect today I can source wood products from Austria cheaper than I can from Canada for projects in Canada.
These things are the broken aspects of our current system that I think can be fixed, but it is going to take investment in education and investment in innovation—
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Changing the code is a laborious process involving a lot of committees and a lot of professionals. It doesn't really rest on government. It rests on the whole industry, and that's the way it should be. It should be a cautious process to develop it. It's about life safety, and that's important.
On the other hand, it has become acceptable that every code takes five years to develop. That's what has created the slow transition. Nobody had ever imagined buildings 30 storeys tall made of wood, truthfully, until we started talking about it 10 to 12 years ago. In fairness, if you haven't imagined it, you don't write the code for it, but steel and concrete have no height limits attached to them.
It's not that we should see an entire world covered in very tall wood buildings. It's not that I believe that's the future, but I believe we should see a lot more large buildings in wood. Introducing these artificial and arbitrary height limits somehow says to the public that wood buildings aren't as good as steel and concrete.
That impression is part of the shift we that we need to change. I often say the hardest part of my job is shifting the public's perception of what is possible. It's not the engineering; that's easy. That shift of public possibility, I think, is a great opportunity for our government to say that we have a history going back to the first nations people of building in wood and that we are as good as anybody on earth at doing this, and so let's champion this as part of our national identity.
Even at a very primitive level, every two years at the Venice Biennale of Architecture, Canada somehow has been embarrassed to demonstrate our leadership in wood because I think there's a sense that we might be looking back at our past rather than recognizing part of our future. Instead we show concrete and steel buildings instead of wood buildings. I think that shift in public perception comes from some investment in.... In the same way that we talk about the national parks in public media and on television ads, we should be talking about Canadian wood products in that same forum.
In Australia that's what they've done. They had a public campaign around recycling tin cans. After that was finished, they moved into encouraging people to build in wood. They had public celebrities across Australia speaking about building in wood. This is from a country that has very little forest. They chose to invest that way, and it made a huge difference. People identified that recycling tin cans makes sense and obviously building in wood makes sense, and the consumer side of the industry started to adopt it.
You introduced the question around code. I think the broader question that we have to address is how the code impacts the perception of what's possible.
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There are two methods of protecting a building. When it's tall, we need to separate a building horizontally and vertically with what's called a two-hour fire separation. There are two ways we can do that with wood.
One is we take our wood and cover it up with two layers of fire-rated gypsum products, meaning drywall. That's what we did in Brock Commons. That's really heavy and it hides the wood, but it creates a traditional fire barrier to protect the wood.
The other method, which is really based on the way we've done things for 100 years—it's not new—is that we overbuild the size of the wood by a certain dimension. If it needs to be this wide structurally, we build it this much wider. That extra width is basically what would be allowed to burn in a big fire. It burns away very slowly—it actually burns at 0.6 millimetres per minute—so we can calculate exactly how much burn there will be. Over two hours, we lose a certain amount of material, but the remaining material still has the structural soundness to support the weight of the building plus the weights of the occupants and the firefighters who need to fight the fire. That's the principle involved.
The reality is that in all of the fire testing we're seeing for CLT products, it's very difficult to sustain a fire. Again, this is a public perception issue. The analogy I give is that it's like taking a big log and a lighter and trying to make a fire. You can't do it. You need little sticks, and you need to build up your kindling before you can put the big log on. These products are so robust that they do not catch fire very easily because they have this massive thickness.
As I said, we've designed wood buildings like this, and our codes have accepted wood buildings like this for the last century, since the beginning of building codes. We build heavy timber buildings with these big wood beams that are allowed to char naturally in a fire, but that protect the core structure. We've been doing it, but we just haven't shifted from thinking about it at certain heights to allow it to go to bigger heights. That's really the obstacle, and it's really, again, just an emotional shift that has to happen to embrace the science we already know. I think we're getting there, but it's going a little bit too slowly to really advance it.