RNNR Committee Report

Dissenting Report from the Official Opposition

Economic Recovery in Canada’s Forestry Sector

As Members of the Official Opposition, we would like to thank the witnesses who appeared before the committee to contribute to this study on the economic recovery of Canada’s forestry sector. We also appreciate the efforts of our committee analysts in the drafting of the original report.

However, considering the overarching theme of the study is economic recovery, we were hopeful that the report would contain some guidance with respect to the government’s lack of effort to achieve a new Softwood Lumber Agreement with the United States and thereby provide some certainty for accessing our largest export market. This is fundamentally the most important factor affecting the long-term sustainability and growth of this industry, and the jobs that are associated with it.

We also believe further emphasis should have been placed on the need for the government to recognize and support the progress the forestry industry has made with regards to environmental protections and sustainable resource development.

These topics were well debated and there was important testimony provided that was highly relevant to the topic being studied. It simply was not included with the emphasis we believe necessary to portray the seriousness of these issues and the affect it is having on the economic recovery in Canada’s forestry sector.

We also expected the report to include a discussion regarding the government’s delay in providing Canadians with a detailed plan on their promise to plant two billion trees in ten years which has resulted in not a single tree being planted, and which could have implications for the forest industry.

We again appreciate the work of the Members and staff of the Standing Committee on Natural Resources, however we must provide a dissenting opinion as laid out below.

Recommendation 1:

That the Government of Canada seriously pursue a new Canada/US Softwood Lumber Agreement as a top priority.

The Liberal Government’s continued lack of action regarding a Softwood Lumber Agreement has resulted in continued uncertainty within Canada’s forestry sector. Prior to COVID, mills were being shut down or curtailed, and thousands of jobs were lost. The rebound that the sector has experienced as a result of the pandemic has not changed the underlying problem caused by the lack of secure access to the United States.  If this is not dealt with, and with demand returning to pre-COVID levels, the industry will still be faced with the same fundamental challenges that were leading to curtailments and mill closures before the pandemic.

The Prime Minister originally promised to negotiate a new Softwood Lumber Agreement in his first 100 days after the 2015 election.  We are now on the third US administration since that promise was made and an agreement seems farther away than ever.

The committee heard from several witnesses who reiterated the importance of negotiating a new Softwood Lumber Agreement for the forestry sector.

Jeff Bromley, Chair of the United Steelworkers Wood Council stated that: “…it’s time for Canada to focus on ending the softwood lumber dispute. Our Canadian industry needs a fair trade deal to provide certainty for industry and certainty for workers and the communities in which they live.”[1]

Jean-François Samray, President and Chief Executive Officer of the Quebec Forest Industry Council, reiterated this point stating that: “It is important to the forest industry that WTO rules be respected and that an agreement be negotiated.” [2]

Diane Nicholls, Assistant Deputy Minister and Chief Forester, Ministry of Forests, Lands, Natural Resource Operations and Rural Development, Government of British Columbia, also made this point stating that: “Obviously, we should continue working on a softwood lumber agreement, which impacts our foundational forest products sector and manufacturing.”[3]

The committee also heard from witnesses about the devasting impacts the U.S.-imposed softwood lumber duties have had on the forestry sector, and the migration of jobs from Canada that are the result. These duties are a direct result of the government’s inability to negotiate a new Softwood Lumber Agreement.

Mr. Bromley testified that: “To date, Canada has paid approximately $4.6 billion in softwood duties since 2017 when the devastating duties were implemented upon expiry of the last softwood lumber agreement. Of that $4.6 billion, $2.4 billion was from British Columbia, $500 million from Ontario, $800 million from Quebec, and the balance from the rest of the nation.”[4]

Mr. Bromley went on to state that: “Since 2017, the job loss has been extensive. Almost 11,000 jobs have been lost industry-wide, over 1,000 USW jobs particularly at eight operations in British Columbia alone. There has been a 15% decrease in market access to the U.S. since the implementation of those duties. However, that gap has not gone away. It’s not a vacuum. That gap has been filled, tariff free, by European nations.”[5]

Tina Rasmussen, Corporate Development and Administration Officer, Meadow Lake Tribal Council Industrial Investments, testified that when it comes to the softwood lumber duties: “We continue to suffer the impacts. Many larger corporations have diversified their portfolios by opening up plants in the U.S., thereby avoiding those tariffs, but with a small single corporation like NorSask Forest Products, we—MLTC—only have one plant, so we feel the full brunt of those tariffs. I think the last numbers provided by our general manager were somewhere in the neighbourhood of $14 million lost on revenue since 2017 due to the tariffs.”[6]

Conservative Members of the committee brought these concerns directly to the Honourable Mary Ng, Minister of Small Business, Export Promotion and International Trade, when she appeared before the committee for this study.

When repeatedly pressed about whether a new Softwood Lumber Agreement was discussed during Canada’s first bilateral meeting with the Biden Administration, Minister Ng finally stated:

“I'm looking forward to speaking with the new U.S. trade representative upon her confirmation, and this will be an item that is a priority for me to raise. There are synergies between our two countries, as all have seen in the road map for a renewed U.S.-Canada partnership.”[7]

Given the Minister’s inability to respond with a firm yes to this question, Conservative Members can only conclude that negotiating a new Softwood Lumber Agreement was not discussed at this meeting, and is therefore not a priority for this government.

It has been six years since the Prime Minister promised to negotiate a new Softwood Lumber Agreement in his first 100 days, and forest-dependent communities and workers are still waiting for the government to take meaningful action.  

Considering the importance that witnesses repeatedly placed on a new agreement for the stability and growth of the forestry sector, as well as the devasting impacts softwood lumber duties have had, it is clear that the government has not acted strongly enough on this file.

While the report makes reference to the Action Plan on Softwood Lumber, there does not seem to be any concrete steps being taken by this government or even any plan in place to negotiate a new agreement. We believe this could have been further reflected in the report.

Recommendation 2:

That the Government of Canada recognize all of the significant progress made by the forestry industry over many decades for environmental protection and sustainable resource development in contrast to enduring negative stereotypes by:

• seeking further input in consultation with the sector regarding its improvement with industrial practices and forest management
• prioritizing and expanding the data collection process to regularly and comprehensively present a full picture of Canadian forests, especially unmanaged forests
• working with stakeholders and experts to develop a strategy for promoting a better understanding of the sector to the public

It is clear from the evidence we heard from witnesses that the Government needs to do more to recognize the important steps the forestry sector is taking regarding environmental protections and sustainable resource management in order to combat outdated negative stereotypes that do not reflect current forestry practices. The forest industry can play an important role in helping to reduce Canada’s greenhouse gas emissions in the future, but this potential can be undermined by misinformation or misunderstanding about modern forest management.

As Ken Kalesnikoff, Chief Executive Officer for Kalesnikoff Lumber Co. Ltd. stated: “We are farmers of the land, in the forest industry. We are no longer what we were painted with back in the sixties and seventies, as some kind of neanderthals. The amount of work we go through, the technology that is used to put out a cutting permit, is unbelievable.”[8]

Mr. Kalesnikoff further stated: “We should be celebrating the forest industry, and right now, because of the stigma behind cutting trees down…it gets in the way. We're not making right decisions; we're making emotional decisions.”[9]

With regards to sustainable forest management and the government’s push to protect 30% of Canada’s land and oceans by 2030, Kathy Abusow, President and Chief Executive Officer for Sustainable Forestry Initiative, stated that: “What you're doing is taking even more of that area out of potentially sustainable forest management to sustain communities—all communities—and Indigenous communities. This is what we're focused on: How do you manage those forests for carbon, for multiple values, but have other effective conservation measures that address protected areas and allow sustainably managed forests to be included in a protected area strategy? It means making them available for harvesting and also acknowledging, when you get conservation outcomes on those forests that are akin to strictly protected areas, that those forests that are sustainably managed should be able to count as well.

“This is something we're working on with ECCC. I think this is all important, because it is all related to species recovery, carbon strategies and sustainable communities. We have to ask ourselves why we want 30% by 2030. We say it's for climate, it's for species, it's for conservation outcomes, but you can have that and also have sustainably managed forests, a circular economy, products that are produced from them and those other benefits through proper management, through new strategies and innovation.”[10]

Ms. Abusow reminded the committee of the importance of Canada’s unmanaged forests, stating: “…our whole forest base needs to count, but we seem to forget that we're already not counting 50% in a lot of what we're doing. I just want to remind this committee of that larger forest base that we work on. It's an important one to consider overall, with all of these strategies, not just that which is under active forest management.”[11]

Ms. Abusow also reiterated the need for more data when it comes to Canada’s unmanaged forests, stating: “I agree that you need to have as much data as possible to have the fullest plan in terms of the path forward.”[12]

Recommendation 3:

That the Government of Canada release a fully-costed detailed plan encompassing steps taken to ensure the two billion trees they intend to plant are incremental and are the right species going into the right places, and to ensure that the program does not create seedling shortages, increase costs for industry, or lead to stranded assets.

In 2019, the Prime Minister promised to plant two billion trees in ten years. However, the government has yet to release a detailed plan regarding how this will be accomplished. As several witnesses pointed out during the course of the study, planting seedlings is complex, and the government needs to ensure that the right species are going into the right places and that the program doesn’t create seedling shortages for those who are already planting hundreds of millions of trees each year.

As Mike Beck, Operations Manager, Capacity Forest Management Ltd., pointed out: “Right now, two billion trees is going to be quite difficult when you have other licence holders and only a certain number of greenhouses to produce those seedlings. What we're looking at right now is that Canada usually plants about 600 million trees a year across Canada. In B.C. alone, it's 250 million. To have the infrastructure there to plant those two billion trees within 10 years is going to be quite difficult and quite challenging to achieve.”[13]

Derek Nighbor, President and Chief Executive Officer for Forest Products Association of Canada, also reiterated that the industry plants five to six hundred million trees in Canada each year, and expressed concerns with capacity issues and the risk of seedling prices rising as a result, stating: “Number one, seedlings don't just pop up. We need time to build capacity, and it can take up to four years to build that capacity. Given that we plant on average a thousand trees every minute, once the capacity is there, we have the ability to do that planting. It's the capacity crunch we worry about for a couple of reasons. Number one, you want to get value for taxpayer dollars here, because, if you have a surge and there's not enough capacity, the prices are going to go through the roof for both the federal government and our companies, and that's not great.”[14]

Claude Villeneuve, Professor, Université du Québec à Chicoutimi, Carbone boreal, pointed to the importance of considering the species of trees and that each species had its own unique characteristics. He went on to state that: “Certainly, planting trees where there are none increases the carbon sink and carbon stocks. However, for this to be integrated into a quantified climate change proposal, the species must be known and planted in such a way that their carbon capture can be measured and reported in a standardized way.”[15]

Mr. Villeneuve went on to reiterate that: “The choice of species must also allow the trees to continue to provide the ecological services they provide to the forest. So it's important not to plant just anything, just anywhere.”[16]

When Conservative Members questioned department officials about details of the government’s plan to plant two billion trees by 2030, Beth MacNeil, Assistant Deputy Minister, Canadian Forest Services, Department of Natural Resources stated: “I do not have a detailed plan at this time. We are awaiting the budget–”[17]

It wasn’t until after Conservative Members began questioning witnesses about this promise that the government finally announced some information regarding their plan. However, to date not one tree has been planted and details related to the concerns expressed by witnesses have yet to be addressed.

We believe the government must prepare and release a detailed plan on how it will fulfill its commitment to plant two billion trees over 10 years – in addition to the 600 million trees that are currently planted yearly by Canada’s forest industry – recognizing that, on a linear basis, this will increase the required plantings in Canada by one-third.

Details of such a plan must include, but are not limited to the following issues, as identified by witnesses to this committee:

• steps to ensure the right species of trees are going into the right places in order to improve survival rates and the ability to prosper and sequester carbon;
• provisions to ensure planted trees are incremental to trees that would otherwise already have been planted by the forest industry, or by groups such as Tree Canada;
• plans to ensure that the program is a fulsome (seeds to trees) effort that does not create seedling shortages, labour shortages, increase costs for industry through labour/feedstock displacement, or lead to stranded assets;
• identification of the land base in which the trees will be planted – and the cost of removing this land base from other potentially profitable and sustainable activity;
• full costing for the effort, including: the cost of planting different species of trees in different areas; the increased infrastructure and labour associated with seedling production; the management of the seedling or tree planting activities; the cost of the land base acquired for the purposes of planting; and the cost of any maintenance or oversight of the planting tree areas. This plan must arrive at a workable budget to be borne by Natural Resources Canada, for the expected life of the ten-year program.

This activity should be coordinated with Canada’s various regional post-secondary institutions that specialize in forest management in order to maximize the environmental benefit and provide opportunities for labour and technological advancement in the application of this full-cycle program.

This program should also be advertised to Canadians for the impact it will bring in sequestering carbon, starting in the early stages – as early as 2025 – midway through the ten-year program so that Canadians can see that government is measuring what it is managing.

All opportunities to participate in the program – from seedling growers to planters – should be offered to interested organizations at least twelve months prior to the activity – thus, giving Canada’s forest industry infrastructure the time to plan and participate to the maximum extent and benefit possible, and make required investments in labour and capital in a timely manner.

Conclusion

We appreciate the efforts of our committee analysts in the drafting of the original report, however considering the overarching theme of the study is economic recovery we were hopeful that the lack of effort to achieve a Softwood Lumber Agreement, the need to recognize the significant progress made by the forestry industry with regards to environmental protection and sustainable resource development, and the government’s continued delay in providing a detailed plan on how they will plant two billion trees in ten years would be highlighted in the main report.

The topics were well debated and positions of our witnesses supported our assertions. Again, our recommendations simply were not included with the emphasis we believe necessary to portray the seriousness of the issues laid out.

Our Canadian forestry sector and the families affected by it deserve our best efforts to see it recover and flourish.

Therefore, we submit this dissenting report which represents the views of the Conservative members of the committee.