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The Pressure’s On

The primary message delivered by Avrim Lazar, president and CEO of the Forest Products Association of Canada (FPAC), was that the government must continue its commitment to fiscal responsibility and debt reduction while still taking strategic action to help advance the ongoing transformation and competitiveness of the Canadian forest products industry. Lazar provided his comments during pre-budget consultations at the House of Commons finance committee meetings in Ottawa held last October.

“We applaud the government for its determined and steady hand on the economy that has resulted in Canada avoiding the sovereign debt crises that have plagued so many other countries,” says Lazar. “Still we feel the economic times dictate the need for modest stimulus. We believe that stimulus funding should focus on measures that boost competitiveness in the long term. For the forest products industry, this translates into a few focused measures that would support penetration of emerging markets, business model innovation and environmental progress.”

Forest Industry Long Term Competitiveness Strategy

As part of its strategy, Lazar says the government should continue to fund existing programs under the Forest Industry Long Term Competitiveness Strategy. This includes continued support for FPInnovations and for the Leadership for Environmental Advantage in Forestry program (LEAF), which should be broadened to include support for the implementation of the landmark Canadian Boreal Forest Agreement.

Lazar also urges the government to unlock the potential of the $500-million Sustainable Technology Development Canada (STDC) Next Gen Biofuels Fund. By opening eligibility up to other bioproducts, Lazar suggests this fund has potential to accelerate the transformation of the forest industry. According to the STDC website, a project must meet the following eligibility criteria:

  • be a first-of-kind facility that primarily produces a biofuel (ethanol or biodiesel) using next-generation processes at a commercial-scale demonstration;
  • be located in Canada;
  • use feedstocks that are, or could, represent Canadian biomass; and have completed a pre-commercial, pilot-scale demo of the technology that has run on continuous or semi-continuous basis and validated technical efficacy.

IFIT

Finally, FPAC is asking the government to replenish the Investment in Forest Industry Transformation program (IFIT) with $300 million over the next three years. The fund has provided $100 million over four years for projects that implement new technologies leading to non-traditional, high-value forest products and renewable energies. Lazar notes that Canadian forest companies have submitted proposals to the original IFIT program worth 52 times the money available. According to the NRC website, the last call for proposals elicited 57 applications representing $1.2 billion in project proposals, for which the requested IFIT contributions amounted to almost $300 million.

“That speaks to the still untapped transformative potential for Canada’s forest products industry,” says Lazar. “The forest sector has been aggressively reinventing itself with government as a critical partner. We are now at the point where industry efforts to transform are making an impact. However, we still need an ongoing partnership so that industry can build on the existing momentum, and help protect jobs and rural communities.”

“We need to move now to accelerate our production of innovative new products such as bioenergy, biochemicals and other bioproducts or lose out to global competitors whose governments are investing billions in their modernization,” he says. “Either we win the future or risk missing out on promising economic opportunities, falling behind our global competitors, and remaining trapped in the lower-value commodity cycle that put so many jobs and communities at risk.”

“FPAC always addresses the finance committee as part of its pre-budget consultations to underscore what we want to see in the budget,” Lazar tells Canadian Forest Industries. “Our goal is definitely to keep the momentum going on government programs, such as IFIT, that are helping the industry transform.”

Government Response

“We have also met with the Minister of Natural Resources and the Minister of Trade, who appeared at our recent board meeting, where we again made the case for continued money to help support the industry transformation,” Lazar says, as he explains that the ministers were receptive but made no firm commitments.

“FPAC will continue to push for action,” Lazar says, adding that further meetings and briefings will take place, with departmental officials, political staff, ministers and elected officials – especially those that belong to a forestry caucus. FPAC’s efforts increase in tempo at budget decision-making time.