Forest Industry Federal Budget 2019 Recommendations: Need For Federal Partnership To Support Innovation, Trade And Healthy Forests For The Future

Canadian forest products are recognized as being among the best in the world, not only in quality but also in sustainability. Forest Products Association of Canada (FPAC) provides a voice for Canada’s wood, pulp, and paper producers nationally and internationally in government, trade, and environmental affairs. The $69-billion-a-year forest products industry contributes $21.7 billion to Canada’s GDP and is one of Canada’s largest employers operating in over 600 communities and providing 230,000 direct jobs across the country.

The forest products sector is facing several challenges including, but not limited to, trade disputes; carbon measures; regulatory unpredictability; wood supply uncertainty; and lack of reliable infrastructure to support a resilient transportation system. Maintaining our industry’s strong Canadian brand in the world is essential to continue our contribution to economic growth for Canadian workers, businesses and communities. More critically, federal financing programs and policies must remain predictable and stable for transformative projects to be successful and to contribute to Canada’s carbon reduction targets, transition to a low carbon economy, contribute to Indigenous and rural economies that depend on the sector, and increase investment to compete effectively in the global marketplace.

The forest products sector is part of the Government of Canada’s Resources of the Future Economic Strategy Table, which has identified the following five priority themes to ensure future investments in Canada’s resource industries:

1)  Regulatory certainty

2)  Innovation for competitiveness

3)  Access to markets

4)  Engagement with Indigenous peoples and communities

5)  Attracting and re-skilling talent

FPAC works closely with federal and provincial governments to ensure this critical industry is recognized for its innovation, environmental leadership, and social responsibility. A 2018 report by the Standing Committee on Natural Resources identified that “forest product innovations have led to improved industrial competitiveness and environmental performance in a wide range of industries, from natural resources, agriculture and manufacturing, to chemistry, cosmetics and healthcare.”

FPAC recommends the federal government continue to invest in the following:

1. Research and Development, with programs such as FPInnovations, at $30 million/year. These programs provide resources that help the industry innovate and improve areas of the sector’s value chain. For every dollar invested in FPInnovations, it generates four dollars in new markets.
2. Adoption of First Commercial Technologies to Accelerate New Product Diversification with programs such as Investment in Forest Industry Transformation (IFIT) at $30 million/year. IFIT funding has helped deliver 28 projects across Canada. These programs help accelerate the development of new forest products, including those that could replace the use of plastic across Canada.
3. Market Access through long-term programs such as Expanded Market Opportunities (EMO), which promote the use of Canadian wood, pulp and paper and new emerging products, at $22.5 million/year. These programs increase the sector’s presence in the Canadian and international arenas and help develop new markets under free trade agreements.
4. Supporting Indigenous peoples with programs such as the Indigenous Forestry Initiative at $5 million/year. Since 2017, the funding has aimed to increase Indigenous participation in forestry-related opportunities, businesses, careers and governance. These programs will ensure the forest products sector grows and continues to lead in Canada and internationally.

FPAC recommends that government address the competitive position of Canada’s forest products sector by making sound investments to ensure products get to markets and implementing a more agile regulatory system:

5. Establishing an industry-government working group on regulatory competitiveness to address cumulative regulatory burden and access to wood fiber;
6. Alleviating infrastructure bottlenecks and addressing increasingly frequent transportation service interruptions, by allocating capacity to NRCan to support the collection, analysis and distribution of data provided by railways through the implementation of the Transportation Modernization Act;
7. Addressing the overall tax burden, including investment depreciation treatments;
8. Ensuring that during the renegotiation of NAFTA, that enhanced trade facilitation and trade remedies are key objectives;
9. Ratifying the Comprehensive and Progressive Trans-Pacific Partnership trade agreement, ensuring further access to the Asian market for the industry;
10. Guaranteeing greater market access for the Canadian forest products, through the broad network of Canada’s trade offices and promoting “Brand Canada” around the world.

FPAC recommends that government collaborate with provincial governments, Indigenous communities, other rights-holders and stakeholders to develop an action plan to ensure healthy and resilient forests, and in doing so support workers and their communities:

11. In the face of growing fire, pests and other disturbances, support development of a detailed vision and action plan that will help secure healthy forests for future generations.

FPAC provides a voice for Canada’s wood, pulp, and paper producers nationally and internationally in government, trade, and environmental affairs. The $69-billion-a-year forest products industry represents 2% of Canada’s GDP and is one of Canada’s largest employers operating in more than 600 communities and providing 230,000 direct jobs across the country.

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