Forestry in­dus­try must di­ver­sify, cap­i­tal­ize on de­mand for green en­ergy: study


MONTREAL — Canada’s bat­tered forestry in­dus­try can be res­cued by blend­ing tra­di­tional pro­duc­tion of wood with new eco-friendly uses such as bio­chem­i­cals and bioen­ergy, says a new study re­leased Mon­day.

The for­est in­dus­try needs to ex­tract the max­i­mum value “from ev­ery tree har­vested,” said Avrim Lazar, pres­i­dent of the For­est Prod­ucts As­so­ci­a­tion of Canada.

The study, based on in­ter­views with 65 ex­perts as well as in­dus­try leaders and gov­ern­ment, pre­dicts a bright fu­ture for the for­est in­dus­try de­spite the eco­nomic down­turn and col­lapses in the de­mand for lum­ber and pa­per.

An es­ti­mated 50,000 for­est jobs have been lost in Canada over the past few years and the as­so­ci­a­tion says there needs to be changes in or­der to sus­tain the in­dus­try’s re­main­ing 270,000 jobs.

“ What we need is a shift in busi­ness model, a new busi­ness model that still pro­duces lum­ber, pulp and pa­per but also ex­tracts max­i­mum value from ev­ery tree har­vested,” Lazar said.

“The mes­sage for gov­ern­ment is that we have to re-ex­am­ine our poli­cies and pro­grams to make this pos­si­ble. It’s not gov­ern­ment’s job to sup­port the sta­tus quo, to in­hibit change. It’s gov­ern­ment’s job to ac­cel­er­ate this trans­for­ma­tion.”

The as­so­ci­a­tion is call­ing on Ottawa to of­fer eco­nomic stim­u­lus to fa­cil­i­tate the change through re­search, tax mea­sures and other fund­ing. The price tag is $1.5 bil­lion over five years, half of which can come from spending re­al­lo­ca­tion.

The pay­back will be a big in­crease in clean en­ergy for Canada, sus­tain­able jobs in the for­est in­dus­try, and re­vi­tal­ized in­vest­ment, Lazar said.

The new green model would be able to pro­duce the power of nine nu­clear re­ac­tors, enough to meet the en­ergy needs of 2.5 mil­lion homes, or one out of ev­ery five homes across Canada.

While de­mand for pa­per will con­tinue to wane, Lazar said most of the in­dus­try sees good fu­ture de­mand for lum­ber, pulp, bioen­ergy and other new wood prod­ucts.

The chal­lenge fac­ing the in­dus­try is to cap­i­tal­ize on the de­mand for new prod­ucts to re­store growth, he said.

One way of do­ing that is to di­ver­sify mar­kets and re­duce forestry’s de­pen­dence on the United States, he said.

“ The for­est in­dus­try’s gone through a very hard time,” Lazar said.

“ We’ve done a study that points in a di­rec­tion which gives us max­i­mum chances for the fu­ture.”

The head of Canada’s largest forestry union said the in­dus­try as­so­ci­a­tion has de­vel­oped the right for­mula for the ail­ing in­dus­try.

But Dave Coles of the Com­mu­ni­ca­tions, En­ergy and Paper­work­ers Union is con­cerned the Harper gov­ern­ment won’t de­liver nec­es­sary fund­ing.

“I am afraid that it will fall on deaf ears. We are still get­ting no in­di­ca­tion from the fed­eral gov­ern­ment that they view the for­est in­dus­try ex­cept as a sun­set,” he said in an in­ter­view.

Coles said mov­ing to an in­te­grated for­est in­dus­try is needed, rather than just chip and burn which won’t cre­ate jobs.

Pierre La­pointe, pres­i­dent and CEO of FP In­no­va­tions, said years of re­search and de­vel­op­ment have pro­duced tech­nolo­gies that con­vert wood fi­bre into high­value prod­ucts such as bio-fu­els to heat homes or power ve­hi­cles as well as bio-chem­i­cals to make cos­met­ics, sol­vents, food ad­di­tives and re­new­able plas­tics.

Among the pro­pos­als to en­cour­age pri­vate sec­tor in­vest­ment is lever­ag­ing the tax sys­tem by cre­at­ing a cap­i­tal in­vest­ment tax credit sim­i­lar to the United States ap­proach.

“ This new in­te­grated model will cause in­vestors to take a fresh and more op­ti­mistic look at the eco­nomic po­ten­tial of Canada’s for­est prod­ucts in­dus­try,” said Don Roberts, manag­ing di­rec­tor of CIBC World Mar­kets and the study leader.

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