The House of Commons Standing Committee on Natural Resources met to study the state of the Canadian forest sector, hearing from Glenn Hargrove, Assistant Deputy Minister of the Canadian Forest Service at Natural Resources Canada (NRCan).
Glenn Hargrove described the forest sector as highly integrated, with disruptions to lumber exports affecting byproduct availability for pulp, paper, and bioenergy. He noted that since 2022, 21 sawmills and nine pulp and paper mills have closed, with many more curtailing operations, largely due to U.S. softwood lumber duties exceeding 35% and a new 10% tariff under a Section 232 investigation. He outlined a $1.25-billion federal support package, including $700 million in loan guarantees through the Business Development Bank of Canada (BDC) rolling out that week, $500 million for NRCan’s forest sector transformation programs starting April 1, and $50 million for worker support through provincial labour agreements. He emphasized diversification through the housing agenda, mass timber construction, and offshore market development in Asia, Europe, and the Middle East, and noted that the two billion trees program is ramping up non-linearly, with commitments for about one billion trees already in place.
Responding to a question from Gaétan Malette, Hargrove confirmed that NRCan’s innovation programming, particularly the Investments in Forest Industry Transformation (IFIT) program, supports bioeconomy research and development, including bioenergy and bioproducts, often co-funded with provinces. He added that the Global Leadership in Forestry (GloFor) program funds offshore market diversification through trade missions and codes and standards work. When Mario Simard suggested that the $700-million loan guarantee is insufficient compared to the $10–12 billion in duties held in the U.S., Hargrove deferred trade risk options to Global Affairs Canada and said the government would assess the program’s impact as it rolls out. Simard also requested a table showing the number of applications versus funded projects for all forest sector programs, which Hargrove agreed to provide.
In response to Claude Guay, Greg Smith, a colleague of Hargrove, provided examples of successful program outcomes, including the Green Construction through Wood (GCWood) program piloting novel wood buildings in Vancouver and Winnipeg, IFIT investments in biofuel and bioenergy equipment at mills, and the Indigenous Forestry Initiative supporting capacity building. Hargrove added that the department could send the committee further examples. When Guay asked about international competitiveness, Hargrove noted that species differences, transportation costs, and prior codes and standards work in China and Japan give Canadian products advantages in some markets.
Addressing Jonathan Rowe’s questions about the 30% by 2030 and 50% by 2050 conservation targets, Hargrove said the file is led by Environment and Climate Change Canada but that conservation and economic development can coexist through careful area identification. He disagreed with Rowe’s implication that unharvested forests necessarily increase fire risk, stating that different management regimes can reduce wildfire risk beyond harvesting. On biomass energy, Hargrove noted that Canada already exports significant wood pellets, including through companies like Drax, and that he would join a trade mission to Japan to promote that sector. He confirmed that Newfoundland and Labrador softwood lumber producers are eligible for the BDC loan guarantees, with no regional carve-outs.
In response to John-Paul Danko, Hargrove identified mass timber and prefabricated housing as major growth opportunities for value-added products, supported by demonstration projects under GCWood to de-risk adoption, and by work with the National Research Council and FPInnovations on codes and standards. He said the federal government has a role in standardizing building codes both domestically and internationally to open markets. Danko also gave Hargrove an opportunity to clarify the two billion trees program, which Hargrove did, explaining that the program’s trajectory is non-linear due to the three-year lead time from planning to planting, and that long-term agreements are being secured with provinces and territories.
The committee agreed to receive a follow-up brief from the witnesses if they wished to submit one.
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