Natural Resources

The House of Commons Standing Committee on Natural Resources met to study the state of the Canadian forestry sector amid U.S. softwood lumber duties. Appearing as witnesses were Steven Rustja, President of the Association of Lumber Remanufacturers of Ontario; Stéphane Renou, President and CEO of FPInnovations; and Michel Lessard, President of GreenFirst Forest Products Inc.

Steven Rustja said that independent remanufacturers have been hit hardest by the duties because the duty is applied to the full value of the finished product, including labour and freight, effectively doubling the tax on the lumber itself. He argued that his sector is an innocent victim, as remanufacturers buy wood at arm's length and have never been accused of being subsidized. He urged the government to make a softwood lumber deal now, even a bad one, and to tie it to other U.S. priorities like CUSMA, while also providing immediate supports such as BDC loans, duty deposit buybacks, and freight assistance to keep the industry alive until a deal is reached. He stressed that any future agreement must explicitly enshrine independent remanufacturers with direct quota allocations and a duty based on first mill value.

Stéphane Renou said that with tariffs of 35 to 45 per cent, most mills are operating at a loss, and even if tariffs were resolved tomorrow, the industry would still face long-term challenges from high transport costs, difficult fibre access, and outdated mills. He argued that Canada must stop chasing magic solutions and instead focus on grounded innovation, modernizing a small number of mills that can be globally competitive through vertical integration into higher-value products like engineered wood and mass timber. He recommended a regional approach, treating each forest ecosystem as a distinct business problem, and called on the federal government to exercise leadership by convening a task force of policymakers, economists, and scientists to prioritize the most viable areas for support.

Michel Lessard said his company faces a 45 per cent combined duty and historically weak U.S. demand, forcing it to suspend investments and focus on liquidity. He noted that Ontario has lost most of its pulp and paper mills, creating a structural surplus of wood chips and biomass that could be turned into energy solutions like biochar and biofuels, but developing those markets takes about three years. He called for a coherent package of federal measures, including rapid access to announced loan programs, export support for emerging markets in Europe and North Africa, a preferential investment fund for modernization, harmonization with Ontario programs, and incentives for wood use in Canadian housing. He agreed with the proposal to have the government buy back 50 per cent of duty deposits monthly, calling it a very interesting measure that would provide immediate liquidity.

During the question period, members debated the political history of the softwood lumber file, with Conservative members criticizing the Liberal government's approach and Liberal members noting the dispute has persisted for decades under both parties. A motion was moved to continue debate on a previously tabled notice of motion, but no procedural debate or vote on that motion was concluded in the transcript.