NOVA SCOTIA HOUSE OF ASSEMBLY
Thursday, April 20, 2017
Forest Nova Scotia and Taylor Lumber Company
Printed and Published by Nova Scotia Hansard Reporting Services
Ms. Suzanne Lohnes-Croft (Chairman)
Mr. Terry Farrell (Vice-Chairman)
Mr. Stephen Gough
Mr. Bill Horne
Mr. Derek Mombourquette
Hon. Pat Dunn
Mr. John Lohr
Hon. Sterling Belliveau
Ms. Lenore Zann
[Mr. Brendan Maguire replaced Mr. Terry Farrell]
[Hon. Christopher d'Entremont replaced Hon. Pat Dunn]
Mrs. Darlene Henry
Legislative Committee Clerk
Mr. Gordon Hebb
Chief Legislative Counsel
Forest Nova Scotia
Mr. Jeff Bishop, Executive Director
Mr. Andrew Fedora, 2nd Vice-President, Forest Nova Scotia (Port Hawkesbury Paper)
Taylor Lumber Company
Mr. Robert Taylor, President
Mr. Seth Taylor, Operations Manager
HALIFAX, THURSDAY, APRIL 20, 2017
STANDING COMMITTEE ON RESOURCES
Ms. Suzanne Lohnes-Croft
MADAM CHAIRMAN: Good morning. I call this meeting to order. This is the Standing Committee on Resources. My name is Suzanne Lohnes-Croft, I am the MLA for Lunenburg and Chair of this committee.
We will be receiving a presentation from Forest Nova Scotia and Taylor Lumber Company, re forest sustainability.
I have a few reminders. We ask that you refrain from indicating approval or disapproval of anything that takes place in any part of this committee room. This includes applause, cheering, whistling and any other audible expression of approval or disapproval.
We ask that you refrain from photographs or recording anything here in this committee room. You may not conduct any protests, such as use of a sign, banner, flag or prop to demonstrate. Appropriate respectfulness is required. Anybody in violation of these standards can and will be asked to leave.
I'd like to remind those in attendance to have their phones turned off or put on vibrate. The only people who can take a photograph or video are members of the media. Washrooms and coffee can be found in the anteroom. In case of emergency, you are asked to exit on the Granville Street, and proceed to Grand Parade Square by St. Paul's Church.
I would like witnesses to remember that I will address you before you speak and that way your microphone can be turned on. Today we welcome our representatives. We'll introduce our members around the table, your names and the constituency you represent, please.
[The committee members and witnesses introduced themselves.]
MADAM CHAIRMAN: We will begin our opening remarks with Mr. Robert Taylor.
MR. ROBERT TAYLOR: Madam Chairman, members, ladies and gentlemen, I'd like to start off by saying that I am not a public speaker nor do I propose to be one. I've been asked to come here today and speak to you concerning my views of the forest sustainability in regard to forestry practices, methods used and value-added products.
For those who do not know me, my name is Robert Taylor, President of Taylor Lumber Company. I graduated from Saint Mary's University in 1975 with a Bachelor of Commerce and have been with the company for 42 years. Taylor Lumber Company Limited began as a family operation in 1936, with three employees. We are now fifth generation, a local, family-owned operation, employing between 90 and 110 people, directly and indirectly.
Our company currently consists of a sawmill operation, a planing mill operation, a chipping plant operation, a biomass co-generation facility, a pallet manufacturing plant, a baled shavings facility, a retail building supply store and woodlands operations. We produce between 12 million and 14 million board feet of kiln-dried lumber per year, which is sold predominantly to the local domestic market and we are FSC certified.
Taylor Lumber was a pioneer in the development of a privately-owned biomass co-generation plant over 26 years ago and was the first privately-owned sawmill operation to sell electricity to Nova Scotia Power. We produce 100 per cent of our own power requirements from our sawmill waste biomass and produce enough additional power to sell to the utility for 30 square kilometres. We are currently working on plans for a five-acre greenhouse, which would be heated and powered 100 per cent by our biomass co-generation plant. Our heating source for the greenhouse would be the excess waste steam from our power production process, which we are currently not using. Our goal in today's market and industry is to develop and implement sustainable forest practices that allow for the diversification and further development of value-added products, encouraging the mindset of doing more with less.
I would like to speak today about three main topics: (1) the current perception of our forest industry; (2) encouraging the use of our homegrown wood locally; and (3) diversification and development of value-added products. I would like to start off with the public's perception of our industry.
I believe our industry has a bad reputation, in a lot of cases rightfully so. Over the past 20 years, pulp mills and lumber mills in this province have been either propped up or bailed out in one form or another by the government to keep from closing, to try to save some jobs. Further, I believe that people of this province who read the paper, watch the news, and use social media are often misled by information which is not always presented in the correct context and soils the image of the industry, an industry which helped build the province and continues to be one of the largest employers.
I believe companies structured with the correct business model are able to build stable, sustainable, and successful businesses with opportunities for future growth and development. This in turn creates a strong environment for industry and presents a positive view to the public.
Businesses and organizations that have received money from government in the form of bailouts, funding, or loans have created an unlevel playing field in the industry. The forest form of government assistance encourages poor business models to continue, forcing other companies to restructure and change their business models to become more independent. For example, businesses that did not receive the funding are forced to use their R&D money to compete with government-supported companies on the open market for raw materials such as stumpage. This in turn prevents them from diversifying and growing their business. It's not hard to see who has the advantage here.
Crown wood is an important source of wood fibre in Nova Scotia's sector, but it's becoming increasingly more expensive and difficult to acquire this wood. A lot of this restricting of accessibility is due to the increase of stumpage rates, implementation of new rules and regulations, as well as the increased amount of field work and paperwork required, which used to be completed by the DNR staff at one time. To give you an example, when looking at Crown stumpage rates across the country, Nova Scotia has the highest stumpage rates in Canada, $38 a metric tonne for saw logs. In comparison, Crown stumpage rates in western Canada range anywhere from $1 to $5 a tonne for saw logs. We all live in the same country.
To operate on Crown land, mills are required to present DNR with extensive operating plans before harvesting can begin, as well as follow-up reports. These plans involve hours of plot surveys before and after, and soil and tree analysis, which determines the harvesting procedures allowed. All of this is carried out by the industry first, and then DNR will conduct their own surveys, largely to audit the information provided by the industry to ensure industry has adhered to the standards. In the past, these duties were all performed by DNR to meet their own standards, and wood was tendered out to the appropriate mills, which is similar to how Newfoundland DNR is managing presently.
For a company to be competitive in the market, we need to have more reasonable stumpage rates that reflect other parts of the country. If the Crown rates are too high, this tends to artificially increase local private rates. Crown rates are only adjusted once a year. That's too long between adjustments. It should be quarterly. Our private markets change, at times, on a weekly basis.
You may be aware that Nova Scotia has tentatively reached an agreement with the U.S. for a product exclusion in the SL, softwood lumber, agreement. On the surface, this looks like a positive outcome for our local economy; however, for those of us producing on the domestic market, I can see some big problems looming. For example, lumber from the West Coast mills, facing countervailing duties up to 50 per cent, will likely be shipped here first, saturating our markets before shipping to the U.S. thus hindering local producers in their ability to sell locally. This product exclusion will also hinder our government's ability to work with industry in any way, as it could be seen as a subsidy, jeopardizing our exclusion with the U.S.
Nova Scotia is a small province with a small wood supply. Our focus should be on producing lumber for our local market, building local industry, and keeping jobs here, not for us producing lumber for export.
This brings me to my next point which is encouraging the use of locally-grown and manufactured materials here in our province. By buying local you help the local industry and build a healthier community. In Nova Scotia if we were to use more of our own lumber here for construction of buildings, both residential multi-story units and industrial buildings, it is my belief that we would use every stick of lumber produced by our mills. This, in turn, would generate employment opportunity and industry development opportunity to keep a large percentage of our secondary jobs here.
Atlantic WoodWORKS! has done some research and has documentation on these facts. In 2015 non-residential investment was $720 million, with wood accounting for only 5 per cent of that. That leaves $684 million that is basically untapped.
Recently we had specifications for construction of six-storey wooden buildings passed through legislation and added to our building code. This has been studied, engineered and then presented to government for approval over a year ago and was just passed. That's too long. The next step is to pass the design for a 12-storey building. This design has already been passed in Quebec, which means that we, as a province and industry, are behind the eight ball. This could be a way for the government to work with the industry in promoting sustainability.
The environmental benefits of these buildings are immense. Wood is a renewable resource; 50 per cent of its mass is stored carbon that was sequestered from the atmosphere. The first proposed six-storey wooden building structure, and I might say this is happening now in Dartmouth, will store enough carbon to offset the CO2 emissions created by 735 cars, if the average distance those cars drive is 18,000 kilometres each per year. One of these six-storey buildings would use approximately 899,000 board feet. To put that in perspective, that would be almost one-twelfth of our yearly production.
Trees are our natural carbon sink. In a society where we're all trying to think green and be ecology-minded, I do not believe we are promoting these facts nearly enough. This is not just an industry responsibility but a government responsibility. Programs like Maritime Lumber Bureau's Atlantic WoodWORKS! Program, FSC Certification and other green initiatives need to be moved to the forefront and take their rightful place in promoting the industry. An example, Taylor Lumber has been FSC Certified for the past 10 years. This program was developed to educate the public, buyers et cetera, that we at Taylor Lumber look after our forest operations in a sustainable manner.
This certification is internationally recognized. We worked diligently for years putting the right checks and balances in place to get our certification and work with FSC internationally continually to ensure that our practices are maintained and represent the latest codes, laws of forest sustainability world-wide.
This comes at a great cost to our company but as of late, has not been very successful due to the lack of consumer awareness. Just to maintain the program costs approximately $20,000 a year. We still maintain a certification with hopes that government will come on board and support this program through public awareness. An example would be to give first-time homebuilders a rebate if they use FSC Certified products. This would enable producers to continue to sustain the program and to help cover off costs. This revenue could be passed back from the producers to the contractors in the woods and eventually to the landowners. This would encourage responsible forestry and silviculture practices on private lands, thus encouraging a healthy wood supply for the future.
My third point, as I stated in my introduction, we as a company believe that business needs to diversify laterally versus vertically. Rather than cutting more trees, we need to cut fewer trees but do more with them. I strongly believe that at Taylor Lumber one of the reasons for our success is our diversification. We are able to produce more with one tree, employing more people, than using 10 trees for just one product. For example, at our company, waste from one manufacturing process is used as a primary material in the next. Our co-generation biomass plant is a perfect example of that.
In Middle Musquodoboit and Musquodoboit Harbour we constructed a new retail building supply store. We are a Timber Mart store, which is a not-for-profit national organization. Our objective was to market our product directly to the consumer, thus getting rid of the middle man. We used all local material and contractors in this construction and it is staffed with people from the local community. This has proven to pay big dividends with the community supporting the store - you can't go wrong with that. I believe that local stores supporting local communities can do everything the RONAs and the Home Depots of this world can do.
To build awareness and promote positive image for the forest industry we, as a company, recently did an online contest called Not Just a Two-by-Four. This entailed giving customers one piece of two-by-four, which they had to use to create a project of any type, with no other materials being used. With the first prize consisting of a set of kitchen cabinets, all the projects were displayed and voted on and the prizes given out. This was a huge success but, most importantly, it allowed us as a company the opportunity to explain what our company was all about, from green power production to forest sustainability and encouraged people to buy local and to support our community.
As I mentioned previously, we currently have a $5 million greenhouse project in the works. This came about as we researched ways to use our excess heat. In the greenhouse industry 60 per cent of the cost is heat, which we have available and are currently not using. This is the potential to employ 20 more people and provide local produce to the local markets, like Sobeys and Superstore. These companies are promoting Buy Local, brought on by the public and that's a big point I'd like to make - it was brought on by the public. What better way to promote our forests than to show how you can go from one tree to a head of lettuce.
In summing up, I would like to see the government work more hand in hand with our industry to rid ourselves of the negative publicity being generated. Promoting forest sustainability, diversification and value-added products through programs like Atlantic WoodWORKS!, educational tours and other promotional aids will help towards this goal. Thank you very much.
MADAM CHAIRMAN: Thank you, Mr. Taylor. Mr. Bishop, do you have as long a presentation?
MR. JEFF BISHOP: I don't know, I'll try and make my way through it as quick as I can.
MR. ROBERT TAYLOR: I didn't think I was that bad.
MADAM CHAIRMAN: You were fine.
MR. BISHOP: I'll just start a little bit. I've got a PowerPoint that we'll go through. Just a little bit of background about our association. Forest Nova Scotia has just over 600 members across the province, everything from private woodlot owners to Christmas tree growers, silviculture trucking and harvesting contractors, pellet mills, hardwood and softwood mills, energy producers, pulp and paper mills, just about every part of the industry that you can think of. Eight-five per cent of our members, by numbers, are actually small, private woodlot owners across the province.
Areas of focus within our association, our advocacy industry competitiveness and environmental and sustainable forest management. Really we like to think that our members are continually taking good care of our forests because who cares more for the forests than the people who live and work in them every day.
Our folks are driven by a passion that is not hard to see when you get to work inside the industry or have a connection to it, a passion for this work because it's not just a job, it's a way of life and it becomes part of who you are.
Our industry is also guided by science. Decisions and actions are grounded in the science of forestry and other sciences that connect to that and focused on a legacy. The two Mr. Taylors to my right are a great example of that legacy, it's a fifth-generation family that's doing it. Cassie Turple sitting behind me is a member of the Ledwidge family in Enfield, another multi-generational family and we have a number of those who are running our businesses across this province and contributing to the communities in ways that Mr. Taylor talked about. Again, for them it's not just a job, it's a way of life.
A little bit of context is always an interesting way to look at some of the things when we talk about forestry and how we are a little bit different in Nova Scotia. We stand out a little bit when you look at the lay of the land, if you will.
This pie chart talks about land ownership and this is on a national basis. If you look Canada-wide, about 93 per cent of the forested land across the country is Crown-owned, either provincially, territorially or federally. Private lands held by individuals represent about 6 per cent.
Industrial - look at it the same way that we do in Nova Scotia: if you own a production facility for a forest product and you also own land, that's what we refer to as industrial freehold here in Nova Scotia. It's very different when you look at Nova Scotia: 65 per cent of our land base is privately held, and 35 per cent publicly.
When you dissect that a little bit more, it gets down to that 55 per cent of that big basket is actually held by private woodlot owners, small private landowners in the province, some 30,000 of them that are spread across the province. What this translates into, when we look into the context of how we manage our lands and how we govern our lands in the province, is decisions are made in forest management in Nova Scotia a little differently than they are in other areas. If you look at B.C., for example, the high 90s, 97 per cent or 98 per cent, of forest land in that province is publicly owned. Decisions are made in the halls of government around the vast majority of forest management in that. In Nova Scotia, an awful lot of forest management decisions are made at the kitchen table by Nova Scotians like you and I who own woodland across this province and have managed it for generations.
We often hear about just how much forest there is in our province and how much we are able to use as a resource, if you will. It's interesting to break it down to what that land base looks like. The total land area in the province is just under 5.3 million hectares in total. Protected area lands has increased somewhat since these numbers. were pulled together last year, but it doesn't really change the context of the breakdown here.
Outside of protection is some 4.8 million hectares across the province. Non-forested land - the area where we're sitting right now would fall into that category - is just over 1 million hectares. That leaves us a forested land base of about 3.8 million hectares, about 71 per cent of the total province if you look at it that way. You'll see there that I have forested land base exclusions. Those are areas where it just simply doesn't make sense or is not appropriate for managing the forest in those areas. That is everything from sloped areas - we just don't do steep-sloped forestry in Nova Scotia to any scale; areas also in the 12 per cent, protected areas fall in that forested land base exclusion; and also a number of buffers that we have across our lands where there is no forestry activity done in them, things like the Boreal Felt Lichen or moose or lynx habitats.
That leaves us with a working land base of just a hair over 3 million hectares, so that gets us to about 57 per cent of the total land base. Then there's the working land base special management areas. Those are areas where there would be little to no forest management. Those are things like the 20-metre watercourse buffers, streams, 100-metre buffers on main streams within the province, mainland moose areas, wood turtle habitats, those sorts of things. All of those surround and are within the areas that we come down to at the end, where it says no restrictions, if you will.
But it does, by nature, have restrictions on it because, as I say, those special management areas are around and within the just over 2 million hectares, or about 39 per cent of the total area that is our forest land base for us to work in and manage in the province. Sometimes it's portrayed that every tree that's growing is available as a resource within our province. What this really does is focus down and talk about the reality of what it is on the ground, when we look at managing forests within this province, that's actually not true.
Quite quickly, what does our forest look like here in Nova Scotia? About 52 per cent of our growing forest stock is softwood base, 23 per cent would be mixed wood, 12 per cent each for hardwood and what they consider unclassified.
Now in each of those categories there are thresholds, if you will, and I won't go too far down. When I say "softwood", if you walk through what would fall into a softwood category and be categorized as that, you're going to find hardwoods within those. There's a threshold within there that determines whether it falls into a mixed wood, which would sort of be the next category, so a percentage of hard and soft within the stand, and then to a hardwood stand which would be dominated by, again, hardwoods but you would still find softwood within those stands.
What does that mean from an industry perspective, when we look at the supply of wood, the most recent numbers you can see there, 64 per cent - these are 2005 numbers - to just under 3.8 million cubic metres of wood were harvested within the province, 64 per cent of that came from private lands, 1 per cent from federal lands. Industrial freehold lands provide about 12 per cent and Crown lands 23 per cent within that year. You can see that the vast majority of wood that goes to market in Nova Scotia comes from private wood, so they are a significant, important part of the fibre supply chain within our province.
We often hear about issues around Crown forest management and concerns around that as being a supply, if you will, part of the fibre supply chain, but they represent 23 per cent. As I say, if you get 23 per cent of your raw material for any industry that comes from a single manager or customer, if you will, that's a valuable relationship. As Robert alluded to, it's an important part of the fibre supply chain.
MADAM CHAIRMAN: Can I just ask you to go back to the last circle? Where would the Acadian forests fall in that? Is that included in that pie?
MR. BISHOP: I'm going to hand that one over to someone who is a little more technically . . .
MADAM CHAIRMAN: We'll get it later. I'm just curious if that came under "unclassified" or "mixed wood".
MR. BISHOP: Do you want to take just two seconds? Andrew.
MR. ANDREW FEDORA: Just briefly, that chart encompasses the entire Acadian forests so we're in that region which is Nova Scotia, New Brunswick, parts of Maine, so unclassified would be probably some of your wet coniferous, wet deciduous areas, areas that don't really fall into the typical classifications of a true softwood forest or hardwood. These are classifications within the Acadian forest type.
MADAM CHAIRMAN: Okay, thank you. Sorry, proceed.
MR. BISHOP: No problem. We're here to talk today a little bit about sustainable forest management, which is a way of using and caring for forests so as to maintain their environmental, social and economic values and benefits over time.
Decisions and actions or activities that happen within sustainable forest management are based on a number of things, like scientific research, rigorous planning processes and public consultations and are guided by laws and regulations and policies, all things that we are a part of within our industry, and work together with the provincial government and federal government at times, in terms of different things, like scientific research.
If you look at the newly-released biodiversity guidelines within the province just released yesterday, those are some of the things that are underpinned by scientific research - the ecological land classification system here in our province, silviculture treatment research and soils research that help us determine what trees will grow in the best places, what soils provide the best nutrients and need certain care within the scheme of forest management. The uses of those best sciences are used to inform our decisions.
More and more we are also looking to the science of climate change and what impact that will have on the forests that are growing here now and the forests that will grow in our future. If we, as some predict, will warm in Nova Scotia, then there are species of trees that are growing here now, particularly fir that we look at, that this will not be the most habitable place for fir in the future.
If we are planning on 100-year and 200-year horizons for growing trees within the province, we have to consider what implications the science of climate change will have on what our growing stock will be and what is best to be planted to be harvested on those levels.
Laws, regulations and policies, you folks are probably just as aware as any other of the level of those that exist within our provinces, from the Forests Act to the Crown Land Act, the Code of Forest Practice and the various regulations, like forest sustainability regulations, the wildlife habitat and watercourse protection regulations and the requirements for reporting of harvests, all those sorts of things that govern our industry and guide us through our processes of sustainable forest management.
The policies, probably the best example is two pieces, one which again Mr. Taylor referred to as certification. FSC is one of the models that Mr. Taylor referred to. There are a few others out there that are used by different companies but those are champions in ensuring that our forests are managed sustainably, within the policies and guidelines and best practices of those certification systems for the companies that manage under those, and the simple best management practices that companies adopt for themselves. They set goalposts in the way in which they wish to manage or run their companies, that help guide them.
When you come back to the definition that I read out earlier, the biggest piece of that is balance. It's finding that balance between the values and benefits environmentally, social and economic, to determine what is the best for all of those pieces as we manage our forests here in Nova Scotia. That's the key, that balance. It doesn't say "either/or" and we never would suggest that it says either/or between any of those items because it's the work that our members are doing every day, as forest professionals in managing our forests and making the decisions between and balancing between environmental, social and economic values and benefits.
What do those encompass? Just a few examples we can have a look at from each of those sectors, if you will, for sustainable forest management, environmental. We look at considerations around wildlife habitat, water quality, not only for salmon and other fish ways, but also for municipalities in managing forest watersheds that are comprised of forests, for our municipal water systems, forest health, air quality, carbon sinks and managing for pests that are in our forests and that are coming to our forests.
On the social side of things, managing for recreation, parks, protected areas and landowners' rights and cultures of all kinds that embrace the use of forestry within their culture.
On the economic side, there's forestry jobs and the jobs that those support within the community, like again Mr. Taylor referred to, exports being an important part of our industry and the economy of our province in bringing money into our province through exports. Landowner income, as many of you know, those 30,000 woodlot owners that I mentioned earlier, have grown and managed their woodlots as an investment. At times, a very important part of the income of their family on a yearly basis, is the way that they manage their forests. Of course, taxes on various levels that come back to our governments within the province, from the activities of the forest industry.
One aspect of sustainability, of course, within our industry is the health of the forest and resources themselves - how much wood are we growing and how much are we harvesting. It's interesting to note that one of our board members told a story a few months ago at a meeting, he was talking about when he first got into the industry. What makes me think of this is it was around the first part of this, on the bottom of that chart are the years starting in 1975. So when Stephen started in the industry it was right around the mid 1970s. Someone asked him what he was doing and he told them that he was getting into the forest industry and someone said at that time that you had better work fast because there's not going to be much forest growing in Nova Scotia in a couple of years.
It really puts into the scope for someone who is able to sit back, has worked for almost 40 years within the industry and continues to be an active part of managing our forests and growing our forests as much as we are harvesting our forests because it's an important part of the cycle to consider. We often focus on the harvest side of things but we've got to remember that we're in the business of growing trees as much as anything.
Just a little context of where we've come in the last 10 to 15 years within this chart. You'll see that harvesting within the province is down about 41 per cent from those peaks - in 2000 is that middle peak. The one on the right is actually Hurricane Juan - that was the year before so it's really the rationale for that new bump that we see over there on that right peak. You'll see that contrary to popular belief, if you will, there's a significant amount of decrease in the harvesting levels across our province.
If you focus down into the last five-year period that we have some numbers for, what does that look like when you compare what we're harvesting in the province, compared to what we're growing and what we refer to as an annual allowable cut or levels that are set and targets, if you will, that are set out there that ensure that we're harvesting within the amount of wood that is growing each year within the province.
The bottom line you see there would be our hardwood harvest over the last five years, not tipping over the 1 million cubic metre area, where the annual allowable cut or sustainable harvest level is targeted for about 2.5 million cubic metres.
The softwood is the light green or the middle line that you can see there, over the last five years hovering just somewhere between three and a half to three, somewhere in those areas. The light green line again over on the side, representing the sustainable harvest level of about 5.8 million. The total harvest is the top line, which takes us in sort of a U-shape from just under four to just under four again in 2015, where that total number, if you look at hardwood and softwood and combining those sustainable harvest levels is about 8.3 million within the province. Currently over the last five years we can look at that model, harvesting well below what we consider to be the sustainable harvest level within the province.
Sort of putting that on that bigger scale again, drawing back and understanding where that 8.3 million meets when you look at over the last 40 years of harvesting within the province.
Lastly, beyond the resource, the sustainability of our industry on the broader sense is important to us economically. In 2016 we undertook a study with Gardner Pinfold, an economics group company here, based in Nova Scotia, to look at just where we are, sort of take a benchmark of where things are within our industry and the role we play within the broader economy of Nova Scotia. We found just over $2 billion in total economic output from the forest industry - that's up from numbers in 2012; 11,500 direct and indirect jobs across the province, again a slight increase over the last time we looked at these numbers; $800 million in contribution to the provincial economy - again a good, positive sign in the upwards direction.
Then to look at where we sit, compared to some other industries within our own economy here in the province and just to sort of benchmark ourselves, fifth in contribution to GDP within the goods-producing sector in Nova Scotia, second in terms of jobs and that goods-producing sector and third in exporters in the goods-producing sector in the province.
Forest products - surprisingly to a number of folks - as a category is the number one category that goes through the Port of Halifax. So as much as people talk about the importance - and we talk about it, too - about the importance of the industry to rural Nova Scotia, if we were to remove and see significant decreases to the number one category of exports going through the Port of Halifax every day, that would have a significant impact on the jobs and the economy of our capital city here in Halifax. So it's not just the rural areas of our province that our industry is important.
Our products are selling amid some tumultuous times with friends in other countries where our markets may exist. Our products continue to sell, whether it's lumber, as Mr. Taylor talked about on the domestic and international level, or our pulp and paper products that we produce here in Nova Scotia.
Again, I would be remiss if I didn't mention that return on the investments and the importance of that to our landowners within the province. It's difficult to understand sometimes. We refer to it as the rural RRSP sometimes, that folks make investments in land in Nova Scotia that they manage over those years, to be part of their annual income or for times when they know they are going to need some dollars to put amongst their family assets, everything from weddings to sending kids to university to retirement time. Generations manage these woodlots in ways that allow them to be an economic impact in their own back pocket. We can't forget that that's an important piece of that.
As we talk today about what sustainable forestry management means in Nova Scotia, I think the key is to come back to that main word at the bottom there - balance. It's an important piece of our discussions. I heard an academic talking about forest management one time saying that it's not rocket science, it's much more difficult. There's not a lot of black and whites and absolutes within discussions around forestry, there's an awful lot of grey area. Sitting across this table you could have discussion around what does sustainable forest management mean to you, as an individual. We may have some differences within our own industry of what best practices are or what practices are that fit within a particular company. That's fine because that's all part of the discussion and what keeps us moving forward and setting those goalposts at a higher and higher level as we continue to manage our forests for tomorrow and into the future.
MR. CHAIRMAN: Thank you, Mr. Bishop. We will entertain questions. Mr. Lohr.
MR. JOHN LOHR: Thank you both for those excellent presentations, it was very interesting. I guess I would like to go back to Mr. Taylor - and I've got a number of questions but one at a time.
I'm curious about the $38 a metric tonne for sawlogs. I believe you said the national average was $1 a tonne - I may be corrected on that.
MR. ROBERT TAYLOR: It's $1 to $5.
MR. LOHR: My question is, if we're that much higher than the national average, there must be some reasons for that, there must be some added value in our pricing that the national average doesn't reflect. Maybe we're providing the roads, I don't know. What is the justification, I guess, in your mind for the higher price that we're charging?
MR. ROBERT TAYLOR: None.
MR. LOHR: Is it a competitive bidding process that puts it up that high? Give me some information on that number.
MR. ROBERT TAYLOR: I would like to be able to just shake this crystal ball and give you all the answers you need for that question. It's true, here in the industry in Nova Scotia I'm paying $38 on average for a tonne of sawlogs. On the West Coast they are paying between $1 and $5. I made the comment that we all live in the same country so what's going on here?
You can go even further than that, I mean if they can afford to ship their lumber down here to Nova Scotia and flood our markets, for one reason or another, how can we be competitive if our stumpage rate is at $38, compared to $1 to $5? Jeff, I don't know whether you want to address that or not.
MADAM CHAIRMAN: Mr. Bishop.
MR. BISHOP: There is a level of - that chart, I'll try and zip back to it - that plays within those discussions. So, as Robert said, when you look at using a jurisdiction like B.C. where in the high 90 per cent area is one landowner within that province, so there is a level of competitiveness. Bidding and pricing for stumpage is different in the jurisdictions in that way. Is that the only answer? I don't think it's the only part of the answer.
MADAM CHAIRMAN: Ms. Zann.
MS. LENORE ZANN: Thank you very much, gentlemen, for your presentations today. It's very interesting.
I just wanted to ask you, the Natural Resources Strategy was a result of widespread consultation within the industry, with a variety of stakeholders. A lot of Nova Scotians were upset when Minister Hines announced that the government would be stepping away from the 50 per cent clear-cut cap that had been put in place. Do any of you support the 50 per cent clear-cutting target that was outlined in that Natural Resources Strategy? Mr. Taylor, what's your opinion about that?
MR. ROBERT TAYLOR: Like you mentioned, there's a lot of points of view on that. We're coming at this in our particular business from the point of view that we want to do more with less. I might not be the best one to ask in that particular case.
To answer your question, yes, there's all points of view on that. It's all over the table. Whether he said 50 per cent or 70 per cent, would he be right or would he be wrong? I guess it depends on the individual who's listening to it.
In my particular business - I believe that Nova Scotia is a small province with small reserves. We're not a B.C. As such, I think we have to cut less and do more with it. We have to diversify. I see jobs going out of this province that, over 42 years of business, I think could be here.
I think it's all of our responsibility, and sometimes these things fall on deaf ears. It's not just the industry's responsibility, as I told you. It's the government's responsibility as well. It's public awareness. When I used the exclusion, for instance, that Superstores and Sobeys now are being told to buy local, that's coming from the public.
If we want to move people, we've got to make the public aware that we're not all bad guys here. Like I said, I've been at this for 42 years. I've seen a lot come and go, and I've got nothing to prove one way or the other. I'm here to try to put something back into the industry. We have to do more with less. The biggest person who's going to give me a problem is the guy who's walking down the street. He gets a lot of misinformation that can be construed in a dozen different ways that may not fit the industry whatsoever.
I can give you examples of what we're doing in the industry. Did I make mistakes? Lots. A good business model will lend itself to mistakes. I think you get up and you go from that.
No, more with less is what I think, diversification, not so much vertically, to do more as far as production goes, but take that one tree and do more with it. Sending things down to the United States, for instance, is okay, but what can we do with that product here before we send it there and keep those jobs here?
MS. ZANN: Mr. Bishop, can you also respond to my question about the 50 per cent clear-cutting cap, the fact that companies are now allowed to clear-cut more than 50 per cent?
MR. BISHOP: Using the science of forestry and the tools that we've developed within this province, specifically the ecological land classification system and the tools that come with that as a decision model, if you will, that guides forest management in my view is better than setting a number as a target - basically, using the science that lets the forest tell us what we should be doing to manage it properly. By using the tools within the ecosystem classification system, there are things that look at everything from soils to the water table on the given sites, to what is growing on the site in terms of vegetation beyond just the trees, what kinds of trees are there, what kind of windthrow area are you within on a given harvest site.
In making those plans it allows you to say what is growing here now and what is best suited for an area after we harvest it, what kind of harvesting would be the best within that. So, allowing the land to really tell us what the options are and what are the best options for those harvest sites, I think is a better model than choosing a cap or a number that says . . .
MS. ZANN: So you are in favour of taking the cap off, then?
MR. BISHOP: I think it's operating in a way that allows us to use that science, as I say, because I don't think that this is an effective point of establishing a cap could hinder us in either way. We could be, I guess, in my mind allowing the science to answer the question of what it is, is the best use of the planning process.
MS. ZANN: As a comment, I would say that a lot of the pushback from the public is that they are seeing a lot more clear-cutting and that really concerns them. I'm hearing from a lot of people about the fact that they are going to their cottages and everything is gone, up to a certain point by the lake. Some lakes there are algae blooms and they've been cut and they've been sprayed with glyphosate and people are saying, what's going on here in Nova Scotia. They are seeing an enormous difference and that's really worrisome for a lot of people.
MR. BISHOP: There's lots of those folks who, as Robert mentioned, we're trying to reach out to as an industry, as our members and our association ourselves, to educate Nova Scotians as much as we can. There's lots of cases where, for example, the Atlantic Teachers' Tour, which our association and a number of our members are part of, we take teachers into the woods to talk about forest management and to the mills and facilities to learn about what goes into it.
It's always so fascinating to see the teachers who go through that process. We open the doors, ask any question you want, pose it to the folks who are involved in organizing this tour and are part of it and are part of the industry.
Once folks start to understand that the perceptions they may have about forest management aren't actually true, the science that goes into managing our forests within Nova Scotia, quite literally they admit they are blown away about the considerations that go into it.
Based on that, Ms. Zann, I'm constantly encouraging folks who have concerns to avail themselves any way they can, reaching out to a company in their local community or forest professionals who they may know, to understand a little bit more. I sometimes joke that you could line up a whole bunch of forest professionals in a room and show them a clear-cut and a lot of them might say you know what, that doesn't look right. But it's absolutely the right treatment for the area that was chosen and harvested.
So do we manage for aesthetics all the time? No. Do we manage for aesthetics sometimes? Absolutely. Do you manage for what's best for the site? Most of the time.
MS. ZANN: Sort of like the endangered species and stuff like that?
MR. BISHOP: Absolutely.
MS. ZANN: So that's definitely being taken . . .
MR. BISHOP: That's part of that balance that we mentioned earlier, in the consideration of what's the best decision that can be made on an economic, social and environmental decision-making process.
MS. ZANN: Thank you very much.
MADAM CHAIRMAN: Mr. Maguire.
MR. BRENDAN MAGUIRE: I understand that we have to strike a balance between the economy and the environment. When you are harvesting - I just have a bunch of notes here from when you were speaking so I'm trying to go through them a bit here - are you placing both the hardwood and the softwood, as well as the vegetation on the forest floor which supports the local ecosystem?
MADAM CHAIRMAN: Mr. Fedora.
MR. FEDORA: I'll use Crown land as an example and this is something that is being more and more encouraged on private lands. When you go into a site the first thing that we have to do is forest ecosystem classification. We take a look at the vegetation type and the soil type and everything that is growing there.
Based on those parameters and any other encumbrances, such as potential habitat for species at risk and so on and so forth, that's what guides the treatment. That's when you go in and you decide okay, I'm only going to do a partial removal and leave an over-storey in place or perhaps I'm going to do a clear-cut and then try to replant and so on and so forth. The key determining factor there is your natural regeneration when it come to planting and restocking the site.
In our case with Port Hawkesbury Paper, where we banned the use of herbicides back in 1997, we've really worked hard to work with the natural landscaping. We've actually reduced the amount of trees that we plant, favouring natural regeneration.
In a lot of cases you will have both hardwoods and softwoods coming back. With the forest ecosystem classification system you look at - it gives you a certain predictability in terms of what that stand will turn into after you've done your treatment. So in an area that was a softwood stand and you would like it to remain a softwood stand, no, you won't see hardwood trees planted there or hardwood regeneration favoured. If you have a mixed wood stand and your desire is to have more high quality hardwood sawlogs in the future, then you would manage for that.
MR. MAGUIRE: I've actually had quite a few meetings over the last month and a half around forestry, from concerned people in my community. One of the things I'm being told is that the softwood that's being planted is Norwegian Fir, which is not indigenous to Nova Scotia.
MR. FEDORA: I certainly can't think of anybody who would be growing or planting Norwegian Fir.
MR. MAGUIRE: Is everybody planting the trees that are indigenous? So if you are cutting down a certain type of tree, that's what is being replaced, the exact type of tree?
MR. FEDORA: Yes, so with Port Hawkesbury Paper as an example, we've been working with the Department of Natural Resources in our Highland region just to take an example. We take the seed stock from the Highlands and cultivate that in the nursery in Strathlorne and in Inverness, so it's the same genetic stock.
MR. MAGUIRE: Where is that coming from? I've heard from multiple people - and maybe Mr. Taylor could speak on that too - I've heard from multiple people that the tree that is being replaced is not one that is indigenous to Nova Scotia.
MR. ROBERT TAYLOR: From our perspective in our company, because we have the Acadian forests here in Nova Scotia, we try to go back to the mixed stands whenever possible. If we do planning - at one time the planning thing was a bigger issue than it is now. What we do now is we go in and look at this and as I alluded to in some of my things, the studies that we do on this determine what we're going to put back into it, but nine times out of 10 we'll try to put back into that piece of land what came off it because if it was there before, it is going to grow again on it.
To answer your question, I don't know where they're coming up with that. From our point of view, we put red spruce if we're putting it back into it, like you said, what comes off it in the first place, but mixed stands as far as diseases and things like that, so it won't go in and wipe one particular variety all out without wiping them all out. We can't predict from that perspective.
MADAM CHAIRMAN: Thank you. We'll go on to Mr. Lohr.
MR. LOHR: Thank you. My question also is for Mr. Robert Taylor. When you were giving your presentation you mentioned the softwood lumber dispute now before NAFTA and you went through rather quickly, I thought. I didn't quite catch it all what you were saying about your concerns about that dispute and where you saw that heading. Maybe you could take me back through - you expressed some concerns about it, maybe you could explain that again.
MR. ROBERT TAYLOR: Canada, as you know, is a resource-based nation. I mean we've been doing exports for years and years and we're going to keep on doing exports. My idea of the whole situation - and I've done exports in the past - I've exported to Iraq, Iran, we looked after the lumber going there. I did England for 20 years, I mean, I did the United States and I guess over that period of time you come back to the conclusion that maybe what works the best for our particular company is to get back to the basics of this diversification that I was mentioning on that.
To get back to the dispute, that jury is still out on that. I'm a little bit concerned that the Americans set us up a bit on that. There are mills here, for instance, that require the exports and I'm certainly not going to go against that aspect of it. I think if they are going to single out Nova Scotia and use them as a benchmark for the rest of Canada, are we being fairly treated? Maybe, maybe not. There are those conclusions after April 25th that it's not going to happen at all, we're not going to get an exclusion. There's also that frame of mind out there.
I don't think anything is for sure just yet but where it's going to go, well, they're looking at countervailing duties of up to 50 per cent. What are those mills on the West Coast going to do with that wood? The American economy is supposed to be on fire right now as far as their housing aspect of it goes. Are the mills in B.C. or Alberta, Quebec, Ontario, going to take the plunge and send their lumber down there? They want the lumber, one way or the other. There's two groups down there: there are ones that are giving us the problems and the other ones want the lumber. So they have to be one of two things, they either have to raise the price of the lumber to allow for the countervailing duty that's going to happen or they're not going to get their wood.
Yes, they can send their lumber down to Nova Scotia, for instance. I mean we're only a very small province, the market would be full in a day, but it will make a difference to us who are trying to do things here maybe in a little different manner as far as being domestic and local.
Again, I have to go back to the one thing: we have that tree, and when we cut it down we want to do more with it. We want to be able to keep those diverse jobs here, keep the secondary jobs here.
MR. LOHR: Could I ask Mr. Bishop for his comments on the softwood lumber dispute, where he sees it heading?
MR. BISHOP: Well, just as Robert said earlier about the crystal ball, that's what we're all shaking until next Tuesday or so when the findings are supposed to come back, the initial findings are supposed to come back.
It's an interesting piece, as Robert said, that if other provinces have a high levy placed on lumber that they produce that would go into the U.S. market, then they are going to look elsewhere for where that goes. Is that going to mean that it's going to end up in markets across the country, at a higher rate? If they can sell it at a better rate for the company rather than tacking on a levy for it to go across the border, absolutely. Robert, I think in Atlantic Canada we're something between 2 per cent and 3 per cent of national lumber production across the country? B.C. is over 50 per cent of all lumber in Canada. So it's not difficult to see that there's possibilities that if those levies are set high enough by the U.S. Department of Commerce that it could change our domestic market dramatically.
Does it open doors for Nova Scotia producers? If we did continue to enjoy the exemption that we have, does it mean that we can continue to sell a portion of our production from Nova Scotia into that U.S. market, without having levies or duties placed on it going across the border? Those are all the things to consider and I don't think we're going to know until Tuesday, at the earliest, and then potentially later this year when the final recommendations are made, to see where things will settle. Unfortunately, it's as much a guessing game as anything else at this point.
MADAM CHAIRMAN: Ms. Zann.
MS. ZANN: Yes, let's hope that we're not treated the same way they're treating us about the dairy right now. It's a little bit scary.
Numbers that have been provided by DNR indicate that in the last four years, for instance, clear-cutting on Crown land has increased and that actually last year 91 per cent of harvests on private lands were clear-cut. So if we're talking about forest management and sustainability, is this sustainable?
Also, we hear the minister talk about a new science. He claims that the department is using a new science to determine harvesting methods. I noticed, Mr. Bishop, you mentioned about this science as well. He hasn't exactly expanded on what the new science really is, so two things: that 91 per cent of harvest on private land clear-cutting, is that sustainable, and what is this new science that's being talked about?
MADAM CHAIRMAN: Who would you like to speak first?
MS. ZANN: First of all, Mr. Bishop would be great.
MR. BISHOP: To answer your question around the 91 per cent of harvests on private lands, I don't have that information in front of me, so I'll have to take what you're saying as accurate. The balance towards sustainability, as I talked about when going through our presentation, is that decision-making model where we balance off the values of the landowners and combine that with what's growing on a site that's in line to be harvested, if you will.
MADAM CHAIRMAN: Ms. Zann, do you have a document that supports that?
MS. ZANN: No, but we've done the research.
MADAM CHAIRMAN: But there's no document to support that?
MS. ZANN: I don't think it's my job to have to produce that, but I'm sure we can get it for you if you're interested.
MADAM CHAIRMAN: I'm just curious if you could share a document.
MS. ZANN: Yes, I mean, we've done the research. But I'm not the witness.
Again, 91 per cent of harvests - that seems awfully high, and also the fact that there's more clear-cutting on the Crown lands as well. What's this new science . . .
MR. BISHOP: I think there's some context around increased harvesting on Crown lands . . .
MS. ZANN: The clear-cutting, you mean?
MR. BISHOP: Harvesting of any method on Crown lands, (a) I don't see it as a negative thing, and (b) when you consider that over the last few years, we've made significant additions to Crown lands within Nova Scotia, namely the former Bowater lands as lands that are under active management and have been for over 100 years in this province - adding those to the total tally of Crown lands within the province and continuing to manage them in the way that they've been managed for over 100 years, would show that you're going to have an increase in harvesting of any method on Crown lands in this province.
MS. ZANN: What is the new science they're basing everything on?
MR. BISHOP: You would have to ask the minister about that.
MS. ZANN: You mentioned about the science.
MR. BISHOP: There's a science of forestry . . .
MS. ZANN: You're talking about the same new science he's talking about?
MR. BISHOP: Again, you would have to ask the minister about what he's speaking about. What I was referencing was the science of forestry, a well-founded science that many folks within our industry and beyond have studied and used on the ground every day. Forestry as a science is not a new science, so again, you would have to ask the minister.
MS. ZANN: Do you think southwest Nova Scotia can withstand this type of clear-cutting in that region, the extensive clear-cutting?
MR. BISHOP: In what way do you mean can it withstand this?
MS. ZANN: For instance, the soil composition, things like that in southwest Nova Scotia. That would be included in the science, the soil composition. There's different soil compositions across the province. I'm wondering if they would be able to sustain that kind of high amount of clear-cutting. That's my question.
MADAM CHAIRMAN: Mr. Bishop.
MR. BISHOP: I'm just waiting until she's done. I've tried to answer a couple of times. Sorry.
MS. ZANN: We only have a limited time, so I'm trying to get my question in.
MR. BISHOP: I'm going to ask Andrew to answer.
MADAM CHAIRMAN: Mr. Fedora.
MR. FEDORA: First off, I would like to have it clear on the record that you didn't actually quote any sources . . .
MADAM CHAIRMAN: We are getting a document . . .
MS. ZANN: We'll get that. Don't worry about it.
MADAM CHAIRMAN: Excuse me. A researcher found the document.
MR. FEDORA: There's a lot of loaded questions there, but I guess I'll address the most recent one with respect to harvesting practices in western Nova Scotia.
As stated previously, on Crown lands, everything is guided by the Forest Ecosystem Classification program. I believe that would be a lot of the sort of new science that the minister is quoting. That's something that is continually developing as they tweak it to better understand your impacts on soils and your forest treatment and so on and so forth. When a site comes up for potential harvest, you go in, you do your soils analysis, you do your analysis on your vegetation type, and you get your ecological land classification and so on and so forth. Based on your eco-site, that gives you the guidance and lets you know whether or not a certain treatment is reasonable. With that in mind, following those regulations and also with the added checks and balances in terms of forest certification, in terms of Department of Natural Resources monitoring program and so on and so forth, there are a lot of stops along the way which you can check to ensure that you are indeed giving the correct prescription for a site.
MS. ZANN: And yet the minister . . .
MADAM CHAIRMAN: Ms. Zann, can we wait until your next round?
MS. ZANN: Sure, thank you very much.
MADAM CHAIRMAN: Okay. Mr. Horne.
MR. BILL HORNE: I'm enjoying this conversation. There's a lot of interest in sustainability of course and Mr. Bishop has shown his in the slides of what he feels a good model is. I'm just wondering from Mr. Taylor, do you feel that our forests are sustainable in producing year after year wood? It looks like there is a sustainability model already shown and it seems to be working, balancing out over the years.
I'm just wondering, as you are a producer of wood in various forms and usages, I'm just wondering your perspective in your years of being involved in forest harvesting.
MR. ROBERT TAYLOR: First of all just to back up a step in regard to Crown, our Crown allocation is very small. To go maybe a step out, my son is one of the head environmental scientists for the federal government. He is into all the soil tests and stuff and what we should put down in the ground. We've had many arguments about going in and cutting and so on and so forth.
It's true, as Andrew alluded to, we just can't go in helter-skelter and start cutting on Crowns. There are rules, and lots of rules. I pertained to it in my argument when I had my paper here is that I think a lot of times, I believe the Crown should go in and they should tell us what we should be doing. We go in now with the rules and we do our thing. I find they come in behind and do the same thing all over again. To me it's a waste of taxpayers' money to do that. The DNR used to do that work themselves - they should go do it themselves and we'll adhere to it. To me it's a duplication on that.
Now granted that our allocation is only small on Crown land but in regard to your question, is it sustainable? I have to go back to my original premise here - I think we should do more with less. We should diversify.
Again, getting back to that crystal ball thing, I've seen changes. We've certainly cut a lot less now than what we have. We've got less people in the industry now than what we had. I just hope it doesn't get to a point where the industry doesn't exist any more because as I said in my introduction, the forestry industry had a big part of making Nova Scotia what it is today, as far as industry goes. I don't know whether I helped or made it worse.
MADAM CHAIRMAN: Mr. Horne, do you have a supplementary?
MR. HORNE: Just the fact that you've listened to Mr. Bishop and Mr. Fedora talk about sustainability. Do you think we are able to produce more wood products, maybe diversify that a lot more than we have in the past? Or do you see that sustainability is not there?
MR. ROBERT TAYLOR: Definitely, I think diversification is the way to go. I think if we diversify, the way I would like to see the industry evolve then I think the pressure on the forests will be a lot less but what we're going to get out of it will be a lot more. I'm not just talking about firms being financially more sound - I'm talking about jobs. Too many jobs today - I'll give you the example, for instance, of the six-storey building. We just got this passed through legislation. Those buildings, for instance, and we're only now at six stories, there's one going up in Dartmouth - the ramifications of that are immense as far as our secondary jobs go, keeping them here.
I'm not going to tell you that exports are bad. My own personal preference is to keep that material here in the province. I stated on the record here that I believe if we were set up the way we should be set up, we could use every stick of lumber that comes out of Nova Scotia and have the secondary jobs here to go with it. To me that makes the most sense in my years of experience.
MADAM CHAIRMAN: Mr. d'Entremont.
HON. CHRISTOPHER D'ENTREMONT: Thank you very much and I'm really enjoying some of this discussion, especially when you start talking about the clear-cut of our lands and those kinds of things. We really had a period of time from about 2009 to 2013 when we had a government that couldn't give us a definition of what a clear-cut even was, and then you had an industry really trying to sort of fit within those rules.
I'm just wondering, how does government, or how do you have to respond to the requirements of government when it comes to rules and regulations on what a clear-cut is - how you are supposed to be able to maintain your riparian zones, how you are supposed to be able to do all those rules and regulations that are now imposed upon you. Then we have the inconsistencies, I think, of government rules and regulations. Maybe we can talk about that and Mr. Taylor and then maybe Mr. Bishop as well.
I don't even know what a clear-cut is any more because I don't think we still have a real definition of what it is.
MR. ROBERT TAYLOR: First of all, we find in our private land harvesting if we approach the landowner, for instance, we will do him up a schedule of what we feel should be done on the thing. That will meet all the certifications of our FSC and so on and so forth which, like I say, is internationally recognized.
What we also can find is that sometimes these landowners do not want to follow that. It is their prerogative. You can't make them do it; if they want to cut it, they've got to cut it. Now we can stay away from the streams and all that because that's the law but sometimes we get into a situation like that, for instance, that they're going to cut what they want to cut. But you know what? If you talk to them mostly they'll do what you suggest that you are going to do on that.
In regard to clear-cuts, what clear-cuts we have are smaller now. I think our average clear-cut now is five acres, for instance, so it's very small. But of course we're a smaller mill as well. It's back to the public perception again, we have to get that perception out there that listen, we're not all bad guys here. I'm trying to do the right thing here but information can be misconstrued in many ways and it seems like the lay people out there are the ones who have the most to say.
I had many meetings with the minister, with all Parties - and I guess I've got NDP, Liberal and Progressive Conservative here so I've got to watch what I'm saying. I'm good with all of them. I've given them many opportunities to come to our organization to see what we do. You asked a question, are we getting bogged down sometimes with rules? Yes, for sure. I think that's when government - regardless of what the stripe is - should come to the industry, come out and visit us. I give them this opportunity. I've said listen, I'm proud of what we've done. Come have a look at what we're doing and the people who we are employing and the resources that we are using. You go back and make up your own mind and do your own reports.
I'm here to tell you they will be surprised, but you've got to get the hell off your ass and come out to do it.
MADAM CHAIRMAN: I think that's unparliamentary, Mr. Taylor. (Laughter)
MR. D'ENTREMONT: We accept it, though, we accept it.
MR. ROBERT TAYLOR: In some places it is. (Laughter)
MADAM CHAIRMAN: At committee anyway. Mr. Bishop, do you want to address this question?
MR. BISHOP: Sure.
MR. ROBERT TAYLOR: Can you follow that up?
MR. BISHOP: Well no. (Laughter) There is a definition, I have it. I don't know if you really want it in your question. There is one that's out there. I half suspected that.
MADAM CHAIRMAN: You may add it to the documentation.
MR. BISHOP: Actually I think it might have been in your package that you all received from your Legislative Committee folks, the actual definition from the DNR that is there.
Absolutely, there are a lot of regulations that help guide this industry. Some everybody would say are great, the best. There's red tape in every industry and ours is no different in that way, but we always want to be sitting on the side of a regulatory system that guides our hand, if you will, in decision-making. Sometimes it takes you by the hand a little bit more than you want to be but it's part of finding that balance of managing our public and private lands in the province and what we need to be held to account by the people of Nova Scotia, by our governing officials and by the folks who support our industry and work for our industry.
The extreme, if we were willy-nilly and there wasn't one requirement for us, we all know the story, we'd probably be that much worse with people being concerned about industry. We may not operate any different but regulatory-wise, people may have concerns. So there's that right balance again, like any other industry. And some of them evolve over time, as we get to look at what a policy or a regulation may mean actually on the ground.
I'll go back to Ms. Zann's example of the 50 per cent clear-cut line that was drawn to move towards as a target. There has been lots of work done within this province and by our industry to go towards that target, to move to where we can. But simply using a line and a number is not the best science. Allowing us to use what's out there and letting the forest tell us what those decisions need to be I think is the right way to go. It's a regulatory framework that's guiding our hand in our decision-making that I think is getting us to a spot that is continually improving what we do in forest management. If we looked at the way forests were managed in the 1600s in Nova Scotia and today, it's a pretty dramatic difference in the way from then to today - so constantly improving and looking at what's best for our forests, the economy, and for our communities.
MADAM CHAIRMAN: Mr. Taylor.
MR. ROBERT TAYLOR: Jeff is on the right track in regard to that. But again, I think it's the involvement of the government with the industry. That is a big, big hurdle to get over. We can't make all of our decisions from a room. We have to get out. You brought up the idea, for instance, of these clear-cuts. I've been thinking if I was to sit here and say that's not right - there is. And there are certainly clear-cuts that shouldn't be made. I would be lying to you to say that there's not.
But I'm here to tell you that we're trying to do it the right way. I think if government gets involved with the industry the way they should be and comes out and sees us and sees what we're doing like that, I think you would have no trouble putting together rules and regulations that we could all follow so that, for instance, we don't get this information on he said or she said.
I think that a lot of times, that information gets construed in such a way that it soils the image of the forestry industry. That disturbs me. I spent a lifetime doing this, and I want to see it succeed. I want to see it succeed for the next generations. But if we keep going at it without actually getting involved in the situation, it's not going to be here because there will be so much negativity surrounding it nobody will want to be in it.
MR. D'ENTREMONT: Not necessarily a question, but thanks for the comments on that because I think we get caught up with the red herring that clear-cutting is. The industry is far larger than whether we clear-cut too much or not clear-cut enough. There's a science that I think we need to be comfortable with as well as a regulatory framework that allows you to do your work, while hopefully protecting and finding that balance between it. That's just my comment on that.
MADAM CHAIRMAN: Mr. Seth Taylor.
MR. SETH TAYLOR: Another thing to consider, too, is, do any of the people on the street know - I don't know this number personally, but I could look it up - how much old-growth forest is here in Nova Scotia?
The increasing winds that we are receiving in this province - if you go along, regardless of what sort of harvesting you're doing, you're opening up that forest. As soon as you open up a face - whether it's trees, rocks, or anything - Mother Nature is going to start doing a number on it. That's another thing to consider.
Then as Jeff said before, whether it's land passed down or somehow you've come across it, it's hard times in a lot of the provinces, especially in rural areas - everywhere. It's not always just considered forest. It's considered money on a stump.
Some of these clear-cuts, when we go in and someone comes to us and says, I want you to cut my 15 acres or whatever, you have to uphold the law. You have to go out and try to be a restorative force and all those things. But sometimes people aren't interested in that, and it's an awful challenge for the forest industry these days.
I know clear-cut, ever since I was knee high to a grasshopper, has been a subject. It's an effective tool when used properly, and I don't think anybody can dispute that. Sometimes, like Dad said, there's information that becomes misconstrued or there's other factors that are influencing someone's decision, but just my two cents on that.
MADAM CHAIRMAN: Ms. Zann.
MS. ZANN: Thank you and I really appreciate all of your answers. It's interesting because I've been reading about this subject, knowing that we have this meeting. I was reading just this morning, really early this morning actually, that Germany ranks third in the world behind Finland and Sweden in regard to, for instance, pulp and paper production. They have basically done away with clear-cuts. The quote from one of the sources, which is the Forstwirtschaft in Deutschland website, says, "The aim is to implement close-to-nature forest management throughout Germany. This objective has in Germany already generated an increasing proportion of structurally diverse mixed stands, long regeneration periods and natural rejuvenation methods. Forest management largely dispenses with clear-cuttings."
I thought that is really interesting that Germany, which is usually pretty much on the forefront of a lot of productive and sort of futuristic thinking when it comes to our management of the land, is now getting away from that.
On that note, also I notice that our current minister dropped the Forest Stewardship Council Certification from the Medway district. He is claiming that it is simply the same as SFI Certification and therefore, it is unnecessary. Critics of the decision argue that FSC provides greater assurances that sustainable forestry practices are actually used. When Mr. Zach Churchill was the minister, he said that FSC was the gold standard of certification.
Can either of you explain the difference, for instance, between FSC and SFI Certification?
MADAM CHAIRMAN: You have two questions there so we'll answer the first question . . .
MS. ZANN: The first one was mainly a statement about the clear-cutting.
MADAM CHAIRMAN: Mr. Taylor.
MR. ROBERT TAYLOR: I love to address those questions.
MS. ZANN: Thank you very much.
MR. ROBERT TAYLOR: First of all, Sweden, Finland and Germany, I've been to all those countries and their situation - if you're going to sit there and tell me that clear-cuts are not necessary, I'm going to tell you that you should do some more research.
There are areas that we have to clear-cut, there's no two ways about it, whether I like it or I don't like it. It could be for disease, it could be windthrow, it could be a lot of different reasons. Do we work with nature and stuff to try to put it back? Yes, and we are the golden boy. We are FSC Certified.
MS. ZANN: You are, your company is.
MR. ROBERT TAYLOR: Yes, in the Germans' eyes I should be right up there. I'm here to tell you that Germany is different than Canada, Nova Scotia is different than B.C. and I think we can't lose sight of that. We have to do what's right for our province. I get back to the same thing, come out to our organization, see what we're doing and get educated, by all means.
MS. ZANN: I'll take you up on that, I'll come out.
MR. ROBERT TAYLOR: I'll give everybody here in the room the invitation, I've been doing it for years. But don't sit there and do research because a lot of that bloody research ends up misconstrued and that's the part that bothers me the worst.
MS. ZANN: So what do you think about the fact that the minister dropped the FSC Certification for the Medway district and says that it's not necessary?
MR. ROBERT TAYLOR: Andrew?
MR. FEDORA: With Port Hawkesbury Paper, we have both FSC and SFI certification.
MS. ZANN: What's the difference between them then?
MR. FEDORA: Well I've been involved in certification for over 20 years and previously before coming to Port Hawkesbury Paper I also managed a CSA program for small private woodlot owners and an FSC program for small private woodlot owners.
In my determination there's actually very little difference in the standards. Two things that come up: one, there's a much stronger and aggressive marketing campaign and FSC has won that. But if you look at on-the-ground implementation of these standards, in my experience what I've found is that if you are looking for subtle differences, FSC tends to focus a little more on the broader, larger, social issues and landscape level things, whereas SFI tends to focus a lot more on the skills and qualifications of the people who are actually doing the work on the ground. SFI also has a much stronger private landowner component. So as an SFI Certified company, not only do we have to follow the standards on Crown land, for land which we manage, but there's a fibre-sourcing standard which requires that we practice due diligence, in terms of purchasing from private woodlot owners.
We have auditing programs in place where we do random audits on our suppliers who provide us wood from private lands and, if they are found to be operating out of conformance to the principles of sustainable forestry, we have a demerit system in place and we'll get to a point where we simply won't purchase wood from those people any more.
MS. ZANN: How can you tell when they're not doing it? Do you go out and do the testing yourself?
MR. FEDORA: Yes.
MS. ZANN: So you can tell and then you just don't do business with those companies?
MR. FEDORA: Yes, we go out and audit and we find out and if there's an issue, we investigate it. We talk to the contractor, we talk to the landowner to find out what has happened and go from there.
In addition, with SFI, there's a 1-800 phone number that anybody can call anywhere in the Maritimes and if you see any inconsistent forestry practices, you call that phone number and they will send people out to investigate that. I don't have the number on me now but if you'd like it, I can certainly provide it.
MS. ZANN: I can look it up.
MADAM CHAIRMAN: Excuse me, we'll go on to Mr. Gough. You've had your supplementary.
MR. STEPHEN GOUGH: A lot of information being shared today. I really appreciate that, and the experience and knowledge as well that obviously is coming from you as presenters today, does answer a lot of questions.
What would you say is the most misunderstood aspect of the forest industry? I'll ask Mr. Taylor and Mr. Bishop as well.
MADAM CHAIRMAN: Mr. Robert Taylor.
MR. ROBERT TAYLOR: We're all bad guys. I think that maybe to try to answer your question - information is a big thing. I mentioned that now several times, being able to get out to the public exactly what we're all about and what we're doing. I think that gets construed, then I'll come back to what your question is. I think if we have that cleared up ahead of time, and that again gets back to are we diversifying, are we getting involved with the industry the way we should be? I think when we get to that stage where we're actually getting out there and seeing it - I mean I don't want to jump away from your question but the way I look at it, we're in a small community and we have between 100 and 110 people. Why is government not out there banging down our door and asking, what can we do?
I don't want your damn money, that's not what I'm talking about, but what can we do to make your business run a little bit more efficiently and easier for us? We get burdened down too many times with the red tape and bureaucracy and we lose the actual time that we need to run the companies the way we should.
I think when we're providing jobs for those people, that's a big deal in those small communities. Those small communities were built around businesses. We can't all live in metro and so on and so forth. If they shop there and they work there, they stay there. I think when we get that diversification getting mixed in with the business from the government aspect of it and make that awareness known, a lot of these questions will go away.
MADAM CHAIRMAN: Mr. Bishop.
MR. BISHOP: I think one of the biggest misconceptions that the average person has, if you will, is that a forest stand is not a forest stand is not a forest stand. They are not all the same.
We have a somewhat romanticized vision of what forests look like within our province. Some of that comes from we go to something that is very well-managed, like a park, where you can see large trees, big spaces in between, kept quite clean, all those sorts of things. We see that on TV, all those sorts. But we have forest stands in this province that are 40, 50, 60 years old and nothing growing on that stand is bigger around than my arm. Comparing those two kinds of forest stands, the management that would happen on something like those would be dramatically different.
The trees may be the same age on those two stands. You might go in on the one where it has been spaced and taken care of over the years, the trees could be big enough that you can just barely put your arms around, but the others you can put one hand of fingers. So acknowledging that and knowing that we have a number of low-value - what I mean by that is that it's the very top of the tree, something we can't saw. It's absolutely no good for a veneer, a hardwood quality. If you think of, as you go up the tree, the bigger pieces of it start at the bottom.
Again, it's the misperception of, why is that truck driving by that mill to go somewhere else? Because you can't saw every piece of wood into a two-by-four, a two-by-12, or what have you. So we see those trucks moving in different places because we're using them for the best end use that we get. We may have to truck them a little bit further because all the facilities aren't in the exact same area. But we need markets within our own forest industry here in the province that support everything from high-end best-use for hardwood, for softwood, pulp wood market, and low end for biomass, for energy generation or for other uses that we can have.
It frustrates me sometimes to hear people say we shouldn't be making biomass. Well, you go tell your forest stand to stop growing because biomass is another pile in the sort when you do a harvest within an area. It's another pile. It's a product that can't be used anywhere else, but there's a value to it. We need to have markets that allow for that value to continue, whether it be used for greenhouses or universities or co-gen facilities at other production facilities like the Taylors have.
There needs to be the opportunity to do that because using the whole piece of the tree that we take out of the woods is the best use for it all. It provides the value to the landowner, whether they be public or private, and ensures that those markets continue that allow us. There's a point where, if there's no market for the low-value wood, like we see in the province right now - we're struggling with what to do with low-value wood in the province - it hampers what we're able to do in terms of management for lumber and logs, stud wood, and pulp material that goes to pulp and paper mills.
I think that that's the biggest misconception, that every tree that can be harvested in the province can be made into a two-by-four or the best hardwood veneer. There are some realities that just don't connect there when you understand what's growing. We need to manage for what's actually growing, not what some future state may be. We may want to get to a spot where - you talk to anyone in this industry. If all we had to cut was lovely, spaced, big round trees at the base, there wouldn't be one person within our industry who would argue with you one bit.
That's the example that Ms. Zann gave of Germany and those Scandinavian countries. They've made significant investments and cultural investments. There's a tie to their land in those Scandinavian countries and Germany that we do not have culturally in Nova Scotia. Those people manage their lands - in the same way that many of our private woodlot owners do - knowing that it's a part of their income. We have 30,000 woodlot owners in this province. A small portion of them are connected to a group like ours as an association. In those countries, it would be the flip. The vast majority wouldn't not belong to some group, whether it's a co-op or what have you. They understand we're managing for the best and highest value.
There's a bit of a culture shift that we would definitely need to make in Nova Scotia to have that sort of forest out there in the future. We're trying our best to encourage that those best practices are managed and options given to our landowners to be able get us to that spot.
MADAM CHAIRMAN: We're getting close to the last round, so we'll go quickly with the second round.
Mr. Robert Taylor.
MR. ROBERT TAYLOR: Just to quickly add to what Jeff says, in essence it is true. I must maybe make some consideration in regard to our particular facility. We do not go out to the woods to harvest biomass. Biomass is a direct reflection of the sawmill process that comes off our operations. We got into that years ago because bark was a problem. You couldn't take it and dump it, and so on and so forth, and one thing led to another. But what Jeff says is true. That is a product in the woods when you do your cutting.
I think one thing we've got to keep in mind here is that we don't turn around and build these power plants, for instance, to burn biomass and end up going out and maybe cutting down trees that could be used for other purposes. Again, that all comes back to the government and industry being more in tune with one another. Again, I think they will get the feedback they need so that doesn't happen.
MADAM CHAIRMAN: We have one quick round left. We'll go with Mr. Lohr.
MR. LOHR: We're getting into some interesting topics here. I know we've been hinting around the topic of silviculture. All along, governments had a role in silviculture in the past and, I think, continue to do so. My question is, what do we as a government need to do to promote silviculture in Nova Scotia in your opinion?
MADAM CHAIRMAN: Mr. Fedora.
MR. FEDORA: Just briefly, this is a subject that's close to my heart from the work that I did with the Federation of Nova Scotia Woodland Owners. One of the greatest disincentives that we have here in Nova Scotia, if you appreciate how much private land there is here in this province, is that on Crown land, there's ample funding available, and there's a significant amount of silviculture that takes place. On private land, there simply aren't enough funds to do all the work that's required.
In my opinion, that's why you see a lot more clear-cutting on private lands, because landowners don't have the options that they require. Further to that, on capital gains, they make more money by clear-cutting versus doing successive treatments.
With the Federation of Nova Scotia Woodland Owners, one of the things that they've been doing over the last number of years is lobbying for income tax treatments. So if you derive income from your property, then you can put some of that into a savings plan that would allow you to invest it in your property moving down the road. One of the greatest stumbling blocks is simply the cost of trying to do the work and trying to do responsible forest management.
If you really did have that groundswell of support of people in Nova Scotia who really truly wanted to see better forests in this province, then you would see more people willing to pay for ecological goods and services. If you want me as a landowner to manage my woodlot for your values, how are you going to help me do that? The short answer comes down to dollars and cents. If you can't afford to do the work, then it's just not going to happen.
MADAM CHAIRMAN: Was there someone else?
Mr. Robert Taylor.
MR. ROBERT TAYLOR: Just to go along with what Andrew said, and it's in my presentation as well, if for instance the government came back to a new home builder and offered a rebate if he used FSC - FSC is all about doing things the right way when first going off - that's a prime example of how government can work with industry. Get involved. If I have two people, I have two tips of lumber at the industry, some FSC and some that's not, a new home builder, for instance, is not going to pay an extra $30 or $40 for FSC wood, especially if they're on a tight budget and so on. But let's say, for instance, there was a rebate if they used FSC materials. That's a very good way of getting that money back on the forest floor and following the protocol that the public expects us to follow.
MADAM CHAIRMAN: Ms. Zann.
MS. ZANN: I just want say, first of all, thank you very much for all of your answers. I completely agree with Mr. Fedora and also with Mr. Bishop about the fact that if there are incentives from the government to help the people in this industry manage their forestry in such a way that it would reduce the clear-cutting, I think that would definitely be the way to go.
Also, I believe that, as Mr. Taylor has been mentioning, diversification is so important. Do we really want just a monoculture of forestry in Nova Scotia? I can foresee a time, if we keep going this way, that the Celtic Colours will soon be called the Celtic Colour, and people won't be able to come to Nova Scotia to see all that beautiful variety of colours in the forest, which is so important to our tourism industry as well.
The other thing is the different sizes of forest. There need to be different heights and a variety - not all just one straight green forestry product. Do you think, gentlemen, that for instance DNR has enough capacity to enforce the rules and the regulations that are in place for companies, instead of the companies having to a lot of this legwork themselves to make up for the lack of capacity at DNR? Should there be more capacity at DNR to help people with this type of management?
MR. ROBERT TAYLOR: I think definitely there's capacity at DNR to get involved. I can go back 35 years to when DNR actually went out and cut their own logs in the woods and put them roadside. As mills, we would tender on them and so on and so forth. I made the point a little while ago that when we go out and do our soil tests to see what we're going to do on a particular parcel of land, then the DNR comes back out and does all the same tests. To me, that's duplication there, and it costs us money that maybe we could use in the industry to cover off some of these other problems that we're talking about.
MR. FEDORA: I personally believe that the province would do well to invest more in its Department of Natural Resources. There are a lot of qualified and capable people there who simply don't have the budget to deliver their programs effectively in a lot of cases. It's quite challenging as a government to try to balance budgets, and health care and education are always on the top of the list. If you look at the allotments for the Department of Natural Resources, they're quite low. Then if you factor in staff, costs, and keeping the heat and lights on, when it actually comes to implementing a lot of the policies, it's extremely challenging for them. I think the province as a whole would benefit if there was more investment in that department.
MADAM CHAIRMAN: We'll move on to Mr. Mombourquette.
MR. DEREK MOMBOURQUETTE: First I want to say I was a fastener guy in my former life, and your industry puts a lot of food on the table for a lot of spinoff businesses. I think that's important to note. I've worked with a couple of mills at home when I was a sales rep; it put a lot of food on my table and in a lot of other industries. You guys really contribute a lot outside of wood production.
I always try to go home with some information for Cape Bretoners. I represent Sydney, but I spend a bit of times in the Highlands doing what Cape Bretoners love to do in the summer - fish and travel and camp. You see a lot of the forest management when you do that. In regard to the industry - just broadly, I'm not looking for anything too accurate at this point - in percentages, how is Cape Breton involved in the production across the province? What percentage comes out of the Island?
I know Port Hawkesbury Paper plays a huge part in the industry at home. I always like to take some information back home to the constituents. In the overall industry, where does Cape Breton fit in terms of employment and in terms of production?
MADAM CHAIRMAN: Mr. Fedora.
MR. FEDORA: Port Hawkesbury Paper itself, we have 330 employees at the company, and there's about 450 direct and indirect woodlands contractors and staff. In terms of the breakdown between Cape Breton and mainland Nova Scotia, I don't have those numbers readily available, but I can certainly provide that to you later. I can follow up and give you my card. It is a cornerstone for the forest industry in Cape Breton. Most people who work in forestry are directly associated with our mill in some way, shape, or form.
The industry itself is incredibly important, especially in Cape Breton. I was very sad to see the recent statistics that Cape Breton Regional Municipality's population has dropped by I think 2.7 per cent. It's the lowest point since the Great Depression. With a predominantly rural-based economy and shrinking urban centres, more than ever you need a strong resource sector in that area in order for the smaller communities to thrive and flourish. That's why I moved to Judique.
MR. MOMBOURQUETTE: Right on. It's a beautiful spot.
MR. FEDORA: Yes, I love it. Absolutely. Just one final note on that in terms of the forest management that takes place in the Highlands; if you're driving down logging roads consistently, you're going to see logging. There is a perception that the Cape Breton Highlands are being mismanaged by some, but the reality is that within our Forest Utilization License Agreement, we have over 40 per cent of it under protection, so we don't touch it. There's a lot more to it.
MADAM CHAIRMAN: Would you like to submit those numbers to the clerk at a later date?
MR. BISHOP: I certainly can if people are interested.
MR. MOMBOURQUETTE: I will follow up with that.
MADAM CHAIRMAN: Okay, he'll follow up with you personally.
I'll ask for closing remarks. Mr. Robert Taylor, do you have any closing remarks?
MR. ROBERT TAYLOR: Just what we have been talking about in the meeting is very educational. It's always good to get everybody's point of view on these issues, because it's not just one person's responsibility, it's everybody's responsibility. I'm not leaving the government out of that as well. I still go back to my premise that I'd like to see us as an industry do more with less. I think that by doing more with less and diversifying, we get a chance to keep those jobs here in Nova Scotia. I think keeping those jobs in Nova Scotia is going to be important.
We're looking for research money to do stuff with, well we have to have a tax base don't we? The only way we're going to get that tax base is we have to keep people here working. If that's one way of doing it, then by all means I think we should take a very serious look at that. Thank you.
MADAM CHAIRMAN: Mr. Bishop.
MR. BISHOP: Thank you all very much for the questions and the discussion here today. It's an important part of what Robert touched on earlier and the work that our association has been doing is continually having discussions just like this - about forestry, forest management and our industry in the province. It's an important piece that we are able to share information with folks and hear the response from folks as they learn about our industry, or share their concerns about our industry. I just thank you all for being a part of that discussion.
We're in the business of growing trees, I think as I said earlier today, and it's mostly a rural-based industry, as we know, within the province and plays an important role in those communities like the one that surrounds the Taylors. But you look at the other sawmills, in particular, within our province in some of the rural areas, and you can see that those are the centres of those communities, an important part of that community economy and livelihood, and enables the folks to stay in those rural parts of the province.
Managing our forests properly to ensure that we continue to have a strong forestry sector, I think is just a vital backbone to the communities across this province. We can dampen much of that outflow, if you will, that both Mr. Fedora and Mr. Taylor have talked about of losing Nova Scotians to other places. We think that a strong industry and a strong sector that supports Nova Scotians and our forest management is one of the keys to that.
MADAM CHAIRMAN: We will take a short recess and allow the witnesses to leave, and then we will continue with a short business meeting. Thank you.
[10:53 a.m. The committee recessed.]
[10:56 The committee reconvened.]
MADAM CHAIRMAN: Order, please. We will resume our meeting. There is no business. Did anyone have anything to bring forward very quickly that is not on the agenda? No.
Our next meeting is slated for May 18th. Our topic will be the Maple Producers Association. This is pending House adjournment. That will be followed by a June 15th meeting, which is our tour of the gypsum mine, which I think we've all been looking forward to. That's June 15th.
With that, I declare this meeting adjourned.
[The committee adjourned at 10:58 a.m.]