Canadian government should focus stimulus funding for forest products industry on long-term competitiveness, says FPAC CEO, citing need to focus on bio-products

OTTAWA , October 20, 2011 (press release) – During these perilous economic times, the government must continue its commitment to fiscal responsibility and debt reduction while still taking clear-eyed strategic action to help advance the ongoing transformation and competitiveness of the Canadian forest products industry.

That's the message delivered today by the President and CEO of the Forest Products Association of Canada (FPAC), Avrim Lazar, who was appearing during pre-budget consultations undertaken by the House of Commons Finance committee.

"We applaud the government for its determined and steady hand on the economy that has resulted in Canada avoiding the sovereign debt crises that have plagued so many other countries," said Lazar. "Still we feel the economic times dictate the need for modest stimulus. And we believe that stimulus funding should focus on measures that boost competitiveness in the long term. For the forest products industry this translates into a few focused measures that would support penetration of emerging markets, business model innovation and environmental progress."

Lazar said the government should continue to fund existing programs under the Forest Industry Long Term Competitiveness Strategy. This includes continued support for FPInnovations and for the Leadership for Environmental Advantage in Forestry program (LEAF) which should be broadened to include support for the implementation of the landmark Canadian Boreal Forest Agreement.

FPAC urges the government to unlock the potential of the $500 million Sustainable Technology Development Canada (STDC) Next Gen Biofuels Fund. By opening it up to other bio-products, this fund can accelerate the transformation of the forest industry.

Finally, FPAC is asking the government to replenish the Investment in Forest Industry Transformation program (IFIT) with $300 million over the next three years. Canadian forest companies had submitted proposals to the original IFIT program worth 52 times the money available.

"That speaks to the still untapped transformative potential for Canada's forest products industry," said Lazar. "The forest sector has been aggressively re-inventing itself with government as a critical partner. We are now at the point where industry efforts to transform are making an impact. However we still need an ongoing partnership so that industry can build on the existing momentum, and help protect jobs and rural communities."

"We need to move now to accelerate our production of innovative new products such as bio-energy, bio-chemicals and other bio-products or lose out to global competitors whose governments are investing billions in their modernization," said Lazar. "Either we win the future or risk missing out on promising economic opportunities, falling behind our global competitors, and remaining trapped in the lower-value commodity cycle that put so many jobs and communities at risk."

FPAC provides a voice for Canada's wood, pulp, and paper producers nationally and internationally in government, trade, and environmental affairs. The $57-billion-a-year forest products industry represents 2% of Canada's GDP and is one of Canada's largest employers operating in hundreds of communities and providing 240,000 direct jobs across the country

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