Recommendations for Canada’s high growth industries, including natural resources and clean technology

Innovation report 2018On September 25, the federal Ministry of Innovation, Science and Economic Development released a report:  The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth,  with over-arching “signature” proposals in the consolidated report, and specific proposals in individual reports by six “high-growth potential” sectors: advanced manufacturing  , agri-food , clean technology , digital industries,  health and biosciences  , and resources of the future  .  These six groups had been identified by the Advisory Council for Economic Growth  , a body which has issued many of its own reports, including the 2017 reports,  The Path to Prosperity   and Learning Nation: Equipping Canada’s workforce with skills for the future   .

In this latest series of reports, the identified Sector groups were led by  “Economic Strategy Tables— which the government characterizes as “a new model for industry-government collaboration”.   Each “Table” consisted of a  Chair,  and approximately 15 industry experts, with consultants McKinsey & Company providing “fact-based research and analysis”.  The reports are unmistakably written by management/industry authors (replete with many references to “agility”,  “own the podium” and “sandboxes”). A deeper dive into two of the sector reports reveals very substantial recommendations, with common themes of best practice examples from other countries, Canada’s international competitiveness, Indigenous relationships, and  attention to workforce issues of skills gaps and diversity.

The Clean Technology Economic Table Report  proposes: “the ambitious, export-focused target of clean technology becoming one of Canada’s top five exporting industries, nearly tripling the sector’s current value for exports to $20 billion annually by 2025” –  a growth rate  of 11.4% per year on average.  The report makes recommendations under six categories, including financing, engagement  with Indigenous communities in partnership and co-development of clean technology initiatives, increased government procurement, regulation, and workforce issues. Greatest attention is given to the regulatory environment, with proposals for a “Regulatory Sandbox for Water Regulation” and a “Regulatory Sandbox for air quality and methane emissions regulation”.    “Ultimately, we will need as much innovation in our public policy tools as there is in technology to ensure progress on critical economic and environmental objectives.”  Regarding  workforce issues, the report recognizes that Clean Technology will compete for Scientific, Technology,  Engineering and Math ( STEM) skills, but highlights a particular shortage of soft skills required for entrepreneurship, business development, finance, advocacy, risk management and forecasting. It calls  for “work-integrated learning programs”, and better labour market data collection and dissemination. Without ever using the term “Just Transition”, it does call for “Opening streams of these programs for workers to re-skill”, and “Adding new eligibility criteria for these programs to promote an inclusive and diverse workforce”.

resources of the future coverThe  “Resources of the future” Table Report  examines the mining, forestry and energy industries; the tone is set in the introductory remarks which state: “While resource companies are committed to the highest environmental and safety performance, they are burdened with an inefficient and complex regulatory system that adds cost, delays projects and is not conducive to innovation.” Recommendations are set out in five thematic sections, including “agile regulations, strategic infrastructure, innovation for competitiveness, indigenous people and communities, and attracting and re-skilling talent.

The report notes the established issues of an aging and gender-biased workforce in natural resources and identifies automation and digital skills as a neglected and misunderstood  issue in the industry.  It proposes a “Resources Skills Council” which, notably,  would include labour unions, along with all levels of government, industry associations, universities and polytechnics.

Workforce implications of innovation in Canada’s Forest Sector

On May 4th, the House of Commons Standing Committee on Natural Resources  released its report,    Value-added products in Canada’s forest sector : cultivating innovation for a competitve bioeconomy . The report  is the latest discussion of  advancing Canadian value-added forest products and a forest-sourced bioeconomy, and addresses five themes: (1) protecting Canadian forests and primary resources (which recognizes the threats of climate change and beetle infestation); (2) advancing industrial integration, innovation and talent development; (3) strengthening partnerships with Indigenous peoples; (4) maximizing market opportunities in Canada and abroad; and (5) a case study on building with wood, with a focus on advanced mass timber construction.

Discussion of the issue of training and talent development (beginning on page 18), calls for  more internships and employment opportunities for engineering and science students and highly trained post-graduates;  the need to develop a well-educated forest-sector workforce in rural areas; and the need for diversity and gender equity.  Employment implications are present in the discussion of wood-based construction of homes, where witnesses talk about transforming wood construction from a craft-based industry to a more mainstream manufacturing process, where “prefabrication in a factory environment would make wood construction more cost competitive and less wasteful, with greater potential for automation, customization and design accuracy.” The report also provides a case study of two Canadian examples of “tall wood buildings”: including Brock Commons, a new 18-storey student residence at the University of British Columbia , and Origine, a 13-storey building in Quebec City’s Pointe-auxLièvres eco-district.

The United Steelworkers , who represent over 18,000 forestry workers after their 2004 merger with the  Industrial, Wood and Allied Workers of Canada (IWA), presented a Brief to the Committee in November 2017.  The Brief identifies  the main challenges facing the sector, as low harvest volumes, insufficient infrastructure funding, and decreasing raw log exports, and concludes  that, although it’s a provincial jurisdiction,  “The Steelworkers submit that Canada needs a national forestry strategy that recognizes while the challenges within the lumber, pulp, paper, or value added sector are unique, … the whole sector is highly integrated, and dependent on each facet of the sector succeeding. “  The Brief also states  “The costs that the industry as a whole faces will further increase with the federal government’s plan to roll out a $50/tonne price on carbon by 2022. This new carbon pricing regime will not only risk further impacting tight margins in regions like Ontario, but also risks leading to carbon leakage. Canadian companies are now operating in the southern USA which does not have a carbon pricing regime.”

Unifor, which represents approximately 24,000 forest workers, also issued a report (not submitted to the Committee)  in October 2017:  The Future of Forestry: A Workers Perspective for Successful, Sustainable and Just Forestry .  A key message from Unifor is the need to involve workers in a in  a national  policy-making process: “forestry ministers must lead efforts to bring together business, government, labour, Indigenous leaders, environmental organizations and community leaders in a reinstated National Forestry Council.”  Also on this topic, a 2017 report by the Innovation Committee of the Canadian Council of Forest Ministers,  A Forest Bioeconomy Framework for Canada . 

Unifor, Government visions for Sustainable Forestry

The Future of Forestry: A Workers Perspective for Successful, Sustainable and Just Forestry was released on October 16 by Unifor’s Forestry Industry Council, representing the union’s 24,000 members in the forestry sector.  The report provides an overview of the size and health of the forestry industry, and after the past several years of declining employment, asks, “What could lie ahead?” The answer given:  “Technologies that put forestry resources to uses never previously imagined; transformative innovations in building materials and green construction, and a sustained transition toward higher-value growth products and markets. There is also a coming wave of retirements that means the industry could need upward of 60,000 new workers within the decade.”

The report sets out Unifor’s aims for each of five focal points in an integrated forestry policy, involving the federal and provincial governments and prioritizing the role of First Nations.  The report calls for “ sustainable rules for wood harvesting that secure investments and jobs while meeting the highest environmental standards. There must be stable and appropriately priced hydro-electricity; as well, transportation infrastructure, pricing and access need to be modernized. Trade policies need to support high-value forestry exports, maintain stable access to key markets, while ensuring we are not the target of unfair trade measures. And we need to control the export of unprocessed raw logs.”  A key message is the need to involve workers in a sustained dialogue for  policy-making process: “forestry ministers must lead efforts to bring together business, government, labour, Indigenous leaders, environmental organizations and community leaders in a reinstated National Forestry Council.”

Related reading: In mid-September, Natural Resources Canada released the 2017 edition of The State of Canada’s Forests Annual Report and L’État des forêts au Canada.

At the September annual meeting of the Canadian Council of Forest Ministers (CCFM), their Innovation Committee released A Forest Bioeconomy Framework for Canada , with the vision to make Canada “a global leader in the use of forest bio-mass for advanced bioproducts and innovative solutions” including as a source of renewable energy.   Note the first of the 4 pillars of the framework: “Communities and Relationships. This section in the Framework advances policies towards  “creating green jobs, offering opportunities for rural communities through education and skills training, improving overall quality of life, and enhancing partnerships with Indigenous peoples.”

Also at the Canadian Council of Forest Ministers annual meeting, the Minister of Natural Resources announced a call for proposals   for the next wave of projects through the Investments in Forest Industry Transformation (IFIT) program, a federal grant program to encourage :

  • new or increased production of bioenergy, biomaterials, biochemicals and next-generation building products by the forest sector;
  • increased deployment and encouraging broader adoption of first-in-kind innovative technologies, particularly Canadian, across the industry; and
  • the creation of innovative partnerships with non-traditional forest sector partners as a way to develop new business models for the sector.

Canada’s Forest Sector commits to a voluntary emissions reduction target

On May 2, 2016, the Forest Products Association of Canada (FPAC)   announced its 30 by 30 Climate Change Challenge  – a pledge to remove 30 megatonnes (MT) of CO2 per year by 2030.  FPAC claims that the forest sector is the first to voluntarily contribute to the federal government’s climate goals under the Paris agreement;  the target is “more than 13% of the Canadian government’s emissions target” for 2030.  The details are not yet clear, but  FPAC states generally that it  will rely on improved forest management, increasing “the use of innovative forest products and clean tech to displace materials made from fossil fuels, and by further efficiencies at mill sites.” According to the  Globe and Mail , “the association endorsed the adoption of carbon pricing – either taxes or cap-and-trade systems”. See the Vancouver Sun coverage here    .

Resolute Forest Products on Notice after 3M Announces a new Sustainability Policy for Paper Procurement

Following a review of its procurement processes conducted in collaboration with ForestEthics and Greenpeace, multinational 3M released a revised Pulp and Paper Sourcing Policy in March, with high standards for environmental protection and human rights. 3M will no longer use the Sustainable Forests Initiative (SFI) label. Its new policy requires improved monitoring and reporting of source materials, and “free, prior and informed consent by indigenous peoples and local communities before logging operations occur”. The company has already cancelled its contracts with Indonesian Royal Golden Eagle Group-owned suppliers and has warned Montreal-based Resolute Forest Products that it must quickly improve its controversial relationships with First Nations, as well as its practices of logging of caribou habitat and in High Conservation Areas. Read ForestEthics Applauds 3M’s New Industry-Leading Sustainability Plan (March 5), or 3M’s new pulp & paper policy impacts Resolute Forest Products (CBC, March 5). For an excellent history of Resolute’s controversial environmental record, see “Resolute and Greenpeace at Loggerheads” in the Montreal Gazette (Feb 13).