Key players in Canadian forestry sector strike blue-ribbon council to improve innovative capacity and productivity

The Canadian forestry sector plans to become a lot more strategic in its quest to improve operational efficiencies. Senior government officials and executives from Canada’s largest industry sector have banded together to create the Canadian Forestry Innovation Council (CFIC), which they contend will help to align existing innovative activity and capacity in industry, academia and government.

CFIC is being funded at $600,000 for each of the next three years and maintains an office in Ottawa. The funding will be contributed in equal amounts by the federal government, industry and the provinces.

In the coming months, CFIC plans to articulate a 10-year vision for the industry, quantify Canada’s existing S&T expenditures and strike three task forces to advance its core innovation priorities (see chart next page). The moves come at a time when increased competition from traditional players is being compounded by relatively recent entrants on the global stage — Brazil, Russia, Indonesia and others.

“We have to accelerate the rate of innovation and get better economically and environmentally every year. The bar is always rising,” says Avrim Lazar, president and CEO of the Forest Products Association of Canada (FPAC) and a former ADM policy with Environment Canada. “Good research is being done by universities, governments and forestry research institutes but it’s being done independently. We need to turn it into a system.”

Lazar took over the reins of the newly created FPAC in 2002 and has been a driving force for the CFIC along with Frank Dottori, president/CEO of Tembec Inc. The FPAC brought together pulp and paper and wood products industries under a single association umbrella — one of several preliminary developments that set the stage for the new Council. It also has a CEO-level S&T working group.

Members of the CFIC council will be appointed through a variety of mechanisms (see chart far right). Industry members will be appointed through FPAC while provincial members will be determined by the Canadian Council of Forest Ministers, which includes a DM committee and an S&T working group. Federal representatives will be appointed directly by the Government of Canada.

“There’s no sense that anything was broken, but there is a sense that we didn’t have a longer-term vision for the industry,” says Natural Resources Canada DM George Anderson. “Over time there will be a view formed over the need for a research strategy and that will involve resources that can be brought to bear.”

For his part, Anderson says he will be working to strengthen the economic focus of NRCan’s Canadian Forest Service to bring it up to par with its current emphasis on the underlying science. That will have a significant impact on way the federal government approaches the many substantive issues facing the forestry sector. Chief among them is striking a balance between the industry’s current focus as a commodities business and expanding into new value-added areas.

“Most people in the sector think they are facing a long-term decline in the price of commodities. Russia, Brazil, Indonesia and others can produce cheaper fibre (than Canada). So we have to work at developing better harvesting, forest management and lower transport costs while raising productivity,” says Anderson. “At the same time, we have to develop niches on the value-added side with innovative products, new classes of paper and diverse wood products. CEOs say this should have happened a long time ago. It’s time to put the wheels on this bus.”

By ensuring that leaders from all three sectors are part of CFI, its backers are confident it has the authority to put together concepts and then promote them to make them happen.This strategic capability is critical as the sector moves into an era of sustainable forest management.

CFIC’s proponents stress that the Council is not in the business of acquiring or seeking funding, opting instead to work with relevant government departments, university researchers and industry groups to develop coherent policies and practices relating to S&T and innovation.

Bob Fessenden, DM at Alberta’s Ministry of Sustainable Resource Development, says the non-funding nature of the CFIC is an important feature that should not be underestimated. Fessenden was instrumental in establishing the Alberta Science and Research Authority in the 1990s. He says its lack of funding power meant it was viewed as an honest broker with no vested interest when it made recommendations on how to improve innovation in the province.

“We’re missing a strategic umbrella and this is what CFIC is for ... to develop an innovation system to support a truly sustainable forestry sector,” says Fessenden. “The main outcome is a change in behaviour in all three sectors. Most would agree that increased R&D is also an anticipated outcome but first we need to ensure that current resources are well spent.”

CFIC documents add that while it will not have direct funding authority, its members control the majority of the estimated $350 million in annual R&D spending. It also envisions assembling research teams “of sufficient calibre” to compete for funding from programs for which forestry R&D is eligible.

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