Canada’s plan for Forestry Innovation in Canada’s 2012 Budget

The Government of Canada presented their Budget today for 2012 and beyond.

Here is the information from today’s budget for “Forestry Innovation and Market Development Support“.

Economic Action Plan 2012 proposes $105 million over two years to support the continued transformation of the forestry sector.

In 2011, the forestry sector directly supported 233,000 jobs in over 200 communities across the country and accounted for 1.9 per cent of Canadian gross domestic product. The forestry sector has faced a number of economic challenges over the past decade. In response to these challenges, the forestry industry has taken important steps to become more productive and transition to higher-value activities.

The Government has provided significant support to the forestry sector to facilitate its transformation through a suite of innovation and market development programs. To maximize the effectiveness of federal support, the Government will be refocusing its current programming from five to two initiatives:

• The Expanding Market Opportunities Program will combine the Canada Wood Export and the North American Wood First programs and incorporate the activities previously delivered by the Leadership for Environmental Advantage in Forestry (the LEAF Program).
• The Forest Innovation Program will combine support for the emergence of transformative technologies, including those developed by FPInnovations and the Canadian Wood Fibre Centre, through the previousPromoting Forest Innovation and Investment program, and the technology transfer activities to small and medium-sized enterprises that were previously delivered through the Value to Wood program.

To support the continued transformation of the forestry sector, Economic Action Plan 2012 proposes $105 million over two years. The Government will continue to engage with the forestry industry to identify opportunities for the private sector to increase its investment in innovation and develop new markets for Canadian forestry products.

Reaction from the Forest Products Association of Canada

The Forest Products Association of Canada (FPAC) is pleased that the government has decided to maintain spending on programs aimed at transforming the forest sector even while tough measures are being taken to tackle the deficit.

The “Jobs and Growth” budget from Minister of Finance, Jim Flaherty, includes $105 million over two years for forestry innovation and market development.

“This kind of support has been helping to secure employment and shore up communities that rely on the forest products industry,” says Avrim Lazar, the President and CEO of FPAC. “Maintaining this strategic support at a time of deficit reduction will certainly continue to promote jobs and growth in the forest sector.”

FPAC agrees that the top priority of the government must be to keep the deficit situation under control to support growth.

“We applaud the government for its economic stewardship. There is no doubt the strong fiscal situation in this country is benefitting Canadian forest companies,” says Lazar. “At the same time the government continues to offer strategic support that has helped renew and transform our industry. And we feel this budget signals this vital partnership between the industry and government will continue in the years ahead.”

Lazar notes that several other budget items are useful in helping the transformation of the forest products industry: the support for early movers who adopt new technology; the extended provision of the domestic lending authority by Export Development Canada; the limiting of increases in Employment Insurance premiums and the expansion of the eligibility of the Accelerated Capital Cost Allowance for clean energy generation equipment to include a broader range of bioenergy equipment.

The Association will be unveiling a new vision and challenge to the industry and government later this spring to build on the industry’s recent success.

Reaction from FPInnovations

FPInnovations, a unique industry/government forestry innovation partnership, today commended the Canadian government’s recommitment to Canadian forest sector transformation and innovation in the 2012 federal budget. The budget confirms the federal investment of $105 million over 2 years for market development and forestry innovation, including FPInnovations.

“The 2012 federal budget renews a partnership that has delivered value and is building the future of forestry inCanada,” said Al Ward, Chair of FPInnovations, and President and Chief Operating Officer of Alberta-Pacific Forest Industries Inc. “The budget will help deliver on a strong, competitive and diversified forest sector in Canada. That is good news for high value jobs and good news for hard hit forestry communities across the country.”

FPInnovations brings together stakeholders in an innovation hub for Canada’s forest sector. With a $90 million annual budget and over 550 specialized staff, it delivers and deploys world-class forest sector innovations. FPInnovations unique value chain capacity includes innovative approaches to deliver economic returns in:

• Forest Fibre
• Forest Operations
• Wood Products
• Pulp & Paper
• Bio-products & Bio-energy

“Today’s budget will allow us to continue to pioneer new products such as bio-materials and bio-composites and next generation building systems for multi-storey buildings,” added Pierre Lapointe, President and Chief Executive Officer of FPInnovations. “These innovations will open new markets and new job opportunities for the Canadian forest sector.”