Features Research & Innovation
Interview with the Honourable Maxime Bernier, Federal Minister of Industry

The Honourable Maxime Bernier is a first-time Member of Parliament and was elected to the House of Commons in 2006 where he presently serves as the Minister of Industry. Prior to his election, Mr. Bernier was a senior executive with the Standard Life Insurance Company of Canada and manager of corporate and international relations at the Commission des valeurs mobilires du Qubec.

Mr. Bernier is a lawyer and holds a bachelor’s degree in commerce. He was a member of the board of the Montreal Economic Institute and is a member of several charitable organizations. He was born and raised in Beauce, QC, the federal riding that he currently represents in the House of Commons. Minister Bernier sat down recently with Andrew Casey from the Forest Products Association of Canada to discuss the Canadian forest products sector and his role in relation to it as the federal Industry Minister.

How do you see the forest products industry within the context of the Canadian economy?

Canada’s forest products industry is an integral part of our nation’s economy. The $80 billion industry accounts for almost 3% of Canada’s overall GDP. It supports close to one million jobs across the country. This includes 300,000 direct jobs in forest products manufacturing, which is 14% of the total manufacturing employment. The industry is particularly vital to the more than 300 rural and remote communities that greatly depend on it for their livelihoods. In many smaller cities and towns, the industry drives the economy, and in many cases, it is the only major employer in a community.

The pulp and paper sector is a hugely important subset of the overall forest products industry. The sector directly employs more than 100,000 Canadians, including 40,000 in Quebec. In fact, Quebec is the third largest producer of newsprint in the world, behind only the U.S. and Japan.

So, clearly, a strong and vibrant forest sector is very important to Canada’s overall economic success.

Obviously though, the industry has faced tremendous challenges over the past few years and continues to face serious challenges such as the high dollar, high energy costs and competition from emerging economies.

Nevertheless, I strongly believe that the industry is well situated to take advantage of opportunities to improve productivity, explore new markets and develop innovative new products.

So while there are challenges ahead, there are great opportunities as well. And through Advantage Canada and other measures specifically aimed at the forest products industry, the government is supporting an economically and environmentally sustainable forest sector that is a key part of our country’s economic foundation.

What can the industry and government do to ensure that Canada remains a leading global exporter of forest products?

Canada is currently the world’s largest, most successful exporter of forest products. However, we cannot take continued success for granted. The global forest products market is in flux, and demand is fluctuating. The industry is under significant pressure from a higher Canadian dollar, high energy costs, increasing constraints to our fibre supply (including pest infestation), and competition from low-cost producers such as Asia and South America in our biggest market — the U.S. It all adds up to tougher export markets for Canadian producers. Both industry and governments will need to work together to ensure that Canadian producers remain competitive.

To keep pace with the changing landscape, the industry must become more responsive to global realities, more diversified, and more focused on getting maximum value from the forest resource. It can become more flexible by developing and diversifying its products and services. It must also continue to invest in new technologies to improve productivity.

Canada has invested considerable effort into exploring new markets for our products. We need to work with all stakeholders to continue to grow these new markets, and to pursue other, non-traditional ones.

The government is helping to create the environment necessary for Canada’s forest products industry to compete on a global scale through the $127.5 million Forest Industry Long-Term Competitiveness Initiative that my colleague, Natural Resources Minister Gary Lunn, recently announced.

This initiative will enhance economic opportunities for the forest sector, help it to grow offshore markets, promote value-added manufacturing and help protect our resources from the growing threat of forest pests.

The government is also creating a supportive business environment for all industries, including the forest products industry that promotes competitiveness, innovation and success.

We are doing this with our strategic economic plan, Advantage Canada. It goes to the heart of addressing the challenges of all sectors and industries. By continuing to reduce taxes, cutting red tape, building modern infrastructure, and creating a more skilled and educated workforce, we are setting the stage for economic growth, opportunity and choices for people and business.

What measures has the Conservative government undertaken in support of the industry?

This government is delivering on measures to support the forest products industry. First among them was the softwood lumber agreement with the United States. The agreement brings stable access to the U.S. market, an end to costly litigation, and the return of more than Cdn $5 billion in duty deposits.

Budget 2006 also included a $400 million commitment to strengthen the long-term competitiveness of the forest products industry, support worker adjustment, and to combat the Mountain Pine Beetle.

Under that commitment, Minister Lunn recently introduced the $127.5 million Competitiveness Initiative I mentioned earlier. This will help create a strong, competitive and sustainable forest products industry.

By supporting innovation in the sector, promoting human resource development, developing forest product markets, and protecting our forest resources from pests, Canada’s New Government is helping to create the right conditions for the industry to prosper.

The budget commitment also resulted in Minister Lunn’s January announcement of a $200 million Federal Mountain Pine Beetle Program to combat the spread and consequences of the pine beetle infestation in Western Canada. This followed the government’s announcement last October of a $72.5 million Targeted Initiative for Older Workers. This program will assist older workers in vulnerable communities and industries (including the forest products industry) who have lost their jobs.

Earlier you referenced the government’s strategic economic plan, Advantage Canada, which was announced as part of the 2006 Federal Budget. What role will it play in support of Canadian industry and the economy more broadly?

As I indicated earlier, government must work to create a supportive environment for all industries.

We started to create that environment in Budget 2006, which introduced 29 tax cuts to provide an economic boost for all Canadians, and to make Canada a more attractive destination for investment.

We’ve continued to create a positive environment with Advantage Canada. This plan focuses on creating five Canadian advantages that will help firms succeed in global markets:

Canada’s tax advantage will reduce taxes for all Canadians and establish the lowest tax rate on new business investment in the G7.

Canada’s fiscal advantage will eliminate Canada’s total government net debt in less than a generation.

Canada’s entrepreneurial advantage will reduce unnecessary regulation and red tape and lower taxes to unlock business investment.

Canada’s knowledge advantage will create the best-educated, most-skilled and most flexible workforce in the world. We will support research excellence in areas where Canada has the potential to be a world leader, and better align public research
with the needs of business.

Canada’s infrastructure advantage will create modern, world-class infrastructure to ensure the seamless flow of people, goods and services across the country, and across our borders.

Advantage Canada will provide a sound economic framework so that we have competitive industries that are agile, innovative, and that reach out globally.

As Minister of Industry, what are your top priorities for the coming year?

My overall priority is to continue our government’s work in creating an environment that encourages and rewards people who work hard, that stimulates innovation and that avoids unnecessary regulatory burden. I am working on several initiatives to help achieve this, but there are two that I’d like to highlight.

One is easing the administrative and paperwork burden imposed on business by ensuring that regulations meet their intended goals at the least possible cost. In November 2006, we made a clear commitment to reduce the paper burden on small business by 20%, so business can focus on more productive tasks in running their operations. We are working with key business groups and through the Advisory Committee on Paperwork Burden Reduction to develop concrete measures that will simplify and streamline administrative requirements and information obligations.

Secondly, the government understands that scientific and technological (S&T) development are essential to improve the wealth, wellness and well being of Canadians. I am working closely with Finance Minister Flaherty to develop an S&T strategy that will build on commitments made in Advantage Canada to make Canada a Research and Development (R&D) and innovation leader.

I have been consulting with key stakeholders on the priorities for such a strategy. Key challenges have emerged, such as the need to:

* maximize the impacts of investments in research,

* build on our strengths and promote excellence,

* create a competitive and dynamic business environment,

* create research excellence that is more responsive to business needs, and

* develop, attract and retain the people we need in a globally competitive environment.

The S&T Strategy will help Canadians by guiding the future of government policy and decision-making in support of science and technology, and contributing to the implementation of specific measures that build upon Advantage Canada.