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Appearance before the Parliamentary committee on natural resources (RNNR)

By Canada Economic Development for Quebec Regions

About this publication

Publication author : Canada Economic Development for Quebec Regions

Publish date : July 6, 2020

Table of Contents

  1. 1. Speaking notes for Ms. Manon Brassard, Deputy Minister and President of CED
  2. 2. Intervention in forestry-dependent communities and the forestry sector
  3. 3. Backgrounder – Quebec Forestry Sector
  4. 4. Key Messages – Forest industry
  5. 5. Key Messages – Softwood Lumber
  6. 6. Economic Note – Bioproducts to the rescue of Quebec’s forestry sector
  7. 7. Past Products
  8. 8. Examples of projects – Forestry sector
  9. 9. Approved projects related to assistance to the forest industry since November 2015
  10. 10. CED in Numbers
  11. 11. CED's Accomplishments
  12. 12. Breakdown of funding provided by CED since November 4, 2015
  13. 13. Success Stories
  14. 14. Steel and Aluminum Initiative (Regional Economic Growth through Innovation – REGI)
  15. 15. Initiative for Infrastructure Development
  16. 16. Community Futures Program – Regional Development Agencies (RDAs)
  17. 17. Community Futures Program – Quebec
  18. 18. International Centre of Expertise for the Advancement of Artificial Intelligence in Montréal
  19. 19. Communities reliant on Chrysotile
  20. 20. Lac-Mégantic – Economic recovery
  21. 21. Lac-Mégantic – Rail Bypass

1. Speaking notes for Ms. Manon Brassard, Deputy Minister and President of CED

Before the Standing Committee on Natural Resources (RNNR)

Ottawa, Ontario
Wednesday, March 11

Duration: 4 minutes

Check against delivery.


Thank you Mr. Chair. And thank you Committee members.

Overview of the Quebec Forest Industry

The forest sector is a key economic driver in Quebec’s regions. It is also a wealth generator that contributes to the green economy and our country’s fight against climate change.

In 2018, the forest sector generated 6.6 billion dollars in output, accounting for 1.8% of Quebec’s GDP, and it employed 58,825 workers, accounting for 1.4% of all employment. More than 160 communities in Quebec rely on this industry.

In the past years, the forest sector has been hit hard: commercial softwood lumber disputes, the collapse of the American housing market and the significant worldwide drop on in demand in newsprint have all had negative impacts.

At every step of the way, CED was there with temporary and targeted initiatives to support economic activity in the affected areas. Those initiatives are now complete.

For example:

Between 2009 and 2011, as part of the Community Adjustment Fund, we entered into seven agreements with the Government of Quebec to provide short-term relief for the impacts of the economic downturn through silviculture projects and the restoration of bridges and culverts on multi-use roads.

We invested 119 million dollars in projects that helped create and maintain 8,000 jobs, all while responding to the transition and adjustment challenges faced by communities.  

Also, from 2010 and 2013, the Temporary Initiative for the Strengthening of Quebec’s Forest Economies (TISQFE) allowed us to support 210 diversification and growth projects with a total of 80.5 million dollars in contributions.

Lastly, between 2014 and 2018, I’d like to mention the Strategic Initiative to Combat the Spruce Budworm Outbreak in Quebec, which made it possible to implement intervention measures to control the spread of this parasite to ensure the sustainability of the industry, maintain forest potential and protect jobs.

CED Long-Term Strategy

What CED is currently doing to achieve its mandate is support the long-term economic development of businesses and regions. As such, the value-added role CED plays with the forest industry is strongly tied to support for secondary and tertiary wood processing projects. This is at the heart of our interventions.

Our strategy is based on the approach set by key industry players, which is centred on leveraging innovation, modernisation and diversification for long-term sector development.

At CED, one of our focus areas is projects that promote innovation and green technologies, particularly those in the bioeconomy sector. We believe that this is a growth area because the potential value of biomass - which is abundant in our forests - makes it possible to develop and offer, once processed, a wider range of products that have a positive impact on climate change, among other things. This has significant economic potential on the global market.

Bioeconomy and Forest Bioproducts

We have supported college centres for technology transfer (CCTT) that process biomass for commercial purposes and are very successful with their projects. These are great success stories for us.

For example, CED has supported Agrinova, a CCTT in Mashteuiatsh in Lac St-Jean that is working to revalorize forest residues through the production of biochar.

We also supported Damabois, a company specializing in the manufacturing of handling pallets that wanted to diversify its activities. Damabois now markets energy logs made from aspen bark, one of the wood by-products that the company generates during its operations. Our contribution helped the company acquire the technology needed to put the product into production.

Conclusion

Bioproduct transformation projects, such as those related to wood pellets, are still relatively few. However, CED is well positioned to support them in their initial marketing efforts on foreign markets.

As a regional economic development agency, CED's role is to support the development and diversification of enterprises and regions. To do so, CED is committed to promoting innovation to create economic prosperity. That is what we want for the future of the forestry industry.

Thank you for allowing me to speak about the important work our Agency does. I would be happy to answer your questions.

2. Intervention in forestry-dependent communities and the forestry sector

Description Date Details Budget No. of projects approved Authorized assistance Total costs Results
SICEAI
Softwood Industry and Community Economic Adjustment Initiative (SICEAI):
Generate long-term, sustainable economic benefits for regions and communities affected by the imposition of duties The initiative had two streams:
  1. Community capacity building
  2. Diversification, productivity enhancement and the creation of new economic opportunities
2003–2005 National initiative by Industry Canada, delivered by the regional development agencies (RDAs) $110M (additional) 325 $115M 4,200 jobs created and preserved
CAF–Forest

Through the Community Adjustment Fund (CAF) (total of $211.6M)
Mitigate the economic slowdown’s short-term impact by contributing to job creation and retention, while responding to the challenges of transition and community adjustment.

Ideal projects: rapid startup projects in targeted communities hard hit by the economic crisis, with populations of less than 250,000

April 2009 to March 31, 2011 Forestry work Canada–Quebec agreements
Quebec was the prime contractor, given its jurisdiction. The first six agreements involved forestry work, specifically to bring poorly regenerated areas back into production, to rehabilitate hardwood forests and to carry out intensive silvicultural work.
The seventh agreement involved the rehabilitation of river crossings on wildlife and multi-resource roads on Quebec public land.
$119M (additional – under the CAF) 7 $119M $238M The agreements provided for the creation and retention of 8,000 jobs
Temporary Initiative for the Strengthening of Quebec’s Forest Economies (TISQFE) The TISQFE has two objectives:
- Strengthen and increase economic activity in areas affected by the forestry crisis in order to create and preserve jobs
- Pay particular attention to SMEs based in affected communities with a view to enhancing their performance through innovation and improved productivity
June 2010 to March 2013 Temporary diversification and support measure for communities affected by the forestry sector crisis Delivered through our regular programs: Community Diversification and Business and Regional Growth The Initiative targeted SMEs and NPOs in 54 Quebec RCMs that rely heavily on the forest industry (logging, wood processing, etc.). Of the $100M, $15M came from the CAF – these projects are not included in the report $8M of the overall funding was set aside for operating costs, and $92M for contributions $100M (additional)
Agreements with Quebec Canada-Quebec agreements for forest work and the rehabilitation of bridges and culverts 2013 to March 31, 2014 The first agreement, valued at $9.9 million for each level of government, involved silviculture work. The second agreement, valued at $2 million for each level of government, targeted the rehabilitation of wildlife and multi-resource roads. Regular
budget
2 $11.9M $23.8M
Federal support for spruce budworm intervention initiatives CED provided ad hoc support for the implementation of an initiative to combat a new spruce budworm outbreak 2014–2015 to 2017–2018 The goal was to ensure the sustainability of the forestry sector and protect the jobs of workers who depend on the forest industry, especially in sectors where significant investments have been made in forest management and where wood species have a high commercial value. Delivered by the Société de protection des forêts contre les insectes et maladies (SOPFIM) $6M (additional)
QEDP/REGI Projects that support forestry sector businesses – primarily those involved in secondary and tertiary wood processing Ongoing

3. Backgrounder – Quebec Forestry Sector

A sector made up of three industries

According to the most recent annual data available (2018), the forestry sector accounted for:

2,271 businesses, generating production of $6.6B (1.8% of Quebec’s GDP) and 58,825 jobs (1.4% of total employment)

Profile of the Quebec forestry sector

A driver of economic growth in the regions

A new forest regime

Continued demand offsets U.S. tariffs

The market outlook for 2020 for the wood manufacturing sector remains very good

Delayed investment is hampering the sector’s competitiveness

The industry has potential sources of growth

Other information about the Quebec forest regime

The established regime led to the achievement of a number of objectives:

4. Key Messages – Forest industry

Issue/question:

What is Canada Economic Development for Quebec Regions doing to help the forest industry and forestry-dependent communities in Quebec?

Suggested response:

Context:

Economic importance

Industry – Recent developments

5. Key Messages – Softwood Lumber

Response – Softwood lumber dispute with the U.S.

Response – Why was the softwood lumber conflict not addressed during the Canada-United States-Mexico Agreement (CUSMA) negotiations?

6. Economic Note – Bioproducts to the rescue of Quebec’s forestry sector

The forest industry has been going through a period of upheaval for some time now. The industry’s transformation involves market diversification and new product development. There is a lot of interest in bioproducts, but this is far from a done deal.

A sector in transformation

The last two decades have been trying times for the Quebec forestry sector. The industry has been facing challenges, both cyclical and structural, that it has never experienced before (e.g., trade disputes with the United States over softwood lumber; the collapse of the US housing market during the 2009 financial crisis; and a drop in demand for paper with the emergence of digital media and increased international competition). As a result, many plants have been forced to shut down. In addition, a new forestry regime was put in place in 2013, which in turn led to major changes in the management of Quebec’s forests (redefinition of forest use; reduction of logging volumes on public land; timber auctions; etc.).

The forestry sector in a nutshell (2018)

  • 56,700 jobs (1.5% of all jobs)
  • 2,271 companies
  • $5.9B in production output (1.6% of Quebec’s GDP)
  • $10.5B in exports
  • $404M in capital expenditures
  • 166 dependent communities

Source: Statistics Canada, Tables 34-10-0035-01 / 12-10-0098-01 / 36-10-0402-01 and 14-10-0202-01

To ensure the industry’s recovery, all sectors of the forest industry, whether it be wood harvesting, forest management, wood product manufacturing or pulp and paper, have had to redefine themselves and strike a new balance. For the time being, the changes undertaken point to better times ahead; however, the industry must continue its efforts to diversify and find new markets if it is to succeed in its transformation.

Part of the bioeconomy, bioproducts provide a great development opportunity for the Quebec forest sector. Wood pellets, which are in high demand worldwide, and the potential to convert cellulose and lignin, two organic compounds in wood, into a variety of value-added products, could help spur new activities. Enhancing the properties of fibre in order to multiply its uses in other industries (electricity, fuels, plastics, solvents, lubricants, food additives, packaging, etc.) provides paper mills and wood producers with other outlets for new products. The industry’s transition to the bioeconomy requires major investments and involves a high level of risk in terms of profitability. A good example of this is the conversion and revival by Fortress, in 2011, of the former Fraser Papers kraft pulp mill in Thurso in the Outaouais region (shut down in June 2009), for the production of cellulose pulp. The project cost more than $300 million and, in October 2019, the company had to temporarily shut down its facilities due to the drop in the price of cellulose.

The bioeconomy

The bioeconomy refers to the various activities associated with the use of biomass from renewable and sustainable sources, such as trees, agricultural products and organic residues, resulting from the harvesting or processing of timber. It consists of biochemicals (e.g., cellulose ester and cellulose acetate, including forest cellulose), biofuels (e.g., cellulosic ethanol – forestry biomass), bioenergy (electrical or thermal energy from forest biomass), biofertilizers (biochar from the pyrolysis of residual forest biomass), biomaterials (e.g., lignin for adhesives/bioplastics) and biofoods (e.g., cellulosic sugars / beverages).

This is a growing field that allows for the provision of a wider range of consumer and industrial products. New products may include food additives, textiles, building materials, automotive parts, bioplastics, biochemicals and fuel for vehicles and aircraft. The bioeconomy has many environmental benefits; notably, it can:

Some figures:

Bioproducts

According to Statistics Canada’s Bioproducts Production and Development Survey 2015, there were 190 bioproduct establishments in Canada that sourced their products from agriculture or forestry biomass. These establishments generated $4.3 billion in revenue, almost two-thirds of which came from biofuel, up considerably from 2009 ($1.3 billion). Ontario and Quebec are by far the leading bioproduct players in Canada, generating 44.4% and 25.5% of the country’s total revenue, respectively.

Bioenergy production from Quebec forests is on the rise. In its Portrait statistique 2018 sur les ressources et industries forestières du Québec,Footnote 1 Quebec’s Ministère des Forêts, de la Faune et des Parcs revealed that in 2018, approximately 417 metric tons of anhydrous energy bioproducts (energy pellets and chips and eco-logs) were produced, up 26% from 2009. In terms of energy production, the energy forest is estimated to have generated 7.5 gigawatt hours in 2018, eight times the amount generated in 2009.

Wood pellets

Canada is the world’s second largest exporter of wood pellets, behind the United States. In 2017, the value of Canada’s wood pellet exports stood at almost $400 million, or 11.9% of total global exports. Within Canada itself, British Columbia is by far the largest exporter (78% of the total), followed by Quebec (13%). Wood pellets from Quebec are mainly exported to the U.S, the U.K. and Italy. However, in the realm of bioproducts, wood pellets are among the least innovative and lowest value-added bioproducts when compared with chemical bioproducts generated from cellulose pulp (e.g., bioethylene, biopropylene, biobutylenes and biobenzenes).

Innovation ecosystem

The forest bioeconomy in Quebec can rely on a well-developed public research and R&D capacity innovation ecosystem that includes research organizations such as CanmetENERGY in Varennes; FPInnovations; the Consortium de recherche et innovations en bioprocédés industriels au Québec (CRIBIQ); Agrinova; 12E3 – Innovations Institute in Ecomaterials, Ecoproducts, and Ecoenergies (UQTR); BioChar Boréalis; Laurentian Forestry Centre; the Centre de recherche en pâtes et papiers (UQTR); the Institut de recherche sur les forêts (UQAT); and the Canada Research Chair in Wood Development, Characterization and Processing, to name but a few. In terms of mills, in 2019, 12 of the 31 Quebec establishments that specialize in the production of cellulose pulp were actively involved in bioproduct development.Footnote 2

Issues, trends and opportunities

Innovative bioproducts – key to export market diversification

According to Natural Resources Canada, the global market potential for green chemicals stood at $63 billion in 2015 (5% annual growth rate), and $35 billion for wood fibre composites.Footnote 3 More recently, the Smart Prosperity Institute released a report in December 2019 entitled “Eight Reasons for Canada to Build a Clean Economy Now”.Footnote 4 The reasons cited by the organization in favour of a shift to a green economy in Canada include opportunities in global markets, environmental performance as a competitive advantage, cost reduction, Canada’s strong position in the forest sector, and improved health and quality of life. The organization estimates that the global market potential for bioproducts will exceed $500 billion in the coming years. Mexico alone represents a potential market for bioproducts of almost $8 billion, mainly for its agricultural sector. Opportunities also exist in a number of South American countries, notably Chile. These markets offer good opportunities for the commercialization of biochar, a carbon-rich material made from sawmill waste such as wood chips and other wood residues.

In Quebec, BioChar Boréalis is also aiming to create and develop a network of companies that will form a continuum for the production and marketing of biochars. A number of existing sawmills could be retrofitted to make products such as biochar, which has many potential applications, including air filters, fertilization and decontamination.

The market outlook for biochar is excellent. According to ResearchAndMarkets.com,Footnote 5 the biochar market is forecast to grow from $436 million in 2018 to $871 million by 2024. The prospects are even more promising if you consider that the market is not yet dominated by a major manufacturer. The biochar industry is divided up among a number of small companies, most of which are new businesses. The five largest manufacturers currently account for only 38% of the global market. The main companies in the field (all foreign) are: Cool Planet, Pacific Biochar, Vega Biofuels, Terra Char, Genesis Industries, Element C6, Carbon Gold Ltd, Biochar Solutions and Phoenix Energy.

The low price of competing products – an irritant for the bioproducts industry

The primary challenge remains the competitiveness of bioproducts, primarily as concerns the price of the products they are trying to substitute in various markets. This is particularly true in the case of bioplastics, given the current drop in the price of virgin plastic. Oil companies, faced with downward pressure on demand for fuel as vehicles become increasingly fuel-efficient, are producing more and more virgin plastic resin, driving down prices and making recycled plastic less competitive.Footnote 6 François Bédard of Soucy Techno, a company that produces concentrates used in the manufacture of drainage pipes from recycled resin, is calling for government intervention in the form of regulations: [Translation] “The government needs to step in and force people to use recycled resin in their products, otherwise customers will naturally go for the cheapest option.Footnote 7 The idea of adjusting the regulatory framework to support the commercialization of bioproducts is one of the main recommendations of Canada’s Bioeconomy Strategy, unveiled in 2019 by Bioindustrial Innovation Canada in collaboration with BIOTECanada, FPInnovations and the Forest Products Association of Canada.Footnote 8

Lack of anchor firms in the bioeconomy ecosystem – a significant gap

The need to improve the attraction and retention of anchor firms, i.e., large companies that can play a strategic role in ecosystems, and support for these firms, is one of the priority items identified by the Economic Strategy Tables and the Canada’s Superclusters initiative. Anchor firms assist the smallest—often local—firms in an ecosystem with their integration into global value chains; they also help them grow, facilitate the commercialization of their innovations, and diversify their presence in global markets. Greenfield Global is an example of a Canadian company that has become a global anchor in the bioeconomy field (ethanol refinery in Varennes, Quebec). In the forestry sector, Domtar and Resolute Forest Products are also currently playing an anchoring role in forest bioproduct development in Quebec.

In the absence of domestic anchor firms, attracting foreign firms to local ecosystems can be beneficial.Footnote 9 Since the chemical industry can provide a number of market outlets for bioproducts from the forest sector, investment in biochemical related processing activities by large global companies such as Dow could generate benefits throughout the continuum in Quebec. Dow was a key player in the development of the bioproducts industry in Brazil, which now leads the global biochemical industry. More recently, Alberta was able to attract significant investment in the province from this petrochemical sector multinational. In response to difficulties in the oil industry, Alberta is currently stepping up its efforts to develop petrochemicals,Footnote 10 which are in competition with biochemicals.

The bioeconomy ecosystem – business capacity needs

The vitality of innovation ecosystems is a key factor in attracting investment from anchor firms. Although the development of the bioeconomy in Quebec can currently count on the presence of numerous research centres, there is still little in the way of support for business capabilities in this field. Less than 10% of the active incubators and accelerators in Canada specialize in supporting bioeconomy companies.Footnote 11.

Productivity gains – a resilience factor in the face of competition

Quebec’s pulp and paper industry and its forest bioeconomy development activities are facing growing foreign competition. In addition, the oil industry is stepping up its efforts to boost the petrochemical industry and its products—the main competitor of the biochemical and bioproducts industry. In response to this competition, the industry needs to improve productivity across the board. Cellulose pulp production facilities can achieve this by adopting the 4.0 model. Productivity gains in traditional refining activities will lead to better support for innovative activities within establishments involved in the shift to the bioeconomy.

Public contracts – an effective lever for scaling up bioproducts

The use of public procurement contracts is a proven means of boosting the scale-up and commercialization of innovative products. In the U.S., the government fosters the development and commercialization of bioproducts through the BioPreferred program,Footnote 12 administered by the United States Department of Agriculture on a government-wide basis. This program requires government departments and agencies to purchase bioproducts for certain types of products. In Canada, Bioindustrial Innovation Canada, BIOTECanada, FPInnovations and the Forest Products Association of Canada have recommended that a similar program be put in place to encourage the development, adoption and scale-up of bioproducts in Canada.Footnote 13.

Demand for, and the scale-up and commercialization of, bioproducts can be boosted, not only by means of government contracts, but also through regulation. According to the Association Québécoise de la production d'énergie renouvelable, the creation of a local biofuel industry, through a substantial increase in the minimum volume of renewable fuel in gasoline sold in Quebec, would allow Quebec to reduce not only its oil imports from the U.S. but also its greenhouse gas emissions. It would also create opportunities for the Quebec forest industry’s transition to the bioeconomy (production of biofuels from forest biomass)Footnote 14.

Considerations for CED

Additional reading

For more information on strategies for the development of the bioeconomy in Canada: http://www.biotech.ca/wp-content/uploads/2016/03/National_Bioeconomy_Strategy_EN-compressed.pdf.

https://www150.statcan.gc.ca/n1/pub/18-001-x/18-001-x2017001-eng.htm

Prepared by: Jean-Pierre Racine, Senior Analyst, and Jean-Pierre Lussier, Head, Economic Analysis Economic Intelligence Directorate, February 14, 2020

7. Past Products

Spruce budworm outbreak CED

Issue/question:

What is Canada Economic Development for Quebec Regions (CED) doing to address the spruce budworm outbreak in Quebec?

Suggested response:

Context:

Temporary initiative for the strengthening of Quebec's forest economies (TISQFE)

Issue/question:

How has CED supported communities and businesses in regions that are heavily reliant on Quebec’s forest industry and which were affected by the 2009 forestry crisis?

Suggested response:

Context:

Community Adjustment Fund (CAF) – Forestry measures

Issue/question:

Does the Community Adjustment Fund (CAF)—put in place to counter the effects of the 2009 global recession—include forestry measures?

Suggested response:

Context:

8. Examples of projects – Forestry sector

Saguenay–Lac-St-Jean – Agrinova – #400051978 – January 9, 2017 – CCTT – QEDP

Non-repayable assistance: $5.9M / Total project costs: $7.9M

An initiative of the agri-food community and based on a regional partnership, Agrinova is a college centre for technology transfer (CCTT) created in 1996 by the Collège d'Alma. Its mandate is to assist agri-food–related businesses in their innovation process.

The project stems from the activities of the Filière forestière des Premières Nations du Québec (FFPNQ) which, between 2012 and 2015, carried out various work relating to the production of biochar and its derivative bioproducts. In 2015, in co-operation with the Indigenous community of Mashteuiatsh and the Domaine-du-Roy RCM, the FFPNQ created BioChar Borealis, an NPO.

CED authorized a non-repayable contribution of $5.9M for Agrinova to set up the Centre de recherche en conversion thermochimique, which will act as an accelerator for businesses interested in the commercial opportunities presented by the production of biochar and derivative bioproducts. The centre’s mission will be to accelerate the growth of SMEs by providing them with privileged access to specialized equipment for the production of biochar and derived bioproducts, a non-traditional option for the recovery of harvestable forest wood waste and by-products of the sawmill industry. Total project costs amounted to $7.9M and primarily involved leasehold improvements and the acquisition of specialized equipment.

In addition to the positive impact on the environment, the project is expected to generate significant economic benefits in the community over the medium and long terms. The development of products derived from the pyrolytic process and using wood chips will provide a new avenue of diversification for forest communities. The project will create five new jobs.

Several regions (ATNQ, BSL, OUT) – Uniboard Canada Inc. - #400053809 – July 25, 2018 – QEDP

Repayable assistance: $1M / Total project costs: $18M

Uniboard Canada Inc. is a Quebec family business acquired from foreign interests in 2012. The company has three panel manufacturing plants (Sayabec, Val-d'Or and Mont-Laurier), and a resin manufacturing plant (Val-d'Or). Its head office is in Laval.

A North American leader in the manufacture of engineered wood panel products, Uniboard employs more than 800 people in Quebec and has been experiencing steady growth since 2012, with a 43% increase in revenues from 2012 to 2017. Its growth strategy is based on increased penetration of export markets, particularly in the U.S. The company exports over 75% of its products, either directly or through its clients.

CED authorized a repayable contribution of $1M for a project valued at $18M targeting productivity at the Uniboard plant in Mont-Laurier. The project involves integrating a new and innovative drying process that will make it possible to recover energy currently dissipated in the atmosphere, while improving environmental performance (CO2 sequestration and reduction of particles in the air).

It is part of a five-year investment plan totalling more than $350 million by 2022, the goal of which is to grow the company by at least 5% over the coming years, thus allowing it to be recognized as Canada’s leading global company in the engineered wood sector.

NB: CED recently approved two projects that were also part of this five-year plan: one in the Abitibi-Témiscamingue region ($5M contribution, out of a total cost of $38.5M) and the other in the Bas-Saint-Laurent region ($3M contribution out of a total cost of $15M).

Outaouais – DV Hardwoods Inc. – #400057203 – March 2, 2020 – REGI

Repayable assistance: $185K / Total project costs: $458K

Founded in 1992, DV Hardwoods specializes in the transformation and distribution of hardwood that has been sorted and comes in various dimensions. The company has 38 employees, and its annual turnover has risen considerably since 2017. It is present in more than 15 countries, where it generated 63% of its sales in 2019. Recognized in Canada and internationally for the quality of its products, DV Hardwoods has built up a clientele made up of tertiary wood processing manufacturers (e.g., furniture, flooring and kitchen cabinets) and distributors.

CED authorized a $185K repayable contribution out of a total cost of $458K to allow DV Hardwoods to enhance its productivity and implement a marketing strategy. The main activities include the integration of a new automatic drying control management system, the optimization of production operations, the acquisition of handling equipment, and various marketing activities.

The company has planned its growth by providing for the hiring of three foreign workers to offset the labour shortage that affects not only DV Hardwoods, but all companies in the forest sector. Furthermore, DV Hardwoods has demonstrated an ongoing interest in human resources, which earned it the Coup de cœur award at the Créateurs d'emplois du Québec 2019 gala.

Mauricie – Industries John Lewis – #400052556 – June 13, 2017 – QEDP

Repayable assistance: $569K / Total project costs: $1.7M

Industries John Lewis Ltd. (John Lewis) is a manufacturing company involved in secondary and tertiary wood processing; its plant is located in La Tuque. The company is the North American leader in the production of wooden sticks for the agri-food processing industry (ice cream / popsicle sticks, coffee stirrers, pogo sticks and skewers). It produces overs 28 million sticks a day, with U.S. exports accounting for 85% of its sales; a smaller proportion is destined for Europe and a handful of other countries. John Lewis has 154 full-time employees and is a major employer in La Tuque, a single-industry town that is dependent on the forest industry.

The Agency authorized a $569K repayable contribution to support the growth of this company, which produces a valueadded wood product for the food industry. The project, valued at over $1.7M, involves acquiring a third finishing line and upgrading existing first-line facilities. It will result in the creation of six full-time jobs and the retention of eight others.

Mauricie – Innofibre # 400055190 – May 2, 2019 – QEDP

Non-repayable assistance: $750K / Total project costs: $1M

The Centre d'innovation des produits cellulosiques (Innofibre), is a college centre for technology transfer (CCTT) affiliated with the Cégep de Trois-Rivières. It works out of the offices of the UQTR’s former Centre Intégré en Pâtes et Papiers (CIPP), which was dissolved in 2017. In business for 25 years, Innofibre has 38 employees. Its mission is to contribute to the technological positioning and sustainable development of the paper and bio-refinery industry in Quebec by supporting innovation and the diversification of biomass products, and by adapting paper technologies. Innofibre targets forest and paper industry companies, and biomass sector companies in particular.

The Agency’s $750K non-repayable contribution will serve to boost innovative and technology transfer capacity in order to support the businesses and organizations that Innofibre serves, specifically through the development of clean technologies associated with the bio-based product sector. The project, which is valued at over $1M, involves the acquisition of equipment to be used for the development of renewable materials, new bioactive products and an advanced paper de-inking process, as well as for the chemical modification of fibres. This project will help position the Mauricie region as a leader in the development of biobased products and materials.

9. Approved projects related to assistance to the forest industry since November 2015

The Agency’s $750K non-repayable contribution will serve to boost innovative and technology transfer capacity in order to support the businesses and organizations that Innofibre serves, specifically through the development of clean technologies associated with the bio-based product sector. The project, which is valued at over $1M, involves the acquisition of equipment to be used for the development of renewable materials, new bioactive products and an advanced paper de-inking process, as well as for the chemical modification of fibres. This project will help position the Mauricie region as a leader in the development of biobased products and materials.

Project Number Client's Name Program Short Description of Project Administrative Region  Business Office Authorized Aid Project Cost Date status 600 - agreement accepted by client
400050633 Association forestière de l'Abitibi-Témiscamingue inc. QEDP Network and business contacts : The project aims the organization and animate a conference on the new reality of the forest industry, to be held in Val-d'Or in November. Abitibi-Témiscamingue Abitibi/Témis./Nord-du-Québec $20,115 $45,400 21-10-2016
400050726 Téléforest inc. REGI Commercialization strategy: The project is aimed at the commercial development of a company specializing in the manufacture of forestry equipment. Québec Québec-Chaudière-Appalaches $37,500 $75,000 12-01-2017
400051772 Les laboratoires Bio ForeXtra inc. REGI Commercialization strategy: The project aims to develop sales in Europe and the United States of a company specializing in the manufacture of active ingredients from tree bark (valorization of forest biomass).  Chaudière-Appalaches Québec-Chaudière-Appalaches $150,000 $310,000 19-01-2017
400055248 Bureau de promotion des produits du bois du Québec (BPPBQ) REGI Operating costs: The project aims to support Québec Wood Export Bureau's operations in promoting Quebec's value-added wood products on the North American export market and supporting SMEs of this industry in their export efforts in North America for 24 months. Québec DII - Livraison $1,000,000 $7,260,000 24-04-2019
400051978 Agrinova REGI Acquisition of equipment : The project involves setting up a research and technology transfer centre for thermochemical conversion in the Saguenay-Lac-Saint-Jean region.  Saguenay-Lac-Saint-Jean Saguenay - Lac Saint-Jean $5,900,000 $7,910,875 09-01-2017
400052433 Les Bois Francs D.V. inc. REGI Commercialization strategy and adoption of new technologies : The project aims to support the growth of this wood processing company through the implementation of an international marketing strategy and the adoption of new technologies.  Outaouais Outaouais $257,800 $759,600 31-05-2017
400052835 Granules L.G. inc. REGI Acquisition of equipment : The project aims to ensure the growth of a company specializing in the processing of forest biomass. Saguenay-Lac-Saint-Jean Saguenay - Lac Saint-Jean $400,000 $2,221,970 19-01-2018
400053150 Granule 777 inc. REGI Acquisition of equipment: The project aims to ensure the start-up of a high-efficiency wood pellet manufacturing plant. Nord-du-Québec Abitibi/Témis./Nord-du-Québec $5,000,000 $70,000,000 13-07-2018
400053470 Équipements Cardinal inc. REGI Acquisition of equipment: The project aims to ensure the expansion and growth of a company that manufactures and exports equipment of various sizes for sawmills and mining. Abitibi-Témiscamingue Abitibi/Témis./Nord-du-Québec $166,160 $332,320 02-05-2018
400053900 Les Abatteurs Jacques Élément inc. REGI Acquisition of equipment: The project aims to increase the production capacity and improve the productivity of the company that specializes in the design and manufacture of specialized equipment in the forestry sector. Abitibi-Témiscamingue Abitibi/Témis./Nord-du-Québec $732,644 $1,865,288 04-03-2019
400054309 Pascal Capital (2018) inc. REGI Acquisition of equipment and construction work: The project aims to increase the productivity and assembly capacity of this company. Estrie Cantons de l'Est $500,000 $1,455,000 08-11-2018
400057203 Les Bois Francs D.V. inc. REGI Acquisition of equipment and improvement of facilities : The project aims to improve the productivity of Les Bois Francs D.V. inc., a company specializing in the processing of hardwood in the form of sorted and dimensioned lumber.  Outaouais Outaouais $184,900 $458,300 02-03-2020
400055491 Technologies Boralife inc. REGI Acquisition of equipment: The project aims to optimize the production capacity of a company that has developed and will commercialize a new wood treatment technique based on sodium borate. Montérégie Centre-du-Québec $175,000 $1,832,698 04-09-2019
400052992 Industries P.W.I. inc. REGI Acquisition of equipment : The project involves increasing the production capacity of a company specializing in the manufacture of wood-residue products. Montérégie Centre-du-Québec $400,000 $3,565,000 18-09-2017
400049577 Produits Forestiers Arbec QEDP Acquisition and installation of equipment for a new wood panel finishing line. Mauricie Mauricie $1,200,000 $5,000,000 19-01-2016
400050055 Bois Francs Myrador QEDP The project aims to improve commercialization. Mauricie Mauricie $68,715 $219,580 24-03-2016
400051067 Bois Francs Lanaudière QEDP The aim of the project is to improve productivity and increase production capacity. Lanaudière Mauricie $182,500 $440,000 02-11-2016
400052092 Xylocarbone inc QEDP The project involves the start-up of Xylo-Carbone Inc. Mauricie Mauricie $1,200,000 $7,590,000 09-05-2017
400052556 Industries John Lewis QEDP Acquisition of a production finishing line. Mauricie Mauricie $569,250 $1,700,465 13-06-2017
400052578 Panneaux Maski inc QEDP The aim of the project is to improve productivity, reduce costs and increase production capacity by modernising and automating the main production line for solid wood panels. Mauricie Mauricie $907,200 $3,772,500 18-05-2017
400053306 Matériaux spécialisés Louiseville QEDP The project consists of modernizing the manufacturing process through the acquisition of new digital equipment. Mauricie Mauricie $387,480 $1,261,600 02-02-2018
400055125 La Granaudière REGI Acquisition of equipment: The project aims to start up a high-efficiency wood pellet manufacturing plant. Lanaudière Mauricie $1,500,000 $52,283,695 13-08-2019
400053281 Uniboard Canada inc. REGI Acquisition of equipment : The project is designed to ensure the expansion and growth of a company that manufactures and exports engineered wood. Abitibi-Témiscamingue Abitibi/Témis./Nord-du-Québec $5,000,000 $38,500,000 08-01-2018
400052491 CIMDAT REGI Acquisition of equipment : The project is aimed at automating production and expanding the company, which specializes in high-precision cutting. Abitibi-Témiscamingue Abitibi/Témis./Nord-du-Québec $278,748 $676,926 22-09-2017
400053891 CIMDAT REGI Acquisition of equipment: The project aims to improve productivity and expand a manufacturing company specializing in high-precision cutting of large engineering panels. Abitibi-Témiscamingue Abitibi/Témis./Nord-du-Québec $2,125,000 $703,475 02-10-2018
400052969 LVL Global REGI Acquisition of equipment : The project is designed to ensure the expansion and growth of a company that manufactures and exports engineered wood. Abitibi-Témiscamingue Abitibi/Témis./Nord-du-Québec $4,000,000 $1,000,000 15-03-2018
400053809 Uniboard Canada inc. REGI Acquisition of equipment: The project aims to improve the productivity and growth of a company Laurentides Outaouais $1,000,000 $18,000,000 25-07-2018
400050652 Insulfloor inc. REGI Equipment acquisition and marketing strategy: The project aims to increase the production capacity and sales outside Québec and in the United States of a company specializing in the manufacture of insulated subfloors. Outaouais Outaouais $62,500 $231,565 07-10-2016
400052729 Vizusolution inc. REGI Acquisition of equipment and expansion of facilities: The project involves the growth and productivity improvement of a manufacturer of melamine panels and components.  Laurentides Outaouais $650,000 $2,700,000 25-08-2017
400053856 Luxor Collection inc. REGI Acquisition of equipment: The project aims to digitize and automate a company that specializes in the manufacture of high-end kitchen cabinets. Laurentides Outaouais $1,500,000 $3,000,000 13-07-2018
$35,555,512 $235,171,257

10. CED in Numbers

Between Novembre 4, 2015 and March 3, 2020

Demographic Data

Questions/Subject Answer
Number of employees at CED

334 full-time employees planned for 2019-20.

119 FTE in BO and IID.

6 FTE: projected increase compared to 2018-19. Vary according to operational needs arising from different government priorities and initiatives.

Financial Data

Questions/Subject Answer
CED’s Budget $321.4 million Budget 2019-2020 (Main Estimates, Supplementary B).

$278.8M: Grants and Contributions

$42.6M: Operating
(Variation of $1.7 million with 2018-2019)

Supplementary Estimates B for 2019-2020

CED received the amounts announced in the Budget for:

  • Federal Employment and Tourism Strategy, national initiative: + $1.1M 
  • Women's Entrepreneurship Fund: + $1.7M
  • Transfer to World Affairs Canada for the NIPP: - $0.2M
  • Transfer from ISDEC for artificial intelligence: + $0.5M
  • Transfer to Health Canada for the Economic Forum of the Americas: +$0.035M
  • Transfer from NRC for the Mont-Mégantic Observatory: + $0.5M
  • Transfer from Transport Canada for the Lac-Mégantic bypass: + $0.45M
  • Transfer to World Affairs Canada for the Convention on Biological Diversity: - $0.18M.
Expiry rate of grant and contribution funds at CED For the years 2017-18 and 2018-19, 0.35% of the grants and contributions amounts have lapsed. That is $1.8M out of $520.5M.
Expiry rate for operating expenditures There was no lapse in operating funds for the years 2017-18 and 2018-19.

Source of data :

Context for the numbers: The Public Accounts of Canada for the years 2017-2018 and 2018-2019 were used to provide information on expiry rates. The figures provided are those of the Main Estimates and Supplementary Estimates B for 2019-2020 as the Main Estimates for 2020-2021 have not yet been approved. As actual spending for 2019-2020 has not yet been tabled, we are reporting planned spending for the year (Main and Supplementary Estimates - both public sources). The most recently published actuals are for 2018-2019.

Program Data

The tables below exclude unsigned agreements (status 501) and cancelled agreements (status 700) - Prepared by CEBI on February 25, 2020, based on data as of February 20, 2020.

Questions/Subject Answer
How much does CED invest in Quebec? $1.28 billion (nearly) authorized in grants and contributions.

= 2 735 approved projects.

  • $558M in businesses (44%).
  • $720M in NPOs (56%).
  • 6.9 billion in investments (total project costs)
  • 22,815 Jobs created/maintained
Leverage effect

Ave.: $4.36

Regional innovation: $5.92
Vitality of communities: $3.08
Targeted or temporary support: $1,85

Impact of CED interventions

Growth:

  • supported SMEs increased their revenues by 42% between the beginning and the end of their project.
  • CFP :
    • Sales growth rate for CFP clients is 2.5 percentage points higher than the rate for comparable businesses that did not receive a CDP.

Survival rate :

  • Business development:
    • 5 years after financing: 88% of CED-supported businesses are still alive, compared with 84% of the companies in the comparison group.
    • 10 years after financing: 69% of CED-supported businesses are still alive, compared with 61% of the companies in the comparison group.
How does CED help RCMs with low growth potential? CED has approved 1 316 projects in the MRCs with low growth potential. for approved funding of $ 536 M, representing 42% of total authorized funding.
Support in Quebec's 104 RCMs Since November 4, 2015, CED has approved projects in all 104 RCMs in Quebec.
Indigenous CED approved 104 projects totalling more than $40M in order to promote Indigenous economic development. These projects generated total investments reaching over $163M.
Women (including the Women Entrepreneurship Strategy)

CED approved 188 projects for women entrepreneurs and NPOs that support women-owned businesses.

These projects represent more than $62M in authorized assistance with total investments reaching over $218M.

Clean Technologies 336 projects in clean technology, totalling more than $189 M in authorized assistance resulting in total investments reaching over $1.7 billion.
Details by pillar of intervention
Regional Innovation
Business Development, Regional Productivity and Innovation Ecosystems 1,491 approved projects, for an authorized assistance totaling more than $654M, resulting in total investments of more than $4.5 billions.
Vitality of communities
Local development and promotion of assets and regions 380 approved projects, for an authorized assistance totaling more than $180M, resulting in total investments of more than $1.5 billion.
Economic Development Initiative (EDI) - Official Languages 35 projects approved for assistance $8.7M generating investments of more than $38M.
Community Futures Program (CFP)

In 2019-2020, 69 projects were approved representing $167M authorized funding over 5 years.

Furthermore, since November 2015, 150 projects were approved under CFP for approximately $255M.

Targeted or temporary support
Women Entrepreneurship Strategy (WES) Since the launch of this initiative in 2018, 70 projects have been approved for total assistance of more than $20 million, generating total investments of more than $31 million. These projects will create and maintain 255 jobs
Support to the forest industry

$160,5M in Canada Quebec agreement on the forest for forest communities Between January 1st, 2006 and March 31st, 2016

$6M for the prevention of the spread of the spruce budworm between April 1st, 2014 and March 31st, 2018

In addition, since November 4, 2015, through its regular programs, CED has approved 12 projects to support the growth of companies in this sector, for authorized assistance of more than $14M, generating total investments of more than $92M.

Canadian Initiative for the Economic Diversification of Communities Reliant on Chrysotile Since the launch of this $50M initiative in June 2013, 65 projects have been approved, including 39 projects since November 2015. These 65 projects have generated more than $147 million in investments and allowed to create or maintain 481 jobs.
Economic Recovery for Lac-Mégantic

Since the initiative was launched in 2013, 30 projects have been approved for total assistance of more than $26M, generating total investments of more than $74M. These projects will create or maintain 133 jobs.

Out of these 30 projects, 9 projects were approved since November 2015.

Steel and Aluminum Initiative

Thanks to a new $26.2 M envelope dedicated to the Steel and Aluminum Initiative, CED approved 38 projects. The total budget was used to make investments of $71.8 M and maintain or create 387 jobs.

Moreover, since November 4, 2015, through its regular programs, CED has approved 28 projects in support of the growth of enterprises in this sector, for authorized assistance of approximately $14M, generating total investments of more than $78M.

Canadian Experiences Fund Since the launch of this initiative in 2019, 39 projects have been approved for total assistance of more than $11M, generating total investments of more than $43M. These projects will create and maintain 1,168 jobs.
Initiative for Infrastructure Development On August 27, 2019, CED launched a targeted, one-time initiative to support the vitality and attractiveness of Quebec communities. Since then, CED has approved 9 projects in support of regional economic infrastructure, for authorized assistance of more than $18.8M, generating total investment of more than $77.8M.
Canada 150 Community Infrastructure Program (CIP-150) CED approved 475 projects under this initiative with funding of more than 64M$ since November 2015. This initiative ended on March 31, 2018.
Tableau sommaire par programme depuis le 4 novembre 2015
Pilier Programme Nombre de projets Aide autorisée Coûts totaux Emplois créés/maintenus
Innovation régionale CERI 1491 654 233 731 $ 4 530 520 287 $ 17853
Vitalité des collectivités PDEQ 380 180 482 315 $ 1 520 229 473 $ 1916
IDE 35 8 711 366 $ 38 150 052 $ 89
PDC 150 254 663 387 $ 254 663 387 $ 358
Soutien ponctuel et ciblé DECTIC 39 31 696 844 $ 103 403 866 $ 403
IRELM 9 5 960 274 $ 18 228 957 $ 7
SFE 70 20 346 600 $ 31 402 203 $ 255
IAA 38 27 645 846 $ 71 561 328 $ 387
FEC 39 11 085 608 $ 43 434 439 $ 1168
IDI 9 18 857 164 $ 77 789 695 $ 115
PIC150 475 64 568 964 $ 166 801 416 $ 264
Total général 2735 1 278 252 099 $ 6 856 185 103 $ 22815

11. CED's Accomplishments

National initiatives

Regional initiatives

Incubator

12. Breakdown of funding provided by CED since November 4, 2015

Recipient Definition Province Data Success story - Example
Non Profit Organization (Third Party) Non Profit Organization (Third Party) Quebec 1 219 projects
Funding :
$ 720 379 636
Investments :
2,7 billions
Jobs : 3 721
The Product Development Institute's (PDI) mission is to inspire and support Quebec businesses to innovate and develop new and relevant products and services that contribute to economic, social and environmental prosperity. In April 2019, CED renewed its funding to the PDI of $1.1 million in non-repayable contribution over three years to allow it to continue supporting business innovation, performance and competitiveness.
Business Direct to businesses Quebec 1 516 projects
Funding :
$ 557 872 463
Investments :
4,2 billions
Jobs :
19 094
Machinex Industries Inc. is a world leader in the design and production of recycling and waste management equipment. In 2018, CED authorized a repayable contribution of just over $1 million for a project evaluated at over $5 million involving the development of a series of robotic applications incorporating artificial intelligence recognition systems. The increase in the company's innovation potential is expected to lead to sales growth of 27% by 2020, and to continue the development of international markets.
Women Entrepreneurs Women Entrepreneurship Strategy - Pilot fund only Quebec 63 projects
Funding :
$ 6 058 204
Investments : $14 M
Jobs : 228
Supported under the WES through a $100,000 non-repayable contribution for the acquisition of production equipment, Staca Inc. is a Jonquière company that specializes in the recovery and treatment of industrial residues from aluminum smelters, and specifically the recovery of the electrolytic bath. The company, which is managed by three women, provides a service that is unique in Canada and is the result of continuous R&D activities. As a result of Staca’s expertise, only 0.12% of the materials treated annually are sent to landfill.
Clean tech All clean tech projects (business and Non Profit Organizations) Quebec 336 projects
Funding:
$ 189 418 154
Investments :
1,7 billion
Jobs : 290
In 2019, CED authorized a $250,000 repayable contribution for Quebec City–based company IngeniArts Technologies Inc., which specializes in energy storage for electric vehicles. CED’s funding will allow IngeniArts to improve its production and commercialization capabilities for the electrokinetic battery that it has developed.
Inclusive GrowthFootnote * WomenFootnote * Quebec 188 projects
Funding : 62 199 767 $
Investments : $218 M
Jobs : 943
Galenova Inc. is a Saint-Hyacinthe-based company, headed by a woman, specializing in the design, preparation and packaging of chemical products, supplies and pharmaceutical equipment for the healthcare field. CED is supporting Galenova's growth through a repayable contribution of $1 million, granted in 2019, aimed in particular at automating production processes. The company's expansion project, totalling $8 million, includes the construction of a new plant and the acquisition of state-of-the-art equipment. These investments will enable Galenova to continue its growth, particularly on U.S. markets, leading to the creation of several quality jobs in the central Quebec region.
Indigenous economic development Quebec 104 projects
Funding :
$ 40 240 243
Investments : $163,4 M
Jobs : 84
In 2018, CED authorized a repayable contribution of $262,120 for the startup of Innuberge, a three-star accommodation facility that plans to offer ecotourism activities in the community of Unamen Shipu on the Lower North Shore. The project involves the acquisition and installation of high-end prefabricated cottages and the construction of a multi-purpose pavilion.

13. Success Stories

Issue / Question

 

What are some examples of noteworthy projects that Canada Economic Development for Quebec Regions (CED) has supported in recent years?

Suggested response

14. Steel and Aluminum Initiative (Regional Economic Growth through Innovation – REGI)

Issue/Question:

What is Canada Economic Development for Quebec Regions (CED) doing to support the steel and aluminum industry?

Suggested answer: CED

Background:

15. Initiative for Infrastructure Development

CED

Issue / Question

What is the Initiative for infrastructure development from Canada Economic Development for Quebec Regions (CED)?

Suggested response

Background

Project example

16. Community Futures Program – Regional Development Agencies (RDAs)

Issue/question:

How do the Regional Development Agencies (RDAs) deliver the Community Futures Program (CFP)?

Suggested response:

Background:

17. Community Futures Program – Quebec

Issue/question:

How does Canada Economic Development for Quebec Regions (CED) deliver the Community Futures Program (CFP) in Quebec?

Suggested response:

Background:

18. International Centre of Expertise for the Advancement of Artificial Intelligence in Montréal

CED

Issue / Question

Why transfer $10M from the Strategic Innovation Fund of Innovation, Science and Economic Development Canada (ISDEC) to Canada Economic Development for Quebec Regions (CED) to support a centre of expertise for the advancement of artificial intelligence?

Suggested answer:

Background:

19. Communities reliant on Chrysotile

Issue / Question

What has Canada Economic Development for Quebec Regions (CED) done to support the development and diversification of communities reliant on chrysotile?

Suggested response

Background

20. Lac-Mégantic – Economic recovery

CED

Issue / Question:

What is Canada Economic Development for the Quebec Regions (CED) doing to help Lac-Mégantic following the rail accident?

Suggested response:

Background:

21. Lac-Mégantic – Rail Bypass

CED

Issue / Question:

Why is a $450,000 transfer from Transport Canada to Canada Economic Development for Quebec Regions (CED) required for the Lac-Mégantic rail bypass?

Suggested Answer:

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