Evaluation of Securing Forest Products Markets Sub-Activity: International Influence Programs

Table of Contents

Executive Summary

This report presents the findings of an evaluation of NRCan-CFS (Canadian Forest Service) International Influence Programs, part of the Securing Forest Products Markets Sub-Activity. The evaluation covered program activities from 2006-07 to 2010-11. This is the second part of an evaluation of the same sub-activity (1.1.2 in the 2010-11 Program Activity Architecture). The first part was completed in 2010-11 and covered the Canada Wood Export Program (CWEP), the North American Wood First Program (NAWF) and the Value to Wood Program (VW).Footnote 1

The International Influence programs covered by this evaluation are described below:

Leadership in Environmental Advantage for Forestry (LEAF): The evaluation covers $15.0 million of LEAF funding between 2008-09 and 2010-11 (total LEAF funding for its four-year mandate ending in 2011-12 is $20 million). LEAF is intended to complement existing NRCan programs such as the International Forestry Partnerships Program (which focuses on government-to-government advocacy) in their efforts to create a sustainable forest management market advantage for Canadian industry. Environmental reputation advocacy efforts – including direct interaction with large buyers – are administered through contribution agreements of $4 million a year with the Forest Products Association of Canada (FPAC).Footnote 2CFS receives approximately $1 million annually for program administration and support for science projects that support Canadian sustainable forest management positions. Activities under LEAF fall into three broad categories:

  1. Information development and analysis: LEAF science projects are delivered by CFS in partnership with provinces and academe to address key scientific information gaps. There are seven projects (including three flagship projects) which will be completed in 2012.
  2. Market outreach: Through contribution agreements, FPAC works in-markets with key customers to address sustainability concerns. This includes trade show attendance, hosting tours and workshops, visiting buyers and policy makers, and developing information vehicles (websites, brochures).
  3. Monitoring and reporting trends in markets: Through contribution agreements, FPAC measures market perceptions of Canada’s reputation. This includes policy audits, news monitoring, and market research with buyers.

International Forest Partnerships Program (IFPP): IFPP was a cost-shared Canadian Council of Forest Ministers (CCFM) initiative that began in 1993 between the federal and provincial governments. The Program was designed to promote Canadian sustainable forest management policies and practices internationally, and maintain market access for Canadian forest products abroad by expanding the government-to-government dialogue on sustainable forest management. Key program activities, undertaken in collaboration with Department of Foreign Affairs and International Trade (DFAIT) Trade Commissioners in target markets, included:

  1. Information gathering and analysis: media monitoring, networking, environmental scans, and fact finding missions in target markets.
  2. Developing and distributing communications tools: developing videos, website content, fact sheets, and publications on sustainable forestry in Canada for distribution by DFAIT.
  3. Outreach to target audiences: diplomatic missions, incoming missions, expert tours, hosting seminars, attending trade shows, and information sessions at DFAIT embassies and consulates in target markets.

The Program received a total of $1.5 million in NRCan funding between 2006-07 and 2010-11 (part of the funds were provided to DFAIT Trade Commissioners service to support in-market program activities). In 2010-11, NRCan concluded its funding of the Program.

Economic Action Plan Demonstration Projects (EAP Demos): The EAP Demos projects were delivered through existing Canada Wood Export Program (CWEP) and North America Wood First (NAWF) platforms. They were intended to demonstrate the attributes of using wood frame construction in large-scale residential or commercial applications and emphasize the environmental benefits of wood use in markets that are increasingly sensitive to environmental considerations. This includes projects in both domestic (through non-traditional uses of wood) and offshore (through the use of wood frame construction) markets.

  1. Domestic projects ($3.1million): The Canadian Wood Council (CWC) and FPInnovations were responsible for delivering the domestic projects. Nine projects were selected through two rounds of competition (five in Quebec, three in B.C., and one in Ontario). Two projects were ultimately cancelled as one project did not receive the provincial housing authority approval (Régie du bâtiment du Québec) and the other could not proceed in a timely manner. Approximately $0.4 million was used for domestic support activities including administering the competitive processes, building code reviews, and a cross-laminated timber strategy.
  2. Offshore projects ($6.8 million): The Canada Wood Group and British Columbia Forestry Innovation Investment (B.C. FII) were responsible for delivering the offshore demonstration projects under the CWEP banner. This included nine projects proposed by industry and vetted by NRCan (seven projects in China, and one each in Korea and Italy).

At the time of the evaluation, nine of the 16 demonstration projects were not yet complete. However, all of the expenditures on work approved by NRCan, as stipulated in the agreements, had been incurred prior to the end of the EAP funding in 2010-11. Completion of all projects is expected in 2012. The expenditures incurred under this sub-activity totalled $9.9 million for two years, 2009-10 and 2010-11.

Evaluation Methodology

This evaluation covered NRCan’s direct program spending on Securing Forest Products Markets: International Influence Programs over the period of 2006-07 to 2010-11, and focused on LEAF and EAP Demos given the size of their investments and the fact that IFPP had been the subject of several previous assessments, and has concluded.

The evaluation examined relevance and performance using a multiple lines of evidence approach. This included document, project and administrative data reviews; eight case studies (four for LEAF and four for EAP Demos); and 70 interviews. The evaluation was undertaken using a theory-based approach known as contribution analysis, which examined and tested the established theory of change behind the programs.

While the overall methodology is strong, there are some limitations that should be considered when interpreting the findings. First, the scope of activities in the sub-activity includes two programs not covered by this evaluation,Footnote 3 making attribution difficult to sort out for some outcomes. Second, the scope of the evaluation provided limited focus on IFPP. Third, the EAP Demos were only funded in 2009-10 and 2010-11 and do not have much program history to evaluate. Similarly, LEAF began in 2008-09 and at the time of this evaluation, only had three years of program activity. Fourth, the CFS was asked to identify contacts from which to draw a sample of interviewees for this study, thus introducing a possible selection bias. Finally, while proponent performance reporting has since improved, reports on achievements of LEAF activities in 2008-09 and 2009-10 did not provide enough detail on specific program activities related to overall program outcomes during those years.

Relevance

During the evaluation period, the International Influence programs (LEAF, EAP Demos, and IFPP) addressed the prevailing market access and development needs of the wood products industry, and were well-aligned with federal priorities and NRCan’s role.

Demonstrated Need:

Both LEAF and IFPP addressed prevailing trade barriers related to sustainable forestry. Under considerable scrutiny from environmental non-government organizations (ENGOs), the Canadian forest sector faced significant sales threats from potential and actual boycotts of Canadian forest products, as well as environmental challenges in trade agreements and other governments’ procurement policies related to acceptance of forest certifications used in Canada. The issue of inclusive procurement policies is particularly important for Canadian producers (especially commodity producers of pulp and paper) in export markets as they use a mix of Forest Stewardship Council (FSC) certification and Programme for the Endorsement of Forest Certification (PEFC)Footnote 4 supported certifications. Although PEFC endorses Sustainable Forestry Initiative (SFI) and Canadian Standards Association (CSA) certifications used in Canada, there is a perception that they are not as well understood or marketed where FSC has been heavily promoted by some ENGOs as the only credible system.

The evaluation found that LEAF’s environmental advocacy and IFPP’s government-to-government efforts to be meaningful vehicles for addressing these threats. The need for LEAF has evolved from sales threats arising mainly from ENGO campaigns against Canadian forestry practices and certifications associated with them – which were issues affecting primary commodity shipments to Europe – to matters higher up the value chain (e.g., green building, lifecycle costs and chain of custody). EAP demonstration projects address a need to capitalize on key growth market segments in North America and Asia. Demonstration projects are seen as important means for helping to grow these potential markets by demonstrating environmental strengths, technical feasibility and innovative uses of wood in construction projects.

Federal Government and NRCan Priorities:

The mandate and objectives of the three International Influence programs are consistent with NRCan’s strategic objectives and the federal priority of reducing barriers to trade. Moreover, the $10 million investment in large-scale demonstration of Canadian uses of wood in target markets supported federal economic stimulus priorities.

Appropriate Federal Role:

NRCan’s role in the delivery of all three programs was appropriate given the Department’s mandate to promote market access for Canada’s natural resources products and the need for a government-to-government vehicle for promoting Canada’s sustainable forest management reputation. The federal government’s role in the EAP Demos is legitimate and necessary in order to bring together the necessary stakeholders and funding to implement the projects in target markets, and to play a valuable government-to-government role in offshore markets. In terms of the LEAF science component, NRCan has unique scientific expertise to provide information on Canada’s sustainable forestry practices.

Performance – Effectiveness

The ultimate intended outcome of the International Influence programs is improved acceptance of Canadian forest products in target markets, and increased sales associated with that acceptance. The evaluation found evidence of progress, but long-term outcomes attributable to program activities have not yet been achieved.

Key findings for LEAF:

Noteworthy achievements at least partially attributable to LEAF activities include:

  • LEAF science projects appear to have been well-planned and show strong potential to influence policy-makers with regard to the treatment of Canada’s boreal forest.
  • In terms of reaching market access target groups (e.g., policy makers), LEAF primarily supported and augmented the efforts of other players (i.e., IFPP, DFAIT) that reach governments. FPAC’s contributions to larger efforts at fostering acceptance of Canadian forest products have focused on providing information to customers and key influencers and equipping Canadian industry with the tools needed to promote the environmental credentials of their products in target markets.
  • LEAF was directly involved in reaching and engaging industry through a number of informational activities and campaigns. Industry groups in target markets reached by LEAF-funded FPAC activities have reacted positively; they have used LEAF information to defend Canada’s sustainable forest management practices and to adopt inclusive forest product procurement policies that accept all forest certifications used in Canada.
  • Progress has been made on improving environmental acceptance of Canadian forest products and acceptance of all Canadian forest certifications in target markets, which reduce access barriers.
  • The degree to which successes are attributable to LEAF varies considerably by market. In Europe, intended outcomes on acceptance of all Canadian forest certifications appear to have been achieved by the consortium of participants which included support from LEAF-funded FPAC activities. In the United States, LEAF has been a more significant and sometimes lead contributor. No LEAF-related changes have been observed in Asia as activities have only been underway for a short time.
  • Collaboration is clearly an important factor in successfully delivering LEAF. Where FPAC has had the most success with LEAF-funded activities, it has collaborated with a range of government and associations in key markets, with many of these stakeholders playing leadership roles.

The evaluation also identified some challenges for LEAF:

  • The National Advisory Board (NAB) for guiding LEAF activities and ensuring a national perspective was not implemented as originally planned. The absence of this advisory board made it difficult for CFS to oversee FPAC priority setting for LEAF activities. Moreover, FPAC’s performance reporting on LEAF activities shows a wide scope of activities, but does not clearly link these to intended program objectives. Particularly with single-recipient programs such as LEAF, stricter program oversight is important to ensure that the interests of all forest sectors and regions are adequately being served, and to avoid duplication of effort and potential mixed messages with other programs.
  • While activities promoting Canada’s environmental credentials were acceptable under the LEAF Program, LEAF-funded promotion of the Boreal Forest Agreement has had a potentially negative impact on CFS relationships with stakeholders that were not consulted in its development.
  • The annual funding approach used for LEAF science has meant planning difficulties for projects. Interviewees involved in these projects indicated that multi-year investments would allow lead scientists to better plan and retain research staff (i.e., Doctorate and Masters’ Degree students) with the necessary skills.

Key findings for IFPP:

IFPP contributed to overcoming market barriers in Europe and the U.S. and in increasing awareness and knowledge of Canadian sustainable forestry practices in target audiences by bringing players together and coordinating a Canadian position to governments on issues of sustainability. For example, in-coming missions organized by IFPP, in 2008 and 2010, with key foreign government officials were important elements of a coordinated approach to securing acceptance of PEFC certifications in European Union procurement policies (particularly Dutch).

One of the key factors affecting the achievement of IFPP outcomes was collaboration and relationship development, particularly with DFAIT’s Trade Commissioner Service (TCS). However, due to the multi-player arrangements coordinated for dealing with international trade matters, the impacts of IFPP are difficult to see in isolation.

There is some concern among stakeholders that the end of IFPP may be seen as a signal that the federal government is stepping back from its role in government-to-government market access activities for the forestry sector.

Key findings for EAP Demonstration Projects:

Although it is too early to identify any long term outcomes, early indications of achievements at least partially attributable to EAP demonstration projects are presented below:

  • The demonstration projects attracted the interest of important players in domestic and offshore target markets, including large and reputable developers, building and design firms, and key government officials. This has contributed to the development of a memorandum of understanding (MOU) between China and Canada to promote wood frame construction and green building design, and to jointly participate in two additional EAP demonstration projects.
  • There is evidence of early acceptance of wood frame construction in offshore target markets and innovative uses of wood in domestic markets. While EAP Demos have not yet led to any permanent changes to building codes or standards, some exceptions to the building codes in domestic and offshore target markets have been granted to allow new, innovative designs to be demonstrated. Moreover, a Korean demo project developer and architect have continued to build an estimated 100 new low-rise homes with wood based on the design used in the demonstration project. This suggests acceptance of wood frame construction as a viable low-rise housing alternative in Korea.
  • Successful demonstrations of wood frame construction technology have the potential to increase demand for Canadian wood products both domestically and in offshore markets. Market acceptance will take many years, but anecdotal observations suggest that EAP demo projects, along with the broader CWEP, NAWF and BC FIIFootnote 5 programs, have made positive contributions to the achievement of such goals. The construction of the wood demonstration buildings is part of a broader Canadian government wood frame construction strategy that includes building code development and acceptance, technical advice, quality assurance services, training, promotion and marketing, and working with key government departments and major builders and developers. Together, these activities have helped to yield significant growth in Canadian wood product exports in emerging off-shore markets such as China and Korea and have facilitated increased use of wood in non-traditional applications in the North American market.Footnote 6

It should be noted that these achievements benefitted from favourable economic conditions in key markets and housing policy developments which have helped expand the reach of the demo projects.

The evaluation also identified some challenges for EAP demonstration project delivery agents (i.e., CWEP and NAWF) to consider:

  • Time was the most significant factor hindering the achievement of intended outcomes for EAP demonstration projects. The processes of designing, getting permits, and building demonstration projects are lengthy, making it difficult to complete all proposed projects within the two year funding timeframe. The majority of projects will be completed in 2012, rather than in 2011 as planned.
  • The two demonstration projects showcasing truly innovative wood products illustrated capacity issues among the key construction trades who currently have no experience with these innovative products.

Performance – Efficiency and Economy

The international influence programs are, to varying degrees, economic and efficient means for achieving intended outcomes. Their common strength is the leveraging of partners in target markets, and other governments and departments. This is particularly true for EAP Demos, delivered on existing CWEP and NAWF platforms, but also for IFPP partnerships with provinces and DFAIT, and LEAF scientific collaborations. IFPP was an effective low-cost mechanism for communicating Canada’s sustainability credentials to target markets and providing economies of scale for information gathering. Some interviewees suggested that having a single contribution recipient for LEAF (i.e., FPAC) may have helped to quickly get messages into markets to respond to boreal forest and certification issues in the early years of the program.

There are also opportunities for improving economy and efficiency. Both EAP Demos and LEAF encountered challenges using the funding provided in the short time frame given for the programs. The two-year time frame to implement the EAP demonstration projects was too short, leading to some inefficiencies such as purchased materials now being stored, incomplete projects, and some extra project costs. For LEAF, the short spending time frames for large amounts of contributions and CFS’ oversight of FPAC appear to have contributed to mandate expansion, overlap with some other initiatives and a lack of coordination in some cases. Both IFPP and LEAF have duplicated some efforts of other programs as a result of not having a clear approach to align and coordinate the activities of the programs (e.g., both programs hosted an event with the same group of architects in the space of a few months).

Recommendations, Management Response and Action Plan

Recommendations Management Response and Action Plan Responsible Official/Sector
(Target Date)
1. CFS should develop a comprehensive coordination approach that clearly communicates the roles of different stakeholders and integrates market access and market development programs. Accepted.

Context

CFS recognizes the need to clearly articulate the goals and objectives of each of its market development and market access programs to all of its funded recipients. Clear understanding of program parameters by all stakeholders will help ensure that respective delivery roles are understood, eliminating any potential confusion and possible duplication of efforts.

Action

Should CFS Markets programs be renewed:
  • Administrative functions of all market programs will be merged and environmental reputation will be mainstreamed into all market activities.
  • An annual webinar will be held to disseminate information pertaining to all NRCan/CFS-funded activities with respect to its market programs. Information will include: project description, delivery agent, expected results and performance indicators.
ADM CFS

March 2013
2. CFS should follow-up on and promote the demonstration projects through existing market development programs.

Accepted.

Context

CFS recognizes that to fully exploit the benefits of wood frame construction as illustrated through completed large scale demonstration projects, promotional work is required.

Action

  • CFS will undertake a comprehensive campaign that could include elements such as case studies, interactive exhibits, advertising, public relations, digital marketing and exhibits to publicize the demonstration project to target audiences both off-shore and domestically.

ADM CFS

March 2013

3. Should the LEAF Program be renewed, CFS should ensure that appropriate advisory and governance structures are established and that clear criteria for tracking and reporting activities and outcomes are implemented.

Accepted.

Context

CFS recognizes that advisory and governance structures are key ingredients to successful program delivery.

Action

Should CFS markets programs be renewed:
  • Environmental reputation activities that were conducted under the LEAF Program will be mainstreamed under one market program, and will be guided by previously well-established advisory and governance structures and project and expenditure tracking and reporting mechanisms.

ADM CFS
March 2013

1.0 Introduction and Background

1.1 Introduction

This report presents the findings of an evaluation of NRCan’s (CFS) International Influence Programs. This is the second part of an evaluation of the Securing Forest Product Markets Sub-Activity (1.1.2 in the 2010-11 PAA). The first part was completed in 2010-11 and covered the Canada Wood Export Program (CWEP), the North American Wood First Program (NAWF), and the Value to Wood Program (VW).Footnote 7 This current evaluation covers three programs: the Leadership in Environmental Advantage for Forestry (LEAF), the Economic Action Plan Demonstration Projects (EAP Demos), and the International Forest Partnerships Program (IFPP). The evaluation covered program activities from 2006-07 to 2010-11, consisting of expenditures of $26.5 million:

  • LEAF – $15.0 million;
  • EAP Demos – $10.0 million; and
  • IFPP – $1.5 million.

Overall, the International Influence Programs are designed to strengthen Canada’s position as an exporter of wood products in target markets, which are increasingly sensitive to environmental concerns.

The objectives of this evaluation are to assess the relevance and performance (effectiveness, efficiency and economy) of the key elements of the three programs in meeting their objectives as well as their contribution to the Securing Forest Products Markets sub-activity.

1.2 Context

The Canadian forest industry is, despite its recent difficulties, an important driver of the Canadian economy, contributing 1.8 percent to Canadian gross domestic product (GDP) in 2010.Footnote 8 For over 200 rural communities, the sector makes up over 50 percent of their economic base, and hundreds of thousands of jobs across Canada.9 However, the sector is in the midst of a difficult structural transformation and cyclical downturn. This has resulted in extreme financial distress across much of the industry and an unprecedented number of mill closures and job losses. Forest products sector employment, exports and profitability have been in a state of decline for most of the last decade. The total value of Canadian forest products exports in 2009 was $8.7 billion, the first time exports fell below $10 billion in 15 years, and represents a 65 percent decline from peak exports in 2005 ($25.1 billion).10

As well, employment levels have been dropping since 2004. According to the Forest Products Association of Canada (FPAC), since 2006, the Canadian forest sector closed or suspended operations at 250 mills and many more reduced production levels due to the downturn in the economy. This has resulted in a loss of 85,400 jobs since 2006.Footnote 11 According to the Statistics Canada Labour Force Survey, the sector directly employed 222,500 Canadians in 2010.Footnote 12

Canadian producers have also been facing increased competition in global markets from suppliers in other countries. According to a June 2008 House of Commons Standing Committee on Natural Resources report, the emergence of new competitors in global markets, most notably China, has exacerbated the decline in Canadian market share. The same report also notes that the rapidly rising Canadian dollar from 62 cents U.S. in 2002 to near parity has eroded Canada’s competitive advantage on price.Footnote 13

Exhibit 1 shows the value of Canadian forest products exports from 2005 to 2010. Overall, the value of forest products exports has declined steadily over this period. In terms of specific markets, China and South Korea are noteworthy exception as the value of exports to these markets has steadily increased. The decrease in exports to the U.S. has been driven primarily by the collapse of the housing market in 2008 and its slow recovery.

Exhibit 1: Exports of Canadian Forest Products (2005-2010) (CDN$ 000)
  2005 2006 2007 2008 2009 2010 General Trend
2005 to 2010
Balance of trade 31 962 491 28 076 414 23 532 197 20 065 267 14 439 679 16 626 320 Down
Total exports 41 973 168 38 195 081 33 574 977 30 093 987 23 566 671 25 953 002 Down
United States 33 824 302 29 873 196 24 748 681 21 304 408 16 610 175 16 799 957 Down
China 1 024 403 1 276 748 1 693 020 1 658 942 1 861 276 2 992 556 Up
European Union 2 335 573 1 896 085 2 152 464 1 827 349 1 379 925 1 362 991 Down
Japan 1 849 484 1 855 563 1 508 250 1 433 470 1 093 989 1 353 336 Down
South and Central America 738 257 927 224 875 757 962 072 715 491 767 767 Mixed
Other export markets 548 114 546 315 605 710 698 679 519 322 696 890 Mixed
Middle East 462 028 439 591 567 108 740 906 425 827 577 192 Mixed
South Korea 443 297 500 095 558 260 498 170 350 949 470 206 Up
India 281 738 332 236 277 984 375 249 205 736 449 583 Mixed
Taiwan 281 114 340 994 345 355 320 797 205 280 248 789 Mixed
Oceania 140 509 138 318 172 085 172 549 128 941 155 968 Mixed
Africa 44 349 68 717 70 301 101 395 69 760 77 765 Mixed

Source: NRCan. Canada’s Forests: Statistical Data: http://canadaforests.nrcan.gc.ca/statsprofile/trade/ca.
Note: These figures include all forest products exports including pulp, paper, and logging products.

Canada remains the world’s largest exporter of forest products, meaning that Canada’s forest sector is heavily dependant on exports. It is therefore essential for the health of the sector that Canada maintains and expands access for Canadian producers in international markets.

Environmental concerns have become particularly important market access issues in recent years. According to the Conference Board of Canada, sustainability will remain a comparative advantage for the Canadian industry relative to other forest products exporters, but the pressure to demonstrate sustainability is increasingly important.Footnote 14NRCan figures show that, annually, less than one percent of Canada’s forests are harvested; by law all forests harvested in Canada have to be regenerated; bioenergy now accounts for 58 percent of total energy used by the industry; and about 49 percent of Canada’s 300 million hectares of managed forests are certified by one or more of three globally-recognized certification standards: Canadian Standards Association (CSA), Forest Stewardship Council (FSC), and Sustainable Forestry Initiative (SFI).Footnote 15

Despite these environmental credentials, the Canadian wood products industry has been vulnerable to international environmental campaigns that characterize Canada’s practices as unsustainable. ENGOs have been trying to promote exclusive FSC certification world wide. The rise of overseas environmental campaigns targeting Canadian forest policies and practices has compounded these challenges. This could impact the industry long after the exchange rate has adjusted and the U.S. housing crisis has run its course.Footnote 16

The issue of international acceptance of SFI and CSA certifications compared to the FSC certification is particularly important for Canadian producers (especially commodity producers of pulp and paper) in export markets. Since 2005, the SFI and CSA certifications have been endorsed by the Programme for the Endorsement of Forest Certification (PEFC), an international non-profit, non-governmental organization dedicated to promoting sustainable forest management through independent third-party certification.Footnote 17

FSC is a widely accepted, international certification scheme used throughout the world and is endorsed by leading ENGOs.Footnote 18 PEFC is a ‘principles-based’ approach that promotes third party certifications (e.g., CSA or SFI) that are aligned with sustainable forest management criteria developed and are supported by 149 governments. Although PEFC endorses CSA and SFI certifications, there is a perception that they are not as well understood or marketed, where FSC has been heavily promoted by some ENGOs as the only credible system.

In terms of expanding to new markets, research conducted for CFS suggests that China and South Korea show significant growth potential for Canadian wood products. China’s rapid economic growth, burgeoning middle class, and massive internal migration are driving demand growth for housing and thus has strong potential for wood products.Footnote 19

Korea’s strong GDP growth, its call for massive urban de-centralization and revisions to fire code regulations to allow wood frame construction in multi-story low rise residential housing makes it one of the most important emerging markets for Canadian wood products.Footnote 20

While market research has suggested that these are viable markets for Canada, the same research confirms the presence of barriers to wood exports in these markets. The barriers include codes and standards that are not favourable to wood use in construction; lack of education and training of professionals on wood use in construction; and a need to increase the demand for North American-style wood frame construction in markets that have not traditionally built using these techniques.

1.3 Overview of the International Influence Sub-sub-Activity

1.3.1 The Program Activity Architecture (PAA) for the International Influence Sub-sub-activity

The International Influence Programs are part of the Securing Forest Product Markets sub-activity, which is designed to increase economic opportunities for Canada’s forest products in global and domestic markets. Programs under this sub-activity are divided into two groups: 1) Market Development; and 2) Market Access. LEAF and IFPP are part of the Market Access component, while the EAP Demos are delivered under the Market Development component using the CWEP and NAWF platforms.

Exhibit 2 presents the Securing Forest Product Markets sub-activity within the context of NRCan's 2010-11 PAA, and illustrates how LEAF, IFPP, and EAP Demos are expected to contribute to intended outcomes.

Exhibit 2: Securing Forest Product Markets Sub-Activity in the context of NRCan's PAA

Exhibit 2: Securing Forest Product Markets Sub-Activity in the context of NRCan's PAA
Text Version

Exhibit 2 shows the Securing Forest Product Markets Sub-Activity within NRCan's 2010-11 Program Activity Architecture (PAA).

The programs are under NRCan Strategic Outcome one, Economic Competitiveness, for which the expected result is natural resource sectors are internationally competitive.

Within this strategic outcome, the programs are part of the Economic Opportunities for Natural Resources Program Activity, whose expected result is Competitive national and international markets and stable economic performance. 

Within this program activity is the Securing Forest Products Markets Sub-Activity 1.1.2. The sub-activity contains two groups of programs. These are the Market Development Programs and Market Access Programs. The Market Development programs include Canada Wood Export Program (CWEP), North America Wood First (NAWF), Value to Wood, and EAP Demonstrations. Excluding Economic Action Plan Demonstrations (EAP-Demos), the Market Development Programs were evaluated in 2010-11. The Market Access Programs include International Forest Partnerships Program (IFPP) and Leadership in Environmental Advantage for Forestry (LEAF), which, along with the EAP Demos, have been evaluated in 2011-12 as part of the current evaluation report.

 

The evaluation of the Market Development component (i.e., CWEP, NAWF, and VW) was completed in the fall of 2010, in time to inform program renewal discussions. The International Influence evaluation includes the Market Access component (i.e., LEAF and IFPP) as well as the special demonstration projects announced in Budget 2009 as part of the Economic Action Plan (i.e., EAP Demos). An overview of all five programs within the Securing Forest Products Markets sub-activity can be found in Appendix A.

1.4 LEAF Program Summary

This section provides a brief description of the Leadership in Environmental Advantage for Forestry (LEAF) Program. For greater detail on program objectives, activities, governance, and resources please refer to Appendix B.

1.4.1 LEAF Program Objectives, Expected Results and Rationale

LEAF was created through funding announced in Budget 2008 to support Canadian exporters in international markets in response to internationally-based environmental campaigns that characterized Canada’s forestry practices as unsustainable. LEAF’s main goal is to enhance the Canadian forest sector's environmental reputation abroad and promote market acceptance of Canadian forest products.

LEAF is intended to compliment, without duplicating, existing NRCan-administered programs such as the IFPP in their efforts to create a sustainable forest management market advantage for Canadian industry. While IFPP efforts focused primarily on government-to-government interactions, LEAF supports industry environmental reputation advocacy efforts through non-IFPP channels, including direct interaction with large buyers.

The Program’s Results-based Management Accountability Framework (RMAF) identified five objectives for LEAF, which were updated by program staff:

  1. improve environmental acceptance for Canadian forest products in international markets (final outcome: after 6 years);
  2. Canadian forest products are considered to be an environmentally-responsible and preferred choice internationally (intermediate outcome: 4-6 years);
  3. key influencers have the information they need regarding the environmental credentials of Canada’s forest sector and its products (intermediate outcome: 4 years);
  4. environmental market access issues are reduced and avoided in international target markets (intermediate outcome: 4-6 years); and
  5. the Canadian forest industry works proactively with international policy decision makers to ensure that decisions are based on scientific evidence (intermediate outcome: 4 years).
1.4.2 LEAF Activities and Delivery Structure

The target markets for LEAF activities are Europe, the U.S., and Asia. Activities under LEAF fall into three broad categories. Each of these is described below:

  • Information development and analysis: addressing key science and information gaps, enabling the sector to respond more rigorously to market campaign claims with science-based evidence. LEAF science projects are delivered by CFS to address key scientific information gaps. There are seven projects (including three flagship projects) which are slightly behind schedule but will be completed in 2012.
  • Market outreach: addressing concerns of key customers and influencers about the Canadian forest sector’s sustainability, ensuring market acceptance for Canadian products, and exchanging information on best practices. Through contribution agreements, FPAC works in-markets with key customers to address sustainability concerns. This includes trade show attendance, hosting tours and workshops, visiting buyers and policy makers, and developing information vehicles (websites, brochures).
  • Monitoring and reporting on trends in market perception: to effectively target Canada’s efforts and measure progress in influencing opinions and purchasing behaviours. Through contribution agreements, FPAC measures market perceptions of Canada’s reputation. This includes policy audits, news monitoring, and market research with buyers.
1.4.3 LEAF Program Resources

The Program received funding of $20.0 million between 2008-09 and 2011-12. In total, $16 million in contributions were provided to FPAC for market outreach and monitoring activities, $1.7 million was allocated to CFS for LEAF science projects, and the balance was allocated to CFS for administration, personnel, and departmental levies.

The Program was originally designed for NRCan to fund FPAC up to a maximum of 50 percent of total project costs. The remaining 50 percent was to be provided by funding from FPAC and provincial sources.Footnote 21 However, the cost-sharing arrangement was modified in 2009 to allow FPAC to reduce their contribution to 20 percent. This change was deemed necessary as the economic downturn meant a decrease in FPAC membership fees which directly impacted its operating budget. NRCan’s original funding levels remained unchanged (i.e., no new money was requested for LEAF).

Exhibit 3 provides a detailed breakdown of NRCan expenditures for LEAF for the funding period of the Program. These figures are current as at November 2011.

Exhibit 3: LEAF Estimated Expenditures, 2008-09 to 2011-12 ($’000)
Fiscal Year: 2008-2009 2009-2010 2010-2011 2011-2012
(estimated)
Total
CFS administration, personnel, O&M, and PWGSC levies 511 626 557 606 2,300
CFS science projects 0 686 539 475 1,700
Contributions to FPAC 1,900 4,100 6,000 4,000 16,000
Total 2411 5,412 7,096 5,081 20,000

Source: CFS. Note that figures take into account reprofiling to date.

1.5 IFPP Program Summary

This section provides a brief description of the International Forestry Partnerships Program (IFPP).

1.5.1 IFPP Objectives, Expected Results and Rationale

The IFPP was a cost-shared Canadian Council of Forest Ministers (CCFM) initiative between the federal and provincial and territorial governments that began in 1993-94. The Program was designed to promote Canadian sustainable forest management policies and practices internationally, and to maintain market access for Canadian forest products abroad by expanding the government-to-government dialogue on sustainable forest management, providing data and information, diplomatic missions, dialogue with environmental groups and liaison with embassies and consulates abroad.

According to the IFPP Working Group terms of reference, the specific objectives of the Program were as follows:Footnote 22

  • positioning Canada as an environmentally responsible forest nation;
  • supporting Canada’s trade framework by promoting Canadian forest policies and practices, initiatives and achievements;
  • monitoring and intervening, as needed to help eliminate trade and non-tariff barriers affecting Canada’s forest product exports; and
  • promoting Canadian forest products as an environmentally friendly and renewable choice.

CFS financial support for the Program was discontinued in 2010. In the summer of 2011, Forest In Mind – a program similar to IFPP – was created with financial support from the Northwest Territories, Yukon, British Columbia, Alberta, B.C., Ontario, Quebec, Nova Scotia and New Brunswick. The priorities include market intelligence, targeted communications and outreach to key audiences acting as a one-window entry and on government-to-government relations. Its main goal is to prevent trade and non-tariff barriers in key export markets for Canadian forest products. The Program will act as the federal, provincial and territorial governments’ voice, and consistently communicate Canadian sustainable forest management policies and practices while correcting incomplete and biased information expressed in key markets, promote government-to-government and some other relationships related to market access issues. CFS provides support for the Program with staff by operating a small secretariat through the CCFM.

1.5.2 IFPP Activities and Delivery Structure

The Program was administered through the IFPP Working Group (IFPP WG). It was responsible for the overall operation of the Program. The Working Group was comprised of jurisdictional members (i.e., the provinces and territories) and the secretariat administered by the CFS to oversee daily operations of the Program.Footnote 23

Target markets for IFPP activities included Europe, the United States, and Asia (primarily Japan). According to the CCFM, there were three core activities delivered under the IFPP.Footnote 24 These were:

  • Information gathering, analysis and sharing which included media monitoring and networking, as well as environmental scans in Europe, Asia, and the U.S.
  • Development and distribution of communication tools which included the development of video vignettes for the IFPP website, updating the IFPP website, and production of new fact sheets.
  • Outreach to target audiences which included outgoing missions and expert tours, green building and sustainable forest management seminars, trade show participations, and information sessions for consulates and embassies in the U.S. and EU; support of ministerial forest partnership outreach / outgoing missions (e.g. Europe, Japan); and incoming missions on green building and sustainable forest management for American and European delegates.

Activities were delivered primarily in collaboration with DFAIT Trade Commissioners, and the IFPP Working Group. Other collaborators have included FPAC and the Canadian Wood Council.

1.5.3 IFPP Resources

NRCan provided the federal portion of the funding through its ongoing A-base, while the provincial portion came through a specified purpose account (SPA) that resided with CFS. The IFPP expenditures were solely operations and maintenance (O&M) with no grants or contributions associated with the Program. Some of the Program’s expenditures were made by DFAIT, largely at foreign missions in the three key markets.

Exhibit 4 shows the federal and provincial SPA funding spent to date under the most recent IFPP SPA. From 2006-07 to 2009-10, the IFPP had spent $2.8 million.

Exhibit 4: IFPP Federal and SPA Expenditures, 2006-07 to 2010-11
  2006-07 2007-08 2008-09 2009-10 2010-11 TOTAL
SPA funds (provinces) 159,749 161,902 605,555 251,233 94,108 1,272,547
Federal funds (NRCan) 409,070 319,487 343,570 326,504 117,665 1,516,296
Total 568,819 481,389 949,125 577,737 211,773 2,788,843

Source: Canadian Forest Service.

1.6 EAP Demos Program Summary

This section provides a brief description of the Economic Action Plan Demonstration Projects (EAP Demos). For greater detail on program objectives, activities, governance, and resources, refer to Appendix C. The financial figures provided are based on NRCan’s share of the actual expenditures.

1.6.1 EAP Demos Objectives, Expected Results and Rationale

The EAP Demos announced in Budget 2009 (the first Economic Action Plan) are intended to demonstrate the attributes of using wood frame construction in large-scale residential or commercial applications, and emphasize the environmental benefits of wood use in markets that are increasingly sensitive to environmental considerations. This includes projects in both domestic markets (showcasing innovative wood products and/or non-traditional applications of wood products) and offshore markets (through the use of wood frame construction). Successful demonstration of wood frame construction technology has the potential to increase demand for Canadian wood products both domestically and in offshore markets. For Canadian manufacturers across the country, this market expansion initiative has the potential to lead to future increased sales and employment.

1.6.2 EAP Demos Activities and Delivery Structure

Financial contributions for the demonstration projects were delivered through the CWEP and NAWF program platforms already in place and fall into two groups:

  • Offshore projects delivered under the CWEP banner (69 percent of funding): these projects were proposed by CWEP funding proponents (i.e., industry associations) and were vetted by the industry and then submitted to NRCan for review and approval. Offshore markets included China (seven projects), Korea (one project), and Italy (one project). Overall, EAP funding accounted for 6.7 percent of total project costs in offshore markets, but ranged from 2.1 percent to 79.4 percent depending on the project.
  • Domestic projects delivered under the NAWF banner (31 percent of funding): domestic markets were selected through a competitive process. Expressions of interest were issued in August 2009 and December 2010 in collaboration with the Canadian Wood Council and Cecobois. Proposals were evaluated against a list of pre-determined criteria based on input from the industry. Additionally, domestic support activities were funded including administering the competitive processes, building code reviews, and developing a cross-laminated timber strategy. Domestic demonstration projects included five in Quebec, three in B.C., and one in Ontario. Two projects were ultimately cancelled as one project did not receive the provincial housing authority approval (Régie du bâtiment du Québec) and the other could not proceed in a timely manner. Overall, EAP funding accounted for 2.0 of total project costs in domestic markets, but ranged from 0.6 percent to 11.1 percent depending on the project.

The Canada Wood Group and British Columbia Forestry Innovation Investment (B.C. FII) were responsible for delivering the offshore demonstration projects. The Canadian Wood Council (CWC) supported domestic demonstrations (in all provinces except Quebec) and FPInnovations delivered demonstration projects in Quebec.

Eligible contributions recipients included primary and secondary wood product associations; manufactured housing associations; provinces and provincial Crown corporations; and not-for-profit organizations engaged in forest product research. Individual firms were not eligible for demonstration project funding.Footnote 25

As at August 2011, nine of the 16 demonstration projects were not yet complete. However, all expenditures on work approved by NRCan as stipulated in the agreements had been incurred prior to the end of the final year of the EAP funding (2010-11). Completion of all projects is expected in 2012. A full list of projects and their status can be found in Appendix C.

1.6.3 EAP Demos Resources

The EAP Demos received funding of $9.9 million between 2009-10 and 2010-11. Unlike other projects funded under CWEP and NAWF, these demonstration projects could receive up to 100 percent funding from NRCan. That said, based on the agreements in place, NRCan’s contribution has typically been a small portion of the overall demonstration project costs as noted above (see Appendix C Exhibit C-1 for details). NRCan funding supported design, engineering, construction, research, wood products and jurisdictional building code approval.

Exhibit 5 shows the breakdown of EAP Demos contributions for 2009-10 and 2010-11. In total, CFS contributed $6.8 million to offshore demonstration projects, $2.6 million to domestic demonstration projects, and $0.4 million to the domestic support activities described above.

Exhibit 5: EAP Demos Contributions Profile 2009-10 to 2010-11 ($)
Fiscal Year 2009-2010 2010-2011 Total
Offshore demos 3,995,589 2,799,868 6,795,457
Domestic demos 142,275 2,505,650 2,647,925
Domestic support 230,137 207,193 437,330
Total 4,368,001 5,512,061 9,880,712

Source: Canadian Forest Service.

2.0 Evaluation Approach and Methodology

2.1 Evaluation Scope and Objectives

This evaluation covered NRCan’s direct program spending on Securing Forest Products Markets: International Influence Programs over the period of 2006-07 to 2010-11. In terms of scope, the evaluation focused efforts on LEAF and EAP Demos given the size of their investments (i.e., $20 million and $10 million respectively compared to $1.5 million for the discontinued IFPP) and the fact that IFPP had been the subject of several evaluations and management reviews. IFPP was explored primarily in the context of its relationship to LEAF.

The evaluation was designed to assess the issues of relevance and performance of these programs in accordance with the requirements of the 2009 Treasury Board Policy on Evaluation.Footnote 26 The evaluation responded to seven evaluation questions approved by NRCan’s Departmental Evaluation Committee.

Relevance (alignment with government priorities and sector needs)

  1. Is there an ongoing need for the programs and activities? How are target groups served by the program?
  2. Are programs and activities consistent with government priorities and NRCan strategic objectives? Is there a legitimate, appropriate and necessary role for NRCan in the program?
  3. Is there a legitimate, appropriate and necessary role for the federal government in these programs and activities? Is NRCan’s role appropriate in the context of the role of others?

Performance (effectiveness, efficiency and economy)

  1. To what extent have intended outcomes been achieved as a result of the programs?
  2. What are the factors (internal and external) that have facilitated or hindered the achievement of expected results?
  3. Have there been unintended (positive or negative) outcomes?
  4. Are the programs and activities the most economic and efficient means of making progress towards intended outcomes?

2.2 Evaluation Methodology

The evaluation of the International Influence Programs was undertaken using a theory-based approach known as contribution analysis. This approach to evaluation starts with developing an early understanding of the theory of change behind the programs and then testing and adjusting that theory of change over the course of the evaluation study.

The evaluation study consisted of a multiple lines of evidence approach including document, project and administrative data reviews; eight case studies; and 69 interviews. Exhibit 6 presents an overview of the methods used in this evaluation.

Exhibit 6: Methods Used in the Evaluation of Market Development Programs
Program Document, project file, and administrative data review Interviews Case studies
LEAF Yes 50 4
EAP Demos Yes 40 4
IFPP Review of previous evaluation and management studies 28 No

The following is a description of how each of these methods was applied in this evaluation.

Document, project files and administrative data review:

The document review included an examination of over 250 documents provided by NRCan and others as identified during the interviews. The administrative data review involved reviewing and analyzing project level activity and outcome data and financial information.

Key Informant Interviews:

A total of 69 individuals were interviewed from June 14th to November 10th, 2011. Due to the close relationships among these programs, many of those interviewed were able to speak credibly to issues related to more than one program. In total, 50 interviews were conducted for LEAF, 40 for EAP Demos, and 28 for IFPP. The initial universe of interviewees was identified by CFS, and supplemented as the study team identified other knowledgeable informants. Interviews were selected to ensure a representation of stakeholder groups, regions, industry sub-sectors and governments. The interviews were conducted to collect qualitative information on the needs, governance, priority setting, funding arrangements, conduct of projects, engagement and outcomes with target groups and data synthesis needs of the contribution analysis.

Select interviews were conducted early in the process to assist with identifying change theories and key literature to review. Most interviews took place after the initial contribution story was determined in order to validate it. Interviews were done in person and by phone depending on availability of the informants. Some interviewees were contacted more than once (several as many as nine times) for follow-up on documents, and to support the contribution analysis approach. For example, when ‘facts’ heard in one interview were contradicted or challenged in another or were divergent from those presented in key documents, they were re-visited to help clarify the points.

Exhibit 7 provides a breakdown of interviews by program and type. Note that some interviews covered more than one program. The total number of interviews is therefore not the sum of the individual columns, but rather reflects the number of individuals consulted. These totals exclude the case study interviews.

Exhibit 7: Distribution of International Influence Interviews by Type and Program
Type LEAF IFPP EAP Total # of Individuals Interviewed
NRCan-CFS 13 10 4 15
NRCan (other) 2 2 0 2
Other federal departments 4 5 1 5
Provinces 5 3 2 5
Industry associations 9 3 12 15
Private sector 8 1 8 13
Research organizations 3 0 5 5
International 6 4 8 9
Total 50 28 40 69

Case studies:

Eight case studies were completed for this evaluation. Four were conducted for EAP Demos and four for LEAF. The EAP case studies were selected based on the relative completeness of the projects, covering both domestic and offshore demonstrations, and covered 60 percent of the EAP Demo spending.

The four LEAF cases were selected based on consultations with CFS and FPAC, in which the strongest success stories for the Program were identified for the evaluation to test, while making sure to cover both FPAC-delivered activities and the most prominent CFS-science activities under the Program. The case study approach was to explicitly pursue the strongest success stories and attempt to confirm and quantify the contribution of the program to those successes. Summary information on the case studies selected can be found in Appendix D.

2.3 Evaluation Limitations and Mitigation Strategies

While the overall study methodology is strong and provided the basis for addressing all evaluation issues through multiple lines of evidence, there are some limitations that should be considered when interpreting the findings. These are outlined below:

  • The scope of activities in the sub-activity: This study included only three of the six programs included in the “Securing Forest Products Markets” sub-activity (the other three are CWEP, NAWF, and VW). Because the six programs are complementary, an evaluation of only three makes attribution difficult as programs target similar groups with similar types of activities and expected outcomes. In fact, some projects are funded through more than one of the five sub-activity programs.
  • The scope of the evaluation provided limited focus on IFPP: It was decided at the outset of this evaluation to commit fewer resources to IFPP than to LEAF and EAP Demos given its small size, and that it was no longer going to be funded by NRCan-CFS.
  • Short program history: The EAP Demos were rolled out very quickly in 2009-10, and some have not been fully completed at the time of this evaluation. Similarly, LEAF began in 2008-09, and at the time of this evaluation only had three years of program activity. It was therefore too early to assess the real impacts of many of the projects. It is also important to bear in mind that market access and acceptance issues are not addressed in short time frames and generally take many years of work to effect change.
  • Interview sample was identified by CFS: Contact information for potential interview respondents was compiled by CFS program management and staff as requested by the Strategic Evaluation Division (SED). It was necessary to involve CFS program management in the identification of potential interviewees as CFS was in the best position to identify key program stakeholders. While interviews were ultimately the decision of the evaluation team (subject to willingness and availability of interviewees), this may have resulted in a possible selection bias.
  • Performance and project reporting issues: There were issues with proponent reporting on achievements of LEAF-funded FPAC activities. Performance reports did not systematically document FPAC efforts using LEAF funds. The document review found that LEAF annual performance reports from 2008-09 and 2009-10 did not provide enough information on program activities identified in the work plans for those years (which were also very general). The achievements reported in these annual plans did not address or follow-up on intended outcomes identified in the program RMAF, instead referring only to outputs and deliverables achieved. While project reporting has improved, this point continues to be documented in correspondence between CFS and FPAC as recently as the summer of 2011.

3.0 Evaluation Findings

3.1 Relevance

3.1.1 Need for the Programs

Question: Is there an ongoing need for the programs and activities? How are target groups served by the programs?

The sector is in the midst of a difficult structural transformation and cyclical downturn. This has resulted in extreme financial distress across much of the industry and an unprecedented number of mill closures and job losses. Forest products sector employment, exports and profitability have been in a state of decline for most of the last decade.

LEAF

Summary – Need for LEAF

The need for environmental advocacy continues, but the focus of those efforts has changed over time. The need for LEAF in the early years of the program centred on addressing potential and some actual boycotts of Canadian forest products. This was largely a commodity producers issue (e.g., the pulp and paper membership of FPAC) associated mainly with acceptance of forest certification schemes and ENGO campaigns against harvesting in the boreal. It now appears that environmental issues around forest products have evolved to focus on matters higher up the value chain (e.g., green building, lifecycle costs and chain of custody of wood products).

Evidence:

  • The original need for industry-to-industry environmental certification advocacy to limit boycotts of Canadian forest products was confirmed: The issue of international inclusive procurement policies that accept all Canadian-used certifications is particularly important for Canadian producers (especially commodity producers of pulp and paper) in export markets. In Canada, 63,086,187 hectares of forests are certified by the Canadian Standards Association (CSA), 41,263,846 hectares by Forest Stewardship Council (FSC) and 53,193,507 by Sustainable Forestry International (SFI) (2010 stats). While CSA and SFI are endorsed by the internationally-accepted Programme for the Endorsement of Forest Certification (PEFC)Footnote 27, there is a perception that they are not as well understood outside of North America. However, FSC has been heavily marketed and promoted by some ENGOs as the only credible system.

    Interviewees stated that there were significant potential boycott issues facing Canadian forest products companies when LEAF was first considered. These were highlighted as issues affecting the sale of Canadian commodity-type forest products (particularly pulp and paper) in Europe. Initial program documentation suggested that as much as $80 million in sales could have been affected. While the exact basis for this figure remains unclear, the findings from interviews and document reviews from FPAC strongly suggest that a realistic threat of tens of millions of dollars in potentially lost sales and / or increased costs of doing business existed at the time that LEAF was initiated in 2007-08.
  • Forest science information gaps were identified to support science-based advocacy of Canada’s sustainable forestry practices: LEAF science projects respond to the key information gaps identified during consultations among CFS science and policy managers, the forest industry, ENGOs and others. The key information gaps identified were related to carbon accounting (and Canada’s climate change commitments and mitigation strategies), the state of the boreal forest, and managing for woodland caribou. CFS researchers report ongoing boreal forest research needs including those related to carbon modeling. These information gaps are issues that the Canadian forest sector has been targeted on by ENGO campaigns and have been issues for some foreign governments.
  • LEAF-sponsored market research in 2010 suggests that Canada’s environmental reputation with forest product customers is no longer in the same state of jeopardy across U.S., Asia and Europe: According to the 2010 LEAF annual report by FPAC, a comprehensive survey with forest products customers in the U.S., Asia, and Europe showed that Canada is seen as the most environmentally advanced supplier region among those surveyed. About 60 percent of surveyed customers consider Canada’s environmental practices to be better than average, while only one percent say that they were worse than average.Footnote 28 This suggests that Canadian forestry practices are seen positively by customers in target markets and that their reputation has improved since 2008 when LEAF was originally conceived.
  • The nature of the need has changed from certification to chain of custody over the life of the Program: Interviews across stakeholders suggest that the original rationale for the LEAF investment has evolved and some suggested that the program be re-scoped to deal with new challenges. Key interviewees in industry and government suggested that issues such as illegal harvest and fibre traceability, life cycle analysis of costs, carbon and water footprints are currently more prominent than forest certification as potential market access barriers. These new environmental reputation issues have more to do with solid wood producers and those higher up the value chain rather than commodities such as pulp and paper.
  • LEAF activities addressed the environmental certification advocacy needs of FPAC, but was less attentive to needs of the broader forest sector: Interviews with a diverse range of stakeholders indicated that LEAF was primarily designed to address the needs of the pulp and paper sector to deal with international perceptions of Canada’s forest stewardship which mainly affected ‘commodity’ forest product actors (i.e., FPAC pulp and paper members). Consequently, LEAF supported the goals and interests of FPAC-member companies first and foremost, particularly during the Program’s early years (2008-09 and 2009-10). Some interviewees noted that LEAF-FPAC has made attempts to serve broader interests since that time (i.e., engaging the Canada Wood Japan offices to coordinate an environmental sustainability marketing campaign in Japan).

IFPP

Summary – Need for IFPP

The evaluation confirmed that there was a need for IFPP to address emerging trade barriers related to sustainable forestry, but that the need has evolved to focus more on climate change issues (e.g., lifecycle costs). The Program addressed the needs of provinces and territories as a government-to-government vehicle through Canadian missions. After the termination of NRCan-CFS funding for IFPP, the largest forestry provinces lobbied for a replacement program within CCFM, suggesting a continued need for a government-to-government channel.

Evidence:

  • The need addressed by IFPP has evolved over the life of the Program from sustainable forestry to climate change issues: The 2010 internal review of IFPP recognized that the environment which was in place at the start of the Program, in 1993, had evolved over time and that stakeholder priorities were shifting from an emphasis on sustainable forest management practices to an emphasis on demonstrating environmentally appropriate lifecycle costs (i.e., total lifespan environmental footprint of wood products), GHG levels, carbon footprints, and other means of addressing the climate change agenda.29
  • IFPP fulfilled a need for international trade intelligence gathering among the larger forestry provinces that ultimately developed a replacement program: According to the 2010 internal review of IFPP, representatives from the larger provinces with significant forest programs found surveillance and intelligence gathering activities and some trade mission support work to be an important federal role. Almost all interviewees of the provincial working group felt that the main value of IFPP came from the intelligence it provided to them on international forest markets. A few interviewees also saw the opportunities through missions to showcase their forestry practices outside Canada as a benefit.30
  • IFPP seen as important vehicle for government-to-government market access advocacy: Industry and government interviewees for the current evaluation agree with the two-track approach where IFPP led government-to-government activities, and LEAF led industry-to-industry activities (through FPAC). The emergence of Forest In Mind – promoting government-to-government relationships related to market access issues – suggests that several key stakeholders see a need for a significant government role. In fact, initial program documentation for LEAF indicated that LEAF would address industry-to-industry environmental reputation needs and this should compliment, rather than replace, the government-to-government efforts of IFPP. Interviewees saw this as a useful strategy and suggested a need for an NRCan-CFS role in this channel. A number of interviewees expressed regret that IFPP ended.

EAP Demos

Summary – Need for EAP Demos

EAP Demonstration Projects address a need to capitalize on key growth market segments in North America and Asia. Demonstration projects are seen as important means for helping to grow these potential markets, including demonstrating environmental strengths and technical feasibility of wood use in target market segments and in demonstrating innovative wood products and/or innovative uses of wood products in domestic construction projects.

Evidence:

  • Market development strategies for China and South Korea supported the need for large scale wood demonstrations that target key segments in these markets: The Canada Wood Group had identified demonstrations of wood buildings as the next step in their market development strategies for China and South Korea. These strategies were based on market research conducted for CFS that showed significant growth potential for Canadian wood products in these markets (e.g., hybrid wood frame systemsFootnote 31 in China, and multi-family, multi-storey homes in Korea).

    China’s rapid economic growth, growing middle class, and internal migration from rural communities to urban centers is driving the demand for new housing and the potential for wood products.Footnote 32 Several interviewees noted that China’s 12th 5-year plan identifies a need for 36 million affordable housing units that also address energy efficiency and carbon neutrality. The demo projects were designed to help show how these goals can be reached with wood frame construction. Affordable housing is a big part of China’s housing stock (e.g., six storey walk-ups represent 60 percent of China’s housing) and any effort to introduce wood frame construction into this segment is important due to its size.

    South Korea is an important emerging market for Canadian wood products due to its strong GDP growth, and revisions to building codes in fire and acoustics to allow for wood frame construction in multi-storey low rise residential housing.Footnote 33 EAP Demo projects can help CWEP address the technical and cultural barriers to the development of the wood frame construction in these markets. Wood building starts (single family, renovation / addition, and non residential) are expected to climb from 7,000 in 2007 to between 16,000 and 94,000 by 2020.Footnote 34
  • Demonstration of wood construction plays a key role in increasing receptiveness of target markets to Canadian wood products: The evaluation found that demonstration projects funded by the Economic Action Plan are seen as an efficient and effective way to showcase the benefits of wood frame construction, while building credibility and important networks with Chinese developers, builders and government agencies.Footnote 35
  • Domestic demonstration projects addressed need for innovative uses of wood in non-residential construction: In the Canadian market, EAP Demo projects showcase innovative products and/or the innovative use of traditional wood products in non-residential applications such as schools, health care facilities, and research facilities. For example, the CLT domestic demonstration case study reports that the true ‘demonstration trial’ allowed builders and specifiers to witness and acquire first-hand experience with these innovative uses of wood in non-residential construction.
  • Demonstration projects address environmental concerns in construction and green building, which are emerging as key market acceptance issues for wood products: According to NRCan’s 2010 Forest Products Market Development evaluation, one of the most prominent changes in the market for wood products in recent years is the rise of environmental concerns in construction and green building interest. Green building is emerging as both a trend and a major market access issue across global forest product markets.Footnote 36 Both the offshore and domestic demonstration projects were selected, among other criteria, to emphasize the environmental benefits of wood use in construction. For example, the South Korea Eco-Village Demonstration Project purposefully incorporated many of the latest developments for energy savings and green living.

3.1.2 Alignment of Programs with Government and NRCan Priorities

Question: Are programs and activities consistent with government priorities and NRCan strategic objectives?

Summary – International Influence Programs Alignment with Federal Priorities

The mandate and objectives of all three programs are consistent with NRCan’s first strategic objective: Enabling Competitive Resource Sectors. The programs work to foster an internationally competitive forest sector through investments in innovation and reducing barriers to trade arising from environmental concerns and acceptance of innovative applications of wood in construction. A review of budget documents and NRCan’s Report on Plans and Priorities confirms that these remain priorities for the federal government and for NRCan.

International Influence Programs are consistent with NRCan’s priority of Enabling Competitive Resource Sectors: The mandate and objectives of all three programs are consistent with NRCan’s first strategic objective: Enabling Competitive Resource Sectors. According to the 2011-12 Report on Plans and Priorities, NRCan works to foster a competitive forest sector by generating increased value from forest resources through innovation and by reducing barriers to trade. NRCan invests in and carries out research to advance the competitiveness of the sector through product and process innovation and value-added product development. The Department also supports initiatives to reinforce Canada as a sustainable and responsible forest nation, while promoting the environmental credentials of Canada’s forest products to key influencers and international consumers of those products.Footnote 37

LEAF

  • LEAF was designed to address important market access issues related to forest products certification: LEAF’s mandate is to help create a sustainable forest management market advantage for industry. This directly supports NRCan’s Enabling Competitive Resources Sectors strategic objective by addressing a significant threat to Canadian forest product exports. For example, LEAF funding helped FPAC to address ENGO-led campaigns that strongly promoted FSC certification as the only credible standard, which would have restricted the ability of many Canadian suppliers that are certified through SFI and CSA to meet certification requirements in overseas markets.
  • Forest sector environmental reputation is a federal government priority: Budget 2008 announced $10 million over two years to NRCan for an initiative to promote Canada’s forestry sector in international markets as a model for environmental innovation and sustainability. The Budget noted that Canada’s government is committed to supporting industries experiencing hardship due to international economic volatility.Footnote 38 Ultimately, funding of $20 million for LEAF was allocated over four years.

IFPP

  • IFPP was designed to promote Canada’s sustainable forestry practices and correct misinformation affecting market access: IFPP’s mandate was to promote Canadian sustainable forest management policies and practices internationally, and maintain market access for Canadian forest products abroad. This directly supports NRCan’s Enabling Competitive Resources Sectors strategic objective by monitoring and addressing threats to Canadian forest product exports through promoting Canada’s sustainable forest management policies and practices while correcting incomplete and biased information expressed in key forest export markets regarding those policies and practices.

EAP Demos

  • EAP demonstration projects address market acceptance issues relating to environmental benefits and innovative applications of wood: The EAP Demos were intended to demonstrate the attributes of using wood frame construction in large scale residential and commercial applications and to emphasize the environmental benefits of wood in markets sensitive to environmental considerations. This directly supports NRCan’s Enabling Competitive Resource Sectors strategic objective by addressing environmental and building code market access issues. It also supports the strategic priority through advancing product innovation (e.g., cross laminated timber product innovation used in the domestic demo projects).
  • Large-scale demonstration of Canadian uses of wood in target markets supported federal economic stimulus priorities: Budget 2009 (Economic Action Plan) announced $170 million over two years to secure a more sustainable and internationally competitive forest sector. This included $40 million dollars for the Canada Wood Export Program (CWEP), North America Wood First Program (NAWF), and Value to Wood (VW) programs as well as an additional $10 million to support large-scale demonstrations of Canadian-style use of wood for construction in targeted offshore markets, and non-traditional uses of wood in domestic markets.Footnote 39

3.1.3 Alignment of Programs with Federal Roles and Responsibilities

Question: Is there a legitimate, appropriate and necessary role for the federal government in these programs and activities? Is NRCan’s role appropriate in the context of the role of others?

LEAF

Summary – LEAF Alignment with Federal Roles and Responsibilities

NRCan’s role in LEAF is legitimate, given the Department’s mandate to promote market access for Canada’s natural resources products. In terms of the LEAF science component, NRCan has unique scientific expertise to provide information on Canada’s sustainable forestry practices. NRCan’s role in the contribution portion of LEAF was indirect, but necessary. There was a clear role for supporting a key export industry experiencing difficult times, under significant pressures from ENGOs and facing other governments’ procurement policies. It was appropriate for NRCan to provide contributions to protect the reputation and access for Canadian forest products given that the economic crisis for the sector hindered FPAC’s ability to do this on its own. However, because the activities under LEAF are mainly industry-to-industry and industry-to-ENGO, it is not clear the extent to which the government should remain involved as it is FPAC’s mandate to address these issues for its members.

Evidence:

  • The federal government has jurisdiction over trade and international issues respecting forests: Section 6-f of the Department of Natural Resources Act (1994) indicates that the Minister of Natural Resources shall, “participate in the enhancement and promotion of market access for Canada’s natural resources products.”Footnote 40LEAF addresses market access issues, an international trade matter.
  • NRCan is uniquely suited to provide the scientific expertise necessary to assure consumers of Canada’s sustainable forest practices: According to documents reviewed, CFS is the most authoritative source of information on Canadian forest management, and on the boreal forest in the world. CFS has over 100 years of forest research experience and its scientists are respected throughout the world as authorities on Canadian forest sustainability.
  • FPAC’s role is to advocate for member interests on environmental challenges, exclusionary procurement policies, and perception, but economic crises have decreased FPAC’s ability to do so: FPAC’s mission is to advance the global competitiveness and sustainable stewardship of the Canadian forest products industry.Footnote 41 According to IFPP mission reports in 2006, 2007, and 2008, primary forest products (primarily commodity) producers were experiencing market access pressures in export markets due to ENGO-led campaigns that targeted Canada’s boreal forest harvesting practices, and green procurement policies that favoured FSC certifications over SFI and CSA which were used in Canada.Footnote 42

    Evidence from interviews suggests that the economic crises that the sector has been experiencing over the last ten years, coupled with the acute decline associated with the global economic crisis of 2008, have meant a significant decrease in FPAC member dues. This had limited the ability of FPAC to effectively advocate for its members in the face of these.
  • Some raised concerns over NRCan-CFS’ relationship to FPAC under LEAF due to the single contribution recipient design: Some interviewees suggested a need to clarify CFS’ relationship to FPAC. According to both NRCan-CFS documents regarding the response to the ENGO campaigns and key informant interviews, NRCan-CFS and the Government of Canada in general could be more present in terms of clearly setting the agenda, priorities, and governance of initiatives to respond to environmental campaigns against Canadian forestry practices. It appeared to some stakeholders that the agenda for a Canadian response was highly influenced by FPAC rather than NRCan.

IFPP

Summary - IFPP Alignment with Federal Roles and Responsibilities

NRCan’s role in IFPP was legitimate given the Department’s mandate to promote trade in natural resources and the need for a government-to-government vehicle for promoting Canada’s sustainable forest management reputation. Greater role clarity in the context of other programs may have improved perceived appropriateness of this government-led initiative.

Evidence:

  • Provincial stakeholders see a continued need for IFPP-type programs: The rise of Forest In Mind – a program similar to IFPP in terms of promoting government-to-government relationships related to market access issues – indicates that several key stakeholders, including the large forestry provinces, see a need for a continued federal government role.
  • Stakeholders suggested that IFPP activities were valuable but had been unfocused at times, leading to role confusion: According to the 2010 internal review of IFPP, almost all interviewees agreed that the focus of the Program had been in the most appropriate trade issues and supported its overall objectives. Some provincial stakeholders, however, questioned the role for IFPP in promotion activities, especially while other programs led by the industry sector were better suited to undertake promotion. Similarly, a 2010 CCFM management review suggested that IFPP needed to be redefined with a more strategic focus.Footnote 43 Interviews for this evaluation confirmed that role confusion was a problem. Nevertheless, interviewees felt that there is a role for government-to-government work such as that previously performed by IFPP.
  • IFPP existed in the larger collection of Canadian forest sector market access and development programs and may have suffered from its small size compared to other programs: The IFPP existed within a cluster of Canadian market access / market development programs involving several orders of government, and associations. Evidence from interviews and case studies suggests that although IFPP was still relevant and making a positive contribution when it was terminated, this was difficult to see due to multiple programs and messages, role confusion, overlaps and some reporting gaps.

EAP Demos

Summary – EAP Demos Alignment with Federal Roles and Responsibilities

There is a strong legitimate role for NRCan-CFS in terms of facilitating market development activities such as demonstration projects. NRCan’s involvement brought together the necessary stakeholders, and funding, to implement the projects in target markets. For offshore projects, NRCan played a valuable government-to-government role. For the domestic projects, NRCan brought funding to the table to offset the risks involved in implementing truly innovative wood products applications.

Evidence:

  • A strong legitimate role exists for NRCan-CFS in terms of addressing the government-to-government components of market access issues: Interviews and the document review suggest that a strong role exists for NRCan-CFS in market access issues. For example, in the offshore demonstration projects, the involvement of the federal government helped raise the profile of these projects and build the necessary relationships with key government decision makers in China and Korea. Under the Canada Wood banner in offshore markets, NRCan and other government departments and agencies – including the National Research Council and DFAIT – work collaboratively as ‘honest brokers’ providing unbiased, factual information and advice to international governments and agencies on building codes, performance standards, and environmental issues such as green buildings and sustainable forest management practices.
  • NRCan-CFS relationships with key stakeholders in offshore markets were necessary to implement the demonstration projects: As the EAP demonstration projects were delivered on the CWEP and NAWF program platforms, the existing programs and relationship between the delivery agents and NRCan-CFS facilitated the delivery of EAP demonstration funding. In the offshore projects, the involvement of the federal government helped raise the profile of these projects and build the necessary relationships with key decision makers in China and Korea.
  • Domestic projects would not have gone ahead without federal funding: In the domestic context, the federal role was primarily one of a funder which was appropriate given the role of the provinces in codes and standards, research organizations involved in the research and development of new building materials (e.g., FPInnovations), and existing program delivery groups (CWC and Cecobois).
  • Demonstration projects were higher risk product innovations: Case studies of select projects reveal that they were in many cases true innovations, and in some cases, the first application of designs and materials in key markets. For example, both the Complan Building and cross laminated timber domestic demonstrations employed first time applications of new wood building systems in Canada. Given the ‘newness’ and uncertainty that characterize innovative ventures, NRCan involvement was seen as necessary by industry and government interviewees.

3.2 Performance - Effectiveness

3.2.1 LEAF

3.2.1.1 To what extent have intended outcomes been achieved as a result of LEAF?

Summary – LEAF Achievement of Intended Outcomes

LEAF’s main goal is to enhance the Canadian forest sector's environmental reputation abroad and promote market acceptance of Canadian forest products. The evaluation interviews and case studies identified several areas where LEAF allowed FPAC to contribute to some important successes in terms of market acceptance for Canadian forest products based on environmental credentials and reputation (e.g., engaging large U.S. companies on the merits of PEFC certifications, working with partners on E.U. acceptance of PEFC certifications). FPAC’s main contributions with LEAF funding have been in the U.S. market, and as a supporting but smaller player with other organizations in Europe and Asia.

The LEAF science projects are still underway and results will not be available until 2012 (the Boreal Synthesis Project is slightly behind schedule). Even then, it will be too early to assess the impact of LEAF science projects on improved or maintained access by Canadian companies in international markets. However, evaluation interviews and case studies suggest that positive impacts on decision makers (i.e., responding more rigorously to market campaign claims with science-based evidence) will likely occur within the next few years.

REACH and ENGAGEMENT:
Appropriate target groups are sufficiently ‘reached’ and ‘engaged’ by LEAF initiatives / projects.

In terms of reaching and engaging market access target groups (i.e., policy makers), LEAF-funded FPAC activities primarily supported and augmented the efforts of other players that reach governments. LEAF was more directly involved in reaching industry groups, such as buyers and some designers, through informational activities and campaigns, particularly in the U.S. Many of the achievements of LEAF relate to consolidating environmental sustainability information and developing or delivering key messages to target market audience groups. LEAF funding to FPAC has augmented the efforts of others, allowing FPAC to contribute to in-market changes in the E.U. and Japan which have been led by others. LEAF science projects, although slightly behind schedule, appear to have been well-planned and show strong potential to influence policy-makers with regard to the treatment of Canada’s boreal forest.

Evidence:

  • FPAC is collaborating with Canada Wood Japan to reach industry, environmental and government stakeholders with messages about the sustainability of Canadian wood products: The Japan case study shows that in 2010-11, FPAC and Canada Wood Japan jointly identified a need to consolidate existing communication material and develop an integrated campaign to promote Canadian forest management practices and environmental credentials in Japan. This was in response to emerging Japanese housing and environmental policies that promote the sale of domestic wood products over imports, threatening Canadian exports to Japan. LEAF funding allowed FPAC to hire a public relations firm to develop content for marketing modules and brochures that built on previous efforts in Japan (e.g., the lifecycle cost assessment done by Athena, and the wood miles research showing relatively similar carbon footprint for local and imported wood products). A total of 5,000 copies of the brochure were printed in April 2011.

    FPAC and Canada Wood Japan are in the process of delivering phase 2 of the environmental messaging program which includes speaking opportunities for Canada Wood Japan (40-50 seminars held each year) and a media campaign that will target key groups. This includes leading retail and wholesale buyers of pulp, paper and wood, leading companies that consume large quantities of pulp, paper and wood, and wood products agents and distributors. Copies of the brochures have been sent to approximately 40 Canadian companies working in Japan, and are being used by FPAC and Canada Wood in tradeshows.
  • LEAF-FPAC communicated sustainability of wood messaging to architects / engineers in the U.S., but sustainability message was a small component of a larger wood promotion effort: According to the Texas ‘Power of Wood’ case study, FPAC partnered with DFAIT, NRCan, and the Canadian Wood Council in delivering a series of ‘Power of Wood’ seminars on building with wood in three Texas cities. Close to 400 architects and engineers attended and received American Institute of Architecture professional development credits.

    Interviews with organizers suggest that messages were attractive, but that the green building message was less important to attendees than were the cost-effectiveness, and durability messages. Recent surveys and focus groups conducted for the U.S. Woodworks Program with target audiences in the U.S. show that cost, performance, durability and compliance with building codes are the main factors influencing sourcing/purchasing decisions.
  • LEAF funding has allowed FPAC to develop two web-based vehicles for communicating with Canadian industry and other stakeholders. Uptake has been limited, but Canadian forest industry companies are using some of these marketing materials to reach customers with messages about the environmental performance of their brands: FPAC has developed two websites: www.fpenvironmentalhub.com collates information from a variety of forestry and environmental sources and sends updates to Canadian forest sector partners daily. Website use data provided by FPAC as of June 1, 2011 indicates that 37 registered users had accessed the site in the past year. FPAC managers are disappointed in the level of use and are trying to grow these numbers by refining the website content and promoting it broadly to industry through email campaigns.

    In June 2011, FPAC launched the Feel Good website (www.Feel-Good.ca) which highlights to the international market place the Canadian forest industry’s commitment to environmental leadership. The website includes fact sheets, webinars, and white papers from a majority of LEAF partners and stakeholders divided into key categories: pulp and paper, wood, and sustainable forest management.

    After just one month of operation (i.e., end of July 2011), the number of unique registered users for the latter website was 200. Evidence from industry interviews shows that the Feel Good website provides Canadian industry with generic material (environmental / forestry data, messages, images, video) that several have incorporated into their own marketing material (e.g., company brochures). Several industry interviewees have also referred customers directly to the site for arms-length, unbiased information on Canada’s environmental performance and credentials.
  • LEAF science has shown early progress on engaging stakeholders and encouraging use of science in decision making: There has been some engagement with policy groups (nationally and internationally) to integrate research findings in decision-making. For example, a working prototype of the harvested wood products carbon accounting model has been used to calculate Canada’s 2020 carbon balance reference levels for the international climate change negotiations under the Framework Convention on Climate Change. The project team is also working with CFS economics and policy branch and provincial government agencies to apply the model in an assessment of the climate change mitigation potential of the forest sector. A provincial scale variant of the harvested wood model is used in a collaborative project between the B.C. Ministry of Forests and CFS. The project leader has made presentations to the Canada Green Building Initiative, the Food and Agriculture Organization (FAO), the Canadian Council of Forest Ministers Task Force on Using Wood to Mitigate Climate Change, the University of British Columbia (UBC), and on several other occasions on the benefits of using wood over steel and concrete buildings from the perspective of carbon storage potential and reducing emissions through the use of wood products.
  • Provincial governments have contributed research staff to the LEAF Boreal Synthesis Science Project: The Boreal Synthesis Project will describe the state of the boreal and the impact of various factors on the health of the forest in 13 papers that will be published in a peer reviewed journal in the fall of 2012. According to the project leader, there are approximately 50 researchers involved in writing the 13 papers, including 36 NRCan researchers and the balance from universities (nine researchers) and provinces (five researchers). Program managers expect that the boreal synthesis will provide a consistent and integrated view of the boreal that can be used to inform policy development.

REACTION and CHANGE:
Groups reached by LEAF initiatives show positive reactions, capacity and commitment to change. Incremental changes to policies and practices related to the use of wood have reduced access issues (e.g., environmental market access issues are reduced and avoided in target markets).

Groups reached by LEAF-FPAC efforts have reacted positively and shown that they are willing to use LEAF information on Canada’s sustainable forest management practices. The LEAF case studies suggest that progress has been made on improving environmental acceptance of Canadian forest products and acceptance of Canadian forest certifications in target markets, which by their nature reduce access barriers and promote acceptance. The degree to which successes are attributable to LEAF varies considerably by market. In Europe, intended outcomes on acceptance of non-FSC certifications appear to have been achieved by the consortium of participants which included LEAF-FPAC as a smaller, but supporting contributor. In the United States, LEAF-FPAC has been a more significant and sometimes lead contributor, while LEAF-FPAC has had limited influence in Asia as activities here have only been underway for a short time.

Evidence:

  • LEAF-FPAC monitoring of procurement policies in target markets has identified opportunities to help change the views of decision-makers on acceptable certification standards: As part of the LEAF program, FPAC actively monitors private and public procurement policy developments in the United States, Europe and Asia to ensure inclusiveness of Canadian forest certification schemes. For example, in November 2010, FPAC learned that a California-based alliance for promoting sustainable resources had developed a guidebook on desired public purchase environmental criteria for local governments thinking of adopting environmentally-friendly procurement plans. In its guidance, the alliance only referred to the FSC certification standard, which would exclude Canadian forest products that use a combination of FSC and PEFC certifications. FPAC contacted the project lead and provided information on the similarities between the various certification systems. The alliance then changed its guidance to include both FSC and PEFC certification schemes.
  • FPAC augmented Canadian government efforts by liaising with industry stakeholders to support inclusive certification in European trade and government procurement policies: FPAC reported in its annual performance on LEAF that it had worked with government partners to successfully achieve approval of PEFC endorsed certification schemes in European government procurement markets.Footnote 44

    The European Procurement evaluation case study suggests that while there were significant successes, the LEAF-FPAC role was relatively minor compared to the role of government representatives and their efforts that pre-date LEAF. Consider that in the case of the E.U., particularly Dutch procurement policies, the working group was largely led by Government of Canada officials from NRCan, DFAIT and key provinces, as well as PEFC certification group representatives (SFI and CSA). FPAC worked with these lead Canadian partners to deliver coordinated messages and formal submissions on the acceptability of Canadian certification standards to the U.K. Central Point of Expertise on Timber (CPET) authorities and the Dutch Timber Procurement Assessment Committee (TPAC) authorities. FPAC also lobbied to European industry groups – i.e., U.K. Timber Trade Federation (UK industry) and the Netherlands Timber Trade Association – to support acceptance of Canadian certification standards with CPET and TPAC. While FPAC was part of the working groups, the key stakeholders interviewed reported FPAC to have been a smaller contributor.
  • Canadian forest certification schemes supported in Dutch procurement policies: Despite a 2010 challenge by World Wildlife Fund, the acceptance of CSA and SFI certification systems, in addition to FSC, has been maintained by the Dutch government (i.e., TPAC). Interviews with involved stakeholders suggest that a multitude of activities, some involving LEAF-FPAC, led to the TPAC recognition of alternative certifications. The submissions to TPAC on the merits of CSA and SFI certifications by their representatives (sometimes compensated by LEAF-FPAC) were seen as particularly important to this work.
  • LEAF-FPAC efforts to promote Canadian-used certification schemes have been largely successful, particularly with U.S. market acceptance: According to a broad range of interviewees, promotional support of Canada’s stewardship achievements with regard to forest certification has been used and seen as beneficial by Canadian companies selling to U.S. buyers previously under threat of boycott by ENGOs. For example, LEAF-FPAC initiatives actively engaged, met with, and provided information to key customers in the U.S. to promote Canadian used certification schemes. According to some industry interviews, providing information on the sustainability of Canadian operations to major U.S. buyers, reduced the threat of boycotts because the buyers now have credible information they can refer to when confronted about the sustainability of their Canadian sourced products.
  • Not clear that specific environment-related access issues in the U.S. were reduced, however ‘acceptance’ of wood appears to have been enhanced through possible increased acceptance in green building rating systems: Evidence from interviews revealed that a debate exists as to the seriousness of the boycott threat of Canadian forest products in the U.S. Representatives from some of the large Canadian shippers suggested that their operations never experienced a significant boycott threat in the U.S., though it was possible that their sales could have been impacted in terms of products that would be shipped to the U.S. and then from the U.S. to Europe. Since a widespread boycott in the U.S. was never realized, it is difficult to estimate what the impact would have been had LEAF-FPAC not engaged in outreach activities in that market.

    Having said that, efforts to attain acceptance for wood products in the Leadership in Energy and Environmental Design (LEED) rating systems in Canada remain important. Established in 1998, LEED uses a suite of rating systems to assess and certify the design, construction and operation of green buildings, homes and neighbourhoods. In 2009, a coalition including FPAC, Canadian Wood Council, and BC FII submitted challenges and suggested changes to LEED to adopt inclusive certification schemes. According to interviewees, this is a positive step but there is room to advance LEED through improved government-to-government efforts, as some interviewees believe that LEED continues to discriminate against wood.

Ultimate LEAF Outcome

Improved environmental ‘acceptance’ and increased sales of Canadian forest products.

Improved acceptance ‘overall’ is difficult to determine at this time. In general terms, one could speculate what ENGO-induced boycotts or bans could have meant for the Canadian forest sector had they been widely realized in the U.S. Regarding Europe, sales at risk from non-inclusive forest product procurement rules would be difficult to estimate since wood and fibre sourced from non-FSC forests and sold to Europe is not disclosed. However, it would likely be fair to say that tens of millions of sales might be preserved by this acceptance (i.e., if even one percent of Canadian fibre shipped to Europe was affected because it is PEFC and not FSC certified, this would mean approximately $13.5 million in lost or redirected sales). It is too early to speculate on the impacts of LEAF’s activities in Japan.

LEAF has, with its partners, contributed to progress on resolving certification acceptance issues and has promoted the sustainability credentials of Canadian forest practices with industry (most notably in the U.S.) in target markets. LEAF science projects, when completed should help to address key environmental concerns about Canadian forestry with technical scientific detail. In the long run, these efforts will likely improve acceptance, a logical precursor to increased sales.

3.2.1.2 What are the factors (both internal and external) that have facilitated or hindered the achievement of expected results?

Summary – Factors Influencing LEAF Expected Results

Two significant factors were found to influence LEAF performance – collaboration and program oversight.

Collaboration is clearly an important factor in successfully delivering LEAF. Where FPAC has had the most success with LEAF funded activities, it has collaborated with a range of government and association stakeholders in key markets, with many of these stakeholders playing leadership roles. Moreover, while FPAC strengths are in promotion activities, many LEAF activities require additional scientific and technical expertise beyond FPAC’s current internal capacity. These gaps have been addressed through the development of collaborative agreements between FPAC and third party experts. LEAF science projects also benefitted from strong collaboration and consultation with stakeholders. However, uncertainties about the stability of funding for science projects may be impacting the ability to retain knowledgeable researchers for longer term projects.

The National Advisory Board for LEAF was not implemented as was originally planned. FPAC’s work plans and performance reporting on LEAF activities, particularly in the early years of the Program, shows a wide scope of activities, but does not clearly link these to intended program objectives. This made it difficult to assess the contribution of LEAF funding to activities that were incrementally beyond what FPAC would have done without LEAF funding. Particularly with single-recipient programs such as LEAF, stricter program oversight is important to ensure that the interests of all forest sectors and regions are adequately being served, and to avoid duplication of effort and potential mixed messages with other programs.


Evidence:

  • Collaboration with others on key initiatives has been integral to LEAF-FPAC achievements in target markets: Each of the three LEAF case studies covering FPAC activities in target markets highlighted the importance of collaboration with and, in some cases, reliance on others in achieving LEAF outcomes.

    Collaboration between FPAC and Canada Wood Japan facilitated the design and delivery of a sustainable forest management and environmental credentials marketing campaign, whereas previous less collaborative LEAF-FPAC efforts in the Japan market were less successful. For example, the LEAF-led Japan Policy Audit of laws and regulations affecting the sale of Canadian wood treated the Canada Wood staff in Japan as a resource for the project and not a partner. As a result, the audit ultimately duplicated what Canada Wood in market staff already knew. Interviewees from Canada Wood Japan indicated that without collaboration with them, FPAC, with little experience in Asia, risked duplicating on-going efforts or presenting information contradicting other messaging.

    Similarly, the E.U. Procurement case study demonstrated that the key assisting factor in achieving success in Dutch procurement policy treatment of Canadian certification schemes was the collaborative efforts of Canadian federal government (i.e., IFPP; NRCan and DFAIT), certification groups (i.e., CSA and SFI) and industry (i.e., FPAC). Interviewees felt that public sector and technical expertise on certification practices were key to influencing the Dutch decision to accept CSA and SFI certifications.
    As described earlier, the Texas ‘Power of Wood’ promotion case study showed that this three city tour that promoted wood frame construction to architects took place due to collaboration among IFPP, DFAIT Trade Commissioners, WoodWorks, and FPAC.
  • FPAC strengths are advocacy and promotion, which required significant outsourcing of LEAF funds through FPAC in areas where FPAC lacked expertise, affecting NRCan’s ability to provide oversight: Several interviewees representing different stakeholder groups suggested that FPAC had a skill set as advocates and promotion specialists – but did not have expertise in the technical and scientific aspects of forestry and forest stewardship.

    FPAC may also have lacked experienced in some geographic (e.g., Asia) and product (e.g., value-added, SPF) markets. As a consequence, it appears that extensive consulting and other agencies’ resources were needed to supplement FPAC capacity to successfully carry out projects. This means that FPAC, in some situations, mainly brought money to the table when it came to projects. The 2011 NRCan audit of LEAF, which covered the same time frame as the evaluation, found that 75.6 percent of LEAF funds provided to FPAC were used to sub-contract work to third parties.Footnote 45 This funding arrangement made it difficult for NRCan to track these in-market activities.
  • Limited consultation in early years of LEAF was mainly due to not implementing the National Advisory Board (NAB); consultation has improved in recent years: The concept of a National Advisory Board was presented in the program risk based audit framework (RBAF) as a mechanism to manage the risks of not addressing the needs of the broader community inherent in this national forest sector-wide program delivered through a single contribution recipient (i.e., FPAC). When LEAF began, it was suggested that FPAC’s pre-existing Market Leadership Committee (MLC) could serve as the NAB, but interviews and a review of MLC meeting minutes shows that it did not function as a LEAF national advisory board. FPAC members account for about 60 percent of forest sector revenues, and thus those companies whose sales represent 40 percent of the sector, as well as key provinces were excluded from MLC meetings.

    At the launch of the Program, FPAC did meet with individual associations to discuss priorities – e.g., the Council of Forest Industries (COFI), the Coast Forest Products Association (CFPA), etc.; however, a formal board or committee was never convened. Having said that, interviewees within these associations expressed satisfaction that in recent years, the level of consultation and opportunity to provide input on specific issues when approached by FPAC has improved.
  • FPAC annual reporting on LEAF is limited to activities and CFS has raised concerns about the degree to which such reports reflect the real impact of LEAF: The document review found that the achievements reported in annual and quarterly FPAC reports (required as part of the LEAF contribution agreements) did not address the five intended outcomes outlined in the LEAF Results-based Management Accountability Framework (RMAF). Reports instead referred to outputs and deliverables achieved. This point is documented in correspondence between CFS and FPAC as recently as the summer of 2011. It is important to note that performance reporting from FPAC on LEAF-funded activities has improved over the course of the Program, but further efforts are needed to clearly link activities to intended outcomes. This is in part due to the fact that LEAF work plans (as recently as the 2011-12 work plan) are very broad and do not link activities and deliverables to intended outcomes.
  • Competitive culture across Canadian forest sector associations may have limited LEAF coordination via FPAC: Achievement of results by LEAF-FPAC was also hindered to some degree by the competitive ‘culture’ across sector associations that have, in the past, affected relationships. Evidence from interviews and a review of documentation suggest that there are many industry associations representing a multitude of interests across Canadian regions and different product types. While the relationships have improved, interviewees noted some lingering elements of conflict, competition, and lack of cooperation, suggesting a lack of trust between and among associations as shown by limited information sharing, and occasional lack of coordinated initiatives.
  • Strong engagement of stakeholders on information gaps to be addressed by LEAF science has contributed to focusing on ‘the right’ issues: The CFS science component of LEAF engaged stakeholders early on in the process. CFS consulted with forest industry and ENGO representatives to identify science gaps related to environmental sustainability and to confirm the list of issues. Emerging from these consultations was a list of priority research areas, namely: climate change, carbon targets and reporting; boreal forest management; and woodland caribou protection. Based on these priority areas, CFS science advisors identified key research priorities that could be addressed internally by CFS researchers.
  • Uncertainty around funding for length of science projects may lead to attrition of CFS research teams: According to the LEAF core science projects case study, while there was an ‘unspoken commitment’ that the selected projects had priority, CFS managers and lead researchers were unable to guarantee three-year positions for their research teams because of the annual funding approach used. This has led to attrition of research staff toward projects with more sustained funding, with potentially more attrition to occur in the near future.
  • Renowned reputation of CFS researchers involved in LEAF science projects has attracted strong research partners at Masters and PHD levels: According to the LEAF science case study, the carbon accounting and caribou projects required researchers with specialized skills and experience. The projects and reputations of the lead CFS scientists were sufficient to attract interested and highly qualified students to participate in the projects (i.e., they wanted to work with leaders in their field). This likely had a positive impact on the quality of work on LEAF science projects.
3.2.1.3 Have there been any unintended positive or negative outcomes?

Summary – LEAF Unintended Outcomes

In general, two unintended outcomes arising from LEAF were identified. The first is that there was a perceived lack of clarity on the relationship between NRCan-CFS and FPAC and confusion on the part of stakeholders outside of NRCan and FPAC regarding the status and mandate of LEAF. The second is the potential negative impacts on stakeholder relationships with CFS arising from LEAF-funded promotion of the Boreal Forest Agreement. The agreement was negotiated between FPAC and ENGOs to avoid boycotts of FPAC member products (i.e., pulp and paper), but was not part of their LEAF activities. The agreement is controversial as at the time of its announcement, it did not have the participation of the provinces and aboriginal government.

Evidence:

  • Lack of clarity on relationship between NRCan-CFS and FPAC and other forest sector programs: Interviews suggest that one unintended effect of LEAF could be confusion on the part of stakeholders outside of NRCan and FPAC regarding the status and mandate of LEAF. Part of the problem appears to relate to promotion. LEAF was never officially announced (confirmed by the NRCan audit) yet the acronym was known to various public and private stakeholders. Some provincial and industry interviewees that had heard of LEAF were concerned about the nature of the relationship between the federal government and its key stakeholders and if FPAC priority setting reflected the views and priorities of the federal government. For some, the perceived lack of transparency about NRCan’s relationship to FPAC was compounded by NRCan’s not renewing funding for IFPP (now Forest in Mind).
  • Some LEAF funding to FPAC supported the promotion, not the negotiation, of the Boreal Forest Agreement, whose development was not planned as part of the LEAF program objectives, but was seen by FPAC members as an important achievement: Several industry representatives raised the Boreal Forest Agreement (BFA)Footnote 46 during interviews – citing the agreement as critical to helping maintain sales of boreal-sourced fibre in select markets. Interviews and document review confirm that the agreement has been promoted to target markets in the E.U. and the U.S. through Canadian embassies which has had positive impacts. Prior to the agreement, ENGO campaigns targeted forestry operations in the boreal forest which threatened to affect sales by Canadian companies, especially in E.U. markets. The impact and direct attribution on preserving sales to the specific agreement is difficult, but acknowledged by most informed stakeholders to have been important.

    Several interviewees noted the value of the BFA to their companies’ sales. Prior to the agreement, some buyers had a blanket policy not to buy wood from the Boreal. After the agreement was in place, sales resumed. For example, one company joined FPAC and became a signatory to the BFA to allay concerns of one of their long-standing customers that the company did not have FSC certification (even though it is SFI certified).
  • BFA seen by some as overstepping LEAF mandate, risking broader stakeholder relationships, and implementation liability: Some interviewees tied LEAF funding to the support of the Boreal Forest Agreement (BFA), and FPAC has also identified the BFA as a key LEAF achievement in terms of promotion. It was, in contrast, seen as an ‘overstep’ by others. Several industry interviewees expressed concern with the approach used to develop the BFA. They noted that without the involvement of the provinces and Aboriginal groups, the ability to implement the agreement across the boreal region is at risk. Some key provincial stakeholders felt that they were not appropriately engaged in this process and are not necessarily committed to supporting the tenets of the agreement – many of which would rely on provincial actions given their authority over the resource. An unintended impact of the agreement process may have been the alienation of some provinces, Aboriginal groups, and companies not represented by FPAC.

3.2.2 IFPP

3.2.2.1 To what extent have intended outcomes been achieved as a result of IFPP?

Summary – IFPP Achievement of Intended Outcomes

IFPP contributed to overcoming market barriers in Europe and the U.S. and in increasing awareness and knowledge of Canadian sustainable forestry practices in target audiences by bringing players together and coordinating a Canadian position to governments on issues of sustainability. However, direct attribution of IFPP activities to increased exports in target markets is not possible.

Evidence:

  • IFPP has successfully engaged the broad Canadian interests in market access issues related to sustainable forest management: According to interviews with government and industry representatives conducted in a 2010 management review of IFPP, the Program appears to have worked well in engaging the broad range of Canadian government interests in the forest sector to address market access barriers relating to sustainable forest management. Through its connection to Trade Commissioners and DFAIT missions, the IFPP successfully engaged in monitoring and surveillance of environmental market access issues in target markets. DFAIT officials credited IFPP with making the forestry file a priority in incoming and outgoing missions. These findings have been confirmed by interviews with key stakeholders in the current evaluation.
  • IFPP stakeholders believe that the Program has lead to successful market access outcomes in target markets, though admittedly see performance measurement as an issue: Interviewees for a 2010 management review of IFPP expressed a general satisfaction that there had been positive outcomes from IFPP. Industry sector and DFAIT Trade Commissioners were able to provide anecdotal evidence about successful initiatives in overcoming market barriers in Europe and the U.S. and in increasing awareness and knowledge in target audiences in the U.S. However, interviewees were generally not able to link increased or maintained sales to these reductions in barriers.
  • IFPP incoming government missions were likely instrumental to the inclusion of Canadian PEFC certification schemes in European (especially Dutch) procurement guidelines: Many stakeholders in the European Procurement case study viewed IFPP as a key element in the Dutch Procurement (and broader European) success. IFPP hosted incoming missions involving key Dutch and other European officials. The target audience for the mission included key players involved in the development of green procurement policies and/or in the assessment of forest certification systems. IFPP also organized a visit to B.C. and Quebec for the head of TPAC to better understand Canadian forest certification and sustainable forest management frameworks. Mission participants and follow-up reporting to the CCFM suggested that these missions made a significant difference in securing acceptance of PEFC-endorsed Canadian certifications.
  • IFPP incoming mission generated interest in developing the Power of Wood Texas speaking tour promoting wood: According to the Texas Power of Wood case study, IFPP hosted an incoming mission to demonstrate Canadian sustainable forest management, which served as a catalyst for the three city Power of Wood Texas tour attended by 400 architects. Interviews with organizers credited the IFPP with bringing together partners for and organizing the tour, including speakers from WoodWorks, CFS, and FPAC.
3.2.2.2 What are the factors (both internal and external) that have facilitated or hindered the achievement of expected results?

Summary - – Factors Influencing IFPP Expected Results

One of the key factors affecting the achievement of IFPP outcomes is collaboration and relationship development, particularly with DFAIT Trade Commissioner Service (TCS).

Evidence:

  • IFPP success was highly dependent on the strength of relationships involved: Interviews and case studies conducted for this evaluation suggest that IFPP’s ability to deliver on goals was highly dependant on the relationships involved. For example, the Program relied considerably on DFAIT Trade Commissioners in target markets. In the Texas Power of Wood case study, the promotional tour was jointly organized through the efforts and resource pooling of the Canadian Consulate in Texas and lead IFPP personnel at CFS.
3.2.2.3 Have there been any unintended positive or negative outcomes?

IFPP

No unintended impacts were identified with the conduct of IFPP. However, the conclusion of IFPP suggested to some stakeholders that the federal priority placed on government-to-government market access activities may have changed: IFPP was established in 1993 and not renewed at the end of 2010-11. As noted above, this prompted some forestry provinces to create Forest in Mind with a similar mandate to IFPP. It is funded by the key forestry provinces through CCFM and is administered by a small secretariat at CFS.

3.2.3 EAP Demos

3.2.3.1 To what extent have intended outcomes been achieved as a result of EAP Demos?

Summary – EAP Demos Achievement of Intended Outcomes

The main intended outcomes of the EAP Demos were to demonstrate the attributes of using wood-frame construction in large-scale residential or commercial applications and to emphasize the environmental benefits of wood use in markets that are increasingly sensitive to environmental considerations. While it is too early to assess the true impact of the demonstration projects, given that they were only carried out in 2009-10 and 2010-11, the demo projects from China, Korea, Quebec and BC examined as part of this evaluation (representing over 60 percent of funding) appear to be on track in terms of engaging key target influencers and generating positive interest in new and expanded uses of wood in construction.

It is important to note that the evaluation cannot attribute any outcomes solely to the EAP Demos themselves. The EAP demonstration funding was an add-on to the existing CWEP and NAWF programs and the results of this funding are therefore inextricably linked to these other programs. The EAP Demos should be viewed as part of the wider market development and market access efforts of the CWEP and NAWF programs.

REACH and ENGAGEMENT:
Appropriate target groups are sufficiently ‘reached’ / engaged by demonstration projects.

The demonstration projects were found to have attracted the involvement of key market access and market acceptance players in domestic and offshore target markets, including large and reputable developers, building and design firms, and key government officials. Additionally, the completed projects have been showcased widely to members of these communities in target markets. Both offshore and domestic projects that were completed illustrated to target market audiences a wide range of positive construction and environmental attributes of building with wood.

Evidence:

  • EAP Demos promoted new applications of wood frame construction, which has successfully engaged architects, builders and developers in target markets: In both Korea and China, completed projects were promoted to members of the target market communities. In the Korea Eco-Village case study, the demo project was the first of its kind in Korea (i.e., a four storey wood frame house) and was used a number of times to showcase building techniques to key target groups. In January 2010, Canada Wood Korea organized four industry/university tours of the demo site, bringing 130 architects, builders, professors and students to the site.

    The China demo projects case study also highlights promotion of wood frame construction techniques to target market audiences. During Expo 2010, over 30 seminars and receptions were held at the Pavilion with a total attendance of approximately 1,500 industry experts (developers, builders and architects) and government officials.
  • Highly innovative demonstration projects engaged architects, builders, and wood suppliers in target markets to experiment with new uses of wood: As shown in the case studies and document review, each demo project was in some way a technology trial. In Canada, the projects demonstrated the use of new materials (e.g., use of engineered wood products) which challenged architects, builders, and wood suppliers to implement the new processes. Meanwhile, the offshore projects illustrated how local building codes and standards can be met with wood frame construction and helped develop builder / developer expertise. Interview findings regarding the China demonstrations highlighted that those projects were considered very innovative because China is a country of steel and concrete buildings and these were large-scale buildings using mainly wood.
  • EAP Demo projects demonstrated various construction and environmental attributes of wood in target markets: The offshore projects demonstrated a number of benefits to target market audiences that support the use of wood frame construction. For example, the Korea Eco-Village case study illustrated that the building design and construction demonstrated many positive attributes such as the cost-effectiveness and timeliness advantages over concrete construction. On-site prefabrication allowed for wall production to be done in parallel with the foundation work. The project also allowed for on-site acoustical testing.

    Similarly, the Shanghai Expo 2010 Vancouver Pavilion showcased light wood glulam post and beam designs, and key messaging throughout the building promoted wood as a natural, sustainable building material and wood frame technology as energy efficient, effective at withstanding earthquakes and cost competitive.
  • Low funding ratio in China projects suggests real engagement of key builders to use wood: According to the China case study, the demo projects involved a number of key Chinese builders investing in the projects. Because the demo funding for most of these projects was under seven percent of the total project cost, their participation meant that they financed the majority of the construction. This demonstrates a willingness of these companies to invest in developing wood frame construction expertise.
  • Offshore projects have been promoted to the public, which has potential to change the culture of how consumers think about wood in those markets: In Korea a number of promotional activities were conducted to engage the public. For example, the project proposal for the Korean Eco-Village included a public relations plan to promote the project to the general public. The China case study shows that the Vancouver Pavilion demo project was toured by 650,000 visitors during the Expo event. The Pavilion was mentioned in 180 published articles, on-line and TV features (with an estimated advertising value of $1.3 million as reported by BC FII-China).

REACTION and CHANGE:

Groups reached by demonstration projects show willingness and capacity to use wood, and incremental changes to policies and practices related to the use of wood have reduced access issues. (e.g., market acceptance and access issues are reduced in target markets.)

There is evidence of early acceptance of wood frame construction in offshore target markets and innovative uses of wood in domestic markets. While EAP demo projects have not yet led to any permanent changes to building codes or standards, some exceptions to the building codes in domestic and offshore target markets have been granted to allow new, innovative designs to be demonstrated. Moreover, a Korean demo project developer and architect have built an estimated 100 new low-rise homes with wood, suggesting an acceptance of wood frame construction as a viable low-rise housing alternative in Korea.

Evidence:

  • Chinese housing officials involved in demos are supportive of expanded wood demonstration projects: In China, the Ministry of Housing and Urban-Rural Development of the People’s Republic of China (MOHURD) and several senior Chinese government officials are now working with Canada (Canada Wood Group, BC FII and CFS) under an MOU to promote wood frame construction and green building design generally, and to jointly participate in two additional EAP demonstration projects including an apartment building in Tianjin and a New Technology Promotion Centre in Hebei (to be completed in 2011-12). Key interviewees noted that expanded projects such as this are only possible with the involvement and consent of MOHURD.
  • A Korean demo project developer and architect have continued to build with wood, suggesting a growing market niche for side-by-side homes: In Korea, the Eco-Village project was the first experience with wood frame construction for both the project developer and architect. Follow-up interviews revealed that both have gone on to pursue multiple wood frame construction projects subsequent to their involvement in the demo. For example, the architect estimates that 100 new wood frame construction ‘peanut houses’ (the term being used to market the design used in the demo project) have been built following the project, and another wood frame building project for university residences near Seoul is underway. This implies a commitment to pursue wood frame construction as a viable low-rise housing alternative in Korea.

    According to the document review and case study, Koreans view wood as a ‘healthy’ and environmentally friendly material, and the Eco-Village demo project and green buildings more generally are of growing interest to consumers. Additionally, Canada Wood Korea notes that peanut houses are a good opportunity for builders of single family homes to transition to side-by-side homes.
  • A survey of visitors to the Vancouver Pavilion project suggests audiences in China are beginning to accept the marketing claims about wood frame construction and environmental performance: In September 2010, Canada Wood China and FII China conducted a survey of 1,032 visitors to the Expo 2010 Vancouver Pavilion to assess the extent to which the Pavilion was reaching key decision makers, and better understand their attitudes towards green building and wood frame construction. More than 50 percent of surveyed visitors believe that wood is a sustainable, low-carbon, environmentally friendly construction material but were concerned about price and other issues associated with wood such as termites, fire safety and deforestation. Over 20 percent of the visitors were from the construction or urban planning professions.
  • Most domestic demo projects are not complete, but consideration of the implications of using innovative applications has begun: Interviews with proponents and experts suggest that it is too early to tell if cross laminated timber has caught on in domestic construction markets. To date, interviews and documents suggest that the domestic specifier and design community seem appropriately engaged and are considering the implications of expanding into multi-story buildings using wood instead of conventional concrete and steel.
  • Projects provided the opportunity to promote codes and standards testing in offshore markets, which helped to interest architects and developers in wood frame construction: The EAP demos have not yet led to any changes in policies as reported by interviewees or found in the course of document review, but there is evidence of progress originating from the demos (though these projects did showcase how wood frame construction could meet existing standards, some of which were influenced by earlier CWEP activities). For example, interviewees report that the technical codes and standards (fire and acoustic) research required for the Korea demo project had an impact on acoustic codes and four-storey building codes/restrictions. The demonstration project allowed for in-situ acoustic testing on a wood frame building. According to Canada Wood Korea interviewees, these test results will support future code revisions and refinements to floor and wall designs to meet Korean building code standards.

    Interviewees for the China case study reported that the involvement of the Chinese government (i.e., MOHURD) in several demo projects, and more broadly on market access issues, is a positive step for continued development of codes and standards to support wood frame construction. MOHURD involvement, and research by FPInnovations on meeting code requirements, was instrumental in getting approval for two four-storey wood frame apartment buildings in Tianjin.
  • Innovative domestic demos secured current building code approvals for first time applications, setting precedents for future buildings: The key challenge associated with the domestic construction projects is to satisfy the requirements of the National Building Code of Canada (NBCC) and local codes. According to the Complan Building Demonstration Project case study, the developer obtained permission from the Régie du bâtiment du QuébecFootnote 47 to build a fifth floor on the existing Complan building using a wood structure. This was an important step as the precedent has now been established for other buildings of this nature. The Complan building in Quebec is expected to encourage adjustments to Quebec building code interpretations that will allow for five story and possibly higher wood frame construction.

Ultimate EAP Demo Outcome

Improved ‘acceptance’ and increased sales of Canadian forest products.

Successful demonstrations of wood frame construction technology have the potential to increase demand for Canadian wood products both domestically and in offshore markets. Market acceptance will take many years, but anecdotal observations suggest that EAP demo projects, along with the broader CWEP, NAWF and BC FII programs, have made positive contributions to the achievement of such goals.

Evidence:

  • Progress has been made on securing market acceptance, but must be recognized as an ongoing and long-term effort: The common view among interviewees is that Canada has been promoting wood sales in China for only nine years and that it will be at least five to ten more years before impacts on wood used in construction are seen. In reality, Canada’s involvement in promoting wood use in China is much longer than that. Significant forays were made to promote wood and building code adaptations in China as far back as the early 1990s by Forintek, COFI and others. The impacts of the more recent coordinated efforts can be seen as building on earlier efforts.
  • Increased sales of wood to target markets are evident, but cannot be linked to demos at this time: One of the expected results of CWEP and EAP demonstration projects is an increase in demand for Canadian structural lumber. Statistics Canada data show a sharp increase in the value of Canadian lumber exported to China: from $80.5 million in 2005 to $701.2 million in 2010. Though COFI estimates that only five – eight percent of on-grade lumber is being used in wood frame construction, the number of wood frame housing starts have also increased from 3,870 in 2009 to 10,000 in 2010 (estimates provided by Canada Wood, Quantitative Metrics, June 10, 2011). Evidence from the 2010 evaluation of CFS market development programs suggests that CWEP activities have significantly contributed to increased market share for Canadian wood products in China and South Korea. However, due to the many external factors impacting international trade (e.g., demand, other suppliers, currency fluctuations, etc.), it is not possible to isolate the level of impact that CWEP (including the demonstration projects) has had on these increases.
  • The domestic demonstration projects underway have potential to lead to new acceptance of wood in multi-story construction: The domestic demonstration case studies suggest that, when completed, they may help generate market acceptance of wood in multi-story construction in North America, but that this is likely several years away. For example, the project final report for the Earth Sciences Building notes that the specification and use of the combination of laminated strand lumber-large panels, the Holz-Beton-Verbindung connection system, glulam beams and columns and cross laminated timber, in addition to the construction methodologies evolved to build the project, will be a catalyst that may spur the development and construction of similar hybrid wood buildings in Canada and the U.S.
  • EAP demonstration projects built on the success of established CWEP and NAWF programs: The construction of the wood demonstration buildings is part of a broader Canadian government wood frame construction strategy that includes building code development and acceptance, technical advice, quality assurance services, training, promotion and marketing, and working with key government departments and major builders and developers. Together, these activities have helped to yield significant growth in Canadian wood product exports in emerging off-shore markets such as China and Korea and have facilitated increased use of wood in non-traditional applications in the North American market.Footnote 48
3.2.3.2 What are the factors (both internal and external) that have facilitated or hindered the achievement of expected results?

Summary – Factors Influencing EAP Demos Expected Results

The short time frame was the most significant factor hindering the achievement of intended outcomes for EAP demonstration projects. The processes of designing, getting permits and building demonstration projects are lengthy, making it difficult to complete all proposed projects within the two year funding timeframe. Other external factors affecting the projects include offshore markets conditions and housing policy developments which have helped expand the reach of the demo projects.

Evidence:

  • Short time frame to use the funding: Evidence from case studies and interviews clearly indicate that the two-year window for using the EAP funding was the major challenge for these demo projects and, in some cases, projects were delayed and expected results could not be achieved by the time the Program officially ended (i.e., March 31, 2011). However, all expenditures on work approved by NRCan as stipulated in the agreements had been incurred prior to the end of the fiscal year. Only seven of 16 projects were complete at the time of the evaluation, with the balance scheduled for completion in 2012.
  • Highly innovative projects were slowed by the extra time needed to detail, specify, approve and contract the projects: All of the domestic demonstration projects required innovative uses of wood in non-traditional applications for their markets. While this ultimately produced designs and applications that are on the cutting edge, many projects could not be completed within the EAP time frame because of the extra time needed to coordinate and fully specify the projects, and to undertake the additional consultation required between client and the consulting teams during the design development and project contract commitment process.

    For example, the UBC BioEnergy Wood Demonstration Project – a CLT and glulam beam wood building that houses a pilot-scale combined heat and power generation system – required highly detailed documentation and attention to specific contractor arrangements.
  • Demonstration projects in China funded a low percentage of costs to encourage industry investment, adding to time needed: Several interviewees felt that the level of EAP funding was sufficient, but the duration of the Program (two years) was insufficient to develop a full program, solicit proposals, identify partners, etc. Because the Program was providing a relatively low percentage of the total project costs, more time was required to identify partners and work with them to integrate wood frame construction into their projects.
  • Strong current demand for wood products in China is benefitting Canadian industry, independent of demo project promotion: The growing demand for wood in China for applications outside of the housing sector means that the forest products that are expected to benefit from the demo projects (i.e., SPF lumber) have a ready market available beyond the China housing sector. Based on Council of Forest Industries (COFI) data and industry and association interviews, the forest products that may benefit from this program would, under the current demand conditions, be sold in other non-housing markets. China has a strong demand for wood fibre in many applications beyond housing (e.g., remanufacturing). Nevertheless, the realization of wood as a key construction material in China for the long-term will depend to some degree on successful demonstrations.
  • Policy developments in South Korea have greatly expanded the opportunities for wood frame construction in residential projects: The housing market in Korea is projected to add 350,000 to 450,000 housing units per year between 2010 and 2020. Two government policy developments will affect the new housing market.

    Firstly, the national government will be less involved in the market than before (traditionally, most housing developments were centrally planned). As a result, individual consumers will have more freedom of choice when it comes to buying a home.

    Secondly, the 4th Comprehensive National Territorial Plan (2000-20) includes the development of regional cities outside of Seoul, supported by massive spending on transportation infrastructure (roads and high speed rail), which will provide more land for low-rise housing. These factors will significantly alter the future housing profile, with an increase in single family housing from six to eight percent of total housing starts to a projected 10-20 percent by 2020 providing new opportunities for wood frame construction.Footnote 49
3.2.3.3 Have there been any unintended positive or negative outcomes?

Summary – EAP Demos Unintended Outcomes

The EAP Demo case studies suggested a few unintended impacts. For CLT projects, the innovation required to implement the CLT-based designs led to innovative uses of other wood products. As well, the process of organizing the demonstrations may have helped to identify capacity problems in Canada around using these newer applications of wood in multi-story buildings. For offshore projects, the innovative style of homes built in the Korean Eco-Village led to much publicity for the architect, builder and their design of the “peanut house”.

Evidence:

  • Innovative use of cross laminated timber led to further innovation in application of other wood construction products: According to the CLT case study, one positive unintended outcome from this project is the more creative use of other manufactured wood products beyond CLT such as laminated strand lumber-large panels (LSL); laminated veneer lumber (LVL); and hybrid wood-concrete connection (Holz-Beton-Verbindung or HBV) systems. For example, the project’s final report for the Earth Sciences Building noted that the specification and use of the combination of LSL, the HBV connection system, glulam beams and columns and CLT – in addition to the construction methodologies evolved to build the project – will be a catalyst that may spur the development and construction of similar hybrid wood buildings in Canada and the U.S.
  • The highly innovative use of CLT in the demonstration projects has highlighted a potential gap between the concept and available technical capabilities in the community: According to expert interviewees, the CLT demo projects may have highlighted capacity gaps in the system between the innovative products applied in these demonstrations and the abilities of key construction trades people to use them. For example, when the projects were approved, appropriate CLT panels had yet to be manufactured, and the process to find capable contractors to implement the design was lengthy due to limited experience with CLT to date. Without the CLT demo trials, such capacity gaps would likely only have been realized much later.
  • Innovative products used in domestic demos may lead to valuable niche markets for suppliers: The CLT panels from western Canada are being manufactured using blue stain wood (wood attacked by the mountain pine beetle) which has shown to be more difficult to sell in other product forms. According to industry and government interviewees, expanded markets for CLT may hold promise in terms of creating truly incremental impact for Canadian producers with mountain pine beetle-affected timber. While not a specific goal of the programs, this could be a potentially valuable outcome.

3.3 Performance – Efficiency and Economy

Question: Are the programs and activities the most efficient and economic means of making progress towards intended outcomes?

LEAF

Summary – LEAF Efficiency and Economy

The single-contribution recipient design of LEAF allowed for a quick response to ENGO campaigns and emerging sustainability issues in the beginning of the Program. The evaluation also found that the economy and efficiency of LEAF could be improved, particularly regarding the FPAC portion of the Program. The high level of funding ($16 million over four years) to FPAC was much higher than the amounts allocated for similar initiatives in CFS (e.g., IFPP). This likely affected priority setting, planning and program scope. The combined factors of short spending time frames for large contributions and challenges with CFS’ oversight of FPAC appears to have contributed to mandate expansion, overlap with other initiatives, and a lack of coordination in some cases.

LEAF science projects, though not completed, have gained efficiencies by allowing CFS to participate in larger studies and to attract strong scientific expertise. However, the annual funding approach, as opposed to multi-year funding, has made it difficult to retain researchers.

Evidence:

  • Selection of FPAC allowed for quick response to emerging sustainability issues, particularly from the market campaigns targeting the boreal forest: According to some interviewees, FPAC, as the single contribution recipient under LEAF, provided an efficient means for quickly addressing ENGO claims that Canadian forestry practices were unsustainable. It was explained that it would have been difficult for the federal government to react as quickly as an industry association. Interviewees and key documents reviewed suggest that at the time LEAF was created, these market campaigns were of particular concern.
  • Size of the investment is not clearly commensurate with need and may have been too large: LEAF-FPAC investment averaged $4 million per year from NRCan as compared to roughly $600,000 to $800,000 per year in IFPP (the CFS program with the most similar mandate and scope). Market development programs such as CWEP (averaging $7.0 million/year expenditures) and NAWF (averaging $4.1 million/year expenditures) – arguably with more challenging mandates of market transformation – received similar levels of funding to LEAF during this period. This similarity suggests an attempt to balance market funding support between wood products (served by CWEP and NAWF mandates) and wood pulp and paper sectors (served better by LEAF’s mandate).
  • Absence of National Advisory Board likely contributed to oversight challenges and lack of clear priority setting mechanisms for LEAF-FPAC activities: As noted earlier, the National Advisory Board for LEAF was never implemented, which hindered coordination among key provinces, other CFS programs and industry associations. The absence of this advisory board made it difficult for CFS to oversee FPAC priority setting for LEAF activities. While interviews suggested that FPAC staff collectively set priorities in consultation with key proponents on specific initiatives (i.e., not an overall strategy), file reviews did not reveal a clear process for priority setting or selecting projects. Interviews suggest that non-FPAC industry representatives and key provinces did not feel adequately consulted on LEAF priorities or plans.
  • Evidence that projects beyond LEAF’s mandate may have occurred due to the size of the investment: The suggestion by some interviewees was that the level of LEAF funding to FPAC was more than could be spent in the given time frame on the program goals, and therefore FPAC may have invested in initiatives outside the original intended scope. Indeed some interviewees close to FPAC activities expressed concern that the expected outcomes of some of the projects were outside what they felt to be the true scope of LEAF objectives. For example, the document review found that in addition to FPAC addressing certification issues and claims about sustainability, LEAF supported initiatives less clearly within its mandate such as waste management.
  • Some overlap and duplication has occurred with other initiatives: Some LEAF activities, while worthwhile, appear to be more appropriate for other programs to administer. For example, interviews with key proponents in the Texas Power of Wood promotion case study, suggested that it was an initiative that was more appropriately in the scope of U.S. WoodWorks (funded in part by NAWF) compared to LEAF or IFPP. According to the case study, the agenda for the Texas sessions was very similar to that used by U.S. WoodWorks in its California, Central and South-eastern trials in this same time period. The expertise used and knowledge conveyed dealt with the building (cost, ease of use, durability, technical features, etc.) characteristics of ‘wood’ first and ‘green’ aspects second. In fact, the central promotion messages were delivered by a U.S. WoodWorks employee. While all parties appreciated the timely set-up and delivery of this effort, it might have been more appropriately managed as a U.S. WoodWorks venture paid for through NAWF and partner funders rather than through LEAF.
  • LEAF-funded science endeavours have attracted additional funding from interested stakeholders: The Carbon Accounting project was initially 100 percent LEAF funded, but this core funding then attracted other partners. For the past two years, the B.C. Ministry of Forests Lands and Natural Resource Operations has contributed to the project and is now adapting the model for B.C.-specific conditions. FPInnovations and UBC are now also researching various model parameters on this project.
  • LEAF funding has allowed CFS to participate in much larger boreal forest scientific studies, leveraging significant resources from outside CFS: Healthy caribou population and habitat management are critical issues in the boreal context. The LEAF funding of $300,000 allowed CFS to participate in a larger $3.3 million (over three years) caribou study that involves collaboration with the University of Guelph (which receives Natural Sciences and Engineering Research Council funding), Trent University, the Ontario Ministry of Natural Resources, and the Forest Ecosystems Science Cooperative. The overall project will assess how forest management and other habitat disturbances might affect caribou populations. LEAF funding was used to monitor caribou using 30 high-resolution radio-collar mounted cameras that collect and store data for up to nine months (this is a first-time application of this new technology).
  • Annual funding approach used for LEAF science has meant planning difficulties for projects: LEAF science projects were funded on an annual basis. Interviewees involved in these projects recommended allowing multi-year investments in science activity which would allow lead scientists to better plan and retain research staff with the necessary skills.

IFPP

Summary – IFPP Efficiency and Economy

The IFPP was a low cost mechanism for communicating Canada’s sustainability credentials to target markets. Information gathering activities provided economies of scale for provinces needing the same information, and the Program collaborated frequently with key players to achieve outcomes. Nonetheless, not having a clear strategy meant that IFPP overlapped with other market access and development efforts especially in terms of education and training initiatives.

Evidence:

  • Low cost program facilitated coordination and information sharing across provinces: NRCan-CFS funding for IFPP averaged $600,000 to $800,000 per year, with the remaining 50 percent coming from the provinces. Moreover, according to the 2010 internal review, provincial government representatives indicated that they significantly benefitted from the intelligence provided on international forest markets generated by IFPP.Footnote 51
  • The IFPP may have overlapped and duplicated market access efforts of others: Information provided by both interviewees and document review confirms the possibility of IFPP overlap and duplication with other market access programs. While some interviewees considered that programs were being run in a complementary fashion, other respondents acknowledged that there may be some duplication between activities undertaken by IFPP and other programs such as LEAF. This comment was particularly made in the area of education and training.Footnote 52 For example, both IFPP and LEAF (via FPAC) have organized target market media tours of Canadian forestry operations. There is no formal arrangement in place to ensure that they do not reach the same journalists, though it has been suggested by some interviewees that an informal arrangement was made.
  • Evidence of complimentary efforts with other market access/development programs, particularly government-to-government efforts: Evidence from the E.U. procurement case studies suggests that IFPP was able to effectively partner with and leverage the resources and networks of other key players to achieve results for the Canadian forest sector. For example, IFPP was able to convene incoming missions that played a significant part in influencing Dutch TPAC officials on Canadian sustainable forest management. This was one part of a collection of efforts by DFAIT, CSA, SFI, and FPAC partners.

EAP Demos

Summary – EAP Demos Efficiency and Economy

The EAP demo funding was sufficient to generate an appropriate number and mix of demonstration projects in the key target markets. The implementation of the Program through the established CWEP and NAWF delivery platforms ensured that individual projects received sufficient program support (e.g., program assistance from the Canada Wood Group and FII China in the offshore markets and the Canadian Wood Council and FPInnovations in Canada). However, the two-year time frame was seen as too short to efficiently implement the projects. This led to some inefficiency such as purchased materials being bought and then stored, projects completed after the 2010-11 fiscal year, and some extra project costs (i.e., proponent costs of ensuring the Vancouver Pavilion was ready in time for the summer 2010 Shanghai Expo).

Evidence:

  • Funding level seen as appropriate to carry out the demonstration projects: Interviewees noted that the funding available for the demonstration projects ($10 million over two years, 2009-10 to 2010-11) was an appropriate level of investment. Those familiar with the offshore demos in Korea and China believe that the level of investment was sufficient to undertake projects that targeted key market segments and support Canada’s broader strategy for growing the market for wood frame buildings in these countries. In the case of China, the majority of interviewees felt that the need for future demonstration projects is limited; however, on-going support to promote the results of the current projects is seen as important.
  • Projects were delivered through CWEP and NAWF program platforms, which efficiently used established governance and in-market relationships: The EAP demos successfully made use of the in-market skills and expertise in target CWEP and NAWF markets. For example, in the Korean Eco-Village Demo, Canada Wood Korea (CWK) provided technical support, structural engineering review, quality assurance (twice weekly inspections) and training throughout the construction period. A site superintendent was hired by CWK to provide the on-site training and inspection. The China case study revealed that the delivery of all Chinese demonstration projects was made possible by having the funding flow through Forestry Innovation Investment (FII) China since under Chinese law, the current structure of the Canada Wood Group China Office (as a representative office) did not allow them to implement these large demonstrations projects.
  • Project solicitation process was accomplished quickly, and seen to be fair by industry and government representatives: According to interviewees, the expression of interest for the domestic demonstration projects, rating process, funding and management of the projects were done efficiently and cost-effectively by relying on existing relationships, networks and organizations to assess, fund and monitor the projects (i.e., FPInnovations, Canadian Wood Council, and provincial partners).

    Similarly, industry and industry association interviewees were satisfied with the level of forest sector engagement in the offshore project selection. While there were selection criteria identified, the need to develop the projects quickly meant that the processes had to be streamlined and all players engaged up-front. According to interviewees, despite the fast turn-around times for proposals, the selected projects were consistent with Canadian market development priorities in China and Korea and were of high quality.
  • Long lead times to solicit projects and short two-year period to use the funding meant that not all funding could be spent efficiently: Highly innovative projects using CLT and large offshore projects required time to put project proposals together, identify partners, select building sites, and acquire permission with building code authorities in some cases. This meant that funding could not be released until late in the second year. As a result, some projects could not be completed prior to the March 31st 2011, but CFS approved funding for expenditures that could be incurred prior to March 31st on projects to be completed shortly thereafter. In some cases, projects were further delayed and could not be completed as per the approved timeline. Consequently, materials are now waiting in warehouses until the project can be completed. For example, the UBC BioEnergy Wood Demonstration Project and Research Facility will not be completed until 2012. This has led to a significant amount of the wood required for the production of CLT being purchased and about 40 percent of the CLT panels being produced and inventoried by March 31st, 2011 pending project completion.
  • Pressure to complete projects quickly meant that some demonstration projects incurred unforeseen additional costs: The China case study revealed that the Vancouver Pavilion was completed on time, but was well over the original budget of $1.3 million (the final budget was $2.5 million). According to the BC FII Report on the Vancouver Pavilion (March 31, 2011), FII China / Canada Wood China failed to recognize the added costs associated with participating in international events such as the Expo. Initial cost estimates were based on previous wood frame demonstration projects in China. The Expo, however, because of its own process and procedures, added both cost and time to the construction phase.

4.0 Conclusions and Recommendations

Based on the findings presented in the preceding sections of this report, the evaluation makes the following recommendations:

Recommendation 1: CFS should develop a comprehensive coordination approach that clearly communicates the roles of different stakeholders and integrates market access and market development programs.

Having completed recent evaluations of all CFS market access (i.e., LEAF, IFPP) and market development programs (i.e., CWEP, NAWF, and VW), it is clear that there are many programs and stakeholders acting on various priority issues. Where these programs collaborate, success has been more readily achieved and duplication minimized. However, there have been instances where different programs have had inconsistent messaging in target markets, or have undertaken activities that are better suited to other programs (e.g., the Texas Wood Promotion delivered by IFPP and LEAF rather than U.S. Woodworks). An approach for clarifying roles of the various stakeholders would allow for consistent messaging, minimizing duplication, and enhanced partnerships across sector groups.


Recommendation 2: CFS should follow-up on and promote demonstration projects through its existing market development programs.

Since many of the demonstration projects, particularly the domestic applications, are not yet complete, CFS should follow-up on these to ensure that they are promoted to industry and decision makers in target markets. Despite the widespread promotion of some completed demonstration projects so far, stakeholders saw a need for CFS to provide support to promote the range of existing demonstration projects and communicate the results broadly across the industry. CFS is developing several promotional case studies for EAP domestic projects and has plans to develop further promotional material for offshore projects. Additionally, several domestic demonstration projects highlighted a possible capacity gap between the innovative applications of new wood construction techniques and qualified builders to implement them. Any follow-up on these projects should consider how best to address this gap for techniques and products that have the strongest market potential.


Recommendation 3: Should the LEAF Program be renewed, CFS should ensure that appropriate advisory and governance structures are established and that clear criteria for tracking and reporting on activities and outcomes are implemented.

FPAC engagement of other stakeholder groups has improved since the LEAF Program began, but it is still not at the level called for in the original program design, and the FPAC Market Leadership Committee has not been an effective substitute for a true National Advisory Board (NAB). Since the NAB was never put into place, the program theory that FPAC would deliver in accordance with national priorities drawing on NAB guidance did not occur as anticipated. This greatly hindered LEAF’s ability to engage the broad range of stakeholders in a national program intended to represent an entire sector. The NAB would have also provided a mechanism through which FPAC could have better coordinated its LEAF funded efforts with the full range of forest sector programs and partners.

LEAF achievements reported in annual and quarterly FPAC reports (required as part of the LEAF contribution agreements) did not clearly address the five intended outcomes outlined in the program RMAF. Reports instead referred to outputs and deliverables achieved. It is important to note that performance reporting from FPAC on LEAF-funded activities has improved over the course of the Program, but remains inadequate to link activities and deliverables to intended outcomes. In part, this is due to the fact that LEAF work plans (as recently as the 2011-12 work plan) are very broad. By developing clear project selection criteria, LEAF should be able to better focus the activities it funds and align them with program priorities.


Additional Observations:

In addition to the recommendations above, the evaluation makes the following observations for CFS consideration in future programming:

1. Government-to-government activities have been found to be very important in addressing international trade and market access issues.

Case studies of LEAF achievements demonstrated that a coalition of Canadian interests – including the federal government, provinces, certification bodies, and FPAC – were integral to achieving results. In particular, the evaluation found that government-to-government efforts were essential to achievements on inclusive procurement policies in Europe. Programs such as Forest In Mind, the successor to IFPP, will remain important as a vehicle for coordination and collaboration in relationships with key forestry provinces on trade issues. IFPP was seen as a valuable government-to-government mechanism, and Forest in Mind continues to be valued by key forestry provinces.

2. The annual funding approach used for LEAF science projects likely contributed to difficulties in planning and retaining quality researchers.

While there was an ‘unspoken commitment’ that the selected LEAF science projects had priority, CFS managers and lead researchers were unable to guarantee three year positions for their research teams because of the annual funding approach used. This has led to attrition of research staff toward projects with more sustained funding, with potentially more attrition to occur in the near future. It was suggested that a multi-year funding approach for LEAF science projects would have helped CFS to retain research staff (i.e., Doctorate and Masters’ Degree students) for the life of these specific projects as this would align them with the academic research programs with whom CFS partners.

Appendix A: Overview of Securing Forest Products Markets

Exhibit A-1 provides an overview of the Market Development and Market Access components in the Securing Forest Products Markets sub-activity for the period covered by the current evaluation.

Exhibit A-1: Overview of the Securing Forest Products Markets Sub-Activity
Programs Market Development Market Access
CWEP NAWF VW IFPP LEAF
Overall Objectives Expand export opportunities for Canadian wood products in traditional and emerging overseas markets. Support increased use of wood in non-residential and mid-rise construction in Canada and the United States. Improve the productivity and competitiveness of the value-added wood products sector in Canada. Promote Canadian sustainable forest management policies and practices internationally, maintaining market access for Canadian forest products abroad. Improve environmental acceptance for Canadian forest products in international markets.
Primary Activities CFS administers contribution agreements with wood products associations and the Canada Wood Group to provide infrastructure (e.g., the six Canada Wood Group offices) and international representation, market development and branding activities, and technical support to address trade barriers. CFS administers contribution agreements with the Wood Products Council, Canadian Wood Council, Western Red Cedar Lumber Association and Quebec Wood Export Bureau to educate North American designers, specifiers, and architects on opportunities to use wood. CFS and the provinces fund technology transfer activities delivered by FPInnovations. CFS also administers contribution agreements with FPInnovations and Canadian universities to conduct research to develop value-added wood products and improve manufacturing processes. CFS salaries in support to administer Canadian Council of Forest Ministers funds and to gather/share information, develop communication tools, and conduct outreach with target audiences. CFS administers contributions to Forest Products Association of Canada in support of information development and analysis, market outreach, and monitoring and reporting on market perception trends.
Scope International North America Canada International International
Years Active 2002-03 to
2010-11
2007-08 to
2010-11
1998-99 to
2010-11
1993-94 to
2010-11
2008-09 to
2010-11
Program Expenditures 2006-07 to
2010-11 ($M)
35.0 17.7 17.5 1.5 15
Total Expenditures 2006-07 to
2009-10 ($M)
68.1 16.5

Source: Canadian Forest Service.
Note: The Economic Action Plan Budget (2009) added an additional $10 million to CWEP and NAWF for demonstration projects, which have been evaluated separately as part of the current International Influence evaluation study.

Appendix B: Leadership For Environmental Advantage in Forestry (LEAF) – Detailed Description

LEAF Description, Activities and Outputs:

Activities under LEAF fall into three broad categories (called pillars): 1) information development and analysis; 2) market outreach; and 3) monitoring and reporting trends in markets.

Information development and analysis is delivered through CFS researchers and their partners in academe and the provinces. Market outreach and monitoring & reporting activities are delivered through contribution agreements with FPAC, however the Government of Canada (i.e., NRCan and DFAIT), provinces (i.e., BC-FII) and other industry associations were to work with FPAC where appropriate.

Activities conducted under each of these pillars are described below (note that a comprehensive listing of LEAF-FPAC activities was not possible due to deficiencies in project reporting to CFS):

Information development and analysis:

Goal: addressing key science and information gaps, enabling the sector to respond more rigorously to market campaign claims with science-based evidence (research conducted by NRCan).

A total of seven key LEAF CFS science projects were funded in 2009: there are three on-going ‘flagship’ projects and another four smaller projects that support the flagship activities. The projects address key information gaps as identified by CFS policymakers, FPAC, other boreal stakeholders (including WWF). The flagship projects are ongoing, began in 2009 and include:

  1. Carbon accounting for harvested wood products ($650,000) – The CFS Carbon Accounting Team is developing a new general framework for tracking the fate of harvested carbon in harvested wood products in products and landfills in Canada and for exported products made from wood harvested in Canada. This framework is designed to meet both new international carbon reporting requirements in the harvested wood products sector (i.e., for retrospective analyses of past carbon stock changes) as well as requirements for policy analyses of mitigation options in Canada’s forest product sector.
  2. Woodland caribou ($325,000) – Caribou are listed under the Species at Risk Act and knowledge of critical habitat is a key knowledge gap. The Woodland Caribou Population Viability Project is designed to understand uncertainties about caribou in the boreal shield ecozone of Ontario, eastern Quebec and western Manitoba. The work assesses movement patterns, diet choice, habitat selection and causes of mortality in the population by following radioed animals to assess response to forest management and climate. Caribou survival is a major issue with respect to boreal forest management and climate change in Canada.
  3. The boreal forest synthesis ($218,000) – With LEAF funding there was an opportunity for a discipline-based literature review of boreal forest research. A series of 13 scientific papers is being developed which address four key policy questions regarding the state of the boreal region. These papers will be submitted to a scientific journal and will form the basis of future CFS public information on the boreal. Results will be shared with industry and other stakeholders.

Four supporting projects have all been completed:

  • Inventory of Permanent Monitoring Projects – establishment of new permanent sampling plots in second growth stands in the north-eastern boreal forest of Quebec;
  • Boreal Forest Databases – acquisition, verification of resource and other information to assess progress toward sustainable forest management in boreal forests will be formatted in relational databases;
  • Vulnerability of Genetic Resources – assessment of the vulnerability of forest genetic resources to climate change using available information about genetic variability & related ecological processes; and
  • Report On Impacts Of Future Forest Fires On Forest Characteristics And Timber Growing Stock – assessment of the impacts of future forest fires on Canada’s forests to 2100.

In addition to these key projects, several smaller projects were also funded.

Market Leadership and Outreach:

Goal: addressing concerns of key customers and influencers about the Canadian forest sector’s sustainability, ensuring market acceptance for Canadian products and exchanging information on best practices.

FPAC undertakes a wide range of activities under this category. Examples of these include:

  • Participate in trade shows – FPAC attends key trade shows such as the American Institute of Architects (AIA) conference and trade show, the U.S. Green Building Council’s Greenbuild, and the Gravure Association of America Environmental Workshop.
  • Hosting tours and workshops – In 2010-11, FPAC and WWF-Canada hosted a carbon forum to review progress toward the goal of industry-wide carbon neutrality. The forum was also a chance to explore further ways to reduce the greenhouse gas footprint of the forest sector in Canada and to generate momentum and support. The nearly 40 participants included representatives from industry, ENGOs (WWF, CPAWS, Nature Conservancy), National Council for Air and Stream Improvement (NCASI), NRCan and the Athena Institute. In 2008-09, FPAC hosted a media tour for German journalists to show them first-hand the sustainability of Canadian forestry operations.
  • Regular contact and briefings with buyers and policy makers – FPAC conducts customer/industry briefings in target markets to communicate messages about sustainability and green building with Canadian forest products. FPAC also does promotions through Canadian embassies. For example, they worked with the embassy in Washington, D.C. and Senator John Kerry’s office to host a workshop promoting the Boreal Forest Agreement and the Canadian industry’s innovative solutions to difficult environmental questions. The event was attended by more than 100 guests, including representatives of the U.S. Department of the Interior, the U.S. Environmental Protection Agency, U.S. think tanks, ENGOs, congressional staffers, academics and others.
  • Developing information vehicles on the sustainability of Canadian forestry operations – In 2010-11, FPAC developed and delivered chain of custody webinars with PriceWaterhouseCoopers and made them available to the broader Canadian forest products industry for their information and use. FPAC also delivered four papers on Lifecycle Assessment and Forest Products, the Bio-Industrial Potential of Canada’s Forests, Making the Most of Forests’ Harvests: Maximizing the Paper Fibre Cycle, and Accelerating the Forestry Sector’s Environmental Performance. The lifecycle assessment paper was translated into Korean, Chinese, Japanese, German, Italian and Spanish. Five fact sheets were produced in several languages on subjects including green building, managing Canada’s forests sustainably and improving mill performance. All are distributed through the stakeholder network.


Monitoring and reporting on trends in market perception:

Goal: to effectively target Canada’s efforts and measure progress in influencing opinions and purchasing behaviours.

FPAC undertakes a wide range of activities under this category. Examples of these include:

  • Market monitoring – FPAC has conducted policy audits in Japan, E.U., India and Korea to uncover market access issues related to sustainability that could impact Canadian producers. FPAC also collates news information on its fpenvironmentalhub.com website, which contains an up to date record of environmental issues pertaining to Canadian forestry that appear in media around the world.
  • Market research – FPAC has retained the services of a public opinion research firm and conducts regular surveys with buyers in target markets on perceptions of Canadian forestry operations.

Appendix C: Economic Action Plan Demonstration Projects (EAP Demos) – Detailed Description

EAP Demos Description, Governance and Delivery Structure:

EAP Demo projects seek to demonstrate the attributes of using wood-frame construction in large-scale residential or commercial applications.

Since the EAP demonstration funding is administered through the CWEP and NAWF programs, it follows a similar governance structure to other projects proposed under the programs. Specifically:

  • NRCan’s Wood Markets Secretariat is responsible for the overall administration of the CWEP and NAWF programs.
  • The Management Committee provides strategic advice and guidance on the management of CWEP and NAWF to NRCan.
  • The Joint FII-NRCan Senior Industry Advisory Committeeprovides strategic input on program design and direction from an industry perspective.
  • The Program Advisory Committee provides advice to the Management Committee on program strategy, the development of project selection criteria, and on program outcomes and priorities. While this committee was not involved in the process for the EAP demonstration projects specifically, it is important to take note of its contribution to CWEP and NAWF generally.
  • The Canada Wood Group (CWG) receives funding from CWEP, FII and industry to provide infrastructure (office and staff), and to support market development and market access activities (including demonstration projects) on behalf of its member associations in offshore markets (with offices in London, Toulouse, Seoul, Tokyo, Shanghai and Beijing).

EAP Demos Activities, Outputs and Associated Resources:

Exhibit C-1 describes the demonstration projects (offshore and domestic) that have received funding under this initiative as of November 2011.

Exhibit C-1: EAP Demonstration Projects
Name Location Total Project1$ NRCan ($) NRCan % Objective/description Status/completion date
Offshore Projects
Expo 2010, Vancouver Pavilion China $3.5M $2.50M 72.1% To show Chinese investors that wood is a green building material; it is safe, modern and cost-effective. Completed.
Expo 2010, Espace Montreal China $2.15M $149K 6.9% Showcase Eastern-Canadian wood products Completed.
Shanghai Affordable Housing China $34.1M2 $988K 2.9% Introduce wood/concrete hybrid systems, wood roofing systems in both mid and high-rise buildings Under construction; all wood products purchased by end of March 2011; completion expected by March 2012.
Jinqiao Townhouse Development China $45.6M2 $952K 2.1% Design and construction of 133 “green” three-storey wood frame townhouses Under construction Completion by early 2012. All costs related to design cost and wood products were incurred by March 2011.
Low-cost Rural Housing China $167.6K2 $133K 79.4% Design and construction of two single-family home demos Completed in May 2011.
  • MOHURD Committee
  • Tianjin project – Yuehai Apartments
  • Hebei Project - New Technology Promotion Centre
China N/A $7.3M2 $7.1M2 $150K $660K $651K N/A 9.0% 9.2% Design, technical assistance and wood products in 2 4-storey apartment buildings Design, technical assistance and wood products in a new building. New projects added in November 2010.
Amendments signed in March 2011. Framing completed in October 2011 Completion expected by end of 2011. Completion expected early 2012.
Total China Funding = $6.183 M
Eco-Village Korea $466K $248K 53.3% Show WFC is energy efficient, cost-effective while able to comply with stringent fire, acoustical, and seismic requirements. Completed in March 2010.
L’Aquila day residence for autistic children Italy $1.238M $365K 29.5% Demonstrate quickness of construction, seismic safety, cost effectiveness, and compatibility of panelized wood frame system with Italian design and style. Completed in March 2011, official opening on April 15th, 2011.
Total offshore funding = $6.795 million
Domestic projects
Complan Building Quebec $1.8M2 $200K 11.1% Hybrid construction of fifth floor addition to concrete structure. Cost for engineering and wood products incurred before end of March 2011. Framing completed in early June 2011.
UQAT Quebec $24.2M2 $145K 0.6% Three story expansion showcases glulam and other wood products in an institutional setting. Initial work began in the summer of 2010. Wood framing completed in June 2011. Official opening in 2012.
GlaxoSmithKline HQ Quebec $20.2M $207K 1.0% Innovative use of glulam wood columns and beams Agreement signed. Work completed.
Chibougamau CLT Plant Quebec N/A $18K N/A Use of CLT in an industrial setting Agreement signed; but financial support was cancelled as the proponent is delaying this project to the fall of 2012. NRCan has agreed to support the cost for the Environmental assessment ($25K) as this was an NRCan mandatory requirement prior to initiating the work. EA received.
Tetra Building Quebec N/A $40K N/A Design and structural analysis for inclusion of wood in a 6-storey apartment building Agreement signed. Work to be completed.
UBC Earth Systems Science Building B.C. $35.8M2 $806K 2.3% Five storey academic facility showcasing wood concrete composite floor slabs using LSL panels and glulam column beams. Work began in the summer of 2010. All wood framing completed in June 2011. Official opening – summer of 2012.
UBC Bioenergy Research and Demonstration Plant B.C. $26.6M2 $857K 3.2% Power plant showcases use of cross-laminated timber. Work began in the Fall of 2010. Project underway, occupancy by spring 2012.
Alberni District Secondary School B.C. $14.4M2 $175K 1.2% Design and construction of a gymnasium roof structure with wood wave panels Framing completed. Occupancy spring/summer 2012.
Confederation College ON $8.2M $200K 2.4% Construction of an atrium using glulam beams and arches Completed in March 2011.
Domestic support activities
CWC Cross Laminated Timber Strategic Plan National $99K $99K 100% Development of a long-term strategy to manufacture and promote Cross-Laminated Timber. Completed in fiscal 2009-10.
CWC Expression of Interest National $91K $91K 100% Assist the Canadian wood products and construction industry in the development of their proposals to NRCan Wood Demonstration Initiative (i.e., EAP – Demos). Completed in fiscal 2009/10.
CWC Cross Laminated Timber Research National $40K $40K 100% In-depth assessment of the European experience with CLT and market potential for North America Completed in fiscal 2009-10.
CWC Building Code Review National $207K $207K 100% In collaboration with NRC and FPInnovations, this research will identify the code barriers that prevent or hinder the use of wood in commercial construction projects. Completed in March 2011.
Total domestic funding = $3.085 million

1 Does not include the value of the land in any of the projects.
2 Based on values identified in the signed contribution agreement. Note that final project costs have exceeded the original estimate, but as this project is not yet completed, the final amount is not currently available.

Appendix D: Evaluation Case Study Summaries

Exhibit D-1 presents the case studies used in this evaluation. In total, eight case studies were selected – four for the EAP Demonstration projects and four for LEAF.

Exhibit D-1: International Influence Evaluation Case Studies
Program Title Description Time frame
EAP Demo South Korea – Eco-Village Demonstration Project The project, located 20 km outside Seoul, is the first four-storey wood-frame multi-family building to be constructed in South Korea. The stacked duplex was built to showcase the energy efficiency and cost-effectiveness of building with wood, while demonstrating how wood frame construction can meet South Korea’s fire, seismic and acoustical codes which are among the world’s most stringent. Completed in March 2010; official opening on April 1, 2010.
EAP Demo China - Shanghai Demonstration Projects
  • Expo 2010 Vancouver Pavilion; and
  • Shanghai Affordable Housing Project
The majority of Economic Action Plan demonstration funding (60 percent) was spent in China on seven projects. This case study reviews the investments made in two projects: the Expo 2010 Vancouver Pavilion ($2.5 million) and the Sanlin Affordable Housing project, both in Shanghai. The case study also comments on the MOU signed in 2010 by the Chinese Ministry of Housing and Urban and Rural Development (MOHURD) and the Canadian and BC provincial governments as an example of an emerging mechanism for supporting market development in China. Completed May 2010.
EAP Demo Cross-Laminated Timber Projects
  • The University of Columbia British Columbia Earth System and Science Building (UBC ESSB); and
  • The UBC Bioenergy Research and Demonstration Plant
Cross laminated timber (CLT) is a novel building system of interest in North American construction. The Expression of Interest identified construction projects in the concept, schematic design or in the design development stage that could successfully demonstrate the commercial viability of innovative wood products, traditional wood products used in non-traditional ways or innovative new products such as Cross-laminated Timber (CLT) in either structural and architectural applications. This case study looked at two of those projects. Under construction as of Sept 30th, 2011
NRCan-CWC project support contract: completed in March 2011.
EAP Demo Complan Building Addition This project, delivered in Quebec, was selected for funding as a demonstration project to support the development and transfer of construction techniques using innovative wood structural elements to the architects and engineering involved in the design and construction of large non-residential buildings. Societé de gestion Complan wanted to add a fifth floor to an existing building in Quebec City. The building is a large commercial building constructed in 1980 using primarily concrete for structural elements. Completed in March 2011.
LEAF European Procurement
  • Dutch Timber Procurement Assessment Criteria
  • UK’s Central Point of Expertise on Timber procurement (CPET
The European Union has long been an important market for the Canadian forest products industry. As various jurisdictions were looking at realigning their strategies to deal with key environmental concerns, including climate change and forestry-related issues, new policies on green building, green procurement and certification were being developed and old ones are being updated. There was also an increasing trend by E.U. member states to include social criteria as part of their green procurement plans. These criteria privileged FSC certifications over non-FSC certifications used in Canada. Efforts were undertaken by a coalition of Canadian interests to foster acceptance of Canadian-used PEFC certifications. Efforts began prior to LEAF, but had been a focus of LEAF-FPAC in 2008, 2009, and 2010.
LEAF LEAF Canada Wood Japan Environmental Marketing Program Japan is a significant market for Canadian lumber and in particular lumber from British Columbia. FPAC is working with the Canada Wood Japan office on a sustainable forest management and environmental credentials messaging campaign aimed at Japanese buyers. The first in a series of communications modules was delivered in March 2011. Other elements to come will include an earned media campaign and website components. As the Japanese market matures and competition increases, environmental credentials are becoming a key differentiator. November 2010- November 2011.
LEAF Texas ‘Power of Wood’ Promotional Tour A coalition of Canadian partners delivered green building and environmental reputation briefing sessions to key client audiences in Texas (e.g. architects, builders, designers, engineers) by providing them with current information on why wood is such an environmentally preferable building material; and why the environmental credentials of Canada’s leadership in sustainable forest management, as well as its forest products, make them a logical choice for professionals committed to green building. Completed in March 2010.
LEAF LEAF science projects To address the concerns of major buyers and other key influencers, LEAF funding was allocated to CFS for both existing and new credible science-based evidence and information. In total, seven projects were identified in consultation with industry and ENGO stakeholders, including three flagship research projects: Carbon Accounting for Harvested Wood Products; Boreal Synthesis; and Woodland Caribou. Projects to be completed in 2012.