Table of Contents
- Executive Summary
- 1.0 Introduction and Background
- 2.0 Evaluation Approach and Methodology
- 3.0 Evaluation Findings
- 4.0 Conclusions
- Appendix A: Logic Model for Forest Sector Innovation Sub-Program
- Appendix B: Leadership Component – Key Findings
- Appendix C: Canada Wood Fibre Centre – Key Findings
- Appendix D: Forest Research Institutes Initiative (FRII) – Key Findings
- Appendix E: Transformative Technologies (TT) – Key Findings
- Appendix F: Investment in Forest Industry Transformation (IFIT) – Key Findings
Abbreviations and Acronyms
|CFS||Canadian Forest Service|
|CWFC||Canada Wood Fibre Centre|
|DFAIT||Foreign Affairs and International Trade Canada|
|FIBRE||Forest Innovation by Research and Education|
|FPAC||Forest Products Association of Canada|
|FRII||Forest Research Institutes Initiative|
|FSI||Forest Sector Innovation|
|IFIT||Investments in Forest Industry Transformation|
|ITD||Industry and Trade Division|
|NRAC||National Research Advisory Committee|
|NRC||National Research Council|
|NRCan||Natural Resources Canada|
|NSERC||Natural Sciences and Engineering Research Council|
|PAC||Program Advisory Committee|
|PEIB||Policy, Economics and Industry Branch|
|POIB||Planning, Operations and Information Branch|
|R&D||Research and development|
|S&T||Science and technology|
|SPB||Science Program Branch|
|TT-PSD||Transformative Technologies – Pilot Scale Demonstration|
|TT-STC||Transformative Technologies – Short-Term Competitiveness|
The Evaluation Team would like to thank those who contributed to the Forest Sector Innovation Evaluation, particularly members of the Evaluation Advisory Committee, Canadian Forest Service, as well as others who provided insights and comments crucial to this evaluation.
The evaluation project was managed by Cairine Chisamore and Zelda Yule, with evaluation support from Barthelemy Pierrélus, Jarret Boon, Michelle Brazil and Nicholas Kowbel of the Strategic Evaluation Division. Jennifer Hollington, Head of Evaluation at NRCan and Gavin Lemieux, Director, provided Senior Management oversight. TDV Global also provided evaluation services for the project.
The evaluation presented here covers the Forest Sector Innovation (FSI) Sub-program, approximately $308 million in NRCan expenditures, 150 research projects, and leadership activities from 2009-10 to 2012-13. The overall expected result for the Sub-program is to develop higher value Canadian forest product and processes which lead to new technologies to create a better competitive position for the Canadian Forest Sector.Footnote 1 The Sub-program provides support for activities along the innovation continuum from pre-commercialization research to pilot-scale demonstration and implementation activities. It is designed to increase Canada’s forest sector science and technology capacity by employing a collaborative model. For example, FPInnovations, a not-for-profit research institute that receives funding from federal, provincial and industry stakeholders, is designed to facilitate industry engagement in the innovation process and act as a facilitative leader for research.
The components of the sub-program covered in this evaluation are described below:
Evaluation Scope: FSI Sub-Program Components Covered in this Evaluation
|Canada Wood Fibre Centre (CWFC)|
Branch of Canadian Forest Service (CFS), strategic direction from FPInnovations (FPI).
|Forest Research Institutes Initiative (FRII)|
Annual contribution funding to FPInnovations.
|Transformative Technologies (TT)|
Annual contribution funding to FPInnovations. TT renewed 2012.
Annual contribution funding to FPInnovations. Component completed.
Contribution funding to FPInnovations by project flowed through to industry. Component completed.
|Investments in Forest Industry Transformation (IFIT)|
Contribution Agreements with industry, managed by CFS. Renewed 2014.
|CFS Leadership Activities|
Three projects: 1) Enhancement of Forest Sector Innovation System (e.g. working with other stakeholders to collectively identify, fund and deliver the innovation priorities of the sector); 2) Role of bioenergy (e.g. Biopathways Study); and 3) CFS Knowledge Management (e.g. infrastructure and tools that support research and knowledge exchange).
Evaluation methods utilized include a document and literature review; file review; 76 interviews (20 internal and 56 external –with industry, academia, provinces, other federal government departments); and 14 case studies of research, development and deployment projects.
Before the scheduled completion of IFIT in 2013-14, preliminary evaluation findings from this evaluation were used to inform the Treasury Board Submission process and IFIT was renewed in 2014.
A broad-spectrum science and technology program supported by FSI continues to be needed to support forest sector innovation and transformation
Overall, interview, case study and documentary evidence indicates that there is a clear, continuing need for federal support for a broad-spectrum program to enable innovation and transformation of the forest sector. The literature shows that there is a logical and established connection between science and technology (S&T)Footnote 2 activities, innovation and the economy.Footnote 3
While the forest sector is showing signs of recovery, interviewees agreed that continued support for innovation is needed to address structural factorsFootnote 4, such as the decline in demand for paper, and to minimize the impact of cyclical factors on the forest sector (e.g. economic recessions, forest health issues such as the mountain pine beetle). External stakeholders interviewed recognized the need for innovation and indicated that without FSI program support, industry would likely focus on short-term rather than long-term innovative solutions.
Interviewees agreed that continued federal support for FPInnovations is appropriate and is valuable to enhance a strategic, collaborative approach to innovation and to maintain federal policy and regulatory capacity
Following the economic downturn, federal (51%) and provincial (20%) funding for FPInnovations made up the largest portion of funding in 2009-10. By 2012-13 the share of federal funding had decreased to 36% (and provincial funding decreased to 15%). During that time, the percentage of industry contributions increased from 20% to 41%.Footnote 5 Interviewees cited several advantages to continued federal support for R&D: influence over the direction of R&D to ensure pan-Canadian, international and longer term needs are being met, as well as improved federal capacity for policy and regulatory development and decision-making.
The Forest Sector Innovation sub-program is consistent with Government of Canada priorities and NRCan’s strategic outcome relating to economic competitiveness
The FSI Sub-program is aligned with NRCan’s strategic outcome which states that Canada’s natural resource sectors are globally competitive. In addition, the 2013-14 NRCan Report on Plans and Priorities identifies the priority, consistent with FSI, to innovate for competitiveness and environmental performance. FSI is consistent with Government of Canada priorities indicated in Speeches from the Throne and the Economic Action Plan, BudgetsFootnote 6 relating to growth and job creation including support for innovation and new technologies.
Federal and NRCan roles are legitimate and appropriate, but there is a need to clearly communicate vision and roles and responsibilities of NRCan and key stakeholders
The federal role is consistent with the Natural Resources Act which states that the Minister can enhance the competitiveness of Canada's natural resource products; and the Forestry Act which states that the Minister can enter into agreements for the conduct of research.
Historically, CFS has played a leadership role in forest sector S&T coordination in support of national economic goals, public policies as well as regional and sustainable development.Footnote 7 External stakeholders consulted consider that NRCan’s leadership role continues to be important to coordinate S&T activities, to strengthen the forest innovation system and to ensure that the longer-term needs of the forest sector are being met. To further strengthen the forest innovation system, some CFS interviewees cited the need for enhanced linkages between the Science Program and the Policy, Economics and Industry branches of the CFS.
Many external interviewees indicated there is considerable confusion among stakeholders about NRCan’s role relating to FRII, CWFC, and the TT program. While not all of these interviewees reported negative consequences of this confusion, several indicated that it impedes the understanding of the overall vision for innovation and transformation and limits clarity on how FSI projects and programs link to the overall strategic vision. Moreover, some of the international literature on innovation highlights the importance of a clear vision from Government to help industry overcome reticence in making its own financial investments towards innovation.Footnote 8
FSI leadership activities and programs have contributed to strengthened collaborations and increased alignment of research and deployment programs with industry priorities
According to interview, document and case study evidence, FSI programs and leadership activities such as networking, and partnership brokering has strengthened collaborations among industry, academia and government, and increased alignment of industry priorities with R&D and deployment programs. However, it is less clear whether the needs of small and medium sized firms are aligned with research priorities.
Scientific evidence generated through FSI is being used to support codes and standards in key opportunity areas such as mid-rise wood buildings and cross-laminated timber (CLT)
According to interview, case study and documentary evidence, research (FRII, TT) is being used to support codes and standards, particularly in key opportunity areas such as mid-rise wood buildings and CLT, influencing provincial codes and upcoming iterations of the National Building Code (2015). In addition, work done through CWFC, has influenced provinces and industry decision-makers to use advanced inventory systems and characterization tools.
There are indications that research projects are progressing along the innovation continuum leading to the piloting and introduction of technologies or processes
While many projects are in the pre-commercialization stages (e.g. FRII, TT), a review of project documentation shows a progression of these projects along the research continuum. Pre-competitive research from TT and CWFC has progressed to pilot-scale demonstration and IFIT implementation projects. IFIT is funding 13 first-commercial projects and 1 pilot project. To date, 4 of these projects have been completed. The TT-Pilot Scale Demonstration program provided funding for 14 projects, of which 10 utilized FPInnovations technology.
Innovations are starting to emerge and some are being adopted or commercialized
The achievement of transformation and broad economic impacts requires a longer timeline. Nevertheless, some technologies, processes and tools have been adopted ranging from those with small to larger market potential (e.g. cross-laminated timber [CLT] panels being produced by Canadian companies; FPSuite of decision support tools; and cellulosic nanocrystal [NCCTM] enhanced adhesive for use in transport trailer floors). Examples of innovations that CFS indicates are likely to be adopted in the near-term include lignin enriched adhesives, cellulose filament reinforced pulp and paper products, NCC™ fortified lubricants and other products, and printed electronics such as paper wraps that brown foods in the microwave.Footnote 9
A number of conditions are in place that increase the likelihood of outcome achievement. The evaluation found evidence of a number of internal facilitating factors such as strong collaborations, broad-spectrum program design, and dissemination and knowledge transfer activities. The expansion of market opportunities in Asia was an external factor that interviewees indicated is contributing to transformation and enhanced economic competitiveness of the forest sector.
Continued efforts are needed to progress towards longer-term outcomes
To enhance progress, continued efforts must be made in strengthening linkages with non-forestry sectors, and more detailed consideration of commercialization challenges and regulatory hurdles should be given during project planning stages. While there is evidence of outreach with non-forestry sectors continued efforts are needed to strengthen these linkages, for example, to integrate the production of wood-sourced chemicals and components.
One of the key challenges to implementation and adoption of new products, commonly cited by interviewees, is the challenge of incenting a traditional industry, such as the forest sector, to diversify its product mix. The high initial upfront investment costs coupled with long return on investment (ROI) periods required for many innovative products exacerbate this challenge. Several external interviewees suggested that uptake could be improved by more fully considering commercialization challenges, regulatory hurdles and possible mitigation strategies during the project planning stages.
Performance (Efficiency and Economy)
The FSI Sub-program is well-managed
There are indications that FSI programming is efficient and economic: performance program components were generally implemented as planned; timely delivery of many project tasks/deliverables; utilization of risk management approach (e.g. alternative actions are taken to resolve issues); accessible and professional CFS staff; and leveraging of cash and in-kind resources. Annual cash phasing and some delays in contracting and funding created challenges for strategic and project planning and timely implementation of research.
Through Transformative Technologies over $17M in cash and in-kind support (almost $15M in cash) was leveraged for R&D and technology transfer activities in 2012-2013. This represents a leveraging rate of nearly 63% on the directly invested FIP funds for the year. Based on a file review, IFIT funding had a leveraging rate of 66% on the directly invested IFIT funding.
There is a need to clearly document project selection criteria and process for TT, CWFC, and FRII
While many interviewees indicated that the project selection process generally works well, project selection criteria for CWFC, FRII and TT are not clearly documented. Clearly documented criteria would enhance the transparency of the project selection process. Some industry and other government stakeholders expressed uncertainty as to the reasons projects were selected. In addition, case study, document and interview evidence suggested that successful innovation requires careful consideration of potential implementation, commercialization and regulatory challenges. Project selection criteria that provide guidance on balancing technical and economic considerations would enhance the project planning process.
Conclusion and Recommendations
The suite of programs and leadership activities within the Forest Sector Innovation Sub-program are relevant and effective. The FSI Sub-program has contributed to building forest sector capacity to innovate through increased alignment of research with industry priorities and strengthened collaborations. Research is being used to support policies, codes and standards and to develop, pilot and implement innovations. A number of conditions are in place to facilitate achievement of longer-term outcomes related to the sector’s transformation and economic competitiveness such as the emergence of innovations and dissemination, effective networking and collaboration, and knowledge transfer activities. However, there are some enhancements needed with respect to the following:
Enhance Internal and External Communications
The evaluation found that there was confusion among external stakeholders regarding NRCan’s role relating to FRII, CWFC, and the TT program and insufficient understanding of the overall vision for forest sector innovation. In addition, some CFS interviewees expressed the need to strengthen links and communications within CFS to further integrate science, policy and programs.
Small and Medium Sized Enterprises
The extent to which the needs of smaller firms are aligned with FSI research and deployment programs is not clear, potentially limiting industry’s incentive to invest in additional innovation. In consultation with its key stakeholders, CFS should identify strategies for increasing engagement of small and medium sized firms in Forest Innovation System programs and activities.
Document Project Selection Criteria for CWFC, FRII and the TT program
Clearly documented project selection criteria would enhance the transparency of the project selection process and would also provide guidance on balancing economic and technical considerations for the project planning phase.
Foster Links across Non-forestry Sectors
Through FSI programs, new or enhanced products are being developed that are derived from wood fibre. These non-traditional products have the potential to substitute for alternative fuels, petroleum-based products and chemicals. To further FSI research, development and deployment, CFS should continue to facilitate links with non-forestry sectors, including links with researchers involved in non-forestry sectors such as oil and gas and the chemical industry.
Recommendations and Management Response
|Recommendations||Management Response||Responsible Official/Sector
CFS will develop a plan by April 1, 2015 that outlines how we will engage with stakeholders to communicate the CFS’ role in the forest sector innovation system.
Example of Current External Action
Example of Current Internal Action
April 1, 2015
CFS appreciates the importance of SMEs in innovation and job creation. The CFS will collaborate with FPInnovations in developing the institute’s renewed approach to engaging SMEs in forest sector innovation and will align existing funds within the FIP to addressing approaches identified through this endeavour by April 1, 2015.
In addition, the IFIT program has implemented a streamlined approach to reduce the administrative burden on smaller projects typical of those brought forward by SMEs.
April 1, 2015
CFS will update its project selection criteria in collaboration with FPInnovations for its funded programs. The updated criteria will be finalized by February 1, 2015, in time to develop contributions for 2015-16.
February 1, 2015
The CFS will continue to build on the Biorefinery Collaboration element of the FIP which has brought together NRCan-IETS, NRCan-CFS, FPInnovations, Academic, and non-forest-sector industry expertise and capacity to undertake industry-oriented R&D. It will continue to strengthen relations with non-forestry sectors and will pursue new collaborations with the oil and gas sector in the area of forest biomass as an alternative energy source.
The IFIT project evaluation criteria will favourably consider collaboration of non-forest companies in awarding project funding.
1.0 Introduction and Background
The evaluation assesses the issues of relevance and performance (effectiveness, efficiency and economy). The evaluation questions and the selection of methods (including the associated level of effort) were informed using a risk-based approach implemented. Moreover, the approach was calibrated to ensure compliance with the Directive on Evaluation while respective of available time and resources.
The evaluation covers the timeframe from 2009-10 to 2012-13 and approximately $308 million in expenditures and 150 research projectsFootnote 10 and leadership activities. Expenditures cover CFS resources devoted to the following:
- leadership function (e.g. brokering partnerships, strengthening the forest innovation system; knowledge management);
- research by the Canada Wood Fibre Centre;
- Contribution programs and their management:
- Transformative Technologies (TT) program;
- Forest Research Institutes Initiative (FRII); and
- Investments in Forest Industry Transformation (IFIT).
The forest sector has historically been a very significant part of the Canadian economy. Until 2005, Canada was the world’s largest exporter of forest products drawing on its traditional advantage of large supplies of high quality wood and fibre. However, since the mid-2000’s, Canada’s forest sector has been struggling to remain competitive. In February 2007, to assist the forestry sector, the government announced the Forest Industry Long-Term Competitiveness Strategy, which included the Promoting Forest Innovation and Investment (PFII) initiative.Footnote 11 This initiative put in place structures and programs to assist in the creation of technologies and products to transform the forestry sector. It included:
- Consolidation of the three national forest research institutes into one – FPInnovations.
- The creation of the Canadian Wood Fibre Centre to deliver research solutions.
- The Transformative Technologies Program, to support pre-competitive, non-proprietary R&D to address the development and adaptation of emerging and breakthrough technologies.
The above programs formed the basis for the Sub-program aimed at Forest Sector Innovation. Although not within the scope of this evaluation, FSI has a sister program Expanding Market Opportunities, which is a market innovation program that supports the maintenance and growth of foreign and domestic markets for Canadian forest products.
While the forest sector has started to recover post-recessionFootnote 12 as indicated by the stabilization of the sector’s contribution to GDP, the continued decline in pulp and paper sub-sector (e.g. the falling demand for paper with the growth of electronic mediaFootnote 13) has offset recovery in wood product manufacturing, and forestry and logging. Therefore, the conditions faced by the forestry sector are not only due to transitory factors such as the weak post-2009 economic recovery in the United States, but also structural factors.
1.3 The PAA for the Forest Sector Innovation Sub Program
The Forest Sector Innovation PSA in the 2012-13 PAA is composed of two PSAs from the 2011-12 PAA: Forest Product Innovation; and Institutional Alignment of Forest Research and Development for Effectiveness. The overall expected result for the Sub-program is to develop higher value Canadian forest product and processes which lead to new technologies to create a better competitive position for the Canadian Forest Sector.Footnote 14
1.3.1 Logic Model for the Sub Program
The logic modelFootnote 15 shows how the technology innovation aspects of the FSI Sub-Program (e.g., research, demonstration, and commercialization projects) are expected to lead to innovative products, processes and technologies that transform the forest sector industry and create a more globally competitive forestry sector that is economically viable. NRCan’s CFS activities related to enhancing knowledge exchange and collaboration are intended to lead to increased engagement of the forest sector industry and enhanced alignment of research priorities with the opportunities and threats facing the sector, by organizations conducting / funding forest-based research and deployment programs.
1.3.2 Resources at the Sub Program Level
Table 1 below shows that over the period from 2009-10 to 2012-13 approximately $308 million was provided for FSI, mainly consisting of NRCan’s C-base funding. The Leadership activity and FRII components receive A-base funding. In addition to C-base funding, CWFC receives some A-base funding.
|Innovation in Technology Development, Application and Adoption||CWFC||10.8||11.3||9.7||9.7||41.5|
|Transformative Technologies Program||38.3||68.6||33.8||25.6||166.3|
1.3.3 Sub- Program Structure
This sub-program includes the activities of NRCan’s CFS that are aimed at supporting product, process and technology innovations that support the transformation of the forest sector in order to enhance its long term competitiveness. FSI involves primarily research activities and also leadership activities that are described below:
- Innovation in Technology Development, Application and Adoption –In total, about 90 percent of funds (about $277.5M) were allocated to this activity during the period being evaluated. Activities covered the complete spectrum from pre-competitive research, through pilot-scale demonstration to first-in-Canada or first-in-world implementation, and include:
- Canadian Wood Fibre Centre (CWFC): The CWFC research program is directed at upstream (supply), forest-level research and primarily focuses on those fibre attributes or characteristics to give the sector a competitive advantage.Footnote 16 The Fibre Centre consists of NRCan-CFS research capacity, located across Canada in each of the CFS’ regional offices. CWFC receives approximately $5 Million annually through C-base funding starting in 2007-08 and currently approved to 2016-17.
- Transformative Technologies (TT): Supports pre-competitive, non-proprietary research and development (R&D) having a longer-term focus to address the development and adaptation of emerging technologies. Examples of areas of research conducted in this component include novel use for wood fibre, such as emerging and breakthrough technologies in areas such as forest biomass, forest biotechnology and nanotechnologies ($20-30 million annually through C-base funding starting in 2007-08 and currently approved to 2016-17).
- Pilot-Scale Demonstration (PSD) program under TT providing funding for operating facilities to purchase and install equipment to demonstrate mature research concepts developed under the pre-competitive component of TT ($40 million total over the 2009-10 to 2010-11 period).
- Short-term Competitiveness (STC) component under the TT, whose objective was to facilitate the finalization, transfer, adoption, and optimization of developed non-proprietary R&D, technologies and processes ($27 million total over the 2009-10 to 2011-12 period).
- Forest Research Institutes Initiative (FRII): This is an ongoing initiative that supports sustainable natural resources development by harnessing innovation and technology through public/private partnerships to enhance competitiveness.Footnote 17 The initiative supports R&D for improvement in forest operations; wood product manufacturing; and codes and standards; and
- Investments in Forest Industry Transformation (IFIT): provides funding support for innovative technologies at the pilot to commercial scale that are implemented for the first time in Canada’s forest sector ($100 million total from 2010-11 to 2013-14). IFIT was renewed in 2014-15.Footnote 18
- Leadership –Includes the establishment of networks, communication of knowledge, brokering of partnerships, and the application of influence to convince the sector to focus on transformation, knowledge management and exploring the role of bioenergy (e.g. Biopathways Study). Within this component CFS has been active in focusing their efforts on understanding how innovation function within the forest sector and have published articles on this topic.Footnote 19 Other activities include the development of an Integrated Systems Approach for the Canadian Forest Service, developed, in part, to facilitate further science and policy integration. These activities account for about 10 percent (i.e. $30.4M) of FSI funding over the four year period.
Table 2: Forest Sector Innovation Components – 2005Footnote 20 to 2012
Figure 1: Forest Sector Innovation Components
Table 2 shows the Forest Sector Innovation components from 2005 to 2012 and where they fit along the innovation continuum through 3 approved programs, which are the Forest Research Institutes Initiative (FRII), the Promoting Forest Innovation and Investment (PFII) Initiative, and the Investments in Forest Industry Transformation (IFIT). These approved programs are ranged from basic and applied research to pilot, demonstration and commercial. The basic and applied research includes support to codes and standards, integration strategy, and a collaborative model between NRCan/CFS FPInnovations and partners. Programs covered by basic and applied research are the FRII - composed of the 3 national forest research institutes - the CWFC, and the TTP. The pilot continuum only consists of the Pilot scale demonstration whereas the demonstration to commercial is covered. The FRII funding started in 2005-06 was renewed in 2010-11, but it was reduced in Budget 2012. Under the Promoting Forest Innovation and Investment (PFII) Initiative, while funding for the CWFC and the TTP pre-competitive R&D was extended until 2016-17, funding for the pilot was provided for the 2009-10 to 2010-11 period and the short-term competitiveness was only for the 2009-10 to 2011-12 period. The IFIT that has been in operation since 2010-11 was renewed in 2014-15.
Through the innovation sub-program, CFS plays a leadership role in forest sector Science & Technology (S&T)Footnote 21 coordination in support of national economic goals, sustainable development and public policies.Footnote 22 CFS, in collaboration with FPInnovationsFootnote 23 is a catalyst for aligning the work of other forest sector innovation key actors.Footnote 24
NRCan is one of the major sources of funding for FPInnovations (a non-profit research institute). CFS enters into contribution agreements (e.g. for TTP and FRII) with FPInnovations and other forest sector research partners and forest products companies to research, develop, and deploy new products, processes and technologies. It performs an oversight role of the activities of FPInnovations’ and its partners under these agreements.
NRCan also directly manages and oversees the Investments in Forest Industry Transformation (IFIT) program, which provides contribution funding to industry proponents for first-in-Canada applications of innovative technologies. CFS administers and manages the Calls for Proposals Process and the Contribution Agreements. CWFC is unique in that it is managed as a branch of the CFS and receives its strategic direction from FPInnovations’ multi-stakeholder Board of Directors.Footnote 25
FPInnovations has an advisory process for collaborative research programs and is made up of federal, provincial and industry members. Natural Resources Canada, the Forest Products Association of Canada (FPAC), and FPInnovations collaborate on the National Forest Sector Transformation Strategy. FPInnovations has a National Research Advisory Committee (NRAC)Footnote 26 which brings together key players including university representatives from the forest sector R&D networks industry members (set up by the Natural Sciences and Engineering Research Council –NSERC). There are also 11 Program Advisory Committees (PACs); one for each of FPInnovations’ programs of work in its collaborative research program (for example Primary Wood Product Manufacturing, Forest Operations, Biorefinery and Bioenergy, Resource Assessment). PACs are comprised of industry and government members, including a CFS representative and some PACs include academics as well.Footnote 27 TheyFootnote 28 report to the NRAC and are responsible for ensuring that the FPInnovations’ research programs are relevant to industry’s key needs. The PACs also assess and approve research project proposals.
The FPInnovations Board of Directors, composed of representatives of industry and government, defines strategic priorities to innovate the Canadian forest sector. This is done in consultation with FPInnovations members so that these directions can respond to industry needs. The Assistant Deputy Minister of the CFS is invited to attend all FPInnovations Board meetings as an observer. Projects are managed by FPInnovations, in cooperation with partners. Research under FRII and TTP is guided by FPInnovations’ Board of Directors and based on negotiated (with CFS) annual research workplans. CFS reviews and approves these annual workplans which outlines the projects to be delivered under these programs.
In 2011-12, the NSERC Networks created a council of network directors called FIBRE (Forest Innovation by Research and Education). This group was formed to ensure that regular dialogue takes place, not only among the Networks, but also with other stakeholders such as FPInnovations, NRCan and FPAC.
2.0 Evaluation Approach and Methodology
The Evaluation of the FSI employed multiple lines of evidence approach, which consisted of:
- Document and literature review: An overall review of key program and performance, planning and reporting documents was conducted. These included both documents internal (e.g., FSI Annual Performance Reports) and external (e.g., The Senate Report) to NRCan’s CFS;
- File review: Two sets of file review so far completed, and consisted of 29 projects (a sample of 20 funded project for FRII and first 9 projects approved for IFIT);
- Interviews: A total of 76 individuals (20 internal and 56 external) were interviewed from June 2013 to May 2014. Interviewees included representatives from NRCan senior and program management, FPInnovations management, researchers, academia, forest sector industry, provinces, and other federal departments; and
- Case studies: 14 case studies (TT=6; IFIT=4; CWFC=3; and FRII=1) were completed. The case studies consisted of review of project documentation and interviews with the project lead and key stakeholders.
Note that data collection for the evaluation was done in two parts: the majority of IFIT related work was conducted in the summer of 2013 and the remaining data collection was conducted in the spring-summer of 2014.
2.1 Evaluation Limitations
Two key evaluation limitations and mitigation strategies are discussed below:
- Attribution Issues: The sub-program is built on the premise that collaboration across the forestry sector on common projects, programs and priorities will be more effective in achieving a globally competitive sector. However, this creates issues of attribution making it difficult to measure NRCan’s unique contribution to desired outcomes. While the evaluation design cannot fully resolve this issue, it was mitigated through the use of “contribution analysis” approach which assessed how internal factors (those within the control of NRCan) and external factors have influenced outcomes.
- Complex Nature of R&D: In this sub-program, research occurs at different stages along the innovation continuum is such that not all projects will realize the same outcomes within the evaluation period. While IFIT which as at the later end of the spectrum may reasonably expect to contribute to long-term outcomes in the 5-10 year range, programs aimed at pre-competitive research may only be able to do so in the 20 year range. To mitigate this challenge, the evaluation assessed, primarily through the project document review, how research progressed along the innovation continuum.
3.0 Evaluation Findings
3.1 Key Relevance Findings
Overall, there is a clear, continuing need for federal support for research and for CFS leadership activities to enable innovation and transformation in the forest sector to diversify its product mix and contribute to the sector’s economic competitiveness. Even though the sector is showing signs of recovery, support is still needed, particularly for high risk research to facilitate the forest sector’s commitment to an innovation culture.
The research and leadership activities are consistent with Government of Canada priorities and the federal/CFS role in supporting and conducting research is both legitimate and appropriate. A collaborative and broad-spectrum approach, such as that utilized by FSI, is considered an appropriate model for the federal government. NRCan is best positioned to administer and manage the FSI programming because it has the suitable mandate, expertise and experience. The NRCan leadership role is considered appropriate to ensure that the broad, longer-term needs of the forest sector are being met. NRCan’s role could be further enhanced by clearly communicating its vision for innovation and transformation, and the roles played by various partners and stakeholders.
Relevance Issue 1: Ongoing Need
Finding: The leadership and research activities supported by FSI, with its collaborative and broad-spectrum approach, continue to be needed because it supports the momentum created in the last five years towards innovation and transformation.
All lines of evidence support the need for continued work related to the innovation in full spectrum, from research to implementation, due to the long term nature of transformative research, the significance of the economic downturn, and the volatility of commodity prices. A report on the analysis of productivity trends of the Canadian Forestry Sector, notes the volatility of commodity prices contributes to the conservative nature of the industry and its reticence to invest in innovative, higher-risk research.Footnote 29 According to external and internal interviewees, continued support is needed to sustain the momentum initiated by FSI programming.
Although a number of the forest sub-sectors are experiencing economic recovery, the culture of innovation within the sector is just beginning. External stakeholders interviewed recognize the need for innovation and indicate that without FSI support industry would likely focus on short-term rather than long-term innovative solutions.
The 2011 Report of the Standing Senate Committee on Agriculture and Forestry noted that the sector needs to be more innovative in order to return to competitiveness and recommended an approach, consistent with FSI, that addressed the sector’s low levels of investment in R&D; supported transformation along the research to implementation continuum and created networks for the sector to share knowledge and experience.
Interviewees agreed that continued federal support for FPInnovations is appropriate and is valuable to enhance a strategic, collaborative approach to innovation and to maintain federal policy and regulatory capacity
Following the economic downturn in 2008-09, federal (51%) made up the largest portion of funding in 2009-10, but by 2012-13 the share of federal funding had decreased to 36%. As shown in Table 3, in that same timeframe industry’s contribution increased from 20% to 41%.Footnote 30 External and internal interviewees cited several advantages to continued federal support for R&D: influence over the direction of R&D to ensure pan-Canadian, international and longer term needs are being met, as well as improved federal capacity for policy and regulatory development and decision-making. In addition, the Senate Committee on Agriculture and ForestryFootnote 31 recommended that FPInnovations should be funded on an ongoing basis, even if the sector rebounds, to recognize this entity’s importance in creating innovation in the sector.
|Revenue Sources (%)||2009-10Footnote 32||2010-11||2011-12||2012-13|
|Federal Core Contribution||5.2||5.1||5.0||4.7|
|Provincial Core Contributions||1.3||1.1||1.2||--|
|Industry Member Agreements||9.3||12.7||13.7||11.5|
|Strategic Research Alliance||--||--||--||2.9|
Finding: The broad spectrum approach appropriately addresses various needs along the innovation continuum, from research to implementation
Each program component is seen by interviewees to be providing a leadership and support role within different stages of the innovation continuum. Interview and document evidence show that the Forest Research Institutes Initiative and Transformative Technologies address research and technical gaps, support codes and standards development and are viewed by interviewees as a good use of public funds. According to external stakeholders, the Canada Wood Fibre Centre is the key organization in Canada conducting and funding upstream research. External and internal interviewees agreed that there is a need for this type of research to enhance fibre quality and quantity to help the sector become more competitive.
Investments in Forest Industry Transformation (IFIT) is placed farther along the research continuum and provides financial support for first commercial applications of new technologies, an arena that is currently not significantly occupied by other funding programs. Interviewees indicated that there is a need for the program to “de-risk” new technologies to encourage their broader adoption across the sector. The program was also oversubscribed. After issuing its first call for proposals, IFIT had received proposals from 64 proponents for projects totaling $1.3 billion.
While there is general agreement that the current mix of programs is appropriate, interviewees cautioned that the nature of support should change as the forest sector evolves. The Senate ReportFootnote 33 indicated that the mechanism for supporting activities closer to commercialization may need to change, for example, to different types of funding support (e.g. repayable contributions or support through the Business Development Bank).
Finding: There is little evidence of duplication
The programs supported within NRCan are not perceived by stakeholders to be duplicative as each provides support within different stages of the innovation continuum. Other federal and provincial programs exist that conduct forestry related research (e.g. Natural Science and Engineering Research Council, National Research Council, Alberta Innovates). However, interviewees noted that the NSERC work dovetails with TT work. Moreover, there is evidence of good collaboration and information exchange with NSERC (for example through FIBRE), NRC, and Alberta Innovates which serves to minimize duplication.
Relevance Issue 2: Alignment with Government Priorities
Finding: The Forest Sector Innovation sub-program and its components are aligned with the NRCan strategic outcome and Government of Canada priorities relating to enhancing the competiveness of natural resource sectors.
FSI is aligned with NRCan’s strategic outcome which states that Canada’s natural resource sectors are globally competitive. In addition the 2013-14 NRCan Report on Plans and Priorities identifies the priority, consistent with FSI, to innovate for competitiveness and environmental performance. FSI is consistent with Government of Canada priorities indicated in Speeches from the Throne and the Economic Action Plan, BudgetsFootnote 34 relating to growth and job creation including support for innovation and new technologies: strengthening the competitiveness of industries, including targeted actions to support forestry innovation.
Relevance Issue 3: Consistency with Federal Roles and Responsibilities
Finding: Federal and NRCan roles are legitimate and appropriate
The federal role is consistent with Department of Natural Resources Act which states that the Minister can enhance the competitiveness of Canada's natural resource products; and the Forestry Act which states that Minister can enter into agreements for conduct of research.
Provinces have legislative authority over most publicly owned forest lands while the federal government jurisdiction is based on ownership of 23% of Canada’s total forest land. The forest sector is important to Canada’s economy, indicating that a national interest in it is reasonable. According to the CFS 2013-14 Business Plan, the Canadian forest industry in 2011 contributed over $23.7 billion in GDP (1.9% of total), provided direct employment for 233,000 Canadians and supported 200 forest-dependent communities, mostly rural and remote.Footnote 35 Both internal and external interviewees indicated that the federal and NRCan roles were appropriate for various reasons:
- FSI programs use a strongly collaborative approach that includes industry, academia and federal and provincial governments;
- industry is reticent to make financial commitments given the high levels of risk that innovation requires;
- provides enhanced neutrality and international recognition. Industry stakeholders noted that CFS provides neutrality which enables international recognition of their forest products;
- provides pan-Canadian perspective on forestry issues and helps met the needs of the broader forestry sector; and
- NRCan has appropriate expertise and experience. External stakeholders consulted view NRCan as having the appropriate expertise and as being the key player at the national level.
- External stakeholders agreed that NRCan’s leadership role and activities are important for coordinating S&T activities, brokering partnerships and enhancing collaborations at a national level.
Finding: While the CWFC role in upstream research can be challenging in the context of Canada’s public land tenure system, external stakeholders viewed the CWFC role as appropriate given its strong collaborative approach, and its technical expertise and capacity to broker partnerships
Canada has a public land tenure system with provinces owning most of the forested land while facilities for harvesting and processing wood are typically privately owned.Footnote 36 The “provincial land ownership/industry operation model” sometimes results in each of these parties (provinces and industry) being reluctant to invest, creating a need for CWFC to initiate research projects and bring key partners together. The Somatic Embryogenic case study shows that no investment would have taken place if CWFC had not initiated and coordinated the research activities. Additionally, CWFC’s role in upstream research is seen as appropriate by external interviewees because of their expertise and the fact that their national perspective enhances knowledge transfer.
While CWFC works in a highly collaborative way with the provinces, particularly at the research level, case study and interview evidence suggests that there is a need to build greater links with provinces at a more strategic level, for example provincial policy groups responsible for land management to facilitate broad provincial support.
Finding: There is confusion about the NRCan role and other key stakeholders relating to various FSI components particularly TT, FRII and CWFC
Many external interviewees indicated there is considerable confusion among stakeholders about NRCan’s role relating to FRII, CWFC, and the TT program. For example, the TT uses a model whereby NRCan provides funding to FPInnovations which conducts research in collaboration with partners. This has led to confusion about the roles of the various players including a lack of awareness in industry that NRCan provides the funding for the TT program. Regarding CWFC, some external stakeholders are unclear as to the nature of the relationship between CWFC and FPInnovations (i.e. that CWFC is a branch of CFS and receives it strategic direction from FPInnovations). This leads to confusion among some external stakeholders as to the role difference between FPInnovations and CWFC.
While not all of these interviewees reported negative consequences of this confusion, several indicated that it impedes the understanding of the overall vision for innovation and transformation and limits clarity on how FSI projects and programs link to the overall strategic vision. Moreover, some of the international literature on innovation highlights the importance of a clear vision from Government to help industry overcome reticence in making its own financial investments towards innovation.Footnote 37
3.2 Key Results
FSI has contributed to building forest sector capacity to innovate (e.g. increased alignment of research with industry priorities). However, to further increase forest sector engagement and investment in research, continued efforts are needed to communicate the vision for forest sector innovation to external stakeholders, and to align the needs of small and medium-sized firms with research priorities.
In terms of intermediate outcomes, FSI research and leadership activities are being used to support policies and programs; codes and standards; and to develop, pilot and implement innovations. Conditions are in place to facilitate achievement of longer-term outcomes (e.g. strong collaborations, relevant scientific evidence). Continued efforts are needed to strengthen links with non-forestry sectors.
Performance Issue 4: Effectiveness
3.2.1 Immediate Outcomes
Finding: The evaluation evidence, while weakFootnote 38, suggests that FSI programming is having a moderate impact on industry understanding of opportunities and threats
Interviewees generally agreed that FSI activities are contributing to forest sector’s understanding of opportunities and threats, albeit slowly given the traditional structure of the industry. Understanding of opportunities was noted by external interviewees to vary within the sector (according to size of firm and type of market and product) and within firms, with middle managers and executives having different levels of understanding. The Bio-pathways studyFootnote 39 (led by FPAC) was frequently cited as an effective collaborative effort that increased understanding of opportunities and threats in the bio-economy. Interviewees noted that CFS was an effective partner that helped to shape thought and vision of provinces and the pulp and paper sector.
Finding: FSI programming is contributing to the alignment of R&D and deployment programs with industry priorities to a good extent
As indicated by documentation, key players such as FPI, FPAC, NRCan, and the Senate Committee show a consistent understanding of forest sector priorities established in response to threats. Moreover, the structure of the program itself, facilitated by CFS leadership activitiesFootnote 40, is intended (e.g. FPInnovations and its Advisory Committees and collaborative approach) are meant to ensure research priorities reflect industry needs and opportunities. Priorities are established based on an advisory process. Research advisory committees (within FPInnovations) with strong industry representation exist to align research priorities with needs. Case study evidence suggests that FPInnovations’ Technical Advisory Committees (which include CFS representatives) contribute to projects that are national in scope and are responsive to stakeholder needs. In addition, external interviewees noted that CFS played a critical role in helping to establish FIBREFootnote 41 (Forest Innovation By Research and Education) which is designed to align with the Canadian Forest Sector Transformation Strategy and to align university research to the forest innovation system. Interviewees noted that CFS continues to be an active and effective partner in FIBRE. However, several external and internal interviewees noted that there are some gaps in reaching small and medium sized firms given that they are likely under-represented in FPInnovations and may not be FPAC members.
Finding: FSI programming is contributing to increased and strengthened collaborations to a great extent, although continued efforts are needed to link with non-forestry sectors
The program design itself strongly influences collaborations, with FPInnovations acting as the facilitative leader for research and development and deployment activities. Documents show a broad range of stakeholders involved in FSI projects – forest sector firms, industry associations, provinces and provincial research institutes, municipalities, and other federal government departments (primarily NSERC and NRC). The majority of external stakeholders noted that CFS (through both leadership and programing components), CWFC and FPInnovations have played an active role in brokering partnerships and provided them with opportunities to collaborate with others. According to both external and internal interviewees FIBRE has been important in addressing a previous gap between academia and the forest industry. According to documentation, in the past few years, FPInnovations’ membership has grown and there has been increased engagement of the design, engineering and architecture communities in their Advanced Building Systems program.Footnote 42 By 2012-13, according to FPInnovations, the organization represented 66% of the production volumes of wood products; 70% of forest operations and 52% of pulp, paper and bioproducts.Footnote 43
While there is evidence of collaboration across non-forestry sectors, both CFS and stakeholder interviewees agreed that continued efforts are needed to strengthen linkages with non-forestry sectors. According to interview evidence, the forest sector is more aware that it needs to pursue more multi-disciplinary collaborations and endeavour to form joint projects with the chemical sector for example. However, government and industry representatives noted that they are struggling with how to move forward on this. To help address this issue, CFS has allocated money to the Forest Sector R&D initiative (NSERC research networks). Some interviewees noted, however, that CFS needs to facilitate better links to academics outside of traditional forestry schools and must continue to be vigilant about its role in supporting linkages with industries across sectors.
The following table summarizes the key findings for immediate, intermediate, and long-term outcomes to provide an overall results story. A more detailed narrative of intermediate and long-term outcomes is presented subsequent to this summary. Extent of achievement of outcome (none, some, moderate, good or great) is based on an assessment of key influencing factors; gaps in reach or delivery that might affect the outcome; and triangulation of evaluation lines of evidence.
Table 4: Summary findings and influencing factors by outcome
Immediate Outcomes: Forest Sector industry understands current and future opportunities and threats to the sector
FSI programming is having a moderate impact on industry’s understanding, but interviewees express concern that sector lacks an appropriate long-term vision to fully understand opportunities.
Positive: Program design; marketing studies, demonstration and implementation activities are particularly effective in helping industry see value. Biopathways study identified as a key influence. Key external challenge longstanding focus of forest sector on production of standard products. Need to improve communication of vision for transformation and innovation, roles and responsibilities
Forest sector industry capacity and R&D and deployment programs consistently aligned with industry priorities
FSI leadership activities and programs are contributing to the alignment of industry R&D and deployment programs to a good extent.
Positive: Program design, effective advisory and consultation processes. Key external challenge is risk averse nature of forest sector. There are some gaps reaching small and medium enterprises as well as the few key players that are not members of FPInnovations and/or FPAC
Increased and more effective collaboration amongst organizations working on forest-related research and application of this research
FSI programming and leadership activities are contributing, to a great extent, to increased and more effective collaboration of key stakeholders. Common perception of interviewees that CFS and key stakeholders leading a more coordinated effort in comparison to other countries. However, need continued efforts to strengthen links with non-forestry sectors.
Positive: Program design, national CFS expertise and capacity to broker partnerships. Industry stakeholders note that CFS regularly facilitates or provides networking opportunity. NSERC research networks. Challenges: Insufficient resources, travel restrictions limits international information exchange and domestically, difficult to bring everyone to table at same time.
Intermediate Outcomes: Policy makers and regulators support the use of product, technology and process innovations
FSI, particularly FRII and TT, are contributing to a good extent to standards and codes development
Positive: Strong collaborative approach, CFS and FPInnovations expertise.
Scientific evidence is used to develop innovations in forest products, processes and technologies - optimize value of forest material along the value chain
FSI research contributing to a good extent to development of products, processes and technologies to optimize value
Positive: Broad-spectrum (has programs along the innovation continuum from pre-commercialization research to implementation projects) collaborative approach; CFS and FPI expertise; sufficient time for research to progress. Challenges: annual cash phasing makes it difficult to plan research
Innovations in forest products, processes and technologies have been piloted, introduced
FSI contributing to the emergence of innovations
Positive: Broad-spectrum , strong collaborations approach, CFS and FPI research expertise.
Final and Strategic Outcomes: Forestry sector is transformed – has more diversified, higher value product mix and enhanced economic competitiveness
It is too early to fully assess this outcome as it requires a longer-time horizon. However, many of conditions are in place for achievement. Need to sustain momentum
Positive: Broad-spectrum, collaborative approach. CFS and FPI knowledge transfer activities. Evidence of dissemination and knowledge transfer activities. Challenges: long ROI on many innovations , lack of venture capital; need to strengthen links with non-forestry sectors
3.2.2 Intermediate Outcomes: Use of Research
Case Study: Advanced Forest Resources Inventory Technologies – AFRIT (CWFC)
The premise for this project is that new remote sensing technologies (airborne-acquired Light Detection and Ranging (A-LiDAR) and Individual Tree Classification (ITC)) could be used to obtain and provide inventory information more accurately, precisely and affordably than conventional inventory techniques. FPI annual Report (2012-13) notes that research results show enhanced forest inventory data can contribute significantly toward producing operating plans that lower road construction costs, increase the productivity of harvesting machines and create overall economies within the entire forest operations value chain. While remote sensing is a proven technology, its application to the forest sector globally is more recent. Phase 1 of the project began in 2007-08 and Phase 3 of the project, intended to facilitate large-scale operational uptake and implementation, will continue until 2016-17.
The project is led by CWFC and is a collaborative effort involving industry, a provincial research institute and universities. Stakeholders indicated that CFS played a key role in facilitating the project through their coordination role; by building partnerships between remote sensing researchers and forest managers; and through their understanding of the industry. While some concerns were expressed about the upfront costs of the enhanced system, intended users of the advanced inventory system have generally responded favourably to the project given the need to have accurate and detailed information to plan and make informed decisions to maximize value from the forestry resources.
The research influenced the decision of several larger forest companies and Alberta and New Brunswick to operationally integrate LiDAR into the forest inventories or use acquired data to support planning, decision-making and policy development.
This section assesses the impact of FSI on intermediate outcomes relating to the use of research to support policy and codes; to develop innovations; and to pilot or introduce new innovations.
Intermediate Outcome: Support for Codes, Standards and Policy
Finding: FRII and Transformative Technologies research is being used to support codes, standards and policy, particularly with respect to forest harvesting, transportation, CLT and multi-storey buildings
There is evidence that CWFC, TT and FRII projects are having a good impact on codes, standards, and policies. FRII and TT have contributed to building codes particularly in reference to multi-storey wood buildings, and CLT:
- A file review indicates that multi-storey wood buildings have been supported by efforts to update codes through FRII and TT. The FRII projects file in the building systems/markets and economics and manufacturing research area, showed that the program provided more accurate information to the design and engineering community regarding multi-storey wood and hybrid buildings.
- With partial FRII and TT support, FPInnovations along with partners such as NRC, Canadian Wood Council and NSERC (NewBuilds), new sections of the Canadian Standards are being drafted relating to CLT and multi-storey wood-frame construction design.Footnote 44 Supported development or revision of a number of standards: Canadian Standards Association (CSA) 086 (Engineering Design in Wood); CSA A370 (adhesive heat durability test); CSA S406 (requirements for constructing preserved wood foundations); International Standards Association (ISO) TC 165 (standard test methods for timber floor vibration performance).
- FRII and TT work pertaining to mid-rise buildings is expected to contribute to sections of the 2015 National Building Code of Canada.Footnote 45
- In 2013, the Régis du batiment du Quebec (RBQ) put out an official directive on the construction of 5 and 6 storey wood structures that explicitly referenced a guide developed by FPInnovations using knowledge gained through FRII research.
- With TT support and the knowledge gained from the European experience, FPInnovations prepared a peer-reviewed CLT Handbook (a Canadian and a U.S. version) targeted to design professionals to facilitate the adoption of CLT.
Case Study: Development of Scientific Evidence Relating to Wood Building Vibration Response to Wind (FRII projects)
Interview and document evidence indicate that there is a lack of information about the properties of mid- to high-rise wood and hybrid wood buildings and their responses to wind. The FRII projects contributed to the development of a method and system for field monitoring of wood building vibration response to wind. Field tests were also conducted on non-residential heavy timber platform buildings, heavy timber (glulam) 4-6 storey buildings and on cross-laminated timber (CLT) residential 3 and 4 storey buildings. Moreover a database was developed. Simulations of vibration performance of wood frame buildings were also conducted. While the research completed most deliverables, building monitoring could not be undertaken as the researchers were unable to obtain permission for this task demonstrating some of the inherent challenges of conducting field studies. Nevertheless, the study produced promising results. Along with additional research on wood building vibrations, the results are expected to be used for the National Building Code and for design guidance.
There is evidence that TT has supported the development of provincial transportation policies and regulations.Footnote 46 For instance, interviewees noted that TTP helped demonstrate that wood affected by Mountain Pine Beetle could be transported without hazard. Modelling work under TT has been used to demonstrate road safety. This serves to lower costs for forestry, mining and oil and gas and resulted in restrictions being removed in BC, Ontario and Manitoba.
Finding: CWFC work on advanced inventory systems has influenced provinces and industry decision makers to use advanced inventory systems and characterization tools
CWFC has influenced provinces and industry decision-makers to use advanced inventory systems and characterization tools. Several interviewees indicated that CWFC work is progressing well to support future regulatory change. It was noted by an external stakeholder that “CWFC is helping to direct the research being done in a way that makes it much easier to be picked up by policy makers and regulators.”
Intermediate Outcome: Scientific evidence used to develop technologies and processes that optimize the value of forest material
Finding: The evaluation found several examples of FSI scientific evidence being used to develop new or enhanced products, technologies, processes, models and tools
As evidenced from the project document review and interviews, there have been a number of new or enhanced products and processes developed through FRII and TT research such as evidence Laminated Veneer Lumber (LVL); Cross Laminated Timber (CLT); nanocrystalline cellulose (NCCTM); the use of Microwave for drying wood; and cellulose filaments (CF).
Patent counts can provide an indirect measureFootnote 47 of innovative output. FPInnovations filed 51 patent applications in 2012-13. The table below summarizes the number of patents and notices of discovery filed by FPInnovations, which receives a considerable portion of its funding from NRCan.
Table 5: Patents and Notices of Discovery – FPInnovations (2012-13)Footnote 48
|Number of new patent applications||48|
|Number of patent applications for new inventions||3|
|Number of patent applications granted||25|
|Internal concept disclosures||6|
|Internal concept disclosures from universities involved in research networks/chairs||5|
As of 2012-13, the TT component was supporting approximately 37 process and technology innovations.Footnote 49 CFS has set the following targets with respect to the development of innovations: ten forest products, processes, or technologies by 2016 and six new forest process, technology or product innovations will be adopted by industry by 2017.Footnote 50
Finding: Interview, case study, and document evidence indicate that products and processes developed through FSI research optimize value of forest material
Interviewees agreed that work done through FRII, TT, CWFC and IFIT contribute to higher value products. According to interviewees, NCCTM research has demonstrated the ability to convert low value fibre into a high-tech product useful in a variety of industries and considerably more valuable than its use as either pulp or hog fuel. Similarly, lignin extracted from the pulp stream has increased value when sold as tire blacking. CLT is worth more per board foot than the 2-by-4 lumber used to construct it.
CWFC’s work on enhanced forest inventories provides more detailed and accurate information about trees which interviewees noted is important to optimize the value chain. Enhanced inventory systems, a key focus of CWFC, can produce information about fibre attributes which leads to better decisions as to the best end-use for wood and the capacity to separate trees for different end uses. Interviewees note that having a clear understanding of what exactly is in the forest and where it is located improves the whole value chain.
Of the twelve projects funded by the IFIT Program as of 2012-13Footnote 51, eleven projects involved processes new to Canada; ten projects produced a new product or diversification of product mix from a mill; six projects implemented what the IFIT Program staff considers to be a high level of innovation; three projects implemented medium levels of innovation; and nine projects are expected to produce new intellectual property.Footnote 52
Intermediate Outcome: Innovations are piloted and introduced
Finding: Evidence suggests that research is progressing along the innovation continuum and some products, processes and technologies are being piloted / introduced
There is evidence of progress along the innovation continuum with some of the research progressing sufficiently towards pilot-scale demonstration, implementation and commercialization.
Case Study: Strand Screening Project for Product Diversity (IFIT project evolved from TT-PSD)
The purpose of the IFIT project is to implement strand sorting technologies already proved in a Pilot Scale Demonstration under Transformative Technologies. The TT-PSD project showed that the technologies could produce a stronger, more stable and more moisture resistant product on an existing production line. During this pilot-scale demonstration, Tolko introduced an enhanced product, derived from the process - re-engineered Oriented Strand Board flooring.
These technologies allow the company Tolko to screen wood strands, removing wood dust, and to sort strands into high and medium grade. This is considered to be beyond current forest sector technology in Canada. Efficiencies are being added by utilizing wood dust and unusable fines as a fuel source for the energy system; reducing resin addition rates and density of the products; and improving mill air quality. Importantly, the project will also allow the use of one production line to produce a wider array of products. The high grade strands are intended for speciality products (e.g., OEM flooring, low density decorative panels, truck/trailer decking and Laminated Strand Lumber) while the medium grade strands are for commodity products.
The IFIT project facilitated the transition from pilot-scale demonstration to production and enabled the purchase, refurbishing, and installation of equipment in a completed mill building as well as trials and commissioning of the facility. The project was completed in 2014. While too early to assess longer-term impacts, interviewees indicated that there is good potential to improve quality of existing products; enable development of products new to the existing plant (Laminated Strand Lumber); open new markets; improve efficiency (primarily by enabling a single line to produce a variety of products); and improve the cost competitiveness of those firms adopting the technology.
For example, under the TT program, FPInnovation’s research results have led to improvements to its FPSuite components which are used for the purpose of real time and remote management of forest operations.Footnote 53 As part of FPSuite, FPDatTM an interactive, on-board computer, a new version of the previous MultiDAT® system, is designed to collect and analyze information on the performance and productivity of equipment. FPDat progressed from a prototype installation in 2009 which received positive user feedback Footnote 54 to commercialization.
TT-PSD projects demonstrated previously developed FPInnovations technologies or processes. For IFIT the source of the scientific evidence utilized in the projects include utilization of the technology elsewhere in the world or in other industries, from company’s internal research, from academic results and from evidence provided by FPI. A total of five IFIT projects evolved from Transformative Technologies (2 pre-commercialization and two pilot scale projects) and one from CWFC.
Finding: FRII’s research is used to support pilot-scale demonstration projects and the development of other innovations which have been introduced or adopted
The FRII file review showed that for the projects sampled, most indicated “continuing research” as a next step. Four of the projects reviewed indicated readiness for pilot or implementation, for example dust control guides, and wrapping posts. FRII research has also contributed to other products and processes, which have been piloted, introduced or adopted such as CLT, FPSuite and Enhanced Forest Inventory Systems (EFIS).Footnote 55
Finding: A number of TT-PSD projects are demonstrating potential and promising results
Under TT-PSD, 14 pilot projects, 10 of which used technologies developed by FPInnovations were launched by 2011-12.Footnote 56 These projects covered a variety of products and processes including bioenergy, next generation wood products (e.g. CLT), nanocrystalline cellulose, biogas, and lignin extraction. Two TT-PSD projects considerable potential are highlighted.
Supported through TT-PSD, a pilot plant involving the integration of LignoForceFootnote 57 with the kraft mill process at a Thunder Bay mill was installed. By 2012-13, the plant was running an experimental 100 kg/day production for a two year period. The large quantities of high-quality lignin produced are being used for in-depth testing and product development. Moreover, this technology can be integrated into existing machinery at pulp and paper facilities with a relatively small investment.Footnote 58
Interviewees most frequently cited nanocrystalline cellulose (NCCTM)Footnote 59 as an example of breakthrough research. This research evolved to a TT –PSD project to become the world’s first pilot-scale industrial nanocrystalline cellulose plant which began operations in 2012. The pilot plant is a joint venture between Domtar and FPInnovations called CelluForce. FPInnovations has been studying this area since 2006 (supported by the TTP pre-commercialization funding) and has patented a process to extract the material from wood pulp which can be made in several forms such as powder, gel, or filament. Over the evaluation period FPInnovations have worked extensively on the development of new applications for this substance. NCCTM is widely considered a technological success and viewed as having very strong market potential given its unique chemical, physical, magnetic and electrical properties.Footnote 60 For example, NCCTM could become an important chemical product used in various bio-products. FPInnovations work in this area has generated a number of patent applications and recently it had a patent application approved concerning NCC’s highly adjustable iridescent properties.Footnote 61
The NCC pilot project demonstrated its capacity to produce the material on a continuous basis and met production milestones.Footnote 62 The plant currently has considerable NCCTM in stockFootnote 63 and operations at the pilot plant were put on hold while the potential markets for NCCTM are evaluated. From the outset of the pilot project, it was expected that further investments in nanocrystalline cellulose marketing and applications development would continue. Trials integrating NCCTM into the manufacturing process of different products commenced in 2012 through technical collaboration agreements between CelluForce and 15 companies based in Canada, the United States, Europe and Asia in various industrial sectors.Footnote 64
Finding: While CWFC upstream research is long-term, there are some examples of processes and technologies flowing from CWFC being piloted and introduced
Due to the long-term nature of projects, interviewees indicated that CWFC has had somewhat limited impact on innovations being piloted and introduced, but they noted that CWFC activities were important to making this happen in the future. Nevertheless, the evaluation found examples of processes and technologies flowing from CWFC research being piloted and introduced.
In the three CWFC case studies, science has been piloted or introduced to some extent. Advanced Forest Research Inventory Technologies (AFRIT) has been implemented by Tembec, West Fraser, Westerhauser, J.D. Irving and Island Timberlands as well as the provincial inventories of the provinces of Alberta and New Brunswick.
Somatic Embryogenesis (SE) and Multi-varietal forestry (MVF) research long-term (since the mid-1990s) developed through CFS and CWFC is being implemented by J.D. Irving through IFIT. The SE /MVF research funded showed a great deal potential, but it was found that considerable manual labour was required to plant new tree growth. Subsequently, this evolved to an IFIT project (commercialization of advanced seedlings) with the aim of resolving this problem. It is expected that mechanization will help industry to secure a sustainable supply of wood. In addition, the technology will allow J.D. Irving to seek commercial opportunities for the unique tree varieties developed through the SE/MVF research.Footnote 65
IFIT is providing funding for 14 first-commercial and pilot projects, four of which have been completed and starting to show promising results
IFIT is providing funding for 14 first-commercial (13) and pilot projects (1). By June 2014, 11 of the 14 projects have been publicly announced by NRCan and 4 IFIT projects have been completed. External interviewees indicated that most of the projects would either have not gone ahead or not have proceeded as quickly without IFIT funding.
As of 2012-13, an examination of 12 projects funded, 11 were identified as replicable in the sector to other companies.Footnote 66 According to CFS representatives, some potential projects are currently under consideration for industry led replication of the innovation deployed under IFIT.
The following describe 3 recently completed IFIT projects:
- Al-Pac Forest Products (Methanol Purification). IFIT funding was providing for installation of equipment that uses a unique, patented process which produces high purity bio methanol that is equivalent to the Technical Grade AA of commercially purchased methanol (99.85% pure).Footnote 67 The integration of the new technology at an Al-Pac mill has been completed and allows the purified biomethanol to be used in the production of a pulp whitening agent and any remaining biomethanol is expected to be sold. It is estimated that purified methanol is worth many times more as a chemical commodity compared to the costs of disposal by incineration, with a payback period from 24 to 48 months.Footnote 68 In addition, there are 20 mills identified in Canada that could benefit from this novel approach and potentially generate an additional $220M/year.
- Millar Western Forest Products (Anaerobic Digestion – Bioenergy Effluent Project). The IFIT project implements (at the commercial scale) an innovative technology (anaerobic hybrid digester, or AHD) that removes organic pollutants from the mill’s pulp wastewater by using bacteria (i.e. AHD). This process produces a methane-rich biogas that will fuel a power station, co-generating electricity and heat to replace purchased power and natural gas in the mill process. The technology had been previously tested at the pilot-plant stage by project partners (UEM Inc.). Construction and installation of equipment has been completed (2014). This AHD technology has the capacity to strengthen the company’s economic and environmental performance by generating electricity and heat which offsets power and natural gas costs in addition to other benefits such as reductions in water usage, nutrient costs, sludge production, and GHG emissions. Although AHD has been proven in other industries and countries, it has not yet been applied to the pulp and paper industry.Footnote 69 According to interviewees, the technology is considered to have broad applicability to other Canadian industrial settings.
- Teckle Technical Services -TTS (Engineered Fibre Mats). The IFIT project enabled the preparation of a plant for the commercialization of a process developed by TTS, a small-medium sized enterprise, to produce Engineered Fibre Mats (EFM) from low value wood (which is viewed as an opportunity to make use of underutilized wood fibres) and agricultural fibres. Once working at full capacity, the plant is expected to have the capacity to process up to 11,250 tonnes of natural fibre materials into EFM products per annum. As of 2014 it was producing samples of biofibre mat products on a small-scale production line. This project optimizes the later steps of the value chain: once trees have been milled and can help producers upstream in the value chain manage a waste problem. Moreover, TTS has launched a new division for the marketing of engineered fibre mats.
Ultimate Outcome: Transformation of the forest sector
Finding: FSI programming is contributing to the emergence of innovative, diverse and value-added products, but a sufficient time horizon and sustained momentum are required
As is typical with R&DFootnote 70, long time horizons are required to achieve commercialization and more wide-scale adoption. There have been products ranging from those with small to larger market potential which have been adopted such as cellulosic nanocrystal (NCCTM) enhanced adhesive for use in transport trailer floors; FPSuite decision support tools and Cross-Laminated Timber panels that are produced by Canadian companies such as Structurlam and Nordic EWP.Footnote 71 Examples of innovations that CFS indicates are likely to be adopted in the near-term include lignin enriched adhesives, cellulose filament reinforced pulp and paper products, cellulose nanocrystals (NCC™) fortified lubricants and other products, and printed electronics such as paper wraps that brown foods in the microwave.Footnote 72
While innovations are emerging, many interviewees noted that momentum must be sustained, and it will be a challenge encouraging industry to take it further given their traditional business model and focus. According to interviewees, there is a need to further attract private investment to help diversify revenue sources and markets.
Finding: The evaluation found evidence of internal (e.g. strong collaborations, dissemination and knowledge transfer activities, sustained research) and external facilitating factors such as the expansion of market opportunities in China which are moving the sector towards transformation
A key facilitating factor as noted by external interviewees and supported by the literature is strong collaborations among key stakeholders as well as technology transfer activities (in many cases) with end-users. For example, project documentation shows that Transformative Technologies has provided detailed evidence on the economic viability of technologies and produced models that scientifically demonstrate the economic impact of implementation of innovative technologies (e.g. model developed to demonstrate the value of lignin production and its impact on pulp production). Interviewees reported a variety of activities that produce models that examine the economic potential of wood lots, the cost/benefit of process changes, the payback for chemical extraction processes, and so on. A cost-benefit analysis conducted by Tembec and FPInnovations showed that the increased accuracy of LiDAR-enhanced forest inventory data resulted in cost savings. There is some sense by interviewees that this cost benefit study was a factor in convincing other industry stakeholders and provinces to implement this technology. External stakeholders noted that such projects that demonstrate the feasibility and economic value of technologies and processes are very effective in increasing industry buy-in and would like to see more of these types of activities. In addition, according to interviewees and documentation the FIBRE networks have contributed to FSI research and programming and have been involved in important research work. For example, “lignin-derived conducting polymers for use in flexible electronics (Lignoworks network), low-cost log scanning using x-rays (ForValueNet); and the development of flame-retardant paper (Innovative Green Wood Fibre Products).Footnote 73
External interviewees noted that the long-term vision and involvement of the federal government/NRCan in areas such as enhanced inventory and forest health is important to support the transformation of the forest sector and are areas in which no one else has been consistently involved.
A positive external facilitating factor that is helping the industry move towards transformation is the development of the market in China which some interviewees attributed, in part, to federal (e.g. CFS- Expanding Market Opportunities) as well as provincial efforts (e.g. British Columbia Forestry Innovation Investment).
Finding: High initial upfront investment costs coupled with a long ROI and insufficient access to capital are frequently cited challenges to implementation and adoption
One of the key challenges to implementation and adoption of new products, commonly cited by interviewees, is the high initial upfront investment costs coupled with long Return on Investment (ROI) periods required for many innovative products. While this is an acknowledged inherent challenge of commercialization, several external interviewees suggested that uptake could be improved by more fully considering commercialization challenges, regulatory hurdles and risks and mitigation strategies during the project planning stages in addition to technical and implementation challenges. Another barrier to adoption is that insufficient access to capital issues exist serving to diminish R&D and receptor capacity of companies. According to industry representatives, financing for companies to invest in bringing these new products and processes to market is difficult to obtain.
Finding: The evidence suggests that while forest sector small and medium sized enterprises (SMEs) face many similar challenges as compared to larger firms, they also face different or similar challenges to a greater magnitude
The evaluation found no recent evidence in the literature on the particular needs of Canadian forest sector SMEs in relation to innovation.Footnote 74 However, industry interviewees noted that smaller companies do not typically have assured access to supply due to the nature of Canada’s tenure system. Moreover, it was noted that smaller companies face even more constraints in terms of engagement in R&D due to their limited resources and access to venture capital. Project documentation shows evidence of attempts by FPInnovations to engage smaller companies in R&D. In one instance the companies declined involvement in testing of technologies due to the long ROI of the technology and insufficient access to capital.
STRATEGIC OUTCOME: ENHANCED ECONOMIC COMPETITIVENESS
Finding: There is evidence that FSI programming and activities are contributing to enhanced competitiveness
Case Study: TT-PSD – Manufacturing Cross-Laminated Timber (CLT)
Panels from Underutilized Western Canadian Softwoods CLT is a multi-layer wooden panel made of lumber. Initial development took place in Europe in the early 1990s. Prior to this pilot scale project, under TT, FPInnovations launched a multi-disciplinary research program on CLT in 2005, which provided market analysis, of CLT in the North American market. With support of TT-PSD funding in partnership with Structurlam, a plant was built to manufacture panels of cross-laminated timber (CLT). The project is unique because it is using beetle-killed pine and other underutilized softwood species (such as hemlock and balsam fir), offering increased value recovery over more conventional products.
The pilot scale project is complete and the facility and an extension are in operation. The project proved the feasibility of CLT production in Canada and led to an IFIT project to establish the first CLT plant that brings a new-to-North America product to market. Structurlam is introducing its CLT product into a market for rig matting for the oil and construction industries. As a result of the CLT-PSD, Structurlam is marketing CLT and is building a portfolio of building projects using Canadian made CLT. Currently, Canada has three CLT plants either operating or under development.
This project was highly capital intensive and TT and provincial funding provided Structurlam with sufficient funding (in addition to their own) to proceed more quickly than normally would have been possible. Moreover, FPInnovations provided a great deal of knowledge and expertise and was able to demonstrate the fire and seismic resistance of CLT which assisted in marketing and product acceptance.
Although estimations vary, FPInnovations reports that the introduction of CLT in North America may result in doubled or tripled market share of wood in non-residential applications while FPAC estimates the US market for CLT products at 1.2 to 3.6 million cubic metres of CLT per year; and the Canadian market is estimated at 5 to 10% of that size. This pilot scale project is considered to have facilitated the opening of the North American market.
FSI programming contributes to this outcome through its support of codes and standards developmentFootnote 75; through the implementation of more efficient processes which has contributed to cost savings; and economic benefits of firms due to involvement in R&D.
From 2007 to 2011, FPInnovations reported that it contributed to fifty-two technological advances in over one hundred and fifty facilities with an impact on company margins in excess of $1 billion.Footnote 76 In addition, FPInnovations indicated that bioenergy is part of the platform that is producing new revenue streams for pulp mills.Footnote 77
Case study evidence shows that in addition to direct impact on forest companies, other stakeholders such as suppliers have benefited from R&D projects. In three of the IFIT case studies, for example, engineering firms that provide line equipment to mills had an opportunity to showcase their developments.
Finding: FSI research has contributed to cost savings
Transformative Technologies, mainly through the Short Term Competitiveness component, led to the implementation of efficient processes. TT supported advances in sawmill, pulp and paper mill testing and verification that offer efficiencies and cost savings and many of these were deployed under Short Term Competitiveness component.Footnote 78 Under the FRII, FPInnovations developed technologies for Canadian implementation of the Enhanced Forest Inventory System (EFIS)Footnote 79 which integrates imagery analysis with models for predicting the fiber attributes and value at the tree, strand and landscape levels. Piloted at the Kruger paper mill in Newfoundland, the information led to better control of incoming fiber variability and an estimated savings of $175,000 annually.
As of 2012-13, about 250 FPDat units, developed through TT, have been sold and more than 300 machines are monitored using FPTrak.Footnote 80 The on-board computer is expected to help offset the highly capital intensive forest-to-mill value chain.Footnote 81 Several FPI member companies in Quebec also acquired and used the system. Industry reported that savings of $0.25 to 0.50/m3 have been generated thanks to better planned harvesting.Footnote 82
Finding: The evaluation found examples of promising innovations that if implemented in significant force could generate economic benefits
External stakeholders interviewed, including industry representatives see potential in CLT, multi-storey wood and hybrid buildings and if implemented in significant force would generate broader economic benefits. FPInnovations estimates that Canada-wide, the potential impact of the construction of multi-storey light wood-frame buildings is estimated to be equivalent to the output of a small sawmill, or 150 full-time mill and forest jobs. Construction of next-generation post-and-beam buildings (up to ten storeys) and cross laminated timber (CLT) structures could generate enough work for three large sawmills, or 1,230 full-time mill and forest jobs. Hybrid structures offer similar possibilities. As for wood-fibre insulation, the North American market is conservatively estimated at $200 million.Footnote 83
IFIT projects show promise of economic benefits once implemented by proponent and replicated. IFIT projects, once all completed, are estimated by CFS representatives to create 75 new jobs, help secure approximately 2,500 existing jobs, lead to $66M per year in new revenues and $12M per year in new corporate tax revenue. Interviewees affirmed their belief that the program would contribute to improved competitiveness and viability.
Finding: Numerous positive unintended outcomes were identified such as spillover effects; environmental benefits; social and economic benefits in rural areas; more student awareness and interest in the forestry sector; and development of Highly Qualified Personnel (HQP)
A number of positive unintended outcomes were identified through interview, document and case study evidence:
- Environmental benefits: Many projects have potential to create environmental benefits; for example, extracting more energy and components from fibre. Project documentation identified some environmental benefits resulting energy savings and reduction of GHG emissions from forest operations.
- Community benefits: The evaluation found examples of community benefits especially with respect to demonstration or implementation projects. For example, as a result of the implementation of a methanol plant, an IFIT project, the company serves their local community as an emergency energy stream, providing methanol to local business in the event of a disruption of the existing energy source.
- Spillover effect to other sectors: The evaluation the Advanced Forest Resources Inventory Technologies (AFRIT) case study shows that technology can also be used to obtain better habitat information on wildlife as well as to capture information on the mountain pine beetle epidemic. The FP-Dat product can be used in other natural resource industries, such as mining and oil and gas.
- Raised profile of forestry sector: According to external stakeholders consulted, through some of the work done under FSI, particularly Transformative Technologies pilot scale demonstration work and IFIT implementation projects, the sector was promoted more, raising the profile of the sector to students and engineers.
- Increased capacity of Highly Qualified Personnel (HQP): TT and FRII funding have attracted young researchers to FPInnovations and the university forest sector networks. FPInnovations estimated that they have more HQP studying cellulose and lignin as compared to 20 years ago.Footnote 84
Finding: Some external stakeholders believe that there is a risk that companies will become too dependent on FSI research programs and that industry has reduced its internal research capacity as a result
Some external stakeholders have the perception that companies may become too dependent upon FSI programs to fund innovation and that the industry has reduced its own internal research capacity as a result. However, the majority of external interviewees indicated that without FSI very little innovation would be happening.
3.3 Efficiency and Economy
There are indications that Forest Sector Innovation programming is efficient and economic: performance program components implemented as planned; timely delivery of many project tasks/deliverables; risk management approach utilized; leveraging of cash and in-kind resources; and accessible and professional CFS staff. Delays in contracting, funding and annual funding cycles created challenges in terms of strategic and project planning.
Performance Issue 5: Efficiency and Economy
Finding: Program design facilitates efficiency and is aligned with best practices in R&D identified in the literature review
The collaborative, broad spectrum program design was viewed as facilitating efficiency. FPInnovations was considered to be an excellent model that supports efficiency by acting as a facilitative leader for research through strong collaborations with industry and government. Moreover the program design is aligned with best practices in R&D identified through the literature reviewFootnote 85 such as a strong partnership approach; balanced investment in near-term and long-term projects; and broad spectrum of programs from very short term (e.g. TT-STC) to longer term (e.g. CWFC). The Short-term Competiveness, Pilot-Scale Demonstration programs, and IFIT included funding for knowledge transfer activities. The FSI program design appears to have incorporated both strategic planningFootnote 86 and transfer mechanisms and therefore minimized the gaps highlighted in other NRCan evaluations of R&D programs (e.g. gaps in demonstration activities, knowledge transfer).
Finding: There are indications that the component programs are well-managed: performance program components implemented as planned; timely delivery of many project tasks/deliverables; risk management approach utilized; and accessible and professional CFS staff.
According to the files reviewed, the status of most of the project tasks/deliverables were completed or on track. Overall FSI is viewed as efficient by external partners and CFS representatives. External stakeholders indicate generally that CFS program staff have the requisite expertise and are accessible and professional. In addition, the expertise, knowledge, clear communications of IFIT, CWFC, and Transformative Technologies staff (both NRCan and FPInnovations) was frequently cited by key stakeholders as important to facilitating efficiency (through their coordinating efforts).
Evidence from the files reviewed showed that a risk management approach was applied in those cases requiring action. Examples taken to mitigate risks including shifting projects to different locations to ensure completion of deliverables; and the consideration of alternative implementations to ensure project objectives were achieved.Footnote 87
At the project level, interview, document and case study evidence shows that projects were well managed with regular progress meetings and reports focusing on achievements and deliverables. There were some project delays attributed to external partners, changes in personnel and changing priorities over time which can disrupt progress. There was no evidence or perception that NRCan activities that were performed did not add value or were not cost effective.
Finding: Existing evidence on leveraging shows that FRII, TTP and IFIT are leveraging other cash and in-kind resources
There were gaps in financial information regarding other sources of funding. The available evidence on leveraging is summarized below:
- FRII leveraging ratio (FRII to other funding sources) for 2011-12 and 2012-13; $9.1M:$2.8M (cash and in-kind)Footnote 88
- Principally through Transformative Technologies over $17M in cash and in-kind support (almost $15M in cash) was leveraged for R&D and technology transfer activities.Footnote 89 This represents a leveraging rate of nearly 63% on the directly invested FIP funds for the year.
- The Transformative Technologies – Pilot Scale Demonstration leveraged approximately $83M, representing 68% on the directly invested PSD funds.Footnote 90
- The file review shows IFIT funding was 19-50% (an average of 34%) of project funding. This represents a leveraging rate of 66% on the directly invested IFIT funding.Footnote 91
Finding: There were noted improvements in program level reporting with the establishment of annual reporting for the Forest Innovation Program in 2012-13
FPInnovations produces an Annual Report that covers TT and FRII funding. As of 2012-13, CFS produced a Forest Innovation Program Annual Performance ReportFootnote 92 detailing findings with respect to outputs, outcomes and findings aligned with the performance measurement strategy. The report provides aggregated performance information of the Forest Innovation Program (FIP), launched in 2012, which includes previously existing components such as Transformative Technologies and CWFC. In addition it includes the Forest Biorefinery Collaboration (not within the scope of this evaluation as it was only launched in 2012) and the development of standards for novel nanocellulosic (NCCTM) materials. This performance report is a noted improvement as it contains aggregated performance information providing a clearer overall performance story at a program level.
Each program (CWFC, FRII, TTP and IFIT) also have project-level mid-term and year-end reports. These reports generally report on progress regarding activities, accomplishments and deliverables with a focus on technical progress. As well, output information is documented for each project such as publications and presentations. However, the type of information reported is not always consistent making the project level information difficult to aggregate to a program level. In addition, many of the progress reports include project (primarily technical progress) rather than program outcomes.
Regarding recipient reporting the document review indicated that the Quarterly Cashflow and Accounting report focused on operational and financial progress (i.e. tasks, equipment, schedule and budget) as required by the Transfer Payment Policy. However, innovation programs like IFIT would benefit from additional strategic reporting with focus on the impact of any challenges, financial or schedule variations, or changes to context (e.g. market development) on the business case and expected economic benefits.
Short Funding Cycles/ Cash phasing by fiscal year
A short funding cycle may have hindered selection of transformative projects particularly in view of industry’s traditional nature and short-term focus: Several interviews mentioned that the timeframe of assured funding for TTP was not long enough to foster serious consideration of long-term research projects and was unrealistic. Innovation, from conception to pilot scale, was deemed to take much longer than five years.
Several interviewees (FRII, Transformative Technologies) noted that the annual funding allotments to FPInnovations are not appropriate for longer-term research and made it difficult to plan their research. It was suggested that NRCan cash phasing by fiscal year should more realistically reflect the realities of funding large scale, multi-year projects. This concern, at a broader level, is echoed in a report by FPAC which recommended that the federal government commit to a long-term (5-year) funding scheme for FPInnovations so they can plan for and focus on longer-term, strategic priorities critical to the future of the industry.Footnote 93
Delays in Contracting and Funding
Some external stakeholders (Transformative Technologies and CWFC) indicated that the timing of funding decisions and late signing of contracts delayed the start of their own research. One-year funding terms, and late receipt of funding means that work does not commence until September making it challenging to hire students and complete milestones in a timely manner. Some industry interviewees indicated that these delays contributed to cost escalation of their projects. As well, interview and case study evidence pertaining to TT-PSD indicate the need for a more realistic timeframe between call for proposals and application deadline and time for due diligence (including hiring engineering firm) before signing contribution agreements.
Document and interview evidence also indicated that delays can be more pronounced during the funding application and approval process when it involves both provincial and federal applications because funding is not structured or sequenced in the same way. As well, given typical leveraging requirements, provincial or federal funding cannot proceed without the other funding in place.
Finding: There is a need to clearly document project selection criteria and process for Transformative Technologies, CWFC, and FRII. Project selection criteria should include an appropriate balance of technical and economic feasibility considerations
Except for Transformative Technologies’ Pilot Scale Demonstration component and IFIT, there is insufficient documentation that clearly outlines the project selection process and criteria for TTP, CWFC and FRII. While CWFC makes reference to four guiding principles it uses as criteria for project selectionFootnote 94 the descriptions are fairly general. Documents provide few details on CWFC’s project selection process.Footnote 95 Some external interviewees noted that they were not clear as to reasons why some FRII and TT projects are selected over others.
In addition, several interviewees and a few case studies highlight the need for the planning and project selection process to balance economic and technical considerations as appropriate with respect to selection of projects for CWFC, FRII and TT programs.
The suite of programs and leadership activities within the Forest Sector Innovation Sub-program are relevant and effective with some enhancements needed regarding communication of the vision for innovation and alignment of the needs of smaller firms with FSI to further increase engagement and investment of the forest sector in research and deployment activities. In addition there needs to be strengthened links between CFS branches involved in strengthening the forest innovation system; and clearly documented project selection criteria for CWFC; FRII and the TT program. Finally, continued efforts are needed to strengthen linkages with non-forestry sectors.
Research is leading to the emergence of innovative technologies and processes, many of which have been piloted or implemented through the TT-PSD and IFIT programs. Some products have been adopted and commercialized and there are a number of technologies or processes that are considered to have good near to medium term market potential.
Appendix A: Logic Model for Forest Sector Innovation Sub-Program
|How this links to Strategic Outcome||Canada’s forest Sector is globally competitive and economically viable|
|Long-term outcome||Forestry sector is transformed - has more diversified|
|Intermediate outcomes||Policy-makers and regulators support the use of product, process and technology innovations||Scientific evidence is used to develop innovations in forest products, processes and technology that optimize the value of the material along the value chain||Forest Product, process and technology innovations are piloted and introduced|
|Immediate outcomes||Industry understands current and future opportunities and threats to sector and is engaged in setting corresponding R&D priorities||Forest Sector R&D capacity and R&D and deployment programs (academia, all levels of government, industry) are all aligned with industry priorities||Increased and more effective collaboration among organizations working on forest-related research and application of this research|
|Outputs||Knowledge products (publications reports databases, tools, solutions)||Communication events/tools (workshops, newsletters)||Contributions Agreements||Networks, meetings, committees, framework|
|Conduct research||Transfer knowledge about existing research||Provide funding for research, pilot and commercialization programs||Foster and participate in collaborative arrangements between the various players in the forest sector|
Appendix B: Leadership Component – Key Findings
There was general agreement among internal and external interviewees that NRCan’s leadership role should continue (i.e. its role in terms of coordination, strengthening and supporting the forest innovation system and relationship building).
Moreover interviewees indicated that a strong CFS leadership role is critical for ensuring strategic alignment of federal programs with the long-term needs of the forest sector. Many internal interviewees were not aware of a separate leadership program component, but nevertheless viewed leadership activities as valuable and integral to the other R&D and deployment programs within the FSI Sub-program.
According to internal interviewees, CFS serves important challenge, capacity-building, and stewardship functions within the FSI Sub-program through a variety of means such as:
- provision of advice and analysis, including economic analysis, (e.g. examining economic feasibility of possible new technologies);
- analysis and dissemination of information with respect to the forest innovation system;Footnote 96
- ongoing communications with individual stakeholders and key organizations;
- involvement in committees such as the LignoWorks; Partnership Committee; and Program Advisory Committees;
- contributions to publications such as the State of Canada’s Forests Reports; and
- presentations at conferences.
The Leadership element also includes internal services such as those aimed at enhancing access to information and knowledge. This is considered to be particularly critical in an S&T environment which requires quick and easy access to vast amounts of information. In 2011, CFS initiated the development of an Integrated Systems Approach (ISA). It aims to strengthen cultural, institutional and technological systems within CFS and the integration of science and policy to provide timely forest sector advice on forest sector policy questions.Footnote 97 One aspect of this approach is the need for a CFS Scientific Data RepositoryFootnote 98to manage the large volumes of scientific data.
It is difficult to measure the impact of leadershipFootnote 99 on the forest sector because, while considered critical for the innovation and transformation of the forest sector, these activities such networking and advocacy are more intangible and difficult to separate from other research and deployment components. Nevertheless, interviews with key CFS and other stakeholders suggest CFS leadership activities have contributed key outcomes: has increased the forest sector’s understanding of current and future opportunities; enhanced alignment of industry priorities with R&D and deployment; and increased and strengthened collaborations between academia, industry and government.
Interviewees most commonly cited the following CFS leadership activities as critical to improving the effectiveness of the Forest Sector Innovation Sub-program:
- External interviewees noted that CFS played a critical role (for example, through their involvement in the Partnership Committee) in establishing and supporting NSERC’s FIBREFootnote 100 networks. FIBRE is designed to align with the Canadian Forest Sector Transformation Strategy and to align university research to the forest innovation system. According to both external and internal interviewees FIBRE has been critical in addressing a previous gap between academia and the forest industry.
- External stakeholders generally noted that CFS plays an active role in brokering partnerships and coordinating and facilitating S&T activities, and maintaining ongoing relationships with key stakeholders such as FPAC and FPInnovations.
- CFS has been an active participant concerning FPAC’s Vision 2020 and has provided good insight and feedback into this process.
- There was broad agreement that the Biopathways Study (involving a variety of partners and led by FPAC) helped industry better understand opportunities and threats. External interviewees indicated that CFS played an important role in in helping to shape the thought and vison of the pulp and paper sector as well as provinces. Moreover, the Study is used by stakeholders to highlight and market bioproducts and the use of biotechnologies.Footnote 101
- CFS showed effective leadership through policy advice. CFS policy responses provided long-term advice regarding support of R&D commercialization, and providing capital improvements to improve performance of pulp mills.
- CFS has adopted concept of learning organization. According to CFS interviewees, leadership at all levels is encouraged to optimize performance of employees. Some interviewees noted that various approaches such as visioning and strategic appreciative inquiries were used to encourage effective thought leadership. Some CFS interviewees noted that the learning culture fostered by CFS has indirect contributions to enhancing the FSI sub-program.
Appendix C: Canada Wood Fibre Centre – Key Findings
- Interviewees agree that there is a need for upstream research to find innovations that enhances the value of the fibre, both quality and quantity, to help the forest sector be competitive.
Consistency with Priorities and Roles and Responsibilities
- The CWFC directly supports NRCan’s Strategic Outcome 1: “Canada’s Natural Resource Sectors are Globally Competitive” by doing the upstream research that focuses on the value-added aspect which is important to the competitiveness of the Canada’s forest sector. Also, the CWFC is aligned with the government priority of economic development.
- NRCan has a legitimate role in research according to the Forestry Act and in dissemination of scientific knowledge under the Department of Natural Resources Act. Therefore, the CWFC role of conducting and supporting upstream research is legitimate. Despite the fact that the provinces have primary jurisdiction over forest resources, a role for the CWFC in upstream research (relating to the resource) is seen as appropriate by interviewees because of the CWFC’s unique expertise and the fact that their national perspective enhances knowledge transfer. Interviewees indicated, both internal and external, that the CWFC is the primary organization conducting upstream research. For instance, one external interviewee states that the CWFC raises practical questions that universities and forest companies do not focus on or do not have the capacity to focus on.
- Evidence from case studies suggest that while CWFC works closely with the provinces, there is a need for building greater links with provincial policy groups such as those responsible for land management and seedling development would be helpful to advancing the use of innovative technologies.
- The relationship between the CWFC and FPInnovations (the CWFC while part of NRCan conducts its upstream research according to the priorities of FPInnovations which represents the industry) is generally seen as positive; resulting in researchers being better engaged with the industry and increased knowledge exchange. However, some external stakeholders are unclear about the relationship between the two entities. No duplication was seen between the two organizations and examples of cooperation were seen.
Performance – Effectiveness
Contribution to immediate outcomes (knowledge of opportunities and threats, collaborations, alignment of industry priorities with R&D and deployment)
- The CWFC is creating considerable scientific evidence that is being used to develop innovative processes and tools directly and products indirectly, which is consistent with their role in upstream research. Interviewees agree and examples found in interviews and case studies that the CWFC research is focused at optimizing value. The CWFC is also playing an important role in providing and distributing this evidence and information about these processes and tools. The document review and case studies found further evidence of extensive knowledge transfer through conferences, workshops and site visits, as well as reports, and articles.
- It is clear from project documents, interviews and case studies that the CWFC have collaborated extensively with a variety of partners (provinces, academia, and industry) in undertaking its research projects. Interviewees believe that collaboration has increased and that this has resulted in greater engagement with different players within the sector.
- The CWFC generally has aligned its activities with sector priorities and to some extent has influenced others to shift their focus. Interviewees indicate that the CWFC has aligned its activities with sector priorities to the extent that they respond to an industry need, but also reflect the long-term competitiveness objectives of the FSI. The CWFC management has taken action within its organization to address the challenge identified in the 2009 evaluation about the need to change the CWFC culture from one of research management that emphasized scientific discovery to one that has increased linkages to economic priorities.
Contribution to Intermediate Outcomes (codes and standards; innovations; pilots and introduction of innovations)
- Some examples were identified in case studies and interviews of the CWFC contributing to decision-makers in provinces and industry starting to use or considering the use of some products and processes that are the result of the CWFC research, particularly advanced inventory systems and characterization tools.
- Due to the long-term nature of projects, interviewees indicated that the CWFC has had limited impact on innovations being piloted and introduced, but felt that the CWFC was important to making this happen in the future. Nevertheless, the evaluation found examples of processes and technologies flowing from the CWFC research being piloted and introduced. For instance, FPInterface, which is part of the FP Suite of products is a planning tool to help reduce costs associated with harvesting and builds directly on the CWFC research on enhanced inventory.
Transformation and Enhanced Competitiveness of Forest Sector
- It is too early for the CWFC research to contribute to sector transformation and a more globally competitive and economically viable industry because these are long-term outcomes. Even though they may have potential, there are still a number of challenges to broad uptake mainly relating to commercialization, rather than technical issues.
- One positive unintended impact identified in the CWFC relates to the technology, which is not only being used to obtain and use more detailed information at the tree level, but also being used to obtain better habitat information on moose, caribou, pine marten, as well as to capture information on the mountain pine beetle epidemic.
Performance Efficiency and Economy
- Generally, the CWFC’s activities and approach are seen as an efficient means to conducting upstream research and incenting others to shift focus on conducting such research. Interviewees perceived that CWFC branch was efficient. Several interviewees indicated the high level of collaborations as strength. CWFC needs to clearly document project selection criteria to enhance transparency.
Appendix D: Forest Research Institutes Initiative (FRII) – Key Findings
- According to the files reviewed, interviews and case study evidence, there is a continuing need for scientific and technical information, data and tools that the FRII produces in order to help the forest sector access new markets and become more competitive.
- External stakeholders consulted and project reports, indicate FRII is valuable for a number of reasons: It (through FPInnovations) acts as an intermediary between academia and industry; provides product performance information and new test methods for assessing products; and provides information and tools to reduce costs of operations and transportation.
Alignment with NRCan and Government of Canada priorities
- The FRII is aligned with NRCan’s strategic objective and federal priorities on the economic competitiveness of the Canadian forest sector. FRII is consistent with NRCan’s Strategic Outcome 1: “Canada’s Natural Resource Sectors are Globally Competitive.” Footnote 102 This objective is achieved by conducting science, research, development, and demonstrations on new applications, technologies, processes and products.Footnote 103 Also, the FRII is aligned with the federal government-wide priorities relating to improving economic opportunities for the Canadian forest sector.Footnote 104
Consistency with Federal Roles and Responsibilities
- NRCan’s role in supporting and overseeing FRII research, in the context of a highly collaborative approach utilized, was viewed by stakeholders as appropriate because of the department’s longstanding experience with the forest sector and enhanced neutrality. According to stakeholder, its leadership role is viewed as appropriate and should be maintained given its national view and coverage of forest problems; and its long-term vison of the forest sector. However, the evaluation found that NRCan should clarify FRII’s role within the Forest Innovation System, and the roles of key players within that system.
Contribution to immediate outcomes (knowledge of opportunities and threats, collaborations, alignment of industry priorities with R&D and deployment)
- According to interviewees, the forest sector generally understands current opportunities and threats. While it is difficult to attribute this understanding specifically to FRII, interview and project documentation evidence suggests that FRII enhances the forest sector’s understanding through collaborative research and knowledge transfer activities.
- FRII operates within a highly collaborative program model which interviewees agree facilitates strengthened collaborations. According to the files reviewed and interview evidence, FRII projects involve a variety of partners, primarily industry.
Contribution to Intermediate Outcomes (codes and standards; innovations; pilots and introduction of innovations)
- According to project performance reports and interviewees FRII research and technical expertise gained through this research has effectively supported the development of codes and standards, particularly with respect to mid-rise wood buildings and cross-laminated timber (CLT). FRII work pertaining to mid-rise buildings is expected to contribute to the 2015 National Building Code of Canada. Supported development or revision of a number of standards: Canadian Standards Association (CSA) 086 (Engineering Design in Wood); CSA A370 (adhesive heat durability test); CSA S406 (requirements for constructing preserved wood foundations); International Standards Association (ISO) TC 165 (standard test methods for timber floor vibration performance).
- Examples of new or enhanced products or processes developed using FRII scientific evidence are Cross Laminated Timber (CLT), Laminated Veneer Lumber (LVL), and the use of Microwave for drying wood. FRII supported the development of several models and tools designed to be used as research tools or to enhance forest operations and management such as FPSuite, FPdryKiln, FPdryStack, Optitek, Simul8 and Robcut.
- While many of the projects continued over a multi-year period (file review)there were some examples of innovations being piloted and introduced (wrapping posts, dust control guide). Many projects involve field trials or testing at plants or forestry sites of technologies, processes, best practices or guidelines (e.g. prototype scanning system; portable sensing technology for quick measurement of log moisture).
- FRII databases, computer modelling, test methods, and prototypes used to support other research, within other programs, further along the innovation chain such as pilot scale demonstrations (e.g. pilot scale demonstration project of production process for Oriented Strand Board, pilot scale demonstration project for manufacturing of CLT).
Transformation and Enhanced Competitiveness of Forest Sector
- FRII research is contributing to other transformative research programs such as Transformative Technologies. Plays a role in codes and standards work which will facilitate market access for new or enhanced forestry products. FRII supported revision of Canadian lumber standards, which contributed to the U.S. revisions. Moreover, FRII scientific evidence regarding multi-storey buildings is expected to aid the expansion of the wood market. Several FRII project reports indicate potential for enhancing productivity, reducing production and transportation costs.
Performance (Efficiency and Economy)
Contribution to immediate outcomes (knowledge of opportunities and threats, collaborations, alignment of industry priorities with R&D and deployment)
- There were good indications that FRII is efficient and well managed,: External interviewees indicated that they had effective working relationships with FPInnovations and NRCan. Most of the project tasks were completed on time or on track; and risk management approach was applied (file review). Leveraging ratio for 2012-13 was 1:0.31
- While the project selection process was generally perceived to be working well, the document review found no clear articulation of the FRII project selection process or criteria. As well, there was no documented link between opportunities and threats in the FRII contribution agreements. While projects were aligned to research themes, it is unclear how well these projects are aligned with specific opportunities and threats to the sector.
Appendix E: Transformative Technologies (TT) – Key Findings
- All lines of evidence provide support for the ongoing need of TT, at least in the medium-term, for the following reasons: Long-term nature of transformative research, economic downturn and time needed to recover, structural factors (e.g. Mountain Pine Beetle; decline in demand for paper; and forest sector’s traditional provision of standard products). According to external stakeholders consulted, TT funding has allowed projects to go forward that otherwise would not have occurred or would have been reduced in scope. In the case the pilot scale demonstration case study projects, TT made the investment sufficiently attractive to persuade the forestry sector to invest.
Alignment with NRCan and Government of Canada priorities
- The TT’s mandate and objectives are consistent with NRCan strategic objectives, with its NRCan’s 2012-13 Report on Plans and Priorities and federal government priorities relating to economic competitiveness as indicated in federal budgets.Footnote 105
Consistency with Federal Roles and Responsibilities
- FPInnovations receives TT funding and conducts research in collaboration with partners. However, there is confusion among external stakeholders as to the roles of FPInnovations, NRCan, and others with respect to TT funding. Many external stakeholders were unclear as to the “bigger picture” in terms of the forest innovation system and programs link to this system. Some external interviewees (provinces, industry and other government departments) emphasized that a strong role for NRCan is appropriate in the TT priority setting and project selection process given its strategic perspective, and understanding of broad industry needs and context.
Performance – Effectiveness
- According to interviewees, the sector’s understanding of opportunities not only varies across companies but also within companies. Some industry representatives noted that understanding of opportunities can vary between middle management and executives (decision-makers) within a company. The evaluation found several examples of TT projects that are aligned with industry’s understanding of opportunities such as CLT, lignin extraction, and uses of mountain pine beetle affected lumber. For example the Best Bets and CLT-PSD projects make innovative use of mountain pine beetle-killed lumber.
- There is general consistency between research priorities of FPInnovations and therefore those covered by TT, and other major stakeholders. The “areas of focus” identified in the TT contribution agreementsFootnote 106, align with needs and priorities of key industry stakeholders, including the 2011 Senate Committee report, BioPathways Study, FPAC’s Vision 2020, CFS’s 2012 Business plan, FIBRE priorities, and strategic plans of some provinces. However, some external interviewees questioned whether the broader needs of the forest sector, particularly small firms, are adequately aligned with R&D and deployment programs.
- The TT program is highly collaborative and most projects reviewed show a wide range of partners: universities, industry, other federal departments, vendors and provinces. Interviewees reported that FPInnovations effectively coordinates TT research and engages stakeholders.
Contribution to Intermediate Outcomes (codes and standards; innovations; pilots and introduction of innovations)
- The TT program has influenced provincial codes and Canadian standards, the National Building Code, particularly with respect to CLT and multi-storey wood frame construction. In turn this code work, according to interviewees, has facilitated construction of all wood or hybrid midrise buildings. The NCC case study shows that TT funding support was used to conduct and coordinate the required testingFootnote 107 to demonstrate that NCCTM is non-toxic, enabling the commercial use of NCCTM. TT research has also influenced provincial harvesting and transportation policies (e.g. 1-2-3 partial harvesting method; trucking regulations with respect to wood-killed by Mountain Pine Beetle).
- According to external interviewees, TT scientific evidence provides information on technical and economic feasibility of innovations (e.g. models to identify the value of lignin production; value of methanol as a replacement for natural gas in mills). TT evidence has also contributed to the development of new /enhanced products and processes: NCCTM; CLT; industrial flotation column for pulp mill whitewater cleaningFootnote 108.
- The evaluation found evidence that TT research is progression along the innovation chain. Ten of the 14 pilot-scale demonstration projects under TT utilized previous FPInnovations research and patented technologies. Moreover, four TT projects (2 pre-commercialization and 2 pilot scale demonstrations) evolved to become IFIT implementation projects).
Transformation and Enhanced Competitiveness of Forest Sector
- New innovations have emerged and some are beginning to be commercialized or seen to have potential (e.g. CLT, NCCTM, lignin extraction process, and cellulose filaments).
- Innovations deployed under the TT-STC (e.g. FPSuite, log turning optimization, fines monitoring imaging systems) have resulted in efficiencies that have reduced costs. Project documentation indicates that over 180 STCI implementations are estimated to have reduced industry operating costs by $24 million as of 2012-13.
- Many conditions are in place to facilitate the achievement of transformation such as strong collaborations; evidence of dissemination and knowledge transfer activitiesFootnote 109
Performance Efficiency and Economy
- There are indications that the TT program is efficient and economic as is evidenced by timely deliverables; good project management; expertise of FPInnovations’ researchers and capacity to coordinate and broker partnerships; leveraging of TT funds (1:2.3).
- Enhancements needed with respect to documented project selection criteria, project progress reports should contain links to program outcomes.
Appendix F: Investment in Forest Industry Transformation (IFIT) – Key Findings
- The IFIT program is providing needed support to the forestry sector to address the impact of the economic downturn. The program aligns well with sector problems including aging production capacity.
- The IFIT program aims to “de-risk” new technologies to encourage their broader adoption across the industry. The program meets a key need by offering much needed financial support for first commercial applications of new technologies – an arena that is currently not significantly occupied by funding programs, which tend to focus on applied R&D. IFIT generated significant interest among its stakeholders and was highly oversubscribed.
- Interviewees indicate that IFIT was the impetus for many proponents considering innovative solutions. Many projects would not have gone ahead without IFIT and others were facilitated by accelerating a product to market, lowering risk so that banks were willing to lend. Demand for capital exceeded available funds.
Consistency with Government Priorities and Roles and Responsibilities
- IFIT is fully aligned with NRCan’s Strategic Outcome of global competitiveness and with federal government priorities set out in the Economic Action Plan. NRCan’s role is consistent with the Department of Natural Resources and Forestry Acts; and NRCan’s role is seen as appropriate since the other players in forest sector innovation all do not focus on full scale production experience.
- Some stakeholders believe a greater role in promotion of success stories is needed to encourage broader innovation.
Performance – Effectiveness
- IFIT projects were found to align with industry priorities and key opportunities. However, some stakeholders indicated that IFIT could focus more on market development opportunities.
- All IFIT projects made use of collaboration and partners. IFIT funding averaged 34% of project total meaning that projects leveraged significant resources from proponents and other partners. However, some stakeholders indicated that enhanced collaboration is needed with non-forestry sectors.
Contribution to Intermediate Outcomes (use of scientific evidence for innovations; pilots and introduction of innovations)
- While IFIT is not meant to develop scientific evidence, it was found that projects operationalized technology through internal research, commercial partner’s experience in other industry/geographic location, and research institutes (including FPI and other FSI programs). Eleven of the 12 funded projects covered by the evaluation involve processes and technologies new to Canada (as of 2012-13)
- As of June 2014, the first iteration of the IFIT program is expected to help deploy 14 world-first or Canadian-first commercial scale technologies representing over $200M in total investment across Canada’s forest industry.
- Of these 14 projects, 11 have been publicly announced by NRCan. These 12 projects are at various stages of implementation, with 4 projects completed. These projects are starting to realize outcomes such as production of new products (e.g. fibre mats).
Transformation and Enhanced Competitiveness of Forest Sector
- The projects are planned to provide a diversified product mix as well as increase the value extracted from wood residue. It is too early to tell whether business case assumptions for these projects will hold true, however expected impacts are significant and include: reduced expenditures in energy purchases; reduced operating costs; increased revenue from higher priced products and/or new markets; environmental benefits and reduced handling of waste for mill.
- There is good potential since the projects are aligned with diversity and value goals. Eleven of the 12 projects are identified as being replicable and two engineering companies are ready to sell to other pulp mills as soon as results are clearly demonstrated. The potential economic benefits include the ability to compete in new markets through expanded and diversified product lines, reduced operating costs, new product sales, value generated from waste. CFS estimates that these projects, once all completed, are expected to create 75 new jobs, help secure approximately 2,500 existing jobs, lead to $66M per year in new revenues and $12M per year in new corporate tax revenue.
- Unintended outcomes include positive impact on individual companies including suppliers and partners and on communities that rely on the sector. In addition, many projects will create environmental benefits.
Performance - Efficiency and Economy
- Overall IFIT is economical and efficient, operating with a small professional staff and low overhead and making use of best practices and lessons learned. The application process was seen as well designed and administered, with much praise for the expertise of staff and clear expectations.
- Since delays are to be expected in innovation projects, program processes may need to pay more attention to contingency time in initial project schedules in order to ensure realistic timeframes. In addition, the lack of readiness of the sector meant that an extensive due diligence process was required before most agreements were signed. There were few “shovel-ready” projects were available when IFIT was announced. The significant time for new products to break into markets also increases the financial risk. Inability of firms to announce or promote their project publicly until Ministerial announcement were made delayed at least one project.
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