The Media Room

2009/124 (a)

Backgrounder

Federal Government Invests in Forest Innovation
and the Bioeconomy

Canada’s forest sector is undergoing important restructuring due to a number of competitive challenges, including declining demand in the United States’ residential construction market, increased competition from companies in emerging countries and a global recession. Despite this transition period, new technologies and new markets offer a promising future for Canada’s forest sector.

Supporting the Bio-economy of Northern Ontario

The Government of Canada, through FPInnovations, is investing up to $10 million in a pilot-scale forest biorefinery in Northern Ontario. This project is being developed by FPInnovations and the Centre for Research and Innovation in the Bio-Economy (CRIBE), a not-for-profit organization that focuses on developing and commercializing next-generation forest products using wood fibres.

Under the Economic Action Plan, the Government of Canada lists innovation of forest products and market diversification among its key priorities for the forest industry. By collaborating with research institutes such as CRIBE, the Government is acting on its commitments to support the sustainability and viability of the Canadian forest sector.

Promoting Forest Innovation and Investment

This initiative will provide $40 million over two years to develop pilot-scale demonstration projects of new products for use in commercial applications. In addition, $80 million will be provided over two years to support the Transformative Technologies Program.

These programs are administered by FPInnovations, a national not-for-profit forest research institute that focuses on the development of emerging and breakthrough technologies such as biomass and nanotechnology.

The Government of Canada is committed to helping Canada’s forest sector take advantage of these new opportunities by researching innovative products that meet the needs of the marketplace. We believe that the key to a strong future for the forest sector is to promote innovation and entrepreneurial activity within a competitive business environment.

As outlined in Canada’s Economic Action Plan, the Government is providing $170 million over two years to improve the forest sector’s long-term competitiveness through renewed investments in market diversification and forest innovation. This funding includes the $120 million to help promote forest innovation and investment and $50 million to expand market opportunities for Canadian forest products.

This new funding supports the priorities of Canada’s forest sector as outlined during the 2009 pre-budget consultations.

Support for Workers and Communities

In addition to its ongoing support of Canada’s forest industry, the Government of Canada has also put in place the $1-billion Community Adjustment Fund and the $1-billion Community Development Trust to help mitigate the short-term impacts of economic restructuring in communities hard hit by the recession. To minimize the financial impact of the downturn on workers and their communities, the Government is providing $200 million to extend work-sharing agreements over the next two years to a maximum of 52 weeks. This funding will help assist employers and employees avoid temporary layoffs while their industry recovers.

For additional details on the Government of Canada’s Economic Action Plan, visit www.budget.gc.ca/2009/home-accueil-eng.asp.

Media may contact:

Jocelyne Turner

Press Secretary

Office of the Minister

Natural Resources Canada

Ottawa

613-996-2007

Or

Media Relations

Natural Resources Canada

Ottawa

613-992-4447

NRCan's news releases and backgrounders are available at www.nrcan.gc.ca/media/index-eng.php.