Avrim Lazar on the forest industry's new markets

The Globe and Mail

Avrim Lazar, retiring Forest Products Association of Canada CEO (Remi Theriault/Remi Theriault)

Avrim Lazar was a senior Ottawa mandarin in the Ministry of the Environment in 2002 when he made the leap to become CEO of the Forest Products Association of Canada. The industry was booming in those days, aided by a 65-cent Canadian dollar that made its products cheap in the United States. But a rising loonie and a collapse in U.S. housing construction then sent the sector into crisis. In recent years, Lazar, 64, has worked with companies and the federal government to improve the industry’s environmental performance and to expand export markets in Asia.

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Why did you jump from a senior level of the civil service to the forestry association? I’d spent most of my working life in public policy—I did agriculture, justice, environment and social policy. I wanted to experience things from the other side of the table. When you’re doing policy, your interest is service—trying to make the world better. You realize that a lot of powers to make changes aren’t in government; they’re in civil society. On the environment, the industry has done great things and being able to support them was exciting and at least as powerful as anything I could do at Environment Canada.

What’s the biggest cultural difference between the civil service and the private sector? It’s the immediacy of impact. When our board decided we would deal with climate change, we did it. The conversations about it were franker than anything you’d hear in the civil service. It was a passionate and very open discussion. But once a decision is taken—boom—you get on with it. And in the private sector, your impact on people’s lives is quite a bit more direct. If we do things badly and a mill closes, a whole town loses its economic lifeblood. If you find a path through economic difficulty, you save a whole chunk of rural Canada.

What was your best moment at the association? When we signed the 2010 Canadian Boreal Forest Agreement, in which we got 10 very aggressive environmental groups, including Greenpeace and the David Suzuki Foundation, and the 21 largest forestry companies to agree on a path forward. Even more thrilling was when the process that led up to it stopped being negotiations and started being real discussions about “How do you do this?” People actually began working together as a community trying to solve a problem.

Are there lessons for other industries, such as oil and gas, in what you achieved? Sure. I don’t believe it would be the same sort of deal, but I know that the environmental groups are capable of moving from inflexible opposition to practical problem solving. And I know that executives are capable of adjusting plans to do the right thing.

How did you avoid being captive to the lowest common denominator among your member companies? When I came in, I said we were going to set some higher standards and have a certification system. Anybody who didn’t want to meet the standards didn’t have to stay.

Did your membership decline? No, it grew.

What led to the forestry industry winning government support in the 2010 budget for the biofuel initiative [which has helped finance efforts to use wood waste for biofuels and other chemicals] Over the last 10 years, we’ve lobbied for the government not to subsidize the status quo, but to help us with transformation. We needed to improve our green credentials, because we knew that was a condition of success in the future. They stepped up with $1 billion in support, and it was done much smarter than it was in the United States. It wasn’t just a subsidy—you had to actually invest in green infrastructure in a Canadian mill to get the support.

Has the high Canadian dollar been a big problem? It’s huge. All our inputs are in Canadian dollars and all our sales are in U.S. dollars. Since I started, there’s been a 60% increase in our cost of doing business. Obviously, our job is to be competitive, whatever the value of the dollar. But it was painful how quickly it went up. You couldn’t change your business practices fast enough to keep up.

What will you do now? I’m going to spend more time on my meditation cushion, in my canoe and trail running. I’m going to do some consulting, but no more than 50 days a year. I just want to feel a bit of spaciousness.

Follow on Twitter: @smccarthy55

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