A handful of federal politicians say they are seeking answers into who is behind a B.C.-headquartered forestry giant after a Glacier Media investigation revealed significant links to entities in China and Indonesia.
Paper Excellence has quickly grown to become the largest forestry company in North America. Its latest $2.7-billion takeover of Resolute Forest Products, finalized this month, gives the company control over 22 million hectares of Canadian forests — roughly equivalent to seven Vancouver Islands.
“These are pretty stunning allegations. This is public land of Canada that's now under the control of this company,” said Charlie Angus, the New Democratic Party’s natural resource critic. “I think this is in the public interest. I think this should be beyond partisan.”
“We need to know who this company is, how they operate [and] what their connections are.”
Angus said he has put his fellow members of the Standing Committee on Natural Resources “on notice,” telling them he will bring forward a motion in the coming weeks that will summon Paper Excellence executives before the committee to understand who is controlling the company.
Calls for federal committee probe follow international investigation
Glacier Media recently published a months-long investigation into Paper Excellence as part of a journalistic collaboration with the International Consortium of Investigative Journalists (ICIJ), and media partners that included the CBC and Halifax Examiner in Canada, and Le Monde and Radio France in Europe.
The investigation — which included interviews with former employees and an analysis of shipping records, leaked emails, and 15 years of public and corporate documents — found significant links between Paper Excellence and Asia Pulp and Paper (APP), a forestry giant based in China and Indonesia.
For more than two decades, environmental groups have alleged APP has driven deforestation and been implicated in rights abuses with local Indigenous communities.
The ICIJ investigation found evidence of what former employees describe as a fibre pipeline sending pulp from Paper Excellence mills in Canada to APP’s operations in China and Indonesia. The reporting also uncovered evidence that the China Development Bank — a major finance arm to advance Chinese economic interests overseas — provided Paper Excellence with US$1.25 billion in credit for several years.
Both Paper Excellence and APP said they are independent of one another. Following the initial publication of the investigation, the company released a statement once again denying it had any outstanding Chinese loans or connections to APP.
“Paper Excellence and Fibre Excellence strictly comply with environmental regulations,” stated the company in a press release.
Minister questioned over company’s latest acquisition
Angus, who represents the Ontario riding of Timmins-James Bay, said he has written to François-Philippe Champagne, Minister of Innovation, Science and Industry, asking him to document what steps were taken to ensure due diligence was carried out during Paper Excellence’s recent takeover of Resolute Forest Products.
The NDP natural resource critic said he has yet to hear back from the minister.
“Did the government know who this company was? Did they know how they operate? Did they know about allegations, possible price collusion or connections with Asia Pulp and Paper?” Angus told Glacier Media.
“We want to know who these companies are, and we don't want to be turning the forests over to be a fibre pipeline for Chinese operations.”
In an email to Glacier Media, a spokesperson for Champagne's office said Paper Excellence's acquisition of Resolute was subject to the national security review provisions under the Investment Canada Act.
"Canada’s lead security agencies were consulted on the transaction," said the spokesperson.
"Recognizing the need to ensure that this investment continues to be in Canada’s best interests, as part of the review process, the investor has provided meaningful commitments to Canada which include ensuring strong levels of investment to facilities in Quebec, maintaining existing Canadian patents, maintaining Canadian participation on Resolute Canada’s board of directors and senior management team, and adhering to Canadian employment and environmental laws," the statement continued, concluding no further comment could be provided due to confidentiality provisions of the act.
On Monday, Paper Excellence filed a notice of termination with the U.S. Securities and Exchange Commission, indicating Resolute would become a subsidiary of Domtar Corporation, another forestry giant Paper Excellence bought out and privatized in 2021 for US$3 billion.
The calls to further investigate Paper Excellence come as the federal government moves to modernize the Investment Canada Act. Tabled late last year, the bill proposes giving the minister authority to extend a national security review of investments and create new filing requirements before investments are made in certain business sectors, among other measures.
It’s not clear how forestry would be treated. Either way, said Angus, it would likely not affect any potential investigation into Paper Excellence, as its recent acquisitions have already been approved.
“As New Democrats, we've had deep problems with the legislation that allows foreign takeovers without much scrutiny,” he said. “It’s been very problematic in the past.”
“I don't know, now that Paper Excellence has been approved, whether or not changes in the act will be able to shine a light on that, but I want the minister to come and explain. I've written to him asking him to explain what went down.”
Green leader, Bloc critic question company's overseas ties
In the House of Commons last week, Bloc Québécois natural resource critic Mario Simard questioned Paper Excellence's ties and whether the government had done enough to vet its latest acquisition.
“Paper Excellence has ties to Asia Pulp and Paper, a corporation with dubious practices that is financed by the Chinese government,” Simard told Parliament Friday.
“We want to know if the government did the necessary checks to ensure that the Chinese government is not indirectly controlling one-quarter of Quebec's forest resources.”
Andy Fillmore, parliamentary secretary to the Minister of Innovation, Science and Industry, responded, saying Paper Excellence's takeover of Resolute was subject to a national security review process.
“Due to the confidentiality provisions of the Investment Canada Act, we cannot comment further,” said Fillmore.
Neither Simard nor Conservative natural resource critic Shannon Stubbs — who both hold vice-chair positions on the Standing Committee on Natural Resources — responded to request for interviews.
Reached for comment, Green Party member of Parliament for Saanich-Gulf Islands Elizabeth May said she is backing Angus’s call to investigate Paper Excellence, and is considering a range of options to further educate parliamentarians and Canadians about the company.
But without any committee powers, her official options are limited, unless she resorts to an emergency debate or a constituent files an official petition.
May, whose roots are in Nova Scotia, said she closely followed a dispute between Paper Excellence and Pictou Landing First Nations that erupted when the company dumped millions of litres of effluence into Boat Harbour, N.S. The latest reporting, she said, brings her concern to another level.
“I found this deeply shocking and troubling and that was before I knew that they funded their growth spurt with the China Development Bank,” said May.