Little interest in Canada’s ‘tech trees’

In a non-descript office building on the outskirts of the British Columbia capital, Tom Urban waves away a thick cloud of white fog lingering on top of an open cryo-tank.

Inside, frozen to -196 degrees Celsius, are stacks of tiny vials. Each is neatly arranged in a plastic tray and carefully numbered and catalogued. Each contains the seed material of a single tree. The two dozen similar tanks in this room together contain thousands and thousands of unique genetic signatures.

Most are for loblolly pine, the fast-growing conifer that dominates the southeastern U.S., where Mr. Urban’s company, Cellfor Inc., does most of its business.

Somewhere in the room are vials containing the genetics of lodgepole pine, the tree that covers the ridges and valleys of B.C.’s lumber-rich interior, which happens to be in Mr. Urban’s backyard. But rather than germinating that material into a Canadian super-forest — one that is faster growing, more disease-resistant and more valuable — Mr. Urban, who is the company’s president and CEO, has no immediate plans to move the lodgepole genetics out of the cryo-tanks.

There is simply no market for it. The problem? The companies that plant Canada’s publicly owned forests have little incentive to pay the premium for Cellfor’s seedlings — a fact that, critics say, could jeopardize Canada’s future as a forest leader as other parts of the world rapidly embrace hightech genetics and plant increasingly profitable trees.

Among those is the United States, where Cellfor sells its seedlings for 30¢ each — six times the price of a regular seedling. But Cellfor has calculated that, depending on the taxes a forest company pays, its product can boost the net present value of the region’s forests by 50% to 90%.

Mr. Urban hasn’t done the math for Canada, but is certain that even with the higher seedling price, he could make forests here more profitable, too.

It’s just that no one is especially interested.

“I would love to go ahead and try to produce hundreds of millions of lodgepole pine,” he says. “But the people that are actually planting the trees don’t own the land and … in many respects they don’t know they’ve got the cutting rights in 40 or 50 years time [when a planted tree matures]. So who wants to make that investment up front? That is an impediment to the adoption of innovation, frankly.”

For Cellfor, that innovation is all about finding which of those cryogenically frozen vials contains the genetics of what Mr. Urban calls “the next Peyton Manning” of trees. The vials actually store genetic duplicates of trees that are grown in nurseries and monitored for several years. When Cellfor finds the best of the batch, it will return to the vial that contains that tree’s exact genetic copy. It will carefully move the gooey white seed material — it’s called “germplasm” — into a beaker and watch it replicate in a process called “somatic embryogenesis.” Most people would just call it cloning. In a short period of time, Mr. Urban’s team can take the genetic material from a single tree and grow literally millions of trees, enough to populate a forest of identical superstars.

But Canada isn’t in the market for Cellfor’s superstars, thanks in part to our publicly owned forests, critics say. Since Canadian forest companies do not, by and large, own the trees they cut, they are essentially renters with little incentive to invest in their trees — especially since, in many cases, they are renting a certain tract of land for only a decade or two, not enough to pay back a large up-front investment in high-tech seedlings.

Make them more like homeowners by increasing their ownership stake in the woods, the critics say, and the result would be more investment in better forests — the kind Cellfor says it can plant.

Turns out, there’s proof behind that logic. A landmark UBC study in 1996 found that B.C. forestry companies invested 67% more on private lands in the province than they did on the most “rent-like” land — that which allows harvesting an annual allowable cut under a 15-year “forest licence.”

That is not to say that government could not embrace Cellfor’s seedlings.

“Government can also decide to adopt technology and drive productivity to do those things. And in a sense they could actually do that more effectively than a disparate set of private owners,” said Mr. Urban.

But in an interview, B.C.’s Forestry Minister Rich Coleman admitted he had never heard of Cellfor.

Others, including the province’s chief forester Jim Snetsinger, have, but argue Cellfor simply wouldn’t work in B.C. The province does run its own sophisticated genetics program, which uses helicopter-harvested seeds and carefully tended orchards to breed better forests while maintaining genetic diversity. In several decades of work, that program has developed trees that grow 12% faster than existing forest stands. Half of all seedlings planted in the province now come from those orchards.

Compare that to Cellfor, which has boosted loblolly pine growth by more than 50% in a decade, and has seen exponential growth in its acceptance among private land owners (although Cellfor still only accounts for a small fraction of all seedlings planted in a year). The company has not yet done the work to see exactly how much it could improve lodgepole pine growth — but even so, Mr. Snetsinger admitted it’s unlikely the province will buy into Cellfor’s model. It is leery of taking a single tree and planting it many times over.

“In the face of things like climate change and insects and disease, you want to have as much diversity in your population to be able to withstand those kinds of change,” he said. “And if you have a single clone and it’s susceptible to whatever change comes in the environment, you could be in trouble.”

Still, he acknowledges that Cellfor seedlings may work “on a private land model where you may be were growing some other faster-growing species. But it doesn’t seem to be in a public land model.”

That may be more palatable to environmental groups and cheaper for the public forests owners. But it does carry another risk, said Russ Clinton, a longtime forester who recently retired from one of B.C.’s largest companies. After all, competing markets around the world have embraced the technology — and been rewarded with enormous leaps in productivity and profitability.

“If Canada wants to retain a position in the world forest industry as a significant and reliable supplier of forest products they have to start to excel in forest management,” he said. “And the government-owned system does not promote excellence in forest management.”