Category Archives: Softwood Lumber Dispute

The export tax for Canadian lumber producers exporting to the U.S. will stay at 0% for February.

Under the terms of the 2006 Softwood Lumber Agreement (SLA), the export tax rate drops to 0% when the Random Lengths Framing Lumber Composite  price averages over $355 for  the four-week period occurring 21 days before the beginning of the month.

The composite price used to determine February’s tax rate was $385.

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The British Columbia Lumber Trade Council (BCLTC) responded today to the decision by the London Court of International Arbitration that Canada and British Columbia were not in breach of the Softwood Lumber Agreement (SLA) in the pricing of British Columbia timber.

“We are extremely pleased with the Panel’s decision dismissing all of the United States’ claims in their entirety,” stated John Allan, President, BCLTC.

Allan went on to note that: “The arbitration process was lengthy and thorough and the outcome demonstrates that the B.C. timber pricing system is not in breach of the Softwood Lumber Agreement as the U.S. had claimed.”

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The London Court of International Arbitration has dismissed the complaint from the United States that accused Canadian exporters of violating the softwood lumber act.

“This is a total victory for British Columbia and Canada and is great news for B.C.’s lumber workers and their families. Our government has worked hard to defend and create jobs for British Columbians and to demonstrate that the U.S.’s complaints were unwarranted and groundless,” said British Columbia Minister of Jobs, Tourism and Innovation Pat Bell.

The 2011 complaint filed by the U.S. alleged that British Columbia was selling softwood at less than market value, given an increase in the harvest of low-grade timber. The increased amount of low-grade timber in British Columbia is the result of the unprecedented and devastating mountain pine beetle infestation. British Columbia’s auction-based pricing system ensures that the full value of timber has been captured by government.

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The U.S. Lumber Coalition is accusing British Columbia of under-charging coastal forest companies for timber harvested on Crown land.

Their argument is based on the claim that the British Columbia Ministry of Forests, Lands and Natural Resource Operations hasn’t updated its coastal stumpage data for 3 years.

The US lobby group said the amount of this undercharge is about $70 million a year.

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The Forest Products Association of Canada (FPAC) is pleased that the Minister of International Trade, Ed Fast, has today announced a two-year extension of the Softwood Lumber Agreement along with the US Trade Representative, Ron Kirk.

“The softwood agreement does provide stability and predictability in terms of getting access to our most important market, the United States,” says the President and CEO of FPAC, Avrim Lazar. “The industry is of the view that at a time of ongoing market uncertainty, it is a good idea to extend the deal by another two years to provide a degree of certainty in market access to the U.S.”

Lazar notes that Canadian forest companies have gone through an economically challenging time with mill closures and the job loss in the face of the global recession and the changing marketplace. The sector has had significant success in diversifying their markets especially in Asia. Wood exports to China have increased by 46 times since 2000 and the sector is now the largest Canadian exporting industry to both India and China. However the U.S. still accounts for about two-thirds of the exports of Canadian forest products.

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The current Canada – US Softwood Lumber Act is set to expire in 2013.

It seems that both countries have agreed to simply extend the current agreement for 2 years, rather than to re-open the controversial legislation.

Today Canada’s Minister of International Trade Ed Fast, is meeting with U.S. trade representative Ron Kirk in Washington, D.C.

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British Columbia‘s lumber producers have filed their statement of defense against the U.S. allegations that Canada is exporting mountain pine beetle lumber at unfairly low prices.

Their statement of defense has been filed before the London Court of International Arbitration. Oral arguments in the case will be heard in February. It is not known when the London Court will render a decision.

The B.C. lumber producers contend that the U.S. is ignoring the devastating impact of the mountain pine beetle on the wood supply in British Columbia’s interior. As well, despite efforts to increase the harvest of beetle-damaged pine, British Columbia’s share of the U.S. market has fallen significantly while offshore export volumes, particularly to China, have grown.

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The British Columbia Lumber Trade Council (BCLTC) commented today on the filing of the U.S. Statement of Case in the arbitration under the Softwood Lumber Agreement (SLA) on BC interior timber pricing and log grading.

John Allan, President, BCLTC, stated that “while the U.S. submission remains confidential for a week, it is clear from press reports discussing the submission that the U.S. case is without merit and ignores the real facts associated with the devastating impact of the Mountain Pine Beetle epidemic on the B.C. Interior.”

For many years, B.C. (and increasingly the U.S. Rocky Mountain forest area as well) has been dealing with the impacts of the unprecedented economic and environmental disaster caused by the Mountain Pine Beetle. Catastrophic damage has been done to the interior pine timber supply resulting in a massive degradation in its quality and value. Harvesting of this timber accelerated over the last few years while it continued to have some value.

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On August 9, the United States will makes its case to the London Court of International Arbitration that British Columbia is subsidizing timber prices for pine-beetle damaged trees.

The London Court of Arbitration is the body Canada and the U.S. selected as the final level of appeal for disputes under the Softwood Lumber Agreement.

The details of the U.S. claim have not yet been made public.

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Canada has decided to comply with the recent softwood lumber ruling and will be adding additional export charges of 0.1% and 2.6% for Ontario and Quebec, respectively.

Last month, the London Court of International Arbitration ruled in favour of the U.S.A. who claimed that Canada broke the terms of a 5-year-old agreement on bilateral lumber trade.

The announcement was made by Peter Van Loan, Minister of International Trade on Friday. The context of his announcement:

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