Prince George, B.C.- Although the strength of the Canadian dollar continues to add pressure to lumber exports, there is some good news today from the Ministry of Forests and Range.

Effective May 1^st, the tax B.C.'s softwood lumber producers pay on shipments to the U.S. will be reduced by one-third. The reduction a result of strong lumber prices says Minister of Forests and Range, Pat Bell.

 

Under the 2006 Softwood Lumber Agreement, companies exporting softwood lumber to the United States are required to pay an export tax on their shipments. The formula for determining the tax is based on the average

price over a four-week period 21 days before the start of the month. The higher the average lumber price is, the lower the export tax.

 

the four-week average lumber price, as given by the Random Lengths Framing Composite Price Index, is now $US325 per thousand board feet, the export tax rate that will be in effect May 1 will be 10 per cent, down from 15 per cent. The export tax would reduce to zero if lumber prices exceed $US355 per thousand board feet.

 

"This is the highest average lumber price since the Softwood Lumber Agreement was signed in October 2006. It is a positive indicator that B.C.'s forest sector may be starting on the road to recovery" says Bell.

 

Random Lengths framing lumber composite prices are published each Friday. Today's price was $US342. The export tax is collected at the border by the Canada Revenue Agency and then the tax paid by B.C. producers is re-directed to the provincial government.

 

Bell says the U.S. is still B.C.’s largest market but he is encouraged by the increased shipments to other countries. In January 2010, B.C.'s total softwood lumber exports were 22 per cent higher than they were in January 2009. This includes a four-fold increase in the exports to China, a six per cent increase in exports to the U.S. and an 11 per cent increase in exports to Japan.