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The source for Canadian and U.S. lumber and panel prices
Lumber Remanufacturing
Post Softwood Agreement Effects in BC
When the current Softwood Lumber Agreement was signed in 2006, remanufacturers in British Columbia noticed a marked discrepancy to the previous agreement; they were suddenly required to pay tax on commodities that had been exempt. All attempts, by agencies serving the industry, individual lumber companies, and local politicians, to have the terms of the Agreement in this regard adjusted failed. At the end of 2007 the British Columbia Ministry of Forests and Range, with the help of Pricewaterhouse Coopers, came out with a study of the effects of this new tax, particularly on producers in the Interior.
After heavy consultation with the industry and relevant agencies, the study determined that not only was there a desire to rework the terms of the Agreement regarding remanufacturing, but also there was a call for changes to BC forest policy. The Ministry because it expects changes of ownership and operating structures as a result of the new taxes.
The study concluded that the new Softwood Agreement affects lumber remanufacturers differently, depending on market strategy and product types. As the business of secondary processing differs for various regions of the province, there is no one way to determine the resulting impact. Fibre shortages were found to be a problem throughout the industry, with Coastal mill having trouble sourcing raw logs and Interior mills needing more trim blocks and low grade lumber.
Companies surveyed agreed that “Option B” (Export Charge + Volume Constraint) was having a negative impact on their business. It was felt that exclusion of non-dimensional remanufactured products from the Agreement, and improvements in BC stumpage determination for low grade logs would go far in solving some of these new problems.
The study itself can be found on the Ministry of Forests and Range website, at http//www.for.gov.bc.ca/HET/Sofwood/index.htm, then scroll down to the link *NEW* Softwood Lumber Remanufacturing.