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US export taxes on Canadian timber waived
14/05/2010
Export taxes on wood sent to the USA will be waived for Canadian forestry companies in June, for the first time since 2006.
Industry operatives believe the waiver has been caused by the current high price of lumber, stemming from the increased demand from China and pressures from regulatory restrictions and plagues of beetles.
“It's too soon to say but I subscribe to that notion,” said Hank Ketcham, chief executive officer of Vancouver's West Fraser Timber Co., the largest lumber producer in North America.
When prices are low due to ample supply, Canada has to pay a tax on all the soft wood going to the USA. The tax was first imposed as part of the Softwood Lumber Agreement in 2006.
For West Fraser, the tax has been a levy producers could ill-afford during the worst industry depression in living memory. In the first quarter of this year, the cost was 3 per cent, $19.2-million paid on sales of $688-million. For Canfor Corp., the No 2 player, it was 2 per cent, $11.6-million on $588-million.
In the last five years, however, Canada has seen an exponential rise in the amount of wood it is sending to China. In 2005 86 per cent of British Columbia's wood went to the US and one per cent was sent to China. Last year, 67 per cent went to the US and 14 per cent sailed across the Pacific.
Industry operatives believe the waiver has been caused by the current high price of lumber, stemming from the increased demand from China and pressures from regulatory restrictions and plagues of beetles.
“It's too soon to say but I subscribe to that notion,” said Hank Ketcham, chief executive officer of Vancouver's West Fraser Timber Co., the largest lumber producer in North America.
When prices are low due to ample supply, Canada has to pay a tax on all the soft wood going to the USA. The tax was first imposed as part of the Softwood Lumber Agreement in 2006.
For West Fraser, the tax has been a levy producers could ill-afford during the worst industry depression in living memory. In the first quarter of this year, the cost was 3 per cent, $19.2-million paid on sales of $688-million. For Canfor Corp., the No 2 player, it was 2 per cent, $11.6-million on $588-million.
In the last five years, however, Canada has seen an exponential rise in the amount of wood it is sending to China. In 2005 86 per cent of British Columbia's wood went to the US and one per cent was sent to China. Last year, 67 per cent went to the US and 14 per cent sailed across the Pacific.
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