Higher lumber prices have triggered a reduction in the level of tax paid by British Columbia (BC) sawmills for shipments to the US.
The reduction has prompted Canada to say the country’s timber sector may be on the road to recovery.
The four-week average lumber price has now risen to US$325 per thousand board feet, which means US taxes on Canadian softwood shipments will reduce from 15% to 10%.
Under the 2006 Softwood Lumber Agreement, softwood exporters to the US pay a tax according to average four-week lumber prices.
The export tax could reduce to zero if lumber prices exceed US$355 per thousand board feet.
“This is the highest average lumber price since the Softwood Lumber Agreement was signed in October 2006,” said BC forest minister Pat Bell.
“It is a positive indicator that BC’s forest sector may be starting on the road to recovery.”
The province’s total softwood lumber exports in January were 22% greater than a year ago and included a four-fold growth in business with Japan.
