Under the terms of the 2006 Softwood Lumber Agreement (SLA), the trigger for an increase in the export tax rate for Canadian softwood products going to the United States has been reached. Export taxes on softwood from British Columbia, Alberta, Saskatchewan, Ontario and Quebec will be enforced as of April 1, 2015.
According to the SLA, if a covered softwood lumber product is exported to the United States from a region in a particular month, the amount of the charge in respect to that export is the amount calculated by applying the rate applicable for the month to the export price of the product. See “Border Measures” here.
Therefore, beginning on April 1, 2015, Softwood Lumber from the following provinces in Canada will be affected:
- From BOTH the coastal and interior regions of British Columbia, the export tax will rise from -0- to 5%.
- From Alberta, the export tax rate will increase from -0- to 5%.
- From Saskatchewan and Manitoba the export tax rate goes from -0- to 2.5%.
- In Ontario, the export tax rate will be raised from -0- to 2.5%.
- In Quebec, the export tax rate will be raised from -0- to 2.5%.
The export charge rate is based on the region of origin of the softwood lumber product being exported to the United States. The region of origin is defined as where the product underwent its first primary processing. However, where sawlogs are harvested in an Option A or an Option B region and undergo first primary processing in a region whose exports are excluded, the resulting softwood lumber product is deemed to have been exported from the Option A or Option B region.
- Option A regions: The British Columbia (BC) coast, BC interior and Alberta
- Option B regions: Saskatchewan, Manitoba, Ontario and Quebec
Questions about this regulatory update may be directed to Livingston’s U.S. Regulatory Affairs group .