Notices to Exporters

Softwood Lumber Exports to the United States: Export of Softwood Lumber Products when the Prevailing Monthly Price is Above $US 355

Serial No. 187
Date: December 21, 2012

Table of Contents


1.0 Purpose

The purpose of this Notice is to provide information to exporters with respect to exports of Softwood Lumber Products when the Prevailing Monthly Price exceeds $US 355.

2.0 Duration

This Notice is effective from the first day to the last day of any given month for which the Prevailing Monthly Price exceeds $US 355.

3.0 Authority

Products covered by this Notice were added to theExport Control List(Group 5), a regulation under the Export and Import Permits Act(EIPA), in order to implement and satisfy the conditions of the 2006 Softwood Lumber Agreement (SLA).

4.0 Definitions

“Agreement” or “SLA” means the 2006 Softwood Lumber Agreement between the Government of Canada and the Government of the United States.

“Expected U.S. Consumption” means the expected level of U.S. consumption defined and calculated in accordance with paragraphs 12 through 14 of Annex 7D of the Agreement.

“Export allocation” means an export allocation under paragraph 6.3(3)(b) of theEIPA.

“Prevailing Monthly Price” means the most recent four-week average of the weekly framing lumber composite (FLC) prices, available 21 days before the beginning of the month to which the Prevailing Monthly Price shall be applied, as specified in paragraph 1 of Annex 7A of the Agreement.

“Regional Quota Volume” or “RQV” means the quantity of Softwood Lumber Products that may be exported from a region during a month, as determined by the Minister under subsection 6.3(2) of the EIPA, and consistent with the SLA. More specifically, a specified percentage of monthly expected U.S. consumption (varying by region) multiplied by a price adjustment factor. When the FLC average monthly price is at $US 336 or over, the factor is 1; when the FLC average monthly price is at $US 316-335, the factor is 32/34; when the FLC average monthly price is at $US 315 or under, the factor is 30/34.

“Regional Trigger Volume” or “RTV”, which is applicable to Option A regions, means the amount, for a particular month, that is determined by multiplying the total monthly Expected U.S. Consumption by the region’s U.S. market share, and then multiplying the product by 1.1. If a region exceeds its RTV, additional volume related measures and export controls shall apply as provided in Article VIII of the Agreement.

“Softwood Lumber Products” means the softwood lumber products that are first manufactured in their respective region that are included inExport Control List, item 5104.

5.0 Exports of Softwood Lumber Products When the Prevailing Monthly Price is $US 355 or Below

Under the EIPA and pursuant to Article VII of the SLA, when the Prevailing Monthly Price for any given month is at or below $US 355, exporters of Softwood Lumber Products first manufactured in certain regions may be subject to volume restraints and export measures including company-specific export allocations. The following table outlines the export measures applicable to exports from Option A and Option B regions.

Prevailing Monthly PriceOption A (Alberta& BC) – Export Charge as a % of Export PriceNote *Option B (Manitoba, Saskatchewan, Ontario, Quebec) – Export Charge as a % of Export Price, with Volume Restraint

Notes

Note *

While there is no volume restraint for Option A regions, additional volume related measures and export controls may apply if any of these regions exceed a certain level of exports (i.e. the RTV).

Return to first note * referrer

Over $US 355No Export ChargeNo export charge and no volume restraint
$US 336-3555%2.5% Export Charge + maximum volume that can be exported to the United States cannot exceed the regions share of 34% of Expected US consumption for the month.
$US 316-33510%3% Export Charge + maximum volume that can be exported to the United States cannot exceed the regions share of 32% of Expected US consumption for the month.
$US 315 or under15%5% Export Charge + maximum volume that can be exported to the United States cannot exceed the regions share of 30% of Expected US consumption for the month.

6.0 Exports of Softwood Lumber Products When the Prevailing Monthly Price Exceeds $US 355

Pursuant to Article VII of the SLA, when the Prevailing Monthly Price for any given month exceeds US$ 355, Option B regions (i.e. Quebec, Ontario, Manitoba and Saskatchewan) will not be subject to RQV restraints or the base export charge for that month and, consequently, there will be no requirement to issue export allocations for that month. For the purpose of this Notice, this is referred to as a “no-volume restraint period”.

Please note that surcharges resulting from arbitrations may still be in effect.

Similarly, Option A regions (i.e. British Columbia Coast, British Columbia Interior and Alberta) will not be subject to the surge mechanism based on their RTV, as defined in Article VIII of the SLA.

The applicable export charge for the current month as well as for previous months can be found on the website of the Canada Revenue Agency.

6.1 Transfers of Export Allocations for Option B Regions

In the event of a no-volume restraint period, and therefore a period in which no company-specific export allocations are being issued, the Policy Respecting the Transfers of Export Allocations (Notice to Exporters Serial #158 dated May 20, 2008) will not be applicable.

6.2 Permit Requirements for Both Option A and B Regions

During a no-volume restraint period, exporters are still required to obtain an export permit for exports of Softwood Lumber Products to the United States first manufactured in their respective region as prescribed under the SLA.

6.3 Export History for Both Option A and B Regions

During a no-volume restraint period, exports continue to count towards a company’s export history in the usual manner.

7.0 Resumption of Export Allocations for Option B Regions

If the Prevailing Monthly Price drops below $US 355 following a no-volume restraint period, volume restraints will resume for the following month and companies in Option B regions who qualify will be issued an export allocation for that following month corresponding to their share of the RQV. The export allocation will be issued before the 24th day of the month preceding the month for which the export allocation is being issued and will be reflected in the company’s EIPA account. For example, if the industry experiences a period of no-volume restraint in January and that period comes to an end for February (due to a decline in the Prevailing Monthly Price), qualifying companies would be issued an export allocation for the month of February. This export allocation would be reflected in each company’s account by January 24th.

8.0 Further Information

For further information relating to the export controls on shipments of softwood lumber to the United States, please contact:

Softwood Lumber Controls Division (TNC)
Foreign Affairs and International Trade Canada
125 Sussex Drive
Ottawa, Ontario K1A 0G2
Hot Line: 613-944-2168 or 1-877-808-8838
Facsimile: 613-944-8950
E-mail address: softwood.boisdoeuvre@international.gc.ca
Web Page: softwood lumber.

For further information relating to the SLA, please contact:

Softwood Lumber Division (TNS)
Foreign Affairs and International Trade Canada
125 Sussex Drive
Ottawa, Ontario K1A 0G2
Hot Line: 613-944-2167
Facsimile: 613-944-1452
E-mail address: softwood.boisdoeuvre@international.gc.ca
Web Page: softwood lumber.