WASHINGTON, DC - The U.S. Lumber Coalition says it is "seriously concerned" by log export policy changes in British Columbia, especially an increase in the "fee in lieu of domestic manufacturing" applied to many log exports that will take effect on March 1.
According to the coalition, logs harvested from public or private lands in BC must be advertised to local mills before they can be exported. If a local mill offers to pay the prevailing domestic log price for a particular log sort, export of that sort is prohibited. If permission to export is granted, a "fee in lieu of domestic manufacture" is assessed on logs harvested from public and some private land. Effective March 1, the "fee in lieu" on the BC Coast will be increased by 20 percent.
"In effect, British Columbia has increased the implicit subsidy from log export restrictions for BC Coast lumber mills," said Luke Brochu, president of Pleasant River Lumber Company in Maine. Brochu also heads the coalition. "This gives BC Coast lumber mills a greater advantage in the U.S. market, at the expense of U.S. mills that pay full market price for their inputs," he explained.
Log export restrictions have the effect of insulating the Western Canada lumber mills from world market prices for logs, says the coalition of U.S. sawmills and forest owners. Log prices have increased, especially with growing demand from China. Measures to tighten log export restrictions on the BC Coast will further lower prices that British Columbia lumber producers pay to levels below market prices.
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