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Notices
Softwood Lumber Exports to the United States: Entry Into Force of the
Softwood Lumber Agreement and Transition Period Exports October 12 –
December 31, 2006
Serial No. 145
Date: October 12, 2006
Table of Contents
1.0 Background
2.0 Purpose
3.0 Entry Into Force of the Agreement
4.0 Transition Period Exports
5.0 Option A – Export Charge
6.0 Option B – Export Charge With Export Allocation
7.0 Lumber Manufactured by Excluded Companies
8.0 Coverage
9.0 Authority
10.0 Compliance and Enforcement
11.0 Permit Fees
12.0 Further information
Annex 1 – Covered Products
Annex 2 - Applying for a Softwood
Lumber Export Permit
1.0 Background
1.1 On April 27, 2006 Canada and the United States announced a framework
agreement to resolve the softwood lumber dispute. The legal text of the
Canada-United States Softwood Lumber Agreement 2006 (the Agreement) was
initialled by Canada and the United States on July 1, 2006 and signed
on September 12, 2006.
1.2 On September 18, 2006, the Minister of International Trade introduced
the Softwood Lumber Products Export Charge Act, 2006. Once passed, the
legislation will have retroactive effect to October 12, 2006.
1.3 Under the Agreement, and as provided for under the legislation to
implement the Agreement, the Minister will designate that softwood lumber
first manufactured in a region subject to the export measures be subject
to one of two border measures: Option A, an export charge without export
allocations; and Option B, a lower export charge with export allocations.
The following table summarizes the two options.
Prevailing Monthly Price |
Option A – Export Charge (Expressed as a
% of Export Price) |
Option B – Export Charge (Expressed as a
% of Export Price) with Export Allocation |
Over $US355 |
No Export Charge |
No Export Charge and no volume
restraint |
$US336-355 |
5% |
2.5% Export Charge + maximum volume
that can be exported to the United States cannot exceed the Region’s
share of 34% of Expected U.S. Consumption for the month |
$US316-335 |
10% |
3% Export Charge + maximum volume
that can be exported to the United States cannot exceed the Region’s
share of 32% of Expected U.S. Consumption for the month |
$US315 or under |
15% |
5% Export Charge + maximum volume
that can be exported to the United States cannot exceed the Region’s
share of 30% of Expected U.S. Consumption for the month |
1.4 Regions electing Option B (export charge with export allocations)
will operate under the Option A (export charge) regime, commencing October
12, 2006 until the Government of Canada is able to implement Option B,
on January 1, 2007. The legislation makes provision for exporters shipping
softwood lumber products first manufactured in Option B regions during
this three-month transition period.
1.5 The full text of the Agreement can be found on the Softwood
Lumber web page.
2.0 Purpose
2.1 The purpose of this Notice to Exporters is to advise softwood lumber
exporters to the United States that the Softwood Lumber Agreement will
enter into force on October 12, 2006.
2.2 This Notice also advises that special provisions will be put in place
during the transition period of October 12, 2006 to December 31, 2006,
pursuant to the legislation.
2.3 This Notice amends Notice to Exporters Serial No. 143 with respect
to lumber manufactured by excluded companies
3.0 Entry Into Force of the Softwood
Lumber Agreement
3.1 Further to the Notice to Exporters Serial
No. 144, the Governments of Canada and the United States have agreed
that the Softwood Lumber Agreement will enter into force on October 12,
2006. Changes in export permit requirements outlined in Notice
to Exporters Serial No. 143 will take effect October 12, 2006.
4.0 Transition Period Exports
4.1 The following provisions will apply to exports of softwood lumber
to the United States with shipments dates commencing October 12, 2006
and ending December 31, 2006. Export permits will be required for all
shipments of softwood lumber to the United States during this period.
4.2 The Option A, Export Charge will apply to exports
from: British Columbia Coast, British Columbia Interior, Alberta as described
in Section 5.0 below. The Option B, Export Charge With
Export Allocation will apply to exports from: Quebec, Ontario, Manitoba
and Saskatchewan as described in Section 6.0 below.
5.0 Option A – Export Charge
5.1 Exporters of softwood lumber products to the United States that are
first manufactured in Option A regions will be required to obtain export
permits and to remit export charges at the rates specified in paragraph
1.3 during the transition period October 12, 2006 to December 31, 2006.
5.2 Option A Surge Provisions - Exporters of softwood lumber products
will be subject to the surge provisions as specified in the legislation
during the transition period. In the event that the volume of softwood
lumber products exported to the United States first manufactured in an
Option A region in any month exceeds that region’s Trigger Volume:
-
if the volume of exports from the region exceeds the region’s
Trigger Volume by 1% or less in a month, the applicable Trigger Volume
for that region will be reduced during the following month by the
total volume of the overage (i.e., the amount by which actual exports
exceeded the Trigger Volume);
-
if the volume of exports from a region exceeds that region’s
Trigger Volume by more than 1% in a month, an additional export charge
equal to 50% of the applicable export charge rate (see Annex 1) for
that month will be applied retroactively to all exports to the United
States first manufactured in that region during that month.
5.3 For the month of October 2006, the Trigger Volumes for each region
will be adjusted by a factor of 64.52% of the volume that would have otherwise
been available to each region for the full month of October.
5.4 The Department will publish the monthly Trigger Volumes for each
of the regions on its web
site and update the shipment data on a daily basis, based on the export
permits issued the previous day.
6.0 Option B – Export Charge
With Export Allocation
6.1 Exporters of softwood lumber products to the United States that
are first manufactured in Option B regions will be required to obtain
export permits and to remit export charges at the Option A rates specified
in paragraph 1.3 during the transition period October 12, 2006 to December
31, 2006.
6.2 Although no export allocations will be made to exporters of softwood
lumber first manufactured in Option B regions, a Regional Quota Volume
will be established as specified in the legislation and published on the
department’s web
page.
6.3 Exporters of softwood lumber products first manufactured in an Option
B region that do not exceed the Regional Quota Volume for the month by
more than 12% will be entitled to a refund of a portion of the export
charge remitted to the Canada Revenue Agency (CRA). The refund will be
the difference between the amount remitted at the Option A export charge
rate, and what the exporter would have paid in export charge for that
month under Option B, as specified in paragraph 1.3. The refund of export
charges remitted will be made by CRA. Please consult CRA for procedures
for requesting a refund. Further information which may become available
will be placed on the business pages of the CRA
website. You may also contact the CRA Information Line at 1-866-330-3304.
6.4 During this transition period, Option B regions will be subject to
the carry-forward and carry-back provisions of the legislation, at a regional
level. A region will be permitted to carry-forward from the immediate
prior month up to 12% of the Regional Quota Volume for the current month.
6.5 As well, a region will be permitted to carry-back (borrow) from the
next month up to 12% of the Regional Quota Volume for the current month.
The amount of Regional Quota Volume borrowed from the next month will
be deducted from the Regional Quota Volume for the next month.
6.6 The carry-forwards and carry-backs will be limited to 12% of the
monthly Regional Quota Volume and will be applied on a regional basis
only. No carry-forward from a period prior to October 12, 2006 will be
permitted. No carry-back from a period following the Transition Period
(December 31, 2006) will be permitted.
6.7 If shipments of softwood lumber products to the United States first
manufactured in an Option B region exceed the Regional Quota Volume for
that region during a month, including the adjustment for the carry-forward
and carry-back provisions of the Agreement, exporters of softwood lumber
first manufactured in that region will be subject to the Option A export
charge rates for shipments made during that month. In addition, the Option
A surge provisions of the Agreement and the legislation will apply. See
Paragraph 5.2.
6.8 For the month of October 2006, the Trigger Volumes for each region
will be adjusted by a factor of 64.52% of the volume that would have otherwise
been available to each region for the full month of October. As well,
the carry-back allowance for a region selecting Option B, Export Charge
with Export Allocation will be limited to 12% of the adjusted October
Trigger Volume for each region.
6.9 The Department will publish the monthly Trigger Volumes for each
of the regions on its web
site and update the shipment data on a daily basis, based on the export
permits issued the previous day..
7.0 Lumber Manufactured by Excluded
Companies
7.1 Section 10.0 of Notice to Exporters Serial No.
143, is hereby repealed and replaced with the following:
7.2 Shipments of softwood lumber products manufactured by the excluded
companies listed in Annex 3 - Excluded Companies to Notice to Exporters
Serial No. 143 are exempt from the export measures of the Agreement, up
to an annual level to be established for each of the excluded companies
as specified in the Agreement.
7.3 All exporters of softwood lumber products manufactured by the excluded
companies will be required to register with Canada Revenue Agency and
to obtain an export permit from the Department of Foreign Affairs and
International Trade for every shipment of softwood lumber products to
the United States.
7.4 Shipments of softwood lumber manufactured by an excluded company
will continue to be eligible for exclusion from the export measures as
long as the company’s actual annual export volume does not exceed
its annual export limit, as determined by the Agreement. In the event
that annual shipments do exceed a company’s export limits, the export
limits in following years will be reduced. Continued annual shipments
in excess of an excluded company’s export limit could lead to the
possibility that the company will lose its exclusion from the export measures.
8.0 Coverage
8.1 Effective October 12, 2006, export permits for every shipment to
the United States will be required for covered goods that are described
in Annex 1 - Covered Products. For Canadian implementation purposes, exporters
will be required to provide the Canadian Customs Tariff (CCT) classification
of the goods (first column in Annex 1 –
Covered Products) in the application for export permits. See Annex
2 – Applying for an Export Permit.
9.0 Authority
9.1 Softwood lumber products will be included on the Export Control List
by the Governor in Council pursuant to the Export and Import Permits Act,
as amended. The Export Control List will be amended to include the products
identified in this Notice effective October 12, 2006. As well, Export
Permit Regulations (Softwood Lumber Agreement 2006) will be issued effective
October 12, 2006.
10.0 Compliance and Enforcement
10.1 The exportation of goods listed in Annex
1 – Covered Products and as included on the Export Control List
without an export permit issued by the Minister of International Trade
is an offence and may lead to prosecution under the Export and Import
Permits Act.
10.2 Exporters are required to keep records of individual shipments covered
by each permit. This information may be subject to verification and additional
information may be requested by the Export and Import Controls Bureau
(EICB).
11.0 Permit Fees
11.1 Export permit fees are payable pursuant to the Export and Import
Permits and Certificates Fees Order. A $9 fee will be levied for each
permit where the export permit is delivered by a person who is not employed
in the public service of Canada but who is authorized by the Minister
to make the delivery. However, brokers with on-line privileges may charge
more; brokers' fees may vary.
11.2 Where an exporter applies directly to the EICB for an export permit,
the permit fee is $14 payable with the application. Payment may be made
by cheque or bank money order, payable to the "Receiver General for
Canada"; by bank wire transfer as described below in paragraph 14.3;
or by "Visa" or "Master Card", by providing card number,
expiry date and name of card holder.
11.3 Payment of export permit fees may be made by cheque, bank money
order or bank wire transfer in the following ways. First, exporters may
send a cheque payable to the "Receiver General for Canada" to
the following address:
By Mail or Prepaid Courier:
Foreign Affairs and International Trade Canada
125 Sussex Drive,
Cashiers Office, Tower D-1 (SMFM)
Ottawa, Ontario
K1A 0G2
A second means for payment is available through wire transfers capability.
For this option, an exporter has to request from a bank that a wire transfer
payable to the "Receiver General for Canada" be sent to the
Department's Royal Bank branch at the following address:
Royal Bank of Canada
L.B. Pearson Bldg.
125 Sussex Dr.
Ottawa, Ontario
K1A 8V5
Transit # 1016
Branch # 003
ATT: DFAIT – Export and Import Finance Section (613-944-2496)
12.0 Further Information
12.1 For further information with respect to the Agreement, 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: http://www.softwoodlumber.gc.ca.
12.2 For further information with respect to the export controls on shipments
of softwood lumber to the United States, please contact:
Export and Import Controls Bureau
Foreign Affairs and International Trade Canada
125 Sussex Drive
Ottawa, Ontario K1A 0G2
Hot Line 613-944-2168 or 1-877-808-8838
Facsimile 613-995-5137
E-mail address: softwood.boisdoeuvre@international.gc.ca
Web Page: http://www.softwoodlumber.gc.ca.
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