1.1 The purpose of this Notice is to provide to companies that exported less than ten million board feet during the 1997-1998 allocation year the opportunity of opting out of the growth mechanism for the remainder of the Agreement, effective April 1, 1998.
1.2 This Notice cancels and replaces paragraph 11.6 of Notice to Exporters no. 94, dated October 31, 1996 with respect to opting out of the growth mechanism. All other provisions outlined in this paragraph remain in effect.
In the first year of the Agreement, companies that exported less than ten million board feet in 1995 were entitled to opt out of the growth mechanism. By opting out of the growth mechanism, companies relinquish their Lower Fee Base (LFB) export level allocation in return for having their Established Base (EB) allocation safeguarded for the duration of the Agreement, subject to the applicable under-utilization penalties.
3.1 Based on the advice received from the National Advisory Committee, for the 1998-1999 allocation year, the Department will provide companies that presently have an export level allocation and have exported less than ten (10) million board feet of softwood lumber to the United States in 1997-1998 with a second opportunity to opt out of the growth mechanism.
3.2 In return, the Department will withdraw the company's LFB allocation and safeguard the company's 1997-1998 export level EB allocation for the duration of the Agreement, i.e., for 1998-1999 and for future years. The company will, however, remain subject to the applicable under-utilization penalties.
3.3 Subject to the under-utilization policy outlined in paragraph 11.7 on Notice to Exporters no. 94, dated October 31, 1996, a company that does not use its full allocation may have it reduced in the following allocation year by the amount of its under-utilization, in percentage terms. However, it is not the Government's intent to force companies to export exactly 100 % oftheir allocation. Accordingly, a two per cent (2 %) margin is provided, so that companies using 98 % or more of their export level will be considered to have achieved full utilization.
3.4 Deciding to opt out of the growth mechanism still allows a company to return, without being subject to under-utilization penalties, up to ten per cent (10 %) of its EB allocation by December 31 of any calendar year.
3.5 Moreover, opting out of the growth mechanism will not affect companies' eligibility to receive EB bonus allocation and returned EB export level allocation. Distribution of these allocations remain subject to Ministerial discretion.
3.6 Companies wishing to take advantage of this opportunity and opt out of the growth mechanism have until April 15, 1998 to inform the Department. In notifying the Department, the exporter is requested to provide the following information:
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the exporter's name and EICB number;
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the location of the mill.
3.7 The Department will provide a written confirmation to companies that have notified their intention to opt out of the growth mechanism.
