Softwood lumber tax for western sawmills could drop on May 1st

On May 1st, it is likely that the softwood lumber tax for western Canadian sawmills will drop from 15% to 10%.

The tax rate is determined using a formula based on the weekly price of lumber. The lower the price, the higher the tax, which is meant to squeeze Canadian lumber out of the U.S. market when prices are low.

If the average lumber price over a 4 week period is over a specific threshold (in this case $315 US a thousand board feet), 21 days before the end of the month (in this case April 9), then the export tax drops from 15% to 10%.

The next threshold is $335 US, where the tax would drop to 5%. If prices rise above $355 US, there is no tax.

This could be the first tax break for lumber producers since the Softwood Lumber Agreement came into effect in 2006.

Source:

Softwood lumber tax to drop, perhaps as early as May 1 - Vancouver Sun