BC action supports forest sector

June 12, 2020

By: The Working Forest Staff

BC Government News — The B.C. government is taking additional action to help support people, communities and forest companies dealing with challenges from the COVID-19 crisis. Changes to the Manufactured Forest Products Regulation (MFPR) and the Coast-wide implementation of the variable fee-in-lieu of manufacture on log exports that were scheduled to come into force on July 1,2020 are now postponed until Sept. 30, 2020, and December 2020 respectively.

The government remains committed to exploring opportunities to resolve long-standing fibre supply issues for smaller forest product manufacturing firms. Over the coming months, government will continue to engage with industry and stakeholders to address this issue.

Globally, the forest industry has been hit particularly hard by the challenges associated with the ongoing COVID-19 crisis and the resulting market impacts. Delaying the MFPR and fee-in-lieu provides B.C. forest companies with more time to prepare for and adjust their business models to the upcoming regulatory changes.

The MFPR, introduced in 2003, defines the criteria that products must meet to be considered manufactured under the Forest Act. Under the current regulation, logs that are squared off up to a maximum dimension of 43 by 43 centimetres (17 by 17 inches) are categorized as a sawn-wood product and may be exported without further manufacture.

As of Sept. 30, 2020, the amended regulation will change the maximum dimension of lumber to be considered a sawn-wood product to 30.5 by 30.5 centimetres (12 by 12 inches), requiring further domestic processing of lumber prior to being eligible for export. Additionally, the regulation amendments will require that in the Coast area, lumber that is made from Western red cedar or cypress must be fully manufactured to be eligible for export, or the seller or exporter must obtain an exemption from the manufacturing requirement and pay a new fee-in-lieu of manufacture to the Province.

The new Coast-wide variable fee-in-lieu of manufacture will come into force in December 2020. It will replace the existing fee-in-lieu structure for the Coast and will expand the practice that has been in place for BC Timber Sales advertised in the Coast area since July 7, 2019. The new variable rate fee will be dependent on the economics of the individual stands for harvest, set for the term of the cutting permit to provide cost certainty to forest licence holders.

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