NB forest sector avoids extra duties

July 5, 2019

By: The Working Forest Staff

CBC News — New Brunswick forest companies will not be hit with extra duties from the United States because of low property taxes charged on privately owned timberland in the province.

In a decision released last week, the U.S. Department of Commerce ruled New Brunswick assesses forest properties for taxes too low at $100 per hectare but not low enough to trigger extra duties on forest products.  

In a report by CBC News, Mike Legere of Forest NB, an association of provincial forest companies, welcomed the news.

“It’s another allegation we’ve been able to refute the same as we’re going to continue to try and refute the other allegations of subsidy in New Brunswick,” said Legere.

New Brunswick has assessed and taxed private timberland to be worth $100 per hectare since 1994, well below what the properties routinely sell for on the open market.  

A collection of U.S. lumber companies has been arguing the tax treatment is a clear government benefit to private owners of timberland and wanted duties assessed on forest products entering the United States from New Brunswick because of it.

New Brunswick has assessed and taxed private timberland to be worth $100 per hectare since 1994. (CBC)

The case being considered in Washington was narrowly focused on North American Forest Products (NAFP) of Saint-Quentin, but it was feared an adverse ruling in the case would quickly engulf all New Brunswick forest companies and private owners of timberland.  

In its decision, the Commerce Department agreed New Brunswick forest properties are worth several hundred dollars per hectare more than they are assessed and taxed for but accepted an argument from the province and NAFP that most of that value is in the trees.

New Brunswick does not count the value of crops when it assesses farmland and argued the same principle should apply to the forests, a position the Commerce Department eventually adopted. 

“We agree with the GNB’s [Government of New Brunswick] and NAFP’s argument,” the decision explained. “We have calculated an average value of timberland property in New Brunswick exclusive of the value of standing timber.” 

See more HERE.

Your comments.

Your #1 source for forestry and forest industry news.

Built by Sofa Communications