B.C. Officials Defer Stumpage Fees For Several Months To Aid The Forest Industry During COVID-19 Pandemic
VICTORIA — The British Columbia government is deferring a timber harvesting fee charged to forest companies in an effort to help the struggling industry survive during the COVID-19 pandemic.
Forests Minister Doug Donaldson said Thursday the government will not collect stumpage fees for the next three months.
He said 45 sawmills are closed indefinitely or shut down permanently, affecting 7,000 workers. The timber export market is in steep decline, especially in the United States where housing starts have slowed and timber prices have dropped, said Donaldson.
If export markets rebound, he said many of the curtailed mills can start up operations. Donaldson said the stumpage fee deferral can help companies endure until markets improve.
Stumpage fees are paid by forest operators to the province to harvest, buy or sell trees from Crown land.
Donaldson said eligible companies will have an estimated $80 million in the short-term to help pay employees, contractors and to cover their bills.
“In conversations with the sector, a stumpage deferral was a primary request to support the industry and provide relief,” he added.
A forest industry spokeswoman said the measure helps hard-hit companies in the short-term but what the industry needs is lower costs and for the market to turn around.
“Anything that can contribute to helping us with some liquidity to get through this period of time is helpful,” said Susan Yurkovich, president and chief executive officer of the Council of Forest Industries. “We’ve just got more to do if we’re going to be able to get B.C. back up and being able to compete.”
She said the forest industry must be prepared to compete in global markets after the pandemic.
“We want to be able to provide that wide range of products that the world wants,” Yurkovich said. “We have to do it in a way we can compete with other jurisdictions who want to take advantage of those same opportunities.”
Donaldson said the deferral may help some companies get back to work sooner and could save other firms from shutting down completely.
He said he was confident the initiative would withstand possible challenges from the U.S. lumber lobby under the Canada-U.S. softwood agreement. Donaldson said the deferral is not a subsidy because it must be repaid, with interest.
This report by The Canadian Press was first published on April 30, 2020.