June 2011

Background

In 2007, the United States (U.S.) requested arbitration from the London Court of International Arbitration (LCIA) with respect to Canada's application of the adjustment factor under the Softwood Lumber Agreement, 2006 (the Agreement). The adjustment factor is used to calculate export quotas for Option B regions (Quebec, Ontario, Manitoba and Saskatchewan) that have chosen to operate under a volume restraint.

In February 2009, the LCIA ruled that Canada did not properly apply the adjustment factor during the first six months of 2007. To remedy this breach of the Agreement, Canada was ordered to impose an additional 10% export charge on softwood lumber products originating from Option B regions until a total of C$68.26 million (remedy amount) was collected.

Refund of overpayment of the 10% additional export charges

The Canada Revenue Agency (CRA) has determined that the full remedy amount of C$68.26 million has been satisfied. The Government of Canada will terminate the 10% additional export charge on exports from Option B regions, effective July 1, 2011.

The CRA will determine the amount of any overpayment of the 10% additional export charge and provide refunds to exporters based on their pro-rata share of the overpayment for the month in which the overpayment occurred. Note that exporters will not be required to file refund applications.

Enquiries