BC, Alberta and New Brunswick, have different methodologies of setting stumpage rates for provincial sawlogs that can disproportionately impact sawmill operators.

When it comes to trying to analyze how public timber stumpage prices are set by some provinces in Canada for companies holding forest licences, this can be a real puzzle. Three provinces, British Columbia, Alberta and New Brunswick, have different methodologies of calculating and setting stumpage rates for provincial sawlogs that can disproportionately impact sawmill operators, as summarized below. New Brunswick has held its rates at the same level as was set six years ago. …Consequently, the provincial government may have foregone millions of dollars in public timber revenues in the last four quarters. …Alberta has taken the other extreme where timber stumpage prices are tied in a formula to monthly lumber prices for the previous four weeks. …In contrast to New Brunswick, Alberta appears to have captured its fair share on the value of its crown timber. In the middle is British Columbia with a third approach, and one that has turned out to be messy at times for forest operators when lumber prices are volatile.

Pricing timber on public forests does not have to be complicated for forest operators and sawmills, as Alberta and New Brunswick demonstrate. Why these three provincial stumpage systems are so widely different – and why BC’s timber formula lags the reality of lumber market prices – is a real puzzle. How then are the Americans supposed to assess these different provincial stumpage formulas as all being equitable, especially when the negotiations on the next US-Canada softwood lumber agreement take place?