Crown Timber Charges

Forest companies in Ontario pay Crown charges for every cubic metre of timber they harvest.  

The pricing system used by the Ministry of Natural Resources (MNR) to calculate stumpage charges is designed to trigger higher prices in times of strong markets for forest products, while in poor markets timber harvesters pay lower, or minimum rates.

Crown charges are composed of:

A) Stumpage Charge (Crown Forest Sustainability Act Section 31(1))

The stumpage charge is made up of two components:  

1. Minimum Price Component
   
   A minimum price component per cubic metre of harvested timber, determined by species, goes to the Consolidated Revenue Fund (general revenue) of the Province of Ontario.
   
   This price is adjusted annually. The minimum price component ensures a secure level of revenue to the provincial treasury regardless of market conditions. The minimum price component is set by species and product sector by the Minister on April 1 of each year.
    
2. Residual Price Component
   
   A residual value price component is collected, which is paid to the province’s Consolidated Revenue Fund. This price component is adjusted monthly, and ranges from zero in times of low forest product prices, to about $25 per cubic metre when product prices are high, depending on species and product sector.
   
   The residual value (RV) price component is assessed when the price of the forest product produced from the timber reaches a certain “threshold” level. The RV price component increases or decreases according to the market prices of forest products. The RV price component depends on the price of the end product produced (such as lumber, panels, paper and pulp), and estimated costs associated with the production of that end product. RV price components are calculated based on the type of mill that receives the timber.
   
   The RV price component ensures that the Crown, as the owner of the timber resource, shares in the financial rewards of strong end-product markets. For example, when the estimated price that softwood lumber mills receive for their products exceeds a threshold level, an RV price component is assessed on softwood timber to sawmills. As market prices rise for softwood lumber, the RV price component will increase in tandem each month. Conversely, as market prices fall, the RV price component will decrease each month, reaching zero when the original threshold level is reached. 

Calculating Stumpage Charges:

Stumpage charges (minimum and residual) are calculated by using the Ontario Crown Timber Charges (Stumpage) monthly tables.

Stumpage charges are payable to the Consolidated Revenue Fund (general revenue) of the Province of Ontario. 

* View current rates for: Stumpage charge

B) Forestry Futures Trust Charge (Crown Forest Sustainability Act 51(5)):

The Forestry Futures Trust charge is collected for silvicultural work on forest areas affected by natural disturbances such as flood, fire, insect, disease, blow down, insolvency situations where silviculture work and expenses are required, intensive stand management or pest control and other purposes specified by the Minister, is also applied; this charge is currently $0.48 per cubic metre of timber harvested.

The Forestry Futures Trust charge is made up of three components: 

1. Forestry Futures Trust Component
   
   The forestry futures trust component generates revenue to fund forest renewal and protection for situations and purposes not covered by the forest renewal charge. The Forestry Futures Trust may be used for projects that meet approved criteria. The forestry futures trust is overseen by the Forestry Futures Trust Committee, an independent committee appointed by the Minister of Natural Resources. To qualify, projects must identify:
   
   • silviculture expenses in Crown forests where forest resources have been killed or damaged by fire or natural causes;
   • silviculture expenses on land that is subject to a forest resource licence, if the licensee becomes insolvent;
   • forest protection costs from insect or disease infestation;
   • intensive stand management costs related to a critical wood supply;
   • costs for other purposes as specified by the Minister (e.g. Independent Forest Audits).
   The forestry futures trust charge is set by the Minister on April 1 of each year. The forestry futures trust charge is the same for all management units and all tree species groups. It is assessed uniformly per cubic metre of timber sold.
    
2. Forest Resource Inventory Component
   
   The forest resource inventory component generates revenue to fund the province’s forest resource inventory program, which includes: photography; interpretation; calculation of inventory figures by stand type; and, planning and scheduling of inventory activities.
   
   The forest resource inventory component is the same for all management units but can vary by tree species groups and category/grade on harvested fibre. When the forest resource inventory component is being collected, the minimum price is reduced by an amount equal to the forest resource inventory component of the stumpage price.
    
3. Forest Management Component
   
   The forest management component generates revenue to fund forest management operating costs for an MNR District when a Sustainable Forest Licence is surrendered to the Crown. The forest management component is set annually and the rate varies by specific Crown forest management unit. Rates can be changed during the year; however, new rates start at the beginning of the following month, and there is no retroactivity on the rates charged. 

Calculating Forestry Futures Trust Charges:

The Forestry Futures Trust charges are calculated by using the Ontario Crown Timber Charges (Stumpage) monthly tables.

Forestry Futures Trust charges are payable to the Forestry Futures Trust.
   

C) Forest Renewal Trust Charge (Crown Forest Sustainability Act Section 49(1)): 

The Forest Renewal Trust charge provides dedicated funding for forest renewal. This charge varies depending upon anticipated renewal costs, which are determined annually by tree species group for each management unit in the province. Forest renewal charges are held in either a Forest Renewal Trust or a Forest Renewal Special Purpose Account, and can only be used for regenerating and maintaining the health of Ontario’s forests. 

The forest renewal charge provides the funds necessary to cover the cost of renewing the harvested area. This charge is determined based on the projected amount of annual harvest, the projected costs of renewing the areas harvested, and the required amount of money that must be in the Forest Renewal Trust to cover the annual renewal costs on a specified management unit. The forest renewal charge is an amount charged per cubic metre of timber, and is set annually.

Forest renewal charges vary across management units and by species group, to reflect the difference in renewal cost that results from the unique landscape, climate and forest attributes of different units. These amounts can be used only for silviculture expenses. In addition, the renewal revenue generated for each individual management unit can only be used on that same management unit.
 

Calculating Forest Renewal Trust Charges:

Forest renewal charges are calculated by using the Ontario Crown Timber Renewal Rates annual table.

Forest renewal charges are payable to the Forests Renewal Trusts to be held in either a Forest Renewal Trust or a Forest Renewal Special Purpose Account.

* View current rates for: Forestry Futures Trust charge | Forest Renewal Trust charge

The licensee or agent for the Crown is responsible for paying Crown charges (stumpage) amounts owing. The Crown charges are grouped on two invoices.

1. A stumpage invoice is generated for all charges payable to the Consolidated Revenue Fund.
2. A renewal invoice is created for all charges payable to the Forest Renewal Trust and Forestry Futures Trust.

The Crown charge on the invoice is calculated by adding each applicable price or charge component together to form the Crown charge per unit of cubic metre of wood. The Crown charge is then applied to the cubic metres to calculate the total Crown stumpage amount owing.

A Personal Use Fuelwood Licence is required when a customer wants to use wood for the purpose of generating heat for their own personal use. Example: Furnace, Woodstove, Camp Fire, Etc. There is only one stumpage rate for personal use fuelwood for all species.

A Personal Use Building Products Licence is required when a customer wants to use sawn wood for the purpose of building a structure for their own personal use. Example: Dock, Sauna, Log Cabin, Bridge, Deck, etc.

View current charges for personal use licences.

Stumpage is the price charged by a land owner to companies or operators for the right to harvest timber on that land. It is charged by cubic metres.

• Crown Forest Sustainability Act (CFSA)