Liens have been placed on San Group’s Port Alberni sawmill lands as security for nearly $22 million owed to the province in stumpage payments.
It is the company’s intention to pay off the money owing as soon as possible, hopefully by early 2025, Kevin Somerville, San Group vice president of operations, said from Port Alberni on Thursday. “This is tax owed by the company for the harvesting that we did. We appreciate the support and patience they [the province] have had with us. We will work our best to get it paid off as quickly as we can.”
Details of the payment plan with the province are confidential, he said.
Money owed is for stumpage payments related to timber sale licences on Vancouver Island and the central coast, Somerville said.
Stumpage is a fee imposed for firms harvesting timber from Crown land. Export fees may apply when this timber, or wood residue produced from the timber, is exported out of the province, the province said.
The amount of stumpage paid is based on timber volumes, species and grades and the stumpage rates for its timber.
Liens for eight San Group properties were registered on land titles when the matter came up at the Supreme Court of B.C. in Victoria last month and in spring of this year.
The properties are owned by Coulson Manufacturing 2017 Ltd. part of the Langley based San Group’s holdings, which includes a major value-added manufacturing plant in Port Alberni.
Last month, the deputy district registrar in Victoria for B.C. Supreme Court endorsed a document stating the province is owed $14.608 million by Coulson Manufacturing.
Another $7.48 million is owed to the province, according to a March court document. In that instance, money due represented $7.35 million for the principle amount owed plus $131,347 in interest.
The total owed is almost $22 million.
Somerville said the payment plan involves an agreed-upon process and amount. The parties meet regularly to ensure everything is on track and in case any adjustments need to be made, he said.
“We routinely engage with the ministry to adjust if we need to. Our hope right now it that we can accelerate things.”
Similar to other forestry companies, San Group is facing a wood fibre supply challenge. The company is planning to continue business as usual while paying its debt to the province.
“The only curtailment we’ve had is over the lack of fibre supply,” Somerville said.
Other issues for the company include allegations of substandard accommodation in Port Alberni for temporary foreign workers this year, a matter San Group is challenging in court. These are false allegations and impacted the company in its efforts to buy raw materials and sell products internationally, a spokesman said earlier.
The debt is “another added challenge within the industry,” Somerville said.
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