GreenFirst Announces Lumber Duty Deposit Rate Reduction

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Toronto, ON – July 31, 2023 – GreenFirst Forest Products Inc. (TSX: GFP) is pleased to announce the reduction in its softwood lumber duty deposit rate from 20.23% to 7.99%, which is expected to take effect on or about August 2, 2023.   

This official change by the United States Department of Commerce (“US DOC”) results from the Final Determination of the Fourth Administrative Review of softwood lumber imports from Canada to the United States for the year 2021.

Since August 28, 2021, upon the acquisition by GreenFirst of the Rayonier sawmills, the US DOC assessed GreenFirst’s duty deposit rate on softwood lumber imports to the United States at a significantly higher rate than its Canadian peers. The net effect of the US DOC’s decision has resulted in a reduction in GreenFirst’s earnings and a corresponding overpayment of softwood lumber duties in relation to other Canadian exporters. We believe the amount of the overpayment up to the end of June is approximately US$21 million; however, at this time we are not certain when this reimbursement may occur. Beyond this overpayment, GreenFirst has an additional US$51 million of duties on deposit pending a broader industry settlement.

The impact of this reduction in duties, both with respect to the potential release of funds on deposit and on GreenFirst’s future earnings, will be discussed in greater detail on GreenFirst’s forthcoming second quarter earnings call.

“Today’s announcement is welcome news for GreenFirst, as the reduced softwood lumber duty rate will significantly improve our earnings and cash flow profile,” said Paul Rivett, Chair of the Board. “We will continue to advocate for our shareholders to see a timely return of the duties overpayment and for a settlement of all remaining duty deposits.”

About GreenFirst

GreenFirst Forest Products is a forest-first business, focused on sustainable forest management and lumber production. The Company owns four sawmills located in rich wood baskets proudly operating over 6.1 million hectares of FSC® certified public Ontario forestlands (FSC® C167905). The Company believes that responsible forest practices, coupled with the long-term green advantage of lumber, provide GreenFirst with significant cyclical and secular advantages in building products.

Source: GreenFirst Forest Products