All right, I'll try my best.
I'd like to thank the committee for getting our opinion on trade with Japan. I'm here representing two groups, one is Brian Moore Log Homes, of which I'm a part owner. It's a father and son business. We have 15 employees. Three of them are Japanese and they've been able to assist us in our export to contractors in Japan.
I also happen to be the president of the BC Log and Timber Building Industry Association. Our industry in British Columbia has about 120 producers of log and timber frame homes. We are one of them, and many of our members are exporting products to Japan. It's been a very active market for us for about the last 20 years.
In Japan approximately 2,500 log homes are built every year. British Columbia claims a significant share of that, so we see it as a very important market for us. It provides good economic diversification. I know many companies that export to Japan, and considering what has happened in the U.S. recently, it has been nice to have other sources of revenue. We also think there's an increased opportunity to rebuild housing, unfortunately due to the tsunami.
There are a couple of technical barriers to trade that I want to make you guys aware of.
Currently our clients are paying a 3% to 6% tariff on our products. They can avoid the tax if they bundle it into a kit home, which would include doors and windows and roofing materials. Most of the time our clients are not able to do that. They're contractors, so they're packaging materials in Japan as part of their value to their customers.
Right now we're being penalized. I think it's somewhat unfair, because we're providing a high-value product to our customers. There are some substitutes in Japan. They make log homes out of cedar called hinoki there, but it's a very small log. It also doesn't have the same insulating values. We're offering a premium product. I don't see it being a huge competitor to us.
Something else I'm concerned about in the Japanese market is that we end up with some of the regulations that the European Union has right now. I like the status quo that we have for the declaration process in Japan. If Japan were to follow the European road, we would have issues. Something we have to do in Europe is phyto certification; we have to have the Canadian Food Inspection Agency look at every product we export.
Another regulation that will be coming on line in the EU is the European Union timber regulation. It will come into effect in July 2013. They're going to be asking Canadian exporters to declare that we're using legally harvested trees. That's definitely the case in British Columbia. That's definitely the case in Canada. Although it's just another regulation, it's another impediment to trade, and we would like to avoid that happening in Japan.
The last thing is I want to make sure we don't see any more permit regulations in Japan. Their building code is very favourable to us right now. They've adopted stick-frame construction techniques. There's no reason that we are not able to comply; however, in Europe, the CE markings they require are an impediment to trade for kit home manufacturers. Kit home manufacturers are not log home manufacturers. However, we're very concerned that our industry could be targeted next.
In summary, as part of any trade negotiation with Japan, we would certainly like to see a reduction in the tariffs to zero. The other point is that we really like the regulatory status quo right now, as far as the paperwork required and any kind of manufacturing standards they require are concerned.