Appeals from the Forest Act - 2009
2009-FA-005(a), 006(a)
Canadian Forest Products Ltd. v. Government of British Columbia
Decision Date:
December 14, 2009
Panel:
James S. Hackett
Keywords:
Forest Act - s. 105(1); Interior
Appraisal Manual – ss. 2.1(6), 6.3(2)(a), 6.3(4);
stumpage rate; reappraisal; billing history record
Canadian Forest Products Ltd.
(“Canfor”) appealed the stumpage rate determinations set
out in two stumpage advisory notices issued by the
Timber Pricing Coordinator, Ministry of Forests and
Range (the “Ministry”). The stumpage rates pertained to
timber harvested under two road permits associated with
two licences held by Canfor.
The Interior Appraisal
Manual (“IAM”) states that stumpage rates for road
permits are calculated using the previous twelve-month
average stumpage rate for sawlogs for all cutting
authorities issued under a given licence. This
twelve-month period is known as the “billing history
record”. Before the appealed determinations were
issued, Canfor had submitted reappraisal information for
three cutting permits issued under the two licences, and
the reappraisal information had been accepted by the
Ministry, which resulted in reduced stumpage rates for
the three cutting permits. Canfor had expected that the
reduced stumpage rates would be included in the billing
history records for the two licences and would,
therefore, be included in calculating the stumpage rates
for the road permits. However, due to a delay in
processing the reappraisal information, only one of the
three reduced rates was incorporated into the billing
history records in time to be used to determine the
stumpage rates for the road permits. Each party blamed
the other for the delay.
In the appeal, Canfor
argued that the IAM required the reappraisal information
for the three cutting permits to be incorporated in the
billing history records for the licences, and to be used
in calculating the stumpage rates for the road permits.
Canfor requested that the stumpage rates be
re-calculated by including the reappraisal information
for all three cutting permits in the billing history
records.
The Commission found
that the Timber Pricing Coordinator properly applied the
relevant provisions of the IAM. The Commission found
that, in this case, the twelve-month period of the
billing history records ended on March 31, 2009, and new
stumpage invoices for two of the three reappraised
cutting permits were not issued before that date. The
Commission held that the old stumpage invoices had to be
cancelled and replaced with new invoices before the
reappraisal information could be included in the billing
history records. The Commission also found that there
was no Ministry policy that set a time period by which
the Ministry must update billing history records with
new information. However, based on the facts, the
Commission found that all of the reappraisal information
could have been into the billing history records by
March 31, 2009, and that reasonable parties should have
agreed on the accuracy of the reappraisal information
well before the deadline.
Accordingly, the
Commission confirmed the stumpage determinations.
The appeals were
dismissed.
2009-FA-008(a), 009(a), 010(a), 011(a), 012(a)
Juggernaut Development Inc. v. Government of British Columbia
Decision Date:
December 3, 2009
Panel:
David Ormerod
Keywords:
Forest Act - ss. 47.6(2), 105(1),
149(2); Interior Appraisal Manual – ss. 6.2(1); stumpage
rate; forestry licence to cut; occupant licence to cut;
silviculture levy; jurisdiction
Juggernaut Development
Inc. (the “Appellant”) appealed the determinations of
stumpage rates set out in five stumpage advisory notices
issued by the Regional Appraisal Coordinator, Southern
Interior Forest Region, Ministry of Forests and Range.
The stumpage rates pertained to timber harvested under
five occupant licences to cut (“OLCs”) that were issued
to the Appellant.
The Appellant was issued
a number of licences to harvest Crown timber as part of
a “daylighting” project that involved clearing 20
kilometres of highway right-of-way. The project was
initiated by the Ministry of Transportation and
Highways, in cooperation with the Ministry of Forests
and Range, to improve highway safety. The parties
understood that the project would be financially
marginal for the Appellant due to log market
conditions. The Appellant asserted that the Ministry of
Transportation and Highways had promised to help with
the project costs by paying for traffic control, and the
Ministry of Forests and Range had promised to help by
keeping stumpage rates on the harvested timber as low as
possible. Once the project proceeded, the first three
timber harvesting licences issued to the Appellant were
forestry licences to cut (“FLCs”), and the next five
were OLCs. The stumpage rates set by the Interior
Appraisal Manual (“IAM”) for damaged timber, which apply
to FLCs, are lower than those set by the IAM for OLCs.
In addition, a silviculture levy applies to OLCs,
whereas FLCs are not subject to a silviculture levy.
The Appellant appealed on
the grounds that there was inconsistency in the types of
harvesting licences issued to it, and in the application
of the IAM. The Appellant claimed that the unexpected
costs it incurred during the project forced it to the
brink of financial ruin.
The Commission found
that the switch from
FLCs to OLCs had a significant impact on
the stumpage costs and silviculture levy costs to be
paid by the Appellant. The Commission also found that
there was no clear explanation why the Ministry of
Forest and Range switched to OLCs after it had already
issued three FLCs, and that there was inconsistency in
the issuance of the licences. However, the Commission
held that it had no jurisdiction in these appeals of
stumpage determinations to grant a remedy for this
inconsistency.
The
Commission
concluded that the stumpage rates were correctly
determined in accordance with the applicable provisions
of the IAM. Accordingly,
the Commission confirmed the stumpage determinations.
The appeals were
dismissed.
1996-FAB-001(a)
& 1996-FAB-001(b) Sonny Lulua v. Government of British Columbia
Decision Date:
April 30, 2009 (Decision No.
1996-FAB-001(a))
September 15, 2009
(Decision No. 1996-FAB-001(b))
Panel:
Rob Kyle, Carol Roberts, Shelley Nitikman
Keywords:
Consent order; unauthorized timber harvesting;
aboriginal rights; costs
Sonny
Lulua appealed a decision issued in January 1996 by the
Deputy Chief Forester, Ministry of Forests, finding that
Mr. Lulua had cut and removed trees from Crown land
without authority, in contravention of section 138 of
the former Forest Act, R.S.B.C. 1979. Mr. Lulua
appealed to the former Forest Appeal Board. The timber
harvesting occurred in 1994 and involved 30.6 cubic
metres of timber.
Mr.
Lulua is a member of the Xeni Gwet’in First Nation. In
his submissions to the Deputy Chief Forester, Mr. Lulua
claimed an aboriginal right to cut timber on Crown land
if the timber is used to construct housing for
aboriginal people. The Deputy Chief Forester found
insufficient evidence to support Mr. Lulua’s claim of an
aboriginal right to cut the timber. Mr. Lulua appealed
to Forest Appeal Board (the “Board”), and continued to
claim an aboriginal right to harvest the timber for the
purposes of housing.
The
Board commenced a hearing of the appeal in May 1996. At
the start of the hearing, Mr. Lulua requested an
adjournment of the appeal on the basis that he intended
to proceed to the B.C. Supreme Court for a declaration
that sections of the Forest Act were
unconstitutional to the extent that they infringed a
constitutionally protected aboriginal right to harvest
timber for housing, as well as a declaration as to the
existence, nature and extent of that aboriginal right.
The Board granted the adjournment pending the outcome of
the court proceedings.
Over
the next few years, the Board granted several further
adjournments pending the outcome of other litigation
involving aboriginal rights. Once that litigation
concluded, the parties sought a further adjournment for
the purpose of attempting to negotiate a settlement of
the appeal.
Before
the Board heard the merits of the appeal, the parties
negotiated a settlement. By consent of the parties, the
Board ordered that the Deputy Chief Forester’s decision
be reversed, and that the Deputy Chief Forester shall
pay Mr. Lulua’s costs of the appeal (Decision
No. 1996-FAB-001(a)).
Subsequently, by consent of the parties, the Board
confirmed that the parties had agreed upon a quantum of
costs, and the Deputy Chief Forester had paid costs of
$38,428.64 to Mr. Lulua (Decision
No. 1996-FAB-001(b)).
Accordingly, the appeal was allowed, and Mr. Lulua’s
application for costs was granted.
2008-FA-029(a) 606546 BC Ltd. v. Government of British Columbia
Decision Date:
May 14, 2009
Panel:
David Ormerod
Keywords:
Forest Act - s. 105(1); Coast
Appraisal Manual – ss. 5.1.2, 5.3.1.1(5); stumpage rate;
development cost estimate; re-usable portable bridge
606546 BC Ltd. (the
“Appellant”) appealed a stumpage determination issued by
the Regional Appraisal Coordinator, Coast Forest Region,
Ministry of Forests and Range (the “Ministry”). The
determination applied to timber harvested under cutting
permit (“CP”) 49 issued under forest licence A19202 held
by the Appellant. The Appellant argued that the
Regional Appraisal Coordinator erred by failing to
include the purchase costs of two portable bridges in
determining the stumpage rate for CP 49.
The Appellant owns shares
in Tamihi Logging Ltd. (“Tamihi”). In January 2008,
Tamihi purchased four portable bridges from Cattermole
Timber. In April 2008, the Appellant acquired forest
licence A19202 from Cattermole Timber. When the
Appellant applied for CP 49, it submitted construction
cost estimate forms which included the purchase costs of
two portable bridges, as well as the costs associated
with moving and installing the bridges in order to
harvest timber under CP 49. However, in determining the
stumpage rates for CP 49, the Regional Appraisal
Coordinator only allowed the costs of moving and
installing the bridges.
In the appeal, the
Appellant argued that the language in the
Coast Appraisal Manual
(“CAM”) supported including the bridge purchase costs in
determining the stumpage rate for CP 49.
The
Government argued that the bridge purchase costs could
not be included in determining the stumpage rate because
the corporation holding the forest licence is not the
same corporation that purchased the bridges, and the
costs of the bridges were already included in previous
stumpage appraisals related to the
forest licence.
The
Commission reviewed the language in sections 5.1.2 and
5.3.1.1(5)(c) and (d) of the CAM. Based on the language
in the CAM and the evidence provided by the parties, the
Commission found that the bridge purchase costs could be
included in determining the stumpage rate if the holder
of forest licence A19202,
i.e. the Appellant, had purchased the bridges, or there
was sufficient evidence that the licensee would incur a
cost of that kind in harvesting CP 49. The Commission
found that the bridges were not purchased by the
Appellant; rather, they were purchased by Tamihi, which
is a separate corporation and is not the holder of
forest licence A19202. In
addition, there was insufficient evidence that the
Appellant had purchased or had agreed to purchase the
bridges from Tamihi. Furthermore, the Commission found
that, if the capital costs of the bridges had already
been accounted for in prior appraisals for forest
licence A19202, their costs to the licensee has been
accounted for in reduced stumpage rates for timber
harvested under the licence.
Accordingly, the
Commission confirmed the stumpage determination under
appeal.
The appeal was dismissed.
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