Decision Date: May 10, 2018

Court: B.C.S.C., Justice Silverman

Citation: 2018 BCSC 771

The Minister of Forests, Lands and Natural Resource Operations (the “Minister”) filed an appeal with the BC Supreme Court, against a decision issued by the Forest Appeal Commission (the “Commission”). The Commission’s decision involved the denial of an application for summary dismissal of eight appeals filed by Canadian Forest Products Ltd. (“Canfor”) against stumpage re-determinations issued by the Ministry of Forests, Lands and Natural Resource Operations (the “Ministry”).

In 2017, Canfor appealed eight stumpage rate re-determinations issued by a Ministry employee. The stumpage rates applied to timber harvested by Canfor under cutting permits (“CPs”) issued under a forest licence. Stumpage is a fee paid to the government for harvesting Crown timber. In determining stumpage rates for timber harvested in the Interior Region, the Ministry must apply the policies and procedures set out in the Interior Appraisal Manual (“IAM”). The original stumpage rates, which were determined in 2012 and 2013, were lower than the re-determined rates.

The re-determinations were issued after a delegate of the Minister directed the original stumpage rates to be re-determined under section 105.2 of the Forest Act. The Minister received submissions from Canfor before issuing the direction, and the Minister issued reasons for his direction. The Minister directed the Ministry employee to re-determine the stumpage rates by taking into account water transportation (lake tow) of the harvested logs for part of the distance from the CP areas (i.e., from a log dump on Williston Lake) to the point of appraisal, rather than based on truck haul for the entire distance. Lake tow is a lower cost transportation method than truck haul, and therefore, lake tow produced a higher stumpage rate.

The direction to conduct the re-determinations was preceded by a 2015 decision of the Commission regarding several other stumpage appeals by Canfor involving the issue of water transportation from the same log dump on Williston Lake (Canadian Forest Products Ltd. v. Government of British Columbia, Decision Nos. 2014-FA-001(a) to 009(a)). The Commission’s decision was confirmed on appeal to the BC Supreme Court in November 2016 (Canadian Forest Products Ltd. v. British Columbia, 2016 BCSC 2202).

The Government applied to the Commission for an order summarily dismissing the stumpage appeals pursuant to section 31(1) of the Administrative Tribunals Act. The Government argued that the appeals: (1) were outside of the Commission’s jurisdiction because they were, in substance, challenging the Minister’s direction, and the Forest Act does not provide for appeals of Minister’s directions; (2) raised issues that were addressed in the Commission’s 2015 decision, and therefore, the appeals were an abuse of process as a collateral attack, and/or their substance had been appropriately dealt with in another proceeding (i.e., was “res judicata” – had been conclusively and finally dealt with).

The Commission found that the appeals were within its jurisdiction. Section 105.2 of the Forest Act required the Ministry employee to take into account the information that formed that basis of the Minister’s direction, but the employee was not bound by the Minister’s opinion or the reasons for the Minister’s direction. The appeals were against the re-determinations, and not the Minister’s direction. The Commission also found that the appeals were not an abuse of process or an attempt to re-argue issues that were appropriately dealt with in another proceeding. The process that led to the Minister’s direction did not take the place of the appeal process, the Commission’s 2015 decision did not consider the argument that formed the basis of the 2017 appeals, and it would be unreasonable to expect Canfor to have raised that issue in the previous appeals.

For all of those reasons, the Commission denied the Government’s application to summarily dismiss the appeals.

The Province, as represented by the Minister, appealed the Commission’s decision to the BC Supreme Court. The Province essentially made the same arguments to the Court that it made before the Commission.

The Court found that the Province’s arguments regarding res judicata, collateral attack, and abuse of process raised questions of mixed fact and law. However, section 140.7 of the Forest and Range Practices Act provides that the Commission’s decisions may be appealed to the Court on “a question of law or jurisdiction” only. Consequently, the Commission’s findings on those issues could not be appealed to the Court. The Court also found that, even if those issues could be appealed to the Court, the Commission’s decision would be entitled to deference, such that the “reasonableness” standard of review would apply, and the Commission’s findings were reasonable.

Regarding the Province’s argument that the stumpage re-determinations were not within the Commission’s jurisdiction, the Court found that the appropriate standard of review was the deferential standard of reasonableness, and the Commission’s finding that it had jurisdiction to hear the appeals was reasonable. The Court found that a re-determination ordered by the Minister under section 105.2 of the Forest Act is a determination under section 105(1) of that Act, and therefore, is appealable to the Commission under section 146(2) of the Forest Act.

Accordingly, the Court dismissed the Province’s appeal.