Decision Date:August 31, 2018

Court: B.C.C.A, Justice Stromberg-Stein

Citation: Docket: CA45336

The Minister of Forests, Lands and Natural Resource Operations (the “Minister”) sought leave from the BC Court of Appeal to appeal a decision of the BC Supreme Court. The matter involved the Forest Appeal Commission’s (the “Commission”) decision denying 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. The re-determinations were issued after 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. Thus, the re-determined stumpage rates were higher than the original rates.

The Minister’s 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 Ministry applied to the Commission for an order summarily dismissing the appeals of the stumpage re-determinations, pursuant to section 31 of the Administrative Tribunals Act. The Government argued that the appeals: (1) were outside of the Commission’s jurisdiction because they were 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 denied the Government’s application to summarily dismiss the appeals. The Commission found that the appeals were within its jurisdiction because the appeals were against the re-determinations, and not the Minister’s direction. 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 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.

The Province, 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 had made before the Commission.

The Court dismissed the Province’s appeal. The Court found that the Province’s arguments regarding res judicata, collateral attack, and abuse of process raised questions of mixed fact and law, which could not be appealed to the Court. Section 140.7 of the Forest and Range Practices Act provides that the Commission’s decisions may be appealed on “a question of law or jurisdiction” only. In addition, the Court 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 “reasonableness” standard of review applied, 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, which is appealable to the Commission under section 146(2) of the Forest Act.

The Province applied for leave to appeal to the BC Court of Appeal.

The Court of Appeal applied the test for leave to appeal that is set out in Queens Plate Development Ltd. v. Vancouver Assessor, Area 09 (1987), 16 B.C.L.R. (2d) 104, 1987 CanLII 2626 at para. 14 (C.A.). The Court held that: the proposed appeal did not raise questions of general importance as to the extent of the Commission’s jurisdiction; the proposed appeal was not limited to questions of law; and, there was no marked difference of opinion in the decisions below and sufficient merit in the issues put forward. The Court found that there was little prospect of the appeal succeeding, and no clear benefit to be derived from allowing the appeal to proceed. The stumpage appeals should be heard by the Commission and determined on the merits. The Province’s application for leave to appeal was denied.