Decision Date: March 4, 1998

Panel: Toby Vigod, Patricia Marchak, Howard Saunders

Keywords: Forest Act – ss. 146(1)(a), 84; stumpage appraisal; cost estimate; transport costs; user fees for log dumps; designated scale sites; appurtenancy clause; Cost Appraisal Manual (“CAM”); Timber Mark; Scale Site Designation; land use charge.

TimberWest Forest Ltd. appealed the decision of a Review Panel confirming a stumpage appraisal for Cutting Permit (CP) 13C of Tree Farm Licence (TFL) 46 (Port Renfrew Operations). The decision had substituted Jordan River in place of Cowichan Bay / Chemainus (Shoal Island) as the point of origin for timber transportation costs, for use in a reappraisal of the stumpage rates. TimberWest argued that since the designated scale sites for the logs from CP 13C are at Lake Cowichan and the east cost of Vancouver Island, it must transport logs to these points and the stumpage appraisal should reflect this.

The Board found that the obligation imposed on TimberWest by the TFL to transport logs to certain points is not part of the cutting permit. It was therefore not an appropriate consideration for determining the point of origin in the stumpage appraisal. However, the Board found that it was an error to designate Jordan River as the point of origin because the log dump facility at Jordan River, which is owned by Western Forest Products, was operating at full capacity and no other operator had access to it. The Board noted that the use of Jordan River as a point of origin for stumpage appraisals would capture Western’s unique efficiencies, contrary to the Ministry of Forests’ stumpage pricing principles.

The Board rescinded the Review Panel’s decision and remitted the matter back to the Appraisal Co-ordinator to set the appropriate stumpage rates based on the point of origin with the next lowest cost, which in the view of the Board appeared to be Cowichan Bay / Chemainus. In relation to the outstanding issue of whether user fees for log dumps are included in the average cost estimates or are separate items, the Board recommended that the Ministry of Forests and licensee representatives seek clarification of this issue. The appeal was allowed.