Decision Date: June 2, 2004

Panel: David Ormerod

Keywords:  Forest Act – s.105, 146; stumpage rate; base permit; salvage operations; Interior Appraisal Manual

Robin Stuart Tutte appealed an administrative review decision confirming a stumpage rate determination that applied to a cutting permit under a Woodlot Licence held by Mr. Tutte.  Mr. Tutte appealed the determination on the grounds that the method used to determine the rate was inequitable.  In particular, he argued that the base permit that the Ministry of Forests (“MOF”) used to determine the stumpage rate applicable to his cutting permit was calculated using unreasonably high stumpage rates from other cutting permits in the area.  Mr. Tutte sought to have the stumpage rate reduced for all timber harvested under the cutting permit during the winter of 2002/2003.

The issue in this appeal was whether the stumpage rate should be reduced in the circumstances.

The Commission found that the Forest Act required the Commission to apply the policies and procedures approved by the Minister of Forests that were in effect at the time of the initial stumpage appraisal; in this case, the November 2002 Interior Appraisal Manual (“IAM”).  In addition, the Commission noted that, although the IAM has the force of law, a memorandum issued by the Director of MOF’s Revenue Branch setting out a procedure for establishing base permits, did not have the force of law.  Nonetheless, the Commission found that there was no compelling evidence demonstrating that the Director’s policy was unreasonable and, therefore, the Commission was prepared to apply the policy to the facts of this case.

The Commission noted Mr. Tutte’s submission that the permits selected by MOF to calculate the base permit in his area were not harvested during the period in question because the stumpage rates that applied to those permits were so high that logging would have been unprofitable.  Although neither Mr. Tutte nor MOF provide evidence to establish what information was used to determine the base permit, the Commission found that the selection of a base permit, in this case, may have relied on cutting permits that were not harvested in the period and, if this was the case, the base permit was unreasonable.

The Commission ordered that the matter be sent back to the Acting Appraisal Coordinator for reconsideration, with directions to ensure that the base permit reflects actual harvested permits for that period.

The appeal was allowed, in part.