Decision Date: September 14, 2004

Panel: David Ormerod

Keywords:  Forest Act – ss. 105; Ministry of Forests Act – s. 4; Interior Appraisal Manual – s. 2.3.1, 2.4.1; sudden and severe damage; reappraisal; stumpage

William Isaac Cowan appealed a stumpage rate determination with respect to a cutting permit issued under a woodlot licence on the grounds that the Ministry of Forests (“MOF”) incorrectly applied an effective date of September 1, 2003 to the stumpage reappraisal rate made under section 2.4.1(1)(b) of the Interior Appraisal Manual (the “IAM”).  Section 2.3.1 of the IAM requires a reappraisal where there has been significantly changed circumstances and “at least fifteen percent of the volume of the appraised timber in a cutting authority has been suddenly and severely damaged.”  Section 2.4.1(1)(b) sets out the effective date for reappraisal after sudden and severe damage as “the first day of the month following the date of the occurrence of the damage.”

Mr. Cowan argued that because the fire continued through September of 2003, and the damage assessment did not commence until October 9, 2003, the proper date for the re-appraisal of stumpage should have been October 1, 2003.  The Government asserted that the proper date is determined by when the “sudden and severe damage” occurred.  The Government argued that a fire progression map showed that the fire passed through the woodlot area before August 23, 2003, providing an effective date of September 1, 2003.  As a secondary issue, the Government argued that Mr. Cowan’s interpretation would hinder MOF’s ability to assert the financial interests of the Crown in a “systematic and equitable manner” pursuant to section 4(e) of the Ministry of Forests Act (“MOF Act”).

The Commission found that “suddenly and severely” differentiates between damage to timber that happens at low intensity over extended time periods and damage that is more unusual and results in significant losses.  The intent of the relevant sections of the IAM is to cover such damage when it exceeds the threshold of a 15 percent reduction in the amount of timber that was originally appraised within the cutting permit area.  The Commission noted that the Government’s argument focused on the date of the “event” rather than on the “damage.”  The Commission also noted that MOF accepted the damage estimates in the appraisal data sheets that were submitted by Mr. Cowan, which took into account all of the damage from the fire, including the damage that continued developing into September.  Therefore, the Commission found that the appropriate effective date for a reappraisal was October 1, 2003.

On the secondary issue, the Commission noted that the application of this interpretation of the IAM, that damage can occur after the initial onslaught of a sudden and severe event, would lead to systematic and equitable reappraisals consistent with section 4(e) of the MOF Act.

Accordingly, the appeal was allowed.