Decision Date: December 17, 2004

Panel: Alan Andison, Bruce Devitt, R. A. Gorley

Keywords: Forest Act – ss. 105(1); Coast Appraisal Manual; stumpage rate determination; log grade percentage; cruise compilation algorithm predictions; billing history record.

Weyerhaeuser Company Limited (“Weyerhaeuser”) appealed three stumpage appraisal determinations for cutting permit (“CP”) 175 of Tree Farm Licence (“TFL”) 39, CP 269 of TFL 44 and CP 866 of TFL 44, which were made by the Regional Appraisals Coordinator, Coast Forest Region, Ministry of Forests (“MOF”).  Weyerhaeuser submitted that the Regional Appraisal Coordinator should have based the log grade percentages on the cruise compilation algorithm predictions, rather than the historic billing record.  By not doing so, Weyerhaeuser submitted that he incorrectly calculated the stumpage rates.

The Commission found that the Regional Appraisal Coordinator interpreted the relevant sections of the Coast Appraisal Manual correctly and properly determined the stumpage rates.  The Commission observed that section 2.8 of the CAM was silent with regard to what was to happen if the volume of second growth timber in a cutting authority area is less than 80 percent.  However, the Commission found that the meaning of section 2.8 became clear when that section is considered in the context of the CAM as a whole.  The Commission found that section 2.8 of the CAM provides overarching direction for conducting appraisals.  The Commission found that despite the lack of specific reference to log grade percentages in section 2.8(4), the term “appraisal” was found to include the process of determining log grade percentages.  Thus, the Commission found that section 2.8(4) of the CAM should be broadly interpreted.

A broad interpretation means that the 80 percent threshold the CAM sets out in section 2.8(4) applies to all appraisals, and it establishes a condition whereby section 3.2.2(8) of the CAM only applies to the determination of log grade percentages when the volume of second growth coniferous timber in a cutting authority exceeds 80 percent.  If the volume of second growth coniferous timber in a cutting authority area is less than 80 percent, then log grade percentages must be derived under section 3.2.2(2) based on the billing history record, not the cruise compilation algorithm (the method asserted by Weyerhaeuser).  The CP areas at issue in these appeals did not contain at least 80 percent second growth coniferous timber by volume.  Thus, the CPs in these appeals did not “contain” second growth coniferous timber as defined by the CAM and therefore, section 3.2.2(8)(b), which allows for the log grade percentages to be determined by cruise compilation algorithm predictions, does not apply.

The Commission confirmed the Regional Appraisal Coordinator’s stumpage rate determinations for the CPs.  The appeals were dismissed