Decision Date: April 22, 2005

Panel: James S. Hackett

Keywords: Forest Act – s. 105(1); Interior Appraisal Manual – ss. 2.5, 2.3.2; stumpage rate determination; adjustable stumpage rates; fixed stumpage rates; financial viability of operation; annual reappraisal

Jack Alexander Bellamy appealed the stumpage rate determinations of the Timber Pricing Co-ordinator with respect to a blanket salvage cutting permit issued under a woodlot licence.  Mr. Bellamy stated that the Interior Appraisal Manual (“IAM”) amendment requiring reappraisal commencing November 1, 2003 should not apply to him.  Further, he argued that the reappraisal incorrectly applied an adjustable stumpage rate rather than a fixed rate, and there was a flaw in the appraisal system that resulted in operations becoming uneconomical.  He asked that the stumpage rate for the cutting permit be fixed at $0.25 per cubic metre, the rate that was previously given for the duration of the cutting permit.

On the first ground, the Commission agreed with the Government that the financial viability of an operation is not a relevant factor to be taken into consideration when considering the appropriateness of a stumpage rate.

On the second ground, the Commission found that sections 2.5(2)(d) and 2.3.2 of the amended IAM apply to the facts of this case, and therefore, the cutting permit is subject to a mandatory annual reappraisal commencing on November 1, 2003.  The Commission found that there is nothing in woodlot licences, the legislation or the IAM that indicates the rate in a stumpage notice is not subject to change. Stumpage rates may change if the IAM is amended.  The Commission also found that Mr. Bellamy had ample time to check the Ministry of Forests’ website to inform himself of the amendment.

On the third ground, the Commission found that Mr. Bellamy had elected to fix the rate for the cutting permit before the amendment to the IAM came into effect, and therefore, the rate should have remained fixed until the next annual reappraisal, which was in November 2004.  The Commission rescinded the stumpage notices that did not reflect the $0.25 per cubic metre rate, and referred the determinations back to the Timber Pricing Co-ordinator to be reassessed to reflect Mr. Bellamy’s previous choice of a fixed rate.

Accordingly, the appeal was allowed in part.