Decision Date: February 6, 2006

Panel: Alan Andison

Keywords: Forest Act ss. 105 (1)(b), (3) and (4)(e); Coast Appraisal Manual ss. 5.1(d), 5.2(a), 5.5(1)(a), 5.5(1)(c), 5.5(1)(d), 5.5(1)(e) and 5.5(3); stumpage; tenure obligation adjustment; tributary cutting authority; road use charge

Western Forest Products Inc. (“Western”) appealed a Stumpage Advisory Notice (the “SAN”) issued by the Regional Appraisal Coordinator (the “Coordinator”). Western submitted that the Coordinator incorrectly assessed the stumpage rate because he utilized the wrong road use charge in the calculation of the SAN. Western asked the Commission to rescind the stumpage determination and direct the Ministry to reappraise the stumpage rates.

The main issue was whether a licensee can claim, in calculating the Tenure Obligation Adjustment for one cutting authority, unappraised road use charges incurred for other “tributary” cutting authorities.

Western argued that the language in the Coast Appraisal Manual (CAM) indicates that a road use charge incurred in relation to one cutting authority can be applied in the appraisal of a tributary cutting authority.  In addition, Western argued that the CAM should be interpreted in a manner consistent with the obligation of the Ministry to appraise stumpage in a systematic and equitable fashion.

The Government argued that Western’s appeal was a relitigation of a matter that was recently decided by the Commission (see Appeal Nos. 2004-FA-048(a) and 049(a), Doman-Western Lumber Ltd. v. Government of British Columbia, January 10, 2005)). The Government sought that the appeal be dismissed and, in addition, sought an order for costs.

The Commission found that Western’s interpretation of the provisions in the CAM, was more “established and workable” than the Government’s. The Commission found that this interpretation works harmoniously within the scheme of the statute as a whole, and is appropriate for policy and practical reasons. In addition, the Commission found that the Government’s case was challenged because of its past practices.  While the law is quite clear that past practices or past administrative interpretations, do not bind the courts – or this Commission – it is also clear that past interpretations or past practices can be taken into consideration.

Regarding the application for costs, the Commission concluded that the circumstances of this case did not warrant such an order.

The Commission rescinded the SAN and directed the Coordinator to reappraise the stumpage rate based upon a road use charge forwarded by Western.

The appeal was allowed. The application for costs by the Government was denied.