Decision Date: April 11, 2006

Panel: Alan Andison

Keywords: Forest Act – s.105(1)(b); Interior Appraisal Manual – ss.2.2(1), (7)(a) and (b), 4.1, 4.2, 4.3.1 and 4.3.2; stumpage determination; discretion in calculation of stumpage rate; least cost principle

Weyerhaeuser Company Limited (“Weyerhaeuser”) appealed three stumpage determinations issued by the Timber Pricing Co-ordinator (the “Co-ordinator”) for the Southern Interior Forest Region of the Ministry of Forests and Range.  In calculating the stumpage rates set out in the determinations, the Co-ordinator did not accept Weyerhaeuser’s submissions regarding the lengths of roads to be constructed in order to develop and harvest the cutting permit areas.  Rather, the Co-ordinator reduced the length of on-block roads for the purpose of calculating the stumpage rates.

This decision addressed preliminary issue of whether, under the Interior Appraisal Manual (the “IAM”), the Co-ordinator had the authority to reject the data for on-block roads that was submitted by Weyerhaeuser and substitute her own criteria for the length of on-block roads.  The factual merits of the Co-ordinator’s decisions were not addressed by the Commission.

Weyerhaeuser argued that the on-block road lengths it submitted should have been allowed, and that the Co-ordinator had no discretion under the IAM to substitute road lengths that she considered to be required to be built, consistent with regulatory requirements in order to harvest the timber based on the least total cost estimate for development, harvesting and transportation.

The Government submitted that the stumpage rates were calculated in accordance with the IAM, and the Co-ordinator’s determinations should be confirmed.

The Commission found that the Co-ordinator had the discretion to reject the road length submitted by Weyerhaeuser, and to substitute a road length that was reasonable, if, based on the relevant information available to her, the length of road proposed by Weyerhaeuser was not necessary, taking into account regulatory requirements and the least cost principle.  The Co-ordinator had the discretion to estimate the length of road using the formulae provided in section 4.3.2.2 of the IAM, taking into account regulatory requirements and the least cost principle.

Accordingly, the Commission decided the preliminary issue in favour of the Government.

This decision did not, in itself, dispose of the appeal, because the factual merits of the Co-ordinator’s decisions were not addressed.  Consequently, the Commission decided that it would proceed to hear the merits of the Co-ordinator’s decisions regarding the stumpage rates, if the parties so desired.