Decision Date: December 14, 2009

Panel: James S. Hackett

Keywords:  Forest Act – s. 105(1); Interior Appraisal Manual – ss. 2.1(6), 6.3(2)(a), 6.3(4); stumpage rate; reappraisal; billing history record

Canadian Forest Products Ltd. (“Canfor”) appealed the stumpage rate determinations set out in two stumpage advisory notices issued by the Timber Pricing Coordinator, Ministry of Forests and Range (the “Ministry”).  The stumpage rates pertained to timber harvested under two road permits associated with two licences held by Canfor.

The Interior Appraisal Manual (“IAM”) states that stumpage rates for road permits are calculated using the previous twelve-month average stumpage rate for sawlogs for all cutting authorities issued under a given licence.  This twelve-month period is known as the “billing history record”.  Before the appealed determinations were issued, Canfor had submitted reappraisal information for three cutting permits issued under the two licences, and the reappraisal information had been accepted by the Ministry, which resulted in reduced stumpage rates for the three cutting permits.  Canfor had expected that the reduced stumpage rates would be included in the billing history records for the two licences and would, therefore, be included in calculating the stumpage rates for the road permits.  However, due to a delay in processing the reappraisal information, only one of the three reduced rates was incorporated into the billing history records in time to be used to determine the stumpage rates for the road permits.  Each party blamed the other for the delay.

In the appeal, Canfor argued that the IAM required the reappraisal information for the three cutting permits to be incorporated in the billing history records for the licences, and to be used in calculating the stumpage rates for the road permits.  Canfor requested that the stumpage rates be re-calculated by including the reappraisal information for all three cutting permits in the billing history records.

The Commission found that the Timber Pricing Coordinator properly applied the relevant provisions of the IAM.  The Commission found that, in this case, the twelve-month period of the billing history records ended on March 31, 2009, and new stumpage invoices for two of the three reappraised cutting permits were not issued before that date.  The Commission held that the old stumpage invoices had to be cancelled and replaced with new invoices before the reappraisal information could be included in the billing history records.  The Commission also found that there was no Ministry policy that set a time period by which the Ministry must update billing history records with new information.  However, based on the facts, the Commission found that all of the reappraisal information could have been into the billing history records by March 31, 2009, and that reasonable parties should have agreed on the accuracy of the reappraisal information well before the deadline.

Accordingly, the Commission confirmed the stumpage determinations.

The appeals were dismissed.