Decision Date: December 3, 2009

Panel: David Ormerod

Keywords:  Forest Act – ss. 47.6(2), 105(1), 149(2); Interior Appraisal Manual – ss. 6.2(1); stumpage rate; forestry licence to cut; occupant licence to cut; silviculture levy; jurisdiction

Juggernaut Development Inc. (the “Appellant”) appealed the determinations of stumpage rates set out in five stumpage advisory notices issued by the Regional Appraisal Coordinator, Southern Interior Forest Region, Ministry of Forests and Range.  The stumpage rates pertained to timber harvested under five occupant licences to cut (“OLCs”) that were issued to the Appellant.

The Appellant was issued a number of licences to harvest Crown timber as part of a “daylighting” project that involved clearing 20 kilometres of highway right-of-way.  The project was initiated by the Ministry of Transportation and Highways, in cooperation with the Ministry of Forests and Range, to improve highway safety.  The parties understood that the project would be financially marginal for the Appellant due to log market conditions.  The Appellant asserted that the Ministry of Transportation and Highways had promised to help with the project costs by paying for traffic control, and the Ministry of Forests and Range had promised to help by keeping stumpage rates on the harvested timber as low as possible.  Once the project proceeded, the first three timber harvesting licences issued to the Appellant were forestry licences to cut (“FLCs”), and the next five were OLCs.  The stumpage rates set by the Interior Appraisal Manual (“IAM”) for damaged timber, which apply to FLCs, are lower than those set by the IAM for OLCs.  In addition, a silviculture levy applies to OLCs, whereas FLCs are not subject to a silviculture levy.

The Appellant appealed on the grounds that there was inconsistency in the types of harvesting licences issued to it, and in the application of the IAM.  The Appellant claimed that the unexpected costs it incurred during the project forced it to the brink of financial ruin.

The Commission found that the switch from FLCs to OLCs had a significant impact on the stumpage costs and silviculture levy costs to be paid by the Appellant.  The Commission also found that there was no clear explanation why the Ministry of Forest and Range switched to OLCs after it had already issued three FLCs, and that there was inconsistency in the issuance of the licences.  However, the Commission held that it had no jurisdiction in these appeals of stumpage determinations to grant a remedy for this inconsistency.

The Commission concluded that the stumpage rates were correctly determined in accordance with the applicable provisions of the IAM.  Accordingly, the Commission confirmed the stumpage determinations.

The appeals were dismissed.