Decision Date: April 30, 2012

Panel: Alan Andison

Keywords: Forest Act – ss. 52, 71(2); Forest Planning and Practices Regulation – definition of “harvest”; Scaling Regulation – s.4; forestry licence to cut; unauthorized timber harvesting; timber scale; penalty; application for costs

Greg Schacher appealed a determination of contravention and penalty issued by the District Manager (the “District Manager”), Okanagan Shuswap Forest District, Ministry of Forests, Lands and Natural Resource Operations (the “Ministry”).

Mr. Schacher owns and operates a cedar shake business. He makes roofing shakes by cutting cedar logs into blocks and then hand splitting the blocks into shakes. In 2004 or 2005, Mr. Schacher walked to a remote site in the Puddingbowl Creek area and saw some dead standing cedar trees that he could use to make shakes. The site had limited vehicle access, and timber harvested from the area would have to be removed by helicopter.

In 2007, Mr. Schacher gave instructions to Mr. Franklin, his brother-in-law, to apply to harvest an estimated 30 cubic metres of Crown salvage timber in the Puddingbowl Creek area. Mr. Schacher instructed Mr. Franklin to submit the application because Mr. Schacher worked for the Ministry at the time.

The Ministry issued a licence authorizing the harvest of up to 30 cubic metres of standing dead or damaged cedar in a specific area. All other timber was defined in the licence as “reserved” and could not be cut. The licence included a schedule of conditions, including that the licensee was required to “utilize the entire log”. There was no provision for harvesting trees to provide access to the site.

Harvesting began in September 2007. Felled trees were transported by helicopter to a landing, where they were processed into smaller blocks. Debris from processing was burned near the landing. In November 2007, the Ministry amended the licence to allow the harvest of 45 cubic metres of dead or damaged cedar, at the licensee’s request.

In 2008, the Ministry received a public complaint that a salvage operation had left waste and debris at Puddingbowl Creek. The Ministry inspected the site and initiated an investigation.

The District Manager determined that Mr. Schacher had contravened section 52 of the Forest and Range Practices Act (the “Act”) by cutting, damaging and destroying Crown timber without authorization. Specifically, the District Manager found that several reserve trees had been cut, some standing trees had been damaged by a debris pile burn, and useable portions of trees were left at the site. The Ministry scaled 67 logs/trees at the harvest and landing sites that were cut, damaged or destroyed without authorization. Subsequently, Mr. Schacher hired his own scaler to attend the site. His scale results differed significantly in terms of volume and grade from the Ministry’s results. Based on the Ministry’s scale, the District Manager levied a penalty of $3,994.93. He determined that Mr. Schacher was 75% responsible for the contravention, and ordered him to pay 75% of the penalty, which amounted to $2,996.20.

Mr. Schacher appealed to the Commission on the basis that the District Manager made several mistakes and there were errors in the Ministry’s timber scale. Specifically, Mr. Schacher submitted that: (1) he never intended to use the entire log, and the Ministry was aware that he intended to harvest cedar for shake blocks only; (2) the application contained an “estimate” of the volume to be harvested, and he should not be held accountable to an estimate; (3) the word “harvest” is not defined in the licence, and should be interpreted to reflect his intention to harvest wood for shakes; (4) the Ministry scaler did not scale the logs in accordance with established scaling standards, and failed to account for the amount of rot in the logs; (5) the District Manager erred by preferring the Ministry’s scale over the more accurate scale performed by Mr. Schacher’s scaler; (6) the District Manager implicitly acknowledged that the Ministry’s scaling results were inaccurate; and (7) the District Manager incorrectly applied the penalty formula in the legislation. Mr. Schacher did not challenge the Government’s evidence regarding the alleged contravention; rather, he offered explanations for his decisions and actions. Mr. Schacher requested that the Commission order the Government to pay his costs associated with the investigation and appeal.

At the appeal hearing, the Government agreed that the penalty should be reduced because three logs should not have been included in the penalty calculation, and the Government would be issuing a stumpage invoice to Mr. Schacher for some of the scaled logs. However, the Government submitted that Mr. Schacher contravened section 52 of the Act by cutting and damaging trees near the helicopter landing area, cutting reserved timber, and leaving substantial amounts of cut timber at the site.

The Commission first considered whether Mr. Schacher contravened section 52 of the Act. The Commission found that the initial estimate of the volume to be harvested became a term of the licence that was enforceable. Although the word “harvest” is not defined in the licence, it is commonly understood to mean the cutting and removal of trees, not the cutting and removal of the desired or valuable portion of the trees, and Mr. Schacher should have been aware if that. In addition, the licence states that words not defined in it have the meaning given to them under the Act and its regulations. The Forest Planning and Practices Regulation defines “harvest” to include “felling trees”, which is contrary to the assertion that only the portion of the tree that is removed from the site counts towards the harvest volume under the licence. By signing the licence, the licensee accepts the terms and conditions of the licence, which may not be exactly what the licensee sought in its application, as the Ministry has the discretion to add terms and conditions that it considers appropriate. The licensee is responsible for complying with the terms and conditions of the licence, or requesting an amendment if required, and in this case the only amendment requested was for an increase in the volume that could be harvested. There was undisputed evidence that reserved trees were cut, standing trees were damaged by a debris burn pile, and the entire log was not utilized in many instances. Mr. Schacher cut more than 45 cubic metres in order to remove that amount of cedar for shakes. Based on the evidence, the Commission found that Mr. Schacher contravened section 52.

Next, the Commission considered what volume and grade of wood was cut, damaged or destroyed contrary to section 52. Both the Ministry’s scaler and Mr. Schacher’s scaler testified and provided detailed evidence. Their scaling approaches and results were significantly different. The Commission preferred the evidence of the Ministry’s scaler based on her experience and knowledge, and because her approach complied with the Scaling Regulation and accepted practices in the Ministry’s Scaling Manual. However, the Commission found that three logs should not have been included in her scale, because they were likely felled before Mr. Schacher began harvesting.

Regarding the penalty, the Commission agreed with the Government’s submission that a penalty levied under section 71(2) of the Act cannot include stumpage revenue that is recoverable under section 103 of the Forest Act. The Commission concluded that the penalty should be reduced by deducting the amount of stumpage that would be billed to Mr. Schacher. The Commission rejected the request to deduct an amount for the three logs that should not have been included, because the District Manager had already reduced the potential penalty by 33 percent to account any errors in the Ministry’s scaling.

Finally, the Commission denied Mr. Schacher’s application for costs. The Commission held that its authority to award costs is limited to costs associated with an appeal, and not costs associated with an investigation. Regarding Mr. Schacher’s appeal costs, the Commission found that the circumstances did not warrant an award of costs.

Accordingly, the penalty was reduced to $1,858.24 with the Government’s consent, the appeal was dismissed, and the application for costs was denied.