Decision Date: March 12, 2020

Panel: Norman E. Yates, Les Gyug, Lorne Borgal

Keywords: Wildfire Act – ss. 6, 27; Wildfire Regulation – ss. 6(2), 6(3), 31(1); wildfire; contravention; cost recovery order; fire suppression costs; damaged or destroyed Crown resources; other forest land resources; grass land resources; payroll loading costs; agreed statement of facts

Canadian National Railway Company (“CN”) appealed an order issued in May 2018 by the Fire Centre Manager (the “Manager”), Prince George Fire Centre, Ministry of Forests, Lands and Natural Resource Operations (the “Ministry”).

The order arose from the following circumstances. On June 11, 2016, a wildfire ignited adjacent to CN’s railway tracks across the Fraser River and south of Lytton, BC. Grass adjacent to the railway was ignited by sparks from CN’s activities. The wildfire spread to adjacent Crown land. Firefighting crews responded from the Ministry’s Wildfire Service. The wildfire burned a large area of Crown land, and the provincial government incurred significant costs to suppress it.

The Manager determined that CN caused the wildfire in contravention of section 6(2) of the Wildfire Act (the “Act”), and sections 6(2) and (3) of the Wildfire Regulation (the “Regulation”). The Manager ordered CN to pay: a $75,000 administrative penalty for the contraventions; the government’s costs to control the wildfire ($7,073,317.07); the value of Crown timber, other forest resources, and grass land resources that were damaged or destroyed in the wildfire ($8,971,289.75); and, the government’s costs for silviculture and reforestation ($169,065.31).

CN appealed the order. CN accepted responsibility for the contraventions and the administrative penalty. CN did not dispute the amounts assessed in the order for the value of damaged or destroyed Crown timber, and silviculture and reforestation. However, CN disputed the amounts assessed for fire control costs, and “other forest land resources” and “grass land resources” that were damaged or destroyed by the wildfire. CN’s main argument was that it should not be liable for the entire area that was burned—and the associated fire control costs and damaged or destroyed grass land and other forest land resources—because the Wildfire Service’s approach to controlling the wildfire caused the burnt area to increase in size. In addition, regardless of the outcome on that argument, CN questioned the amount assessed for “payroll loading costs” as part of the government’s fire control costs.

First, the Commission considered whether any portion of the wildfire did not result from CN’s contraventions, but rather from actions or decisions by the Wildfire Service, and should not be included when calculating the area damaged or destroyed by the wildfire and associated fire control costs. The Commission found that it has the jurisdiction to consider the amount of the government’s fire control costs “that resulted, directly or indirectly, from the contravention”, and the dollar value of the specified Crown resources “damaged or destroyed as a result, directly or indirectly, of the contravention”, as stated in sections 27(1)(b) and (c) of the Act. Those sections require those amounts to be calculated “in the prescribed manner” found in sections 30 and 31 of the Regulation. The Commission found that it may consider whether the amounts assessed in the order fit within the scope of the language used in section 27 of the Act and sections 30 and 31 of the Regulation. The Commission’s role is not to critique, with the benefit of hindsight, whether the Wildfire Service could have controlled a wildfire in a different manner that may have reduced the burnt area or resulted in lower associated fire control costs. Based on the evidence, the Commission found that all of the burnt areas and associated fire control costs resulted “directly or indirectly” from CN’s contraventions, and were within the scope of sections 27(1)(b) and (c) of the Act. Furthermore, the Commission held that even if it was wrong about the scope of its jurisdiction in an appeal of this type of order, it would not have found that the Wildfire Service should have taken a different approach to controlling the wildfire.

Next, the Commission considered how many hectares of “other forest land resources” and “grass land resources” were damaged or destroyed by the wildfire, and the value assigned to them under the Act and the Regulation. Based on the parties’ evidence and the relevant legislation, the Commission found that no burned areas within the wildfire’s perimeter should be classified as “grass land resources”. The Commission found that some of the areas classified as grass land resources (valued at $500 per hectare under the Regulation) should be reclassified as “other forest land resources” subject to a visual quality order (valued at $5,000 per hectare under the Regulation), and the remainder should be classified as non-vegetated land (which has no dollar value under the Regulation). Consequently, the Commission varied the order by reducing the value of damaged or destroyed grass land resources to zero, and increasing the value of damaged or destroyed other forest land resources to $9,378,600 from $8,919,100.

Finally, the Commission considered whether the Manager could order CN to pay “payroll loading costs” as part of the government’s fire control costs under section 31(1) of the Regulation. On this issue, the parties provided an agreed statement of facts that corrected certain calculation errors in the order. The Commission held that the Regulation is clear that some amount is to be billed for payroll loading costs as part of the “wages” of government employees who respond to a wildfire, and the Province has discretion to choose a method for determining the rates charged for “wages”, which includes payroll loading costs. With no evidence of a different way to assess payroll loading costs, the Commission accepted the corrected amount for payroll loading costs set out in the agreed statement of facts, and varied the amount in the order.

In conclusion, the Commission rejected CN’s grounds of appeal, and dismissed the appeal. However, after considering the evidence and legislation, the Commission reduced the amount that CN had to pay for damaged or destroyed grass land resources, and increased the amount that CN had to pay for damaged or destroyed other forest resources (excluding timber). To correct a calculation error in the order, the Commission also varied the amount that CN had to pay for payroll loading costs as part of the government’s fire control costs.