Decision Date: March 12, 2004

Panel: David Ormerod

Keywords:  Forest Act – s. 105, 146; culvert cost; stumpage rates; Interior Appraisal Manual;

Riverside Forest Products Limited (“Riverside”) appealed five stumpage appraisal determinations by the Timber Pricing Forester in the Southern Interior Forest Region (the “SIFR”) of the Ministry of Forests.  The determinations were upheld by an administrative review panel.  Riverside requested that the Commission rescind the appraisals and refer the matter back to the SIFR for recalculation.

The issues in this appeal were whether the recommendations of the Regional Appraisal Advisory Committee (“RAAC”) and the policy directives issued by the Ministry’s regional managers were relevant to the stumpage determinations under appeal, whether the engineered cost estimates for small corrugated steel pipe culverts should be calculated by applying the trend factor specified in Table 4-5 of the Interior Appraisal Manual (“IAM”) to the installed culvert cost estimates listed in the Ministry’s 1993 Engineering Manual, and what the appropriate remedy was in this situation.

The Commission found that the RAAC’s recommendations were merely advisory in nature and not binding for the purposes of stumpage appraisals.  In addition, the Commission found that the policy directives issued by the regional managers on matters addressed by the IAM were useful in providing guidance about the IAM, but such directives were not binding and did not have the legal force of the IAM.

The Commission found that, according to section 4.3.3.1 of the IAM, the Appellant was correct to trend the 1993 Engineering Manual estimates of culvert costs by the factor of 1.29, as specified in Table 4-5.  In addition, the Commission found that Riverside was under no obligation to use estimates from previous development work for the new development work specified in the appraisals under appeal.

The Commission found that the appropriate remedy in this case was to refer the matter back to the Timber Pricing Forester in the SIFR with directions to recalculate the stumpage rates using installed culvert cost estimates from the 1993 Engineering Manual, together with 1.290 trend factor from Table 4-5 of the IAM.

The appeal was allowed.