Decision Date: November 3, 2004

Panel: R.A. Gorley

Keywords:  Forest Act – s. 105(1); Interior Appraisal Manual – ss. 2.2, 4.1, 4.3.3; special projects; stumpage rate; mechanical brushing; Engineered Cost Estimates

Babine Timber Limited (“Babine”) appealed a stumpage rate determination included in a July 7, 2004 Stumpage Advisory Notice issued by the Timber Pricing Coordinator for the Northern Interior Forest Region, Ministry of Forests.  In the Stumpage Advisory Notice, the Timber Pricing Coordinator determined that some Engineered Cost Estimates (“ECEs”) for road development should be reduced.  The Timber Pricing Coordinator: reduced the ECE for a bridge to reflect a shorter span; reduced costs for grass seeding along part of a road upgrade; and, rejected the ECE for paving approaches to a bridge.

The Commission held that Babine did not provide the Timber Pricing Coordinator or the Commission with sufficient information or justification for the longer bridge span; therefore, the Commission upheld the decision to reduce the ECE for the bridge.  The Commission also found that the seeding costs should be allowed because the Interior Appraisal Manual (the “IAM”) and the Ministry’s regional policy documents governing the cost allowance for brushing were unclear, and it was unclear how the Timber Pricing Coordinator decided that seeding was unnecessary.  In this case, the Timber Pricing Coordinator should have allowed the seeding costs given that such costs had previously been allowed on similar circumstances, and the Ministry’s Policy Manual indicates that assumptions made in appraisals should be consistent.  The Commission found that the Timber Pricing Coordinator rejected Babine’s submissions on paving the bridge approaches without considering their argument, contrary to the IAM.  The Government acknowledged that the Timber Pricing Coordinator cannot simply refuse a paved approach because it was not approved by a forest service engineer.  The Commission sent the matter of the paving costs back to the Timber Pricing Coordinator with directions to consider: Babine’s arguments for paving the bridge approaches, and whether circumstances are sufficiently similar to other cases where paving costs were allowed.

Accordingly, the Timber Pricing Coordinator’s decision to reduce the ECE for the bridge was affirmed.  However, the Commission allowed Babine’s ECE for seeding along the road, and the matter of the ECE for paving the approaches to the bridge was sent back for reconsideration, with directions.

The appeal was allowed in part.