Decision Date: January 10, 2005

Panel: Alan Andison

Keywords: Forest Act – s. 105(1); Coast Appraisal Manual; road use charge; stumpage rate determination.

Doman-Western Lumber Limited (“Western”) appealed two stumpage advisory notices (“SANs”) issued on July 30, 2004 by the Regional Appraisal Coordinator, Coast Forest Region, Ministry of Forests. Both SANs were issued for cutting permit 746 (“CP 764”) under Forest Licence A19231. Western submitted that the Regional Appraisal Coordinator erred by applying a road use charge of $0.25 per cubic metre. Western requested that the Regional Appraisal Coordinator be directed to re-appraise the stumpage rates using a road use charge value based on a prepayment of $20,000 from Western to Bowen Contracting Ltd. The prepayment was made pursuant to road use agreements between them, which provided that Western would pay Bowen $1.00 per cubic metre of timber hauled over a road on Bowen’s property.

The Commission found that the appropriate road use charge should not be based on the prepayment of $20,000. The Commission found that section 5.1(2) of the 2004 Coast Appraisal Manual (the “2004 CAM”) indicated that any road use costs associated with CP 746 could only be applied in the reappraisal if Western actually incurred them when harvesting occurred. The Commission characterized the prepayment of $20,000 as a floating deposit that would not be utilized if Western did not use the road.

However, the Commission rejected the road use charge of $0.25 per cubic metre as arbitrary. The Commission found the $1.00 per cubic metre charge set out in the road use agreements to be reasonable. For purposes of appraisals and reappraisals under the 2004 CAM, the Commission found that a road use charge may include reasonable costs associated with activities that are incidental to, or associated with, the use of a road to transport logs to a log dump. The Commission found that, based on the evidence, Western used the road largely, if not entirely, for transporting timber.