Decision Date: December 6, 2005

Panel: David Ormerod

Keywords: Forest Act – s.45(1)(f)(vi), s.75.51(1),(2), (3)(c) and (4), s.105(1)(b); Interior Appraisal Manual – s.4.8.3 and s.2.2(8)(b); stumpage; annual allowable cut; low volume additive;

Jason Matthew Carmichael, Ian Robert Carmichael and Linda Joanne Carmichael (collectively referred to as the “Appellants”) appealed a stumpage advisory notice (“SAN”) issued by the Timber Pricing Co-ordinator (the “Co-ordinator”), for their woodlot under Cutting Permit D (“CP D”).  They appealed because the Co-ordinator did not apply the low volume additive (“LVA”) in her calculations of the stumpage fee rate set out in the SAN.

In order to harvest the trees, the Appellants obtained a cutting permit that provided an annual allowable cut (“AAC”) of 2777 m³ (cubic meters) for the Crown land portion of their harvest.  All fully appraised cutting authorities are eligible for a specific LVA estimate in addition to all other phase cost estimates.  Section 4.8.3 of the Interior Appraisal Manual (the “IAM”) states that if the licence to which the cutting permit has an AAC for Crown timber that is equal to or less than 3000 m³, then the LVA is $8.35 per m³.  If the AAC is more than 3000 m³, then the LVA is significantly lower or disallowed, depending on the type of harvesting performed.

Accordingly, the Appellants stated that the LVA should have been applied to the SAN as their AAC for the year 2005 was less than the upper 3000 m³ limit.  Accordingly, they requested to have the SAN re-determined by the Co-ordinator with directions to apply the LVA as she did not have the authority to remove the LVA from the calculations of the SAN.  In addition to that, they also requested the opportunity to “lock-in” the stumpage rate resulting from this re-determination.

The Government submitted that the Co-ordinator knew the harvest under the woodlot was already in excess of the AAC and therefore harvesting of CP D, without an increase in the AAC for Crown timber, would contravene the Forest Act. The Co-ordinator also stated that the Appellants had advised that they would apply for an AAC increase and therefore she was compelled to remove the LVA from the stumpage determination.  The Government submitted that the Co-ordinator used this information in determining the appraisal because it was “relevant to the appraisal” pursuant to section 2.2(8)(b) of the IAM.

The Commission note that the woodlot licence is a legal agreement between the Government and the Appellants, and that the Regional manager or District Manager sets the AAC for this agreement pursuant to the Forest Act.  The AAC is fixed in a woodlot licence, and any subsequent amendments that both parties agree to.

Accordingly, the Commission found that there was no authority under the Forest Act or under a woodlot licence authorized by the Forest Act, for the Co-ordinator to unilaterally impose an AAC or exercise discretion in deciding what it is for the purposes of stumpage appraisal. Furthermore, the Board found the Co-ordinator was obliged to apply the AAC set out in the licence documents, as it stood at the time of issuance of the SAN, and not assume that a different AAC was going to be agreed to.

Thus, the Commission found section 4.8.3(1) of the IAM requires that the LVA be applied to the appraisals for all harvesting authorities issued for the woodlot, until such time that the official AAC exceeds 3000 m³ of Crown timber.

In respect to the Appellants’ request to be able to “lock in” a new stumpage rate for the re-determined SAN, the Commission found that there is no authority under the IAM to allow the Appellants to retroactively fix a new rate for a cutting period that has passed.  However, the Commission found that the Appellants continued to have the opportunity to fix any current stumpage rates for cutting authorities extant.

Accordingly, the appeal was allowed, in part.