Decision Date: May 14, 2009

Panel: David Ormerod

Keywords:  Forest Act – s. 105(1); Coast Appraisal Manual – ss. 5.1.2, 5.3.1.1(5); stumpage rate; development cost estimate; re-usable portable bridge

606546 BC Ltd. (the “Appellant”) appealed a stumpage determination issued by the Regional Appraisal Coordinator, Coast Forest Region, Ministry of Forests and Range (the “Ministry”).  The determination applied to timber harvested under cutting permit (“CP”) 49 issued under forest licence A19202 held by the Appellant.  The Appellant argued that the Regional Appraisal Coordinator erred by failing to include the purchase costs of two portable bridges in determining the stumpage rate for CP 49.

The Appellant owns shares in Tamihi Logging Ltd. (“Tamihi”).  In January 2008, Tamihi purchased four portable bridges from Cattermole Timber.  In April 2008, the Appellant acquired forest licence A19202 from Cattermole Timber.  When the Appellant applied for CP 49, it submitted construction cost estimate forms which included the purchase costs of two portable bridges, as well as the costs associated with moving and installing the bridges in order to harvest timber under CP 49.  However, in determining the stumpage rates for CP 49, the Regional Appraisal Coordinator only allowed the costs of moving and installing the bridges.

In the appeal, the Appellant argued that the language in the Coast Appraisal Manual (“CAM”) supported including the bridge purchase costs in determining the stumpage rate for CP 49.

The Government argued that the bridge purchase costs could not be included in determining the stumpage rate because the corporation holding the forest licence is not the same corporation that purchased the bridges, and the costs of the bridges were already included in previous stumpage appraisals related to the forest licence.

The Commission reviewed the language in sections 5.1.2 and 5.3.1.1(5)(c) and (d) of the CAM.  Based on the language in the CAM and the evidence provided by the parties, the Commission found that the bridge purchase costs could be included in determining the stumpage rate if the holder of forest licence A19202, i.e. the Appellant, had purchased the bridges, or there was sufficient evidence that the licensee would incur a cost of that kind in harvesting CP 49.  The Commission found that the bridges were not purchased by the Appellant; rather, they were purchased by Tamihi, which is a separate corporation and is not the holder of forest licence A19202.  In addition, there was insufficient evidence that the Appellant had purchased or had agreed to purchase the bridges from Tamihi.  Furthermore, the Commission found that, if the capital costs of the bridges had already been accounted for in prior appraisals for forest licence A19202, their costs to the licensee has been accounted for in reduced stumpage rates for timber harvested under the licence.

Accordingly, the Commission confirmed the stumpage determination under appeal.

The appeal was dismissed.