Canadian Forest Products Ltd. v. Government of British Columbia.

The Commission confirmed a reappraisal of a stumpage rate that applied to timber harvested under a cutting permit issued to Canfor. The reappraised stumpage rate was set out in a stumpage advisory notice issued in March 2007 by a Timber Pricing Officer with the Ministry of Forests and Range (the “Ministry”). The reappraisal was triggered when the Ministry determined that there had been a “changed circumstance” as defined in the Interior Appraisal Manual (“IAM”). The reappraised stumpage rate was higher than the rate set in the stumpage notice sent to Canfor when the cutting permit was issued. The reappraised rate was effective from January 16 to March 31, 2005, which meant that it was backdated to apply to timber that had already been harvested and scaled. Canfor had appealed to the Commission on the basis that the reappraised rate could not apply to timber that had already been scaled. Canfor argued that the section 103 of the Forest Act precludes the retroactive reappraisal of stumpage on timber that has already been scaled. Canfor submitted that the IAM is a form of subordinate legislation created under the Forest Act, and as such cannot conflict with the Forest Act. Canfor argued that section 2.4.1 of the IAM conflicts with section 103(1) of the Forest Act, and therefore, is ultra vires the Forest Act. Canfor submitted that the Commission must refuse to apply section 2.4.1 of the IAM, and rescind the reappraised stumpage rate. The Commission found that section 2.4.1 of the IAM does not conflict with section 103(1) of the Forest Act. The Commission held that stumpage rates are determined under section 105 of the Act, and those rates are then applied pursuant to section 103(1) of the Act. Section 103(1) focuses on the calculation of the amount of stumpage owing, rather than the rate of stumpage, and section 103(1) does not limit the timing of the determination or redetermination of stumpage rates. Section 103(1) refers to the stumpage rate applicable under section 105, which says that “rates of stumpage must be determined, redetermined and varied …” in accordance with the IAM. Section 2.4.1 of the IAM permits the reappraisal of stumpage applicable to timber that has already been scaled. On that basis, the Commission confirmed the reappraised stumpage rate and dismissed the appeal.