fourth floor 747 fort street forest appeals …abitibi’s osilinka operating area, north of...

Forest Appeals Commission

Fourth Floor 747 Fort Street Victoria British Columbia Telephone: (250) 387-3464 Facsimile: (250) 356-9923 Mailing Address: PO Box 9425 Stn Prov Govt Victoria BC V8W 9V1

APPEAL NO. 2004-FA-006(a)

In the matter of an appeal under section 147 of the Forest Act, R.S.B.C. 1996, c. 157.

BETWEEN: Abitibi-Consolidated Company of Canada APPELLANT

AND: Government of British Columbia RESPONDENT

BEFORE: A Panel of the Forest Appeals Commission Alan Andison, Chair

DATE: Conducted by way of written submissions closing on April 30, 2004

APPEARING: For the Appellant: Wayne Lewis For the Respondent: A.K. Fraser, Counsel

PRELIMINARY ISSUE OF JURISDICTION

Abitibi-Consolidated Company of Canada (“Abitibi”) filed an appeal of the February 4, 2004 letter issued by Ljiljana Knezevic, Timber Pricing Co-ordinator for the Northern Interior Forest Region, Ministry of Forests (“MOF”). She issued the letter in response to five objection letters filed by Abitibi concerning stumpage advisory notices for cutting permits H16, M12, N01, N02 and N03, located within Abitibi’s Osilinka operating area near Mackenzie, British Columbia. The stumpage advisory notices are dated September 10, 2003, June 3, 2003, June 3, 2003, August 19, 2003 and December 1, 2003, respectively.

Abitibi appealed on the grounds that the stumpage rates for the cutting permits should have been calculated on the basis that the cutting authority is an “isolated cutting authority,” as set out in section 4.8.2 of the Interior Appraisal Manual (the “IAM”).

In its submissions on the merits of the appeal, the Government questioned whether the Commission has jurisdiction to hear the appeal as it pertains to the four stumpage advisory notices that were issued before November 4, 2003. Effective on that date, certain amendments to the Forest Act came into effect. Among other things, those amendments removed the requirement in the Forest Act that a stumpage determination had to undergo an administrative review before it could be appealed to the Commission. In the present case, four of the stumpage determinations were issued before November 4, 2003, and none of those determinations have been subject to an administrative review under the Forest Act.


This decision addresses the preliminary issue of the Commission’s jurisdiction to hear the appeal as it pertains to the four stumpage advisory notices issued before November 4, 2003.

BACKGROUND

This appeal involves a dispute over the estimated transportation costs that Abitibi submitted in stumpage appraisal data sheets for five cutting permits in Forest Licence A15385. The areas covered by the cutting permits are located within Abitibi’s Osilinka operating area, north of Mackenzie, B.C.

A stumpage appraisal is the process by which an MOF employee determines the stumpage rates that a licensee must pay to the Government for harvesting Crown timber. Using data submitted by the licensee regarding the estimated costs of road construction, timber harvesting and transportation for a cutting permit, the MOF employee estimates how much it should reasonably cost the licensee to harvest an area, and then takes those costs into account when setting the stumpage rate for the cutting permit.

Section 105(1)(b) of the Forest Act provides that stumpage rates “must be determined, redetermined and varied… in accordance with the policies and procedures approved for the forest region by the minister.” The policies and procedures approved for the Interior region by the Minister of Forests are found in the IAM. In this case, the applicable version of the IAM is that which was effective November 1, 2002, including amendments that were in effect when the stumpage advisory notices were issued.

Section 2.2 of the IAM describes the steps in the appraisal process for the Interior region. It states that the licensee (or, in some cases, BC Timber Sales) submits appraisal data to the appropriate MOF district manager when applying for a cutting authority. The district manager or their designate reviews the data, confirms or varies the licensee’s cost estimates, and notifies the licensee of any omissions, errors, or provisions of the IAM that have not been considered by the licensee. The licensee may then revise its submission. Next, the district manager or their designate gives the information supplied by the licensee, as well as any other information that he or she consider relevant to the appraisal, to the MOF employee who determines the stumpage rate. After the stumpage rate has been determined, MOF regional staff notify the licensee of the stumpage rate by way of a stumpage advisory notice.

When the first four stumpage advisory notices in this case were issued, the Forest Act stated that stumpage determinations under section 105(1) of the Forest Act must undergo an administrative review process, which is set out in sections 143 to 145 of that Act, before they may be appealed to the Commission. That review process is referred to in this decision as a “statutory review.” Effective as of November 4, 2003, the requirement for a statutory review before appealing a stumpage determination was removed from the Forest Act, and stumpage determinations could be appealed directly to the Commission.


In addition to the statutory review and appeal processes set out in the Forest Act, the IAM sets out a process by which a licensee may file an “objection” to a stumpage advisory notice. That objection process, which is referred to in this decision as a “non-statutory review,” is set out section 2.2 of the IAM.

In the present case, Abitibi sent separate objection letters to the MOF regarding each of the stumpage advisory notices. In all of those letters, Abitibi made the same basic argument; namely, that the cutting authorities fit within the designation of “isolated cutting authority” under section 4.8.2 of the IAM.

Ms. Knezevic considered Abitibi’s objection letters, and issued her opinion in a single letter dated February 4, 2004. In that letter, she rejects Abitibi’s argument that all of the cutting authorities fit within the designation of “isolated cutting authority” under section 4.8.2 of the IAM. She found that Abitibi’s cutting permits were not isolated cutting authorities.

With regard to Abitibi’s options if it disagreed with her conclusion, Ms. Knezevic’s letter states as follows:

… Any further concerns should be addressed under section 146(2)(C) of the Forest Act, as an appeal to the Forest Appeals Commission. As per section 147(2)(ii) of the Forest Act you may appeal this decision by serving a notice of appeal to the commission no later than 3 weeks after the date you received this letter.

It should be noted that, in contrast to those directions, all of the stumpage advisory notices in this case state as follows:

Objections to this rate determination should be brought immediately to the attention of the undersigned in this office. The formal 21 day review period specified in the Forest Act begins upon delivery of this notice. Consideration of any objection does not delay the determination nor stop the 21 day review period.

Abitibi did not request a statutory review of the first four stumpage advisory notices under the former section 143(1) of the Forest Act, or an appeal of the fifth notice under the new section 146(2)(c) of the Forest Act, within the 3-weeks of the issuance of the stumpage advisory notices.

Rather, on February 27, 2004, Abitibi filed a Notice of Appeal with the Commission, in which Abitibi states that it is appealing “the decision put forth in” Ms. Knezevic’s letter.

In a letter dated March 2, 2004, the Commission proposed to hear the appeal by way of written submissions.

In its submissions on the merits of appeal, the Government maintains that the stumpage advisory notices are the decisions against which Abitibi may appeal, and not the decision in Ms. Knezevic’s letter. Furthermore, the Government questions whether the Commission can consider an appeal of the four notices that were


issued before November 4, 2003, because they have not undergone a statutory review. However, the Government accepts that the Commission has jurisdiction over an appeal of the stumpage advisory notice issued on December 1, 2003, because that notice was issued after the statutory requirement for a review was removed from the Forest Act.

In its reply submissions, Abitibi asked the Commission to “provide comment to the Appellant on what jurisdiction the Commission possesses so that the Appellant may appropriately challenge either the five stumpage determinations or the determination presented in Ms. Knezevic’s letter of February 4, 2004.”

By a letter dated April 23, 2004, the Commission offered the parties the opportunity to provide written submissions in respect of the jurisdictional issue. In that letter, the Commission proposed that, subject to any objections from the parties, it would address the jurisdictional issue as a preliminary matter, before deciding the merits of the appeal. The parties did not object to that proposal.

ISSUES

1. Whether Ms. Knezevic’s letter is a determination of an employee of the MOF under section 105(1) of the Forest Act that may be appealed to the Commission.

2. If the stumpage advisory notices are the determinations that may be appealed, whether a statutory review is required before the notices issued before November 4, 2003 may be appealed.

RELEVANT LEGISLATION

Stumpage rates must be determined in accordance with section 105 of the Forest Act. Before it was amended effective November 4, 2003, section 105(1) stated as follows:

Stumpage rate determined

105 (1) Subject to the regulations made under subsections (6) and (7), if stumpage is payable to the government under an agreement entered into under this Act, the rates of stumpage must be determined, redetermined and varied by an employee of the ministry identified in the policies and procedures referred to in paragraph (b),

(a) at the times specified by the minister, and

(b) in accordance with the policies and procedures approved for the forest region by the minister.

After the November 4, 2003 amendment, section 105(1) stated as follows:

105 (1) Subject to the regulations made under subsections (6) and (7), if stumpage is payable to the government under an agreement entered into under this Act or under section 103 (3), the rates of stumpage must be determined, redetermined and varied


(a) by an employee of the ministry, identified in the policies and procedures referred to in paragraph (c),

(b) at the times specified by the minister, and

(c) in accordance with the policies and procedures approved for the forest region by the minister.

Sections 143, 144, 146, and 147 of the Forest Act provide for reviews and appeals. Those sections provided as follows when the June 3, 2003 SANs were issued:

Determinations that may be reviewed

143 (1) A review may be required under this Division of

…

(c) a determination of an employee of the ministry under section 105(1).

(2) A review of the determinations, orders and decisions referred to

(a) in subsection (1)(a) and (c) is to be conducted by the regional manager, and

…

(3) If a review is to be conducted by the chief forester or the regional manager under subsection (2), the chief forester or regional manager may delegate the power to decide the review to an official in the Ministry of Forests.

(4) A person who exercises a power through a delegation made under subsection (3) is required to comply with the requirements of this Division in respect of the exercise of that power and a decision of the delegate is a decision of the person who delegated the power to decide for the purposes of this Act.

…

Request for review

144 (1) If under the provisions referred to in section 143(1) a determination, order or decision is made, the person

(a) in respect of whom it is made, or

…

may request a review of the determination, order or decision by serving a request for review on the person responsible for conducting the review under section 143(2).

…


(3) The person must serve the request for review on the person responsible for conducting the review under section 143(2) not later than 3 weeks after the date the notice of determination, order or decision is served on the person.

…

(4) Before or after the time limit in subsection (3) expires, the person responsible for conducting the review under section 143(2) may extend it.

(5) A person who does not serve the request for review within the time required under subsection (3) or (4) loses the right to require a review.

Determinations that may be appealed

146 (1) Subject to subsection (3), an appeal may be made to the Forest Appeals Commission from a determination, order or decision of

(a) a district manager or regional manager, under the provisions referred to in section 143 (1) (a) and (b),

(b) an employee of the ministry, under section 105(1),

(c) the chief forester, under section 60 (2), 68, 70(1), 77(1)(a) or 112(1), and

(d) the chief forester, by way of a determination under section 66(4)(b) or (5)(b), of the area of Crown land described in that section.

(2) No appeal may be made under subsection (1)(a) and (b) unless the determination, order or decision has first been reviewed under Division 1 of this Part.

(3) If a determination, order or decision referred to in subsection (1)(a) is varied by the person conducting a review under section 145, the appeal to the commission is from the determination, order or decision as varied under that section.

(4) If this Act gives a right of appeal, this Division applies to the appeal.

Notice of appeal

147 (1) If under the provisions referred to in section 146 a determination, order or decision is made, the person


(b) in respect of whose agreement it is made

may appeal the determination, order or decision by

(c) serving a notice of appeal on the commission


(i) in the case of a determination, order or decision that has been reviewed, not later than 3 weeks after the date the written decision is served on the person under section 145(3), and

(ii) in the case of a determination, order or decision that has not been reviewed, not later than 3 weeks after that date the determination, order or decision is served on the person under the provisions referred to in section 146 (1)(c) and (d), and…

(4) Before or after the time limit in subsection (1) expires, the chair or a member of the commission may extend it.

(5) A person who does not serve the notice of appeal within the time required under subsection (1) or (4) loses the right to an appeal.

Effective on June 20, 2003, sections 143(1) and (2) were amended, section 146 was re-enacted, and sections 147(1) and (1)(c)(ii) were amended (BC Reg 242/03). Thus, sections 143, 144, 146, and 147 provided as follows when the August 19 and September 10, 2003 SANs were issued:



…

(d) a determination of an employee of the ministry under section 105(1).


(a) in subsection (1)(a) and (d) is to be conducted by the regional manager,

…



(5) For the purpose of subsection (1), a redetermination or variation of stumpage rates under section 105(1) is deemed to be a determination.

Request for review

144 (1) If under the provisions referred to in section 143(1) a determination, order or decision is made, the person



…

may request a review of the determination, order or decision by serving a request for review on the person responsible for conducting the review under section 143(2).

…

(3) The person must serve the request for review on the person responsible for conducting the review under section 143(2) not later than 3 weeks after the date the notice of determination, order or decision is served on the person.

…

(4) Before or after the time limit in subsection (3) expires, the person responsible for conducting the review under section 143(2) may extend it.



146 (1) Subject to subsection (3), an appeal may be made to the Forest Appeals Commission from a determination, order or decision of

…

(b) an employee of the ministry, under section 105(1),

…

(2) No appeal may be made under subsection (1)(a) and (b) unless the determination, order or decision has first been reviewed under Division 1 of this Part.

(3) If a determination, order or decision referred to in subsection (1)(a) and (b) is varied by the person conducting a review under section 145, the appeal to the commission is from the determination, order or decision as varied under that section.


Notice of appeal

147 (1) If a determination, order or decision referred to in section 146(1) or (2) is made, the person






(i) in the case of a determination, order or decision that has been reviewed, not later than 3 weeks after the date the written decision is served on the person under section 145(3), and

(ii) in the case of a determination, order or decision that has not been reviewed, not later than 3 weeks after that date the determination, order or decision is served on the person under the provisions referred to in section 146(2), and…



Effective on November 4, 2003, section 143(1) was amended, section 143(2)(a) was amended, and section 143(5) was repealed, section 146(2)(c) was added, and section 146(6) was added (BC Reg 400/03). Thus, sections 143, 144, 146, and 147 provided as follows when the December 1, 2003 SAN was issued:



(a) a determination, order or decision of a district manager under section 75.1(1)(d), 76(1), (2) or (6), 77(1)(c), 78 or 112(2),

(b) a determination, order or decision of a timber sales manager under section 78, and

(c) a determination, order or decision of a regional manager under section 59, 59.1(9) or (10), 70(4), 71(1)(d), 75, 75.1(1)(d), 76(1), (2) or (6), 77(1)(b) or 112(2).


(a) in subsection (1)(a) is to be conducted by the regional manager,

(b) in subsection (1)(b) is to be conducted by a person authorized by the minister, and

(c) in subsection (1)(c) is to be conducted by the chief forester.




(5) [Repealed 2003-31-65.]

Division 2 — Appeals


146 (1) Subject to subsection (3), an appeal may be made to the Forest Appeals Commission from a determination, order or decision that was the subject of a review required under Division 1 of this Part.

(2) An appeal may be made to the Forest Appeals Commission from a determination, order or decision of

(a) the chief forester, under section 60(2), 68, 70(1), 77(1)(a) or 112(1)

(b) the chief forester, by way of a determination, under section 66(4)(b) or (5)(b), of the area of Crown land described in that section, and

(c) a determination of an employee of the ministry under section 105(1).

(3) No appeal may be made under subsection (1) unless the determination, order or decision has first been reviewed under Division 1 of this Part.

(4) If a determination, order or decision referred to in subsection (1) is varied by the person conducting the review, the appeal to the commission is from the determination, order or decision as varied under section 145.


(6) For the purpose of subsection (1), a redetermination or variation of stumpage rates under section 105(1) is considered to be a determination.

Notice of appeal

147 (1) If a determination, order or decision referred to in section 146(1) or (2) is made, the person





…


(ii) in the case of a determination, order or decision that has not been reviewed, not later than 3 weeks after that date the determination, order or decision is served on the person under the provisions referred to in section 146(2)…



DISCUSSION AND ANALYSIS

1. Whether Ms. Knezevic’s letter is a determination of an employee of the MOF under section 105(1) of the Forest Act that may be appealed to the Commission.

The Government submits that this is an appeal of the stumpage determinations contained in the five stumpage advisory notices issued to Abitibi. The Government notes that all five notices were the subject of a non-statutory review under section 2.2(10) of the IAM, and Ms. Knezevic declined to modify the notices. The Government submits that the notices stand, and that it is against those notices, being decisions of an employee under section 105(1) of the Forest Act that the appeal is taken under section 146 of the Forest Act.

Abitibi submits that Ms. Knezevic’s letter indicates that she thought her decision was a determination under section 105(1) of the Forest Act. Abitibi notes that her letter states that “this decision” may be appealed to the Commission under section 147(c)(ii) of the Forest Act, and Abitibi followed that direction when it appealed to the Commission.

In addition, Abitibi submits that Ms. Knezevic was empowered to make a determination under section 105(1) of the Forest Act because the IAM is enabled by section 105(1) of the Forest Act, and she followed the procedure set out in section 2.2(10) of the IAM when she considered Abitibi’s objections to the stumpage advisory notices.

Moreover, Abitibi submits that it acted reasonably in following the directions provided by MOF in Ms. Knezevic’s letter, and it argues that it should not lose the right to challenge the five stumpage determinations or the “determination” in Knezevic’s letter through the appropriate procedure, whether that procedure may be a review or an appeal.

Commission’s findings

The parties do not dispute that the five stumpage advisory notices are determinations of an MOF employee under section 105(1) of the Forest Act, but Abitibi seeks clarification as to whether Ms. Knezevic’s letter dated February 4, 2003 is a determination of an MOF employee under section 105(1) that may be appealed to the Commission.


In deciding this issue, the Commission has considered the relevant provisions of the Forest Act and the IAM. In particular, the Commission has considered sections 143 through 147 of the Forest Act, which provide for statutory reviews and appeals. To determine the intention of the Legislature with regard to what constitutes a determination under section 105 that may be appealed, the Commission has considered the statutory language that applied both when Ms. Knezevic’s letter was issued and when the stumpage advisory notices were issued.

When Ms. Knezevic’s letter was issued (i.e. after November 4, 2003), section 146(2)(c) of the Forest Act provided that an appeal may be made to the Commission from “a determination of an employee of the ministry under section 105 (1).” Similarly, when the first four stumpage advisory notices were issued (i.e. before November 4, 2003), section 143(1) of the Forest Act provided that a review, and later an appeal, may be required of “a determination of an employee of the ministry under section 105 (1).” The Commission notes that, while the statutory process for disputing stumpage determinations has changed, there has been no change in the language used to describe the type of determination that may be reviewed and/or appealed.

The Commission also notes that, under those sections, the determination must be made by an employee of the MOF who is authorized to make such determinations, and the determination must be made pursuant to section 105(1) of the Forest Act. Thus, the Commission has considered (1) whether Ms. Knezevic was, when she issued her February 4, 2003 letter, an employee of the MOF who may determine stumpage rates, and (2) if so, whether she was making a determination under section 105(1) of the Forest Act when she issued that letter.

Which employees of the MOF may determine stumpage rates?

Section 1.4 of the IAM effective November 1, 2002 (as amended by Amendment No. 4, effective April 1, 2003), identifies the MOF employees who may make stumpage determinations:

1.4 Responsibility for Stumpage

For the purposes of section 105 of the Forest Act, the following employees of the ministry are authorized to determine, redetermine and vary stumpage rates.

• regional managers, regional appraisal coordinators and employees of the regional revenue section, and

• director, Revenue Branch, Ministry of Forests and the employees of Revenue Branch.

When Ms. Knezevic issued her February 4, 2003 letter, she signed it as the Timber Pricing Coordinator for the Northern Interior Forest Region. As such, she was an employee of the regional revenue section, and was an MOF employee who could make stumpage determinations.


Thus, the question becomes whether she was determining, redetermining or varying a stumpage rate when she issued her letter in response to Abitibi’s objections.

Whether Ms. Knezevic was making a determination under section 105(1) of the Forest Act when she issued her February 4, 2003 letter

Before considering whether Ms. Knezevic’s letter contains a “determination” under section 105(1), the Commission has considered the meaning of “determination” in the context of sections 146(2)(c) and 105(1) of the Forest Act.

The word “determination” is not defined in the Forest Act. However, section 146(6) of the Forest Act clarifies the meaning of “determination” for the purposes of an appeal of a stumpage determination. When Ms. Knezevic’s letter was issued, section 146(6) of the Forest Act provided that “For the purpose of [an appeal under] subsection (1), a redetermination or variation of stumpage rates under section 105 (1) is considered to be a determination.” Similarly, when the first four stumpage advisory notices were issued, section 143(5) of the Forest Act provided that, “For the purpose of [a review] subsection (1), a redetermination or variation of stumpage rates under section 105 (1) is deemed to be a determination.” The Commission notes that those former and current sections of the Forest Act do not state that a decision issued in response to an “objection” under the IAM is a determination under section 105(1) that may be reviewed or an appealed under the Forest Act. Rather, those sections indicate that a determination by an employee under section 105(1) of the Forest Act, including a redetermination or variation of a stumpage rate, could be reviewed and/or appealed.

The IAM provides further guidance as to what constitutes a stumpage determination under section 105(1). Section 2.1 of the IAM lists the following types of stumpage determinations:

2.1 Types of Determination

Stumpage rates are determined, redetermined or varied by:

1. An appraisal, reappraisal or quarterly adjustment using the comparative value pricing system,

2. an appraisal, reappraisal or quarterly adjustment using the market pricing system,

3. an Order-in-Council under the Forest Act, section 105, or

4. a procedure identified in chapter 6 of this manual.

Paragraphs 1 through 3 above make no reference to the “objection” process set out in section 2.2 of the IAM, or any form of non-statutory review process. Furthermore, with regard to paragraph 4, the non-statutory review process that led to Ms. Knezevic’s letter is not a procedure identified in chapter 6 of the IAM.


The Commission has also considered the appraisal procedure set out section 2.2 of the IAM:

2.2 Appraisal Procedure

1. An appraisal is a process used to determine a stumpage rate for a cutting authority area using the Interior Appraisal Manual in effect on the effective date of the cutting authority.

…

8. To determine the stumpage rate the person who determines the stumpage rate will consider:

a. the information provided by the licensee and the district manager or their designate, and

b. any information available to the person who determines the stumpage rate that is relevant to the appraisal.

9. Regional staff will notify the licensee of the stumpage rate in the form of a stumpage advisory notice and will provide the licensee with a summary of the information used to determine the stumpage rate.

10. Within three (3) weeks of the date of the stumpage advisory notice, the licensee may notify regional revenue staff, in writing, of any objection to the information contained in the stumpage advisory notice that could be resolved without a review or appeal. The written objection must state the grounds for objection as well as a statement describing the relief requested. At this point, the objection is not considered a request for [review or] appeal under the Forest Act (section 143 to 150).

11. Regional revenue staff will notify the licensee, in writing, if the objection referred to in subsection (10) cannot be resolved. In this notification, the regional revenue staff will indicate that the three (3) week time requirement for notice for review specified in section 144 (3) of the Forest Act, will commence upon receipt of that notification.

[underlining added]

Sections 2.2(8) and (9) of the IAM expressly refer to the determination of a stumpage rate through the appraisal procedure, and notification of a stumpage rate in a stumpage advisory notice. In contrast, sections 2.2(10) and (11) of the IAM expressly refer to a process for filing an “objection” after the stumpage rate set out in a stumpage advisory notice has been determined. Despite the fact that the objection process is described under the heading “Appraisal Procedure”, the objection process seems to be a distinct process, designed to provide an alternative to a statutory review or appeal, which may occur after a stumpage rate is determined.


Thus, the relevant provisions of the Forest Act and the IAM indicate that a decision issued in response to an objection under section 2.2 of the IAM is not a “determination” within the meaning of sections 105(1) and 146(2)(c) of the Forest Act.

The Commission has also considered the nature of the decision in Ms. Knezevic’s letter, and whether it constitutes a “determination” of a stumpage rate. Her letter states as follows:

The Interior Appraisal Manual (IAM) section 4.8.2 states that ‘An isolated cutting authority area has no continuous road access to the nearest support centre. The exception is where there is road access, but the route is not routinely used to transport people equipment or supplies to the cutting authority area.’

…

Based on information provided by the Mackenzie Forest District, I believe that there is continuous road access to these cutting authority areas that can provide reasonable access during the operational season (and it is routinely used).

…

In consideration of the information you have presented in your letters, the information from the Mackenzie Forest District and the wording of the IAM, my decision is to consider these cutting permits as not being isolated cutting authorities.

[underlining added]

Based on her letter, the Commission finds that Ms. Knezevic was not redetermining or varying a stumpage rate, given that she rejected Abitibi’s objection and, therefore, did not recalculate or reconsider the stumpage rates in the stumpage advisory notices. Thus, for her letter to contain an appealable determination under section 105(1), she must have been making a determination of a stumpage rate.

On the face of Ms. Knezevic’s letter, the Commission finds that she was not making a determination of a stumpage rate when she responded to Abitibi’s objections. Stumpage rates are determined based on calculations involving a number of different cost estimates and other factors. In this case, she was simply considering whether one component of those calculations was classified incorrectly when the stumpage rates were originally determined.

In summary, the Commission finds that the relevant sections of the Forest Act and the IAM indicate that Ms. Knezevic’s February 4, 2003 letter is not a determination under section 105(1) of the Forest Act that may be appealed to the Commission.


Whether Ms. Knezevic’s letter contains another type of appealable decision, determination or order

Before proceeding to the next issue, the Commission has considered whether Ms. Knezevic’s letter contains another type of decision, determination or order that may be appealed to the Commission.

When Ms. Knezevic’s letter was issued, section 143(1) of the Forest Act listed the types of determinations, orders and decisions that could be reviewed. Under section 146(1), those determinations, orders and decisions could then be appealed to the Commission, and under section 146(2), a number of other determinations, orders and decisions could be appealed directly to the Commission. With the exception of a determination by an employee under section 105(1), all of the determinations, orders and decisions that may be appealed to the Commission are those made by district managers, regional managers, timber sales managers, or the chief forester concerning matters unrelated to stumpage determinations. Ms. Knezevic is not a district manager, regional manager, timber sales manager, or the chief forester. As such, Ms. Knezevic’s letter does not fall into any of those categories of determinations, orders and decisions.

Conclusion

In summary, the Commission finds that Ms. Knezevic’s February 4, 2003 letter is not a determination under section 105(1) of the Forest Act, and contains no determination, order or decision that may be appealed to the Commission. Consequently, it is the stumpage determinations contained in the five stumpage advisory notices that may be appealed to the Commission in this case.

2. If the stumpage advisory notices are the determination(s) that may be appealed, whether a statutory review is required before the notices issued before November 4, 2003 may be appealed.

The Government raises the issue of whether a statutory review of the four stumpage advisory notices that were issued before November 4, 2003 is required before they may be appealed to the Commission. In particular, the Government questions whether the “right of statutory review” which existed before November 4, 2003 was preserved after that date, and whether there is, therefore, no right to an appeal against them without first seeking a review. The Government submits that the alternative view would be that any right to a review that had not been requested by November 4, 2003 was lost, and in those cases a new right of appeal directly to the Commission was acquired.

Specifically, the Government submits that no specific transitional provisions apply in this case, and therefore, sections 35 and 36 of the Interpretation Act, R.S.B.C. 1996, c. 238, apply. The question then becomes whether section 35(1)(e) or, alternatively, section 36(1)(c) applies in this case. The relevant portions of sections 35 and 36 of the Interpretation Act are as follows:


Repeal

35 (1) If all or part of an enactment is repealed, the repeal does not

…

(c) affect a right or obligation acquired, accrued, accruing or incurred under the enactment so repealed,

…

(e) affect an investigation, proceeding or remedy for the right, obligation, penalty, forfeiture or punishment.

(2) Subject to section 36(1), an investigation, proceeding or remedy described in subsection (1)(e) may be instituted, continued or enforced and the penalty, forfeiture or punishment imposed as if the enactment had not been repealed.

Repeal and replacement

36 (1) If an enactment (the "former enactment") is repealed and another enactment (the "new enactment") is substituted for it,

…

(c) the procedure established by the new enactment must be followed as far as it can be adapted in the recovery or enforcement of penalties and forfeitures incurred under the former enactment, in the enforcement of rights existing or accruing under the former enactment, and in a proceeding relating to matters that happened before the repeal,

…

The Government submits that section 35(1)(e) applies if the right to a review is characterized as a “remedy” for a right acquired, accrued, accruing or incurred under the former provisions of the Forest Act. Alternatively, section 36(1)(c) applies if the right to a review is merely a “procedure” for enforcing a right existing or accruing under the former provisions of the Forest Act.

The Government submits that, if section 35(1)(e) applies, then the repeal of the provision conferring the right of review will not affect that right, assuming that it accrued before November 4, 2003. If section 36(1)(c) applies, then the procedure will change from a review procedure to an appeal procedure with immediate effect in all cases where a review has not been commenced. Furthermore, the Government submits that if the change is characterized as purely procedural, then no rights that accrued before November 4, 2003 are affected by a retrospective application of the new procedural provisions in cases where no review has been commenced.


The Government submits that there is a “very respectable argument” that stumpage determinations that were made before November 4, 2003, must follow the scheme in force before that date, namely, they must be reviewed before they may be appealed. If so, then the Commission has no jurisdiction to hear an appeal of such a determination until the determination has undergone a statutory review.

In support of those submissions, the Government cites the Supreme Court of Canada’s decision in Puskas v. R [1998] 1 S.C.R. 1207 (hereinafter Puskas). In that case, a new requirement for leave to appeal to the Supreme Court of Canada was imposed through a change to the Criminal Code. Prior to that change, the appellants could have appealed without having to seek leave of the Court. The Court held that leave was necessary because the decision appealed from was made after the new requirement was imposed.

The Government submits that Puskas stands for the proposition that a right to an appeal is not purely procedural in nature; rather, it is a substantive right that accrues or vests, at the latest, on the date that an apealable decision is made. Even where there is a change in the mechanism for getting to an appellate body, as opposed to the right to get there at all, that change will not affect decisions made before the change in the mechanism took effect.

Finally, the Government notes that it has no interest in contending that the Commission has no jurisdiction over an appeal of the first four stumpage determinations in this case, but as a matter of jurisdiction, the parties cannot waive or otherwise consent to a procedure that is not authorized by the statute. The Government submits that the Commission still has jurisdiction over the fifth stumpage advisory notice, and should the Commission allow that appeal on its merits, then the Government would take no point on the lateness of any request for a review by Abitibi.

Abitibi takes no position on the Government’s submissions as to the law on this issue, but Abitibi notes that it is concerned that it should not lose the right to challenge the five stumpage determinations through the appropriate procedure.

Commission’s findings

The Commission has considered the relevant provisions of the Interpretation Act, above, in light of the Court’s decision in Puskas. In that case, the Court held that “the possibility of an appeal is a substantive right, not merely a question of procedure,” and that the real question was whether the appellants’ right to an appeal was acquired, accrued or accruing before the change to the legislation came into force. The Court then applied principles of statutory interpretation, focusing on sections 43(c) and 44(c) of the federal Interpretation Act, R.S.C. 1985, c. I-21, which are, respectively, substantially the same as sections 35(1)(c) and 36(1)(c) of the British Columbia Interpretation Act. The Court held that:

A right can only be said to have been “acquired” when the right-holder can actually exercise it. The term “accrue” is simply a passive way of stating the same concept… Similarly, something can only be said to be “accruing” if its eventual accrual is certain, and not conditional on


future events… In other words, a right cannot accrue, be acquired, or be accruing until all conditions precedent to the exercise of the right have been fulfilled.

The Court then described the conditions that were precedent to the appellants’ acquisition of the right to appeal to the Supreme Court of Canada without leave: the accused had to be charged with an indictable offence; they had to be acquitted of that offence at trial; the acquittal had to be reversed by the Court of Appeal; and finally, the Court of Appeal had to order a new trial. In the appellants’ cases, the change to the Criminal Code came into force on May 14, 1997. The appellants were charged and acquitted before that date, but the Court of Appeal remitted their cases for new trials after that date. The Court held that section 43 of the federal Interpretation Act did not exclude the appellants’ cases from the operation of section 44, which indicated that the old proceeding should be continued under the new enactment. Since the new enactment did not grant an appeal as of right, but rather imposed a requirement for leave, the appellants had to seek leave to appeal.

In the present case, the Forest Act was amended and the sections allowing Abitibi to request a review, and requiring a review of stumpage determinations as a condition precedent to an appeal, were repealed effective on November 4, 2003. Four of the stumpage advisory notices were issued before that date. Therefore, the first question is whether the ability to request a statutory review is a “right” that accrued before November 4, 2003, or whether it is purely procedural in nature.

In considering whether a statutory review is a “right” in itself or merely a procedure for enforcing other rights, the Commission has considered that Puskas was a criminal case involving the right of the accused to a fair trial, whereas the present case involves no criminal penalties. Rather, it involves the financial interests of a licensee who has rights to harvest Crown timber. Without considering the language in the Forest Act, those circumstances may indicate that a statutory review should not be characterized as a right, in itself. However, the language in the Forest Act indicates that the Legislature intended otherwise. Specifically, when the stumpage advisory notices dated June 3, August 15 and September 10, 2003 were issued, section 144(5) of the Forest Act stated as follows:


[underlining added]

Based on section 144(5) of the Forest Act, the Commission concludes that Abitibi acquired a right to a statutory review of the four stumpage advisory notices before November 4, 2003.

Applying the reasoning is Puskas, the Commission concludes that a statutory review is necessary before the Commission may hear an appeal of those notices, because Abitibi’s right to a review had accrued before the review process was eliminated. Specifically, section 35(1)(c) of the British Columbia Interpretation Act excludes those stumpage advisory notices from the operation of section 36(1)(c), in that the new procedures cannot be applied in a way that takes away the right to a statutory


review that had already accrued. Accordingly, the Commission finds that it has no jurisdiction over an appeal of the four stumpage advisory notices that were issued before November 4, 2003.

The Commission notes that the 3-week period for requesting a review of those stumpage advisory notices expired some time ago. However, section 144(4) of the Forest Act, as it was then, provided that “Before or after the time limit in subsection (3) expires, the person responsible for conducting the review under section 143 (2) may extend it”, and the Government has indicated that it would take no point on the lateness of any request for a review by Abitibi.

On the issue of timelines for filing reviews and appeals, the Commission has also made some observations about the process set out in section 2.2 of the IAM.

The Commission notes that the former and current provisions in sections 143 through 147 of the Forest Act set out specific timelines for requesting reviews and appeals. In particular, the Forest Act expressly states that the person requesting a review (prior to November 4, 2003) or an appeal (after November 4, 2003) of a stumpage determination may do so by serving a notice of appeal on the commission “not later than 3 weeks after that date the determination, order or decision is served on the person”.

The objection procedure set out in section 2.2 of the IAM purports to delay the commencement of the 3-week period for requesting a review (formerly) or an appeal (currently) of a stumpage determination. However, section 144(4) of the Forest Act, as it was before November 4, 2003, provides that “the person responsible for conducting the review under section 143 (2) may extend” the period for requesting a review of a stumpage determination. Similarly, section 147(4) of the Forest Act, as it is now, states that “the chair or a member of the commission may extend” the period for requesting an appeal of a stumpage determination.

The Commission finds that the provisions in section 2.2 of the IAM that purport to delay the commencement of the 3-week period conflict with the express provisions in the Forest Act that require reviews (formerly) and appeals (currently) of stumpage determinations to be filed within 3 weeks of the issuance of the determination, subject to an extension being granted by the Commission (under the current procedure) or the person conducting the review (under the former procedure).

Moreover, the Commission finds that this conflict between the IAM and the Forest Act must be resolved in favour of the Forest Act, because it is a law approved by the Legislature, whereas the IAM is, effectively, a form of subordinate legislation approved by a minister of the Government. Regulations and other forms of subordinate legislation generally cannot oust the provisions of an Act unless the enabling Act expressly states otherwise. In other words, the Minister of Forests cannot approve policies and procedures in the IAM that conflict with the Forest Act, unless the Forest Act gives him the authority to do so. As stated by R.W. Macauley and J.L.H. Sprague in “Practice and Procedure Before Administrative Tribunals” (2004), section 9.4(b) at page 9(13):


Subject to the Constitution, to the extent that Parliament has set out procedure in legislation an agency is bound by that procedure. It cannot impose procedures which conflict with that legislative direction unless the legislation gives it the authority to do so. This is because a power to make subordinate legislation (i.e. regulations or rules) cannot be used to oust the expressed will of a Legislature, nor can a non-legislative discretionary power be used to oust legislative provisions.

The Forest Act contains no indication that the Legislature intended to empower the Minister of Forests to approve policies and procedures in the IAM that conflict with the timelines for reviews and appeals set out in the Forest Act. While section 105 of the Forest Act requires the IAM to be applied when determining, redetermining or varying stumpage rates, section 105 does not state that the IAM must be applied with regard to reviews, appeals or disputes concerning stumpage determinations. Furthermore, sections 105 and 143 through 147 of the Forest Act contain no language indicating that the Legislature intended to empower MOF staff, other than the person responsible for conducting the review (under the former procedure), or the Commission (under the current procedure) to extend the timelines for filing reviews or appeals of stumpage determinations.

The Commission notes that the stumpage advisory notices in this case appear to recognize that the 3-week limitation period set out in the Forest Act cannot be ousted by the IAM. The notices all state as follows:

Objections to this rate determination should be brought immediately to the attention of the undersigned in this office. The formal 21 day review period specified in the Forest Act begins upon delivery of this notice. Consideration of any objection does not delay the determination nor stop the 21 day review period.

[underlining added]

In light of the conflict between sections 2.2(10) and (11) of the IAM and the provisions in the Forest Act regarding the 3-week limitation periods, the Commission recommends that the MOF revise the IAM to make it consistent with the Forest Act.

DECISION

In making this decision, this panel of the Commission has considered all of the evidence and arguments provided, whether or not they have been specifically reiterated here.

For the reasons provided above, the Commission finds that it has no jurisdiction over the appeal as it pertains to the four stumpage advisory notices issued before November 4, 2003.

Accordingly, the Commission will only consider the merits of the appeal pertaining to the stumpage advisory notice issued on December 1, 2003. Although the appeal was filed more than 3 weeks after that stumpage advisory notice was issued, and


therefore was filed after the time limit in section 147(1) of the Forest Act had expired, the Commission finds that it is appropriate in the circumstances of this case to extend the time limit for filing this appeal, pursuant to section 147(5) of the Forest Act.

Finally, with regard to the parties’ submissions on the merits of the appeal, the Commission notes that the Government objected to evidence included in Abitibi’s rebuttal submissions on the grounds that it was new evidence that the Government did not have an opportunity to respond to, and the Government suggested that the appeal should be conducted by way of an oral hearing. In keeping with the principles of fairness, the Commission finds that the Government should be given an opportunity to respond to that evidence. However, the Commission finds that an oral hearing is not necessary in order for the Government to have a fair opportunity to respond to that evidence.

Accordingly, the Commission is offering the Government an opportunity to respond, in writing, to the evidence in Abitibi’s rebuttal submissions regarding relating to transport by barge. The Government should provide its submissions by no later than June 24, 2004.

Alan Andison, Chair Forest Appeals Commission

June 10, 2004

fourth floor 747 fort street forest appeals …abitibi’s osilinka operating area, north of...

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