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Vol: I – Issue: I – May 30, 2008

[ Other Forestry Law Reporters ]

Forests and Range Statutes Amendment Act, 2008
S.B.C. 2008, c.4 ("Bill 8")

Generally

Bill 8 received Royal Assent and was enacted on March 31, 2008. A handful of sections came into force immediately upon Royal Assent, and another couple of sections will come into force as of June 1, 2008. The remainder will come into force by Order in Council.

Bill 8 represents a modest package of amendments to BC's forestry legislation, and is primarily of interest to planning and administrative foresters and forest technicians. There is little of concern to operational personnel. Much of Bill 8 is of a "house-keeping" nature. Language is rephrased, existing concepts are clarified for greater certainty, and various sections are broken up and reassembled in new locations without much substantive change to the law. Nevertheless, Bill 8 does contain some substantive changes.

Forest Act

Noteworthy changes made to the Forest Act in Bill 8 include:

• Free Use Permits for Traditional and Cultural Activities – Bill 8 will make an amendment of some significance to any First Nation that requires timber for non-commercial traditional and cultural activities. Currently, a free use permit is not available for this purpose if the applicant already has access to suitable timber. Moreover, even if the applicant is otherwise eligible, the volume of timber available under a free use permit for non-commercial traditional and cultural activities is capped at 250 m³.

  Bill 8 will amend sections 48 and 49 of the Forest Act to authorize free use permits for non-commercial traditional and cultural activities even if the applicant already has access to suitable timber. It will also do away with the volume limitations. Once these amendments are brought into force, First Nations should avoid the use of any other harvesting rights they may have for traditional and cultural activities.

• Timber Marking – Bill 8 has amended section 84 of the Forest Act to remove any substantive timber marking requirements from the Act. For example, the requirement in section 84 to mark timber "conspicuously" and in a manner that is "readily discernable" no longer exists. All technical timber marking standards are now left for the provincial Cabinet to enact in the "Scaling Regulation".

• Stumpage – There is a potentially interesting amendment to those provisions of section 105(7) of the Forest Act that allows Cabinet to order stumpage rates that are lower than those otherwise produced through the section 105(1) appraisal process. Bill 8 amends section 105(7) and adds a new section 105(8) to provide that if there is noncompliance with a condition imposed in a section 105(7) stumpage reduction order, the order is immediately terminated and stumpage is determined through the usual appraisal process. Obviously, the idea behind this amendment is to ensure that anyone who benefits from a reduced stumpage rate under section 105(7) complies with the conditions applicable to that reduced stumpage rate.

  However, Bill 8 does not address the question of who determines whether there is any such noncompliance, or how the Ministry of Forests and Range ("MoF") and a licensee resolve a dispute regarding alleged noncompliance. Presumably, the thinking was that the MoF's Revenue Branch will simply make the call, but neither Bill 8 nor the Forest Act itself appears to give Revenue Branch (or anyone else for that matter) the authority to terminate an order of Cabinet for noncompliance with conditions. Moreover, while a dispute over the existence of noncompliance is not expressly subject to the administrative review and appeal provisions of the Forest Act, a licensee may still challenge any subsequent stumpage determination under section 105(1) of the Forest Act through an administrative appeal on jurisdictional grounds. In other words, a licensee may argue that if Revenue Branch had no right to assess compliance with the section 105(7) Cabinet order in the first instance, it had no legal authority to determine a different stumpage rate under subsection 105(1).

• Reporting Costs – Bill 8 has amended section 136 of the Forest Act to expand the scope of the information that licensees are required to report to the MoF with respect to their costs. In addition to the other information already required under section 136, licensees are now required to report the costs of transporting timber and forest management administration.

Forest and Range Practices Act ("FRPA")

The noteworthy amendments that Bill 8 makes to FRPA are focused almost entirely on Part 2 – "Forest Stewardship Plan, Site Plan and Woodlot Licence Plan".

• Forest Stewardship Plan ("FSP") Exemptions – The legislative notes that accompanied Bill 8 suggest that the amendments to section 4 of FRPA will limit the availability of exemptions to the requirement for an approved FSP. In part, this is true: Bill 8 will eliminate the exemption that was available to harvest 500 m³ of timber in circumstances where the value of that timber faced a significant reduction of value due to insects, fire or disease.
  
  That said, Bill 8 will also add a new exemption into section 4 of FRPA: a licensee is now exempt from the need to obtain an FSP if timber harvesting or road construction activities "incidental" to one or more "primary forest activities" (timber harvesting, silviculture, or road construction, modification and maintenance) strays outside a forest development unit but does not exceed 50 m³. Given that a person does not commit a timber trespass under section 52 of FRPA if that person is authorized to harvest the timber at issue under FRPA, this exemption could potentially provide a defense to the imposition of a fine or administrative penalty on account of some smaller-scale timber trespasses.

  In addition, Bill 8 also adds a new section 4(2) of FRPA that provides for ministerial exemptions to the requirement for an FSP.

• FSP Extensions – Bill 18 will do away with the theoretical possibility of endless extensions to the term of an FSP. Section 6(2) of FRPA will become amended so that only a single extension of up to five years is available for an FSP, and so that the total combined term of an FSP cannot exceed 10 years.

• Protection of Cutting and Road Permits – Bill 18 will limit the protection available under section 19 of FRPA to previously approved cutting permits and road permits when there is a subsequent approval of, or refusal to approve, an FSP, a woodlot licence plan ("WLP"), or amendment to either. Previously approved cutting permits and road permits are currently protected so long as the permit was in effect immediately before the approval or refusal. Once this amendment comes into force, the previously approved permit will only receive protection under section 19 of FRPA if harvesting or road construction has begun under the permit. Accordingly, permit holders who want to ensure that their previously approved permits survive subsequent FSP or WLP approvals or refusals need to ensure they have an ax in the tree or shovel in the ground before the FSP is submitted for approval.

• Stocking Standards – Under Bill 18 a new section 20.1 is added to FRPA that will expressly allow for the amendment of an expired FSP or WLP if the amendment concerns stocking standards.

Other Matters – Recent Arbitration

Though it has nothing to do with the amendments contained in Bill 8, a recent arbitration decision under the "Timber Harvesting Contract and Subcontract Regulation" (B.C. Reg. 22/96) (commonly referred to as "Bill 13") could have significant implications for so-called "fairness disputes" under Bill 13. In Powell Daniels Contracting Ltd. v. Cascadia Forest Products Ltd., the arbitrator had to consider whether a "forestry revitalization proposal" applied Bill 13's AAC reduction criteria "fairly". The significance of the decision is that the arbitrator applied a form of procedural fairness and did not look at the fairness of the end result. According to the arbitrator, so long as the licensee proceeds in a manner that is impartial as between the contractors that are subject to the proposal, then the licensee can impose virtually any substantive result it wants. Unless successfully appealed, this decision significantly narrows the field of battle in a Bill 13 fairness dispute.