2003 Legislative Session: 4th Session, 37th Parliament
FIRST READING

The following electronic version is for informational purposes only.
The printed version remains the official version.

HONOURABLE MICHAEL DE JONG
MINISTER OF FORESTS

BILL 28 -- 2003

FORESTRY REVITALIZATION ACT

Contents

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:

Definitions

1 (1) In this Act:

"group of licences" means 2 or more licences that

(a) are listed in an item of the Schedule under a group name assigned to them in Column 1 of that item, and

(b) are each identified by licence number in Column 2 of that item;

"licence" means a licence that is replaceable under the Forest Act and is a

(a) forest licence,

(b) tree farm licence, or

(c) timber sale licence;

"timber licence" means a timber licence

(a) that describes an area of Crown land that is not in a tree farm licence area, and

(b) is held by a person who is the holder of a licence in a group of licences;

"ungrouped licence" means a licence that is

(a) mentioned in an item of the Schedule separately from other licences, and

(b) identified by licence number in Column 2 of that item

but does not include a licence in a group of licences.

(2) Words and expressions used in this Act but not defined in subsection (1) or in a regulation under section 13 (2) (a) have the same meanings as in the Forest Act.

Harvesting rights reduced for timber licences and certain replaceable licences

2 (1) The allowable annual cut of an ungrouped licence identified in an item of the Schedule is reduced by the amount specified in Column 3 of that item.

(2) Each area of Crown land described in a timber licence is reduced by 20%.

(3) The total of the allowable annual cuts of the licences in a group of licences listed in an item of the Schedule is reduced by the amount specified in Column 3 of that item opposite the group name, assigned in Column 1, under which the licences are listed.

Minister's orders

3 (1) By order in writing, the minister must

(a) attribute a reduction in area under section 2 (2) in equal or unequal portions, specified in the order, to one or more of the timber licences held by a licensee that is the holder of one or more licences in a group of licences, and

(b) specify, for each of the timber licences referred to in paragraph (a) of this section, the part of the area of Crown land described in the timber licence that remains after

(i) the reduction made by section 2 (2), and

(ii) the attribution under paragraph (a) of this subsection.

(2) By order in writing, the minister must attribute a reduction of allowable annual cut under section 2 (3) in equal or unequal portions, specified in the order, to one or more of the licences in a group of licences.

(3) The allowable annual cut of a licence to which the minister attributes all or part of a reduction made under section 2 (3) is reduced by the amount attributed by the order to that licence.

(4) By order in writing, the minister must specify, for each tree farm licence in a group of licences, the area of Crown land in the tree farm licence area that remains after the reduction made by subsection (3).

(5) A minister's order that must be made under this section

(a) may be made at any time within 3 years after the coming into force of section 2,

(b) may differ for different timber, places or transactions or for different licences or timber licences, and

(c) when made

(i) is deemed to have come into force on the date this section comes into force, and

(ii) is retroactive to the extent necessary to give it effect on and after that date.

(6) Written notice of an order under this section must be delivered to the holder of a

(a) licence, or

(b) timber licence

that is affected by the order.

Provision of information

4 (1) The minister, by written notice, may require the holder of an ungrouped licence, a timber licence or a licence in a group of licences, at the holder's expense, to provide information that the minister considers necessary for the purposes of the orders referred to in section 3.

(2) At the time and in the form and manner required by the minister, the holder of an ungrouped licence, a timber licence or a licence in a group of licences must provide the required information to the minister.

(3) A holder of an ungrouped licence, a timber licence or a licence in a group of licences who contravenes subsection (2) commits an offence.

Deemed amendments to affected timber licences and other licences

5 (1) An ungrouped licence referred to in section 2 (1) is deemed amended to reflect the reduction under section 2 (1).

(2) A timber licence referred to in section 2 (2) is deemed amended to reflect the minister's order under section 3 (1).

(3) A licence referred to in section 2 (3) is deemed amended to reflect the minister's orders under section 3 (3) and (4).

Compensation

6 (1) Each holder of an ungrouped licence is entitled to compensation from the government for a reduction under section 2 (1) of the allowable annual cut of the ungrouped licence, in an amount equal to the value of the harvesting rights taken by means of the reduction, which value must be determined under the regulations, for the unexpired portion of the term of the licence.

(2) Each holder of a timber licence is entitled to compensation from the government in respect of the part, if any, of a reduction in the area of Crown land described in the timber licence that is made under section 2 (2) and that is attributed under section 3 (1) to that licence in an amount equal to the value of the harvesting rights taken by means of the reduction, which value must be determined under the regulations.

(3) Each holder of a licence in a group of licences is entitled to compensation from the government in respect of the part, if any, of a reduction of the allowable annual cut of the licence that is made under section 2 (3) and that is attributed under section 3 (2) to that licence, in an amount equal to the value of the harvesting rights taken by means of the reduction, which value must be determined under the regulations, for the unexpired portion of the term of the licence.

(4) In addition to the compensation to which the holder of an ungrouped licence, a timber licence or a licence in a group of licences is entitled under subsection (1), (2) or (3), the holder is entitled to compen-sation from the government in an amount equal to the value, determined under the regulations, of improvements made to Crown land that

(a) are, or have been, authorized by the government,

(b) are not improvements to which section 174 of the Forest Practices Code of British Columbia Act applies, and

(c) are not, or have not been, paid for by the government under the Forest Act or the former Act as defined in the Forest Act.

(5) An entitlement to compensation under this section vests in the holder to which it applies on the date this section comes into force.

(6) A dispute between the minister and the holder of an ungrouped licence, a timber licence or a licence in a group of licences as to the amount of the compensation to which the holder is entitled under this section must be submitted to arbitration under the Commercial Arbitration Act.

(7) Unless the holder of an ungrouped licence, a timber licence or a licence in a group of licences, in a notice delivered to the minister, elects arbitration before a single arbitrator, an arbitration referred to in subsection (6) is before 3 arbitrators.

Limit on compensation

7 (1) In this section, "compensation" includes damages.

(2) The compensation to which the holder of an ungrouped licence, of a timber licence or of a licence in a group of licences, is entitled under section 6 is limited to the amount of compensation determined in relation to that licence under this Act.

(3) No action lies, and an action or other proceeding must not be brought or continued, against the government for compensation

(a) arising out of this Act,

(b) because of any of the things specified in or under this Act, or

(c) because of any of the things specified in or under this Act in combination with any or all of the other things specified in or under this Act,

in an amount that exceeds the amount limited under subsection (2).

(4) The Expropriation Act does not apply to a reduction under section 2 or 3 of this Act or to anything done by or under a minister's order referred to in section 3 of this Act.

Act to be given effect

8 (1) This Act must be applied to and must be given effect in every action or other proceeding whether commenced before, on or after the date this Act receives Royal Assent.

(2) This Act must not be construed as lacking effect, whether retroactive or otherwise, in relation to any matter because it makes no specific reference to that matter.

Appropriation for compensation

9 In the 2002-2003 fiscal year of the government, the minister is authorized to pay not more than $200 million out of the consolidated revenue fund for the purpose of providing compensation to which holders of ungrouped licences, of timber licences or of licences in a group of licences are entitled under section 6.

BC Forestry Revitalization Trust

10 (1) In this section, "BC Forestry Revitalization Trust" refers to the trust

(a) that has been created under that name by the deed of trust, dated for reference as of March 17, 2003, between Her Majesty the Queen in Right of the Province of British Columbia, as represented by the minister, and the Bank of Nova Scotia Trust Company, the initial trustee, which deed of trust sets out the terms and conditions of the BC Forestry Revitalization Trust, and

(b) the purpose of which, under Part 2 of the deed of trust, is to mitigate adverse financial impacts suffered by any eligible person, as described in the deed of trust, as a result of restructuring of the forestry sector and forestry operations within British Columbia, arising out of reductions under the Forestry Revitalization Act of harvesting rights available to licensees under the Forest Act.

(2) A true copy of the BC Forestry Revitalization Trust must be kept on file, and made available for public inspection without charge, in each regional office of the ministry.

(3) For the purposes of section 24 of the Perpetuity Act, the BC Forestry Revitalization Trust is a trust for a specific noncharitable purpose that creates no enforceable equitable interest in a specific person.

(4) In the 2002-2003 fiscal year of the government, the minister must pay $75 million out of the consolidated revenue fund to the BC Forestry Revitalization Trust.

Balanced Budget and Ministerial Accountability Act

11 For the purposes of sections 5 (1) and 6 (1) of the Balanced Budget and Ministerial Accountability Act in relation to the Minister of Forests for the 2002-2003 fiscal year, the estimated amount under section 6 (1) of that Act is the sum of the amounts appropriated.

(a) for the operating expenses for which that minister is responsible in the main estimates for that fiscal year, and

(b) under sections 9 and 10 (4) of this Act.

Clarification of scheduled items

12 The Lieutenant Governor in Council, by regulation, may amend the Schedule to correct, as necessary, the names of licensees itemized in Column 1 and the licence numbers itemized in Column 2.

Regulations

13 (1) The Lieutenant Governor in Council may make regulations referred to in section 41 of the Interpretation Act.

(2) Without limiting subsection (1), the Lieutenant Governor in Council may make regulations

(a) defining a word or expression not otherwise defined in this Act, and

(b) for the purposes of section 6, prescribing respecting value, including but not limited to

(i) determining value and defining the components that comprise value,

(ii) prescribing methods of evaluation for use in determining value,

(iii) prescribing factors to be taken into account in an evaluation,

(iv) defining the role of evaluators in a determination of value and prescribing qualifications for evaluators that are prerequisite to their participation in the determination of value, and

(v) prescribing requirements for the selection of

(A) the arbitrators in an arbitration before 3 arbitrators, or

(B) the arbitrator in an arbitration before a single arbitrator.

(3) A regulation made under this Act may

(a) be made applicable generally or to a specific person, entity, thing or transaction, or class of persons, entities, things or transactions,

(b) for the purpose of the regulation, define classes of timber licence holders and of licence holders, other persons or entities,

(c) for the purpose of the regulation, define classes of things or transactions, and

(d) provide differently for different persons, entities, things or transactions, or for different classes of persons, entities, things or transactions.

(4) In making a regulation under this Act, the Lieutenant Governor in Council may

(a) delegate a matter to a person, and

(b) confer a discretion on a person.

 
Schedule

 
Explanatory Note

At present, the Provincial allowable annual cut under the Forest Act, of approximately 74 million m³ is considered fully allocated, because more than 98% of the volume has been apportioned to existing tenures. This means that there is no "pot" of readily available volume to support new initiatives.

This Bill takes back harvesting rights by reducing the allowable annual cut of ungrouped licences as defined and itemized in the Schedule, by reducing the area of certain timber licences as defined, although not itemized in the Schedule, and by reducing the allowable annual cut of licences in groups of licences, as defined and itemized in the Schedule.

This Bill provides that each affected holder of a timber licence, as defined, and of a licence, as defined, is entitled to compensation from the government, in an amount equal to the value of the harvesting rights taken by means of the reduction in area or the reduction of allowable annual cut, which value must be determined under the regulations.

The compensation in respect of each affected timber licence or licence, both as defined, is limited to the amount determined under the Forestry Revitalization Act as enacted by this Bill.

This Bill, in the 2002-2003 fiscal year of the government, appropriates not more than $200 million out of the consolidated revenue fund for the purpose of providing the compensation.

This Bill also requires the minister in the 2002-2003 fiscal year of the government, to pay $75 million out of the consolidated revenue fund to the BC Forestry Revitalization Trust, referred to in section 10 enacted by this Bill. That trust is a trust outside of the government, created by means of the trust deed described in that section.

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