Section 3 - Forest Revenue

Question 1

What is stumpage?

Answer 1

The fee that licensees are required to pay the government when they harvest crown timber in BC
its not a tax on logging, it is a payment for utilization of a public resource
Major contributor to general revenues for the province

Question 2

How does sec. 103 of the Forest Act relate to stumpage?

Answer 2

part 7, section 103: amount of stumpage
provides the authority to charge stumpage and bonus/offer/bid from competitive sales

Question 3

How does sec. 105 of the Forest Act relate to stumpage

Answer 3

Part 7, section 105: stumpage rate determined
stumpage rates must be determined according to policies and procedures approved by the minister (policies and procedures = coast appraisal manual and interior appraisal manual)
secs. 105 (5.1) and (5.2)
the holder of an agreement, who is required in the appraisal manual to submit appraisal information, must comply with this requirement

Question 4

What is ADS

Answer 4

Appraisal data submission
- must be signed by RPF or RFT
- contains field data that is used to determine a stumpage rate (or the upset if its BCTS)

Question 5

How does sec. 136 relate to stumpage?

Answer 5

provides the authority for FLNRO to obtain accurate cost, value and other information for purposes of keeping the market pricing system current

Question 6

What is MPS

Answer 6

Market pricing system
uses auction theory and market principles to determine the value of a particular stand of trees, and accounts for obligations that are incorporated into long-term forestry tenures
stumpage = estimated winning bid - tenure obligation adjustments

Question 7

Whats EWB

Answer 7

Estimated winning bid
the value of the timber on the stump
determined through BCTS auctions, using regression analysis, generates EWD equation

Question 8

What are TOAs

Answer 8

Tenure obligation adjustments
represent the value of the services provided to government by the licensee harvesting the timber
- services include timber cruising, road development, reforestation and engineering
- the total value of the TOAs is subtracted from the EWB to determine market-based stumpage rates for licensees

Question 9

Name some specific pricing situations where the normal MPS appraisal process may not work

Answer 9

specific species
special forest products (shake blocks, fence posts, wood chips)
low grade logs
specific tenures and salvage situations
sawlogs on Woodlot Licenses and Community Forest Agreements

Question 10

Under sec 93 (timber scaling interpretation) of the Forest Act what does it mean by the term “to scale”

Answer 10

a) determine the volume or quantity of timber
b) classify the quality of timber

Question 11

What is sec 103.1 of the Forest Act and how does it relate to waste

Answer 11

assessments for merchantable crown timber that is not cut and removed
- provides that waste assessments are payable to the government in respect of merchantable Crown timber that could have been cut and removed, but is not

Question 12

What is sec 106 of the forest act and how does it relate to cruising

Answer 12

cruise instead of scale
- provides the authority to calculate stumpage payable on Crown timber using the information provided by a cruise of the timber before it is cut, instead of the volume reported in a scale

Question 13

Where in the range act is range revenue discussed, describe it

Answer 13

sec. 79
provides powers to the lieutenant governor in council to make regulations to prescribe rents, fees and costs payable in respect of applications licenses and permits

sec. 12-16
provide for application and issuance fees, fees for processing a change in ownership or control, annual fees for use of forage and annual rent

Question 14

What legislation deals with recreation revenue and how

Answer 14

FRPA part 5 (protection of resources) Division 3 (recreation) sec. 56-58
- major provisions for recreation on crown land, outside of parks and settled areas

recreation regulation of FRPA
- details rules for the use of rec sites, rec trails, and interpretive forest sites
- describes provisions for recreation site and trail fees, and enforcement actions for non compliance
- FLNRO responsible for this regulation

Question 15

Explain revenue associated with log export

Answer 15

sec. 129 of the forest act provides powers to the lieutenant governor in council or the minister to set fees to be paid to the government in respect of an exemption made under sec. 128 (exemptions) and permits granted under sec. 129 (b)
- (both under part 10, manufacture in bc)

coastal timber export fees are varied by the species, log grade and exemption type.
interior timber export fee is set at $1.00 per cubic metre of export volume
only charged on timber leaving canada