What laws govern timber harvesting in Canada?
It is a well-known fact that a super-majority of Canada’s public forest lands are in the provinces or territories. These provinces and territories are therefore responsible for managing and enforcing regulations to protect forest lands.
Federal, Provincial, or Territorial Forest Lands
As part of the regulation of these public forest lands, provinces and territories (including the municipalities) enact laws and regulations applicable to their respective governed public forest lands. These cover:
- protecting the forest when harvesting other resources
- engaging with the public and the Indigenous Peoples before proceeding with any harvesting
- issuing licences and permits for harvesting forest resources such as timber
In Canada, both at the federal and provincial or territorial level, timber harvesting is prohibited. The only exception: when a person or a juridical company acquires the necessary permit, licence, lease, or agreement with the respective government authority.
For public forest lands under the federal government, these leases or agreements may be acquired in line with the Forestry Act and its Timber Regulations, 1993. These laws apply to federal forest lands, such as the designated Forest Experimental Areas, or lands owned by the Department of National Defence, the Aboriginal Peoples, Natural Resources Canada, or Parks Canada.
As for public forest lands within provinces and territories, a permit or licence to harvest timber may be acquired by entering a timber harvesting contract or subcontract with the provincial or territorial government.
Timber Harvesting Contracts
This is an agreement between two parties: the landowner and the harvester or licence holder.
Under this agreement, the landowner or property-owner consents to harvesting on their timberland. They grant the harvester or licence holder access to their land with stipulations on payment and other remuneration. The contract may include penal clauses or conditions that both parties must heed and submit themselves to the applicable regulations and forestry laws.
These contracts apply not only to public forest lands, but especially to private forest lands. These lands are only protected by contracts law without any applicable law about timber harvesting on private forest lands.
What is the Timber Harvesting Contract and Subcontract Regulation?
British Columbia has enacted the Timber Harvesting Contract and Subcontract Regulation which states the rules for the enforceability of these contracts and subcontracts, dispute resolution processes, and any other implications.
The Regulation was recently amended and took effect on June 10, 2021. Some of the major changes covered:
- addressing transparency issues of timber harvesting contracts
- improving the dispute resolution process
- adding requirements for licence holders, such as providing contractors with clearer work specifications so that they can negotiate their rates
Here’s a summary of provisions under the Timber Harvesting Contract and Subcontract Regulation:
Provisions on Contracts
A contract or subcontract must be in writing. Otherwise, the Minister may, by order, relieve parties who do not conform to this requirement until a specified date or generally (Section 3).
Should the contract or subcontract be replaceable or assignable, the contract itself must clearly indicate this. It should state that the interests of the contractor or the subcontractor are assignable, subject to the consent of the licence holder (as for the former) or the contractor (as for the latter).
The Regulation also provides for implied consent to assign the contract or subcontract. This takes effect when the licence holder or contractor fails to convey their decision 31 days or more after notice to assign a contract or subcontract was given (Section 4).
Dispute Resolution Process
The Regulation states that all contracts or subcontracts must include a clause making mediation and arbitration mandatory.
All disputes arising from any matter on the contract or subcontract must be referred to mediation first. If issues are unresolved, both parties then go through arbitration (Section 5).
Disputes may pertain to:
- amount of work (Division 4)
- rates for work, including administrative and overhead costs, equipment costs, labour costs, and other costs (Division 4)
- allowable annual cut (AAC) reductions (Division 5)
- forestry revitalization proposal (Division 5.1)
The process of mediation or arbitration is also provided in the Regulation:
- Rules governing the dispute resolution process (Section 6)
- Appointment of mediators and arbitrators (Section 7)
- Mediation and arbitration proceedings (Section 8)
- Fees, expenses, and costs (Sections 9 and 10)
- Registration of arbitration awards (Section 11)
Licence Transfer, Subdivision and Consolidation
When a licence is either transferred, subdivided, or consolidated, the Timber Harvesting Contract and Subcontract Regulation grants rights to the transferee or the new licence holder.
These rights include the obligation to perfect the transfer, subdivision, or consolidation (Division 5.2). It may also cover the execution of a new contract, either with the similar or amended rights and responsibilities on the parties to the said contract.
Subcontracts
A replaceable subcontract under the Regulation must be offered by the contractor to the subcontractor through a replaceable subcontract. Here, the replaceable subcontract must be offered 3 months or more before the expiry of the subcontract being replaced.
The subcontract must also state the amounts to be paid to the subcontractor. Should the parties fail to agree on the amount of payment, it will be determined through the process of rate proposal (Section 25), or through mediation or arbitration of the rate dispute (Sections 25.01 and 25.02).
To know more about the Timber Harvesting Contract and Subcontract Regulation, talk with the best forestry lawyers who may also guide you through other Canadian laws and regulations governing forest lands and timber contracts.