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Volume 66, No. 11

153/2023

The British Columbia Gazette,

Part II

July 4, 2023

B.C. Reg. 153/2023 , deposited June 26, 2023, under the FOREST AMENDMENT ACT, 2021 [section 75] and FOREST ACT [sections 151, 151.01 and 265 to 269]. Order in Council 386/2023, approved and ordered June 26, 2023.

On the recommendation of the undersigned, the Lieutenant Governor, by and with the advice and consent of the Executive Council, orders that, effective July 15, 2023,

(

a) sections 18, 25, 29, 31, 34, 41, 44, 51, 62, 65 and 68 of the Forest Amendment Act, 2021 , S.B.C. 2021, c. 38, are brought into force, and

(

b) the attached Special Purpose Areas Regulation is made.

— B. RALSTON, Minister of Forests ; P. ALEXIS, Presiding Member of the Executive Council .

SPECIAL PURPOSE AREAS REGULATION

Contents

Part 1 –

Definitions and General Provisions

Definitions

Rules for determining after‑tax net income amounts

Determining present value amounts

Rules for calculating interest

Impact statements

Part 2 – Compensation for Area-Based Licences, Non‑TFL Timber Licences and Forest Licences

Deletions under Park Act

Duty of holder of licence to provide information to minister

Information that minister may consider in determining compensation for licence

Criteria for determining relevance of information

Adjustments to licence compensation to reflect tax and present value

Interest payable on compensation for licence

Compensation if licence holder also eligible under cutting permit compensation provision

Part 3 – Compensation for Cutting Permits

Division 1 –

Definitions,

Interpretation and Purpose

Definitions for

Part 3

Meaning of "remaining term" of cutting permit

Purpose of

Part 3

Division 2 – Requirements for Cutting Permit under Community Forest Agreement or Woodlot Licence

Requirements for

section 243 (1) of Act

Division 3 – Determining Compensation for Cutting Permit

Duty to provide information under

section 244 of Act

Information that minister may consider in determining compensation for cutting permit

Matters that minister must determine in respect of cutting permit

Formula for proportion of cutting permit area impacted

Compensation for cutting permit

Formula for annual volume of timber harvested under cutting permit

Adjustments to cutting permit compensation to reflect tax and present value

Interest payable on compensation for cutting permit

Compensation if holder also entitled under licence compensation provision

Part 4 – Compensation if Holder Eligible Under Licence Compensation Provision and Cutting Permit Compensation Provision

Division 1 –

Definitions, Purpose and Compensable Volumes

Definitions for

Part 4

Purpose of

Part 4

Compensable volumes

Division 2 – Compensation if Aggregate Compensable CP Volume Equal to or Greater Than Aggregate Compensable AAC Volume

Application of Division 2 of

Part 4

Compensation under Division 2 of

Part 4

Interest payable under Division 2 of

Part 4

Division 3 – Compensation if Annual Compensable CP Volume Equal to or Greater Than Compensable AAC Volume

Application of Division 3 of

Part 4

Matters that minister must determine for remaining term of cutting permit

Matters that minister must determine for period after cutting permit ends

Formula for determining reduction amount

Compensation under Division 3 of

Part 4

Division 4 – Compensation if Annual Compensable CP Volume Less Than Compensable AAC Volume

Application of Division 4 of

Part 4

Matters that minister must determine for portion of licence period ending when cutting permit ends

Matters that minister must determine for remaining portion of licence period

Compensation under Division 4 of

Part 4

Part 5 – Compensation for Forestry Licences to Cut

Definitions for

Part 5

Purpose of

Part 5

Requirements for

section 246 (1) (

b) of Act

Duty of holder of forestry licence to cut to provide information to minister

Information that minister may consider in determining compensation for forestry licence to cut

Matters that minister must determine in respect of forestry licence to cut

Compensation for forestry licence to cut

Interest payable on compensation for forestry licence to cut

Compensation if forestry licence to cut provides for issuance of cutting permits

Part 6 – Compensation for Timber Sale Licences

Definitions for

Part 6

Purpose of

Part 6

Requirements for

section 247 (2) (

b) of Act

Duty of holder of timber sale licence to provide information to minister

Information that minister may consider in determining compensation for timber sale licence

Matters that minister must determine in respect of timber sale licence

Formula for proportion of timber sale licence area impacted

Compensation for timber sale licence

Formula for annual volume of timber harvested under timber sale licence

Adjustments to timber sale licence compensation to reflect tax and present value

Interest payable on compensation for timber sale licence

Part 7 – Compensation for Christmas Tree Permits

Definitions for

Part 7

Purpose of

Part 7

Requirements for

section 249 (1) (

b) of Act

Duty of holder of Christmas tree permit to provide information to minister

Information that minister may consider in determining compensation for Christmas tree permit

Criteria for determining relevance of information respecting Christmas tree permit

Cutting profile for permit area

Compensation for Christmas tree permit

Adjustments to Christmas tree permit compensation to reflect tax and present value

Interest payable on compensation for Christmas tree permit

Part 8 – Compensation for Roads and Timber Production Improvements

Division 1 –

Definitions and Information Requests

Definitions for

Part 8

Information requests under

section 260 of Act

Division 2 – Compensation for Road Located in Special Purpose Area

Purpose of Division 2 of

Part 8

Licences prescribed for

section 252 (1) (

b) of Act

Requirements if road associated with cutting permit or timber sale licence

Matters that minister must determine if road associated with cutting permit or timber sale licence

Compensation under

section 252 (2) of Act if road associated with cutting permit or timber sale licence

Matters that minister must determine if road not associated with cutting permit

Compensation under

section 252 (2) of Act if road not associated with cutting permit

Matters that minister must determine if road authorized under special use permit

Compensation under

section 252 (2) of Act if road authorized under special use permit

Interest payable on compensation under

section 252 (2) of Act

Division 3 – Compensation if Road Outside Special Purpose Area Associated with Cutting Permit

Purpose of Division 3 of

Part 8

Licences prescribed for

section 254 (1) (

b) of Act

Compensation under

section 254 (2) of Act

Interest payable on compensation under

section 254 (2) of Act

Division 4 – Compensation in Other Road Permit Cases if Road Outside Special Purpose Area

Purpose of Division 4 of

Part 8

Requirements for

section 256 (1) of Act

Impact requirements for

section 256 (1) of Act

Compensation under

section 256 (2) of Act if road associated with timber sale licence

Compensation under

section 256 (2) of Act if road not associated with timber sale licence

Interest payable on compensation under

section 256 (2) of Act

Division 5 – Amortization Agreements

Definition for Division 5 of

Part 8

Application of Division 5 of

Part 8

Adjustments to compensation if road costs subject to amortization agreement

Division 6 – Compensation Under Special Use Permit if Road Outside Special Purpose Area

Purpose of Division 6 of

Part 8

Requirements for

section 257 (1) of Act

Impact requirements for

section 257 (1) of Act

Compensation under

section 257 (2) of Act

Interest payable on compensation under

section 257 (2) of Act

Division 7 – Compensation for Timber Production Improvements

Purpose of Division 7 of

Part 8

Matters that minister must determine in respect of timber production improvement

Compensation under sections 258 (2) and 259 (2) of Act

Interest payable on compensation under sections 258 (2) and 259 (2) of Act

Part 1 –

Definitions and General Provisions

Definitions

1 In this regulation:

"Act" means the Forest Act ;

"cutting permit compensation provision" means any of the following sections of the Act:

(

a) section 241 [compensation if special purpose area overlaps cutting permit area] ;

(

b) section 242 [compensation if special purpose area does not overlap cutting permit area] ;

(

c) section 243 [compensation for cutting permit under community forest agreement or woodlot licence] ;

"impact statement" means the statement described in

section 5 (2) (a) [impact statements] ;

"licence compensation provision" means any of the following sections of the Act:

(

a) section 231 [compensation for area-based licence for deletion for access purpose] ;

(

b) section 232 [compensation for area-based licence for deletion for non-timber production purpose] ;

(

c) section 233 [compensation for area-based licence for deletion for other special purposes] ;

(

d) section 234 [compensation for non‑TFL timber licence for deletion for access purpose] ;

(

e) section 235 [compensation for non‑TFL timber licence for deletion for non-timber production purpose] ;

(

f) section 236 [compensation for non‑TFL timber licence for deletion for other special purposes] ;

(

g) section 238 [compensation for forest licence for reduction for access purpose] ;

(

h) section 239 [compensation for forest licence for reduction for non-timber production purpose] ;

(

i) section 240 [compensation for forest licence for reduction for other special purposes] ;

"profile of timber" , in relation to a cutting permit area, timber sale licence area or the area described in a forestry licence to cut, means the composition of timber in the area, having regard to the following factors:

(

a) the types of timber in the area;

(

b) the types of terrain in the area;

(

c) other factors that the minister considers relevant;

"special purpose area designation" , in relation to the compensation to which a person may be entitled or for which a person may be eligible under

Part 16 [Compensation in Relation to Special Purpose Areas] of the Act, means the designation of the area, as a special purpose area, that gives rise to the person’s entitlement or eligibility;

"stumpage appraisal policies" means the policies and procedures approved by the minister under

section 105 [stumpage rate determined] of the Act;

"timber sale licence area" , in relation to a timber sale licence, means the area described in the timber sale licence.

Rules for determining after‑tax net income amounts

(1) In this section, "income tax legislation" means the following:

(

a) the Income Tax Act ;

(

b) the Income Tax Act (Canada);

(

c) the regulations under the Income Tax Act and the Income Tax Act (Canada).

(2) If a provision of this regulation requires the minister to determine after‑tax net income amounts for each annual net income amount determined under a provision of

Part 16 [Compensation in Relation to Special Purpose Areas] of the Act, the after‑tax net income amounts are to be determined as follows:

(

a) for each annual net income amount, estimate the following notional amounts:

(

i) the portion of the net income amount that would be taxable;

(ii) the income tax that would be payable on the taxable net income amount estimated under subparagraph (

i) of this paragraph;

(

b) for each annual net income amount, determine the after‑tax net income amount by deducting, from that annual net income amount, the notional income tax amount estimated under paragraph (a) (ii) of this subsection.

(3) A notional amount described in subsection (2) (a) (

i) or (ii) must be estimated based on the income tax legislation, as that legislation reads at the start date of the remaining term of the licence or permit to which the compensation relates.

Determining present value amounts

3 If a provision of this regulation requires the minister to determine present value amounts for each annual after‑tax net income amount determined under a provision of

Part 16 [Compensation in Relation to Special Purpose Areas] of the Act, the present value of the after‑tax net income amount for the year is to be determined using the discounted cash flow approach in accordance with the following formula:

annual net income (after tax)

present value

(1 + discount rate) years

where

annual net income (after tax)

the after‑tax net income amount for the particular year;

discount rate

the weighted average cost of capital, as determined using the formula set out in the stumpage appraisal policies;

years

the number of years that have elapsed since the start of the remaining term of the licence or permit to which the compensation relates.

Rules for calculating interest

(1) In this section, "court order interest rate" has the same meaning as "interest rate" in

Part 2 [PostJudgment Interest] of the Court Order Interest Act .

(2) If a provision of this regulation requires the minister to pay interest on the amount of compensation payable to the holder of a licence or permit under a provision of

Part 16 [Compensation in Relation to Special Purpose Areas] of the Act, the following rules apply for the purposes of calculating the interest:

(

a) unless the provision of this regulation indicates otherwise, the interest must be calculated from the start date of the remaining term of the licence or permit to the date of payment;

(

b) the interest must be calculated at the court order interest rate;

(

c) the interest must be calculated in accordance with

section 7 (3) and (4) [interest rate] of the Court Order Interest Act .

Impact statements

(1) In this section, "applicable impact requirement" means the following:

(

a) in relation to the holder of a cutting permit issued under a community forest agreement or woodlot licence, the requirement set out in

section 16 (a) (ii) [requirements for

section 243 (1) of Act] ;

(

b) in relation to the holder of a forestry licence to cut, the requirement set out in

section 43 (a) (ii) [requirements for

section 246 (1) (

b) of Act] ;

(

c) in relation to the holder of a timber sale licence, the requirement set out in

section 52 (a) (ii) [requirements for

section 247 (2) (

b) of Act] ;

(

d) in relation to the holder of a Christmas tree permit, the requirement set out in

section 63 (a) (ii) [requirements for

section 249 (1) (

b) of Act] .

(2) If the holder of a cutting permit, forestry licence to cut, timber sale licence or Christmas tree permit believes that the applicable impact requirement is met, the holder must, for the purposes of

section 16 (d), 43 (d), 52 (

c) or 63 (c), respectively, of this regulation, provide to the minister, in the form and manner that the minister may require,

(

a) a statement setting out why the holder considers that the applicable impact requirement is met, and

(

b) any additional information that the minister may require.

(3) The holder of a permit or licence referred to in subsection (2) is not eligible for compensation under the provision of

Part 16 [Compensation in Relation to Special Purpose Areas] of the Act to which the impact requirement relates unless all of the information required under subsection (2) of this

section is provided before the earlier of

(

a) the cancellation of the special purpose area designation, and

(

b) the following date:

(

i) in the case of a cutting permit, timber sale licence, or Christmas tree permit, the date the remaining term of the permit or licence ends;

(ii) in the case of a forestry licence to cut, the date the licence expires.

Part 2 – Compensation for area-based Licences, non‑TFL Timber

Licences and Forest Licences

Deletions under Park Act

(1) For the purposes of the following provisions of the Act, a previous deletion includes a deletion that occurs, under

section 11 (2.3) [minister’s power to acquire land] of the Park Act , in connection with an area required for the establishment or enlargement of a park, conservancy or recreation area:

(a)

section 232 (1) (b) [compensation for area-based licence for deletion for non-timber production purpose] ;

(b)

section 235 (1) (b) [compensation for non‑TFL timber licence for deletion for non-timber production purpose] .

(2) For the purposes of

section 239 (1) (b) [compensation for forest licence for reduction for non-timber production purpose] of the Act, a previous reduction includes a reduction made, under

Part 18 [Expropriations and Deletions under the Park Act ] of the Act, as a result of a deletion that occurs, under

section 11 (2.3) of the Park Act , in connection with an area required for the establishment or enlargement of a park, conservancy or recreation area.

Duty of holder of licence to provide information to minister

(1) The holder of an area-based licence, non‑TFL timber licence or forest licence must provide to the minister, on request, specified information that the minister considers may be relevant for the purposes of determining the compensation to which the holder is entitled under a licence compensation provision.

(2) Without limiting subsection (1), the minister may request any of the following:

(

a) information related to

(

i) net income, including revenues and costs, referred to in the formula set out in

section 228 [meaning of "net income"] of the Act,

(ii) established practices, or

(iii) adjustments to net income to reflect notional income tax and present value;

(

b) information required to be kept or submitted under

(

i) section 136 [records and returns] of the Act,

(ii) the stumpage appraisal policies, or

(iii) any other provision of the Act.

(3) Information requested under this

section must be provided in the form and manner and within the time period specified by the minister.

(4) The minister may extend, by not more than 2 months, the time period specified under subsection (3), but an extension may be granted only once.

(5) The minister must determine the compensation to which the holder of the licence is entitled regardless of whether the holder complies with a request for information under this section.

Information that minister may consider in determining compensation for licence

(1) For the purposes of determining the compensation to which the holder of an area-based licence, non‑TFL timber licence or forest licence is entitled under a licence compensation provision, the minister may consider any of the following:

(

a) relevant information that the holder provides under

section 7, or otherwise provides under the Act;

(

b) aggregated information derived from relevant information that the holder or other persons provide under the Act;

(

c) relevant information, including statistical information, that is publicly available or is otherwise available to the minister.

(2) The minister may refuse to consider information described in subsection (1) if, in the minister’s opinion, the information is incomplete or inaccurate.

Criteria for determining relevance of information

9 For the purposes of determining, under a licence compensation provision, the net income amounts that would be earned during each year of the remaining term of an area-based licence, non‑TFL timber licence or forest licence, and unless the minister determines otherwise, information described in

section 8 is to be considered relevant if the information relates to the harvest and sale of timber harvested under cutting permits or timber sale licences that meet the following criteria:

(

a) in the case of cutting permits, the cutting permits were issued

(

i) under the holder’s licence, or

(ii) under other licences or agreements that the minister considers are comparable to the holder’s licence;

(

b) the cutting permit areas or timber sale licence areas have profiles of timber that the minister considers are comparable to the relevant harvest profile;

(

c) timber harvesting under the cutting permits or timber sale licences was completed not more than 5 years before the effective date of the special purpose area designation;

(

d) the volume of timber harvested under the cutting permits or timber sale licences is sufficient to accurately indicate the net income amounts that would be earned, and the established practices that would be carried out, in relation to the harvested timber for which the holder is being compensated.

Adjustments to licence compensation to reflect tax and present value

(1) This

section sets out the adjustments that the minister must make in order to determine the compensation to which the holder of an area-based licence, non‑TFL timber licence or forest licence is entitled under a licence compensation provision.

(2) The adjustments set out in this

section are established for the purposes of

(a) subsection (3) of each licence compensation provision, or

(

b) in the case of

section 234 [compensation for non‑TFL timber licence for deletion for access purpose] of the Act, subsection (4) of that section.

(3) After determining, under a licence compensation provision, the net income amounts that would be earned during each year of the remaining term of the licence, the minister must do the following:

(

a) for each annual net income amount, determine the after‑tax net income amount in accordance with

section 2 [rules for determining after‑tax net income amounts] ;

(

b) for each annual after‑tax net income amount determined under paragraph (a), determine the present value of that amount in accordance with

section 3 [determining present value amounts] ;

(

c) determine the total amount of compensation to which the holder is entitled under the licence compensation provision by calculating the sum of the present value amounts determined under paragraph (b).

Interest payable on compensation for licence

(1) The minister must pay interest on the amount of compensation that the minister determines is payable under a licence compensation provision to the holder of an area-based licence, non‑TFL timber licence or forest licence.

(2) Interest under subsection (1) is to be calculated in accordance with

section 4 (2) [rules for calculating interest] .

Compensation if licence holder also eligible under cutting permit compensation provision

12 If, in relation to the designation of an area as a special purpose area, the holder of an area-based licence or forest licence is, as a result of the designation, eligible for compensation under both a licence compensation provision and a cutting permit compensation provision, the total amount of compensation for which the holder is eligible under those provisions must be determined under

Part 4 [Compensation if Holder Eligible Under Licence Compensation Provision and Cutting Permit Compensation Provision] of this regulation.

Part 3 – Compensation for Cutting Permits

Division 1 –

Definitions,

Interpretation and Purpose

Definitions for

Part 3

13 In this Part:

"applicable impact date" , in relation to a cutting permit compensation provision, means the following:

(

a) in the case of

section 241 [compensation if special purpose area overlaps cutting permit area] of the Act, the effective date of, as applicable,

(

i) the deletion referred to in subsection (1) (

a) of that section, or

(ii) the order referred to in subsection (1) (

b) or (

c) of that section;

(

b) in the case of

section 242 [compensation if special purpose area does not overlap cutting permit area] of the Act, the date on which the minister determines that all of the requirements under subsection (1) and (2) of that

section are met;

(

c) in the case of

section 243 [compensation for cutting permit under community forest agreement or woodlot licence] of the Act,

(

i) if the special purpose area overlaps the cutting permit area, the effective date of the deletion referred to in

section 16 (a) (i) [requirements for

section 243 (1) of Act] of this regulation, or

(ii) if the special purpose area does not overlap the cutting permit area, the date by which both of the following have occurred:

(

A) the holder has provided an impact statement and additional information in accordance with

section 5 [impact statements] of this regulation;

(

B) the minister is satisfied that the impact described in

section 16 (a) (ii) of this regulation has occurred;

"established practices" , in relation to a cutting permit compensation provision, means practices that have been carried out previously in relation to the harvest and sale of a volume of timber that is harvested from the harvest profile specified under

section 19 (a) [matters that minister must determine in respect of cutting permit] ;

"relevant timber cruise" , in relation to a cutting permit compensation provision, means the most recent timber cruise that meets both of the following criteria:

(

a) the timber cruise was conducted by the holder of the cutting permit before the effective date of the special purpose area designation;

(

b) the information provided by the timber cruise was used, in accordance with the stumpage appraisal policies, to determine, redetermine or vary the rate of stumpage for timber authorized to be harvested under the cutting permit;

"remaining term" has the meaning set out in

section 14 [meaning of "remaining term" of cutting permit] .

Meaning of "remaining term" of cutting permit

(1) The remaining term of a cutting permit, in relation to a cutting permit compensation provision, is the period that

(

a) starts on the applicable impact date, and

(

b) ends on the expiry date of the term of the cutting permit, as at the effective date of the special purpose area designation.

(2) If the operation of the cutting permit is, as at the effective date of the special purpose area designation, subject to a postponement under

section 58.21 [postponement of operation of cutting permits] of the Act, the expiry date of the cutting permit is deemed to be the date on which the cutting permit would expire if the cutting permit were not subject to the postponement.

Purpose of

Part 3

15 This Part sets out the following:

(

a) the impact and other requirements that must be met for the purposes of

section 243 (1) [compensation for cutting permit under community forest agreement or woodlot licence] of the Act;

(

b) the method for determining compensation under a cutting permit compensation provision.

Division 2 – Requirements for Cutting Permit

Under Community Forest Agreement or Woodlot Licence

Requirements for

section 243 (1) of Act

16 The requirements for the purposes of

section 243 (1) [compensation for cutting permit under community forest agreement or woodlot licence] of the Act are as follows:

(

a) as a result of the special purpose area designation, the cutting permit has been impacted in one of the following ways:

(

i) the special purpose area overlaps the cutting permit area and the area of overlap is deleted under

section 194 (1) [deletion of cutting permit area within licence area] of the Act;

(ii) the special purpose area does not overlap the cutting permit area but there is no practicable means by which the holder can access the cutting permit area, or a portion of that area, for the purposes of harvesting timber in that area or portion;

(

b) the cutting permit was issued before the effective date of the special purpose area designation;

(

c) the rate of stumpage for timber authorized to be harvested under the cutting permit was determined, redetermined or varied using information provided by a relevant timber cruise;

(

d) in the case of a cutting permit impacted in the way described in paragraph (a) (ii) of this section, the holder has provided an impact statement and additional information in accordance with

section 5 [impact statements] of this regulation.

Division 3 – Determining Compensation for Cutting Permit

Duty to provide information under

section 244 of Act

(1) For the purposes of

section 244 [duty of cutting permit holder to provide information to minister] of the Act, and without limiting that section, the minister may request the holder of the cutting permit to provide any of the information described in

section 7 (2) [duty of holder of licence to provide information to minister] of this regulation.

(2) The minister may extend, by not more than 2 months, the time period specified under

section 244 (2) of the Act, but an extension may be granted only once.

(3) The minister must determine the compensation for which the holder of a cutting permit is eligible regardless of whether the holder complies with a request for information under

section 244 of the Act.

Information that minister may consider in determining compensation for cutting permit

(1) For the purposes of determining the compensation for which the holder of a cutting permit is eligible under a cutting permit compensation provision, the minister may consider the following:

(

a) relevant information that the holder provides under

section 244 [duty of cutting permit holder to provide information to minister] of the Act, or otherwise provides under the Act;

(

b) relevant information described in

section 8 (1) (

b) and (c) [information that minister may consider in determining compensation for licence] of this regulation.

(2) The minister may refuse to consider information referred to in subsection (1) if, in the minister’s opinion, the information is incomplete or inaccurate.

(3) For the purposes of determining, under a cutting permit compensation provision, the net income amounts that would be earned during each year of the remaining term of a cutting permit, and unless the minister determines otherwise, information referred to in subsection (1) is to be considered relevant if the information relates to the harvest and sale of timber harvested under cutting permits and timber sale licences that meet the following criteria:

(

a) the criteria set out in

section 9 (a), (

c) and (d) [criteria for determining relevance of information] ;

(

b) the cutting permit areas or timber sale licence areas have profiles of timber that the minister considers are comparable to the harvest profile for the cutting permit area, as specified under

section 19 (a).

Matters that minister must determine in respect of cutting permit

19 To determine the compensation for which the holder of a cutting permit is eligible under a cutting permit compensation provision, the minister must do the following:

(

a) specify the harvest profile for the cutting permit area by identifying the components of the profile of timber that the minister considers could be harvested in that area, as at the date on which the relevant timber cruise is conducted, to support the allowable annual cut of the licence or agreement to which the cutting permit relates;

(

b) determine the volume of harvestable timber that the minister considers is in the cutting permit area as at the date the relevant timber cruise is conducted;

(

c) specify the size of the impacted portion of the harvestable cutting permit area by determining the number of hectares that the minister considers

(

i) are in the portion of the cutting permit area that is impacted as a result of the special purpose area designation, and

(ii) contain harvestable timber as at the applicable impact date;

(

d) specify the size of the total harvestable cutting permit area by determining the number of hectares that the minister considers

(

i) are in the cutting permit area, and

(ii) contain harvestable timber as at the date the relevant timber cruise is conducted;

(

e) determine the proportion of the cutting permit area that is impacted, as a result of the special purpose area designation, by using the formula set out in

section 20.

Formula for proportion of cutting permit area impacted

20 The formula for the purposes of

section 19 (

e) is as follows:

impacted portion of harvestable permit area [in hectares]

proportion

total harvestable permit area [in hectares]

where

impacted portion of harvestable permit area [in hectares]

the number of hectares that the minister determines under

section 19 (c);

total harvestable permit area [in hectares]

the number of hectares that the minister determines under

section 19 (d).

Compensation for cutting permit

21 Subject to the adjustments under

section 23 [adjustments to cutting permit compensation to reflect tax and present value] , the compensation for which the holder of a cutting permit is eligible under a cutting permit compensation provision is an amount determined by the minister based on the net income that would be earned on the sale of harvested timber if, during each year of the remaining term of the cutting permit,

(

a) the volume of the harvested timber were equal to the annual volume determined using the formula set out in

section 22,

(

b) the timber were harvested from the harvest profile specified under

section 19 (a) [matters that minister must determine in respect of cutting permit] , and

(

c) the timber were harvested and sold in accordance with established practices.

Formula for annual volume of timber harvested under cutting permit

22 The formula for the purposes of

section 21 (

a) is as follows:

cutting permit volume

annual volume

× proportion of area impacted

permit term

where

cutting permit volume

the volume of harvestable timber determined under

section 19 (b) [matters that minister must determine in respect of cutting permit] ;

permit term

the number of years in the remaining term of the cutting permit;

proportion of area impacted

the proportion of the cutting permit area that is impacted as a result of the special purpose area designation, as determined under

section 19 (e).

Adjustments to cutting permit compensation to reflect tax and present value

23 After determining, under

section 21 [compensation for cutting permit] , the net income amounts that would be earned during each year of the remaining term of the cutting permit, the minister must do the following:

(

a) for each annual net income amount, determine the after‑tax net income amount in accordance with

section 2 [rules for determining after‑tax net income amounts] ;

(

b) for each annual after‑tax net income amount determined under paragraph (

a) of this section, determine the present value of that amount in accordance with

section 3 [determining present value amounts] ;

(

c) determine the total amount of compensation for which the holder is eligible under the cutting permit compensation provision by calculating the sum of the present value amounts determined under paragraph (b).

Interest payable on compensation for cutting permit

(1) The minister must pay interest on the amount of compensation that the minister determines is payable under a cutting permit compensation provision to the holder of a cutting permit.

(2) Interest under subsection (1) is to be calculated in accordance with

section 4 (2) [rules for calculating interest] .

Compensation if holder also entitled under licence compensation provision

25 In the circumstances described in

section 12 [compensation if licence holder also eligible under cutting permit compensation provision] , the total amount of compensation for which the holder of a cutting permit issued under an area-based licence or forest licence is eligible must be determined under

Part 4 [Compensation if Holder Eligible for Compensation Under Licence Compensation Provision and Cutting Permit Compensation Provision] .

Part 4 – Compensation if Holder Eligible Under Licence

Compensation Provision and Cutting Permit Compensation

Provision

Division 1 –

Definitions, Purpose and Compensable Volumes

Definitions for

Part 4

(1) In this Part:

"aggregate compensable AAC volume" means the licence volume determined under

section 28 (d) [compensable volumes] ;

"aggregate compensable CP volume" means the cutting permit volume determined under

section 28 (b);

"annual compensable CP volume" means the cutting permit volume specified under

section 28 (a);

"compensable AAC volume" means the licence volume specified under

section 28 (c).

(2) The

definitions set out in

section 13 [definitions for

Part 3] apply for the purposes of this Part.

Purpose of

Part 4

27 This Part sets out the method for determining the total amount of compensation for which the holder of a cutting permit issued under an area-based licence or forest licence is eligible in the circumstances described in

section 12 [compensation if licence holder also eligible under cutting permit compensation provision] .

Compensable volumes

28 If the holder of a cutting permit issued under an area-based licence or forest licence is eligible for compensation under both a cutting permit compensation provision and a licence compensation provision, the minister must do the following:

(

a) specify the annual cutting permit volume, as determined under

section 21 (a) [compensation for cutting permit] of this regulation, for which the holder is eligible to be compensated under the cutting permit compensation provision;

(

b) determine the aggregate cutting permit volume for which the holder is eligible to be compensated under the cutting permit compensation provision by multiplying the holder’s annual compensable CP volume by the number of years in the remaining term of the cutting permit;

(

c) specify the allowable annual cut volume, as described in subsection (2) (

a) of the licence compensation provision, for which the holder is entitled to be compensated under that licence compensation provision;

(

d) determine the aggregate allowable annual cut volume for which the holder is entitled to be compensated under the licence compensation provision by multiplying the holder’s compensable AAC volume by the number of years in the remaining term of the licence.

Division 2 – Compensation if Aggregate Compensable CP Volume Equal to or Greater Than Aggregate Compensable AAC Volume

Application of Division 2 of

Part 4

29 This Division applies to the holder of a cutting permit issued under an area-based licence or forest licence if the holder’s aggregate compensable CP volume is equal to or greater than the holder’s aggregate compensable AAC volume.

Compensation under Division 2 of

Part 4

30 If this Division applies, the total amount of compensation for which the holder is eligible under the cutting permit compensation provision and licence compensation provision is the amount determined under the cutting permit compensation provision, in accordance with Division 3 [Determining Compensation for Cutting Permit] of

Part 3 [Compensation for Cutting Permits] of this regulation.

Interest payable under Division 2 of

Part 4

(1) The minister must pay interest on the amount of compensation that the minister determines is payable under

section 30 to the holder of a cutting permit issued under an area-based licence or forest licence.

(2) Interest under subsection (1) is to be calculated in accordance with

section 4 (2) [rules for calculating interest] .

Division 3 – Compensation if Annual Compensable CP Volume Equal to or Greater Than Compensable AAC Volume

Application of Division 3 of

Part 4

32 This Division applies to the holder of a cutting permit issued under an area-based licence or forest licence if

(

a) the holder’s aggregate compensable CP volume is less than the holder’s aggregate compensable AAC volume, and

(

b) the holder’s annual compensable CP volume is equal to or greater than the holder’s compensable AAC volume.

Matters that minister must determine for remaining term of cutting permit

(1) The matters under this

section must be determined for the period corresponding to the remaining term of the holder’s cutting permit.

(2) To determine the total amount of compensation for which the holder is eligible under this Division, the minister must do the following:

(

a) in accordance with

section 21 [compensation for cutting permit] , determine the net income amounts that would be earned during each year of the remaining term of the holder’s cutting permit;

(

b) for each annual net income amount determined under paragraph (a), determine the after‑tax net income amount in accordance with

section 2 [rules for determining after‑tax net income amounts] ;

(

c) for each annual after‑tax net income amount determined under paragraph (b), determine the present value of that amount in accordance with

section 3 [determining present value amounts] ;

(

d) calculate the sum of the present value amounts determined under paragraph (c).

Matters that minister must determine for period after cutting permit ends

(1) The matters under this

section must be determined for the period that

(

a) starts when the remaining term of the holder’s cutting permit ends, and

(

b) ends when the remaining term of the holder’s area-based licence or forest licence ends.

(2) In addition to determining the matters under

section 33, the minister must do the following:

(

a) in accordance with the licence compensation provision, but subject to reducing the holder’s compensable AAC volume by an amount determined using the formula set out in

section 35, determine the net income amounts that would be earned during each year of the period described in subsection (1) of this section;

(

b) for each annual net income amount determined under paragraph (a), determine the after‑tax net income amount in accordance with

section 2 [rules for determining after‑tax net income amounts] ;

(

c) for each annual after‑tax net income amount determined under paragraph (b), determine the present value of that amount in accordance with

section 3 [determining present value amounts] ;

(

d) calculate the sum of the present value amounts determined under paragraph (c).

Formula for determining reduction amount

35 The formula for the purpose of

section 34 (2) (

a) is as follows:

(aggregate CP volume) – (AAC volume × permit term)

amount

(licence term – permit term)

where

aggregate CP volume

the holder’s aggregate compensable CP volume;

AAC volume

the holder’s compensable AAC volume;

permit term

the number of years in the remaining term of the holder’s cutting permit;

licence term

the number of years in the remaining term of the holder’s area-based licence or forest licence.

Compensation under Division 3 of

Part 4

(1) If this Division applies, the total amount of compensation for which the holder is eligible under the cutting permit compensation provision and licence compensation provision is an amount equal to the sum of

(

a) the amount calculated under

section 33 (2) (d) [matters that minister must determine for remaining term of cutting permit] , and

(

b) the amount calculated under

section 34 (2) (d) [matters that minister must determine for period after cutting permit ends] .

(2) The minister must pay interest on the amount of compensation that the minister determines is payable under subsection (1) to the holder of a cutting permit issued under an area-based licence or forest licence.

(3) Interest under subsection (2) is to be calculated in accordance with

section 4 (2) [rules for calculating interest] .

Division 4 – Compensation if Annual Compensable CP Volume

Less Than Compensable AAC Volume

Application of Division 4 of

Part 4

37 This Division applies to the holder of a cutting permit issued under an area-based licence or forest licence if

(

a) the holder’s aggregate compensable CP volume is less than the holder’s aggregate compensable AAC volume, and

(

b) the holder’s annual compensable CP volume is less than the holder’s compensable AAC volume.

Matters that minister must determine for portion of licence period ending when cutting permit ends

(1) The matters under this

section must be determined for the period that

(

a) starts when the remaining term of the holder’s area-based licence or forest licence starts, and

(

b) ends when the remaining term of the holder’s cutting permit ends.

(2) To determine the total amount of compensation for which the holder is eligible under this Division, the minister must do the following:

(

a) in accordance with

section 21 [compensation for cutting permit] , determine the net income amounts that would be earned during each year of the remaining term of the holder’s cutting permit;

(

b) in accordance with the licence compensation provision, but subject to reducing the holder’s compensable AAC volume by an amount equal to the holder’s annual compensable CP volume, determine the net income amounts that would be earned during each year of the period described in subsection (1);

(

c) for each year of the period described in subsection (1), determine the net income amount that would be earned during the year by calculating the sum of

(

i) the net income amount for that year, as determined under paragraph (

a) of this subsection, and

(ii) the net income amount for that year, as determined under paragraph (

b) of this subsection.

(3) After determining the net income amounts that would be earned during each year of the period described in subsection (1), the minister must do the following:

(

a) for each annual net income amount determined under subsection (2) (c), determine the after‑tax net income amount in accordance with

section 2 [rules for determining after‑tax net income amounts] ;

(

b) for each annual after‑tax net income amount determined under paragraph (

a) of this subsection, determine the present value of that amount in accordance with

section 3 [determining present value amounts] ;

(

c) calculate the sum of the present value amounts determined under paragraph (

b) of this subsection.

Matters that minister must determine for remaining portion of licence period

(1) The matters under this

section must be determined for the period that

(

a) starts when the remaining term of the holder’s cutting permit ends, and

(

b) ends when the remaining term of the holder’s area-based licence or forest licence ends.

(2) In addition to determining the matters under

section 38, the minister must do the following:

(

a) in accordance with the licence compensation provision, determine the net income amounts that would be earned during each year of the period described in subsection (1) of this section;

(

b) for each annual net income amount determined under paragraph (a), determine the after‑tax net income amount in accordance with

section 2 [rules for determining after‑tax net income amounts] ;

(

c) for each annual after‑tax net income amount determined under paragraph (b), determine the present value of that amount in accordance with

section 3 [determining present value amounts] ;

(

d) calculate the sum of the present value amounts determined under paragraph (c).

Compensation under Division 4 of

Part 4

(1) If this Division applies, the total amount of compensation for which the holder is eligible under the cutting permit compensation provision and licence compensation provision is an amount equal to the sum of

(

a) the amount calculated under

section 38 (3) (c) [matters that minister must determine for portion of licence period ending when cutting permit ends] , and

(

b) the amount calculated under

section 39 (2) (d).

(2) The minister must pay interest on the amount of compensation that the minister determines is payable under subsection (1) to the holder of a cutting permit issued under an area-based licence or forest licence.

(3) Interest under subsection (2) is to be calculated in accordance with

section 4 (2) [rules for calculating interest] .

Part 5 – Compensation for Forestry Licences to Cut

Definitions for

Part 5

41 In this Part:

"cancellation order" , in relation to compensation under

section 246 [compensation for forestry licence to cut] of the Act, means the order referred to in subsection (1) (

a) of that

section by which rights under the licence have been cancelled;

"established practices" , in relation to compensation under

section 246 of the Act, means practices that have been carried out previously in relation to the harvest and sale of a volume of timber that is harvested from the harvest profile specified under

section 46 (a) [matters that minister must determine in respect of forestry licence to cut] of this regulation;

"forestry licence to cut area" , in relation to a forestry licence to cut, means the area described in the licence.

Purpose of

Part 5

42 This Part set outs the following:

(

a) the requirements that must be met for the purposes of

section 246 (1) (b) [compensation for forestry licence to cut] of the Act;

(

b) the method for determining compensation under

section 246 (2) of the Act.

Requirements for

section 246 (1) (

b) of Act

43 The requirements for the purposes of

section 246 (1) (b) [compensation for forestry licence to cut] of the Act are as follows:

(

a) as a result of the cancellation order, harvesting rights under the forestry licence to cut have been impacted in one of the following ways:

(

i) the holder is no longer authorized to harvest timber in the forestry licence to cut area;

(ii) there is no practicable means by which the holder can access the forestry licence to cut area, or a portion of that area, for the purposes of harvesting timber in that area or portion;

(

b) the forestry licence to cut was issued before the effective date of the cancellation order;

(

c) the forestry licence to cut does not provide for the issuance of cutting permits;

(

d) in the case of a forestry licence to cut impacted in the way described in paragraph (a) (ii) of this section, the holder has provided an impact statement and additional information in accordance with

section 5 [impact statements] of this regulation.

Duty of holder of forestry licence to cut to provide information to minister

(1) The holder of a forestry licence to cut must provide to the minister, on request, specified information the minister considers necessary for the purposes of considering or determining a matter under

section 246 [compensation for forestry licence to cut] of the Act.

(2) Section 7 (2) (b), (3), (4) and (5) [duty of holder of licence to provide information to minister] applies for the purposes of this section.

Information that minister may consider in determining compensation for forestry licence to cut

(1) To determine the compensation for which the holder of a forestry licence to cut is eligible under

section 246 [compensation for forestry licence to cut] of the Act, the minister may consider the following:

(

a) relevant information that the holder provides under

section 44 of this regulation, or otherwise provides under the Act;

(

b) relevant information described in

section 8 (1) (

b) and (c) [information that minister may consider in determining compensation for licence] of this regulation.

(2) The minister may refuse to consider information referred to in subsection (1) if, in the minister’s opinion, the information is incomplete or inaccurate.

Matters that minister must determine in respect of forestry licence to cut

46 To determine the compensation for which the holder of forestry licence to cut is eligible under

section 246 [compensation for forestry licence to cut] of the Act, the minister must do the following:

(

a) specify the harvest profile for the forestry licence to cut area by identifying the components of the profile of timber that the minister considers could be harvested by the holder, in that area, to support harvesting rights under the licence as at the date immediately before the effective date of the cancellation order;

(

b) determine the costs that the minister considers were actually and reasonably incurred by the holder, in applying for the licence, for the purposes of identifying the areas to be described in the licence;

(

c) determine the volume of harvestable timber under the licence that, as a result of the cancellation order, the minister considers can no longer be harvested and sold in accordance with established practices;

(

d) determine the total volume of harvestable timber that the minister considers would be harvested and sold under the licence if

(

i) the cancellation order had not been made, and

(ii) the timber were harvested and sold in accordance with established practices.

Compensation for forestry licence to cut

47 After specifying and determining the matters under

section 46, the minister must determine the compensation for which the holder of the forestry licence to cut is eligible by using the following formula:

unharvested volume

amount = incurred costs

total harvestable volume

where

incurred costs

the costs determined under

section 46 (b);

unharvested volume

the volume of harvestable timber determined under

section 46 (c);

total harvestable volume

the total volume of harvestable timber determined under

section 46 (d).

Interest payable on compensation for forestry licence to cut

(1) The minister must pay interest on the amount of compensation that the minister determines is payable under

section 246 (2) [compensation for forestry licence to cut] of the Act to the holder of a forestry licence to cut.

(2) Interest under subsection (1) is to be calculated

(

a) from the effective date of the cancellation order to the date of payment, and

(

b) in accordance with

section 4 (2) (

b) and (c) [rules for calculating interest] .

Compensation if forestry licence to cut provides for issuance of cutting permits

(1) If a forestry licence to cut provides for the issuance of cutting permits, this Part does not apply and the compensation, if any, for which the holder is eligible must be determined under the applicable cutting permit compensation provision.

(2) If compensation, as determined under the applicable cutting permit compensation provision, is provided to the holder of a cutting permit issued under a forestry licence to cut, the minister must reduce the volume of timber authorized to be harvested under the forestry licence to cut by an amount determined using the following formula:

amount = cutting permit volume × proportion of area impacted

where

cutting permit volume

the volume of harvestable timber in the cutting permit area as at the date the relevant timber cruise is conducted, as determined under

section 19 (b) [matters that minister must determine in respect of cutting permit] ;

proportion of area impacted

the proportion of the cutting permit area that is impacted as a result of the special purpose area designation, as determined under

section 19 (e).

Part 6 – Compensation for Timber Sale Licences

Definitions for

Part 6

50 In this Part:

"applicable impact date" , in relation to compensation under

section 247 [compensation for timber sale licence] of the Act, means the following:

(

a) in the case of a cancellation order that results in the impact described in

section 52 (a) (i) [requirements for

section 247 (2) (

b) of Act] of this regulation, the effective date of the cancellation order;

(

b) in the case of a cancellation order that results in the impact described in

section 52 (a) (ii) of this regulation, the date by which both of the following have occurred:

(

i) the holder has provided an impact statement and additional information in accordance with

section 5 [impact statements] of this regulation;

(ii) the minister is satisfied that the impact has occurred;

"cancellation order" , in relation to a compensation under

section 247 of the Act, means the order referred to in subsection (2) (

a) of that

section by which rights under the licence have been cancelled;

"established practices" , in relation to compensation under

section 247 of the Act, means practices that have been carried out previously in relation to the harvest and sale of a volume of timber that is harvested from the harvest profile specified under

section 55 (a) [matters that minister must determine in respect of timber sale licence] of this regulation;

"relevant timber cruise" , in relation to compensation under

section 247 of the Act, means the most recent timber cruise that provided information that was used, in accordance with the stumpage appraisal policies, to determine, redetermine or vary the rate of stumpage for timber authorized to be harvested under the licence;

"remaining term" , in relation to compensation under

section 247 of the Act, means the period that

(

a) starts on the applicable impact date, and

(

b) ends on the expiry date of the term of the timber sale licence, as at the effective date of the cancellation order.

Purpose of

Part 6

51 This Part sets out the following:

(

a) the requirements that must be met for the purposes of

section 247 (2) (b) [compensation for timber sale licence] of the Act;

(

b) the method for determining compensation under

section 247 (3) of the Act.

Requirements for

section 247 (2) (

b) of Act

52 The requirements for the purposes of

section 247 (2) (b) [compensation for timber sale licence] of the Act are as follows:

(

a) as a result of the cancellation order, harvesting rights under the timber sale licence have been impacted in one of the following ways:

(

i) the holder is no longer authorized to harvest timber in the timber sale licence area;

(ii) there is no practicable means by which the holder can access the timber sale licence area, or a portion of that area, for the purposes of harvesting timber in that area or portion;

(

b) the timber sale licence was issued before the effective date of the cancellation order;

(

c) in the case of a timber sale licence impacted in the way described in paragraph (a) (ii) of this section, the holder has provided an impact statement and additional information in accordance with

section 5 [impact statements] of this regulation.

Duty of holder of timber sale licence to provide information to minister

(1) The holder of a timber sale licence must provide to the minister, on request, specified information that the minister considers necessary for the purposes of considering or determining a matter under

section 247 (2) or (3) [compensation for timber sale licence] of the Act.

(2) Without limiting subsection (1), the minister may request any of the information described in

section 7 (2) [duty of licence holder to provide information to minister] .

(3) Section 7 (3), (4) and (5) applies for the purposes of this section.

Information that minister may consider in determining compensation for timber sale licence

(1) To determine the compensation for which the holder of a timber sale licence is eligible under

section 247 [compensation for timber sale licence] of the Act, the minister may consider the following:

(

a) relevant information that the holder provides under

section 53 of this regulation, or otherwise provides under the Act;

(

b) relevant information described in

section 8 (1) (

b) and (c) [information that minister may consider in determining compensation for licence] of this regulation.

(2) The minister may refuse to consider information referred to in subsection (1) if, in the minister’s opinion, the information is incomplete or inaccurate.

(3) For the purposes of determining the net income amounts under

section 57 [compensation for timber sale licence] and unless the minister determines otherwise, information referred to in subsection (1) of this

section is to be considered relevant if the information relates to the harvest and sale of timber harvested under cutting permits or timber sale licences that meet the criteria set out in

section 9 [criteria for determining relevance of information] .

Matters that minister must determine in respect of timber sale licence

55 To determine the compensation for which the holder of a timber sale licence is eligible under

section 247 [compensation for timber sale licence] of the Act, the minister must do the following:

(

a) specify the harvest profile for the timber sale licence area by identifying the components of the profile of timber that the minister considers could be harvested in that area, as at the date on which the relevant timber cruise is conducted, to support harvesting rights under the licence;

(

b) determine the volume of harvestable timber that the minister considers is in the timber sale licence area as at the date the relevant timber cruise is conducted;

(

c) specify the size of the impacted portion of the harvestable timber sale licence area by determining the number of hectares that the minister considers

(

i) are in the portion of the timber sale licence area that is impacted as a result of the cancellation order, and

(ii) contain harvestable timber as at the applicable impact date;

(

d) specify the size of the total harvestable timber sale licence area by determining the total number of hectares that the minister considers

(

i) are in the timber sale licence area, and

(ii) contain harvestable timber as at the date the relevant timber cruise is conducted;

(

e) determine the proportion of the timber sale licence area that is impacted, as a result of the cancellation order, by using the formula set out in

section 56.

Formula for proportion of timber sale licence area impacted

56 The formula for the purposes of

section 55 (

e) is as follows:

impacted portion of harvestable licence area [in hectares]

proportion =

total harvestable licence area [in hectares]

where

impacted portion of harvestable licence area [in hectares]

the number of hectares that the minister determines under

section 55 (c);

total harvestable licence area [in hectares]

the number of hectares that the minister determines under

section 55 (d).

Compensation for timber sale licence

57 Subject to the adjustments under

section 59 [adjustments to timber sale licence compensation to reflect tax and present value] , the compensation for which the holder of a timber sale licence is eligible under

section 247 (3) [compensation for timber sale licence] of the Act is an amount determined by the minister based on the net income that would be earned on the sale of harvested timber if, during each year of the remaining term of the licence,

(

a) the volume of the harvested timber were equal to the annual volume determined using the formula set out in

section 58 of this regulation,

(

b) the timber were harvested from the harvest profile specified under

section 55 (a) [matters that minister must determine in respect of timber sale licence] of this regulation, and

(

c) the timber were harvested and sold in accordance with established practices.

Formula for annual volume of timber harvested under timber sale licence

58 The formula for the purposes of

section 57 (

a) is as follows:

licence volume

annual volume

proportion of area impacted

licence term

where

licence volume

the volume of harvestable timber that is in the timber sale licence area as at the date the relevant timber cruise is conducted, as determined under

section 55 (b);

licence term

the number of years in the remaining term of the timber sale licence;

proportion of area impacted

the proportion of the timber sale licence area that is impacted, as determined under

section 55 (e).

Adjustments to timber sale licence compensation to reflect tax and present value

59 After determining, under

section 57 [compensation for timber sale licence] , the net income amounts that would be earned during each year of the remaining term of the timber sale licence, the minister must do the following:

(

a) for each annual net income amount, determine the after‑tax net income amount in accordance with

section 2 [rules for determining after‑tax net income amounts] ;

(

b) for each annual after‑tax net income amount determined under paragraph (

a) of this section, determine the present value of that amount in accordance with

section 3 [determining present value amounts] ;

(

c) determine the total amount of compensation for which the holder is eligible under

section 247 (3) [compensation for timber sale licence] of the Act by calculating the sum of the present value amounts determined under paragraph (

b) of this section.

Interest payable on compensation for timber sale licence

(1) The minister must pay interest on the amount of compensation that the minister determines is payable under

section 247 (3) [compensation for timber sale licence] of the Act to the holder of a timber sale licence.

(2) Interest under subsection (1) is to be calculated in accordance with

section 4 (2) [rules for calculating interest] .

Part 7 – Compensation for

Christmas Tree Permits

Definitions for

Part 7

61 In this Part:

"applicable impact date" , in relation to compensation under

section 249 [compensation for Christmas tree permit] of the Act, means the following:

(

a) in the case of a cancellation order that results in the impact described in

section 63 (a) (i) [requirements for

section 249 (1) (

b) of Act] of this regulation, the effective date of the cancellation order;

(

b) in the case of a cancellation order that results in the impact described in

section 63 (a) (ii) of this regulation, the date by which both of the following have occurred:

(

i) the holder has provided an impact statement and additional information in accordance with

section 5 [impact statements] of this regulation;

(ii) the minister is satisfied that the impact has occurred;

"cancellation order" , in relation to compensation under

section 249 of the Act, means the order referred to in subsection (1) (

a) of that

section by which rights under the licence have been cancelled;

"established practices" in relation to compensation under

section 249 of the Act, means practices that

(

a) have been carried out previously in relation to the cutting and sale of trees cut from the cutting profile specified under

section 67 [cutting profile for permit area] of this regulation, and

(

b) are evidenced by management plans for permit areas, or by other records, that the minister considers relevant;

"permit area" , in relation to a Christmas tree permit, means the area described in the permit;

"remaining term" , in relation to compensation under

section 249 of the Act, means the period that

(

a) starts on the applicable impact date, and

(

b) ends on the expiry date of the term of the Christmas tree permit, as at the effective date of the cancellation order.

Purpose of

Part 7

62 This Part sets out the following:

(

a) the requirements that must be met for the purposes of

section 249 (1) (b) [compensation for Christmas tree permit] of the Act;

(

b) the method for determining compensation under

section 249 (2) of the Act.

Requirements for

section 249 (1) (

b) of Act

63 The requirements for the purposes of

section 249 (1) (b) [compensation for Christmas tree permit] of the Act are as follows:

(

a) as a result of the cancellation order, cutting rights under the Christmas tree permit have been impacted in one of the following ways:

(

i) the holder is no longer authorized to cut trees in the permit area;

(ii) there is no practicable means by which the holder can access the permit area, or a portion of that area, for the purposes of cutting trees in that area or portion;

(

b) the Christmas tree permit was issued before the effective date of the cancellation order;

(

c) in the case of a Christmas tree permit impacted in the way described in paragraph (a) (ii) of this section, the holder has provided an impact statement and additional information in accordance with

section 5 [impact statements] of this regulation.

Duty of holder of Christmas tree permit to provide information to minister

(1) The holder of a Christmas tree permit must provide to the minister, on request, specified information the minister considers necessary for the purposes of considering or determining a matter under

section 249 [compensation for Christmas tree permit] of the Act.

(2) Without limiting subsection (1), the minister may request any of the information described in

section 7 (2) [duty of holder of licence to provide information to minister] .

(3) Section 7 (3), (4) and (5) applies for the purposes of this section.

Information that minister may consider in determining compensation for Christmas tree permit

(1) For the purposes of determining the compensation for which the holder of a Christmas tree permit is eligible under

section 249 [compensation for Christmas tree permit] of the Act, the minister may consider the following:

(

a) relevant information that the holder provides under

section 64 of this regulation, or otherwise provides under the Act;

(

b) relevant information described in

section 8 (1) (

b) and (c) [information that minister may consider in determining compensation for licence] of this regulation.

(2) The minister may refuse to consider information referred to in subsection (1) if, in the minister’s opinion, the information is incomplete or inaccurate.

Criteria for determining relevance of information respecting Christmas tree permit

66 For the purposes of determining the net income amounts under

section 68 [compensation for Christmas tree permit] and unless the minister determines otherwise, information referred to in

section 65 is to be considered relevant if the information relates to Christmas tree permits that meet the following criteria:

(

a) the permit areas have cutting profiles that the minister considers are comparable to the cutting profile specified under

section 67;

(

b) the cutting of trees under the permits was completed not more than 5 years before the effective date of the cancellation order;

(

c) the number and height of the trees cut under the permits are sufficient to accurately indicate the net income that would be earned, and the established practices that would be carried out, in relation to the trees for which the holder is being compensated.

Cutting profile for permit area

67 To determine the compensation for which the holder of a Christmas tree permit is eligible under

section 249 [compensation for Christmas tree permit] of the Act, the minister must specify a cutting profile for the permit area by identifying

(

a) the number of trees that the minister considers can no longer be cut as a result of the cancellation order, and

(

b) the height of the trees identified under paragraph (a).

Compensation for Christmas tree permit

68 Subject to the adjustments under

section 69, the compensation for which the holder of a Christmas tree permit is eligible under

section 249 [compensation for Christmas tree permit] of the Act is an amount determined by the minister based on the net income that would be earned on the sale of trees cut under the permit if, during each year of the remaining term of the permit,

(

a) the number of trees cut were equal to an amount determined by dividing the number of trees specified under

section 67 (

a) of this regulation by the number of years in the remaining term of the permit, and

(

b) the trees were cut and sold in accordance with established practices.

Adjustments to Christmas tree permit compensation to reflect tax and present value

69 After determining, under

section 68, the net income amounts that would be earned during each year of the remaining term of the Christmas tree permit, the minister must do the following:

(

a) for each annual net income amount, determine the after‑tax net income amount in accordance with

section 2 [rules for determining after‑tax net income amounts] ;

(

b) for each annual after‑tax net income amount determined under paragraph (

a) of this section, determine the present value of that amount in accordance with

section 3 [determining present value amounts] ;

(

c) determine the total amount of compensation for which the holder is eligible under

section 249 (2) [compensation for Christmas tree permit] of the Act by calculating the sum of the present value amounts determined under paragraph (

b) of this section.

Interest payable on compensation for Christmas tree permit

(1) The minister must pay interest on the amount of compensation that the minister determines is payable under

section 249 (2) [compensation for Christmas tree permit] of the Act to the holder of a Christmas tree permit.

(2) Interest under subsection (1) is to be calculated in accordance with

section 4 (2) [rules for calculating interest] .

Part 8 – Compensation for Roads

and Timber Production Improvements

Division 1 –

Definitions and Information Requests

Definitions for

Part 8

71 In this Part:

"incurred costs criteria" , in relation to compensation under any of the following provisions of the Act, means costs that were actually and reasonably incurred by the holder of a road permit or special use permit before the effective date of the special purpose area designation:

(

a) section 252 [compensation for road located in special purpose area] ;

(

b) section 254 [compensation for road located outside special purpose area if road associated with cutting permit] ;

(

c) section 256 [compensation in other cases if road under road permit located outside special purpose area] ;

(

d) section 257 [compensation if road under special use permit located outside special purpose area] ;

(

e) section 258 [compensation for timber production improvement located in special purpose area] ;

(

f) section 259 [compensation for timber production improvement located outside special purpose area] ;

"stumpage criteria" , in relation to compensation under

section 252, 254 or 256 of the Act, means costs that were applied, in accordance with the stumpage appraisal policies, to determine, redetermine or vary the rate of stumpage for timber authorized to be harvested under a cutting permit or timber sale licence.

Information requests under

section 260 of Act

(1) The minister may extend by not more than 2 months the time period specified under

section 260 (3) [duty of holder of road permit or special use permit to provide information to minister] of the Act, but an extension may be granted only once.

(2) The minister must determine the compensation for which the holder of a road permit or special use permit is eligible under Division 6 [Compensation for Roads and Timber Production Improvements] of

Part 16 [Compensation in Relation to Special Purpose Areas] of the Act regardless of whether the holder complies with a request for information under

section 260 of the Act.

Division 2 – Compensation for

Road Located in Special Purpose Area

Purpose of Division 2 of

Part 8

(1) This Division applies for the purposes of determining the compensation for which the holder of a road permit or special use permit is eligible under

section 252 [compensation for road located in special purpose area] of the Act.

(2) For the purposes referred to in subsection (1), this Division sets out the following:

(

a) section 74 sets out the licences prescribed for the purposes of

section 252 (1) (

b) of the Act;

(

b) section 75 [requirements if road associated with cutting permit or timber sale licence] sets out requirements that must be met, for the purposes of

section 252 (1) (

e) of the Act, if a road permit authorizes a road associated with

(

i) a cutting permit issued under a forest licence, timber licence, area-based licence or forestry licence to cut, or

(ii) a timber sale licence;

(

c) sections 76 [matters that minister must determine if road associated with cutting permit or timber sale licence] and 77 [compensation under

section 252 (2) of Act if road associated with cutting permit or timber sale licence] set out the method for determining the costs for which the holder of a road permit may be compensated if the road permit authorizes a road associated with a cutting permit or timber sale licence;

(

d) sections 78 [matters that minister must determine if road not associated with cutting permit] and 79 [compensation under

section 252 (2) of Act if road not associated with cutting permit] set out the method for determining the costs for which the holder of a road permit may be compensated if the road permit authorizes a road that

(

i) is associated with a forest licence, timber licence, area-based licence or forestry licence to cut, and

(ii) is not associated with a cutting permit;

(

e) sections 80 [matters that minister must determine if road authorized under special use permit] and 81 [compensation under

section 252 (2) of Act if road authorized under special use permit] set out the method for determining the costs for which the holder a special use permit may be compensated.

Licences prescribed for

section 252 (1) (

b) of Act

74 For the purposes of

section 252 (1) (b) [compensation for road located in special purpose area] of the Act, the following licences are prescribed:

(

a) a community forest agreement;

(

b) a first nations woodland licence;

(

c) a woodlot licence;

(

d) a forestry licence to cut;

(

e) a timber sale licence.

Requirements if road associated with cutting permit or timber sale licence

75 If a road permit authorizes a road associated with a cutting permit or timber sale licence, the requirements for the purposes of

section 252 (1) (e) [compensation for road located in special purpose area] of the Act are as follows:

(

a) the cutting permit or timber sale licence was issued before the effective date of the special purpose area designation;

(

b) costs to construct the road were applied, in accordance with the stumpage appraisal policies and before the effective date of the special purpose area designation, in determining, redetermining or varying the rate of stumpage for timber authorized to be harvested under the cutting permit or timber sale licence.

Matters that minister must determine if road associated with cutting permit or timber sale licence

76 To determine the costs for which the holder of a road permit may be compensated under

section 252 (2) [compensation for road located in special purpose area] of the Act if the road permit authorizes a road associated with a cutting permit or timber sale licence, the minister must determine the following:

(

a) the portion of the costs incurred to construct the road that the minister considers meet both the incurred costs criteria and the stumpage criteria;

(

b) if the holder of the road permit has removed an ancillary road structure used in relation to the road, the amount of the costs under paragraph (

a) of this

section that the minister considers is attributable to the ancillary road structure;

(

c) in the case of a road permit that authorizes a road associated with a cutting permit,

(

i) in accordance with

section 19 (c) [matters that minister must determine in respect of cutting permit] of this regulation, the size of the impacted portion of the harvestable cutting permit area,

(ii) in accordance with

section 19 (

d) of this regulation, the size of the total harvestable cutting permit area, and

(iii) in accordance with

section 19 (

e) of this regulation, the proportion of the cutting permit area impacted as a result of the special purpose area designation;

(

d) in the case of a road permit that authorizes a road associated with a timber sale licence,

(

i) in accordance with

section 55 (c) [matters that minister must determine in respect of timber sale licence] of this regulation, the size of the impacted portion of the harvestable timber sale licence area,

(ii) in accordance with

section 55 (

d) of this regulation, the size of the total harvestable timber sale licence area, and

(iii) in accordance with

section 55 (

e) of this regulation, the proportion of the timber sale licence area impacted as a result of the special purpose area designation.

Compensation under

section 252 (2) of Act if road associated with cutting permit or timber sale licence

77 After determining the matters under

section 76, the minister must determine the portion of the costs for which the holder of the road permit may be compensated by using the following formula:

costs = incurred costs × proportion of area impacted

where

incurred costs

the costs determined under

section 76 (

a) less, if applicable, the ancillary road costs determined under

section 76 (b);

proportion of area impacted

the proportion of the cutting permit area or timber sale licence that is impacted as a result of the special purpose area designation, as determined under

section 76 (c) (iii) or (d) (iii).

Matters that minister must determine if road not associated with cutting permit

(1) In this section, "established practices" ,

(

a) in relation to a forest licence, timber licence or area-based licence, has the same meaning as in

section 226 [definitions for

Part 16] of the Act;

(

b) in relation to a forestry licence to cut, has the same meaning as in

section 41 [definitions for

Part 5] of this regulation.

(2) To determine the costs for which the holder of a road permit may be compensated under

section 252 (2) [compensation for road located in special purpose area] of the Act if the road permit authorizes a road that is associated with a forest licence, timber licence, area-based licence or forestry licence to cut, but is not associated with a cutting permit, the minister must determine the following:

(

a) the portion of the costs incurred to construct the road that the minister considers

(

i) meet the incurred costs criteria, and

(ii) if the road were associated with a cutting permit, would meet the stumpage criteria;

(

b) if the holder of the road permit has removed an ancillary road structure used in relation to the road, the amount of the costs under paragraph (

a) of this subsection that the minister considers is attributable to the ancillary road structure;

(

c) the volume of harvestable timber under the licence that the minister considers can no longer be harvested and sold, in accordance with established practices, as a result of the special purpose area designation;

(

d) the total volume of harvestable timber that the minister considers would be harvested and sold under the licence if

(

i) the special purpose area designation had not been made, and

(ii) the timber were harvested and sold in accordance with established practices.

(3) The minister may determine the volumes described in subsection (2) (

c) and (

d) based on established practices in relation to the harvest profile that the minister specifies for the purposes of this

section if

(

a) in the case of a road associated with a forest licence, timber licence or area-based licence, a relevant harvest profile has not been specified by the chief forester under

Part 15 [Special Purpose Areas] of the Act because the timber supply area or licence area does not overlap the special purpose area in which the road is located, or

(

b) in the case of a forestry licence to cut, the minister has not, under

section 46 (a) [matters that minister must determine in respect of forestry licence to cut] of this regulation, specified a harvest profile for the forestry licence to cut area because rights under the licence are not exercisable in the special purpose area in which the road is located.

Compensation under

section 252 (2) of Act if road not associated with cutting permit

79 After determining the matters under

section 78, the minister must determine the portion of the costs for which the holder of the road permit may be compensated by using the following formula:

unharvested volume

costs = incurred costs

total harvestable volume

where

incurred costs

the costs determined under

section 78 (2) (

a) less, if applicable, the ancillary road costs determined under

section 78 (2) (b);

unharvested volume

the volume of harvestable timber determined under

section 78 (2) (c);

total harvestable volume

the volume of harvestable timber determined under

section 78 (2) (d).

Matters that minister must determine if road authorized under special use permit

80 To determine the costs for which the holder of a special use permit may be compensated under

section 252 (2) [compensation for road located in special purpose area] of the Act, the minister must determine the following:

(

a) the portion of the costs incurred to construct the road that the minister considers meet the incurred costs criteria;

(

b) if the holder has removed an ancillary road structure used in relation to the road, the amount of the costs under paragraph (

a) of this

section that the minister considers is attributable to the ancillary road structure;

(

c) in respect of the timber production improvement to which the road provides access, the number of years in the total useful life of the timber production improvement;

(

d) the number of years remaining, as at the date the holder’s rights in relation to the road were cancelled by the order referred to in

section 252 (1) (

c) of the Act, in the total useful life of the timber production improvement.

Compensation under

section 252 (2) of Act if road authorized under special use permit

81 After determining the matters under

section 80, the minister must determine the portion of the costs for which the holder of the special use permit may be compensated by using the following formula:

remaining useful life

costs = incurred costs

total useful life

where

costs

the costs determined under

section 80 (

a) less, if applicable, the ancillary road structure costs determined under

section 80 (b);

remaining useful life

the number of years remaining in the useful life of the timber production improvement, as determined under

section 80 (d);

total useful life

the total number of years in the useful life of the timber production improvement, as determined under

section 80 (c).

Interest payable on compensation under

section 252 (2) of Act

(1) The minister must pay interest on the amount of compensation that the minister determines is payable under

section 252 (2) [compensation for road located in special purpose area] of the Act to the holder of road permit or special use permit.

(2) Interest under subsection (1) is to be calculated

(

a) from the effective date of the cancellation order referred to in

section 252 (1) (

c) of the Act to the date of payment, and

(

b) in accordance with

section 4 (2) (

b) and (c) [rules for calculating interest] .

Division 3 – Compensation if Road Outside

Special Purpose Area is Associated with Cutting Permit

Purpose of Division 3 of

Part 8

83 This Division sets out the following:

(

a) the licences prescribed for the purposes of

section 254 (1) (b) [compensation for road located outside special purpose area if road associated with cutting permit] of the Act;

(

b) the method for determining the costs for which the holder of a road permit may be compensated under

section 254 (2) of the Act.

Licences prescribed for

section 254 (1) (

b) of Act

84 For the purposes of

section 254 (1) (b) [compensation for road located outside special purpose area if road associated with cutting permit] of the Act, the following licences are prescribed:

(

a) a community forest agreement;

(

b) a first nations woodland licence;

(

c) a woodlot licence;

(

d) a forestry licence to cut;

(

e) a timber sale licence.

Compensation under

section 254 (2) of Act

(1) To determine the costs for which the holder of a road permit may be compensated under

section 254 (2) [compensation for road located outside special purpose area if road associated with cutting permit] of the Act, the minister must determine the matters set out in

section 76 (a), (

b) and (c) [matters that minister must determine if road associated with cutting permit or timber sale licence] .

(2) After determining the matters under subsection (1), the minister must determine the portion of the costs for which the holder may be compensated by using the formula set out in

section 77 [compensation under

section 252 (2) of Act if road associated with cutting permit or timber sale licence] .

Interest payable on compensation under

section 254 (2) of Act

(1) The minister must pay interest on the amount of compensation that the minister determines is payable under

section 254 (2) [compensation for road located outside special purpose area if road associated with cutting permit] of the Act to the holder of a road permit.

(2) Interest under subsection (1) is to be calculated

(

a) from the applicable impact date to the date of payment, and

(

b) in accordance with

section 4 (2) (

b) and (c) [rules for calculating interest] .

(3) For the purposes of subsection (2) (a), the applicable impact date is as follows:

(

a) in the case of harvesting rights impacted in the way set out in

section 255 (1) [impact requirements for road associated with cutting permit] of the Act, the effective date of the order referred to in, as applicable, paragraph (a) (

i) or (ii) (

A) or (

B) of that section;

(

b) in the case of harvesting rights impacted in the way set out in

section 255 (2) of the Act, the date, as determined by the minister, of the occurrence of the impact described in that section.

Division 4 – Compensation in Other Road Permit Cases

if Road Outside Special Purpose Area

Purpose of Division 4 of

Part 8

87 This Division sets out the following:

(

a) the impact and other requirements that must be met for the purposes of

section 256 (1) [compensation in other cases if road under road permit located outside special purpose area] of the Act;

(

b) the method for determining the costs for which the holder of a road permit may be compensated under

section 256 (2) of the Act.

Requirements for

section 256 (1) of Act

88 The impact and other requirements for the purposes of

section 256 (1) [compensation in other cases if road under road permit located outside special purpose area] of the Act are as follows:

(

a) the road permit is associated with a forest licence, timber licence, area-based licence, timber sale licence or forestry licence to cut;

(

b) the road permit was issued before the effective date of the special purpose area designation;

(

c) as a result of the special purpose area designation, harvesting rights under the licence have been impacted in a way described in

section 89 of this regulation;

(

d) the general requirements set out in

section 253 [general requirements for compensation for road] of the Act;

(

e) costs incurred to construct the road are not compensable under

section 254 [compensation for road located outside special purpose area if road associated with cutting permit] of the Act.

Impact requirements for

section 256 (1) of Act

89 For the purposes of

section 88 (c), the minister must be satisfied that the following apply:

(

a) the only purpose of the road, as it relates to the holder of the road permit, is to provide access

(

i) to a particular area for the purpose of harvesting timber under the holder’s licence, or

(ii) to another road that provides access to a particular area for the purpose of harvesting timber under the holder’s licence;

(

b) as a result of the special purpose area designation, the holder is no longer authorized or able to obtain authorization

(

i) to harvest timber in the particular area, or

(ii) to use the other road to access the particular area for the purpose of harvesting timber under the holder’s licence;

(

c) in the case of the impact described in paragraph (b) (ii) of this section, there are no practicable alternative means by which the holder can access the particular area for the purpose of harvesting timber under the holder’s licence.

Compensation under

section 256 (2) of Act if road associated with timber sale licence

(1) To determine the costs for which the holder of a road permit may be compensated under

section 256 (2) [compensation in other cases if road under road permit located outside special purpose area] of the Act if the road permit authorizes a road associated with a timber sale licence, the minister must determine the matters set out in

section 76 (a), (

b) and (d) [matters that minister must determine if road permit associated with cutting permit or timber sale licence] of this regulation.

(2) After determining the matters under subsection (1), the minister must determine the portion of the costs for which the holder may be compensated by using the formula set out in

section 77 [compensation under

section 252 (2) of Act if road associated with cutting permit or timber sale licence] .

Compensation under

section 256 (2) of Act if road not associated with timber sale licence

(1) To determine the costs for which the holder of a road permit may be compensated under

section 256 (2) [compensation in other cases if road under road permit located outside special purpose area] of the Act if the road permit authorizes a road associated with a forest licence, timber licence, area-based licence or forestry licence to cut, the minister must determine the matters set out in

section 78 [matters that minister must determine if road not associated with cutting permit] of this regulation.

(2) After determining the matters under subsection (1), the minister must determine the portion of the costs for which the holder may be compensated by using the formula set out in

section 79 [compensation under

section 252 (2) of Act if road not associated with cutting permit] .

Interest payable on compensation under

section 256 (2) of Act

(1) The minister must pay interest on the amount of compensation that the minister determines is payable under

section 256 (2) [compensation in other cases if road under road permit located outside special purpose area] of the Act to the holder of a road permit.

(2) Interest under subsection (1) is to be calculated

(

a) from the applicable impact date to the date of payment, and

(

b) in accordance with

section 4 (2) (

b) and (c) [rules for calculating interest] .

(3) For the purposes of subsection (2) (a), the applicable impact date is the date, as determined by the minister, of the occurrence of the impact described in

section 89 [impact requirements for

section 256 (1) of Act] .

Division 5 – Amortization Agreements

Definition for Division 5 of

Part 8

93 In this Division, "amortization agreement" means an agreement that

(

a) is entered into in accordance with the stumpage appraisal policies, and

(

b) authorizes costs incurred to construct a road to be distributed among one or more existing or proposed cutting permits for the purposes of determining, redetermining or varying stumpage.

Application of Division 5 of

Part 8

(1) This Division applies in relation to the following provisions of this regulation:

(

a) section 77 [compensation under

section 252 (2) of Act if road associated with cutting permit or timber sale licence] ;

(

b) section 79 [compensation under

section 252 (2) of Act if road not associated with cutting permit] ;

(c)

section 85 (2) [compensation under

section 254 (2) of Act] ;

(d)

section 90 (2) [compensation under

section 256 (2) of Act if road associated with timber sale licence] ;

(e)

section 91 (2) [compensation under

section 256 (2) of Act if road not associated with timber sale licence] .

(2) This Division applies in relation to the following provisions of the Act:

(a)

section 252 (2) [compensation for road located in special purpose area] ;

(b)

section 254 (2) [compensation for road located outside special purpose area if road associated with cutting permit] ;

(c)

section 256 (2) [compensation in other cases if road under road permit located outside special purpose area] .

Adjustments to compensation if road costs subject to amortization agreement

(1) Despite the provisions set out in

section 94 (1), the minister may adjust the compensation for which the holder of a road permit is eligible under a road compensation provision set out in

section 94 (2) if the minister considers that all of the following apply:

(

a) the holder entered into an amortization agreement before the effective date of the special purpose area designation;

(

b) in respect of the road authorized under the road permit, the costs incurred to construct that road have not yet been fully distributed in accordance with the amortization agreement;

(

c) as a result of the special purpose area designation, the remaining costs can no longer be fully distributed among the cutting permits and proposed cutting permits to which the amortization agreement relates;

(

d) adjusting the compensation is just in the circumstances.

Division 6 – Compensation Under Special Use Permit

if Road Outside Special Purpose Area

Purpose of Division 6 of

Part 8

96 This Division sets out the following:

(

a) the impact and other requirements that must be met for the purposes of

section 257 (1) [compensation if road under special use permit located outside special purpose area] of the Act;

(

b) the method for determining the costs for which the holder of a special use permit may be compensated under

section 257 (2) of the Act.

Requirements for

section 257 (1) of Act

97 The impact and other requirements for the purposes of

section 257 (1) [compensation if road under special use permit located outside special purpose area] of the Act are as follows:

(

a) the special use permit was issued before the effective date of the special purpose area designation;

(

b) as a result of the special purpose area designation, access to an area for a timber production purpose has been impacted in a way described in

section 98 of this regulation;

(

c) the general requirements set out in

section 253 [general requirements for compensation for road] of the Act.

Impact requirements for

section 257 (1) of Act

98 For the purposes of

section 97 (b), the minister must be satisfied that the following apply:

(

a) the only purpose of the road, as it relates to the holder of the special use permit, is to provide access

(

i) to a particular area that the holder uses for a timber production purpose, or

(ii) to another road that provides access to a particular area that the holder uses for a timber production purpose;

(

b) as a result of the special purpose area designation, the holder is no longer authorized or able to obtain authorization

(

i) to use the particular area for the timber production purpose, or

(ii) to use the other road to access the particular area for the timber production purpose;

(

c) in the case of the impact described in paragraph (b) (ii) of this section, there are no practicable alternative means by which the holder can access that particular area for the timber production purpose.

Compensation under

section 257 (2) of Act

(1) To determine the costs for which the holder of a special use permit may be compensated under

section 257 (2) [compensation if road under special use permit located outside special purpose area] of the Act, the minister must determine the following:

(

a) the matters set out in

section 80 (

a) to (c) [matters that minister must determine if road authorized under special use permit] of this regulation;

(

b) the date of the occurrence of the applicable impact described in

section 98 of this regulation;

(

c) the number of years remaining, as at the date determined under paragraph (

b) of this subsection, in the total useful life of the timber production improvement to which the road provides access.

(2) After determining the matters under subsection (1), the minister must determine the portion of the costs for which the holder may be compensated by using the formula set out in

section 81 [compensation under

section 252 (2) of Act if road authorized under special use permit] .

(3) In applying the formula set out in

section 81 for the purposes of this section, the "remaining useful life" is the number of years determined under subsection (1) (

c) of this section.

Interest payable on compensation under

section 257 (2) of Act

(1) The minister must pay interest on the amount of compensation that the minister determines is payable under

section 257 (2) [compensation if road under special use permit located outside special purpose area] of the Act to the holder of a special use permit.

(2) Interest under subsection (1) is to be calculated

(

a) from the impact date determined under

section 99 (1) (

b) to the date of payment, and

(

b) in accordance with

section 4 (2) (

b) and (c) [rules for calculating interest] .

Division 7 – Compensation for Timber Production Improvements

Purpose of Division 7 of

Part 8

101 This Division sets out the method for determining the costs for which the holder of a special use permit may be compensated for the purposes of the following provisions of the Act:

(a)

section 258 (2) [compensation for timber production improvement located in special purpose area] ;

(b)

section 259 (2) [compensation for timber production improvement located outside special purpose area] .

Matters that minister must determine in respect of timber production improvement

102 To determine the costs for which the holder of the special use permit may be compensated under

section 258 (2) [compensation for timber production improvement located in special purpose area] or 259 (2) [compensation for timber production improvement located outside special purpose area] of the Act, the minister must determine the following:

(

a) the portion of the costs incurred to construct the timber production improvement that the minister considers meet the incurred costs criteria;

(

b) the total useful life of the timber production improvement;

(

c) the number of years remaining, as at the date of the occurrence of the impact described in

section 258 (1) (

a) or 259 (1) (

a) of the Act, in the useful life determined under paragraph (

b) of this section.

Compensation under sections 258 (2) and 259 (2) of Act

103 After determining the matters under

section 102, the minister must determine the portion of the costs for which the holder of the special use permit may be compensated by using the following formula:

remaining useful life

costs = incurred costs

total useful life

where

costs

the costs determined under

section 102 (a);

remaining useful life

the number of years remaining in the useful life of the timber production improvement, as determined under

section 102 (c);

total useful life

the total useful life of the timber production improvement, as determined under

section 102 (b).

Interest payable on compensation under sections 258 (2) and 259 (2) of Act

(1) The minister must pay interest on the amount of compensation that the minister determines is payable under

section 258 (2) [compensation for timber production improvement located in special purpose area] or 259 (2) [compensation for timber production improvement located outside special purpose area] of the Act to the holder of a special use permit.

(2) Interest under subsection (1) is to be calculated

(

a) from the applicable impact date to the date of payment, and

(

b) in accordance with

section 4 (2) (

b) and (c) [rules for calculating interest] .

(3) For the purposes of subsection (2) (a), the applicable impact date is as follows:

(

a) in the case of compensation payable under

section 258 (2) of the Act, the effective date of the order referred to in

section 258 (1) (

a) of the Act;

(

b) in the case of compensation payable under

section 259 (2) of the Act, the date, as determined by the minister, on and after which the access means described in

section 259 (1) (a) (

i) of the Act can no longer be used.

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