A-18.1, r. 6 - Regulation respecting the method for assessing the annual royalty and the method and frequency for assessing the market value of standing timber purchased by guarantee holders pursuant to their timber supply guarantee

Updated to 1 September 2016

This document has official status.

chapter A-18.1, r. 6

Regulation respecting the method for assessing the annual royalty and the method and frequency for assessing the market value of standing timber purchased by guarantee holders pursuant to their timber supply guarantee

Sustainable Forest Development Act

(chapter A-18.1, s. 126).

1. For the purposes of this Regulation,

(1)  “harvest year” means the period extending from 1 April to 31 March of the following year;

(1.1)  “merchantable timber” means all logs or parts of logs greater than 9 cm in diameter;

(2)  “reference period” means the period extending from 1 April to 31 December of the following year;

(2.1)  “special development plan” means a special development plan within the meaning of section 60 of the Sustainable Forest Development Act (chapter A-18.1);

(3)  “billed volume of timber” means all merchantable timber from forests in the domain of the State that is billed to the holder of a timber supply guarantee by the timber marketing board, except timber acquired on the open market.

O.C. 167-2013, s. 1; O.C. 725-2016, s. 1.

2. The timber billed during the reference period is the timber harvested in the last complete harvest year preceding the time at which the annual royalty is assessed.

The annual royalty payable by holders of a timber supply guarantee is assessed in February of each year.

O.C. 167-2013, s. 2; O.C. 725-2016, s. 2.

3. If the volume of timber billed to a guarantee holder during the reference period is equal to or greater than 10% of the volume of timber specified in the holder’s timber supply guarantee, the first annual royalty instalment is assessed using the following method:

RAVBG1 = VBG2 [18% (VMBSPF3 / VBF4)]

RAAR1F5 = {(VBG2 - VBR16) [18% (VMBSPF3 / VBF4)]}

RA1F7 = 50% RAAR1F5

If, however, the annual royalty after waiver used to determine the first billing is less than 50% of the annual royalty according to the volumes of timber specified in the holder’s timber supply guarantee, the first annual royalty instalment is assessed using the following method:

RA1F7 = 50% RAVBG1 50%

1the annual royalty according to the volume of timber specified in the holder’s timber supply guarantee

2 the volume of timber specified in the holder’s timber supply guarantee

3 the amount calculated on the basis of the market value of the standing timber related to the volume of timber billed to the holder during the reference period

4 the volume of timber billed to the holder during the reference period

5 the annual royalty after waiver used to determine the first billing

6 the volume of timber waived or deemed to have been waived by the holder at the time the sales contract for the standing timber purchased pursuant to the holder’s timber supply guarantee was made

7 the annual royalty to be paid on the first billing

The second annual royalty instalment is assessed using the following method:

RAAR2F8 = {(VBG2 - VBR16 - 50% VBR29 – VBR2PAS10) [18% (VMBSPF3 / VBF4)]}

RA2F11 = RAAR2F8 - RA1F7

If, however, the annual royalty after waiver used to determine the second billing is less than 50% of the annual royalty according to the volumes of timber specified in the holder’s timber supply guarantee, the second annual royalty instalment is assessed using the following method:

RA2F11 = (50% RAVBG1) - RA1F7

8 the annual royalty after waiver used to determine the second billing

9 the volume of timber, not under a special development plan, waived by the holder between the time the sales contract for the standing timber purchased pursuant to the holder’s timber supply guarantee is made and 15 August of the current harvest year

10 the volume of timber, under a special development plan, waived by the holder between the time the sales contract for the standing timber purchased pursuant to the holder’s timber supply guarantee is made and 15 August of the current harvest year

11 the annual royalty to be paid on the second billing

At the end of the harvest year, the holder of a timber supply guarantee is entitled, for the timber under a special development plan waived by the holder between 16 August and 31 March of the harvest year concerned, to be reimbursed for a portion of the annual royalty, assessed using the following method:

RAARA2F12 = RAAR2F8 - (VBRA2FPAS13) [18% (VMBSPF3 / VBF4)]

PRAR14 = (VBRA2FPAS13) [18% (VMBSPF3 / VBF4)]

If, however, the annual royalty after waiver following the second billing is less than 50% of the annual royalty according to the volumes of timber specified in the holder’s timber supply guarantee, the reimbursed portion of the annual royalty is assessed using the following method:

PRAR14 = (RA1F7 + RA2F11) - (50% RAVBG1)

12 the annual royalty after waiver following the second billing

13 the volume of timber, under a special development plan, waived by the holder between 16 August and 31 March of the harvest year concerned

14 the reimbursed portion of the annual royalty

O.C. 167-2013, s. 3; O.C. 725-2016, s. 3.

4. If the volume of timber billed to a guarantee holder during the reference period is less than 10% of the volume of timber specified in the holder’s timber supply guarantee, the first annual royalty instalment is assessed using the following method:

RAVBG1 = Σe2 {(VBGe3) [18% (VMTBSPFe4 / VBTFe5)]}

RAAR1F6 = Σe7 {(VBGe3 - VBRe18) [18% (VMTBSPFe4 / VBTFe5)]}

RA1F9 = 50% RAAR1F6

If, however, the annual royalty after waiver used to determine the first billing is less than 50% of the annual royalty according to the volumes of timber specified in the holder’s timber supply guarantee, the first annual royalty instalment is assessed using the following method:

RA1F9 = 50% RAVBG1 50%

1 the annual royalty according to the volume of timber specified in the holder’s timber supply guarantee

2 the sum of the operation performed for each annual royalty for the species or group of species concerned, as specified in the holder’s timber supply guarantee

3 the volume of the species or group of species concerned, as specified in the holder’s timber supply guarantee

4 the amount calculated on the basis of the total market value of the standing timber related to the volume of timber billed to all the holders during the reference period for the species or group of species concerned

5 the total volume billed to all the holders during the reference period for the species or group of species concerned

6 the annual royalty after waiver used to determine the first billing

7 the sum of the operation performed for each annual royalty for the species or group of species concerned, as specified in the holder’s timber supply guarantee after waiver

8 the volume of the species or group of species concerned, as specified in the holder’s timber supply guarantee, waived or deemed to have been waived by the holder at the time the sales contract for the standing timber purchased pursuant to the holder’s timber supply guarantee was made

9 the annual royalty to be paid on the first billing

The second annual royalty instalment for the species or groups of species specified in the holder’s timber supply guarantee is assessed using the following method:

RAAR2F10 = Σe11 {(VBGe3 - VBRe18 - 50%VBRe212 - VBRe2PAS13) [18% (VMTBSPFe4 / VBTFe5)]}

RA2F14 = RAAR2F10 - RA1F9

If, however, the annual royalty after waiver used to determine the second billing is less than 50% of the annual royalty according to the volumes of timber specified in the holder’s timber supply guarantee, the second annual royalty instalment is assessed using the following method:

RA2F14 = (50% RAVBG1) - RA1F9

10 the annual royalty after waiver used to determine the second billing

11 the sum of the operation performed for each annual royalty for the species or group of species concerned, as specified in the holder’s timber supply guarantee after waiver

12 the volume of the species or group of species concerned, as specified in the holder’s timber supply guarantee, not under a special development plan, waived by the holder between the time the sales contract for the standing timber purchased pursuant to the holder’s timber supply guarantee is made and 15 August of the current harvest year

13 the volume of the species or group of species concerned, as specified in the holder’s timber supply guarantee, under a special development plan, waived by the holder between the time the sales contract for the standing timber purchased pursuant to the holder’s timber supply guarantee is made and 15 August of the current harvest year

14 the annual royalty to be paid on the second billing

At the end of the harvest year, the holder of a timber supply guarantee is entitled, for the timber under a special development plan waived by the holder between 16 August and 31 March of the harvest year concerned, to be reimbursed for a portion of the annual royalty, assessed using the following method:

RAARA2F15 = RAAR2F10 - Σe11 (VBReA2FPAS16) [18% (VMTBSPFe4 / VBTFe5)]

PRAR17 = Σe11 (VBReA2FPAS16) [18% (VMTBSPFe4 / VBTFe5)]

If, however, the annual royalty after waiver following the second billing is less than 50% of the annual royalty according to the volumes of timber specified in the holder’s timber supply guarantee, the reimbursed portion of the annual royalty is assessed using the following method:

PRAR17 = (RA1F9 + RA2F14) - (50% RAVBG1)

15 the annual royalty after waiver following the second billing

16 the volume of the species or group of species concerned, as specified in the holder’s timber supply guarantee, under a special development plan, waived by the holder between 16 August and 31 March of the harvest year concerned

17 the reimbursed portion of the annual royalty

O.C. 167-2013, s. 4; O.C. 725-2016, s. 3.

4.1. If the Minister cancels a timber supply guarantee pursuant to subparagraph 3 of the first paragraph of section 109 of the Sustainable Forest Development Act (chapter A-18.1), or terminates a timber supply guarantee pursuant to paragraph 1 of section 112 of that Act and, following the cancellation, the sales contract for the standing timber purchased pursuant to that guarantee is cancelled, the Minister is to reimburse the holder of the cancelled guarantee for the portion of the annual royalty corresponding to the volume of timber remaining harvestable by the holder before cancellation of the standing timber sales contract.

A holder granted a timber supply guarantee by the Minister in the course of the harvest year must pay, for that year, an annual royalty corresponding to the proportion of the volumes of timber the holder could purchase before the end of the harvest year. In addition, if the plant for which the guarantee is granted was or had already been operated under a guarantee and the guarantee was cancelled within 12 months of the date on which the guarantee granted took effect, the rate of the annual royalty to be paid by such a holder is the rate that applied to the holder of the cancelled guarantee at the time of the cancellation.

O.C. 725-2016, s. 3.

5. The market value of standing timber purchased pursuant to a timber supply guarantee is assessed on 1 April of each year according to the parity technique applicable in property assessment by comparing the timber to similar timber for which the selling price is known. The value is expressed in Canadian dollars per cubic metre.

The unit rates obtained on the basis of that assessment are adjusted every 3 months according to the rate of increase in forest product price indexes.

O.C. 167-2013, s. 5.

6. (Omitted).

O.C. 167-2013, s. 6.

REFERENCES

O.C. 167-2013, 2013 G.O. 2, 620

O.C. 725-2016, 2016 G.O. 2, 3203