MacMillan Bloedel Parks Settlement Agreement Decision
On March 16, 1999, the Province of British Columbia (the "Province") and MacMillan Bloedel Ltd. ("MB") entered into a Settlement Agreement. The Settlement Agreement settled actions brought by MB against the Province to seek compensation for lost timber cutting rights. MB had brought two separate actions against the Province for compensation. One consisted of a Petition filed in Supreme Court and the second was a Notice of Arbitration filed to determine compensation payable under the Forest Act.
These losses occurred when parks were created by the Province in 1990 and 1995. The losses occurred on approximately 8,000 hectares of timber licenses owned by MB and lost opportunity to cut on Tree Farm Licenses 39 and 44 over an area of approximately 34,000 hectares.
The effect of creating these parks is that MB was deprived of an opportunity to harvest approximately 6 million cubic metres of timber. In addition, capital investments made by MB in forestry infrastructure such as roads and bridges were lost. Based on detailed calculations about estimate future lost revenues, net of costs to MB such as environmental constraints, the loss to MB was determined to be $83.75 million. Although the Province has not admitted liability for compensation, nevertheless the Province has agreed to pay this amount to MB.
For the purpose of this report, the Settlement Agreement determined two important points. First of all, the Province agreed that compensation was owed to MB in the amount $83.75 million effective January 1, 1999, and that interest would be payable on that amount following that date. Secondly, the Province proposed and MB agreed that there would be an attempt to pay this compensation by way of transfer of land and/or resource rights to MB rather than a payment in cash.
It was a term of the Settlement Agreement that the Province would conduct public consultations before making any determination whether or not to use a transfer of land and resource rights as a method of compensation rather than paying cash.
I was retained by the Ministry of Forests to conduct these public consultations on behalf of the Province and to prepare a report for Cabinet. The report is to reflect the views heard by me in the course of the public consultations and include my recommendations to the Province based on the public input received.
Specifically, the Terms of Reference of my mandate from the Province provided that I will:
"Under the general direction of the Assistant Deputy Minister, Forest Industry Projects, the Ministry of Forests, consult with First Nations, other potentially affected individuals or organizations, and appropriate interest groups with respect to the proposed land and resource rights transfers to MB contemplated by the MB Settlement Agreement.
The objectives of the consultation programs are to:
The public consultations that I carried out with the assistance of Ministry of Forests staff were aimed at two different sectors. Because of the constitutional obligations of the Province to consult with First Nations where there are potential breaches to aboriginal rights or title, I was specifically directed to determine whether or not any of the proposed land transfers or resource rights transfers could infringe on aboriginal rights or title. If I found that such an infringement was likely, I was also to determine what, if any, consultation would be required with affected First Nations before such resource rights or land transfers could take place.
In addition, I was required to consult with members of the public generally about the effect of these proposed transfers. In the course of my consultations with members of the public, the scope of debate greatly exceeded the narrow issue of whether or not to compensate MB with cash or land. My primary goal in conducting the public consultations was to ascertain public preferences on this narrow issue, nevertheless because of the broad range of issues raised by members of the public during these public consultations, I am reporting back to government on this wider scope of public opinion.
The time available for this public consultation was short. The timing was governed by the restrictions in the Settlement Agreement itself and the need, given the large interest payments accumulating on the sum owed to MB, to settle the matter as quickly as possible. Given this short time line, an initial mail out was distributed to all parties identified as potential stakeholders in the affected lands by the Vancouver Forest Region Office of the Ministry of Forests. The mailout advised stakeholders of the opportunity to make presentations to me, either in public forums or in private meetings. The mailout also contained details of the Settlement Agreement and identified the parcels of land that had been initially selected by MB. Potentially affected parties included First Nations, municipalities, contractors and logging companies currently with an interest in the affected lands, unions and other holders of resource tenures. In addition to this direct mail out, public hearings were scheduled for seven communities on Vancouver Island together with hearings in Powell River, Vancouver and Queen Charlotte City. These hearings were advertised in local newspapers several weeks in advance and members of the public were also invited in those advertisements to submit written submissions to me in support of their opinions.
There was a great deal of critical comment about the process used in this public consultation. Many members of the public expressed frustration at the lack of information available about the specific parcels under review and the short time line for the consultation process. For example, maps provided with the initial mailout did not include cadastral information or roads, making it difficult to pinpoint exactly the land under consideration.
In my view, much of this criticism was based on a difference in perspective of the purpose of these public consultations. Members of the public who desired a much higher level of information to be available and an opportunity to consult in a more intensive manner saw the process as a planning exercise for the use of each individual parcel. Obviously the process as designed could not accommodate the active involvement of perhaps hundreds of members of the public in determining the future of these parcels of land.
But this was not the intent of the public consultation that I conducted. Because using land as a currency for settling obligations to MB was a new idea, recognized as potentially controversial by the Province, the government chose to include a canvassing of public opinion as part of the Settlement Agreement. The purpose of the consultation exercise as designed was to find out in a general way the reaction of members of the public to the transferring of land and resource rights to settle obligations of the Province to MB rather than simply paying cash. My process was not designed to give members of the public an opportunity to be involved in tenure reform or higher-level planning. There are other ongoing processes currently taking place — such as completion of the Vancouver Island Land Resource Management Plan — where the public can be more actively involved in decisions concerning land use.
In my view, given the large number of written submissions, and attendees at public hearings and private sessions, the consultation process has successfully canvassed the issue of whether or not to use cash or land for this transaction, and this report reflects a reasonable cross-section of public opinion on the issue.
Part of public frustration with this limited public consultation may arise from the fact that compensation is an unresolved issue left over from the much more extensive and intensive Commission on Resources and the Environment (CORE) process which resulted in the creation of the parks which deprived MB of cutting rights and the subsequent decision to compensate MB. Because the land-use planning process took place over a number of years and involved a high level of ongoing round table discussions with members of the public, it was a much more participatory model than the public consultation which I have just conducted. Had compensation issues been resolved through the CORE process, then this brief canvassing of public opinion would have been redundant.
In order to carry out the Terms of Reference with respect to First Nations, letters were sent to all of the affected First Nations to determine how they wished to participate in the consultation process. Meetings were arranged with the following First Nations: Sliammon, Cowichan Tribes, Nuuchahnalth First Nations, Kwakiutl Laich-Kwil-Tach Nations Treaty Society, Te'Mexw Treaty Association and Hupacasath First Nation.
The Snuneymuxw First Nation and the Council of Haida Nations specifically declined an invitation to meet with me, both expressing a preference to deal directly with the Province. Some representatives of the Haida did however participate in the public hearing which took place on Haida Gwaii. Many other First Nations, mainly those on the north of Vancouver Island, did not respond at all to the invitation to a meeting. Meetings with First Nations were conducted on the basis that I wished to exchange information and points of view on the proposal to use land and resource rights, rather than cash in the Settlement Agreement. I specifically assured First Nations that the meetings were not meant to be a replacement for constitutional consultation between the Province and any potentially affected First Nation.
In addition to these one-on-one meetings, I held a number of meetings with environmental groups, forestry companies, municipalities and interested members of the public. Open houses, where members of the public had an opportunity to ask questions of Ministry of Forests staff and representatives of MB, were held in nine communities. After these open houses, public hearings were held in the same communities, giving members of the public an opportunity to make presentations to me. Approximately 1,500 people in total attended these public hearings. Finally, I received approximately 1,100 written submissions from members of the public during the course of the consultation process.
Based on this public consultation, this Report was prepared. The Report is organized into the following sections:
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