Statutes and Regulations

Regulations – Forest Act

TIMBER HARVESTING CONTRACT AND SUBCONTRACT REGULATION
B.C. Reg. 22/96

Last Amendment: Reg. 524/2004

Part 1 - Interpretation, Application and Notice

Interpretation

(1)

In this regulation:

"AAC" means allowable annual cut;

"AAC reduction criteria" means each of the following factors:

(a)

achieving a contractor configuration that optimizes the effective utilization of capital within all timber harvesting operations carried out under all licences included by a licence holder in an AAC reduction proposal or a forestry revitalization proposal;

(b)

achieving a contractor configuration that optimizes the efficiency of all timber harvesting operations carried out under all licences included in an AAC reduction proposal or a forestry revitalization proposal by a licence holder;

(c)

the demonstrated historical operational effectiveness, ability to carry out timber harvesting operations and compliance with safety, environmental and other applicable laws of each contractor with a replaceable contract pertaining to any licences held by a licence holder;

(d)

minimizing the overall need for geographic relocation by contractors and company operations to operating areas different than those they have traditionally operated in;

"AAC reduction proposal" means a proposal made under Part 5 Division 5 that the amount of work specified in a replaceable contract be varied or a proposal that a replaceable contract be terminated;

"Act" means the Forest Act;

"amount of work compliance period" when used in relation to a licence means

(a)

a 5 year period commencing on the date of the commencement of the cut control period of that licence in effect on January 1, 2004,

(b)

any consecutive 5 year period commencing at the end of the prior amount of work compliance period, or

(c)

any other period of time agreed to by the parties to a replaceable contract;

"amount of work dispute" means a dispute between a licence holder and a contractor with respect to the amount of work to be specified in a replaceable contract as required by sections 17, 18 and 19;

"amount of work proposal" means a proposal made in respect of an amount of work dispute pursuant to section 23 (4) or (10) (d) or (e), in which a licence holder, contractor or union proposes the amount of work to be specified in each of the replaceable contracts entered into by the licence holder with respect to timber harvesting operations that

(a)

are carried out under that licence, and

(b)

may be affected by the disposition of the amount of work dispute;

"coastal area" means the area within one or more timber supply areas or tree farm licences listed below:

Forest Region	Timber Supply Areas	Tree Farm Licences
Vancouver	Queen Charlotte, Mid-Coast, North Coast Kingcome, Strathcona, Arrowsmith, Sunshine Coast, Soo and Fraser	6, 10, 19, 24, 25, 26, 37, 38, 39, 43, 44, 45, 46, 47 and 54
Northern Interior		41

"company contract operations" means any phase of a licence holder's timber harvesting operations other than timber harvesting operations carried out either

(a)

by employees of the licence holder, or

(b)

under a replaceable contract;

"company operations" means any phase of a licence holder's timber harvesting operations carried out by employees of the licence holder;

"contract" and "subcontract" mean a contract or a subcontract, as defined in section 152 of the Act, if

(a)

the contract or subcontract provides that the contractor or subcontractor will carry out one or more phases of a licence holder's timber harvesting operation under

(i)

a replaceable tree farm licence,

(ii)

a replaceable forest licence,

(iii)

a non-replaceable forest licence under which the total volume of timber to be sold under the licence, when divided by the original term of the licence in years, is more than 10 000 m³, or

(iv)

a timber licence under which the total net volume of merchantable timber remaining at the time the contract is entered into is more than 30 000 m³, and

(b)

one or more of the following applies:

(i)

the contract or subcontract is for a specified term of more than 6 months;

(ii)

the total specified terms of

(A)

the contract or subcontract, and

(B)

any previous contract or subcontract entered into during the same calendar year in relation to the same licence

is more than 6 months;

(iii)

during a calendar year, the total of

(A)

the work performed by the contractor or subcontractor under the contract or subcontract, and

(B)

similar work performed by the contractor or subcontractor under previous contracts in relation to the same licence is more than the equivalent of 6 months full time work for a contractor or subcontractor performing similar work in similar circumstances

and includes a market contract or market subcontract;

"contractor" has a meaning that corresponds to "contract";

"contractor clause" means a provision in

(a)

a replaceable tree farm licence that requires timber to be harvested by a person under contract with the holder of the licence, or

(b)

a replaceable forest licence under which the regional manager has required that a portion of the timber harvested under the licence be harvested by contractors;

"dedicated phase contract" means a replaceable contract that

(a)

pertains to a licence for the coastal area, and

(b)

contains an agreement by the contractor to perform all or part of one or more phases of a timber harvesting operation that are required with respect to

(i)

the work carried out under another specified replaceable contract entered into by the licence holder with respect to timber harvesting operations carried out under the licence, or

(ii)

the timber harvesting operations carried out by a specified company operation;

"fibre basket agreement" means an agreement entered into by a licence holder and one or more contractors under section 16;

"forestry revitalization proposal" means a proposal made under Part 5, Division 5.1 that

(a)

changes the licence to which a replaceable contract pertains,

(b)

varies the amount of work specified in a replaceable contract pertaining to a licence held by the licence holder making the proposal, or

(c)

terminates a replaceable contract pertaining to a licence held by the licence holder making the proposal

and includes any amended proposal made under sections 33.43 (1), 33.5 (5) or 33.51 (4);

"full contract" means a contract under which a person under contract agrees with the holder of a licence referred to in the definition of "contractor clause" to carry out some or all of the phases of a timber harvesting operation if they constitute a substantial proportion of a timber harvesting operation;

"interior area" means an area of British Columbia that is not in the coastal area;

"licence" means an agreement entered into under Part 3 of the Forest Act;

"logging access road" means a road referred to in section 110 (2) (a) (i) of the Forest Act;

"market contract" or "market subcontract" means a contract or subcontract in which the remuneration payable to the contractor or subcontractor is determined in whole or in part with reference to the market value of the timber harvested;

"original replaceable contract" means, for the purposes of Part 5, Division 5.2, the replaceable contract in effect between a licence holder and a contractor immediately prior to a licence transfer or to the amendment or replacement of a licence;

"peer" means an individual who is familiar with, and has operational experience with, timber harvesting operations similar to those at issue in a rate dispute, appointed under section 25 (5);

"person under contract" means, for the purposes of Part 6 of this regulation and sections 14 (g) and 35 (1) (j) of the Act, a person who has a contract to provide timber harvesting services under a full contract or a phase contract with the holder of

(a)

a replaceable tree farm licence that requires timber to be harvested by a person under contract with the holder of the licence, or

(b)

a replaceable forest licence under which the regional manager has required that a portion of the timber harvested under the licence be harvested by contractors

but does not include

(c)

a person who is a holder of the licence referred to in paragraph (a) or (b),

(d)

a corporation in which more than 10% of the outstanding voting shares are beneficially owned, directly or indirectly

(i)

by a person who is a holder of the licence referred to in paragraph (a) or (b), or

(ii)

by a person who is the beneficial owner of more than 10% of the outstanding voting shares of a corporation that is the holder of a licence referred to in paragraph (a) or (b), or

(e)

a person who is the beneficial owner, directly or indirectly, of more than 10% of the outstanding voting shares of a corporation that is the holder of a licence referred to in paragraph (a) or (b);

"phase", when used in relation to a timber harvesting operation, means felling, bucking, yarding, skidding, processing, decking, loading, hauling, unloading, non-mill or non-custom dryland sorting or booming, logging road construction, logging road maintenance including temporary road deactivation, logging access road construction and any other phases or combinations or components of them that are aspects of a timber harvesting operation under a licence, but does not include catering, cruising, forest engineering, semi-permanent or permanent road deactivation, towing, barging, mill or custom dryland sorting or booming, reforestation, scaling, equipment rental, equipment maintenance or providing support services relating to timber harvesting;

"phase contract" means a contract in which a person under contract agrees with the holder of a licence referred to in the definition of "contractor clause" to carry out one or more phases of a timber harvesting operation, but does not include a full contract;

"phase contribution amount" means the amount of work to be performed annually under a timber harvesting contract expressed in cubic meters per year, having regard to the tables in paragraphs (a) and (b) and determined in accordance with paragraph (c), (d), (e), (f) or (g):

(a)

for the coastal area, the relative portion of a timber harvesting operation attributed to each phase of the operation, is as set forth in the following table:

Falling and Bucking	13%
Yarding, Skidding or Forwarding	32%
Loading	5%
Hauling	15%
Dumping, Sorting and Booming	10%
Road Construction	20%
Road Maintenance	5%
Total All Phases	100%

(b)

for the interior area, the relative portion of a timber harvesting operation attributable to each phase of the operation, is as set forth in the following table:

Bunching	20%
Processing	25%
Yarding or Skidding	13%
Loading	9%
Hauling	19%
Miscellaneous (sorting, brush piling and others)	7%
Road Construction	7%
Total All Phases	100%

(c)

if the contract expresses the amount of work as a percentage of the total amount of that type of work to be performed in a year, the phase contribution amount is

A x B x C

where

is the percentage of work expressed in the contract reduced to a fraction,

is the aggregate of the percentages shown in the table in paragraph (a) or paragraph (b) for the phases to be performed under the contract, reduced to a fraction, and

is the allowable annual cut of the licence, or licences in a fibre basket agreement, to which the contract pertains;

(d)

if the contract expresses the amount of work as a fixed volume of timber to be handled in a year, the phase contribution amount is

D x E

where

is the aggregate of the percentages shown in the table in paragraph (a) or paragraph (b) for the phases to be performed under the contract, reduced to a fraction, and

is the fixed volume, expressed in the contract in cubic meters of timber;

(e)

if the contract expresses amount of work as a percentage of work to be provided using a specified harvesting system, the phase contribution amount is

F x G/H x I

where

is the percentage of work expressed in the contract, reduced to a fraction,

is the actual volume of timber harvested by the contractor in the calendar years 2001 through 2003 using that particular harvesting system,

is the total volume of timber harvested under the licence, or licences in a fibre basket agreement, to which the contract pertains in the calendar years 2001 through 2003, and

is the allowable annual cut of the licence, or licences in a fibre basket agreement, to which the contract pertains;

(f)

if the contract is

(i)

for part of a phase,

(ii)

for a phase that is not listed in paragraph (a) or (b),

(iii)

a dedicated phase contract, or

(iv)

a contract not described in paragraph (c), (d) or (e),

the phase contribution amount is an amount that reflects the amount of work to be performed under the contract relative to the total amount of work to be performed under all phases of timber harvesting operations under the licence, or the licences in a fibre basket agreement, to which the contract pertains, determined in a manner consistent with the approach in paragraphs (c), (d) and (e);

(g)

if the contract allocates work with reference to a seniority system, the amount of work attributable to each position in the seniority system is

M/N

where

is the amount of work for all positions in the seniority system determined in accordance with paragraphs (c), (d), (e) or (f), as the case may be, and

is the number of positions in the seniority system;

"prior timber harvesting services" means similar timber harvesting services provided by a contractor to a licence holder before the provision of timber harvesting services in respect of which a rate dispute has arisen;

"rate dispute" means a dispute that arises when the parties to a replaceable contract or a replaceable subcontract are unable to agree upon the amount to be paid for the timber harvesting services to be provided thereunder;

"rate proposal" means a notice in writing from a licence holder to a contractor with a replaceable contract describing all of the following:

(a)

the specific services the licence holder requires the contractor to perform under the replaceable contract;

(b)

the replaceable contract in respect of which the proposal is being made;

(c)

the rate that the licence holder proposes to pay the contractor for those services;

(d)

the estimated quantity of work the licence holder requires the contractor to perform at the proposed rate;

(e)

the location where services are to be provided;

(f)

the projected start date and completion date for the services;

(g)

any other information that is not otherwise available to the contractor, that is in the possession of the licence holder and that is reasonably necessary for the contractor to assess the proposed rate;

"registered arbitrator" means a person registered as an arbitrator in the Register of Timber Harvesting Contract and Subcontract Mediators and Arbitrators established by the minister under section 156 of the Act;

"registered mediator" means a person registered as a mediator in the Register of Timber Harvesting Contract and Subcontract Mediators and Arbitrators established by the minister under section 156 of the Act;

"Schedule" means a Schedule to this regulation;

"seniority system" means a system for allocating work that describes the sequence in which contractors, or contractors and company operations, will be called upon by a licence holder to provide services that are required from time to time in respect of timber harvesting operations carried out under the licence;

"subcontractor" has a meaning that corresponds to "subcontract";

"substantial proportion of a timber harvesting operation" means

(a)

a proportion in which the total cost of the phases, as estimated in the stumpage rate determination plus any credit to stumpage for logging access road construction handled under the contract, constitute at least 65% of the total cost of all the estimated phases of a timber harvesting operation within the area covered by the contract, and

(b)

for the interior area, also means any contract that includes all of the following phases:

(i)

felling;

(ii)

bucking;

(iii)

yarding or skidding;

(iv)

decking;

(v)

loading other than loading by a self-loading logging truck;

"timber harvesting services" means services provided in respect of one or more phases of a timber harvesting operation;

"union" means a trade union, as defined in the Labour Relations Code, that is certified by the Labour Relations Board as the bargaining agent for employees of

(a)

a licence holder engaged in company operations, or

(b)

a contractor with a replaceable contract;

"volume independent contract" means, for the purposes of Part 5, a replaceable contract that

(a)

pertains to a licence for the coastal area,

(b)

is not a dedicated phase contract, and

(c)

provides exclusively for work relating to one or more phases, where the amount of work associated with that phase does not depend directly on a volume of timber, and by way of example, may include log hauling, logging road construction, logging access road construction, logging road maintenance and temporary logging road deactivation;

"volume of timber harvested" means, for the purposes of Part 6, the total volume of timber that is billed to a licence holder under the licence during the calendar year.

(2)

If a contract or subcontract is deemed to be amended under section 160 (3) of the Act to include a standard provision prescribed under this regulation, a reference to

(a)

the "licence holder" in that standard provision is deemed to refer to the party who holds the licence under which the timber harvesting operation to which the contract pertains derives timber,

(b)

the "contractor" in that standard provision is deemed to refer to the party that is the contractor as defined in this section,

(c)

the "subcontractor" in that standard provision is deemed to refer to the party that is the subcontractor as defined in this section,

and "licence", "contract" and "subcontract" have corresponding meanings.

(3)

Any terms defined in the Act and used in this regulation have the meaning given to them in the Act unless otherwise defined in this regulation.

(4)

Any terms defined in the Act or in this regulation and used in a Schedule to this regulation or in a provision of a Schedule used in a contract or subcontract pursuant to this regulation have the meaning given to them in the Act or regulation unless otherwise defined in the Schedule.

(5)

Where the context requires, a reference to a replaceable contract or replaceable subcontract includes any contract or subcontract that replaces or is replaced by that replaceable contract or replaceable subcontract.

(6)

A reference to "arbitrator" includes an arbitration panel where parties to a dispute have agreed to use a 3 person arbitration panel.

(7)

For the purposes of paragraph (a) (ii) of the definitions of "replaceable contract" and "replaceable subcontract" in section 152 of the Act, a replacement contract or replacement subcontract is on substantially the same terms and conditions as the contract or subcontract it replaces if the replacement contract or replacement subcontract

(a)

pertains to the same area as the one it replaces, or to a similar area,

(b)

provides the same term as the one it replaces, or for a longer term, expressed as a number of whole years,

(c)

provides for a specified amount of work that is the same as or greater than the amount of work specified in the one it replaces,

(d)

subject to the provisions of section 14, provides for the same type of work as the one it replaces or a similar type,

(e)

is a replaceable contract or a replaceable subcontract as the case may be, and

(f)

subject to any changes in government enactments or policies affecting the licence holder's timber harvesting operations, provides for other operational terms and conditions that on balance are no less favourable to the contractor or subcontractor than those in the contract or subcontract being replaced and non-operational terms and conditions that are not inconsistent with the requirements of this regulation.

(8)

For the purpose of section 158 (1) (d) of the Act, a replacement contract is on substantially the same terms and conditions as the expired or terminated contract that it replaces if the replacement contract

(a)

pertains to the same area as the expired or terminated contract it replaces, or to a similar area,

(b)

meets the requirements of subsection (7) (b) to (d),

(c)

is a replaceable contract, and

(d)

subject to any changes in government regulations or policies affecting the licence holder's timber harvesting operations, provides for other operational terms and conditions that on balance are not less favourable to the contractor than those of the expired or terminated contract that the contract replaces and non-operational terms and conditions that are not inconsistent with the requirements of this regulation.

(9)

Any reference to "regulation" in a Schedule to this regulation, or in a provision of a Schedule used in a contract or subcontract pursuant to this regulation, means this regulation as amended from time to time.

Application

This regulation applies to contracts and subcontracts that are

(a)

in force on April 1, 1996, or

(b)

made on or after April 1, 1996.

Giving notice

2.1

If a proposal, notice or other thing is to be delivered or given in this regulation, it must be delivered in accordance with section 8 (13) (b).

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