Search Results | Clear Search | Previous (in doc) | Next (in doc) | Prev Doc | Next Doc
B.C. Reg. 351/2004
O.C. 782/2004
Deposited July 23, 2004
This consolidation is current to June 11, 2019.
Link to consolidated regulation (PDF)
Link to Point in Time

Forest Act

Disposition and Change of Control Regulation

[includes amendments up to B.C. Reg. 76/2019, April 11, 2019]

Contents
1Definition
Part 1 — Exempt Dispositions
1.1Definition
2Repealed
3Dispositions where notice not given may be exempt
Part 2 — Permitted Dispositions
4Definitions and application
5Disposition of certain licences entered into with first nations
6Disposition of other licences entered into with first nations
7Disposition of community forest agreement entered into under section 43.2 or 43.51 (1) (b) of Act
8Disposition of restricted forest licences
Part 3 — Dispositions and Changes of Control That Unduly Restrict Competition
9Definitions and interpretation
10Allocated fibre volumes and agreement areas of certain agreements
11Dispositions of agreements that unduly restrict competition
12Corporate changes of control that unduly restrict competition
13Calculation of HHI
14Calculation of HHI share
15Calculation of allocated fibre volume share
16Calculation of estimated annually received timber
17 Calculation of allocated fibre volume/estimated annually acquired timber ratio
18Calculation of estimated annually acquired timber
19Fibre distribution zones

Definition

1   In this regulation, "Act" means the Forest Act.

[en. B.C. Reg. 104/2011, Sch. 5, s. 1.]

Part 1 — Exempt Dispositions

Definition

1.1   In this Part, "agreement" means an agreement in the form of a licence, permit or agreement referred to in section 12 of the Act.

[en. B.C. Reg. 76/2019, s. 3.]

Repealed

2   Repealed. [B.C. Reg. 76/2019, s. 4.]

Dispositions where notice not given may be exempt

3   For the purposes of section 54.3 of the Act, sections 54 to 54.2 of the Act do not apply to, or in respect of, a disposition of an agreement where

(a) notice is not given under section 54 (2) (a) of the Act, or

(b) the disposition occurs before the minister gives notice under section 54 (2) (e) of the Act

if

(c) the disposition complies with section 54 (2) (b) to (d.2) of the Act, and

(d) the minister, having considered the circumstances existing on the date of the disposition, is satisfied that the requirements set out in section 54.1 of the Act have been met.

[am. B.C. Reg. 76/2019, s. 5.]

Part 2 — Permitted Dispositions

Definitions and application

4   (1) In this Part:

"company" means a company as defined in the Business Corporations Act;

"extraprovincial company" means an extraprovincial company as defined in the Business Corporations Act;

"first nations agreement" means an agreement referred to in section 43.51 (1) (a), 43.54 (2) or 47.3 (1) (a) of the Act between a first nation and the government respecting treaty-related measures, interim measures or economic measures;

"processing facility" has the same meaning as in section 1 (1) of the Forest Licence Regulation;

"replaceable forest licence" means a replaceable forest licence entered into with a first nation or its representative under section 47.3 (1) (a) of the Act;

"restricted forest licence" has the same meaning as in section 14.2 (1) of the Act;

"secondary processing facility" has the same meaning as in section 1 (1) of the Forest Licence Regulation;

"society" means a society as defined in the Societies Act.

(2) This Part applies for the purposes of section 54.4 (1) (b) and (1.01) of the Act.

[en. B.C. Reg. 104/2011, Sch. 5, s. 3; am. B.C. Regs. 203/2012, Sch. 3, s. 1; 190/2014, Sch. 4; 211/2015, s. 35.]

Disposition of certain licences entered into with first nations

5   (1) In this section, "licence" means

(a) a forest licence, other than a replaceable forest licence,

(b) a community salvage licence,

(c) a woodlot licence, or

(d) a forestry licence to cut

that is entered into with a first nation or its representative under section 47.3 (1) (a) of the Act.

(2) A first nation or its representative may dispose of a licence to a person if the minister is satisfied that

(a) the first nation will continue to comply with the first nations agreement that relates to the licence, and

(b) the person is

(i) an individual,

(ii) a company or an extraprovincial company,

(iii) a society that meets the requirements set out in subsection (3), or

(iv) a partnership that meets the requirements set out in subsection (4).

(3) For the purposes of subsection (2) (b) (iii),

(a) holding a licence must be one of the purposes of the society, and

(b) the society must not be prohibited under section 2 (2) of the Societies Act from holding a licence.

(4) For the purposes of subsection (2) (b) (iv), the partnership must be comprised of

(a) individuals,

(b) companies or extraprovincial companies,

(c) societies that meet the requirements set out in subsection (3), or

(d) a combination of any of the entities referred to in paragraphs (a) to (c).

[en. B.C. Reg. 104/2011, Sch. 5, s. 3; am. B.C. Reg. 211/2015, s. 36.]

Disposition of other licences entered into with first nations

6   (1) In this section, "licence" means

(a) a replaceable forest licence,

(b) a community forest agreement entered into with a first nation or its representative under section 43.51 (1) (a) of the Act, or

(c) a first nations woodland licence.

(2) A first nation or its representative may dispose of a licence to a person if the minister is satisfied that

(a) the first nation will continue to comply with the first nations agreement that relates to the licence, and

(b) the person is

(i) a company or extraprovincial company that meets the requirements set out in subsection (3), or

(ii) a society that meets the requirements set out in subsection (4).

(3) For the purposes of subsection (2) (b) (i), the company or extraprovincial company must be a company or extraprovincial company in which the first nation owns sufficient voting shares to

(a) elect more than 50% of the effective directors of that company or extra-provincial company, or

(b) otherwise effectively control the operations and direction of the company or extraprovincial company.

(4) For the purposes of subsection (2) (b) (ii),

(a) holding a licence must be one of the purposes of the society, and

(b) the society must not be prohibited under section 2 (2) of the Societies Act from holding a licence.

[en. B.C. Reg. 104/2011, Sch. 5, s. 3; am. B.C. Reg. 211/2015, s. 36.]

Disposition of community forest agreement entered into
under section 43.2 or 43.51 (1) (b) of Act

7   (1) In this section:

"association" means an association as defined in the Cooperative Association Act;

"community forest agreement" means a community forest agreement entered into under section 43.2 or 43.51 (1) (b) of the Act.

(2) The holder of a community forest agreement may dispose of that agreement to a person if the minister is satisfied that

(a) the disposition is in the best interests of the community to which the community forest agreement relates, and

(b) the person is

(i) a first nation,

(ii) a municipality or regional district,

(iii) a company or an extraprovincial company,

(iv) a society that meets the requirements set out in subsection (3),

(v) an association that meets the requirements set out in subsection (4), or

(vi) a partnership that meets the requirements set out in subsection (5).

(3) For the purposes of subsection (2) (b) (iv),

(a) holding a community forest agreement must be one of the purposes of the society, and

(b) the society must not be prohibited under section 2 (2) of the Societies Act from holding a community forest agreement.

(4) For the purposes of subsection (2) (b) (v), holding a community forest agreement must be consistent with a purpose of the association.

(5) For the purposes of subsection (2) (b) (vi), the partnership must be comprised of

(a) first nations,

(b) municipalities or regional districts,

(c) companies or extraprovincial companies,

(d) societies that meet the requirements set out in subsection (3),

(e) associations that meet the requirements set out in subsection (4), or

(f) a combination of any of the entities referred to in paragraphs (a) to (e).

[en. B.C. Reg. 104/2011, Sch. 5, s. 3; am. B.C. Reg. 211/2015, s. 36.]

Disposition of restricted forest licences

8   (1) This section applies to the holder of a restricted forest licence if the holder, at the time the restricted forest licence was entered into, owned or leased, or intended to own or lease, one or more of the following types of processing facility:

(a) a secondary processing facility;

(b) a processing facility that produces pulp, paper, oriented strand board or newspaper;

(c) a processing facility that

(i) produces wood chips or ground wood, and

(ii) is not an excluded processing facility, as defined in section 1 (3) of the Forest Licence Regulation;

(d) a processing facility that produces pellets, bioenergy or biochemicals from timber or wood residue.

(2) For the purposes of section 54.4 (1.01) of the Act, the holder of a restricted forest licence to whom this section applies may dispose of the licence to another person only if both of the following apply at the time of the disposition:

(a) the holder of the licence owns or leases the type of processing facility that applicants for the licence were required to own or lease, or intend to own or lease, when categories of applicants for the licence were established under section 13 (2.1) of the Act;

(b) the intended recipient of the licence

(i) owns or leases the type of processing facility referred to in paragraph (a), or

(ii) is obtaining from the holder the ownership or lease of the type of processing facility referred to in paragraph (a).

(3) The disposition of a licence under subsection (2) to an intended recipient that is obtaining the ownership or lease of a processing facility, as described in subsection (2) (b) (ii), is without effect if the intended recipient fails to obtain that ownership or lease within 60 days of the disposition.

[en. B.C. Reg. 203/2012, Sch. 3, s. 2.]

Part 3 — Dispositions and Changes of Control That Unduly Restrict Competition

Definitions and interpretation

9   (1) In this Part:

"agreement" means any of the following:

(a) a forest licence;

(b) a tree farm licence;

(c) a pulpwood agreement;

(d) a woodlot licence;

(e) a community forest agreement;

(f) a first nations woodland licence;

(g) an agreement that is deemed to be held by BCTS under section 10 (3);

"agreement area", in relation to an agreement, means, subject to section 10 (4), the following:

(a) in the case of a forest licence, the timber supply area or tree farm licence area in which the holder may harvest Crown timber, as specified in the licence;

(b) in the case of a tree farm licence, other than Tree Farm Licence No. 25, the tree farm licence area;

(c) in the case of Tree Farm Licence No. 25, an agreement area set out in section 10 (2);

(d) in the case of a pulpwood agreement, the pulpwood agreement area;

(e) in the case of a woodlot licence, the woodlot licence area;

(f) in the case of a community forest agreement, the community forest agreement area;

(g) in the case of a first nations woodland licence, the first nations woodland licence area;

(h) in the case of an agreement that is deemed to be held by BCTS under section 10 (3), an agreement area set out in that section;

"allocated fibre volume", in relation to an agreement, means, subject to section 10 (4), the following:

(a) in the case of an agreement, other than an agreement referred to in paragraphs (b) to (d), the allowable annual cut associated with the agreement;

(b) in the case of a pulpwood agreement, an allocated fibre volume determined under section 10 (1);

(c) in the case of Tree Farm Licence No. 25, an allocated fibre volume set out in section 10 (2);

(d) in the case of an agreement that is deemed to be held by BCTS under section 10 (3), an allocated fibre volume determined under that section;

"allocated fibre volume/estimated annually acquired timber ratio", in relation to an interested person and a fibre distribution zone, means a ratio determined under section 17;

"allocated fibre volume share", in relation to a person and a fibre distribution zone, means a number, determined under section 15, that represents the person's proportion of the total allocated fibre volume of all agreements that have agreement areas in the fibre distribution zone;

"apportionment report" means a report, published by the government, setting out the minister's specification of apportionment under section 10 of the Act;

"change of control", in relation to a corporation that holds an agreement, means a change of control, disposition of control or acquisition of control of the corporation, as referred to in section 54.5 (1) of the Act;

"estimated annually acquired timber", in relation to the timber processing facilities for which the interested person holds an interest in a particular fibre distribution zone, means an amount determined under section 18;

"estimated annually received timber", in relation to the timber processing facilities for which the interested person holds an interest in a particular fibre distribution zone, means an amount determined under section 16;

"fibre distribution zone" means a fibre distribution zone set out in section 19;

"fibre market" means a standing timber market, log market or chip market;

"HHI", in relation to a fibre distribution zone, means the Herfindahl-Hirschman Index for the fibre distribution zone, as determined under section 13;

"HHI share", in relation to a person, means an amount representing the person's contribution to the HHI for a fibre distribution zone, as determined under section 14;

"interested person" means, as applicable,

(a) the intended recipient of an agreement, as referred to in section 11 (1), or

(b) the corporation referred to in section 12 (1).

(2) For the purposes of this Part, an agreement is deemed to be held only by an interested person if the agreement is held, singly or jointly with one or more other persons, by

(a) the interested person, or

(b) an affiliate of the interested person, if applicable.

(3) For the purposes of this Part, an interest in a timber processing facility is deemed to be held by an interested person if the interest is held by

(a) the interested person, or

(b) an affiliate of the interested person, if applicable.

(4) For the purposes of this Part, an agreement is singly held by a person if the person holds the entire interest in the agreement.

[en. B.C. Reg. 76/2019, s. 7.]

Allocated fibre volumes and agreement areas of certain agreements

10   (1) For the purposes of this Part, a pulpwood agreement has an allocated fibre volume of one of the following:

(a) unless paragraph (b) applies, the volume identified in the most recently published apportionment report as being committed to the pulpwood agreement;

(b) a volume determined by the minister.

(2) For the purposes of this Part, Tree Farm Licence No. 25

(a) has the following 2 agreement areas:

(i) that portion of its tree farm licence area that is within the Skeena Fibre Distribution Zone;

(ii) that portion of its tree farm licence area that is within the Coast Fibre Distribution Zone, and

(b) has the following allocated fibre volumes for the agreement areas set out in paragraph (a):

(i) with respect to the agreement area set out in paragraph (a) (i), the volume set out in section 22 (a) of the Great Bear Rainforest (Forest Management) Regulation, B.C. Reg. 327/2016;

(ii) with respect to the agreement area set out in paragraph (a) (ii), the volume set out in section 22 (b) of the Great Bear Rainforest (Forest Management) Regulation.

(3) For the purposes of this Part, BCTS is deemed to be a person who holds, for each fibre distribution zone, an agreement that has

(a) an agreement area consisting of the entire fibre distribution zone, and

(b) an allocated fibre volume consisting of one of the following:

(i) unless subparagraph (ii) applies, the sum of the following:

(A) the volume identified in the most recently published apportionment report as being committed to BCTS for each timber supply area, other than the Cascadia Timber Supply Area and Pacific Timber Supply Area, in the fibre distribution zone;

(B) if a fibre distribution zone includes a portion of an area of the Cascadia Timber Supply Area or Pacific Timber Supply Area, a volume determined by the minister as being associated with BCTS for that portion of the timber supply area;

(ii) a volume determined by the minister.

(4) Despite the definitions of "agreement area" and "allocated fibre volume" in section 9, if the agreement area of an agreement is in more than one fibre distribution zone, the minister may do either of the following:

(a) deem that the agreement area is within only the fibre distribution zone that includes the majority of the agreement area;

(b) deem that the agreement has a different agreement area for each of those fibre distribution zones, and assign a portion of the allocated fibre volume associated with the agreement to each agreement area.

[en. B.C. Reg. 76/2019, s. 7.]

Dispositions of agreements that unduly restrict competition

11   (1) For the purposes of section 54.1 (a) of the Act, the minister may determine that a disposition of a tree farm licence, forest licence or pulpwood agreement unduly restricts competition in a fibre market if any of the following apply:

(a) in relation to the fibre distribution zone that includes the agreement area, the HHI would be 1 800 or greater after the disposition and, subject to subsection (2),

(i) the HHI would increase by 100 or more as a result of the disposition, or

(ii) the HHI share associated with the intended recipient would be 100 or greater after the disposition;

(b) the HHI share associated with the intended recipient is 100 or greater for a fibre distribution zone adjacent to the fibre distribution zone that includes the agreement area;

(c) in relation to the fibre distribution zone that includes the agreement area,

(i) the estimated annually received timber of the timber processing facilities for which the intended recipient holds an interest is 150 000 m3 or greater, and

(ii) the allocated fibre volume/estimated annually acquired timber ratio associated with the intended recipient is 1.0 or greater.

(2) Subsection (1) (a) (ii) does not apply if the HHI for the fibre distribution zone that includes the agreement area would, as a result of the disposition, decrease by an amount equal to or greater than the HHI share associated with the intended recipient for the fibre distribution zone, as calculated after the disposition.

(3) If more than one person is intended to be the recipient of an agreement, the minister may make the determination under subsection (1) as though each person were the only recipient of the agreement.

(4) Subsection (1) does not apply if the intended disposition is from a corporation to an affiliate of the corporation.

[en. B.C. Reg. 76/2019, s. 7.]

Corporate changes of control that unduly restrict competition

12   (1) For the purposes of section 54.5 (1) (b) (ii) of the Act, the minister may determine that a change of control of a corporation that holds a tree farm licence, forest licence or pulpwood agreement unduly restricts competition in a fibre market if any of the following apply:

(a) in relation to the fibre distribution zone that includes the agreement area, the HHI is 1 800 or greater after the change of control and, subject to subsection (2),

(i) the HHI increases by 100 or more as a result of the change of control, or

(ii) the HHI share associated with the corporation is 100 or greater after the change of control;

(b) the HHI share associated with the corporation, after the change of control, is 100 or greater for a fibre distribution zone adjacent to the fibre distribution zone that includes the agreement area;

(c) in relation to the fibre distribution zone that includes the agreement area,

(i) the estimated annually received timber of the timber processing facilities for which the corporation holds an interest is 150 000 m3 or greater after the change of control, and

(ii) the allocated fibre volume/estimated annually acquired timber ratio associated with the corporation is 1.0 or greater after the change of control.

(2) Subsection (1) (a) (ii) does not apply if, as a result of the change of control, the HHI for the fibre distribution zone that includes the agreement area decreases by an amount equal to or greater than the HHI share associated with the corporation for the fibre distribution zone, as calculated after the change of control.

[en. B.C. Reg. 76/2019, s. 7.]

Calculation of HHI

13   (1) The Herfindahl-Hirschman Index for a fibre distribution zone is the amount determined by the following formula and in accordance with subsection (2):

HHI = 10 000 x N
 ∑
i = 1
si2
where
si = the allocated fibre volume share associated with person "i" who holds an agreement that has an agreement area in the fibre distribution zone;
N = the number of persons who hold an agreement that has an agreement area in the fibre distribution zone.

(2) For the purposes of calculating the HHI under subsection (1), the following rules set out which agreements are held by persons other than the interested person:

(a) if 2 or more corporations, other than the interested person, are affiliates, the group of corporations is deemed to be a single person;

(b) an agreement is held only by a person, other than the interested person, if the agreement

(i) is singly held by the person, or

(ii) is deemed to be held by the person under paragraph (c) or (d), as applicable;

(c) if an agreement is held jointly by 2 or more persons, other than the interested person,

(i) each of those persons is deemed to be the single holder of a deemed agreement, rather than the agreement itself, that has an agreement area in the fibre distribution zone, and

(ii) each deemed agreement has an allocated fibre volume consisting of the allocated fibre volume associated with the agreement divided equally between the deemed agreements;

(d) despite paragraph (c), the minister may do either of the following if the minister considers that the division of allocated fibre volumes under that paragraph does not accurately reflect the nature of the interests that are held in the agreement:

(i) deem that one of the persons who hold the agreement is the single holder of the agreement;

(ii) deem that each person who holds the agreement is the single holder of a deemed agreement, rather than the agreement itself, that has an agreement area in the fibre distribution zone, and assign a portion of the allocated fibre volume of the agreement to each deemed agreement.

[en. B.C. Reg. 76/2019, s. 7.]

Calculation of HHI share

14   The HHI share associated with the interested person for a fibre distribution zone is the amount determined by the following formula:

HHI share = 10 000 x s2
where
s = the interested person's allocated fibre volume share for the fibre distribution zone.

[en. B.C. Reg. 76/2019, s. 7.]

Calculation of allocated fibre volume share

15   The allocated fibre volume share of a person for a fibre distribution zone is the number determined by the following formula:

allocated fibre volume share  = total allocated fibre volume
associated with the person
 total allocated fibre volume in
fibre distribution zone
where
total allocated fibre volume
associated with the person
 = the sum of the allocated fibre volumes associated with each agreement that
(a) is held by the person, within the meaning of section 9 (2) or as determined under section 13 (2), as applicable, and
(b) has an agreement area in the fibre distribution zone;
total allocated fibre volume
in fibre distribution zone
 = the sum of the allocated fibre volumes associated with each agreement that has an agreement area in the fibre distribution zone.

[en. B.C. Reg. 76/2019, s. 7.]

Calculation of estimated annually received timber

16   (1) The estimated annually received timber of the timber processing facilities for which the interested person holds an interest in a fibre distribution zone is the amount determined by the following formula and in accordance with subsection (2):

estimated annually received timber = 3 year total of received timber
 3
where
3 year total of received timber = the sum of the volumes of timber that, in the 3 calendar years previous to the current calendar year,
were received for processing at each timber processing facility
(a) for which the interested person holds an interest, and
(b) that is located in the fibre distribution zone.

(2) For the purposes of subsection (1), the sum of the volumes of timber that were received for processing at a timber processing facility is an amount determined as follows:

(a) unless paragraph (b) applies, an amount determined by the minister based on information received by the government under the Act in relation to that timber processing facility;

(b) if the minister does not have sufficient information about the volume of timber processed at a timber processing facility in the 3 calendar years previous to the current calendar year, another amount determined by the minister.

[en. B.C. Reg. 76/2019, s. 7.]

Calculation of allocated fibre volume/estimated annually acquired timber ratio

17   The allocated fibre volume/estimated annually acquired timber ratio associated with an interested person for a fibre distribution zone is the number determined by the following formula:

allocated fibre volume/estimated
annually acquired timber ratio

 = 
total allocated fibre volume
associated with the interested person
estimated annually acquired timber
where
total allocated fibre volume associated with
the interested person
 = the sum of the allocated fibre volumes associated with each agreement that
(a) is held by the interested person, and
(b) has an agreement area in the fibre distribution zone;
estimated annually acquired timber = the estimated annually acquired timber of the timber processing facilities
(a) for which the interested person holds an interest, and
(b) that are located in the fibre distribution zone.

[en. B.C. Reg. 76/2019, s. 7.]

Calculation of estimated annually acquired timber

18   (1) In this section, "acquired timber" means timber other than the following:

(a) timber that was harvested under an agreement that is currently held by the interested person, regardless of whether the agreement was held by the interested person at the time the timber was harvested;

(b) if the interested person is the intended recipient of an agreement, as referred to in section 11 (1), timber that was harvested under the agreement.

(2) The estimated annually acquired timber of the timber processing facilities for which the interested person holds an interest in a fibre distribution zone is the amount determined by the following formula and in accordance with subsection (3):

estimated annually acquired timber = 3 year total of acquired timber
  3
where
3 year total of acquired timber = the sum of the volumes of acquired timber that, in the 3 calendar years previous to the current calendar year, were received for processing at each timber processing facility
(a) for which the interested person holds an interest, and
(b) that is located in the fibre distribution zone.

(3) Section 16 (2) applies to this section for the purposes of determining, under subsection (2) of this section, the sum of the volumes of acquired timber that were received for processing at a timber processing facility.

[en. B.C. Reg. 76/2019, s. 7.]

Fibre distribution zones

19   (1) In this section, "Administrative Boundaries Regulation" means the Administrative Boundaries Regulation, B.C. Reg. 137/2014.

(2) For the purposes of the definition of "fibre distribution zone" in section 9,

(a) a fibre distribution zone is a fibre distribution zone identified in column 1 of the following table, and

(b) each fibre distribution zone consists of the areas described in column 2 opposite the fibre distribution zone:

ItemColumn 1
Fibre Distribution Zone
Column 2
Fibre Distribution Zone Areas
1Cariboo Fibre Distribution ZoneThe area within the boundaries of the Cariboo Forest Region, as set out in section 1 (1) of the Administrative Boundaries Regulation.
2Coast Fibre Distribution ZoneThe area within the boundaries of
(a) the South Coast Forest Region, as set out in section 6 (1) of the Administrative Boundaries Regulation, and
(b) the West Coast Forest Region, as set out in section 8 (1) of the Administrative Boundaries Regulation.
3Kootenay Boundary Fibre Distribution ZoneThe area within the boundaries of the Kootenay Boundary Forest Region, as set out in section 2 (1) of the Administrative Boundaries Regulation.
4Northeast Fibre Distribution ZoneThe area within the boundaries of the Northeast Forest Region, as set out in section 3 (1) of the Administrative Boundaries Regulation.
5Omineca Fibre Distribution ZoneThe area within the boundaries of the Omineca Forest Region, as set out in section 4 (1) of the Administrative Boundaries Regulation.
6Skeena Fibre Distribution ZoneThe area within the boundaries of the Skeena Forest Region, as set out in section 5 (1) of the Administrative Boundaries Regulation.
7Thompson Okanagan Fibre Distribution ZoneThe area within the boundaries of the Thompson Okanagan Forest Region, as set out in section 7 (1) of the Administrative Boundaries Regulation.

[en. B.C. Reg. 76/2019, s. 7.]

[Provisions relevant to the enactment of this regulation: Forest Act, R.S.B.C. 1996, c. 157, s. 151.]