Legality of stumpage fee decided by fall: appeals judge to decide to reject or keep residual value charge.

• Author: Ross, Ian
• Position: FORESTRY

It will be a one-day showdown in September 2 to decide the legitimacy of the Ontario's Residual Value Charge.

On that date, Sault Ste. Marie hardwood mill operator Jim Boniferro's ongoing fight to repeal a Crown stumpage fee will come to a final conclusion.

The government's one-day appeal will heard at the Ontario Court of Appeal in Toronto.

In January, Ontario Superior Court Judge Gary Tranmer ruled the Crown had "no lawful authority to impose" and collect the charge.

A month later, the Ontario government appealed the decision.

Boniferro estimates he's paid out between $1.2 and $1.7 million since he acquired the mill from Domtar and restarted it six years ago. "We're extremely confident we're ultimately going to win," says Boniferro, "we're just frustrated by the delay. There's no new evidence. We know that Tranmer got it right and it's been deemed a tax."

Boniferro says the hearing it will be strictly oral arguments.

"The government's going to argue the same argument again in front of another judge and think they're going to get a different result."

Boniferro says he knows of 15 other large and small wood manufacturers who have filed notice of applications challenging the residual value charge. A spokesman with the Ministry of Attorney General could not confirm this.

What surprises Boniferro is no other forestry companies have gone public with their opposition to the fee. Inquiries to three northeastern Ontario forest producers were not returned.

The residual value charge is one of four charges in Ontario's Crown Timber Pricing System--also known as stumpage charges--paid by forest product companies for harvesting on Crown lands.

Five years ago, Boniferro began challenging the formula used to assess the value charge arguing it was an illegal tax that had not been passed by the Ontario Legislature.

Stumpage fees fluctuate according to market prices for lumber, panels, pulp and paper. It ensures the Crown reaps some financial rewards from strong...