SpruceRoots Magazine - July, 1998


April 21, 1998

Minister of Forests, Victoria, BC

Attention: Honourable David Zirnhelt


Dear Sir:

Re: Sale of Sandspit Portion of TFL 47 to J.S. Jones Limited

Representatives of TimberWest and J.S. Jones met with senior Regional and Victoria staff from your ministry last Friday [April 17, 1998] to discuss government's concern that the subdivision of Tree Farm License #47, and the entry into a new tree farm licence with J.S. Jones covering a portion of the land that was subdivided (pursuant to section 39(1) of the Forest Act) may not be permitted under section 35(1)(b) of the Forest Act as the tree farm license must


"describe a tree farm licence area composed of,

(1) an area of Crown land, the timber on which is not otherwise encumbered


Because of the decision of the British Columbia Court of Appeal in Haida Nation v. British Columbia (Minister of Forests) which concluded that the word "encumbered" includes possible encumbrances by aboriginal title, should such a title be proved, your ministry is concerned that a tree farm license entered into under section 30(1) of the Forest Act is subjected to risk of attack by the Haida Nation. Concerns relative to this risk should be minimal as forest tenures have been granted over the areas included in TFL #47 since 1901.

If the request for the approval of the subdivision and transfer of a portion of TFL #47 is turned down, because of concerns of aboriginal title (if proved), there will be grave implications not only to the economic viability of Sandspit, and the Queen Charlottes, but to the investment climate in British Columbia. Numerous other tenure divisions and transfers will undoubtedly take place over the next year and each will face the same issue. A clear and decisive resolution is required now.

TimberWest is a wholly owned indirect subsidiary of TimberWest Trust, a publicly listed trust whose units trade on the Toronto Stock Exchange. If the transfer of a portion of TFL #47 is not approved, it will be necessary for the Trust to issue an explanatory press release. This press release will unfortunately signal grave consequences to the value of all forms of governmental licenses and concessions in British Columbia, and will increase the concerns of the business and investment community emanating from the Delgamuukw decision of the Supreme Court of Canada.

It is proposed that the government deal with this matter by introducing an amendment to the Forest Act that defines the word "encumbered" as used in the Forest Act as a reference to an encumbrances by reason of an existing license, free use permit, licence to cut, timber licence, timber sale licence, or wood lot licences issued under the Forest Act.

The foregoing amendment would clarify the intention of the drafters of the Forest Act when the words "not otherwise encumbered" were included in the statute. We understand that it may be entirely feasible to introduce such an amendment into the house within a weeks time.

In respect of the transaction proposed between TimberWest and J.S. Jones, J.S. Jones informed TimberWest Limited that this transaction, if it is to be completed, must receive consent of the Minister of Forests by not later than April 28, 1998 to allow for closing, by no later than April 30, 1998. After that date, the financing arranged by J.S. Jones to complete the transaction will expire and may no longer be available.

We the undersigned, urge immediate legislative action to clarify the intent of "not otherwise encumbered" so that this transaction may be completed by the April 30th, 1998 deadline. Successful and timely action on government's part will also enable operations to open up under J.S. Jones management thereby bringing new economic life to the community of Sandspit.


Yours truly,

[signed by]

Dick Jones, J. S. Jones Sandspit Ltd.

R.K. Purchase, TimberWest Forest Limited


SpruceRoots Magazine - July, 1998