VANCOUVER, B.C.— The B.C. Supreme Court has dismissed a claim by a forest company to be compensated for business impacts arising from reductions in harvest levels and conservation measures implemented by the Haida Gwaii Management Council (“HGMC”), an intergovernmental regulatory body established under BC and Haida law. See Teal Forest Products Ltd. v. British Columbia, 2025 BCSC 595.
In 2011, HGMC was granted legal authority to establish the allowable annual cut of timber on Haida Gwaii, and oversee ecosystem-based management (“EBM”) measures to protect environmental and cultural values across the Haida Gwaii archipelago.
Teal Cedar Products Ltd. owned two forest licences that were affected by the new EBM-based regulations. In 2016, it sold these tenures and sued the HGMC and the Province of British Columbia claiming lost profits.
During the course of the 64-day trial, the Court heard considerable evidence about the evolution of BC forest policy. A key theme was the growing importance of EBM, both on Haida Gwaii and across the province, as a means of managing our forest resources in a manner that aligns with best available science, Indigenous rights, and community values. It also considered extensive argument on the question of whether and when governmental regulators can incur liability for “constructive expropriation” arising from impacts experienced by resource tenure holders as regulatory regimes evolve and change.
Justice Brenda Brown’s reasons affirm that government regulators are not generally liable to compensate private stakeholders adversely impacted by regulatory action where that action is based on bona fide determinations about how to conserve or sustain natural and cultural resources, or comply with Indigenous and Canadian law.
Her judgment, along with the recent decision in Altius Royalty Corporation v. Alberta, 2024 ABCA 1056 suggest that ambit of governmental liability for constructive expropriation remains narrow, particularly in relation to the management of public resources. As such, these decisions tend to confirm that Annapolis v. Halifax Regional Municipality, 2022 SCC 36 has not substantially altered the applicable law in this area.
For further reflections on this broader topic see C. Tollefson and A. Ho, “Environmental Regulation and Regulatory Takings” in D. Williamson, G. Lynch-Wood and A. Prochorskaite, eds., Research Handbook on Environmental Regulation (UK: Edward Elgar Publishing Ltd., forthcoming). Available here on SSRN.
Tollefson Law was counsel at trial for the defendant HGMC. See HGMC’s Media Release and Backgrounder.
Photo: Skidegate Inlet, Haida Gwaii taken by Chris Tollefson.
