On March 31, 2025, the Supreme Court of British Columbia released a decision dismissing an action brought by Teal Cedar Products Ltd (“Teal”) against the Province of British Columbia (the “Province”) and the Haida Gwaii Management Council. Teal alleged that the Haida Gwaii Land Use Objectives Order (the “Land Use Order”) caused harm to Teal by reducing the allowable annual cut (“AAC”), which reduced the timber volume that Teal can harvest on Haida Gwaii under forestry tenures held by Teal. The court held that Teal had failed to establish that the Province breached a duty of good faith owed to Teal, confiscated Teal’s property interests, or violated an oral agreement to keep Teal operational and provide replacement timber volume if Teal’s share of the AAC was reduced.
Teal argued that the Province established the Land Use Order for the purpose of reconciliation, rather than for the goals that the tenures were intended to support, thereby breaching the duty of good faith owed to Teal. The court held that the Land Use Order was consistent with applicable laws and that the tenures explicitly contemplated reconciliation, while recognizing the Province’s authority to alter the AAC. As a result, the court found that the Province did not act in a manner that breached the duty of good faith.
Teal argued that the tenures constituted property interests, and that the Land Use Order’s restriction on logging effectively took Teal’s property rights under the tenure agreements. The court found that the legal test for a taking was not met. The court held that, while the Land Use Order modified the parameters of where forest harvesting could occur, it did not confiscate Teal’s tenures.
Teal also argued that, in 2008, the Minister of Forests, Patrick Bell, entered into an oral agreement with Teal under which the Province promised to keep the company as “close to whole as possible.” Teal claimed that the Province breached this oral contract by authorizing the Land Use Order. The Province responded that the Minister lacked the authority to enter into such an agreement. The court found that although the Ministry had made efforts to protect Teal’s interests, the Minister’s representations did not create any enforceable contractual obligations.
This decision is an important affirmation of the ability of the Province to make decisions regarding the management of forest resources in a way that supports reconciliation with Indigenous Peoples without incurring liability to forest tenure holders.
This case summary provides our general comments on the case discussed and should not be relied on as legal advice. If you have any questions about this case or any similar issue, please contact any of our lawyers.
See CanLII for the Reasons for Judgement.