Federal Court - Christian Aboriginal Infrastructure Developments ...

Federal Court - Christian Aboriginal Infrastructure Developments ... Federal Court - Christian Aboriginal Infrastructure Developments ...

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Page: 338 [1276] Mr. Van Leeuwen based his projections of the Plaintiffs’ lost income upon the assumption that SYFC would sell 100 percent of its production in the readily accessible markets of the Yukon Territory and Alaska. Although he was aware that the Plaintiffs were also considering sales to the Japanese market and he said in his oral evidence that probably about 15 percent of the mill’s production would be exported to Japan, he did not use any sales to the Japanese market in calculating the average value of SYFC’s product. 2010 FC 495 (CanLII) [1277] Mr. Van Leeuwen grounded his opinion as to sales from the mill upon the view that 75 percent of the kiln-dried, planed lumber would be sold to the Alaska market, with generally the remaining 25 percent sold to the local market in Yukon. The “kiln-dried, planed lumber” would be the product after completion of Phase 2 of the capital investment plan, a fundamental assumption in the preparation of his report. [1278] With respect to the Alaska market, Mr. Van Leeuwen estimated that some 65 to 70 million board feet per year would be consumed in that market. This is a reasonable estimate that he derived from the MacDowell Report. He was cross-examined at pages 1988-1989 about the different types of measuring but not as to any implication of there being a difference. [1279] In commenting on the Alaska market, Mr. Van Leeuwen noted that this used only 20 percent spruce, pine and fir (“SPF”) in 1998. He assumed that the consumption of SPF would increase due to the significant cost advantages and he assumed that 75 percent of the lumber produced by SYFC would be sold to the Alaska market.

Page: 339 [1280] In cross-examination, Mr. Van Leeuwen slightly reduced the volume that would be sold to the Alaska market to the range of 50 – 60 percent. As a result, the projected losses of the Plaintiffs will be reduced accordingly. [1281] He supported his opinion as to the likelihood of a “local” market, including the Alaska 2010 FC 495 (CanLII) market, by reference to the “unique” location of the mill on a site adjacent to the Alaska Highway, a fact that meant significant reduction to the costs of transporting wood to the Alaska market. Transportation by road was available and that mode of transportation was significantly lower than the costs of transporting lumber from the usual sources for that market, that is the states of Washington and Oregon in the United States. [1282] Mr. Van Leeuwen’s observations in this regard are based on fact. He was cross-examined briefly at pages 1978 to 1979: Q. “High-quality structural lumber”. Again in the same sentence, “…the SPF would have a considerable freight cost advantage over imported lumber. You’re talking freight cost advantage to Alaska A. Yes, and to the Yukon. … Q. Was that freight cost advantage incorporated into the premium that you had set out in your pro formas, for the number A. Yes. Yes, it is.

Page: 338<br />

[1276] Mr. Van Leeuwen based his projections of the Plaintiffs’ lost income upon the assumption<br />

that SYFC would sell 100 percent of its production in the readily accessible markets of the Yukon<br />

Territory and Alaska. Although he was aware that the Plaintiffs were also considering sales to the<br />

Japanese market and he said in his oral evidence that probably about 15 percent of the mill’s<br />

production would be exported to Japan, he did not use any sales to the Japanese market in<br />

calculating the average value of SYFC’s product.<br />

2010 FC 495 (CanLII)<br />

[1277] Mr. Van Leeuwen grounded his opinion as to sales from the mill upon the view that 75<br />

percent of the kiln-dried, planed lumber would be sold to the Alaska market, with generally the<br />

remaining 25 percent sold to the local market in Yukon. The “kiln-dried, planed lumber” would be<br />

the product after completion of Phase 2 of the capital investment plan, a fundamental assumption in<br />

the preparation of his report.<br />

[1278] With respect to the Alaska market, Mr. Van Leeuwen estimated that some 65 to 70 million<br />

board feet per year would be consumed in that market. This is a reasonable estimate that he derived<br />

from the MacDowell Report. He was cross-examined at pages 1988-1989 about the different types<br />

of measuring but not as to any implication of there being a difference.<br />

[1279] In commenting on the Alaska market, Mr. Van Leeuwen noted that this used only 20<br />

percent spruce, pine and fir (“SPF”) in 1998. He assumed that the consumption of SPF would<br />

increase due to the significant cost advantages and he assumed that 75 percent of the lumber<br />

produced by SYFC would be sold to the Alaska market.

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