Decision Date: June 10, 2011

Panel: Alan Andison

Keywords:  Water Act – s. 92(9); stay; preliminary decision; RJR-MacDonald Inc. v. Canada (Attorney General) (1994), 111 D.L.R. (4th) 385 (S.C.C.)

Chief Richard Harry, in his own right and on behalf of the Xwémalhkwu First Nation (the “Applicant”), appealed a decision of the Assistant Regional Water Manager, Ministry of Environment, to issue two conditional water licences.  The licences authorize Bear River Contracting Ltd. (the “Licence Holder”) to divert, use and store water from the Bear River, and construct certain works, for the purposes of fire protection, industrial (residential lawn watering), industrial (bottling sales), and industrial (enterprise).  The licences indicated that the works to be constructed were an intake, pump, pipe and tanks, and they would be constructed on previously disturbed areas on the Licence Holder’s land.  The licences required the works to be constructed, and the water beneficially used, before December 31, 2014.

The Bear River flows into Bear Bay, which is part of Bute Inlet on the mainland coast of British Columbia.  Before reaching Bear Bay, the Bear River flows through land owned by the Licence Holder, and then through the Xwémalhkwu First Nation’s Indian Reservation No. 8 located at the mouth of the Bear River.  Indian Reservation No. 8 borders Bear Bay to the south and is surrounded on its other three sides by the Licence Holder’s property.  The Xwémalhkwu First Nation is involved in 4th stage treaty negotiations, and the area of Bear Bay is within their claimed traditional territory.

The Applicant requested a stay of the Regional Manager’s decision, pending the Board’s decision on the merits of the appeal.  The Applicant submitted that the Licence Holder never advised or consulted with the Xwémalhkwu First Nation regarding the application for a licence to bottle water, and that granting the Licences precludes the First Nation from using the Bear River for future potential developments, such as run-of-river power and aquaculture.

The Regional Manager took no position on the application.

The Licence Holder opposed the stay application.  The Licence Holder argued that the licences will have no impact on Reserve No. 8 and allow the use of a negligible amount of the mean annual discharge of the Bear River, and that a stay would cause the Licence Holder to suffer financial harm.

In determining whether a stay ought to be granted, the Board applied the three-part test set out in RJR-MacDonald Inc. v. Canada (Attorney General).  With respect to the first stage of the test, the Board found that the Applicant’s appeal raised serious issues to be decided, which were not frivolous, vexatious or pure questions of law.

Regarding the second part of the test, the Board found that the Applicant failed to establish that the Xwémalhkwu First Nation or any of its members would suffer irreparable harm unless a stay was granted.  There was no evidence from Chief Harry or other members of the Xwémalhkwu First Nation regarding the nature or extent of any harm to their interests or aboriginal rights arising from the licences.  The Board held that the Applicant’s claim of harm to its commercial resource development interests was speculative.  The Board also noted that no construction on, or disturbance of, any Crown land or Reserve No. 8 is authorized by the licences.

The Board held there may be a risk of some harm to the First Nation’s aboriginal rights if the Applicant succeeds in its appeals and a stay was denied.  The appeal raised the issue of whether there was inadequate consultation and accommodation by the Ministry in relation to the First Nation’s asserted aboriginal rights in the area of Bear River and Bear Bay.  The Board recognized that the Crown has a legal duty to consult with, and if necessary accommodate, the First Nation’s asserted aboriginal rights if they may be adversely affected by the licences.  However, the Board held that the information before in this preliminary application was insufficient to determine the nature or extent of the First Nation’s aboriginal rights, or the nature or extent of any harm to those rights if a stay was denied.

Turning to the third part of the test, the Board found that a stay would prohibit the Licence Holder commencing construction of the authorized works and drawing water from the Bear River until after the appeals are decided.  The Board held that the window of time for working on the property closes in late October, and the appeal raises potentially complex issues of law and fact.  Consequently, the merits of the appeals would probably not be decided in time for any work to be done on the property in 2011 if a stay is granted.  The Board held that granting a stay, and thereby delaying construction, would harm the Licence Holder’s financial interests and could prejudice the Licence Holder’s rights under the licences, which require completion of the works and use of the water before December 31, 2014.

Weighing the balance of convenience, the Board concluded that the Licence Holder would suffer greater harm if a stay is granted, than the Applicant would suffer if a stay is denied.

Accordingly, the application for a stay was denied.