Decision Date: July 11, 2013

Panel: David H. Searle, CM, QC, Robert G. Holtby, Douglas F. VanDine

Keywords: Water Act – ss. 12(1), 15(1); domestic purpose; licence; fully recorded; precedence of licences; policy

The Southeast Kelowna Irrigation District (the “SEKID”) manages the storage and use of water for ratepayers within a specific geographic area near Kelowna, using a system of reservoirs to store water for use during the dry portions of the year. The SEKID holds water licences dating back to 1908 that authorize the diversion and storage of water. Most of the water used under the SEKID’s licences is for irrigation purposes.

In 2008 and 2009, respectively, the McDivitts and Mr. Lawrence (the Third Parties in the appeals), applied for water licences on reservoirs (lakes) that are part of the SEKID’s system of reservoirs. They sought the licences to authorize the diversion and use of water for domestic purposes at their cabins located on leased Crown land adjacent to the reservoirs.

The licence applications were referred to the SEKID for comment. The SEKID objected to the licence applications on the basis that the Mission Creek watershed, which encompasses the reservoirs that woud supply water under the proposed licences, was designated as “fully recorded” in 1964, such that all of the water available for licensed uses has been allocated, and there is no unlicensed water available to support new licensed consumptive uses.

To assist the Assistant Regional Water Manager (the “Water Manager”) in assessing the licence applications, a Water Stewardship Officer with the Ministry of Forests, Lands and Natural Resource Operations (the “Ministry”) prepared a technical report on each of the licence applications. Both of the technical reports noted the SEKID’s objections, but recommended that the licences be issued on the basis that there is unused recorded water available in the reservoirs to meet the demands of the licences, and the amount of water needed for the licences is insignificant relative to the total volume of water stored in the reservoirs.

In August 2012, the Water Manager issued conditional water licences to the McDivitts and Mr. Lawrence. Both of the licences authorize the diversion of a maximum of 150 gallons per day for domestic purposes, between May 1 and October 31 of each year. The licences contain several conditions, including a requirement to cease withdrawing water when the water level in the source reservoir falls below 30 percent of the live storage volume (i.e., the volume of water stored above the reservoir’s outlet), and a requirement that the licensee install a flow meter to record the volume of diverted. Both of the licences were issued with a cover letter stating that the water is intended for “indoor” domestic use, although that was not a condition in the licences.

The SEKID appealed the Water Manager’s decisions to the Board on several grounds, including that the Mission Creek watershed is fully recorded, there is no unlicensed water available to support new licences, and the technical reports that supported the licences did not account for water discharged from the SEKID’s reservoirs to support fisheries conservation according to the Mission Creek Water Users Plan. The SEKID also submitted that the 30 percent threshold for the licensees to cease withdrawing water was unfair, as it would allow them to continue withdrawing water when users of the SEKID’s system would be under severe drought restrictions, contrary to the principle in section 15 of the Water Act that licences with earlier precedence dates have priority over licences with later precedence dates.

The Board first considered whether the water sources for the Third Parties’ licences are fully recorded. The Board found that both of the water sources are tributary to Mission Creek, which the Ministry designated as fully recorded in 1964, and therefore, those water sources are also fully recorded. However, the Board also found that a “fully recorded” designation is an administrative notation used by the Ministry to guide licensing decisions, and is not legally binding. Neither the Water Act nor its regulations contain any statutory authority for such a designation. Furthermore, Ministry policies indicate that a “fully recorded” designation should be based on the information available at the most recent inspection. Consequently, the Board found that a “fully recorded” designation does not necessarily preclude the issuance of new licences on a water source, especially if a new licence involves a small quantity of water relative to the total stream flow, or if updated information about the water source indicates that the water balance can support further licensed use.

Next, the Board considered whether there is sufficient water available to support the Third Parties’ licences. Based on evidence provided by both the Water Manager and the SEKID, the Board concluded that there is sufficient water to support the licences. In reaching that conclusion, the Board considered that the licences authorize the use of a small amount of water compared to both the water demand and the actual water usage from the reservoirs. The Board also took into account the SEKID’s agreement to release water from its reservoirs for fisheries conservation, and the fact that Mr. Lawrence and most other Crown lot lease holders have been drawing water from the reservoirs for years and disposing their grey water into rock pits. The Board also considered the Ministry’s policies with regard to domestic water licences, and that the SEKID acknowledged that the appeals were initiated on the basis of principle.

Finally, the Board considered whether the conditions in the licences were appropriate in the circumstances. The Board held that three of the licence conditions should be amended: the condition specifying the purpose of the water use; the condition imposing the 30 percent threshold for ceasing water withdrawals; and the condition requiring licensees to install a flow meter. Regarding the specified water use, the Board accepted the Water Manager’s recommendation that the licence be amended to state that all of the water was for “indoor” domestic use, which would better reflect the Water Manager’s intention. Regarding the 30 percent threshold, the Board found that it would be cumbersome to enforce, and was too low in light of the principle of licence precedence and the SEKID’s thresholds for imposing water restrictions during droughts. In particular, the SEKID’s stage 3 drought restrictions are similar to the uses permitted under the Third Parties licences, yet stage 3 restrictions would be imposed sooner (at 36 percent of live storage) and the SEKID’s licences have precedence according to section 15 of the Water Act. Moreover, the SEKID has never imposed stage 3 drought restrictions. The Board found, therefore, that this condition should be amended to require the licensees to cease withdrawals when the SEKID is under stage 2 drought restrictions, as this would protect the SEKID’s priority rights but would not affect the licensees often, given that stage 2 restrictions have only been imposed six times since 1955. Regarding the condition requiring the licensees to install flow meters, the Board found that there may be more practical and less costly ways to record water use, and the Board amended that condition accordingly.

Accordingly, the appeal was dismissed, with the exception of the amendments ordered by the Board.