Decision Date: November 17, 2016

Panel: Gabriella Lang, Daphne Stancil, Douglas VanDine

Keywords: Water Act – ss. 18; conditional water licence; run-of-river hydroelectric project; monitoring; minimum stream flow; fish; invertebrates

5997889 Manitoba Ltd. (“Boralex”) appealed a decision of the Assistant Regional Executive Director (the “Director”), Ministry of Forests, Lands and Natural Resource Operations (the “Ministry”), denying Boralex’s request to amend the Instream Flow Requirements (the “IFRs”) stipulated in Boralex’s conditional water licence. IFRs are the minimum water flows in a stream that are required to maintain a certain level of ecological health. The conditional water licence authorizes Boralex to divert water from Jamie Creek and West Jamie Creek for use in a run-of-river hydroelectric project (the “Project”). Boralex requested that the licence be amended to allow lower IFRs, which would allow more water to be diverted from the stream for use in the Project.

West Jamie Creek flows into Jamie Creek upstream of the Project’s powerhouse. This confluence is downstream of the water intakes on West Jamie Creek and Jamie Creek. After going through the turbines in the powerhouse, the diverted water rejoins Jamie Creek, which flows into Downton Reservoir. There are impassable fish barriers in the form of waterfalls on Jamie Creek upstream of the powerhouse. Jamie Creek is one of about 125 creeks flowing into Downton Reservoir.

The conditional water licence was issued in May 2012, and included several conditions, such as a requirement that a minimum flow of 0.27 cubic metres per second must pass a flow measuring station located upstream of the Project’s tailrace between October 1 and May 31 at all times, and a minimum flow of 0.39 cubic metres per second must pass the flow measuring station between June 1 and September 30 at all times. In addition, the licence required Boralex to carry out a monitoring program to determine whether the Project had any impacts on fish and/or wildlife and their habitats. The licence stated that the IFRs may be adjusted after field data from the 2012 season was submitted to the Ministry. At the time, the Ministry contemplated that the IFRs may be revised after the collection of additional field data to determine if the initial IFRs were necessary to protect fish and stream health.

In December 2014, Boralex submitted its request to lower the IFRs stipulated in its licence. Boralex noted that two separate operational field tests had been done, one for ramping rates and one for the requested IFRs, based on work plans that were approved by the Ministry, and Ministry staff were present during those tests. Boralex submitted that the IFRs could be reduced with minimal impacts on the ecosystem. Boralex also advised that it was committed through the monitoring program to continue operational field tests and to evaluate any changes to the ecosystem made by the Project.

In May 2015, the Director refused to grant Boralex’s request for lower IFRs. Boralex appealed the Director’s decision on numerous grounds, and requested that the Board amend the licence to incorporate the requested IFRs. Boralex also requested an order for costs, but gave no reasons to support that request.

First, the Board rejected Boralex’s arguments that the Director failed to provide adequate reasons for his decision, showed a reasonable apprehension of or actual bias, or fettered his discretion. The Board found that the appeal hearing was conducted as a new hearing of the matter, and therefore, any procedural defects in the Director’s decision-making process were cured by the appeal process.

Next, the Board considered whether the lower IFRs will protect Jamie Creek with respect to stream flow continuity at all times, aquatic invertebrates and riparian vegetation, and fish and fish habitat. In deciding this issue, the Board considered numerous technical reports and expert evidence.

Regarding stream flow continuity, the Board found that the evidence established that Jamie Creek is likely a ‘gaining’ stream, in that groundwater contributes to stream flow. The evidence also established that during tests conducted in 2014 during extremely dry conditions and with zero flow release for 18 hours, stream flow continued at all times in the diversion reach. Although there was a lack of information about the potential impact of the lower IFRs on stream flows in the diversion reach during winter months, evidence established that stream flow continuity at all times can be assured with the lower IFRs if certain conditions are added to the licence.

Regarding aquatic invertebrates and riparian vegetation, the Board finds that the Ministry had accepted Boralex’s aquatic invertebrate and riparian vegetation monitoring plans and assessments in a 2014 monitoring report. The evidence showed that extensive monitoring and data analysis is taking place, and that Boralex is committed to maintaining stream flow continuity to protect aquatic invertebrates and riparian vegetation health, regardless of the approved IFRs. Therefore, the Board found that the lower IFRs would protect aquatic invertebrates and riparian vegetation health, provided that the required monitoring and assessments of impacts continue, and that stream flow continues at all times in the diversion reach.

Regarding fish and fish habitat, the Board found that the Ministry had accepted that Jamie Creek is non-fish bearing, and that the Project posed a low risk to fish and fish habitat. During 2014, the first operational year for the Project, fish surveys were conducted in spring, summer and fall in Jamie Creek. Sampling was intensive and included multiple methods. No fish were caught or observed. Boralex continues to monitor the lower reach of Jamie Creek for fish presence/absence using the sampling times and methods that were requested by the Ministry. Consequently, the Board found that the lower IFRs pose a low risk of adverse impact on fish and/or fish habitat, and any remaining uncertainty regarding the potential impacts on fish and fish habitat would be addressed through the monitoring measures already in place along with some additional monitoring requirements.

In conclusion, the Board sent the matter back to the Director with directions to amend the licence to: include the lower IFRs; add licence conditions aimed at ensuring stream flow continuity at all times; and add requirements that Boralex undertake a winter stream flow continuity study and submit a year-round flow monitoring plan.

Accordingly, the appeal was allowed. Boralex’s application for costs was denied.