Bow River Irrigation District v Wilkinson, 2017 ABQB 616

Court of Queen’s Bench of Alberta Citation: Bow River Irrigation District v Wilkinson, 2017 ABQB 616 Date: 20171013 Docket: 1606 00946 Registry: Lethbridge Between: Bow River Irrigation District Applicant - and - Kevin Wilkinson In His Capacity As Designated Director Under the Water Act for Alberta Environment and Parks Respondent _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice J.H.

Langston _______________________________________________________ Introduction [ 1 ] This is an application by the Bow River Irrigation District (BRID) for judicial review of a decision denying it a water licence for 52,000 acre-feet of water, and granting a licence for only 40,000 acre-feet of water. [ 2 ] The application for the licence was filed in 1992 and the decision denying the licence for the full 52,000 acre-feet is dated July 29, 2016, but BRID does not take issue with the delay.

Instead, it argues that the full 52,000 acre-feet had been reserved for the BRID when the South Saskatchewan Basin Water Allocation Regulation , AR 307/91, was enacted in 1991. BRID claims that the actual grant of the licence was only a formality, and that the only reason the licence was not processed sooner was because upgrades to the Carseland-Bow Headworks needed to be done first. The upgrade was not completed until 2011. At that time, BRID claims that the

granting of a licence for the full 52,000 acre-feet was only a formality. [ 3 ] The Respondent director (formerly legislatively described as the “ Controller of Water Resources ”) disputes BRID’s contention that it was ever automatically entitled to a licence for 52,000 acre-feet of water. [ 4 ] The issues are straightforward. They are as follows:

A) What is the applicable standard of review?

B) Did the director have the authority to make a decision on the merits for the 52,000 acre-feet of water allocation to the BRID, or had the decision previously been made? [ 5 ] The facts are contained in the certified record of proceedings and are not in dispute. This judgment will therefore set out the factual background and then address the issues. Factual Background [ 6 ] In 1991, water use and licencing in Alberta were governed by the Water Resources Act , RSA 1980 c W-5.

Section 11 set out how one could apply for and obtain a water licence.

Section 12 addressed water not subject to a licence, and stated in part:

(1) Notwithstanding anything in this Act, the Lieutenant-Governor in Council may reserve any unappropriated water, the property in which is vested in the Crown, in order that he can determine how the water may be used to the best advantage, and may thereafter authorize the allocation of the whole or any part of the water so reserved among the applicants therefor or otherwise, as he thinks best in the public interest. …

(5) No applicant shall acquire under this

section the right to divert and use any water until he has complied with the provisions of this Act and the regulations respecting the procedure to be followed in obtaining permits or licences. [ 7 ] The South Saskatchewan Basin Water Allocation Regulation was enacted pursuant to the Water Resources Act .

Section 2 of the Regulation stated, “All water in the South Saskatchewan River Basin that is not the subject of an existing licence or other authorization is reserved pursuant to

section 12 of the Water Resources Act ”. Section 4(1) of the Regulation stated that the total area of land within the BRID was 210,000 acres, and that the total amount of water allocated for irrigation purposes to each district “must not exceed the amount sufficient for the irrigation of the total area of land specified” for each irrigation district.

The Regulation also directed that other factors such as canal losses and evaporation were to be factored in when ascertaining the total amount of acre-feet of water that would be sufficient to irrigate the total irrigable area. [ 8 ] At that time, BRID’s licence amount was 380,000 acre-feet. In compliance with the Regulation, calculations were performed to determine the total amount needed to irrigate the total irrigable land area, 210,000 acres. In March of 1991, the Assistant Deputy Minister issued a letter to the BRID.

It stated that the calculations “for the amount of water required to satisfy your current irrigation limit” had been ratified by the Irrigation Council, and the calculated amount was 450,000 acre-feet, an increase of 70,000 acre-feet to the current licence amount. The letter also stated that in addition, “52,000 acre-feet will be reserved for the district under s12 of the Water Resources Act ”. [ 9 ] In January of 1992, the Controller of Water Resources wrote to the BRID and advised that it could apply for the additional 70,000 acre-feet to reach its “allowable maximum acreage”. The BRID applied.

Its application letter concluded with the following: In closing, we would like to note that upon the granting of this application, the total licensed amount for the District will be 450,000 acre feet of water per year. We understand that an additional 52,000 acre feet is being reserved for the District under

Section 12 of the Water Resources Act . It is also our understanding that upon rehabilitation of the Carseland Bow Headworks System, the Bow River Irrigation District will be in a position to make application for this 52,000 acre feet. [ 10 ] Two days later, the BRID sent in its application for the additional 52,000 acre feet. The letter stated, “...the [BRID] is eager to establish its rights to the 52,000 acre feet noted as being reserved for the district under

Section 12 of the Water Resources Act ”.

This application was acknowledged by a letter from the Controller of Water Resources , which in part stated, “Also, I wish to acknowledge receipt of your letter dated January 28, 1992 in which you request reservation of a further 52,000 acre-feet of water pending completion of the rehabilitation works to Carseland Bow headworks system”. [ 11 ] Even though it could not be processed because the infrastructure wasn’t ready, filing the application for the 52,000 acre-water was important because s11(2) of the Water Resources Act established that water licences had priority from the date the application was filed, not from the date that a licence was granted. [ 12 ] Meanwhile, steps were taken on the BRID application for the additional 70,000 acre-feet.

For example, the Controller of Water Resources directed that the BRID was to publish public notice of its application for the 70,000 acre-feet, which it did. [ 13 ] The licence for the additional 70,000 acre-feet was granted in 1996. The decision, issued by the Controller of Water Resources , stated that the application had to be reviewed “to ensure that it is consistent with the terms of the [ South Saskatchewan Basin Water Allocation Regulation ]”.

The decision also noted that the power to authorize the increased limit was discretionary, and there were “a number of considerations which must be taken into account in exercising this power”. Several factors were reviewed as part of the decision. “Adequacy of water supply” was one of the factors. The discussion thereunder referred to the 52,000 acre-feet application:

The application is for 70,000 acre-feet, which, together with a further 52,000 acre-feet (plus an additional 37,00 acre-feet to offset the headworks system losses not accounted for) held in reservation by the Regulation, is in accordance with my decision as to the quantity of additional water required to bring the applicant to a maximum acreage allowed under the Regulation. The additional 52,000 acre-feet has been applied for. The application, which was received February 5, 1992, can be processed when the capacity of the Carseland-Bow River Headworks System is increased.

An increase to 1,800 c.f.s. is part of a planned system rehabilitation. Notwithstanding the increase in capacity during rehabilitation, no increase in diversion rates can occur until the Controller of Water Resources issues a license for the increase. [ 14 ] In 1999, the Water Resources Act was repealed and replaced with the Water Act , RSA 2000, c W-3. It contained transitional provisions which continued the 52,000 acre-feet application, the South Saskatchewan Basin Water Allocation Regulation , and certain sections of the Water Resources Act : 171

(1) Subject to subsection (2), if on January 1, 1999, a complete application under the Water Resources Act , RSA 1980 cW-5, has been made for a permit, licence or other authority but a decision with respect to the application has not been made, the application continues as an application under the Water Resources Act as if it were still in force but the permit, licence or other authority on being issued, is, by order of the Minister, a deemed approval, preliminary certificate or licence under this Act. (2) Sections 18(2) , (5) (

a) and (b), (6) and 20(3) of this Act apply to deemed approvals, preliminary certificates and licences under this section.

(3) If an application referred to in subsection (1) is incomplete, the application must be made in accordance with this Act.

(4) The decision as to whether an application referred to in subsection (1) is complete is in the discretion of the person who would be authorized under the Water Resources Act , RSA 1980 cW-5, to receive the application if the Water Resources Act were in force. 172

(1) The South Saskatchewan Basin Water Allocation Regulation (AR 307/91 ) is continued as a Regulation under this Act. (2) Section 12(1) and (2) of the Water Resources Act , RSA 1980 cW-5, continue to be in force for the purposes of administering the South Saskatchewan Basin Water Allocation Regulation (AR 307/91 ).

(3) The Director under this Act may issue, subject to the South Saskatchewan Basin Water Allocation Regulation (AR 307/91 ), except for sections 1 (

b) and 6 of that Regulation, a licence or preliminary certificate with respect to any or all of the water reserved under the South Saskatchewan Basin Water Allocation Regulation (AR 307/91 ).

(4) An application for a licence with respect to water reserved under the South Saskatchewan Basin Water Allocation Regulation (AR 307/91 ) must be made in accordance with this Act.

(5) Subject to subsections (4) and (6), if the South Saskatchewan Basin Water Allocation Regulation (AR 307/91 ), other than sections 1 (

b) and 6 of that Regulation, is inconsistent with this Act, that Regulation prevails over this Act.

(6) For the purposes of this section, references in the South Saskatchewan Basin Water Allocation Regulation (AR 307/91 ) to “Controller of Water Resources” are deemed to be references to “Director” as defined in this Act. 173

(1) On January 1, 1999, an order with respect to the reservation of water made under

section 12 of the Water Resources Act , RSA 1980 cW-5, continues as an order under that Act as if that Act had not been repealed and section 12(1) and (2) of that Act continue to be in force for the purpose of administering that order.

(2) The Director under this Act may issue a licence or preliminary certificate with respect to any or all of the water reserved under an order referred to in subsection (1).

(3) An application for a licence with respect to water reserved under an order referred to in subsection (1) must be made in accordance with this Act. [ 15 ] Aware of the upcoming repeal of the Water Resources Act and the enactment of the Water Act , the BRID contacted the government to confirm the status of its application for the 52,000 acre-feet.

By letter dated December 23, 1998, the Controller of Water Resources confirmed that the application for the additional 52,000 acre-feet required no further action by the BRID; that it would be dealt with by the transitional provisions in the new Water Act ; and that “the application sets the priority date for any licence subsequently issued to 1992”. [ 16 ] It is clear from the transitional provisions in the Water Act and this correspondence that the Water Resources Act was still in play with regard to the BRID’s 52,000 acre-feet water application. [ 17 ] Changes were also implemented for the management of southern Alberta river basins.

The Approved Water Management Plan for the South Saskatchewan River Basin (Alberta) was implemented by Order in Council 409/2006. In 2007, the South Saskatchewan Basin Water Allocation Regulation was repealed and the Bow, Oldman, and South Saskatchewan River Basin Water Allocation Order , AR 171/2007, came into force.

The South Saskatchewan Regional Plan was implemented by Order in Council 294/2014. [ 18 ] The Bow, Oldman, and South Saskatchewan River Basin Water Allocation Order continued reservations of water that had been made under the South Saskatchewan Basin Water Allocation Regulation ; continued to differentiate water reservation from water allocation; and also discussed the water licences that could be granted for the Bow River basin: 2 All the water in the Bow River Basin, Oldman River Basin and South Saskatchewan River Basin that is not, on the date this Order is filed under the Regulations Act , allocated under a licence or registration or specified in a preliminary certificate is reserved.

3 Water reserved under

section 2 may be allocated by the Director. 4(1) The Director may issue licences with respect to the Bow River Basin in accordance with the following: (

a) for use by a First Nation ... (

b) for a water conservation objective; (

c) for storage, if it is for the protection of the aquatic environment and for improving the availability of water to existing licence holders and registrants; (

d) for any purpose, if, on or before the date this Order is filed under the Regulations Act , an application for the licence that is complete and complies with the Act has been filed with the Director. [ 19 ] Following completion of the Carseland-Bow Headworks upgrade, an amended licence for increased diversion therefrom was issued to the province of Alberta on October 31, 2011. [ 20 ] On May 28, 2013, the government advised BRID that it wished to complete processing of the 52,000 acre-feet application, and asked for any further information the BRID wished to submit for the review.

The BRID responded that it believed the information previously submitted, “should be sufficient to allow you to determine that issuance of the licence is reasonable”. It completed the public notice process, as required under the now-repealed Water Resources Act . Water modelling and consultation with First Nations took place. Other processing activities, such as payment of the licencing fee, also occurred. [ 21 ] The decision to deny a licence for 52,000 acre-feet and grant the BRID a licence for 40,000 acre-feet was issued on July 29, 2016. The BRID then filed this application for judicial review.

A) What is the applicable standard of review? [ 22 ] Dunsmuir v New Brunswick , 2008 SCC 9 (paras 57 , 62), dictates that an exhaustive analysis to determine the applicable standard of review is not necessary if there is existing jurisprudence which has already determined the degree of deference to be accorded to a particular category of issue. Both counsel noted that 979899 Alberta Ltd v Alberta , 2008 ABQB 57 , is similar to the situation here because is it an application for judicial review of a decision made by the designated director under the Water Act .

However, the nature of the issue was different, so Nation J’s analysis of the applicable standard is not completely on point. The process for determining the standard has also been altered since her decision.

Therefore, while her discussion is useful, this Court must undertake an independent inquiry to determine if the reasonableness standard or the correctness standard applies in this case. [ 23 ] The other case relied upon by BRID, Water Matters Society of Alberta v Director, Southern Region, Operations Division, Alberta Environment and Water , 2013 ABQB 44 , centered around a completely different issue involving decisions by a different administrative body, and is not of assistance here. [ 24 ] The first question is whether the presumption of reasonableness applies.

It will if the issue required the tribunal to interpret its home statute or statutes closely connected to its function. If so, there is a presumption that the issue is one of statutory

interpretation and the tribunal is entitled to deference: Edmonton (City) v Edmonton East (Capilano) Shopping Centres Ltd , 2016 SCC 47 at para 22 . [ 25 ] It is important to understand the purpose of the legislation when addressing this question. In 979899 Alberta Ltd v Alberta , Nation J discussed the purpose of the Water Act at paragraph 14 of her judgment: ... The purpose of the Act is set out in

Section 2 . It is to support and promote the conservation and management of water, including the wise use and allocation of water, while recognizing six enumerated factors: environmental concerns, the need for economic growth and prosperity, the shared responsibility and role of residents, the need for cooperative work with other jurisdictions and the important role of comprehensive and responsive action in administering the Act . ...

The Act is often involved in managing polycentric issues, the private rights of specific water users versus a societal wish to stop speculation in the resource and to manage it for the public good. ... [ 26 ] The now-repealed Water Resources Act did not contain a similar

section on its purpose, but in this Court’s view the purpose is no different. This is illustrated by s12(1) of the Water Resources Act , which states that the Crown is to determine how to use water to the best advantage, as it thinks best in the public interest. The only way to do this is to consider a number of factors and competing issues, or, in the words of Nation J, “polycentric issues”. [ 27 ] Nation J also discussed the director’s role in achieving the goals of the legislation. At paragraph 13 she stated: ...

The function of the Director is to manage the water resources in Alberta, through the supervision of that resource and any licencing given for its use. The giving, transferring and dealing with rights under licences is a specialized function, requiring knowledge of the resource, the environmental protection goals and the environmental needs.

This would suggest a measure of expertise, to which the Court should give greater deference. [ 28 ] This statement is true regardless of whether one is considering the role of the tribunal under the Water Act or the Water Resources Act ; both Acts require the tribunal to obtain specialized information in a number of areas to achieve balanced water allocation to various stakeholders for differing needs. [ 29 ] The purpose of the legislation and the role of the director in achieving that purpose clearly demonstrate that the issue at hand, whether the BRID should be issued a licence for 52,000 acre-feet of water, is one that falls squarely within the type to which deference is owed. [ 30 ] BRID is arguing that the director was bound by the Water Resources Act , and had no jurisdiction to consider factors under the

subsequently passed Water Act and other statutory authority. This approach disregards the existence of the transitional provisions of the Water Act , which govern how applications filed under the Water Resources Act were to be treated. In his decision the director referred to these transitional provisions, and both the current and repealed legislation.

The director was interpreting and applying his home legislation, former and current, when deciding the BRID application. [ 31 ] The argument also fails to acknowledge that the category of jurisdictional issues which must be assessed on the correctness standard is narrow ( Dunsmuir , para 59 ), and that more recent Supreme Court authority now goes even further, stating that “True questions of jurisdiction are narrow and will be exceptional.”: Alberta (Information and Privacy Commissioner) v Alberta Teachers’ Association , 2011 SCC 61 at para 39 . [ 32 ] As was stated in Alberta (Information and Privacy Commissioner) v Alberta Teachers’ Association at paragraph 34: The direction that the category of true questions of jurisdiction should be interpreted narrowly takes on particular importance when the tribunal is interpreting its home statute.

In one sense, anything a tribunal does that involves the

interpretation of its home statute involves the determination of whether it has the authority or jurisdiction to do what is being challenged on judicial review. However, since Dunsmuir , this Court has departed from that definition of jurisdiction. Indeed, in view of recent jurisprudence, it may be that the time has come to reconsider whether, for purposes of judicial review, the category of true questions of jurisdiction exists and is necessary to identifying the appropriate standard of review.

However, in the absence of argument on the point in this case, it is sufficient in these reasons to say that, unless the situation is exceptional, and we have not seen such a situation since Dunsmuir , the

interpretation by the tribunal of “its own statute or statutes closely connected to its function, with which it will have particular familiarity” should be presumed to be a question of statutory

interpretation subject to deference on judicial review. [ 33 ] Put simply, the director was interpreting his own statute in an area within his expertise. The issue is not of importance to the legal system as a whole, does not involve competing tribunals, and is not jurisdictional. There is nothing about the issue which makes it “exceptional” and exempt from deference.

I conclude that the appropriate standard of review for the director’s decision is reasonableness. [ 34 ] To review the director’s decision on a reasonableness standard is to inquire into: ... the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to outcomes. In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision- making process.

But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law. Dunsmuir , para 47 .

B) Did the director have the authority to make a decision on the merits for the 52,000 acre-feet of water allocation to the BRID, or had the decision previously been made? [ 35 ] The BRID’s position that over 20 years ago there was an irreversible decision to grant it a licence for an additional 52,000 acre-feet can only be reached if there is a tortured manipulation of the record of proceedings and applicable legislation. The application is dismissed. [ 36 ] The BRID argues that once the Carseland-Bow Headworks upgrade was complete, a licence would be issued, and that issuance was only a clerical matter.

Yet it does not, and cannot, point to a single communication which states that.

Instead, BRID relies on statements that the water will be “reserved”: -March, 1991, letter from the Assistant Deputy Minister: “52,000 acre-feet will be reserved for the district under s12 of the Water Resources Act ” -January 28, 1992 letter from the Controller of Water Resources : “Also, I wish to acknowledge receipt of your letter dated ... in which you request reservation of a further 52,000 acre-feet of water...” -the 1996 grant of licence for the 70,000 acre-feet: “The application is for 70,000 acre-feet, which, together with a further 52,000 acre- feet (plus an additional 37,00 acre-feet to offset the headworks system losses not accounted for) held in reservation by the Regulation...”. [ 37 ] The Water Resources Act could not be clearer in differentiating between “reservation” and “allocation”.

Section 12(1) states that the Lieutenant Governor “may reserve any unappropriated water”, and “may thereafter authorize the allocation of the whole or any part of the water so reserved”. This is a clear two-step process to obtain a licence to use water. Even if the water is reserved, there is still a discretion to then decide whether some or all of it should be allocated, as the Lieutenant-Governor “may thereafter authorize”. Subsection 12(5) confirms reservation of water creates no rights: it states that no applicant acquires the right to divert and use water under

section 12 until the applicant has complied with the Act and regulations respecting the procedure to be used in obtaining a licence. [ 38 ] In 2007 the Bow, Oldman, and South Saskatchewan River Basin Water Allocation Order was enacted, replacing the South Saskatchewan Basin Water Allocation Regulation . It also differentiates between “reservation” and “allocation”.

Section 2 states that water not allocated under a licence on the date this Order was filed is reserved.

Section 3 states that reserved water may be allocated by the director, and

section 4 sets out the situations in which the director may issue a water licence. The BRID application is clearly caught by this discretionary section. [ 39 ] Both the BRID and the Respondent used very specific language in their communications, and both the current and repealed governing legislation differentiates between “reservation” and “allocation”. The current and repealed governing legislation has also always given the director the discretion to issue a licence; reservation has never made allocation mandatory. Given this context, the documentation relied on by BRID is not of assistance to the position taken by BRID. In fact it supports the Respondent’s position.

[ 40 ] There are additional problems with the BRID’s position. First, the applications for the 70,000 acre-feet and 52,000 acre-feet were made mere days apart under the same statutory framework. If the granting of the licence for the 52,000 acre-feet was a mere formality, then so too should have been the licence for the 70,000 acre-feet. But the decision for the 70,000 acre-feet licence indicates a situation far different. The decision states that the application had to be reviewed “to ensure that it is consistent with the terms of the [ South Saskatchewan Basin Water Allocation Regulation ]”.

The decision also noted that the power to authorize the increased limit was discretionary, and there were “a number of considerations which must be taken into account in exercising this power”.

Several factors were reviewed before the Controller of Water Resources stated that he was granting the licence sought. [ 41 ] Second, BRID argues that the transitional provisions of the Water Act require its application to be processed as one under the Water Resources Act , but this again disregards the prevailing point under both the current and repealed legislation: reservation does not equate to allocation, and the decision to allocate water by granting a licence has always been, and remains, discretionary. [ 42 ] Third, BRID has supplied no authority to support its position.

BRID suggests that the process it argues as appropriate, notably the clerical aspect of the issuance of a licence, is in line with the court’s reasoning in Friends of the Oldman River Society v Alberta (Minister of Environmental Protection ) , 1996 ABCA 136 . However, this case actually supports the

interpretation of this Court that having a complete application does not equate to the automatic issuance of a licence. Rather, it supports the purpose of the repealed legislation previously set out in this judgment, namely, that the director has discretion to ensure allocation of water is done to the best advantage and in the public interest. If the

interpretation sought by the Applicant had been adopted by the Court of Appeal, “Irrigation Districts would be given exceedingly broad powers and would not be subject to many of the basis safeguards and supervisory powers which the [director] would otherwise have as a result of the Act and Regulations”: para 8. The same is true in this case. Such an outcome would be contrary to the statutory framework. Conclusion [ 43 ] The director was aware that the BRID application had been outstanding for years. He referred to the transitional provisions in the Water Act , and both current and repealed legislation.

There is no argument that the manner in which he referred to and applied both the current and repealed legislation was unreasonable, only that he had no jurisdiction to do so. I find this argument is without merit. The application for judicial review is dismissed. [ 44 ] The Respondent is entitled to costs. If the parties are unable to agree on those costs, or there is some extenuating matter affecting costs of which the Court is unaware, either party may file an application, within 90 days of the date of this decision, asking the Court to set costs. Heard on the 13 th day of September, 2017.

Dated at the City of Lethbridge, Alberta this 13 th day of October, 2017. J.H. Langston J.C.Q.B.A. Appearances: Thomas B. MacLachlan MacLachlan McNab Hembroff LLP for the Applicant Jodie Hierlmeier Alberta Justice and Solicitor General for the Respondent