Comptroller of Water Rights, Water Sustainability Act v. Harrison Hydro Project Inc., Fire Creek Project Limited Partnership, Lamont Creek Project Limited Partnership, Stokke Creek Project Limited Partnership, Tipella Creek Project Limited Partnership and Upper Stave Project Limited Partnership, and Environmental Appeal Board

File Number:
2022 BCCA 4

Decision Date: January 7, 2022

Court: B.C.C.A., Justices Willcock, Dickson, and Griffin

Citation: 2022 BCCA 4

The Comptroller of Water Rights (the “Comptroller”) appealed a decision of the BC Supreme Court on a judicial review of a 2019 decision of the Board (Harrison Hydro et al v. Comptroller of Water RightsDecision Nos. 2017-WAT-003(b) and 2017-WAT-004(b)).

The Board’s decision related to the appeals of two orders issued by the Comptroller in 2017. Harrison Hydro Project Inc. (“Harrison”) and five limited partnerships appealed the Comptroller’s orders. Harrison is the general partner of the five limited partnerships. Each limited partnership owns and operates a “run of river” hydro project. Each project operates under a water licence authorizing the diversion of water from a stream to produce power.

The Comptroller’s orders retroactively adjusted the water rental billings for the five projects for 2011 and 2012 by aggregating the power produced at all five projects, which resulted in significantly higher water rental rates than if the projects were billed separately. The Comptroller adjusted the water billings following a previous decision of the Board (confirmed on judicial review: Harrison Hydro Project Inc. v. British Columbia (Environmental Appeal Board)2018 BCCA 44, leave to appeal refused [2018] S.C.C.A. No. 146), that the five water licences were properly amended in 2013 by naming Harrison, rather than the limited partnership that owned each project, as the holder of each water licence.

The Board found that the Comptroller had no statutory authority to retroactively adjust water rental fees that were billed and paid in 2011 and 2012. After reviewing the relevant sections of the Water Sustainability Act (the “Act”) and the Water Sustainability Fees, Rental and Charges Tariff Regulation (the “Regulation”), the Board determined that any adjustments made by the Comptroller in respect of water rental bills are forward-looking. Given that Harrison’s water licences were amended in 2013 to make Harrison the holder of all five licences, the adjustment of rental fees for the licences could only take effect from 2013 onwards.

The Comptroller sought a judicial review of the Board’s decision. The BC Supreme Court considered whether the Board’s decision was reasonable. The Court noted that its role was not to interfere with the Board’s fact-finding functions, or to substitute its decision for the Board’s. The Court found that the Board reasonably concluded that the Act and the Regulation did not give the Comptroller the power to retroactively adjust water rental fees. The petition was dismissed, and the Board’s decision was confirmed.

The Comptroller appealed to the BC Court of Appeal. The Court of Appeal held that the Board must be taken to be familiar with the statutory scheme and the context in which it is interpreted. The Board’s decision grappled with the foundational issue raised by the Comptroller, whether the adjustment of water rents was necessitated by the licensees’ failure to report changes in ownership, and reasonably concluded that a power to adjust rents billed and paid in prior years, even in such circumstances, was inconsistent with the statutory scheme. The Board erred in finding the water licences were amended; however, its decision did not solely rely on that finding. The Board’s interpretation of the legislation was reasonable and appropriately considered the jurisprudence and the presumption against interpreting legislation retroactively. The appeal was dismissed, and the Board’s decision was confirmed.