RE: Project No. 3698623 British Columbia Utilities ... · 12/23/2011 · BC Hydro Written Reply Submission – 23 December 2011 Page 2 1 Ruskin Townsite Residents Association (RTRA)

British Columbia Hydro and Power Authority, 333 Dunsmuir Street, Vancouver BC V6B 5R3

www.bchydro.com

Janet Fraser

Chief Regulatory Officer Phone: 604-623-4046 Fax: 604-623-4407 [email protected] December 23, 2011 Ms. Alanna Gillis Acting Commission Secretary British Columbia Utilities Commission Sixth Floor – 900 Howe Street Vancouver, BC V6Z 2N3 Dear Ms. Gillis: RE: Project No. 3698623

British Columbia Utilities Commission (BCUC) British Columbia Hydro and Power Authority (BC Hydro) Application for Ruskin Dam and Powerhouse Upgrade Project (Project)

In accordance with BCUC Order No. G-159-11 (Exhibit A-15), BC Hydro attaches its written Reply Submission with respect to the Project. For further information, please contact Craig Godsoe, BC Hydro’s counsel with respect to this matter, at 604-623-4403 or by e-mail at [email protected]. Yours sincerely,

Janet Fraser Chief Regulatory Officer sh/ma Enclosure (1) Copy to: BCUC Project No. 3698623 (Ruskin Dam Upgrade Project) Registered

Intervener Distribution List.

290 Pages

Ruskin Dam and Powerhouse Upgrade Project Application for a Certificate of Public Convenience

and Necessity

Counsel’s Written Reply Submission on Behalf of

British Columbia Hydro and Power Authority

23 December 2011

Ruskin Dam and Powerhouse Upgrade Project Application for a Certificate of Public Convenience and Necessity

BC Hydro Written Reply Submission – 23 December 2011

Page i

Table of Contents

1 Introduction and Reply Submission Structure .................................................... 1

1.1 Introduction ............................................................................................... 1

1.2 Reply Outline ............................................................................................ 2

1.3 CEABC, Mr. Quigley and the Introduction of New Materials ..................... 2

2 Reply to Interveners Supporting the Project as Proposed .................................. 9

2.1 BCOAPO ................................................................................................... 9

2.1.1 Legal Context and BCUC’s Jurisdiction ...................................... 9

2.1.2 Project Description and Need: Very High Consequence Designation ............................................................................... 11

2.1.3 Project Description and Need: Unit 3 and Average Water ........ 11

2.1.4 Project Options ......................................................................... 13

2.1.5 Project Cost .............................................................................. 14

2.1.6 Consultation .............................................................................. 16

2.2 BCSEA .................................................................................................... 18

2.3 CECBC ................................................................................................... 18

2.3.1 Legal Context/Jurisdictional Issues ........................................... 19

2.3.2 British Columbia’s Energy Objectives – Self Sufficiency ........... 19

2.3.3 Need for the Project/Project Scope ........................................... 20

2.3.4 Alternatives to the Project ......................................................... 20

2.3.5 Project Cost .............................................................................. 21

2.3.6 First Nation Consultation .......................................................... 21

2.4 MRCC ..................................................................................................... 22

2.5 Mr. Ruskin ............................................................................................... 22

3 Reply to Kwantlen ............................................................................................ 22

3.1 The Duty to Consult – Legal Principles ................................................... 23

3.2 The BCUC’s Role in Relation to the Duty ................................................ 26

3.3 Scope and Content of the Duty to Consult .............................................. 29

3.3.1 Environmental Impacts ............................................................. 30

3.3.2 Requirement to Assess the Scope of the Duty to Consult ........ 37

3.3.3 SoC Assessment ...................................................................... 45

3.3.4 Meaning of Deep Consultation.................................................. 48

3.4 Alternatives to the Project Consultation .................................................. 51

3.4.1 Kwantlen Assertions Regarding Consultation Prior to December 2009 ........................................................................ 53

3.4.2 Consultation Concerning Alternatives: December 2009 to February 2011 .......................................................................... 56



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3.4.3 Kwantlen Did not Fulfill its Reciprocal Obligation in Respect of Alternatives ........................................................................... 61

3.5 Adopting a Process of Deep Consultation ............................................... 62

3.5.1 Integration into BC Hydro Decision-Making .............................. 64

3.5.2 Information Sharing .................................................................. 70

3.5.3 Time to Advance Accommodation Discussions ........................ 77

3.5.4 Archaeology Plan ...................................................................... 80

3.5.5 Conclusion ................................................................................ 81

3.6 Remedy ................................................................................................... 84

4 Reply to Interveners that Oppose the Project as Proposed: AMPC, CEABC and Mr. Quigley ................................................................................... 86

4.1 AMPC ...................................................................................................... 86

4.1.1 Reply to AMPC Introductory Remarks and Role of Panel Review Report .......................................................................... 88

4.1.2 Reducing Scope of Upper Dam Work, Right Abutment Work and Left Abutment Work: AMPC’s Possible Solution for Downstream Mitigation ........................................................ 89

4.1.3 Powerhouse Work .................................................................... 93

4.1.4 Dam Crossing ......................................................................... 106

4.1.5 Switchyard Work ..................................................................... 107

4.1.6 Cost Estimates ........................................................................ 107

4.1.7 First Nation Consultation ........................................................ 112

4.2 CEABC .................................................................................................. 113

4.2.1 Value of Firm Energy .............................................................. 114

4.2.2 Value of Dependable Capacity ............................................... 118

4.2.3 Cost of Decommissioning ....................................................... 120

4.2.4 Capital Rationing .................................................................... 122

4.2.5 Conclusion .............................................................................. 123

4.3 Mr. Quigley ............................................................................................ 124

5 Conclusion ..................................................................................................... 126

List of Tables

Table 1 Forced Outage Rates - Ruskin Facility and NERC ......................... 100

Table 2 Forced Outage Duration – Ruskin Facility and NERC .................... 101

Table 3 Summary of RW Beck’s Equipment Condition Assessment and Probabilities of Equipment Failure .................................................. 103



Page 1

1 Introduction and Reply Submission Structure 1

BC Hydro submits this Written Reply Submission (Reply), together with a Reply Book of 2

Authorities, with respect to its Application (also referred to as Exhibit B-1) for a Certificate of 3

Public Convenience and Necessity (CPCN) for the Ruskin Dam and Powerhouse Upgrade 4

Project (Project) pursuant to British Columbia Utilities Commission (BCUC) Order 5

G-159-11.1 6

1.1 Introduction 7

There are 11 interveners in this proceeding. BC Hydro submitted its Final Written 8

Submission (BCH Final Submission) and Book of Authorities (FS Book of Authorities) on 9

25 November 2011. Seven interveners filed Intervener Final Written Submissions (Final 10

Submission) on 12 December 2011: 11

Association of Major Power Consumers of B.C. (AMPC); 12

British Columbia Old Age Pensioners’ Organization (BCOAPO); 13

B.C. Sustainable Energy Association (BCSEA); 14

Clean Energy Association of B.C. (CEABC); 15

Kwantlen First Nation (Kwantlen); 16

Mission Regional Chamber of Commerce (MRCC); and 17

William Quigley (Mr. Quigley). 18

Pursuant to a requested extension, Commercial Energy Consumers Association of BC 19

(CECBC) filed its Final Submission on 16 December 2011.2 Mr. Vernon Ruskin (Mr. 20

Ruskin) made Final Submission in two stages, with the first occurring on 6 June 20113 and 21

the second occurring on 4 October 2011.4 22

1 Exhibit (Ex.) A-15. 2 Ex. C1-5. 3 Ex. C11-2. 4 Ex. C11-6.



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Ruskin Townsite Residents Association (RTRA) did not file Final Submission. District of 1

Mission (Mission) also did not file Final Submission, but the record is clear that Mission 2

supports not only the replacement of the roadway crossing the top of the Ruskin Dam with a 3

second lane and sidewalk (Dam Crossing), but the overall Project. Refer to the BCH Final 4

Submission, section 6, page (pg.) 79, line 9 and footnote 237, which references the Mission 5

letter of support. 6

1.2 Reply Outline 7

The Reply is divided into five parts: 8

Part 1 provides the introduction and addresses the new materials sought to be 9

introduced by CEABC and Mr. Quigley through their Final Submissions; 10

Part 2 canvasses the Final Submissions of the five interveners – BCOAPO, BCSEA, 11

CECBC, MRCC and Mr. Ruskin – that support the granting of a CPCN to BC Hydro for 12

the Project as proposed and on the basis of the Order requested; 13

Part 3 responds to Kwantlen’s assertion that BC Hydro has not fulfilled its duty to 14

“meaningfully consult and accommodate Kwantlen” in relation to the Project to this 15

stage; 16

Part 4 replies to the three interveners – AMPC, CEABC and Mr. Quigley - that take 17

issue with the Project scope and/or other matters, albeit on different grounds; and 18

Part 5 contains BC Hydro’s conclusion. 19

Where the Reply does not directly respond to an intervener’s Final Submission, BC Hydro 20

relies on the BCH Final Submission, the Application, BC Hydro’s responses to Information 21

Requests (IRs) and the other exhibits filed in this proceeding in support of BC Hydro’s 22

position. 23

1.3 CEABC, Mr. Quigley and the Introduction of New Materials 24

CEABC and Mr. Quigley have improperly attempted to introduce new materials through their 25

Final Submissions. Attempting to do so is particularly egregious in the case of CEABC, 26

where the Final Submission is laced with new and speculative materials not on the record 27



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and the intervener is a sophisticated participant (by its own admission in its Final 1

Submission CEABC regularly appears before the BCUC; refer to the CEABC Final 2

Submission, pg. 2). 3

In the case of Mr. Quigley, the new materials relate to electric and magnetic fields (EMF), 4

and are comprised of references to BC Hydro’s website (Mr. Quigley Final Submission, 5

pgs. 1-2) and an e-mail from a Mr. Eric Lemay of Health Canada to Mr. Quigley dated 6

30 March 2011 (pgs. 2-5). In the case of these two new references, there is no prejudice to 7

BC Hydro as the new materials support BC Hydro’s position with respect to EMF, although 8

BC Hydro does not rely on these references for purposes of this proceeding. The date of the 9

Health Canada e-mail indicates that Mr. Quigley could have, and should have, submitted the 10

Health Canada e-mail to BC Hydro through an IR for a response. BC Hydro addresses EMF 11

in section 4.3 of the Reply. There are also unfounded assertions as to how often the Mission 12

Fire/Rescue Service would use the Dam Crossing and how BC Hydro communicated with 13

local organizations with respect to the need for the Dam Crossing (pg. 18) which are 14

addressed in section 4.3. 15

Virtually every section of CEABC’s Final Submission contains new material not on the 16

record: 17

Section 1: Climate change (pgs. 2-5) – This entire section, with the exception of an 18

extract from BC Hydro’s response to Kwantlen IR 1.7.1.1 quoted on pg. 4 of the 19

CEABC Final Submission, consists of new evidence. CEABC references: (1) “a report 20

released by the President of the United States in June 2009” which allegedly examines 21

the possible effects of climate change on the United States (U.S.) Pacific Northwest 22

snowpack (pgs. 2-3); (2) extracts from the 2008 Long-Term Acquisition Plan (pg. 3); 23

and (3) “media reports” dated 2 May 2011 concerning asserted climate change impacts 24

to Williston Reservoir created by the W.A.C. Dam in the Northern Interior of British 25

Columbia (B.C.) (pg. 3). The dates of all three new references indicate that if CEABC 26

considered them to be of such value that the BCUC should review the references as a 27

possible basis for either putting the Application in abeyance for an unspecified period 28

of time or rejecting the Application (pg. 11), then CEABC should have either put these 29

materials to BC Hydro through IRs or sought to enter them as CEABC’s own evidence 30



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to ensure a proper and fully considered response, and to ensure that other interveners 1

and BCUC staff could test these materials. CEABC did not ask a single IR on this topic 2

despite three rounds of IRs and the length of the evidentiary phase of this proceeding – 3

almost nine months from the filing of the Application on 22 February 2011 through to 4

the submission of BC Hydro’s responses to the third round of IRs on 5

4 November 2011. This behaviour does not accord with either an efficient or effective 6

hearing or the principles of procedural fairness. BC Hydro respectfully submits that all 7

of the new materials in section 1 of the CEABC Final Submission should be given no 8

weight by the BCUC in rendering its decision on the Application. 9

CEABC goes on to express surprise that the issue of potential climate change impacts 10

on the Ruskin Facility was not addressed. CEABC is not correct; section 11.2 of the 11

Hemmera Envirochem Inc. (Hemmera) draft Summary of Environmental Information, 12

Assessment and Mitigation report (SEIAM), quoted at pg. 4 of the CEABC Final 13

Submission and found as Attachment 1 to BC Hydro’s response to 14

Kwantlen IR 1.7.1.15 clearly addresses the potential effects of climate change on the 15

Project, and concludes that: (1) Project construction should not be affected; (2) 16

possible increased flows due to climate change can be accommodated by the Ruskin 17

Facility post-Project; and (3) possible reduced discharges from the watershed due to 18

climate change would have to be addressed through a future Water Use Plan (WUP) 19

and Water Licences for the Ruskin Facility. As stated in section 5.2.1(b) of the BCH 20

Final Submission at pg. 58, BC Hydro engaged Hemmera to among other things 21

develop the SEIAM using methodologies6 employed in reviews pursuant to the 22

Canadian Environmental Assessment Act7 (CEAA) and B.C. Environmental 23

Assessment Act8 (BCEAA), even though the Project does not trigger either Act or an 24

environmental assessment (EA). Section 2 and subsection 16(1) of CEAA mandate 25

that the effects of the environment on the Project, including potential climate change, 26

be examined. This was done in the case of the Project, and accordingly neither 27

CEABC’s incorrect assertion nor the new untested materials provide a basis for the 28

5 Ex. B-7-2; see also pg. 8 of 278 of the draft SEIAM. 6 Ex. B-10-2, BC Hydro’s response to CEABC IR 2.11.1, pg. 2 of 5. 7 S.C. 1992, c.37. 8 S.B.C. 2002, c.43.



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BCUC to grant CEABC’s requested relief. The issue of the potential impacts of climate 1

change on the Project is not addressed any further in the Reply; 2

Section 1: Cost of alternative supply (pgs. 5 -7) – Much of this section contains new 3

material not placed on the record: (1) an undated chart allegedly illustrating the output 4

of a “typical wind farm” and accompanying text (pgs. 5-6); (2) a “recent article from 5

Bloomberg New Energy Finance” which apparently is a press release dated 6

10 November 2011 supposedly predicting that the cost of wind turbines will drop over 7

the next five years (pgs. 6-7); and (3) extracts from a “recent presentation by Brent 8

Baudais, Technical Director – Energy Technologies, TransAlta Corp.” made at a 9

CEABC conference on 27 September 2011 and an accompanying chart (pg. 7). 10

CEABC could have at least put the Baudais presentation to BC Hydro in the third 11

round of IRs to permit BC Hydro, other interveners and/or BCUC staff to respond to 12

and test the presentation materials. The comments above regarding CEABC’s 13

attempted introduction of climate change-related materials by way of argument apply to 14

this material, and again, this new material must be disregarded. 15

In section 4.2.1 below, BC Hydro references sources on the record to demonstrate that 16

use of the 2010 Clean Power Call-related price of $129 per megawatt hour (/MWh) to 17

value future firm energy is entirely appropriate, and that there is no evidence on the 18

record whatsoever that independent power producers (IPPs) now or in the future can 19

meet a hurdle rate based on the levelized cost of producing energy from the Ruskin 20

Facility post-Project on the Expected Amount of $67.50/MWh net of the 21

decommissioning credit and $50.90/MWh net of the capacity credit. The evidence is 22

not only compelling, it is overwhelming that IPPs are not as cost-effective as the 23

Ruskin Facility post-Project on any reasonable measure based on the record; 24

Section 5: Consideration of other alternatives (pgs. 9-11) – Despite 15,114 pgs. of 25

evidence filed by BC Hydro in this proceeding, and despite 1,087 IRs to BC Hydro, 26

CEABC asserts that there is an option not previously raised in IRs or otherwise 27

entailing the de-watering of Hayward Lake Reservoir through the construction of a new 28

water conveyance system apparently to run from Stave Lake Reservoir to a new 29

relocated Ruskin powerhouse. In introducing this suggested “potentially very cost 30



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effective option” CEABC explains that “it only became apparent after all the evidence 1

was reviewed”. BC Hydro respectfully submits that there is no evidence on the record 2

that would make this alternative appear feasible (or more properly, less infeasible), and 3

in particular no evidence presented during the third round of IRs that could make this 4

alternative “apparent” at that time. For example, the unattractiveness of re-locating the 5

Powerhouse was identified in the Application9 and the underlying reasons for that 6

assessment were known in detail when the Klohn Crippen Berger Ltd. report was filed 7

on 20 April 201110 indicating that “a new powerhouse … in the vicinity of the Ruskin 8

powerhouse” was less attractive than rehabilitation of the existing Powerhouse. To the 9

extent that there are any claimed advantages to such an alternative (which is not 10

accepted by BC Hydro), there was nothing preventing CEABC from presenting it at a 11

time that would have allowed proper consideration; CEABC’s claim that this ‘only 12

became apparent’ at some recent date to justify or excuse the late introduction of new 13

material is untenable. 14

CEABC goes on to advance that there are several advantages to this option, which in 15

BC Hydro’s submission is unsupported new material. CEABC’s position is that the 16

Application should be placed in abeyance to permit the re-opening of the evidentiary 17

record for the purpose of examining this canal/pipeline/tunnel option. BC Hydro 18

respectfully submits that advancing options through assertions and new material in 19

argument is inappropriate as it does not place testable evidence on the record which 20

could then be relied on, and which would include sufficient detail to allow an evaluation 21

of the issue at hand. The assertion that this is a “potentially very cost effective option” 22

does not make it so – particularly when made in regard to an ill-defined project scope 23

that includes “a pipe, canal, and/or tunnel(s)” that would convey water from “the Stave 24

Falls tailrace, or at the same elevation as the Stave Falls intake” to a new powerhouse 25

“in the vicinity of the existing Ruskin powerhouse.” This description is vague, 26

encompassing virtually any hydroelectric project that could be contemplated between 27

Stave Lake Reservoir and the Fraser River, and may or may not eliminate the 28

generating capability of the nearly new Stave Falls Generating Station depending on 29

9 Ex. B-1, section 3.4.1, pg. 3-44 10 Ex. B-7, attachment 1 to BC Hydro’s response to BCUC IR 1.2.1.



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whether the conveyance is from the elevation of the Stave Falls intake or tailrace. 1

There has been no evidence on the record that would indicate the technical feasibility 2

of CEABC’s ill-conceived proposal, including geotechnical considerations relating to a 3

5 to 6 kilometer (km) large-bore tunnel or canal. This section of the CEABC Final 4

Submission boils down to a claim that ‘something else, somewhere nearby might be 5

less costly than the Project,’ but there is simply no basis to give credence to that 6

assertion; given the lack of detail in the scope suggested, CEABC has clearly not done 7

enough investigation to make the statement plausible, except on the basis that 8

‘potentially’ is an all-purpose catch-all. 9

BC Hydro cannot respond in a detailed way without itself introducing new evidence 10

after the close of the evidentiary record, but can offer the following observations based 11

on the record: 12

CEABC’s ill-considered option would likely present adverse operational impacts in 13

draining Hayward Lake Reservoir. The reservoir provides a buffer that de-couples 14

the Stave Falls Facility and the Ruskin Facility so that a change in operating regime 15

(i.e., number of units on-line, rate of discharge, or even a plant upset) at one facility 16

does not immediately affect the other. A canal reduces and a tunnel virtually 17

eliminates this buffer capability. The result of the suggested option would be 18

reduced operational flexibility, peaking capability and reliability, as well as a loss of 19

available head at the Ruskin Facility due to increased frictional losses in the canal 20

or tunnel; 21

It is not clear how fish habitat will be restored if the water volume through the 22

powerhouse is maintained – water that currently passes through Hayward Lake 23

Reservoir will instead be contained within “a pipe, canal, and/or tunnels(s)”, and will 24

therefore not be in the Stave River, and cannot restore habitat. If water is made 25

available for fish habitat in the reach of the Stave River between the Stave Falls 26

and Ruskin Facilities it must reduce available energy from the powerhouse; 27



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In addition to the capital costs of the suggested “pipe, canal and/or tunnel(s)”, this 1

option would require a new dam at the Stave Falls tailrace to prevent runner 2

cavitation at Stave Falls;11 3

As well as the economic impacts, de-watering Hayward Lake Reservoir in this way 4

has all the disadvantages associated with Decommissioning Alternatives C and D, 5

such as eliminating a source of Mission’s drinking water and significantly impacting 6

tourism; refer to section 4.2.1(b) of the BCH Final Submission and to 7

section 3.3.1(b) below. 8

BC Hydro respectfully submits that this option must be disregarded and should not be 9

used as a ground for refusing to issue a CPCN to BC Hydro for the Project. The 10

CEABC scheme is not addressed any further in the Reply. 11

The introduction of new material through argument is highly improper and should not be 12

permitted. The BCUC is a quasi-judicial body that is bound by the rules of natural justice and 13

procedural fairness.12 While the degree of rights flowing from these principles will vary from 14

circumstance to circumstance one can say that as a general rule natural justice and 15

procedural fairness require that a party such as BC Hydro has an opportunity to know the 16

case against it and to present its case to the BCUC. This cannot occur if new evidence is 17

introduced in the argument phase well after the evidentiary phase has closed. Unlike 18

Kwantlen, who properly requested that the BCUC amend the regulatory timetable to permit 19

the filing of Kwantlen’s evidence,13 CEABC took no such step. The new material presented 20

in relation to potential climate change impacts, the asserted cost of new IPP supply or 21

consideration of an amorphous “option” does not properly form part of the record, and 22

therefore these materials cannot be given any weight whatsoever by the BCUC in rendering 23

its decision on the Application. 24

11 Ex. B-10-2, BC Hydro’s response to AMPC IR 2.6.1. 12 BCUC, Section 5 Inquiry, Appendix A to Order G-108-09, pg. 10 of 17; extract at Tab 1 of the Reply Book of Authorities. 13 Ex. C3-4.



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2 Reply to Interveners Supporting the Project as Proposed 1

Three of the four customer interveners – BCOAPO, BCSEA and CECBC, respectively 2

representing the interests of low income BC Hydro residential ratepayers;14 environmentally 3

minded BC Hydro ratepayers;15 and BC Hydro commercial ratepayers16 – support the 4

Project. Each of their Final Submissions is addressed in sections 2.1, 2.2 and 2.3. In 5

addition, MRCC and Mr. Ruskin support the Project; refer to sections 2.4 and 2.5. 6

2.1 BCOAPO 7

BCOAPO supports the Project as proposed, and arrives at this conclusion after measuring 8

the “potential benefit to be gained from this Project” against “serious concerns about the cost 9

uncertainties with BC Hydro’s application of the Expected Amount as well as the risk 10

associated with the status of consultation and accommodation” (BCOAPO Final Submission, 11

pg. 10). With respect to the latter issue, BCOAPO concludes that “it does appear likely that 12

based on the record [BC Hydro] has fulfilled their duty of consultation to the degree required 13

under current law” (pg. 9). In this section BC Hydro addresses BCOAPO’s concerns with 14

respect to cost uncertainties and the status of consultation with and accommodation of 15

Kwantlen, as well as other miscellaneous issues raised by BCOAPO in its Final Submission. 16

2.1.1 Legal Context and BCUC’s Jurisdiction 17

BC Hydro agrees with BCOAPO’s submission regarding the BCUC’s jurisdiction as it 18

pertains to alternatives to the Project, and in particular with the statement that the public 19

interest test does not simply entail a comparison of the Project to alternatives. BCOAPO 20

acknowledges BC Hydro’s position in section 2.2.1 of the BCH Final Submission that the 21

BCUC cannot choose a preferred alternative; in the case at hand this power rests with 22

BC Hydro’s Board of Directors (Board) and senior management. BC Hydro agrees with 23

BCOAPO that the BCUC, if it were to refuse to grant a CPCN for the Project on the basis 24

that there is a more cost-effective alternative, can make suggestions to BC Hydro with 25

regard to the more cost-effective alternative. BC Hydro notes that BCOAPO concludes at 26

pg. 5 of its Final Submissions that BC Hydro has “considered a reasonable range of 27

14 Ex. C2-1. 15 Ex. C4-1. 16 Ex. C1-1.



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alternatives and chosen the most cost-effective”. This issue is addressed further in 1

sections 3.3.1 and 3.4 with respect to Kwantlen and sections 4.1.1 and 4.2.3 with respect to 2

AMPC and CEABC respectively. 3

BCOAPO expresses alarm at what it characterizes as BC Hydro’s submission that 4

subsection 46(3.3) of the Utilities Commission Act17 (UCA) changed the public interest test 5

to provide that the section 2 Clean Energy Act18 (CEA) British Columbia’s energy objectives 6

“trump the public interest consideration when the two are in conflict” (pgs. 2-3). BC Hydro 7

has not advanced such an argument. Section 2.1 of the BCH Final Submission sets out that 8

in BC Hydro’s view, the overall public convenience and necessity test is a public interest 9

test. Subsection 46(3.3) of the UCA provides that the BCUC, in deciding whether to grant a 10

CPCN to BC Hydro for the Project, must: (1) consider the interests of persons in B.C. who 11

receive service or may receive service from BC Hydro (the ratepayer test); and (2) consider 12

and be guided by the British Columbia’s energy objectives. In other words, as reflected in 13

the BCH Final Submission, the ratepayer test and the British Columbia’s energy objectives 14

are components of the overall public interest test. Neither (1) nor (2) “trump the public 15

interest test”. There are additional components to the public interest test, namely the 16

adequacy of First Nation consultation, and in the context of this Application the local 17

community’s interests in the Project; refer to sections 2.1.3 and 2.1.4 of the BCH Final 18

Submission. 19

However, subsection 46(3.3) of the UCA does establish the relative weighting of 20

components (1) and (2); it is clear from the wording of subsection 46(3.3) that while the 21

BCUC must consider the ratepayer test, it must consider and be guided by the British 22

Columbia’s energy objectives. The phrase “guided by” must mean more than “consider” for 23

the reasons set out in section 2.1.1 of the BCH Final Submission. Nevertheless, BC Hydro 24

agrees with BCOAPO that the BCUC need not decide the meaning of “guided by” in this 25

proceeding if it finds as BC Hydro has that the Project aligns with both the ratepayer test and 26

the British Columbia’s energy objectives. 27

17 R.S.B.C. 1996, c.473; copy at Tab 1 of the FS Book of Authorities. 18 S.B.C. 2010, c.22; copy at Tab 2 of the FS Book of Authorities.



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2.1.2 Project Description and Need: Very High Consequence Designation 1

At pg. 3 of its Final Submission, BCOAPO states that “BC Hydro has designated Ruskin’s 2

Dam a ‘Very High Consequence’ facility – a designation that BCOAPO endorses given the 3

strong potential of property damage, environmental impacts, financial loss, or even more 4

importantly loss of life in the event of a dam breach”. BC Hydro notes that the 2003 Dam 5

Safety Review, performed by external consultants pursuant to the B.C. Dam Safety 6

Regulation, confirmed the “Very High” consequence classification at that time for the Dam, 7

the Right Abutment and the Left Abutment. The 2003 Dam Safety Review was provided to 8

BC Hydro and the B.C. Comptroller of Water Rights (CWR).19 BC Hydro also notes that the 9

consequence classification is driven by the B.C. Dam Safety Regulation and does not result 10

from BC Hydro designation. In fact, pursuant to recent amendments to the B.C. Dam Safety 11

Regulation,20 the classification of the Dam and water retaining structures (e.g., Left 12

Abutment and Right Abutment) is now “Extreme Consequence” under the B.C. Dam Safety 13

Regulation and the Canadian Dam Association’s Dam Safety Guidelines (CDA Guidelines) 14

because as noted by BCOAPO, the loss of life could exceed 100 persons, and in addition to 15

loss of life, there would also be significant economic, social and environmental impacts. 16

Schedule 1 to the B.C. Dam Safety Regulation includes a five-tier dam failure consequence 17

classification (Low, Significant, High, Very High and Extreme) which aligns with the most 18

recent version of the CDA Guidelines. This issue is further addressed in section 4.1.1 in 19

response to AMPC. 20

2.1.3 Project Description and Need: Unit 3 and Average Water 21

BCOAPO suggests at pg.4 of its Final Submission “that it might be useful to the [BCUC] to 22

have BC Hydro address” what BCOAPO calls the “outstanding issue” of what impact a 23

change in the self-sufficiency requirements from ‘critical water, with insurance’ to ‘average 24

water with no insurance’ would have “on the financial evaluation of upgrading two versus 25

three generating units”. BC Hydro advises that it can respond to the BCOAPO query without 26

introducing new evidence. 27

19 The relevant extracts from the 2003 Dam Safety Review are provided as Attachment 1 to Ex. B-7, BC Hydro’s response to BCUC IR 1.65.1. Refer also to Ex. B-7, BC Hydro’s response to BCUC IR 1.65.2, pg. 3 of 3. 20 B.C. Reg. 44/2000, copy at Tab 3 of the FS Book of Authorities. Refer in particular to the table in Schedule 1.



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Unit 3 (U3) is a capacity resource allowing increased shaping of energy out of low value 1

periods and into high value periods.21 The change in self-sufficiency requirements from 2

‘critical water, with insurance’ to ‘average water with no insurance’ does not change the 3

capacity Load Resource Balance22 (LRB) – except for one year, BC Hydro remains in a 4

capacity deficit throughout the forecast period. Since the capacity balance is not affected by 5

this potential change to self-sufficiency requirements, BC Hydro does not expect the value of 6

a capacity resource to be materially affected, and therefore the economic considerations 7

relating to the replacement of U3 will be unchanged. However, from material that has been 8

placed on the record it is possible to calculate the impact of the changes to the 9

self-sufficiency requirements on the assumption that capacity values will move with the 10

value of energy; BC Hydro considers this conservative since the capacity deficit remains 11

unchanged despite an energy surplus under this scenario. 12

The Present Value (PV) of the benefits from the U3 addition as shown in Table 3-12 of 13

Ex. B-1 is $52.4 million. This was calculated by simulating the operation of the Stave River 14

System after completion of the Project with a two-unit and a three-unit configuration at the 15

Ruskin Facility and comparing the economic value of the system as a whole. The pricing 16

inputs for that simulation are the premiums and discounts for seasonal and time of day 17

energy deliveries in the 2010 Clean Power Call as described in Tables 3-10 and 3-11, based 18

on a price of $129/MWh for a flat block of firm energy or $119.50/MWh adjusted for the 19

Ruskin Facility’s energy firmness. 20

The spreadsheet provided as Attachment 4 to the Evidentiary Update (Ex. B-15) allows a 21

calculation of the levelized value of energy (adjusted for the Ruskin Facility’s energy 22

firmness) at the In Service Date (ISD), assuming that BC Hydro faces an energy surplus 23

until an arbitrarily set date. Using the weighted average energy price forecast (select “F” in 24

cell B29 of the spreadsheet at Attachment 4 to Ex. B-15) and an energy surplus until 2024 25

(enter “2025” in cell C9, indicating that 2025 is the first year of energy deficit) the calculated 26

firmness-adjusted value is $90.40/MWh. If capacity values follow energy values, this implies 27

that the PV of retaining a third unit at the Ruskin Facility will be reduced in proportion to the 28

21 Ex. B-10, BC Hydro’s response to BCUC IR 2.4.1. 22 Ex. B-15, table 4, and footnote 61, both on pg. 35.



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change in the value of energy from $119.50/MWh to $90.40/MWh, or a 24.4 per cent 1

reduction. Applying this factor to the PV set out in Table 3-12 of Ex. B-1 indicates a PV of 2

$39.6 million. As shown in Table 3-12, the incremental cost of replacing U3 is $41.7 million, 3

so the Net Present Value (NPV) of the decision to replace U3 is a $2.1 million reduction in 4

value. Other reasons for maintaining a three-unit powerhouse configuration (operating 5

flexibility and redundancy) are unaffected by the change in self-sufficiency requirements, 6

and BC Hydro considers that the marginally lower NPV result on a conservative analysis 7

together with the value of retaining U3 make it in the interest of current and future ratepayers 8

to do so. 9

Given that retention of the three-unit configuration is in the best interests of current and 10

future ratepayers BC Hydro submits that the appropriate timing to replace U3 is as a part of 11

the current Project, rather than adopting a “run to failure” strategy and replacing U3 after a 12

future failure. Refer also to BC Hydro’s reply to AMPC in section 4.1.3. The analysis 13

presented in Ex. B-10, BC Hydro’s response to BCUC IR 2.33.4 remains applicable. In brief, 14

that analysis considered the time value of money benefits of deferring the replacement of U3 15

and the increased costs of procuring a single turbine and generator rather than obtaining the 16

economies of a larger three-unit order, the risk that this second procurement and installation 17

contract would be required during the currency of the Project contracts, and the delay 18

between the failure and eventual replacement, when the facility must operate with only two 19

units. The conclusion of that response was that a deferral would have to extend for at least 20

5½ years after the planned third unit ISD to provide a net benefit, and that this was unlikely 21

given the Powerhouse equipment condition. 22

2.1.4 Project Options 23

BCOAPO concludes that with respect to alternative means of carrying out the Project, in 24

“each case the proposed Project [is] the most cost-effective or more appropriate once the 25

constructability risk and seismic standards [are] taken into consideration” (pg. 6). BCOAPO 26

favours including the three “optional” Project components – U3, the Dam Crossing and the 27

switchyard – within the Project scope. This issue is further addressed with respect to the 28

Dam Crossing and switchyard in sections 4.1.4 and 4.1.5 of the Reply. 29



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BCOAPO acknowledges that BC Hydro has “implemented a number of measures to reduce” 1

Total Dissolved Gas (TDG)-related issues associated with the existing Ruskin Facility, but 2

also states that in its view, TDG is an issue “requiring more attention in the future to achieve 3

better understanding and hopefully consensus on the merits of” implementing the two TDG 4

mitigation measures BC Hydro has not adopted to date. Implementing the Project does not 5

preclude implementing these two TDG mitigation measures; refer to section 3.1.1, lines 7 to 6

18, of BC Hydro’s Rebuttal Evidence (Ex. B-16). While BC Hydro’s initial assessment is that 7

one of the TDG mitigation measures is not technically feasible, and that the second may not 8

be effective in addressing TDG concerns in the Stave River, BC Hydro has consistently 9

stated that it is willing to examine these two proposed measures with Kwantlen and 10

Fisheries and Oceans Canada (DFO), and is also willing to consider funding to enable 11

Kwantlen to participate in the development of a site-specific TDG guideline.23 This issue is 12

addressed in section 3.5.2(b) in reply to Kwantlen. 13

2.1.5 Project Cost 14

BCOAPO expresses concerns regarding the Project Expected Amount and BC Hydro’s 15

ability to accommodate the total cost of the Project. Specifically, BCOAPO states that the 16

Expected Amount lacks treatment and therefore does not adequately address risks 17

associated with cost escalation (pg. 6). This statement is incorrect. The term “treatment” is 18

described at Ex. B-1, pg. 5-3, line 23 to pg. 5-5, line 16. Treatment consists of a number of 19

measures to ensure that the Project cost estimates are adequate to address cost 20

uncertainties. Treatment has been applied to both the Expected and Authorized Amounts; it 21

is the level and nature of treatment that varies between the Expected and Authorized 22

Amounts. The following treatment has been incorporated into the Expected and Authorized 23

Amounts: 24

An overall procurement strategy which included an advanced level of design, due 25

diligence, detailed constructability reviews, construction plans, environment and safety 26

plans as well as the assignment of experienced BC Hydro staff to the Project, early 27

contractor involvement in the most specialized portion of the Project, detailed 28

specifications and bi-weekly contractor reporting; 29

23 Ex. B-18, BC Hydro’s response to Kwantlen IR 3.2.4.



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A Project schedule which was developed to enable among other things best estimate 1

for accumulation of direct and indirect costs as well as loadings such as Interest During 2

Construction (IDC); and 3

A detailed cost analysis performed using range estimating techniques (Monte Carlo 4

simulation) that considered the different levels of uncertainty for the various scope 5

items and converted this uncertainty into an overall probability curve for the Project 6

estimates. 7

BCOAPO states that the Expected Amount does not include any allowance for consultation 8

and accommodation costs to First Nations or a Management Reserve (pg. 7). While 9

BCOAPO is correct with respect to accommodation costs, BC Hydro has included an 10

allowance for ongoing consultation.24 In addition, BC Hydro provided the BCUC with both its 11

overall First Nations mandate,25 which includes all accommodation costs, and the quantum 12

BC Hydro has offered Kwantlen as part of the proposed Benefits Agreement.26 13

While BC Hydro acknowledges the potential risk of cost increases, the Expected Amount 14

includes a level of contingency that BC Hydro believes is sufficient for and consistent with a 15

P50 level cost estimate. BC Hydro notes that Pacific Liaicon and Associates Inc. (Pacific 16

Liaicon), who carried out a third party review of the cost estimate, contracts and schedule 17

(Pacific Liaicon Report),27 found that neither the Expected nor the Authorized Amount was 18

too low or inadequate to address the Project.28 19

As noted in Ex. B-15, BC Hydro is seeking a CPCN on the basis of, among other things, the 20

Expected Amount because this is consistent with BC Hydro’s Capital Project Filing 21

Guidelines, which provide that the form of Board approval should govern BC Hydro’s capital 22

project-related filings with the BCUC. The Board approved Project expenditures to the 23

Expected Amount; the Board resolution specifically provides that proposed expenditures 24

beyond the Expected Amount require review and approval(s) by the Board Capital 25

24 Ex. B-7-2, BC Hydro’s response to BCOAPO IR 1.14.1. 25 Ex. B-7-1, BC Hydro’s confidential response to BCUC IR 1.14.5. 26 Ex. B-12, Confidential Attachment 1 to BC Hydro IR 1.1 to Kwantlen. 27 Ex. B-10-2, Attachment 1 to BC Hydro’s response to BCOAPO IR 2.4.1. 28 Ex. B-1, pg. 5-4, lines 17 to 21.



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Committee.29 BC Hydro also notes that pursuant to its requested Order, it will submit 1

semi-annual reports to the BCUC which will track actual Project expenditures against the 2

Expected Amount. In addition, expenditures in excess of the Expected Amount can be 3

reviewed in future Revenue Requirement Applications (RRAs).30 4

2.1.6 Consultation 5

As stated above, BCOAPO concludes that “it does appear likely that based on the record 6

[BC Hydro] has fulfilled their duty of consultation to the degree required under current law” 7

(pg. 9). BCOAPO also notes at pg. 9 that BC Hydro has: 8

… made efforts to identify the Aboriginal peoples potentially entitled to 9 consultation and to engage those parties through meetings and the 10 provision of information, providing to the Kwantlen capacity funding for 11 a Traditional Use Study to inform the consultation and accommodation 12 process, offering ongoing capacity funding payments and employment 13 opportunities, the incorporation of some recommended environmental 14 mitigation measures in the Project, taking steps to avoid or mitigate 15 impacts to known Kwantlen archaeological and burial sites and a 16 funding commitment to a project intended to house artifacts 17 uncovered as a result of work completed in anticipation of the Project 18 amongst other actions. The Utility has also expressed that it remains 19 hopeful a resolution is possible and that their obligation to consult and 20 perhaps accommodate affected Aboriginal peoples like the Kwantlen 21 in this case is ongoing. 22

BCOAPO desires to reduce First Nation-related risk by having consultation completed prior 23

to the issuance of a CPCN. BC Hydro notes that BCOAPO recognizes that this is not a legal 24

requirement (as described below). BC Hydro also notes that it needs to balance reduction of 25

such risk with cost and project development. For example, reducing such risk through a 26

Benefits Agreement or otherwise would likely result in BC Hydro filing for a CPCN for a 27

project much later in the project life cycle because detailed design, additional field work and 28

discussion with First Nations would be required to identify all possible accommodation 29

measures, regardless of the seriousness of the impact a measure is intended to address, 30

which is inconsistent with the findings of courts. The delay would likely result in BC Hydro 31

spending more money in advance of a BCUC review. In BC Hydro’s view, generally 32

29 Ex. B-15, pg. 2, lines 14 to 22. 30 Ex. B-18, BC Hydro’s response to BCUC IR 3.2.1, pg. 2.



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speaking consultation and accommodation can and should continue in parallel with the 1

BCUC regulatory review process and after a CPCN is granted for a project. This is 2

particularly so with sustaining capital projects such as the Project that are needed to 3

address significant societal issues including public safety, worker safety, environmental and 4

other risks. 5

In any event, it was not possible to reach agreement with Kwantlen prior to filing the 6

Application in this case due to, among other things, delays resulting from Kwantlen’s desire 7

to address broader relationship issues at the expense of Project-related consultation;31 8

delays in Kwantlen’s selection of an environmental consultant;32 delays in arriving at a 9

Capacity Funding Agreement (CFA);33 and delays in the tabling of a Benefits Agreement 10

proposal at Kwantlen’s request.34 The consultation process with Kwantlen has now 11

exceeded five years. As acknowledged by the courts, at some point a decision must be 12

made. The Supreme Court of Canada (SCC) in Beckman v. Little Salmon/Carmacks First 13

Nation35 stated: 14

Somebody has to bring consultation to an end and to weigh up the 15 respective interests, having in mind the Yukon public policy favouring 16 agricultural development where the rigorous climate of the Yukon 17 permits. The Director is the person with the delegated authority to 18 make the decision whether to approve a grant of land already 19 surrendered by the First Nation. The purpose of the consultation was 20 to ensure that the Director’s decision was properly informed. 21 [Emphasis in the original]. 22

Pursuant to section 5 of the Hydro and Power Authority Act,36 the Board is charged with 23

supervising the management of the affairs of BC Hydro. The Board concluded that among 24

other things in the context of the consultation carried out to date with Kwantlen, it was 25

honourable to proceed with the filing of the Application for a sustaining capital project 26

required to address significant public safety risks entailing only a small change to the 27

existing Ruskin Facility footprint confined to a previously disturbed area, and which after 28

31 Ex. B-16, pg. 5, lines 4-18. 32 Ibid, pg. 8, lines 17-22. 33 Ibid, pg. 3, lines 19-23. 34 Ibid, pg. 4, lines 13-19. 35 2010 SCC 53, para. 84; copy at Tab 23 of the FS Book of Authorities. 36 R.S.B.C. 1996, c.212; copy at Tab 7 of the FS Book of Authorities.



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implementation will result in significant environmental and operational benefits. Refer to 1

Part 3 below for additional detail. 2

BCOAPO recognizes that BC Hydro’s position is supported in law, namely: (1) the duty to 3

consult does not need to be discharged prior to the issuance of a CPCN; (2) there is no 4

requirement that the parties come to an agreement; (3) consultation does not need to be 5

perfect; and (4) an application does not have to be decided by the BCUC in the interests of 6

First Nations. Where, as in the case of the Project, societal interests outweigh the potential 7

for impacts on First Nations’ interest, it remains in the public interest to approve the 8

Application. 9

2.2 BCSEA 10

BCSEA supports the Project as proposed. BCSEA takes no position with respect to the 11

adequacy of consultation (BCSEA Final Submission, pg. 1). BCSEA agrees with BC Hydro 12

that the “Project is the most cost-effective way to meet the need for energy, capacity and 13

transmission support” and that the “Project is superior to the alternatives across a wide 14

range of assumptions regarding the value of energy, capacity and transmission support”. 15

The evidence is clear that the Project is robust because it is cost-effective across a large 16

number of firm energy, non-firm energy and dependable capacity pricing scenarios; refer to 17

section 4.2.1(a) of the BCH Final Submission, and to sections 4.2.1 and 4.2.2 below. 18

Regarding TDG, BCSEA supports BC Hydro’s position that TDG is not a Project-related 19

impact. BCSEA states that “TDG is an ongoing environmental challenge at the Ruskin 20

Facility but not one that weights against the Project being in the public interest and not a 21

factor that negates the Project being in the public interest”. Thus Kwantlen is alone in its 22

view of TDG; refer to section 3.5.2(b). 23

2.3 CECBC 24

CECBC supports the Project as proposed (pg. 9). In addition, CECBC agrees with BC Hydro 25

that consultation with Kwantlen has been adequate to this stage and that BC Hydro has 26

approached such consultation in an “honourable” manner (pg. 8). In this section BC Hydro 27

addresses an assortment of issues raised by CECBC in its Final Submission. 28



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2.3.1 Legal Context/Jurisdictional Issues 1

CECBC generally supports BC Hydro’s legal analysis set out in sections 2.1 and 2.2 of the 2

BCH Final Submission. There are two possible exceptions: (1) the CECBC observation with 3

respect to Kwantlen and BC Hydro delays (pg. 2) which is not a legal or jurisdictional issue 4

but rather an evidentiary one, and is addressed in section 2.3.7 below; and (2) CECBC 5

questions BC Hydro’s position in section 2.2.3 of the BCH Final Submission that the BCUC 6

does not have the jurisdiction through the imposition of CPCN conditions under 7

subsection 46(3) of the UCA to direct post CPCN-consultation activities, although CECBC 8

also questions whether it would be wise for the BCUC to exercise such jurisdiction if it has it 9

(pg. 3). BC Hydro notes that BCOAPO supports BC Hydro’s view that the “the BCUC lacks 10

the necessary jurisdiction to direct [BC Hydro’s] consultation with Aboriginal peoples such as 11

the Kwantlen in this process” (BCOAPO Final Submission, pg. 2). This issue is addressed in 12

reply to Kwantlen in section 3.6. 13

2.3.2 British Columbia’s Energy Objectives – Self Sufficiency 14

CECBC agrees with BC Hydro that the Project aligns with and advances the four CEA 15

British Columbia’s energy objectives set out in section 3 of the BCH Final Submission; 16

CECBC uses the terms “complimentary” and “consistent with” the British Columbia’s energy 17

objectives. BC Hydro notes that CECBC refers to self-sufficiency as a British Columbia’s 18

energy objective (pg. 3) and as a “policy” (pg. 8). Self-sufficiency is not only a British 19

Columbia’s energy objective; it is a legally binding requirement on both BC Hydro (pursuant 20

to subsection 6(2) of CEA) and the BCUC (pursuant to Special Direction No. 1037 (SD 10)). 21

Refer to section 2.2.4 of the BCH Final Submission. Accordingly, CECBC’s statement at 22

pg. 8 under “Risk Management” that “the self-sufficiency policy is demonstrably not in the 23

public interest” is not relevant to the proceeding. In any event, like BCOAPO, CECBC takes 24

comfort in the Ex. B-15 analysis that demonstrates the Project is cost-effective under an 25

‘average water/no insurance scenario’ (pg. 8). Finally, BC Hydro submits there is no 26

evidence on the record to support CECBC’s contention that Demand Side Management 27

(DSM) may be more cost-effective than the Project; the only evidence on the record relates 28

37 B.C. Reg. 245/2007, copy at Tab 5 of the FS Book of Authorities.



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to DSM deliverability risk.38 Given that there is a DSM-related section 44.2 UCA expenditure 1

determination request before the BCUC as part of the F12-F14 RRA, BC Hydro urges the 2

BCUC to make no findings in respect of DSM cost-effectiveness as part of this proceeding. 3

2.3.3 Need for the Project/Project Scope 4

CECBC accepts the need for the Project and the Project scope as proposed, including the 5

Powerhouse Work and Switchyard Work (pgs. 4, 5 and 7). BC Hydro notes that CECBC 6

rejects both deferral of the Powerhouse Work and a piecemeal approach to address the 7

Powerhouse’s unsatisfactory condition (pgs. 4 and 6), as a piecemeal approach “may run 8

significant risks of interactions between components of the Project which could have 9

unintended consequences”. BC Hydro submits that CECBC’s position is supported by the 10

evidence such as R.W. Beck, Inc.’s (RW Beck) “Ruskin Power Plant Assessment Report” 11

(RW Beck Report).39 CECBC further submits that it is important to take a “holistic approach” 12

to the Powerhouse and the Project “so as to not make changes with false economies”. Thus 13

CECBC does not agree with AMPC’s position regarding the Powerhouse; refer to 14

section 4.1.3. 15

2.3.4 Alternatives to the Project 16

Like BCSEA and BCOAPO, CECBC concludes that “the Ruskin Project is the most 17

cost-effective option among the alternatives reviewed” (pg. 6). CECBC makes two 18

observations with which BC Hydro agrees: 19

Use of $55 per kilowatt year (kW-year) (F$2011) - based on the Unit Capacity Cost 20

(UCC) of Revelstoke Unit 6, the lowest cost B.C.-based capacity supply alternative - is 21

a conservative basis for valuing the Ruskin Facility post-Project’s dependable capacity; 22

in CECBC’s words this value “is highly likely too conservative” (pg. 5). There is no 23

guarantee that Revelstoke Unit 6 will be built, and the Project may defer higher priced 24

capacity resources such as Simple Cycle Gas Turbine facilities (SCGTs). Refer to 25

section 4.2.2; 26

38 Ex. B-10, Attachment 1 to BC Hydro’s response to BCUC IR 2.65.1, pg. 14 of 40, and Ex. B-10-2, BC Hydro’s response to CEABC IR 2.11.1, pg. 5 of 5. 39 Appendix B-3 to Ex. B-1, pgs. 9-10 of 54.



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That the value of the Project is understated vis-à-vis both the Decommissioning 1

Alternatives B, C and D and the De-Rating Alternatives A and E, and IPPs, because 2

the economic analysis does not account for the benefits of its Lower Mainland location 3

and in particular the role of the Ruskin Facility in enhancing the reliability of the 4

BC Hydro integrated system; providing voltage support for the Lower Mainland 5

69 kilovolt (kV) transmission network; and reducing the impact of transmission failures. 6

Refer to section 4.1.2(c) of the BCH Final Submission. If Alternatives B, C or D in 7

particular were to be implemented, new transmission plans with associated costs 8

would be required, and these costs have not been factored into the alternatives 9

analysis at this time.40 10

2.3.5 Project Cost 11

CECBC submits that “BC Hydro’s cost estimating procedures and processes have provided 12

evidence that the cost estimates used are reasonable and prudent practice” (pg. 7). CECBC 13

acknowledges that the CPCN proceeding is not “the appropriate or best place to pursue” 14

capital overhead allocation issues. BC Hydro has indicated that the best forum for reviewing 15

this issue is BC Hydro’s RRAs, as this is not a Project-specific issue.41 16

2.3.6 First Nation Consultation 17

CECBC submits that BC Hydro has adequately consulted with First Nations, including 18

Kwantlen, to this stage of the Project (pgs. 8-9). At pg. 2 CECBC notes that there were a 19

number of instances where BC Hydro provided materials to First Nations and then did not 20

hear back or receive a response, and that periodic follow-up would represent a better ‘good 21

faith’ process. It is difficult for BC Hydro to respond given that CECBC has not provided any 22

specific examples. In fairness to CECBC, it does not have access to the confidential meeting 23

minutes or the consultation log. The meeting minutes and the consultation log42 contain 24

numerous examples of BC Hydro diligently following-up with Kwantlen on outstanding 25

matters. Refer, for example to the draft Project Description provided to Kwantlen on 3 26

October 2008 prior to BC Hydro submitting it to the Environmental Assessment Office (EAO) 27

40 Ex. B-7-2, BC Hydro’s response to CECBC IR 1.6.2. 41 Ex. B-18, BC Hydro’s responses to BCUC IRs 3.1.4 and 3.1.6; Ex. B-15, pg. 4, lines 5-25. 42 Ex. B-7-1, Confidential Attachment 1 to BC Hydro’s response to BCUC IR 1.17.1.



Page 22

as part of BC Hydro’s application to voluntarily opt-in to BCEAA. Another example is with 1

respect to the draft SEIAM provided to Kwantlen on 10 August 2010. This issue is also 2

addressed sections 3.4 and 3.5 below. 3

2.4 MRCC 4

MRCC supports the Project as proposed (MRCC Final Submission, pg. 2). BC Hydro agrees 5

with MRCC’s submission that the BCUC, as part of determining whether the Project is 6

cost-effective as compared to Decommissioning Alternatives C and D, which drain Hayward 7

Lake Reservoir, must take into account that Decommissioning Alternatives C and D 8

eliminate the current water supply for the Ruskin Townsite; negatively impact regional 9

tourism; and eliminate grants-in-lieu of municipal taxes payable to Mission, among other 10

negative impacts. Refer to sections 4.2.1(b) and (c) of the BCH Final Submission. 11

2.5 Mr. Ruskin 12

Mr. Ruskin, a former director of planning for BC Hydro’s predecessor, BC Electric,43 13

supports the Project as proposed (Ex. C11-6). Like CECBC, Mr. Ruskin emphasizes the 14

location of the Ruskin Facility in the Lower Mainland; refer to Ex. C11-6 and Ex.C11-2, 15

pgs. 2 and 3. As laid out in section 4.2.1(c) of the BCH Final Submission, BC Hydro agrees 16

that the location of the Ruskin Facility is a significant consideration in the overall 17

determination of the cost-effectiveness of the Project. 18

3 Reply to Kwantlen 19

Kwantlen is the only intervener to argue that BC Hydro has not fulfilled its duty to consult 20

with respect to the Project. BCOAPO, CECBC and AMPC (discussed below in section 4.1.7) 21

support BC Hydro’s position that BC Hydro has adequately consulted with Kwantlen to this 22

stage of the Project; BCSEA takes no position on this issue and the other interveners make 23

no submissions in this regard. 24

BC Hydro submits that the essence of Kwantlen’s argument is that the BCUC should not 25

issue a CPCN or should suspend the Application for an undetermined period of time 26

because consultation between BC Hydro and Kwantlen is not complete and more time is 27

43 Ex. C11-2, pg. 1.



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needed to in effect agree on key issues such as alternatives to the Project and economic 1

compensation. Kwantlen’s submission is based on: 2

(1) The fact that CPCN represents the only major regulatory approval for the Project to 3

proceed. This is addressed in section 3.2; 4

(2) Kwantlen’s characterization that the duty to consult is at the high end of the Haida v. 5

British Columbia (Minister of Forests)44 (Haida) spectrum. BC Hydro correctly scoped the 6

duty to consult as towards the medium range of Haida scale. The principal underpinning of 7

BC Hydro’s position is that the residual impacts of the Project are low to none, and Kwantlen 8

has provided no response to this as described in section 3.3.1 below. Even if the BCUC 9

concludes that Kwantlen’s strength of claim (SoC) is high as opposed to reasonable as 10

found by BC Hydro, the scope of the duty to consult remains at the medium range of the 11

Haida scale because of the low incremental Project impacts. Refer to sections 3.3.1 through 12

to 3.3.3. In the alternative, as is demonstrated in section 3.5, the consultation that has 13

occurred with Kwantlen to date has met the high end of the Haida spectrum and constitutes 14

“deep consultation” as defined by the SCC. BC Hydro is committed to undertake further 15

consultation with Kwantlen, including negotiations respecting the tabled Benefits Agreement, 16

throughout Project construction and implementation. 17

For ease of reference BC Hydro’s reply to Kwantlen’s assertions is structured along the lines 18

of the Kwantlen Final Submission. 19

3.1 The Duty to Consult – Legal Principles 20

BC Hydro does not dispute some of the general summary of the law regarding the duty to 21

consult and accommodate that Kwantlen provides in paras. 4-10 of its Final Submission. 22

However, BC Hydro submits that the referenced cases should speak for themselves and 23

that the BCUC should be wary of relying on paraphrases or summaries (from any party) that 24

may not capture the full nuance of the court’s decision. In addition, BC Hydro respectfully 25

submits that, in certain places, further clarification or context may be useful to the BCUC in 26

considering Kwantlen’s summary of the law as in places it is not consistent with the case 27

law. 28

44 2004 SCC 73, copy at Tab 14 of the FS Book of Authorities.



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In para. 7, Kwantlen states “legally sufficient consultation cannot be achieved through 1

positional bargaining”. Kwantlen cites Haida in support of this paragraph. However, what the 2

SCC was directing was reasonable good faith attempts by the Crown, and went on to state: 3

Mere hard bargaining, however, will not offend an Aboriginal people’s 4 right to be consulted (Haida, para. 42). 5

Also missing from Kwantlen’s argument is the requirement in Haida that both sides must in 6

good-faith commit to a meaningful process of consultation. As stated in Haida, Aboriginal 7

claimants “must not frustrate the Crown’s reasonable good faith attempts” to consult, “nor 8

should they take unreasonable positions to thwart government from making decisions or 9

acting in cases where, despite meaningful consultation, agreement is not reached” 10

(para. 42). In addition, BC Hydro notes the following with respect to Kwantlen’s quote of 11

para. 42 of Haida to the effect that the Crown’s obligation to conduct itself in good faith and 12

with the intention of “substantially addressing [Aboriginal] concerns” as they are raised. First, 13

this quote needs to be considered alongside the SCC’s many statements that consultation 14

and reconciliation are also a question of balance between the aboriginal rights at issue and 15

other societal interests. Refer to section 2.1.3(d) of the BCH Final Submission for case law 16

references. Second, the key to this quote is that the First Nation must raise the concern; this 17

was not done with respect to alternatives to the Project until the Kwantlen-BC Hydro meeting 18

of 27 July 2011, just prior to the filing of Kwantlen evidence on 29 July 2011. In BC Hydro’s 19

respectful submission, this is too little, too late and is not in accordance with the reciprocal 20

duties on Kwantlen to engage in consultation. Refer to section 3.4 below. 21

With respect to para. 8, BC Hydro does not accept Kwantlen’s description of what “deep 22

consultation” entails; refer to sections 3.3.4 and 3.5. 23

In para. 10, Kwantlen cites para. 82 of the decision of Phelan J. of the Federal Court Trial 24

Division in Dene Tha’ v. Canada (Minister of Environment)45 (FCTD Dene Tha’ Decision). 25

Kwantlen does note (in footnote 8) that this decision was appealed to the Federal Court of 26

Appeal (FCA) (Canada (Environment) v. Imperial Oil Resources Ventures Ltd.)46 (FCA Dene 27

Tha’ Decision). However, what Kwantlen fails to note is that, while the appeal was 28

45 2006 FC 1534; extracts at Tab 3 of the Kwantlen Book of Authorities. 46 2008 FCA 20; copy at Tab 2 of the Reply Book of Authorities.



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dismissed, the FCA stated: “[w]e should not be taken to agree with every statement made by 1

Justice Phelan in his reasons” (FCA Dene Tha’ Decision, para. 11). The FCA also stated 2

that “this case does not establish a new principle relating to the determination of when the 3

duty to consult arises, or the content of the duty to consult” (FCA Dene Tha’ Decision, 4

para. 8). The FCA stated: 5

“This case turns entirely on its own facts. Having regard to the 6 evidence on the record, it was open to Justice Phelan to find as a fact 7 that, given the unique importance of the Mackenzie Gas Pipeline, and 8 the particular environmental and regulatory process under which the 9 application for approval of the Mackenzie Gas Pipeline would be 10 considered…the process itself had a potential impact on the rights of 11 the Dene Tha’.” [Emphasis added] (para. 9). 12

There is no parallel in this to the case at bar. Unlike the Co-operation Plan considered in 13

Dene Tha’, the CPCN is not the means by which a whole process will be managed. The 14

Co-operation Plan considered in Dene Tha’ involved a unique (project specific) tribunal that 15

was created specifically for the review of a project of “unique importance” (the Mackenzie 16

Gas Project). The FCA at para. 3 paraphrases the FCTD’s finding that the Co-operation 17

Plan was an essential feature of the construction of the Mackenzie Gas Project and thus 18

formed part of the conduct contemplated by the Crown. There is no analogy here, where the 19

well-established and independent regime of the BCUC and the UCA are being employed 20

without variation or embellishment. 21

BC Hydro has concerns with Kwantlen’s statement in para. 10 that “consultation cannot be 22

reduced to seeking mitigation of adverse effects to specific Aboriginal rights or practices”. 23

The question is whether there is a claim or right that potentially may be adversely impacted 24

by the current proposed Crown conduct or decision in question. The SCC in Rio Tinto Alcan 25

Inc. v. Carrier Sekani Tribal Council (Carrier Sekani)47 found that the duty consult is 26

grounded in the need to protect Aboriginal rights and to preserve the future use of the 27

resources claimed by aboriginal peoples while balancing countervailing Crown interests; the 28

SCC stated that “cut-off from its roots in the need to preserve Aboriginal interests, 29

[consultation’s] purpose would be reduced to giving one side in the negotiating process an 30

advantage over the other”. 31

47 2010 SCC 43; copy at Tab 15 of the FS Book of Authorities.



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3.2 The BCUC’s Role in Relation to the Duty 1

In para. 11(a) Kwantlen seeks to expand the BCUC’s statutory mandate on the grounds that 2

there is no other regulatory body or government agency (through an EA, for example) that 3

will review the Project. In particular, Kwantlen submits that because the CPCN is the “only 4

regulatory approval required by BC Hydro prior to constructing the Project”, and because the 5

BCUC “is the only body charged with reviewing and approving this Project”, the BCUC’s 6

assessment of BC Hydro’s consultation with Kwantlen to this stage somehow must be more 7

rigorous than when a project does trigger an EA and should entail an expanded scope to 8

“include all aspects of the Project development from the initial planning stages through to 9

construction and operational issues”.48 BC Hydro respectfully submits that it would be a 10

perverse outcome if low environmental impact projects such as the Project which do not 11

trigger either a federal or provincial EA and require only a small number of construction 12

period-related environmental permits should be subject to greater scrutiny by the BCUC 13

than projects which do trigger EAs. In any event the Kwantlen submission is: (1) at odds with 14

the case law; (2) factually incorrect; and (3) is an argument that has already been made by 15

Ktunaxa Nation Council (KNC) and rejected by the BCUC in the Columbia Valley 16

Transmission Project (CVT) proceeding. Each of these points is addressed in turn. 17

Kwantlen’s position is contrary to the finding of the SCC in Carrier Sekani: 18

B. The Role of Tribunals in Consultation 19

[55] The duty on a tribunal to consider consultation and the scope of 20 that inquiry depends on the mandate conferred by the legislation that 21 creates the tribunal. Tribunals are confined to the powers conferred on 22 them by their constituent legislation: R. v. Conway, 2010 SCC 22, 23 2010 SCC 22, [2010] 1 S.C.R. 765. It follows that the role of particular 24 tribunals in relation to consultation depends on the duties and powers 25 the legislature has conferred on it. … 26

[62] … administrative tribunals are confined to the powers conferred 27 on them by the legislature, and must confine their analysis and orders 28 to the ambit of the questions before them on a particular application… 29

48 Kwantlen refers to Kwikwetlem v. British Columbia (Utilities Commission) (Kwikwetlem) 2009 BCCA, copy at Tab 20 of the FS Book of Authorities to the effect that the B.C. Court of Appeal (BCCA) observed in respect to the Interior-to-Lower Mainland Project (ILM) that a rigorous assessment of the adequacy of consultation is required given that the CPCN is a vital step, and Kwantlen goes on to claim that “this applies with added force in the present Application” because there is no EA review of the Project.



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[63] … If the tribunal structure set up by the legislature is incapable of 1 dealing with a decision’s potential adverse impacts on Aboriginal 2 interests, then the Aboriginal peoples affected must seek appropriate 3 remedies in the courts: Haida Nation, at para. 51. [Emphasis added]. 4

As set out in section 2.1.3(b) of the BCH Final Submission, while it is correct that due to its 5

low environmental impact in the case of the Project a CPCN is the only significant regulatory 6

approval or permit required, there are a small number of other review and permitting 7

processes that would occur after the granting of a CPCN, such as submission of the Project 8

Environmental Management Plan (EMP) to DFO and the B.C. Ministry of Environment 9

(MoE) for review prior to BC Hydro proceeding with the Project. More materially, it is not 10

correct that the BCUC is the only regulatory body/government agency charged with 11

reviewing the Project. Kwantlen overlooks that in the case at hand, environmental reviews of 12

the Project have occurred before the CPCN process, and ignores the fact that several 13

government agencies have already reviewed the Project and in the case of some of these 14

agencies, retain on-going jurisdiction with respect to the Project, including: 15

DFO, charged with reviewing the Project pursuant to the Canada Fisheries Act.49 DFO 16

began its review of the Project in March 200750 and continued this review up to the 17

issuance of the DFO Letter of Advice on 12 May 2010 pursuant to which DFO 18

concluded that the Project would not cause the harmful alteration, disruption or 19

destruction of fish habitat provided that mitigation agreed to in writing is carried out.51 20

DFO retains on-going supervision over the Project;52 21

EAO, which reviewed the Project Description submitted by BC Hydro pursuant to its 22

voluntary application to opt-in to the provincial EA regime under subsection 7(1) of 23

BCEAA, and after review of the Project Description, determined that a provincial EA of 24

the Project was not warranted given the Project will not cause significant adverse 25

49 R.S.C. 1985, c.F-14. 50 Ex. B-10-2, BC Hydro’s response to Kwantlen IR 2.3.4, pg. 3 of 4; Ex. B-7-2, BC Hydro’s response to Kwantlen IR 1.1.1. 51 Ex. B-1, pg. 2-39, lines 9-11 and footnote 13. 52 Ex. B-18, BC Hydro’s response to Kwantlen IR 3.2.1.



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environmental effects and that the Ruskin Facility post-Project would continue to 1

operate within the WUP and relevant Water Licence parameters.53 2

MoE, the Canadian Wildlife Service (of Environment Canada) and Transport Canada have 3

also reviewed the Project and have determined that the Project does not require approval 4

under the various statutes for which they are responsible, although in the case of MoE some 5

permitting related to the Project construction period may be required for short term use of 6

water and/or waste discharge.54 BC Hydro respectfully submits that the BCUC must 7

acknowledge that these reviews have taken place, and must respect the decisions made, 8

and in particular the determinations made by DFO to date. The BCUC’s assessment of the 9

adequacy of consultation must not be used as a backdoor to second guess DFO, who alone 10

is charged with administering the fish protection and fish habitat provisions of the Fisheries 11

Act and who will decide with respect to the development of a site-specific TDG guideline. 12

The Project is not exempted from an EA requirement due to some subterfuge, or a loophole 13

exploited by BC Hydro: BC Hydro voluntarily submitted an application to the EAO to opt-in to 14

a BCEAA review which was refused. The fact that the Project does not need an EA is not an 15

argument that the Project needs additional environmental scrutiny from the BCUC; it is 16

evidence of the Project’s low environmental impact that allows the BCUC to properly 17

concentrate on the public interest criteria it is charged to consider. 18

In the CVT proceeding, KNC also argued that the BCUC should permit more time for a 19

number of consultation and accommodation-related discussions because among other 20

things a CPCN represented the only major regulatory approval required for CVT to proceed. 21

As is evident in the BCUC CVT Decision,55 the BCUC undertook a scope of consultation 22

assessment on the Haida scale to determine whether BC Hydro’s consultation with KNC up 23

to the point of the BCUC’s decision was adequate, and in the reasons for decision did not 24

expand the scope of its assessment merely because the CPCN was the only significant 25

regulatory approval required for CVT. In particular, the BCUC did not require that 26

negotiations concerning a Benefits Agreement be completed or substantially completed prior 27

to the granting of a CPCN. 28

53 Ex. B-1, pg. 2-40, lines 5-14; and 54 Ex. B-1, sections 4.3.2.1 and 2.7.3; and Ex. B-7-2, BC Hydro’s response to Kwantlen IR 1.8.1. 55 Refer to extracts of the CVT Decision at Tab 17 of the FS Book of Authorities.



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In BC Hydro’s respectful submission, the fact that a CPCN is the only significant regulatory 1

approval required for the Project is a powerful indicium that the potential residual 2

environmental impacts of the Project are low to none, but does not serve to change the 3

nature of the BCUC’s assessment of the adequacy of consultation, and in particular is not a 4

reason to accede to Kwantlen demands that more time is required for discussions 5

concerning the Benefits Agreement proposal tabled by BC Hydro,56 or other demands made 6

by Kwantlen that consultation should be completed prior to the issuance of a CPCN. 7

Kwantlen’s position is not supported in law. BC Hydro urges the BCUC to resist Kwantlen’s 8

call to expand its mandate on the spurious notion that it “is the only body charged with 9

reviewing and approving this Project …”. 10

3.3 Scope and Content of the Duty to Consult 11

BC Hydro concludes that the scope of the duty to consult Kwantlen is towards the medium 12

range of the Haida spectrum; refer to the BCH Final Submission, section 5.2.1. Kwantlen 13

submits that BC Hydro has not correctly assessed the scope of the duty to consult with 14

Kwantlen, and that BC Hydro owes Kwantlen a process of “deep consultation”. The 15

Kwantlen supposition rests almost entirely on artificially expanding the Project environmental 16

impacts to include the effect of continuing the historic impact of the entire Ruskin Facility into 17

the future. This is addressed in section 3.3.1 below. Of lesser importance is the Kwantlen 18

argument with respect to its SoC, because as stated in the BCH Final Submission, given 19

that the residual impacts of the Project are low to none, for purposes of determining the 20

scope of the duty to consult it does not matter if the Kwantlen SoC is reasonable as found by 21

BC Hydro or strong as asserted by Kwantlen; this issue is addressed in section 3.3.3. 22

Section 3.3.2 addresses the contentions contained in Kwantlen’s Final Submission at 23

paras. 13 through 20 with respect to preparing an assessment of the scope of the duty to 24

consult. Section 3.3.4 concludes this subsection with observations concerning the meaning 25

of “deep consultation”. 26

56 A copy of the Benefits Agreement is found at Ex. B-12, Confidential Attachment 1 to BC Hydro IR 1.1 to Kwantlen.



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3.3.1 Environmental Impacts 1

Kwantlen provides no response with respect to the potential environmental impacts of the 2

Project itself. The reason for this is clear – the evidence is overwhelming that the residual 3

effects of the Project are low to none. As a point of clarification, while Kwantlen states at 4

paras. 30 and 36 that BC Hydro focused on the construction-related impacts, the record is 5

clear that BC Hydro examined both the construction period and operational impacts of the 6

Project. As set out in section 5.2.1(b) of the BCH Final Submission, there will be no changes 7

in the Ruskin Facility resulting in negative environmental impacts due to the implementation 8

of the Project; to the contrary, the Project yields significant environmental benefits. 9

Instead, in paras. 29 to 37 Kwantlen asserts that BC Hydro took a “narrow view” of the 10

Project-related environmental impacts even though consistent with CEAA and BCEAA 11

methodology Hemmera and BC Hydro examined the incremental Project impacts against 12

the existing environmental baseline (BCH Final Submission, pages 58 to 59); Kwantlen 13

resorts to a contrived expansion of the environmental impacts to include the effect of 14

continuing the historic impact of the entire Ruskin Facility into the future on the basis that 15

BC Hydro faces a stark choice between implementing the Project or fully decommissioning 16

the Ruskin Facility and dewatering Hayward Lake Reservoir as envisioned by 17

Decommissioning Alternative C, and it is only in this way that Kwantlen is able to claim that it 18

is owed deep consultation. If the environmental impacts are correctly assessed as the 19

incremental Project impacts, Kwantlen fails in this submission and the scope of the duty to 20

consult is towards the medium range of the Haida spectrum because, even assuming a 21

strong SoC as asserted by Kwantlen, the residual environmental impacts of the Project are 22

low to none, and accordingly the Project will lead at most to low impacts on any of 23

Kwantlen’s asserted rights. Refer to section 5.2.1(b) of the BCH Final Submission in its 24

entirety. 25

BC Hydro and Kwantlen agree that historical grievances do not suffice to trigger the duty to 26

consult.57 The parties further appear to agree that the duty to consult is only triggered “if the 27

present decision has the potential of causing a novel adverse impact on a present claim or 28

57 BCH Final Submission, pg. 12, ln. 25-26; Kwantlen Final Submission, para. 37.



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existing right.”58 It therefore follows that consultation applies only in respect of those novel 1

impacts. Where the parties disagree is what constitutes a “novel adverse impact”. 2

In essence, it is Kwantlen’s position that “novel impacts” include situations where but for the 3

currently contemplated decision, the existing impacts would not continue. In other words, the 4

decision to rehabilitate/rebuild parts of the Ruskin Facility through the Project has the effect 5

of continuing the historic impact of the entire Ruskin Facility operation into the future and is 6

therefore a novel impact. BC Hydro disagrees with this position—both at law and on the 7

facts of this case. Its response to this argument is twofold: 8

The jurisprudence provides that: (1) rebuilding/expanding/altering an existing, 9

permitted facility does not have the effect of continuing existing impacts arising from 10

the existing, permitted facility; and (2) the environmental impact for consultation 11

purposes is that arising from the incremental effects of the rebuild/expansion/alteration 12

only; 13

In any event, Kwantlen’s argument is dependent on a specific set of facts that are not 14

present in the current case. 15

Below BC Hydro addresses each of these points in turn. 16

(a) Lack of Support at Law 17

The critical difference between the parties’ interpretation of “novel impacts” is the situation 18

against which new impacts arising from the Project should be assessed. Kwantlen would 19

have the BCUC measure the impacts arising from the Project by contrasting the physical 20

state of the Ruskin Facility after the Project compared to the original state of the area as it 21

existed without the Ruskin Facility in 1929. Kwantlen does so on the basis of its (incorrect) 22

assertion that, but for the Project, the Ruskin Facility including the main dam and Hayward 23

Lake Reservoir would be at the end of their life and as a result, the entire Ruskin Facility 24

would have to be removed, Hayward Lake Reservoir drained and the area restored to its 25

pre-development state. BC Hydro addresses the inaccuracy of Kwantlen’s factual 26

assumptions below. This section discusses how Kwantlen’s position is not supported at law. 27

58 BCH Final Submission, pg. 12, ln. 25 to pg. 13, ln. 10; Kwantlen Final Argument, para. 37; Carrier Sekani, supra note 47 at para. 49.



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The SCC in Carrier Sekani was clear that: 1

[49] The question is whether there is a claim or right that potentially 2 may be adversely impacted by the current government conduct or 3 decision in question. … To trigger a fresh duty of consultation — the 4 matter which is here at issue — a contemplated Crown action must 5 put current claims and rights in jeopardy. (Para. 49; italics in original, 6 underlining emphasis added). 7

Kwantlen is not exercising “current claims and rights” in respect of the land under Hayward 8

Lake Reservoir (just as the Carrier Sekani was not exercising “current claims and rights” in 9

respect of the Nechako fishery) in any way that may be adversely impacted by the BCUC’s 10

decision to issue a CPCN for the Project. 11

BC Hydro submits that the assessment of the seriousness of the impacts needs to be 12

measured against the current (impacted) environment and not against the original (or 13

non-impacted) environment. Such an approach provides a proper assessment of the true 14

potential impacts arising from the current decision and is in line with EA methodology. 15

BC Hydro finds support for its position in a recent case from the B.C. Supreme Court 16

(BCSC), Louis v. British Columbia (Energy, Mines and Petroleum Resources) (Endako 17

Mine), where Justice Crawford applied the principles from Carrier Sekani and limited the 18

scope of consultation to impacts from the expansion of an existing mine operation rather 19

than including the impacts of the existing mining operation:59 20

Endako Mine involved a rebuild, expansion and extension of facilities associated with 21

an existing mining operation. Similarly, the case before the BCUC involves the Project, 22

which entails the rehabilitation/replacement of the Powerhouse and the replacing of the 23

spillway gates and piers and rehabilitation of the Left and Right Abutments, all in 24

association with an existing hydroelectric operation, the Ruskin Facility; 25

In Endako Mine, the proponent decided for commercial reasons to build a new, larger, 26

more technologically advanced mill adjacent to its existing mill. Similarly, here 27

BC Hydro has for public and worker safety, economic and environmental risks reasons 28

59 2011 BCSC 1070, copy at Tab 26 of the FS Book of Authorities.



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decided to refurbish the Upper Dam and Powerhouse almost entirely within the existing 1

Ruskin Facility footprint; 2

In Endako Mine, one of the effects of the rebuild was to push back the anticipated 3

closure date of the mining facilities as the existing mill was at the end of its useful life; 4

in other words, the rebuild would extend the life of the existing mill operation. Similarly, 5

certain Ruskin Facility components are at the end of their useful life, although the main 6

dam is not part of the Project scope as it has adequate seismic stability to withstand 7

the Maximum Design Earthquake60 (MDE) and the reservoir (unlike a mineral body that 8

can be depleted) continues to have all the hydroelectric capability it has always 9

possessed; 10

As in Endako Mine, the Ruskin Facility has been in operation for a number of decades. 11

In both cases, the project in question involves changes to the existing facility that 12

would prolong the existing facility’s activity, but in neither case is the proponent’s right 13

to undertake the activity associated with the existing facility put in issue by the “current” 14

Crown conduct. As discussed below, the BC Hydro Water Licences for the Ruskin 15

Facility (like the Endako mining permit) are unaffected by the currently contemplated 16

decision.61 17

Kwantlen has taken an almost identical position in the present proceeding to that which was 18

taken by the Stellat’en First Nation in Endako Mine. In the Endako Mine litigation, the First 19

Nation stated that it did not seek to have historical grievances addressed by the Court, but 20

rather took the position that approving the expansion would extend the life of the existing 21

mining operation going forward, thus extending the harmful effects of the existing 22

operation.62 Like Kwantlen, the First Nation argued that the environmental impacts were not 23

limited to the new, incremental effects of the expansion project, and that there must be 24

consideration of the impacts of the existing facility over the prolonged life enabled by the 25

expansion. The positions of the respective Crowns in both cases are also similar. In Endako 26

Mine, the Crown took the position that the decision contemplated does not “change the 27

general footprint of the mine, it is just an improvement of an existing facility”, much like 28

60 Ex. B-1, Table 2-1, pg. 2-12. 61 Ibid, pg. 2-41, lines 2-4. 62 Endako Mine, supra, note 59, para. 117.



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“changing the engine of a truck”.63 BC Hydro takes a similar position with respect to the 1

Project in this proceeding. 2

The BCSC in Endako Mine accepted the Crown’s position and held that the decision to 3

rebuild, expand and extend the existing mining operation did not bear on the legal ability to 4

continue the permitted activity of the existing mining operation and as a result, the 5

continuation of the effects arising from that permitted existing mining activity were not novel 6

impacts for the purpose of determining the seriousness of the potential adverse impacts 7

arising from the decision contemplated. The Court grounded its reasoning in the fact that at 8

the root of the First Nation’s argument was the ability of the proponent to undertake the 9

activity pursuant to a mineral lease—a right that was not at issue in the proceeding: 10

To emphasize, the 28,000 tonnes of ore per day production rate is 11 already permitted, so nothing prevents TCMC from continuing to mine 12 the existing orebody at this rate for a longer period of time (so long as 13 a closure/reclamation plan is properly filed, the legislative 14 requirements are met and crown’s constitutional duties are satisfied). 15 Again (aside from any alleged failure on the part of the Province in 16 consulting with Stellat’en at the time the Mine opened in 1965), I fail to 17 see what novel potential adverse impacts may arise if the Company 18 were to pursue either option. [Emphasis in the original]. 19

I dismiss this argument concerning extension of the Mine’s life 20 and further mineral extraction. In reality, Stellat’en’s complaint 21 lies in historical claims against the very existence of the Mine 22 itself. The right to mine has been granted; so, Stellat’en’s remedy lies 23 at the treaty table or through court action.64 [Emphasis added]. 24

In Endako Mine, the proponent held a mining permit (M-4 Permit) which gave it the right to 25

mine and process 28,000 tonnes of ore daily.65 Likewise, in the present case, BC Hydro 26

holds Water Licences 117533, 117535, 117536 and 117537 which give it the right to divert 27

and store water from the Stave River for purposes of the Ruskin Facility.66 In addition, 28

pursuant to subsection 45(2)(a) of the UCA BC Hydro has a deemed CPCN for the existing 29

Ruskin Facility. BC Hydro has the right to engage in the existing Ruskin Facility activity. 30

Furthermore, as in Endako Mine, BC Hydro’s right to engage in this activity is not at issue in 31

63 Endako Mine, supra, note59, para. 135. 64 Endako Mine, supra, note 59, paras. 186-187. 65 Endako Mine, supra, note 59, paras, 9-13. 66 Ex. B-1, pg. 2-40, lines 16-22.



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this Application. Regardless of whether the Project proceeds or not, BC Hydro’s right to 1

continue to divert and store water remains, just as the proponent in Endako Mine’s right to 2

mine continued whether or not the rebuild of the mill was approved. 3

Endako Mine is another example of courts reaffirming the conclusion in Carrier Sekani that 4

First Nations cannot use past alleged infringements of their asserted Aboriginal rights 5

(including title) to broaden consultation on proposed developments such as the Project. 6

Applying the BCSC’s logic in Endako Mine to the present case, the result is the same. The 7

novel adverse impacts arising from the Project do not include the continuation of the existing 8

impacts associated with the current Ruskin Facility. Thus, the seriousness of the impacts is 9

properly ascertained by measuring against the current (impacted) environment and not 10

against the original (or non-impacted) environment. In the present case, those impacts are 11

limited to the residual environmental effects (effects once the mitigation has been applied) of 12

the Project as outlined in section 5.2.1(b) of the BC Hydro Final Submission. The evidence 13

establishes that the seriousness of these impacts is low to none. 14

(b) Lack of Factual Basis for Kwantlen’s Argument 15

BC Hydro further submits that the underlying factual foundation associated with the 16

Kwantlen position is incorrect. According to Kwantlen’s understanding of the facts, “but for” 17

the Project, BC Hydro would have no choice but to decommission the Ruskin Facility in its 18

entirety and as a consequence, the lands and lower Stave River would (perhaps eventually) 19

return to their pre-impacted state. The evidence is clear that proceeding with the Project or 20

decommissioning the Ruskin Facility in its entirety, dewatering Hayward Lake Reservoir and 21

restoring the area to pre-development condition are not the only choices open to BC Hydro. 22

As described in section 4.2 of the BCH Final Submission, BC Hydro considered a number of 23

alternatives including: 24

Three alternatives that would leave Hayward Lake Reservoir intact at a reduced level 25

(Alternatives A, B and E); 26

Two alternatives that would drain Hayward Lake Reservoir, with Alternative C entailing 27

the complete removal of the Dam, including the main dam which has a useful life and 28



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is not part of the Project scope, and Alternative D which would leave the Dam in place; 1

and 2

Two Deferral Alternatives. 3

The evidence is also clear that of the five Alternatives A through E, Alternative C – which is 4

the alternative matching the description in para. 33 of the Kwantlen Final Submission – is 5

the least cost-effective. Alternative C would require costly replacement IPP energy and the 6

securing of dependable capacity not likely to be located in the Lower Mainland, thus 7

triggering potentially costly transmission upgrades and/or other work; refer to 8

section 4.2.1(c), pgs. 35-36, of the BCH Final Submission. Alternative C triggers both a 9

federal and provincial EA, as well as a large number of other regulatory approvals including 10

permission to permanently cease operations from the BCUC pursuant to section 41 of the 11

UCA. It is the alternative most likely to generate opposition from stakeholders due to the 12

additional cost, and the likely limited additional environmental benefit of removing the Dam 13

entirely, and more importantly the de-watering of Hayward Lake Reservoir. Implementing 14

Alternatives C or D would impact Mission’s ability to withdraw water for purposes of 15

supplying drinking water, which likely complicates acceptance and implementation of these 16

two decommissioning alternatives. Mission has expressed concerns with Alternatives C and 17

D; refer to section 4.2.1(b), pgs. 32-35 of the BCH Final Submission. In the words of the 18

BCUC in its Reconsideration of the Interior to Lower Mainland Transmission Project 19

decision67 (ILM February 2011 Reconsideration Decision) Alternatives C and D are 20

“inferior to other options”, including the Project. Nevertheless, BC Hydro consulted Kwantlen 21

with respect Alternative C and the other alternatives as described in section 3.4 below. 22

While BC Hydro acknowledges that Alternative C contemplates draining Hayward Lake 23

Reservoir and removing the Dam, Kwantlen’s argument relies on this alternative as being 24

the only course of action open to BC Hydro if the Project is not pursued. This is not correct. 25

For example, BC Hydro could pursue De-Rating Alternative A, which is the next most 26

cost-effective alternative after the Project. The environmental impacts of Alternative A are 27

similar to those of the Project, with Alternative A having a greater impact due to the lowering 28

67 3 February 2011, pg. 62; extracts at Tab 18 of the FS Book of Authorities; additional excerpts are found at Tab 3 of the Reply Book of Authorities.



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of Hayward Lake Reservoir, a risk of exposing and/or damaging archaeological resources 1

and a greater risk of spill.68 De-Rating Alternative E is the next most cost-effective, with 2

environmental impacts similar to Alternative A. Alternative B is the lowest cost 3

Decommissioning Alternative with environmental impacts greater than but in the same range 4

as Alternatives A and E as, similar to Alternatives A and E, it leaves Hayward Lake 5

Reservoir intact but at a lower level. 6

As a result, the critical link of causation upon which Kwantlen’s but for argument is based is 7

not supported by the facts of this case and the argument that the novel impacts arising from 8

the Project is the continuing state of the disturbed lands and watercourses must fail. 9

3.3.2 Requirement to Assess the Scope of the Duty to Consult 10

In this part BC Hydro responds to Kwantlen paras. 12 to 20. 11

(a) Was BC Hydro Required to Provide a Preliminary SoC Assessment? 12

Kwantlen takes the position that BC Hydro committed a “threshold error” in that it was 13

required to prepare and provide a SoC assessment. Kwantlen appears to take the position 14

that this is a necessary precondition to discharge the duty to consult, regardless of the 15

circumstances. Kwantlen relies on the BCSC cases of Adams Lake Indian Band v. British 16

Columbia69 (Adams Lake) and Halalt First Nation v. British Columbia (Environment)70 17

(Halalt) to support its argument. 18

BC Hydro submits that this is not a legal requirement. BC Hydro respectfully submits that 19

there is no absolute obligation on the Crown to share with First Nations its SoC and impact 20

assessments during the course of a consultation process. To find or impose such a duty 21

would be detrimental to the consultation process and is not supported by the case law. 22

BC Hydro submits that Kwantlen’s submission is contrary to: (1) policy considerations; 23

(2) previous BCUC decisions; and (3) SCC precedents. Each will be discussed in turn. 24

(b) Policy Considerations 25

68 Ex. B-1, pg. 3-38, lines 1-14. 69 2011 BCSC 266, excerpt at Tab 1 of the Kwantlen Book of Authorities. 70 2011 BCSC 945, excerpt at Tab 6 of the Kwantlen Book of Authorities.



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Imposing such a duty would be detrimental to the consultation process. The SCC stated that 1

“the scope of the duty is proportionate to a preliminary assessment of the strength of the 2

case supporting the existence of the right or title, and to the seriousness of the potentially 3

adverse effect upon the right or title claimed” (Haida at para. 39). BC Hydro believes that, in 4

many cases, disclosing an internal “preliminary” SoC and impact assessments would not be 5

helpful to the consultation process - especially if done at an early stage in the process. This 6

is especially so when, as discussed above, the scope and content of the duty to consult may 7

change as a project moves through different stages. 8

In commenting on the variety of claims, the SCC stated: 9

A dubious or peripheral claim may attract a mere duty of notice, while 10 a stronger claim may attract more stringent duties. The law is capable 11 of differentiating between tenuous claims, claims possessing a strong 12 prima facie case, and established claims. (Haida at para. 37) 13

BC Hydro does not believe it would assist the consultation process (especially at the early 14

stages) if the Crown was required to announce that in its assessment (even if only a 15

preliminary assessment) it believed that a particular First Nation had a “dubious”, 16

“peripheral”, or “tenuous” claim. This is unlikely to get a consultation program off to a good 17

start. To the contrary, it is likely to become a source of debate, friction and distraction that 18

directs the consultation process away from (rather than towards) a more useful discussion of 19

potential impacts and how they may be avoided, mitigated or otherwise accommodated. In 20

addition, new information may come to light that causes the level of consultation to change 21

as the process goes on. If that new information results in a claim being assessed as 22

stronger and/or the required consultation as deeper, then the initial debate and distraction 23

around the preliminary assessment will have served no purpose; indeed, it may frustrate that 24

future consultation. 25

While Kwantlen asserts in para. 19 that “BC Hydro has not provided any explanation for why 26

it did not share the report three years earlier, when it was first prepared”, this is 27

demonstrably incorrect. As set out in Ex. B-10, BC Hydro’s response to BCUC IR 2.39.1, 28

BC Hydro did not share the report entitled An Evaluation of First Nations’ Aboriginal Rights 29



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and Title Interests in the Vicinity of the Ruskin Dam71 (2008 Bouchard & Kennedy Report) 1

because: 2

Through BC Hydro’s prior experience in the Stave River WUP process, BC Hydro 3

understood that Kwantlen has the strongest claim relative to other First Nations in the 4

Project area. This was confirmed through interactions with Sto:lo Nation and Sto:lo 5

Tribal Council in March and May 2007 respectively; 6

BC Hydro approached consultation with Kwantlen consistent with consultation at the 7

deeper end of the Haida spectrum; and 8

SoC issues, as they relate to the consultation process being conducted by the parties, 9

were not raised by Kwantlen during the consultation process prior to Kwantlen’s 10

intervention in the BCUC Project proceeding, and because SoC issues had not been 11

an impediment to consultation on the Project. 12

Similarly, BC Hydro does not believe it would advance the consultation process if BC Hydro 13

was required to announce that in its assessment it believed that a particular First Nation had 14

a “strong prima facie case” and/or a “deep” consultation requirement. In the words of the 15

SCC, such assessments are “preliminary” and often based on incomplete information. 16

Further information may come to light that causes the level of consultation to change as the 17

process goes on. If that new information results in a claim being assessed as weaker and/or 18

the required consultation being not as deep, the initial assessment may have already 19

created expectations (particularly around accommodation) that may prove unwarranted, 20

placing an additional burden on the consultation process. Again, sharing the preliminary 21

assessment will have served no useful purpose and will not assist (and may inhibit) the 22

process from moving forward. 23

(c) BCUC’s Previous Decisions 24

The BCUC has previously considered this very same issue and determined that there is no 25

absolute requirement to provide a SoC assessment. In the ILM February 2011 26

Reconsideration Decision, the BCUC considered extensive argument on this issue and 27

made the following determination: 28

71 Provided as Ex. B-7, Attachment 1 to BC Hydro’s response to BCUC IR 1.14.1.



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“Commission Determination 1

The Commission Panel accepts BC Hydro’s testimony that sharing 2 initial strength of claim assessments can be unproductive and accepts 3 BC Hydro’s submissions that case law does not specifically require 4 the Crown to disclose strength of claim assessments. The 5 Commission Panel finds that the initial strength of claim assessments 6 need not necessarily be disclosed at the outset of consultation and 7 the fact that they were not disclosed prior to the Options Decision did 8 not cause consultation to be inadequate. 9

The Commission Panel does agree that that consultation must include 10 a sharing of relevant information between the parties engaged in 11 consultation and that this could include the strength of claim 12 assessments and scope of duty to consult, should a First Nation 13 specifically request such information. There is no evidence before the 14 Commission Panel that a First Nation Intervener specifically sought 15 such information.72 16

Several First Nations sought reconsideration of the ILM February 2011 Reconsideration 17

Decision on this exact point. The request for reconsideration was based expressly on the 18

lower Court statements (relied on here by Kwantlen) in Adams Lake. 19

On 6 May 2011 the BCUC dismissed the request for reconsideration of the ILM 20

February 2011 Reconsideration Decision. The BCUC found that Madam Justice Bruce’s 21

comments in Adams Lake were obiter since no SoC assessment was in fact prepared in that 22

case. However, the BCUC went on to state that since SoC assessments were in fact shared 23

during the ILM Reconsideration proceeding and the First Nations had the full opportunity to 24

participate in the BCUC’s assessment of their SoCs, the goal of effective consultation was 25

not served by finding BC Hydro’s failure to share the assessments fatal to the overall ILM 26

consultation process:73 27

The Commission notes that, subsequent to the [ILM Reconsideration] 28 Decision, the BC Supreme Court has issued the Adams Lake decision 29 which addresses the issue of sharing strength of claim determinations 30 and which the Interveners rely on as support for their allegation of 31 error. The Commission agrees with BC Hydro that the comments in 32

72 Supra, note 67, pg. 101; Extracts of the ILM February 2011 Reconsideration Decision are found at Tab 4 of the Reply Book of Authorities. 73 Order G-77-11, Appendix A, pg. 10, referred to as the ILM Further Reconsideration Decision; copy at Tab 4 of the Reply Book of Authorities.



Page 41

Adams Lake on sharing strength of claim analysis are technically 1 obiter dicta. The Commission’s findings in the Decision are thus not 2 contrary to the principles set out in Adams Lake. The Commission has 3 considered Coldwater et al.’s position that the Crown is precluded 4 from using the ILM Reconsideration proceeding to discharge its duty 5 to share strength of claim assessments because of the proceeding’s 6 August 5, 2008 cut-off date for evidence, but finds that in context of 7 the ILM Reconsideration proceeding, where the assessments have 8 now been shared, the goal of effective, engagement or consultation is 9 not served by finding BC Hydro’s failure to share the preliminary 10 assessments fatal to the overall ILM consultation process. 11

Accordingly, the Commission does not find that the First Nations 12 Interveners have substantiated, on a prima facie basis, that the 13 Commission erred in finding that BC Hydro’s failure or refusal to 14 provide its strength of claim analysis to the First Nations did not 15 constitute a breach of its constitutional obligations. 16

On 13 July 2011, after the above BCUC ILM-related decisions, Madam Justice Wedge 17

issued a further decision in Halalt. Justice Wedge allowed a challenge by the Halalt First 18

Nation to an Environmental Assessment Certificate (EAC) on the basis that the Province 19

failed to discharge its duty to consult and accommodate. The key paragraph regarding the 20

sharing of a SoC is the following: 21

Second, as a matter of fairness, Halalt ought to have been given an 22 opportunity to respond to the information in the possession of the EAO 23 upon which it based its assessment of the strength of claim and the 24 scope of its duty to consult with respect to both the rights and title 25 claims of Halalt. Had the EAO been transparent about its misgivings 26 concerning the strength of Halalt’s claim of Aboriginal title, Halalt 27 would have been in a position to respond during the lengthy 28 environmental assessment instead of at its conclusion. For all 29 practical purposes, the environmental review was over when the EA 30 Report went to the Ministers. There was little value in disclosure at 31 that point. The strength of claim assessment must come at the 32 beginning of the process, not at the end, because it is the foundation 33 for the Crown’s decision concerning the nature and scope of the 34 required consultation with First Nations. [Emphasis added.] 35 (para. 641). 36

The Court described the issue of SoC as an issue of “fairness” in the circumstances (and not 37

a rule of law). The Court’s concern was that Halalt ought to be able to respond to the 38

information that EAO based its assessment on, and was not provided with an opportunity to 39



Page 42

do so. That concern does not arise in this case. Similar to the situations discussed in both 1

the ILM February 2011 Reconsideration and the ILM Further Reconsideration Decision, 2

BC Hydro’s SoC assessments (and the 2008 Bouchard & Kennedy Report that, in part, 3

informed the assessment) were shared with Kwantlen during this BCUC proceeding and 4

Kwantlen has had (and has taken advantage of) the full opportunity to respond to and test 5

these assessments. Kwantlen also has had the full opportunity to participate in the BCUC’s 6

independent assessment of Kwantlen’s SoC. On this basis, BC Hydro respectfully submits 7

that Halalt does not assist Kwantlen on this point. Refer also to the potential impact on the 8

consultation process itself described in section 3.3.2(b) above. 9

(d) SCC Precedents 10

There is no support in the SCC jurisprudence (Haida and Taku River Tlingit v. British 11

Columbia (Project Assessment Director)74 (Taku)) for a duty upon the Crown to share with 12

First Nations its SoC and impact assessments. To the contrary, the SCC’s overarching 13

framework in Haida indicated that the parties’ behaviour is to be governed by the 14

circumstances, not a set of absolute rules. 15

The SCC decision in Taku makes it clear that there is no such requirement. In Taku the SCC 16

considered the process undertaken pursuant to BCEAA. At the time the EAO review was 17

undertaken it was the position of the Provincial government that there was no duty to consult 18

with a First Nation prior to proof of claim. In other words, the view of the Crown was that 19

there was no duty to consult with a First Nation prior to the determination of rights through 20

litigation or conclusion of a treaty, but only a common law duty of fairness (Taku, para. 23). 21

Given this, it is clear that at no time would any Crown representative have shared with First 22

Nations any SoC and impact assessments. Notwithstanding that the SCC found there was a 23

duty to consult, the SCC still examined the actions undertaken by the Crown and the actual 24

contents of the consultation process (see paras. 40 to 46) and concluded that the duty to 25

consult had been discharged. Clearly, sharing a SoC and impact assessment was not a 26

necessary precondition for discharging the duty to consult. 27

(e) Distinguishing the case on the facts 28

74 2004 SCC 74, copy at Tab 21 of the FS Book of Authorities.



Page 43

As discussed above, BC Hydro submits that producing a “strength of claim” report early, or 1

at all, during the course of the consultation process is not a legal precondition to discharging 2

the duty to consult. To make such a finding would run directly counter to the conclusions of 3

the SCC (in Taku for example), which found that the Crown can (by appropriate actions) 4

discharge a consultation obligation even in circumstances where it has denied it has a legal 5

duty to consult. If the Crown can be found to have discharged its legal obligations in such 6

circumstances, the SCC clearly does not consider it a necessary legal requirement that a 7

SoC assessment be prepared and provided to the First Nation. As a policy matter, to impose 8

such a requirement would create an unnecessary and unhelpful formalism to a consultation 9

process which the SCC has stated in Haida turns on the individual case. 10

In any event, irrespective of the legal requirements, BC Hydro submits that the facts of this 11

case are entirely distinguishable from the factual circumstances of the cases relied on by 12

Kwantlen. In Halalt, the Crown was taken to task for not providing any reason for withholding 13

a report from the First Nation. As noted by the Court: 14

Mr. Finkel did not provide any reason for withholding the Duqette 15 Report from Halalt which he received in early 2007. The Province did 16 not assert privilege over the document…. 17

The 2008 Bouchard & Kennedy Report was created as a privileged document. The text at 18

pages 1 and 4 of 5475 of the 2008 Bouchard & Kennedy Report makes this clear: 19

The purpose of this review is to provide BC Hydro with ethnographic 20 and ethnohistorical information identifying areas in the environs of the 21 Ruskin Dam which are potentially subject to claims of Aboriginal title 22 and/or rights. The present research will assist counsel to make an 23 assessment of the relative strengths of these First Nations claims. 24

In the interests of allowing greater transparency, BC Hydro chose to waive legal privilege 25

and to produce the 2008 Bouchard & Kennedy Report. 26

The complaint of Kwantlen is not that BC Hydro failed to produce the 2008 Bouchard & 27

Kennedy Report. Kwantlen’s complaint in this proceeding is that the 2008 Bouchard & 28

Kennedy Report was produced too late. However, since the time that the Report has been 29

75 Supra, note 71.



Page 44

produced, Kwantlen has not raised any substantive objection to the content of the report nor 1

sought to contradict its conclusions. To the contrary, Kwantlen appears to place reliance on 2

the content of the 2008 Bouchard & Kennedy Report in its own Final Submission; See for 3

example para. 23. Kwantlen has never sought an adjournment or an extension of any time 4

period to allow additional time to consider or respond to the 2008 Bouchard & Kennedy 5

Report. 6

(f) Conclusion 7

In summary, BC Hydro submits that there is no absolute obligation upon the Crown to share 8

with First Nations its SoC and impact assessments during the course of a consultation 9

process. The BCUC’s previous decisions regarding sharing of SoC assessments were 10

reasonable and were entirely consistent with the SCC precedents. There is no absolute 11

requirement of law to share a SoC assessment. If there is any such duty (which is denied), 12

BC Hydro submits that it does not arise prior to the point at which the adequacy of 13

consultation is challenged and an adjudicator or decision-maker is called upon to assess the 14

adequacy of consultation. During the consultation process itself (especially in the early 15

stages), the parties should be left to focus on the substance of the process, including 16

identifying and addressing any potential adverse effect of the proposed project. The parties 17

should be allowed time to see if they can jointly find ways in which any potential adverse 18

effects can be avoided, mitigated or otherwise accommodated. If the parties cannot agree, 19

tribunals and courts can assist. However, prior to the point in time at which a court or 20

tribunal is called upon, there should be no “duty to share” imposed, which as discussed 21

above could have detrimental effects on the consultation process. 22

In this context, BC Hydro submits that BC Hydro’s conduct is defensible on both the facts 23

and the law. However, if the BCUC finds that there is a legal requirement that BC Hydro was 24

required at law to provide a SoC assessment, BC Hydro respectfully submits that the BCUC 25

should rely on the reasoning in the ILM Further Reconsideration Decision. A SoC 26

assessment was provided in this proceeding before the BCUC, and Kwantlen has had the 27

full opportunity to respond to and test these assessments. Kwantlen also has had the full 28

opportunity to participate in the BCUC’s independent assessment of the BC Hydro’s SoC 29

assessment. Given this, BC Hydro respectfully submits that there were no consequences to 30



Page 45

BC Hydro’s actions and the BCUC should decline to answer this question or, in the 1

alternative, should refuse to grant a remedy. 2

BC Hydro respectfully submits that Kwantlen has not demonstrated any reason why a CPCN 3

should be denied simply because it received (legally privileged) information at a later date 4

than Kwantlen would have ideally preferred. BC Hydro respectfully submits that to find the 5

entire consultation process to be inadequate based on this single factor would be to place 6

form over substance. As the SCC has recognized: 7

Perfect satisfaction is not required; the question is whether the 8 regulatory scheme or government action “viewed as a whole, 9 accommodates the collective aboriginal right in question”: Gladstone, 10 supra, at para. 170. What is required is not perfection, but 11 reasonableness (Haida, para. 62.). 12

3.3.3 SoC Assessment 13

This part addresses paras. 21 to 28. Kwantlen relies extensively on the same historical 14

records as the 2008 Bouchard & Kennedy Report. Kwantlen appears to suggest that the 15

conclusions contained in the report submitted by Kwantlen in evidence entitled Report on 16

Kwantlen Occupation and Land Use in Seeyeqs and the Surround Area76 (McLaren Report) 17

should be accepted merely based on the fact that “BC Hydro did not contest this conclusion 18

by filing any reply evidence from Bouchard & Kennedy” (Kwantlen Final Submission, 19

para. 23 (b)). BC Hydro responded to the conclusions of the McLaren Report stating that 20

BC Hydro did not agree with the findings, and identifying a number of areas of 21

disagreement.77 22

(a) The Allegedly Consistent Evidence 23

In para. 23, Kwantlen provides a long list of factors and suggests in para. 24 that “there is no 24

disagreement in the evidence before this commission on any of the [preceding] points”. For 25

the reasons set out in section 3.3 and 3.3.1 above, BC Hydro does not believe that it is 26

necessary for the BCUC to make factual findings on all of the points raised by Kwantlen in 27

para. 23. However, BC Hydro would reiterate that while both the 2008 Bouchard & Kennedy 28

76 Ex. C3-6, Evidence of Dr. McLaren, Tab B. 77 Ex. B-18, BC Hydro’s response to Kwantlen IR 3.2.5.



Page 46

Report and the McLaren Report have reviewed and largely considered the same historical 1

records, BC Hydro does not agree with some of the McLaren’s Report’s conclusion, or on 2

the specific points raised in para. 23. For example: 3

It is unknown whether the Skayuks had died out entirely as a result of the smallpox 4

epidemics of the 1770s, or whether there were remnants of the people when Kwantlen 5

migrated into the area who were absorbed by Kwantlen. BC Hydro submits that there 6

is insufficient evidence to conclude either way; 7

The village observed by in 1824 Work at the mouth of the Stave River was not 8

explicitly identified by Work as being Kwantlen, unlike the village in the area of the Pitt 9

River or the village in the area of Hatzic Slough; 10

In 1858, George Gibbs reported that “Hai-yuks or Shai-yuks” was the name of the 11

“Kwantlen R”. Prior to 1858, it is unknown what name was commonly used for the 12

Stave River, although Hudson Bay Company (HBC) in 1827 applied the term “Quoitte” 13

[Kwantlen] River to the Pitt River, and a Fort Langley website states that with the 14

arrival of a cooper at Fort Langley in 1845 the “Work River” became known as the 15

“Stave River”; 16

There is no historical evidence that Kwantlen moved into and occupied the Stave area 17

during the small pox epidemics of the 1770s, or how soon thereafter. The first definitive 18

evidence of Aboriginal occupation in the historic period is provided by the HBC parties 19

in 1824; 20

Archaeological evidence cannot in itself identify the peoples associated with a site. 21

Also, while the archaeological evidence indicates use of the area for different 22

purposes, at different intensities, and during different periods of time, the McLaren 23

Report does not appear to specify the particular uses and intensity of use relating 24

specifically to Kwantlen for the period of known Kwantlen presence in the area. 25

Kwantlen appears to attribute all archaeological evidence for the area (dating back as 26

far as 1790 before present) to use and occupation by Kwantlen; and 27

There is no direct evidence that the Kwantlen winter village “up the little rivers” which 28

was reported to the HBC party during the 1824 expedition) referred to a village on the 29



Page 47

Stave River. The HBC journal does not indicate the location of this winter village and 1

could have been referring to the village around Hatzic Slough. 78 2

(b) The test for Aboriginal Title 3

In para. 25, Kwantlen suggests that “the evidence in support of Kwantlen use and 4

occupation of the Project area meets all the indicia of aboriginal title”. The sole reference 5

provided is to Delgamuukw v. B.C.79 (Kwantlen, footnote 32). While BC Hydro clearly 6

recognizes that Delgamuukw initially established the test for Aboriginal title, BC Hydro notes 7

that the SCC has subsequently elaborated on the required elements of this test in R. v. 8

Marshall; R. v. Bernard,80 in which the Court clarified that the requirements for proof of 9

Aboriginal title are significant. The SCC found that Aboriginal title: 10

…is established by aboriginal practices that indicate possession 11 similar to that associated with title at common law. (para. 54). 12

And further: 13

It follows from the requirement of exclusive occupation that exploiting 14 the land, rivers or seaside for hunting, fishing or other resources may 15 translate into aboriginal title to the land if the activity was sufficiently 16 regular and exclusive to comport with title at common law. However, 17 more typically, seasonal hunting and fishing rights exercised in a 18 particular area will translate to a hunting or fishing right. (para 58). 19

In summary, given the stringent requirements of the case law to prove Aboriginal title, 20

BC Hydro respectfully suggests that while Kwantlen appears to have established a 21

reasonable prima facie case, the evidence is not so clear, consistent or compelling to 22

suggest a strong prima facie case. In any event, as set out in section 5.2.1, pg. 55 of the 23

BCH Final Submission, BC Hydro submits that BC Hydro’s assessment of the consultation 24

required (medium range of Haida spectrum) would not be altered even if Kwantlen were 25

found to have a strong prima facie case, given the low degree of impacts of the proposed 26

Project. 27

78 Ibid; Ex. B-10, BC Hydro’s responses to BCUC IRs 2.401. through to 2.44.3; and the 2008 Bouchard & Kennedy Report, supra, note 71. 79 [1997] 3 S.C.R. 1010; excerpts at Tab 4 of the Kwantlen Book of Authorities. 80 2005 SCC 43, excerpt at Tab 5 of the Reply Book of Authorities.



Page 48

3.3.4 Meaning of Deep Consultation 1

(a) Kwantlen Description 2

At paras. 40 and 64, Kwantlen purports to set out a list of “principles concerning the required 3

content of deep consultation”. BC Hydro notes that Kwantlen does not provide any 4

references or authority for these principles other than to Delgamuukw (Kwantlen footnote 5

40), a case regarding the nature of proven (not asserted) Aboriginal title. Kwantlen has not 6

resolved its claims by way of treaty or proven its claims in court.81 7

The SCC has not provided a definitive list of what deep consultation must encompass. 8

Where deep consultation is required (which BC Hydro submits is not the case here), the 9

SCC statements in Haida must be borne in mind: 10

At the other end of the spectrum lie cases where a strong prima facie 11 case for the claim is established, the right and potential infringement is 12 of high significance to the Aboriginal peoples, and the risk of 13 non-compensable damage is high. In such cases deep consultation, 14 aimed at finding a satisfactory interim solution, may be required. While 15 precise requirements will vary with the circumstances, the consultation 16 required at this stage may entail the opportunity to make submissions 17 for consideration, formal participation in the decision-making process, 18 and provision of written reasons to show that Aboriginal concerns 19 were considered and to reveal the impact they had on the decision. 20 This list is neither exhaustive, nor mandatory for every case. 21 (Haida, para. 44; emphasis added). 22

The SCC in Taku again made the observation that “it is impossible to provide a prospective 23

checklist of the level of consultation required”,82 and accordingly BC Hydro’s submission the 24

Kwantlen checklist cannot be accepted. 25

There is no support for Kwantlen’s contention in para. 40(e) that deep consultation includes 26

reflecting underlying “jurisdictional and ownership” interest inherent in Aboriginal title. The 27

SCC cautioned expressly about mixing the elements of proven Aboriginal title (described in 28

Delgamuukw) with the consultation requirements (described in Haida): 29

This process [of consultation and accommodation] does not give 30 Aboriginal groups a veto over what can be done with land pending 31

81 Ex. B-7, BC Hydro’s response to BCUC IR 1.14.1, pg. 2 of 7. 82 Supra, note 74, para. 32.



Page 49

final proof of the claim. The Aboriginal “consent” spoken of in 1 Delgamuukw is appropriate only in cases of established rights, and 2 then by no means in every case. Rather, what is required is a process 3 of balancing interests, of give and take. (Haida, para. 48; emphasis 4 added). 5

As discussed below in section 3.5, BC Hydro submits, in the alternative, that even if deep 6

consultation is required (which is denied), BC Hydro has in practice been meeting this 7

standard in any event. 8

(b) Economic Accommodation 9

The mischaracterization of the requirements of deep consultation (resulting from Kwantlen’s 10

conflating of the elements of proven Aboriginal title with the requirements of consultation) 11

leads to other conclusions that BC Hydro believes are questionable in law. In para. 40(e), 12

Kwantlen suggests “…the ownership component of Kwantlen title requires consideration of 13

economic accommodation measures such as compensation”. Kwantlen cites (Kwantlen 14

footnote 41) as support for this proposition the 2005 case of Musqueam Indian Band v. 15

BC,83 at para. 97. However, what Kwantlen’s submission fails to acknowledge is that other 16

judges on this same case expressly distanced themselves from these obiter comments. In 17

particular, Mr. Justice Lowry stated the following: 18

105 There is little in the decided cases from which assistance can be 19 drawn with respect to the measure of interim accommodation that may 20 be required in the circumstances that prevail in this case. Where, as 21 here, no aboriginal title has been finally established, there may well be 22 questions about whether and to what extent economic compensation 23 or other forms of what might be said to be non-reversible 24 accommodation are necessary or appropriate. Given the disposition of 25 the appeal, I consider these and other related questions that were not 26 directly addressed in argument before us are now best left entirely to 27 the parties unfettered by judicial commentary. 28

Subsequent case law has provided a clear answer. In Tzeachten First Nation v. Canada 29

(Attorney General),84 the trial judge concluded that given that the nature of the applicants’ 30

interest in the land did not appear to be based on its unique importance, any present 31

83 2005 BCCA 128, excerpt at tab 9 of the Kwantlen Book of Authorities. 84 2008 FC 928.



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infringement may be compensated, monetarily or otherwise, over the course of treaty 1

negotiations. The FCA dismissed the appeal:85 2

As I understand Justice Tremblay-Lamer’s reasons, she was not 3 applying the law of injunctions when she considered the question of 4 compensability. She was applying the principle from Haida Nation (at 5 paragraph 44) that it is relevant, when assessing the seriousness of 6 the potentially adverse effect of a decision on an Aboriginal title claim, 7 to consider whether the adverse effect is compensable in money, or 8 whether it is not compensable in money because the subject of the 9 claim is unique in some substantial way relating to an unrecognized 10 Aboriginal claim. I see no error in her analysis of that issue. 11

More importantly, consideration of the policy behind the SCC’s reasoning and the stated 12

purpose of the duty to consult and, if appropriate, accommodate, strongly suggests that 13

accommodation was not intended to take the form of economic compensation for the simple 14

reason that economic compensation does not meet the objective of preserving the asserted 15

rights and title. In Carrier Sekani, the SCC stated: 16

[41] The claim or right must be one which actually exists and stands to 17 be affected by the proposed government action. This flows from the 18 fact that the purpose of consultation is to protect unproven or 19 established rights from irreversible harm as the settlement 20 negotiations proceed … (para 41, emphasis added). 21

The test for accommodation as established by the Court is aimed at modifying the Crown's 22

contemplated conduct to avoid or minimize “non-compensable damage” to asserted 23

Aboriginal interests pending proof. It would follow that “compensable harm” would be 24

addressed either as part of a treaty settlement or in the form of court-awarded damages 25

(after an unjustified infringement of proven Aboriginal rights or title has been established). 26

While BC Hydro makes the above submissions regarding the appropriate legal principles, 27

BC Hydro submits that the BCUC does not need to make any final determination about 28

whether deep consultation includes a requirement for economic accommodation given that: 29

(1) deep consultation is not the appropriate standard in this case because the potential 30

residual Project impacts are low to none; and (2) in any event, BC Hydro has made an offer 31

85 2009 FCA 337, para. 31, leave to appeal to the SCC denied; copy at Tab 7 of the Reply Book of Authorities.



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of economic accommodation to Kwantlen; refer to the confidential copy of the Benefits 1

Agreement at Ex. B-12, Confidential Attachment 1 to BC Hydro IR 1.1 to Kwantlen. 2

3.4 Alternatives to the Project Consultation 3

In para. 41, Kwantlen advances that BC Hydro failed to consult regarding the selection of 4

the Project as the preferred alternative. BC Hydro disagrees with this assertion. Kwantlen’s 5

position boils down to this – because alternatives to the Project were not raised or discussed 6

by either party between November 2006 and December 2009, the alternatives to the 7

Project-related consultation that did occur from 15 December 2009 to the Board’s decision in 8

February 2011 ought to be discounted because the Project must have been a fait accompli. 9

BC Hydro respectfully submits that this argument cannot be accepted: 10

Kwantlen’s declaration ignores the organic nature of project development, in which 11

alternatives to a project may be examined later in the Definition phase due to the 12

complexity of assessing the need, scope of and cost-effectiveness of, a project, and as 13

preliminary investigation informs the assessment of these factors they may change, 14

relatively and absolutely, over the course of the development process. In para. 47, 15

Kwantlen states “The law requires BC Hydro to integrate Kwantlen into the alternatives 16

assessment process at the earliest stage”. There is no reference to any case law to 17

back up this contention with respect to the alternatives decision-making process, and if 18

it does apply, it is only with respect to “deep consultation”, the content of which is 19

examined in section 3.3.4 and applied in section 3.5. The factual question for this 20

section is: what is the “earliest stage” in the context of the Project. The BCCA in 21

Kwikwetlem, a case involving the granting of a CPCN and consultation with respect to 22

alternatives to a project, stated that “if consultation is to be meaningful, it must take 23

place when the Project is being defined and continue until the project is completed”86 24

[emphasis added]. As is clear from the Application itself, BC Hydro is currently in the 25

Definition phase;87 it is also clear from the record that in 2006, BC Hydro was in the 26

Investigation phase, which BC Hydro explained is the earliest phase for the start of a 27

86 Supra, note 48, para. 70. 87 Ex. B-1, pg. 5-1, line 17.



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project during which a project is conceptualized and feasibility is determined.88 It is 1

during Definition phase when preliminary design occurs, the project scope is defined 2

and that generally speaking alternatives to the scoped project are developed. 3

BC Hydro consulted with Kwantlen during the Definition phase concerning the two 4

De-Rating Alternatives A and E and three Decommissioning Alternatives B, C and D 5

from 15 December 2009 to the filing of the Application in late February 2011 and 6

during the BCUC regulatory review process. Refer to section 3.4.1 below; 7

Kwantlen’s claims glance over the period from 15 December 2009 onwards, where it is 8

clear from the materials and presentations made to Kwantlen that BC Hydro was 9

seriously considering Alternatives A-E to the Project. BC Hydro did not narrow the field 10

of choices from several alternatives to a single preferred alternative, the Project, until 11

the Board’s 17 February 2011 decision. Evidence that supports this comes in the form 12

of: (1) the document shared with Kwantlen on 15 December 2009 entitled “Ruskin Dam 13

and Powerhouse Upgrade Project: Summary of Information” (Summary of 14

Information); (2) the 22 July 2010 presentation to Kwantlen concerning alternatives to 15

the Project; (3) Hemmera’s “Minimum Cost Study Analysis: Socio-Economic and 16

Environmental Assessment of Alternatives “(Hemmera Report) and Black & Veatch 17

Canada Company’s (B&V) “Minimum Cost Analysis Study” (B&V Report) provided to 18

Kwantlen almost 3 months before the Application was filed; and (4) the Board decision 19

materials themselves. Refer to section 3.4.2. 20

BC Hydro further submits that its consultation efforts in this regard were reasonable because 21

it openly and continually shared Project alternatives information during the December 2009 22

to February 2011 time period (and beyond, as part of the BCUC regulatory review process). 23

BC Hydro also submits that because Kwantlen did not raise with BC Hydro any alternatives 24

to the Project-related issues and concerns throughout the consultation period and in 25

particular between December 2009 and February 2011, Kwantlen did not discharge its 26

reciprocal consultation duty to engage in consultation related to Project alternatives in good 27

faith. Endako Mine and Haida put the onus on First Nations to identify their interests. This 28

88 Ex. B-7-2, BC Hydro’s response to Kwantlen IR 1.3.2.



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simply did not occur until the Kwantlen-BC Hydro meeting of 27 July 2011, just prior to the 1

filing of Kwantlen evidence on 29 July 2011. This is addressed in section 3.4.3. 2

3.4.1 Kwantlen Assertions Regarding Consultation Prior to December 2009 3

Kwantlen asserts that there was a lack of consultation concerning alternatives to the Project 4

by first referring to a number of meetings and correspondence prior to December 2009, 5

summarized in para. 43 (a) to (k), and seeks to portray that through these pre-December 6

2009 meetings etc., it was clear that BC Hydro, presumably including both senior 7

management and the Board, had decided on the Project to the exclusion of all alternatives 8

as early as 2007. The Kwantlen position: 9

Denies the reality of a project development process that explores the costs, impacts 10

and benefits of various alternatives is that, as information and input is received, the 11

merits of the particular project and possible alternatives becomes clearer, and some 12

appear more attractive than others. By December 2009, BC Hydro had reached the 13

state where it could conclude that the two De-Rating Alternatives and three 14

Decommissioning Alternatives were perhaps viable, if not as attractive as the Project, 15

and proceeded to consult Kwantlen; and 16

Does not accord with the record, which amply demonstrates that there was no decision 17

to prefer the Project over the alternatives until the February 2011 Board decision, and 18

BC Hydro was open to input from Kwantlen up until that decision (and even afterwards, 19

particularly through the BCUC regulatory review process). Refer to section 3.4.2. In 20

para. 62 Kwantlen goes so far as to state that the Board’s selection of the Project as 21

the preferred alternative and to approve filing of the Application was “artificial”. 22

Kwantlen mistakenly points to BC Hydro’s 15 January 2009 application to EAO to 23

voluntarily opt-in to BCEAA as the basis for this position. This is addressed further 24

below in this section. 25

BC Hydro does not agree with Kwantlen’s description of events in paras. 43(a) to (k). In 26

particular, at paras. 43(e), 45 and 59 Kwantlen claims that it specifically asked whether 27

BC Hydro was considering decommissioning the Dam. This claim is not correct. As is clear 28



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from the 22 October 2007 meeting notes which Kwantlen refers to,89 Kwantlen asked if there 1

was any consideration of decommissioning the powerhouse (referred to as the PH in the 2

meeting notes). In fact, Kwantlen did not raise any issue with decommissioning the Dam 3

until 27 July 2011. As set out in section 3.1 of Ex. B-1, BC Hydro makes a distinction 4

between “alternatives to the Project”, which consists of two De-Rating, three 5

Decommissioning and two Deferral Alternatives, and “alternative means of carrying out the 6

Project”, which are the various ways the Project can be implemented or carried out.90 7

Kwantlen’s question regarding the Powerhouse, as well as information that BC Hydro 8

provided to Kwantlen in October 2008 in the draft Project Description, relate to this latter 9

category of “alternative means of carrying out the Project”. 10

In para. 44, Kwantlen relies on BC Hydro’s voluntary application to EAO to opt-in to BCEAA 11

as an indication that the decision to proceed with the Project had been made. BC Hydro 12

disagrees with this conclusion. The contention that BC Hydro’s early 2009 opt-in application 13

to EAO meant that BC Hydro had foreclosed all other alternatives was squarely addressed 14

in section 2.4.1 of Ex. B-16: 15

BC Hydro’s voluntary opt-in application to the EAO was not a strategic 16 decision by BC Hydro to narrow the number of alternatives under 17 consideration or to proceed with the Project without further 18 consideration of alternatives to the Project. The reasons why 19 BC Hydro applied to the EAO to voluntarily opt-in to BCEAA are laid 20 out in Exhibit B-7-2, BC Hydro’s responses to Kwantlen IRs 1.1.1 and 21 1.1.2 and were communicated to Kwantlen in the October 3, 2008 22 letter found at Exhibit B-1, Appendix H-1, pages 91 and 92 of 345 and 23 subsequent BC Hydro-Kwantlen meeting of November 5, 2008. 24

BC Hydro made the application to EAO to facilitate the assessment of the potential 25

environmental and social impacts of the Project. In BC Hydro’s view, the BCEAA process 26

would provide certainty, guidance and timelines for such an assessment. Refer to 27

BC Hydro’s 15 January 2009 letter, provided as Ex. B-7-2, Attachment 1 to the response to 28

Kwantlen IR 1.1.1. 29

89 Ex. B-7-1, Confidential Attachment 1 to BC Hydro’s response to BCUC IR 1.17.2, pg. 17 of 154. 90 Refer also to Ex. B-7, BC Hydro’s response to BCUC IR 1.14.6.



Page 55

Kwantlen’s assertion also ignores the role of EAO and Kwantlen’s own characterization of 1

the BCUC’s role in para. 11(b) of its Final Submission where Kwantlen states that it is the 2

BCUC “alone” that determines “whether the Project is required and in the public interest, as 3

compared against alternative options”. In Ex. B-16, pg. 16, BC Hydro explained that the role 4

of EAO is to examine the environmental effects of a proposed project and not to review 5

alternatives to a project. BC Hydro notes that EAO has only rarely required a project 6

proponent to describe alternatives to the particular project which is the subject of an 7

application under BCEAA for an EAC. 8

There is no evidentiary basis for Kwantlen’s assertions in paras. 46 and 62 that BC Hydro 9

was proceeding into Project implementation in 2007. As set out above, in 2007 the Project 10

was not in the Implementation phase. BC Hydro was in the beginning of the Definition 11

phase. Similarly, claims that BC Hydro expected to make a decision on options by 2007 are 12

not correct and not supported by the evidence, including the meeting notes Kwantlen refers 13

to. In para. 62 Kwantlen incorrectly references November 2006 to support its contention; the 14

reference should be to the 20 December 2006 meeting notes, which clearly state that “BCH 15

is analyzing several alternatives to reinforce the Ruskin Dam”.91 From Ex. B-7-2, BC Hydro’s 16

response to Kwantlen IR 1.2.1, it is clear that at the time of the December 2009 Summary of 17

Information, BC Hydro was engaged in the typical Definition phase review of determining 18

which alternatives to the Project are viable and which are not. The response shows that in 19

December 2009, BC Hydro was considering the two De-Rating Alternatives A and E and the 20

three Decommissioning Alternatives B, C and D. By December 2009 BC Hydro had only 21

rejected certain non-viable alternative means of carrying out the Project, such as Approach 22

1 to the Right Abutment Work (refer to section 4.3.1(a) of the BCH Final Submission) and 23

construction of a new Powerhouse in a different location (refer to section 4.3.1(d) of the BCH 24

Final Submission). 25

As noted below in section 3.4.2, and in section 2.4.1 of Ex. B-16, BC Hydro consulted on the 26

alternatives beginning in December 2009 over 14 months before the filing of the Application 27

at the end of February 2011. BC Hydro respectfully submits that the BCUC ought to accept 28

BC Hydro’s evidence that it remained willing to receive input concerning alternatives to the 29

91 Ex. B-7-1, Confidential Attachment 1 to BC Hydro’s response to BCUC IR 1.17.2, pg. 3 of 154.



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Project after the voluntary application to EAO in January 2009 based on the December 2009 1

to February 2011 time period. 2

3.4.2 Consultation Concerning Alternatives: December 2009 to February 2011 3

BC Hydro submits that contrary to Kwantlen’s allegations in para. 55, it is clear that from the 4

period between 15 December 2009 and the filing of the Application on 22 February 2011, 5

BC Hydro: (1) provided notice of its intention to examine alternatives to the Project; (2) 6

solicited Kwantlen feedback but none was forthcoming until 22 July 2011, well after the filing 7

of the Application; and (3) that the Project was not “locked in” at any time from 8

15 December 2009 onward. In addition, Kwantlen had every opportunity in the BCUC review 9

process to bring forward its views regarding alternatives and to have its concerns given a 10

full, fair and serious consideration by the BCUC. 11

(a) Summary of Information 12

The Summary of Information is found at Ex. B-1, Appendix H-1, pgs. 97 to 131 of 345. 13

BC Hydro did not make any strategic decision through the Summary of Information.92 As 14

stated above, the Summary of Information provided that, among other things, through the 15

Definition phase of the Project BC Hydro analyzed alternative means of carrying out the 16

Project, some of which were not viable and therefore no longer considered. 17

At paras. 43(l) and 49, Kwantlen insists that use of the past tense in some places in the 18

Summary of Information somehow indicates that the decision to proceed with the Project 19

was finalized before December 2009. At the 15 December 2009 meeting, BC Hydro 20

specifically told Kwantlen that the Summary of Information contained information on Project 21

alternatives. The Summary of Information contains an entire section and appendix devoted 22

solely to the description of alternatives, including descriptions of Alternatives A, B, C, D and 23

E.93 At pgs. 108 and 127 of 345 respectively of Appendix H-1 to Ex. B-1, the Summary of 24

Information clearly provides “[s]ome of these design alternatives continue to be assessed” 25

and “[s]ome alternatives continue to be considered”. 26

92 Ex. B-16, pg. 17. 93 Refer to the Summary of Information description set out at Exhibit B-7-2, BC Hydro’s response to Kwantlen IR 1.2.1 and Exhibit B-10-2, BC Hydro’s response to Kwantlen IR 2.1.1.



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The purpose of the Summary of Information is set out in the 15 December 2009 cover letter 1

to Kwantlen, found at Ex. B-1, Appendix H-1, page 97 of 345, namely: 2

The enclosed document provides a current summary of the proposed 3 Project, with updated information from that in the draft Project 4 Description I shared with you in October 2008. The Summary of 5 Information also includes information on alternatives to the Project 6 considered by BC Hydro. … I am sharing this document with you in 7 furtherance of BC Hydro’s commitment and on-going practice of 8 openly and proactively sharing information with you concerning the 9 Project. If you have any questions regarding the Summary of 10 Information or require further information about the Ruskin Dam and 11 Powerhouse Project, please do not hesitate to contact me at 12 604-528-8331 or [email protected]. 13

Despite this, and despite Ms. Knott’s statements concerning the importance of 14

decommissioning to Kwantlen in her evidence at Ex. C3-6, Kwantlen asked no questions 15

and provided BC Hydro with no comments concerning alternatives to the Project, either at 16

the 15 December 2009 meeting or afterwards until the BC Hydro-Kwantlen meeting of 27 17

July 2011. 18

BC Hydro acknowledges that the BCCA decision in Kwikwetlem provided a degree of clarity 19

regarding the need for BC Hydro to consult on alternatives. This degree of clarity had been 20

lacking in the law prior to this date. The law of consultation is still under development. As the 21

SCC noted in Haida at para. 11: 22

This case is the first of its kind to reach this Court. Our task is the 23 modest one of establishing a general framework for the duty to consult 24 and accommodate, where indicated, before Aboriginal title or rights 25 claims have been decided. As this framework is applied, courts, in the 26 age-old tradition of the common law, will be called on to fill in the 27 details of the duty to consult and accommodate. 28

The BCCA decision in Kwikwetlem filled in some details regarding BC Hydro’s role in 29

consultation on alternatives. The record in this proceeding is clear that BC Hydro embraced 30

that role and discharged its duty between December 2009 and February 2011. To the extent 31

that the record is less clear regarding the period prior to December 2009, BC Hydro has 32

explained above the stage that the project was at during that earlier time. To the extent that 33

the law regarding consultation on alternatives was unsettled prior to the BCCA’s decision in 34

mailto:[email protected]



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Kwikwetlem, BC Hydro cannot be faulted for not more clearly addressing elements of the 1

duty to consult that had not yet been articulated by the Courts - especially when the issue 2

had never been raised by the First Nation. BC Hydro makes this comment on the 3

development of the law as only in passing with respect to Kwantlen’s remarks in para. 48. 4

BC Hydro’s primary submission on this point (as discussed above) is that it addressed 5

project alternatives with the First Nations at the appropriate stage of project development. 6

(b) 22 July 2010 Presentation 7

Kwantlen asserts at para. 50 that there was only “a single slide identifying Project 8

alternatives” in the July 2010 presentation materials. This assertion is false. The content of 9

the slides are found at Exhibit B-1, Appendix H-1, pgs. 139 to 163 of 345. The agenda for 10

the 22 July 2010 meeting is set out in the slide found at pg. 142 of 345, and BC Hydro notes 11

that two of the six items concerned alternatives to the Project. In addition to the slide on 12

pg. 149 that discusses the Project alternatives, pgs. 160 to 162 describe the upcoming 13

Hemmera and B&V Minimal Cost Studies concerning alternatives. 14

More importantly, Kwantlen’s evidence in para. 50 that the discussion of alternatives was 15

brief and presented as background information is contradicted by BC Hydro’s Rebuttal 16

Evidence (Ex. B-16). At the 22 July 2010 meeting BC Hydro spent considerable describing 17

five specific alternatives to the Project, namely the two De-Rating Alternatives A and E, and 18

three Decommissioning Alternatives B, C and D. BC Hydro also outlined the consequences 19

of some of these alternatives; for example, with respect to de-rating that much of the Project 20

work would still have to be undertaken, and that draining Hayward Lake Reservoir per 21

Alternatives C and D would impact Mission’s ability to draw water. 22

In response to Kwantlen claims in para. 51, it is important that the BCUC take note of the 23

fact that at the 22 July 2010 meeting, BC Hydro described how it had recently retained two 24

third party consultants to review and provide two studies concerning the two de-rating and 25

three decommissioning alternatives to the Project, and also explained that the two third party 26

consultant studies were not complete. In addition to describing the status of these two third 27

party consultant studies, the scope of each study was also described at the 22 July 2010 28



Page 59

meeting, and is reflected in three slides found at pgs. 160 to 162 of 345 of Appendix H-1. 1

Refer to section 2.4.1 of Ex. B-16. 2

BC Hydro submits that consistent with its finding in the ILM February 2011 Reconsideration 3

Decision94 that BC Hydro’s engagement of external consultants to study particular 4

alternatives is an indication that the particular alternative is one that is being “seriously 5

considered”, the BCUC should find that at the 22 July 2010 presentation and discussion at 6

which both the scope and status of the third party studies and Alternatives A through E 7

themselves were described, it was clear that BC Hydro was “seriously considering 8

alternatives”. 9

As set out in Ex. B-16, pgs. 17 to 18, BC Hydro asked if there were any questions on the 10

alternatives portion of the 22 July 2010 presentation, and there were none. Nor was there 11

any follow-up by Kwantlen with respect to the status of the two third party consultant studies 12

or alternatives to the Project more generally, until Kwantlen’s consultant Pottinger Gaherty 13

Environmental Consultants Ltd. (PGL) requested BC Hydro’s alternatives to the Project 14

analysis in a letter dated 13 October 2010.95 15

(c) Hemmera/B&V Reports 16

BC Hydro provided Kwantlen with the Hemmera and B&V Reports on 2 December 2010, 17

almost three months before filing the Application. Copies of the Hemmera Report and 18

B&V Reports are found at Appendices G-3 and G-2 to Ex. B-1 respectively. Kwantlen 19

complains at para. 54 that the Hemmera Report was “presented as a finished product,” and 20

again at para. 61 that three months was not sufficient time for ”any meaningful input”, yet 21

Kwantlen did not ask any questions or provide BC Hydro with any comments or concerns 22

concerning either the Hemmera Report or the B&V Report prior to BC Hydro filing the 23

Application on 22 February 2011 or indeed until the filing of Kwantlen responses to IRs on 24

14 September 2011. Kwantlen did not even take the opportunity to communicate that it 25

required time to review the two reports. 26

94 Supra, note 67, pg. 67; excerpt at Tab 3 of the Reply Book of Authorities. 95 Found at Appendix H-1 of Ex. B-1, pg. 225 of 345.



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Nor does BC Hydro agree with Kwantlen’s contention in para. 54 that there has been no 1

evaluation of alternative-related impacts in the Hemmera Report. Kwantlen asserts 2

Aboriginal rights (including title) in the Project area which include “the right to … a 3

ceremonial fishery”, “the right to harvest and use forest resources, including timber, plants, 4

roots and berries”, “the right to preserve, manage and steward Kwantlen cultural resources, 5

including archaeological resources”, “the right to hunt for …. deer, elk, ducks, geese and 6

other small mammals and waterfowl”.96 The Hemmera Report examined the impacts of 7

Alternatives A, B, C, D and E on: fisheries, terrestrial ecology which includes impacts to 8

vegetation and wildlife, and archaeology, among other impacts. 9

In para 52, Kwantlen asserts that the Hemmera Report was “…produced by BC Hydro only 10

because Kwantlen, through PGL, asked for it”. BC Hydro disagrees with this assertion. As 11

set out above, the commissioning of the Minimal Cost Studies (the Hemmera Report, and 12

the B&V Report), was discussed in detail at the 22 July 2010 presentation before PGL was 13

even hired by Kwantlen. 14

(d) Board Decision 15

Kwantlen proclaims in para. 62 that the Board 17 February 2011 decision should be seen as 16

“artificial” from a project planning and consultation point of view. This allegation is entirely 17

without merit. It is clear from the materials contained at Ex. B-7, BC Hydro’s response to 18

BCUC IR 1.97.0 that Board approval was required with respect to: (1) Management’s 19

recommendation that the Project is the preferred alternative as compared to Alternatives A 20

through E; (2) the filing of the Application; and (3) authorization of Project implementation 21

costs up to the Expected Amount (Board Materials). BC Hydro was actively contemplating 22

Alternatives A though E, and consulted Kwantlen on all five of these alternatives, even 23

though some of these alternatives such as Decommissioning Alternatives C and D are 24

clearly inferior to the Project and may not be viable from a regulatory acceptance point of 25

view as described above in section 3.3.1(b). It is clear from the Board Materials that the 26

Board had to decide whether the Project was the preferred alternative, regardless of 27

management’s preference for the Project. 28

96 Ex. C3-10, Kwantlen’s response to BCUC IR 1.1.



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3.4.3 Kwantlen Did not Fulfill its Reciprocal Obligation in Respect of 1 Alternatives 2

Kwantlen is duty bound to “[e]xpress their interests and concerns once they have an 3

opportunity to consider the information provided by the Crown, and to consult in good faith 4

whatever the means are available to them”; “they cannot frustrate the consultation process 5

by refusing to meet or participate, or by imposing unreasonable conditions”; Halfway River 6

First Nation v. British Columbia.97 Kwantlen was afforded many opportunities to raise 7

alternatives as an issue (by for example, reviewing the Summary of Information and 8

Hemmera and B&V Reports, raising questions at the 15 December 2009 and 22 July 2010 9

presentations, sending in written comments or otherwise making known its concerns to 10

BC Hydro), yet they continually failed to raise any concerns with the BC Hydro alternatives 11

analysis much less particularize those concerns in any way. As found by the SCC on 12

numerous occasions, what is required is ‘give and take’. With the limited exception of PGL’s 13

request in October 2010 for BC Hydro’s alternatives analysis, Kwantlen did not raise the 14

issue of or ask any questions concerning alternatives to the Project, and did not make 15

known any preference for any alternative to the Project, over the course of the entire 16

Project-related consultation, and in particular during the period between the 15 December 17

2009 Summary of Information and the 22 February 2011 filing of the Application. The first 18

time BC Hydro was told by Kwantlen that alternatives to the Project were of concern was at 19

the Kwantlen-BC Hydro meeting of 27 July 2011, just prior to Kwantlen filing its evidence on 20

29 July 2011.98 21

In conclusion, BC Hydro is of the view that Kwantlen was adequately consulted on the 22

alternatives. Consultation on alternatives took place from December 2009 onwards. This 23

allowed a period of over 14 months to consult prior to BC Hydro filing the Application. The 24

evidence shows that Kwantlen did not raise the issue or ask questions about alternatives 25

(other than PGL’s request in October 2010) prior to February 2011, and did not indicate its 26

concern about the alternatives until 27 July 2011. 27

97 1999 BCCA 470, para. 60 as cited in Endako Mine, supra, note 59; a copy of Endako Mine is found at Tab 26 of the FS Book of Authorities. Halfway River was also cited by the SCC in Haida, supra, note 44, para. 42. 98 Ex. B-16, section 2.3.1, pg. 11.



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3.5 Adopting a Process of Deep Consultation 1

Notwithstanding that BC Hydro believes that the appropriate scope of consultation is around 2

the middle of the Haida spectrum, BC Hydro submits that the evidence demonstrates that 3

BC Hydro has met and discharged all the requirements of deep consultation as outlined by 4

the SCC. In particular, BC Hydro submits that based on: (1) the consultation to date which 5

began in November 2006 during the Project Identification phase (the earliest project stage), 6

through which BC Hydro continually and openly shared information (as it was being 7

gathered) but which also clearly consisted of much more than the sharing of information; (2) 8

the identification of and sharing of proposed mitigation measures with Kwantlen, and the 9

acceptance of almost all of the PGL recommendations and the provision of reasons for not 10

accepting the PGL TDG and flow recommendations; and (3) the commitments to future 11

consultation that have already been made, consultation has indeed been high. In addition, 12

there is also the Benefits Agreement proposal, which is not a requirement of even deep 13

consultation. This is expanded upon below. 14

The overall test is not whether Kwantlen interests have been currently addressed to 15

Kwantlen’s satisfaction. Bearing in mind that agreement is not required to meet the test in 16

Haida – which is, were BC Hydro’s consultation efforts up to this stage reasonable and in 17

good faith - BC Hydro believes that its consultation with and responses to Kwantlen are 18

adequate in the context of the issues the BCUC needs to address as part of the CPCN 19

proceeding to this stage of the Project. As stated in section 2.1.3(d) of the BCH Final 20

Submission, the BCUC does not need to decide if the consultation process in this case 21

unfolded perfectly or whether the most appropriate accommodation was offered to Kwantlen. 22

BC Hydro submits that its consultation process with Kwantlen to this stage falls within the 23

range of reasonable outcomes. 24

As a preliminary matter, BC Hydro does not accept Kwantlen’s position in para. 63 that the 25

focus of the BCUC’s inquiry into the assessment of the adequacy of consultation with 26

Kwantlen “in this case should be on BC Hydro’s consultation prior to the 11 February 2011 27

Board approval of the CPCN Application”. As set out in section 2.1.3(b) of the BCH Final 28

Submission, the focus of the BCUC’s inquiry in respect of the Application should properly be 29

whether consultation with Kwantlen has been adequate up to the point of its decision. 30



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BC Hydro also refers the BCUC to the AMPC Final Submission, paras. 57-62 in this regard. 1

BC Hydro further submits that the Kwantlen-BC Hydro consultation process ought to be 2

evaluated as a continuum, rather than a series of distinct, separate decisions each of which 3

acts as a separate trigger for the duty to consult. Accordingly, BC Hydro respectfully submits 4

that the entirety of the consultation process from November 2006 to the close of the 5

evidentiary record on 4 November 2011 should be the focus of the BCUC’s assessment. 6

In addition, as described in section 2.1.3(c) of the BCH Final Submission, consultation is 7

on-going, and the filing of the Application does not, to use the words of the BCUC in the ILM 8

February 2011 Reconsideration Decision, constitute the “die being cast”. For example, there 9

is no definitive point of no return on: 10

Environmental mitigation. The SEIAM and the Project EMP remain in draft to permit 11

Kwantlen to provide further input, and the EMP will be submitted to DFO prior to 12

Project implementation. The draft SEIAM and EMP are discussed in section 3.5.2(a) 13

below. Further evaluation of the draft SEIAM and EMP after the granting of a CPCN 14

remains useful as decisions on design, possible Project scope modifications, 15

construction and monitoring occurring after the SEIAM and EMP are finalized can be 16

informed by these two documents, and indeed by additional mitigation measures 17

Kwantlen may wish to propose above and beyond what PGL has recommended to 18

date; 19

The two remaining TDG mitigation measures that BC Hydro has not adopted to date 20

will not be precluded by implementation of the Project. Refer to section 3.5.2(b) below; 21

The form of or acceptance by DFO and MoE of a site specific TDG guideline. Refer to 22

section 3.5.2(b); 23

The quantum amount and other elements of the Benefit Agreement proposal. Refer to 24

section 3.5.3; and 25

The content of the over-all archaeological plan BC Hydro has committed to work with 26

Kwantlen to develop for the Project. Refer to section 3.5.4. 27



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BC Hydro has committed to undertaking further consultation with Kwantlen on each of these 1

issues. BC Hydro fully understands and accepts that in all cases, the honour of the Crown 2

must be met. BC Hydro submits that there is no evidence on the record supporting that once 3

a CPCN is granted, BC Hydro will simply ignore its duty to act honourably. As stated by the 4

SCC in Haida at paras. 42 and 48: “it is always assumed that the Crown intends to fulfill its 5

promises”. 6

3.5.1 Integration into BC Hydro Decision-Making 7

Kwantlen asserts that deep consultation in this case requires the “integrating of Kwantlen 8

into BC Hydro’s decision-making processes”. As discussed above, there is no SCC 9

prescriptive list of what must be included as part of deep consultation. BC Hydro provided 10

Kwantlen with deep, direct engagement which provided an avenue for Kwantlen to make 11

formal submissions, to be “integrated into BC Hydro’s decision-making process” and to be 12

provided reasons. This direct engagement process consisted of providing Kwantlen with: 13

Notice of BC Hydro’s intentions. BC Hydro commenced consultation with Kwantlen in 14

November 2006, about 4 ½ years before filing the Application. BC Hydro provided 15

Kwantlen with notice in advance of the two regulatory applications made to date 16

regarding the Project. The first was with respect to BC Hydro’s 15 January 2009 17

application to EAO to voluntarily opt-in to BCEAA. Prior to BC Hydro’s 17 18

November 2008 decision to make this application, and prior to 15 January 2009 19

application to EAO, BC Hydro provided the Kwantlen with a draft of the Project 20

Description for comment on 3 October 2008;99 BC Hydro states that it is writing to the 21

Kwantlen “to inform you of BC Hydro’s intention to have the [Project] reviewable under 22

[the BCEAA] and to share with you a draft of the Project Description that will 23

accompany this request to the [EAO]” [Emphasis added]. At a meeting held on 24

5 November 2008, BC Hydro and the Kwantlen discussed the draft Project Description, 25

among other things. Refer also to the Kwantlen’s letter of 14 November 2008, provided 26

as Ex. B-7, Attachment 1 to the response to BCUC IR 1.15.1.1, where Kwantlen states: 27

“We wish to acknowledge the significance of being provided a copy of the draft project 28

99 Refer to the 3 October 2008 cover letter at pgs. 91 and 92 of 345 of Appendix H-1 to Ex. B-1.



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description prior to it being submitted to the British Columbia Environmental 1

Assessment Office and wish to thank you for your consideration in this regard”. 2

Regarding the Application, BC Hydro strongly disagrees with Kwantlen’s assertion in 3

para. 1(c) that the Application was filed “prematurely”. BC Hydro on numerous 4

occasions provided Kwantlen with the expected Application filing timeline. For 5

example, per the consultation log, on 15 December 2009 BC Hydro stated that the 6

current timeframe for filing the Application was January 2011, and on 7

28 September 2010 BC Hydro advised Kwantlen that the timing of filing of the 8

Application had been adjusted to February 2011. Further, on 14 October 2010 9

BC Hydro provided Kwantlen information on the BCUC process100 and offered to 10

answer any questions Kwantlen had. In the meetings leading up to the filing between 11

November 2010 and February 2011, BC Hydro reminded Kwantlen on each occasion 12

about the filing of the Application. BC Hydro provided Kwantlen with a copy of the 13

Application. BC Hydro invited Kwantlen to the CPCN Application workshop on 28 14

February 2011 which Kwantlen attended. Even a high level of consultation does not 15

require agreement on a mutually-agreeable schedule for the consultation and 16

negotiation process, or the timing of BC Hydro’s regulatory applications; 17

All the relevant information upon which the proposed Project is based to permit 18

Kwantlen to prepare its views on the matter, including: 19

All information BC Hydro has with respect to alternatives to the Project. Refer to 20

section 3.4 above. The Summary of Information, the B&V Report and the Hemmera 21

Report together contain approximately 520 pages of alternatives to the Project 22

analysis;101 and 23

Extensive information with respect to the potential environmental impacts of the 24

Project throughout the 5 year consultation process with Kwantlen, including an 25

EA-like assessment conducted through the SEIAM. As part of the SEIAM, 26

Hemmera, and independent consultant, assessed the potential effects of the 27

Project on fish and fish habitat, wildlife and wildlife habitat, land use, 28

100 Ex. B-1, Appendix H-1, pgs. 229 to 266 of 345. Refer also to Appendix H-1, pgs. 273 to 274 of 345. 101 Ex. B-16, pg. 14.



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socio-economics and community, and archaeological resources. Hemmera in the 1

SEIAM also recommended measures to reduce or otherwise mitigate potential 2

Project effects to those components. BC Hydro is committed to following the 3

recommended mitigation measures. Refer to section 3.5.2(a) below; 4

Opportunities to make any concerns known to BC Hydro and provide feedback during 5

the consultation process, including the fact that BC Hydro provided Kwantlen with 6

capacity funding through a CFA to gather information with respect to potential 7

Project-related environmental impacts and the development of a Traditional Use Study, 8

among other things. In June 2010 the parties concluded negotiations on a CFA, and 9

the Kwantlen agreed that “…all meeting and other consultation activities to date…” 10

were included in the CFA.102 In addition, as noted in section 3.5.5(a) below, while the 11

parties were negotiating a CFA, BC Hydro specifically offered to cover costs in 12

advance of the conclusion of a CFA. To the best of BC Hydro’s knowledge, from 2007 13

onward there was not a time or set of circumstances where the lack of a formal CFA 14

adversely affected Kwantlen’s ability to engage with BC Hydro on the Project due to 15

BC Hydro’s commitment to fund activities in advance of a CFA. Refer also to 16

section 3.5.2(a) with respect to the sharing with Kwantlen of draft Terms of Reference 17

(ToR) for various environmental studies for comment prior to the initiation of the 18

studies; 19

A forum to review the extensive Project mitigation measures as summarized at pgs. 62 20

to 64 of the BCH Final Submission, and to modify BC Hydro’s proposed mitigation 21

measures before the final decision is made by the CEO to proceed with the Project 22

should a CPCN be granted. For example, In section 3.2 of Ex. B-16 BC Hydro 23

confirmed it has accepted all of the non-TDG fisheries-related recommendations 24

except the issue of ramp-rates, and all of the wildlife recommendations, proposed by 25

PGL, and this was communicated to Kwantlen by way of letter dated 29 August 2011, 26

a copy of which is found at Attachment 2 to Ex. B-16. Another example concerns the 27

archaeological management of DhRo59 as part of the Stage 1 Ruskin Dam Safety 28

Right Abutment Upgrade (Stage 1 Right Abutment Work). During the course of an 29

102 Refer to Ex. B-7-1, BC Hydro’s response to BCUC IR 1.14.3.1 and to the copy of the CFA found at Confidential Attachment 1 to that response.



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Archaeological Impact Assessment (AIA) undertaken in respect of the Stage 1 Right 1

Abutment Work, an archaeological site was identified. It was determined that the 2

archaeological site DhRo59 would be heavily impacted by the Stage 1 Right Abutment 3

Work. On 18 May 2010 BC Hydro confirmed acceptance of Kwantlen’s proposal 4

(originally made at the 15 December 2009 meeting) for settling key issues associated 5

with impacts to DhRo59. In particular, BC Hydro agreed to the specific amount of 6

funding requested by Kwantlen for the requested purposes, namely to provide 7

long-term management and protection of the cultural material excavated from DhRo59. 8

BC Hydro also committed to additional funding to resource the co-operative planning 9

process.103 Yet another example is the fact that BC Hydro has left the SEIAM and the 10

Project EMP in draft to allow for Kwantlen to provide mitigation proposals beyond what 11

PGL has recommended to date. As part of the draft EMP provided to Kwantlen, 12

Kwantlen has been offered the opportunity to review proposed contractor 13

Environmental Protecton Plans. Kwantlen will also have the opportunity to be involved 14

in the deployment of planned Project construction activities, such as Environmental 15

Monitors; 16

Oversight of the AIA conducted for the entire Project area by Cordillera Archaeology, 17

Kwantlen’s preferred archaeologist. Refer to pgs. 67 and 68 of the BCH Final 18

Submission; 19

A fair chance to be directly involved in work related to the Project. Ex. B-7-1, 20

Confidential Attachment to BCUC IR 1.14.4 contains information regarding payments 21

made to Kwantlen for completed work opportunities on the Project. Refer also to the 22

Benefits Agreement proposal. These opportunities will continue during the Project 23

construction period should a CPCN be granted; 24

Through BC Hydro, an avenue to the B.C. Government with respect to: (1) Kwantlen’s 25

desire for a broader relationship (refer to the letter of BC Hydro’s Chief Executive 26

Officer (CEO) to the B.C. Deputy Ministers of Aboriginal Relations and Negotiations, 27

and of Energy and Mines);104 and (2) Kwantlen’s interest in revenue sharing. As set out 28

103 Ibid, pg. 22. 104 Found at Ex. B-12, Attachment 2 to BC Hydro IR 2.1.



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at pgs. 70 to 71 of the BCH Final Submission, BC Hydro’s Director of Aboriginal 1

Relations and Negotiations met with Kwantlen on 14 July 2011 at which both revenue 2

sharing and historic grievances were discussed. At that meeting, BC Hydro offered to 3

discuss revenue sharing further. In addition, BC Hydro communicated to the B.C. 4

Government Kwantlen’s desire to engage in revenue sharing discussions; refer to the 5

letter from BC Hydro’s CEO to the B.C. Deputy Ministers of Aboriginal Relations and 6

Negotiations, and of Energy and Mines, found at Exhibit B-12, Attachment 2 to 7

BC Hydro IR 2.1, and Exhibit C3-8, Kwantlen’s response to BC Hydro IR 2.2; and 8

Specific commitments with respect to on-going consultation. 9

Accommodation is not mandated in every case where there is finding that the scope of the 10

duty to consult is at the high end. As the SCC noted in Haida at para. 47: 11

When the consultation process suggests amendment of Crown policy, 12 we arrive at the stage of accommodation. Thus the effect of good faith 13 consultation may be to reveal a duty to accommodate. Where a strong 14 prima facie case exists for the claim, and the consequences of the 15 government’s proposed decision may adversely affect it in a 16 significant way, addressing the Aboriginal concerns may require 17 taking steps to avoid irreparable harm or to minimize the effects of 18 infringement, pending final resolution of the underlying claim. 19 Accommodation is achieved through consultation, as this Court 20 recognized in R. v. Marshall, 1999 CanLII 666 (SCC), [1999] 3 S.C.R. 21 533, at para. 22: “. . . the process of accommodation of the treaty 22 right may best be resolved by consultation and negotiation”. 23 [Emphasis added]. 24

Nevertheless, BC Hydro has proposed extensive proposed mitigation measures 25

summarized above and at pages 62 to 64 of the BCH Final Submission. In addition, 26

BC Hydro has tabled with Kwantlen a Benefits Agreement proposal which includes a 27

quantum. 28

Kwantlen has been given (both in the BC Hydro direct consultation and via the BCUC 29

regulatory process) the opportunity to make submissions for consideration and formal 30

participation in the BCUC decision-making process. BC Hydro has explained its decisions, 31

and the BCUC will also provide written reasons showing how Kwantlen’s concerns were 32

considered. All of these elements are present in the combination of the BC Hydro direct 33



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consultation and via the BCUC regulatory process. Kwantlen takes issue with the latter, an 1

issue that is addressed below in section 3.5.5(b). 2

To BC Hydro, it is not clear what is meant in para. 65 where Kwantlen state it should have 3

been “involved” in the Board’s 17 February 2011 decision. Direct involvement in the Board 4

decision-making process (a seat at the table) is not required by law and would run afoul of 5

section 5 of the Hydro and Power Authority Act. BC Hydro accepts that information with 6

respect to the BC Hydro-Kwantlen consultation process must and did inform the Board’s 7

decision. Kwantlen asserts that there was only generalized information in front of the Board 8

and relies on the Board Materials forming Ex. B-7, BC Hydro’s response to BCUC IR 1.97.0 9

and in particular Attachments 1 and 2. However, this overlooks BC Hydro’s response to 10

BCUC IR 2.46.1,105 where BC Hydro outlined a number of other inputs that informed the 11

Board’s decision: 12

Benefits Agreement Mandate – The CEO, who attended the 17 February 2011 Board 13

meeting, approved the Benefits Agreement mandate for the Project on 14

4 November 2010 after a briefing by the Director of Aboriginal Relations and 15

Negotiations;106 16

Executive Review of Alternatives, Project Scope/Costs - The CEO and the Executive 17

Vice President of Generation, who were present at the 17 February 2011 Board 18

meeting for discussion and the answering of questions, as well as other members of 19

the Executive Team, reviewed materials at the following meetings: 20

14 December 2010 - The Decommissioning Alternatives; 21

17 January 2011 - Project costs, schedule, procurement and scope. 22

In addition, at a 28 January 2011 meeting the CEO and Executive Vice President of 23

Generation reviewed Powerhouse and Switchyard safety hazards materials;107 and 24

105 Ex. B-10. 106 BC Hydro provided the BCUC with the mandate estimate in Ex. B-7-1, BC Hydro’s confidential response to BCUC IR 1.14.5. 107 A copy of these presentation materials is provided as Ex. B-10-2, Attachment 1 to BC Hydro’s response to AMPC IR 2.10.7.



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Board Capital Committee Meeting – At a meeting on 14 February 2011, Management 1

provided an overview of the condition of the Dam and Powerhouse, including the public 2

safety and worker safety risks, and the five Decommissioning Alternatives, followed by 3

a discussion, and a question and answer session. 4

What follows is BC Hydro’s reply to three issues raised by Kwantlen in paras. 67 to 75, 5

namely: (1) Information sharing (3.5.2); (2) time to advance accommodation-related 6

discussions (3.5.3); and (3) Need for an overall Project archaeological plan (3.5.4), with 7

BC Hydro’s reply to Kwantlen “conclusions” in paras. 76 to 78 set out in section 3.5.5. 8

3.5.2 Information Sharing 9

(a) Environmental Information Generally/Role of SEIAM 10

Kwantlen asserts at para. 67 that BC Hydro has not provided environmental information in a 11

timely and complete manner. Kwantlen also makes the unsubstantiated claim that but for 12

PGL’s request, none of the many environmental reports provided to Kwantlen would have 13

been provided. The Kwantlen statements in para. 67 are not supported by the record. 14

BC Hydro shared relevant Project documentation with Kwantlen proactively and in a timely 15

fashion.108 In particular, the Appendix attached to PGL’s letter dated 22 July 2011 attached 16

as Tab B to the Evidence of Susan Wilkins109 (PGL Letter) does not set out all of the dates 17

on which Kwantlen received environmental and other information related to the Project: 18

BC Hydro shared for comment ToR for environmental studies in the spring and 19

summer and fall of 2008, including ToR for TDG studies.110 Kwantlen were invited to, 20

and in a number of cases did, supply field workers for many of the environmental 21

studies, and Kwantlen’s preferred archaeological consultant was engaged to lead the 22

archaeology study work; 23

108 Ex. B-16, pg. 7, line 5 to pg. 10, line 3. 109 Ex. C3-6. 110 Ex. B-1, Appendix H-1, pgs. 16-90.



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The Project Description submitted to EAO as part of BC Hydro’s voluntary application 1

to opt-in to BCEAA and shared with Kwantlen prior to submission to EAO111 contained 2

detailed Project-related environmental information;112 3

Prior to the execution of the CFA, on at least two occasions – 12 March 2009 and 8 4

October 2009 - BC Hydro provided Kwantlen with a spreadsheet summarizing all of the 5

environmental studies/reports being prepared for purposes of Project review. On both 6

occasions BC Hydro and Kwantlen discussed the status of the various study programs 7

underway, including the socio-economic studies, and BC Hydro offered Kwantlen the 8

opportunity to participate in the further development of fisheries, vegetation and wildlife 9

studies. On both occasions Kwantlen told BC Hydro they would respond to BC Hydro 10

but never did; 11

In October 2009, BC Hydro shared the results of four environmental studies113 – final 12

vegetation and wildlife assessment (switchyard area), final archaeological assessment 13

(Right and Left Abutment areas), final archaeological assessment (switchyard area) 14

and draft socio-economic assessment – and Kwantlen provided no comments on any 15

of the four studies. BC Hydro also offered to bring personnel from Hemmera who were 16

working on specific Project-related studies to meet Kwantlen for purposes of 17

understanding Project-related studies and to ask questions, but this offer was not taken 18

up by Kwantlen; 19

The Summary of Information was provided to Kwantlen on 15 December 2009,114 and 20

not in December 2010 as set out in the PGL Letter; and 21

As noted previously in section 3.4, the B&V and Hemmera Minimal Cost Studies with 22

respect to the alternatives to the Project were identified to Kwantlen in July 2010. 23

In addition, most of BC Hydro’s proposed environmental mitigation measures were identified 24

and sent to Kwantlen for review and comment prior to BC Hydro’s filing the Application, in 25

the form of: 26

111 Ex. B-7-2, BC Hydro’s response to Kwantlen IR 1.1.1. 112 Refer to the copy of the Project Description found in Ex. B-1, Appendix H-4, pgs. 9 to 111 of 115. 113 Ex. B-1, pg. 4-7. Refer also to the environmental study list at Appendix H-1, pgs. 227/228 of 345. 114 Ex. B-1, Appendix H-1, pg. 97 of 345.



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The draft SEIAM, originally sent to Kwantlen on 10 August 2010115 before the PGL 1

request for information made on 13 October 2010.116 The purpose of the SEIAM is 2

set out in section 1.0, and includes “to provide information to facilitate consultation 3

with First Naitons…”. The results of the draft SEIAM were presented to Kwantlen in 4

presentations on 30 July 2010 and 28 September 2010.117 The draft SEIAM contains 5

most of the Project-related environmental information provided in the various 6

supporting technical reports and documents listed in the PGL Letter. The draft 7

SEIAM is the most important environmental document produced by BC Hydro with 8

respect to the Project; and 9

The Project EMP, originally sent to Kwantlen on 10 November 2010.118 10

Twelve reports relating to heritage and archaeology, vegetation and wildlife, TDG, and 11

socio-community and socio-economic were presented to Kwantlen in September 2010.119 12

The remainder of the technical reports were provided to Kwantlen once they were available 13

for distribution between October 2010 and February 2011. 14

(b) TDG 15

At paras. 68, 69 and 70, Kwantlen makes a number of unsubstantiated claims with respect 16

to TDG. The first, in para. 69, is part of the Kwantlen argument that the environmental 17

impacts of the Project should be dramatically expanded to include the effect of continuing 18

the historic impact of the entire Ruskin Facility into the future. As discussed in section 3.3.1, 19

this position finds no support in law or in the facts of this case. The evidence is clear that 20

TDG is not a Project-related impact. The Project is not expected to increase the frequency, 21

duration or magnitude of high TDG events compared to that already experienced at the 22

Ruskin Facility in its current state.120 As part of the review of the Project, neither BC Hydro 23

nor DFO identified that the Project would cause TDG-related impacts to fish. It is notable 24

115 Refer to Exhibit B-7-2, BC Hydro’s response to Kwantlen IR 1.7.1.1. 116 The PGL letter of 13 October 2010 is found at Ex. B-1, Appendix H-1, pgs. 225/226 of 345. 117 Ex. B-1, pg. 4-8, line 19 to pg. 4-9, line 2; and pg. 4-9, lines 10-16. 118 The November 2010 version of the EMP is found at Exhibit B-12, Attachment 7 to BC Hydro IR 9.1 to Kwantlen, with the most recent version of the EMP found at Exhibit B-10-2, Attachment 5 to BC Hydro’s response to RTRA IR 2.1.1. 119 Ex. B-1, pg. 4-9. 120 Refer to Ex. B-1, pg. 2-44 and section 6.0 of the draft SEIAM, supra, note 115.



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that PGL in the PGL Letter does not claim that the Project will result in TDG impacts or 1

identify any mechanism for such impacts; rather, the lens through which PGL analyzes the 2

TDG issue is what opportunities the Project presents to implement TDG reduction.121 3

In fact, BC Hydro has done as PGL urges, which is to use the Project to reduce TDG 4

incidents associated with the current Ruskin Facility. As set out in Exhibit B-7-2, BC Hydro’s 5

response to Kwantlen IR 1.7.3, operational changes have already been adopted at the 6

current Ruskin Facility to reduce the likelihood of a TDG incident which will be carried over 7

to the operations of the Ruskin Facility post-Project. BC Hydro has incorporated 8

cost-effective ways to further reduce the incidence of high TDG into the Project scope. The 9

Powerhouse replacement portion of the Project will further reduce the incidence of high TDG 10

by: 11

Incorporating an auto spill feature, thus no longer needing to rely on load splitting 12

between units to ensure flow continuity, and reducing the need for periods of very low 13

generation; 14

Locating auto spill at spillway Gate 1, which due to the step design of the spillway does 15

not lead to elevated TDG generation during a spill; and 16

Improving unit reliability so that the likelihood of unit failure, and thus the need to spill 17

to maintain tailrace water elevation reduces dramatically. 18

In addition, as set out in Table 1 of Ex. B-16, BC Hydro has accepted 17 of the 19 19

TDG-related recommendations flowing from the four expert reports it commissioned. As set 20

out above in section 2.1.5 in reply to BCOAPO, there are only two recommendations 21

BC Hydro has not accepted to date. These two TDG recommendations are: (1) Widening 22

the flow channel upstream of the waterfall at Blind Slough and installing steps on the invert 23

which has a high probably of reducing the TDG in the plunge pool; and (2) The addition of 24

spillway chute flow deflectors below Bays 3 and 4 which would provide further opportunities 25

for reducing TDG levels downstream. In the case of these two recommendations not 26

accepted by BC Hydro, proceeding with the Project will not preclude the implementation of 27

either recommendation, if on further study, it is determined that they would be effective in 28

121 Refer to the PGL Letter, pg. 3, copy at Ex. C3-6, Evidence of Susan Wilkins, Tab B.



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addressing TDG concerns in the Stave River, and in the case of (2), is technically 1

feasible.122 Thus there is no possible harm if the BCUC grants a CPCN to BC Hydro for the 2

Project. 3

Second, Kwantlen incorrectly claims that BC Hydro has not provided any reason for what 4

Kwantlen characterizes as a “delay in developing site-specific guideline”. BC Hydro has 5

clearly laid out the process for the development of such a guideline in its response to 6

Kwantlen IR 1.7.3. At a May 2009 workshop on TDG issues attended by DFO, among other 7

parties, the following were key outcomes with respect to the development of site specific 8

TDG guidelines for the Ruskin Facility: 9

1. Based on empirical evidence presented at the workshop, DFO indicated support for 10

the development of site specific TDG guideline(s) for the Ruskin and Stave Falls 11

Facilities provided that acceptable levels of protection for aquatic organisms could be 12

clearly demonstrated and that provincial and federal fisheries management 13

objectives continue to be met; 14

2. To determine acceptable levels of protection and help define site specific guidelines, 15

BC Hydro should carry out a comprehensive risk assessment pertaining to TDG 16

issues at the Ruskin Facility. The risk assessment should include an up to date 17

literature review, laboratory studies to resolve key uncertainties and in situ studies to 18

better characterise exposure risk, including potential for depth compensation and 19

mixing between turbine and spill flows; and 20

3. The risk assessment process should include consideration for sub-lethal effects of 21

TDG exposure, in addition to direct effects. 22

There has been no delay in developing a site-specific TDG guideline. BC Hydro is presently 23

carrying out the comprehensive risk assessment work identified during the workshop. 24

BC Hydro will work collaboratively with DFO to prepare a TDG management plan that will 25

identify site-specific guidelines, operational constraints or protocols if required, and 26

monitoring requirements. Given the level of work involved, the anticipated completion date 27

for the TDG management plan is March 2012. As explained below, BC Hydro has not only 28

122 Ex. B-16, section 3.1, pg. 24 and section 3.1.1.



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committed to continue to provide Kwantlen with all copies of future TDG-related studies and 1

consult with Kwantlen regarding the development of a site-specific TDG guideline,123 2

BC Hydro will also consider funding to enable Kwantlen to participate in the development of 3

site-specific TDG guidelines. 4

Third, Kwantlen advance the fact that there has been no written approval from DFO or MoE 5

for the development of a TDG site-specific guideline as somehow indicating that DFO and 6

MoE are not in agreement that BC Hydro should undertake work to develop such a 7

guideline. The record demonstrates that both DFO and MoE have given verbal approval to 8

proceed with the work that is to underpin a Ruskin Facility site-specific guideline.124 MoE’s 9

own “Water Quality Guidelines for Total Dissolved Gas Pressure” specifically contemplate 10

the development of site-specific guidelines.125 11

Fourth, Kwantlen asserts, with no reference to case law, that the law requires that all TDG 12

mitigation must be assessed and discussed with Kwantlen prior to a CPCN issuing. This is 13

not correct. As set out in section 2.1.3(c) of the BCH Final Submission, the SCC in Taku and 14

other cases has recognized that consultation will occur throughout the development, 15

permitting and implementation stages of a project, and that not all First Nation concerns 16

must be addressed at a particular project approval stage. The BCUC itself has recognized 17

this in numerous decisions including the CVT Decision. In BC Hydro’s respectful 18

submission, the BCUC should not accede to Kwantlen’s unreasonable demand that all 19

TDG-related issues be resolved prior to the granting of a CPCN, and instead BC Hydro 20

should be permitted to do what both DFO and MoE agree it can do, which is to complete its 21

site specific guideline work and share the results with DFO, MoE and Kwantlen. There is no 22

reason that this work needs to be completed before a CPCN issues. In fact, there are 23

compelling reasons why TDG issues can and should be addressed after a CPCN is granted: 24

(1) TDG is not a Project-related impact but rather is an issue associated with the existing 25

Ruskin Facility; (2) the Project does not preclude implementing these two TDG mitigation 26

measures; (3) DFO and MoE have given verbal approval for BC Hydro to undertake an 27

assessment of site-specific TDG guideline for the Ruskin Facility and this assessment is not 28

123 Ex. B-7-2, BC Hydro’s response to Kwantlen IR 1.7.3, pgs. 3 and 5 of 7. 124 Ex. B-10-2, BC Hydro’s response to Kwantlen IR 2.3.4, pg. 1 of 4. 125 Ibid, BC Hydro’s response to Kwantlen IR 2.3.1.



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expected to be ready for review until March 2012; and (4) the Project is urgently required to 1

address significant seismic, worker safety, environmental and reliability conditions 2

associated with the existing Ruskin Facility, and waiting to after March 2012 to some 3

underdetermined date to conclude the site specific TDG guideline-related work and review 4

prior to the issuance of a CPCN as requested by Kwantlen means slippage of at least one 5

year in the schedule due to the need to time the Right Abutment Work with the Fraser River 6

freshet.126 7

Finally, in para. 70 Kwantlen erroneously asserts that TDG-related consultations with 8

Kwantlen have been an “afterthought”. The record demonstrates otherwise: 9

Kwantlen has been provided with the following TDG information (extracted from 10

BC Hydro’s response to Kwantlen IR 1.7.3): 11

TDG Information Date Provided Provided a copy of the ToR for the Total Gas Monitoring Program (and offers to get involved in the study, etc.). A copy of the e-mail sent to the Kwantlen concerning this ToR, and the ToR itself, are provided in Appendix H-1 of Exhibit B-1, page 15 (e-mail) and pages 48 to 62 (ToR) of 345.

30 May 2008

There were some minor references to TDG in the draft Project Description; refer to the final Project Description, Appendix H-4 of Exhibit B-1, page 34 of 115.

3 October 2008

There were some references to TDG in the Summary of Information; refer to Appendix H-1, pages 117 to 118 of 345.

15 December 2009

Presentation by BC Hydro to the Kwantlen; refer to Appendix H-1 of Exhibit B-1, pages 165, 175 and 210 to 251 of 345.

30 July 2010

Provided the draft SEIAM, which in section 6.0 discusses TDG. 10 August 2010; the most recent version of the SIEAM is provided as Attachment 1 to the

response to Kwantlen IR 1.7.1.1

Four TDG related technical documents provided to the Kwantlen: (1) Aspen Applied Sciences Ltd. (2008), a copy of which is provided as Attachment 1 to the response to Kwantlen IR 1.7.1.1; (2) Bruce, James and Greenbank, Jeff (October 2008); (3) Northwest Hydraulic Consultants Ltd. (August 2009); and (4) Falvey, H., Gulliver, J. and Weitkamp, D. (2008).

13 September 2010

BC Hydro re-presentation of July 30, 2010 at the Kwantlen’s request. 28 September 2010

126 Ex. B-1, pg. 5-6, lines 5-11.



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BC Hydro and the Kwantlen held a meeting regarding TDG. 17 January 2011 BC Hydro’s responses to the Kwantlen/PGL’s information requests on TDG resulted in BC Hydro providing the Kwantlen with two additional technical documents related to TDG, labelled as follows: (1) Greenbank, J. (2007); and (2) Greenbank J. (2010). Refer to Appendix H-1 of Exhibit B-1, pages 339 to 342 of 345.

8 February 2011

BC Hydro’s responses to TDG-related first and second round IRs 20 April 2011 and 16 June 2011

As can be seen from the above, Kwantlen’s statement in para. 67 that BC Hydro was 1

forthcoming with respect to TDG information only because of PGL’s 13 October 2010 2

request is demonstrably false. 3

A meeting was held with Kwantlen on 17 January 2011 which was devoted entirely to 4

TDG issues and which PGL attended. A commitment was made to keep Kwantlen 5

informed of new study developments as well as provide an opportunity for engagement 6

in the development of the site specific TDG management plan. BC Hydro offered to do 7

further TDG presentations and continue the TDG discussion. Neither Kwantlen nor 8

PGL followed up on this offer, and PGL did not contact the BC Hydro personnel 9

presenting at the 17 January 2011 meeting to ask about the status of the expert TDG 10

recommendations or other TDG issues;127 11

BC Hydro funded Kwantlen’s engagement of PGL through the CFA, who examined all 12

of the material referenced in the table above. Unfortunately, PGL’s assertions that 13

BC Hydro had not implemented expert-related recommendations and that the Project 14

would limit TDG mitigation options were not correct;128 15

BC Hydro has stated that it will consider funding to enable Kwantlen to participate in 16

the development of site-specific TDG guidelines, and that this funding could include 17

Kwantlen retaining technical and/or environmental consultants.129 18

3.5.3 Time to Advance Accommodation Discussions 19

In paras. 71-74, the essence of Kwantlen’s submission is that the BCUC should not issue a 20

CPCN because consultation between BC Hydro and Kwantlen has not been complete and in 21

127 Ex. B-16, section 3.1.1, pg. 33. 128 Ibid, section 3.1. 129 Ex. B-18, BC Hydro’s response to Kwantlen IR 3.2.4.



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particular more time is needed to advance “negotiation of interim economic accommodation 1

measures”. Kwantlen’s submission appears to be based on the fact that the CPCN 2

represents the major regulatory approval for the Project to proceed, as well as Kwantlen’s 3

characterization of the duty to consult in the circumstances at the high end of the Haida 4

spectrum. 5

BC Hydro replies as follows. While BC Hydro has tabled a Benefits Agreement proposal with 6

Kwantlen, and while the conclusion of such an agreement may be persuasive, if not 7

conclusive, evidence that consultation has been reasonable and adequate, the absence of 8

such an agreement is not determinative of, nor arguably even relevant to, whether or not 9

consultation has been adequate to this stage. The SCC has been clear that there is no duty 10

to agree and that an agreement is not required; refer to the BCH Final Submission, 11

section 2.1.3(c) where Haida at para. 49 and Taku at para. 22 are cited. In the FCTD Dene 12

Tha’ Decision, the court stated: “the goal of consultation does not indicate any specific result 13

in any particular case. It does not mean that the Crown must accept any particular position 14

put forward by a First Nations people”.130 Accordingly, in BC Hydro’s respectful submission it 15

would not be appropriate for the BCUC to grant Kwantlen its requested relief by either 16

denying the Application or suspending it to permit finalization of the Benefits Agreement, 17

mitigation measures and other accommodation-related issues. 18

BC Hydro further submits that it is incorrect to suggest that it is premature to conclude that 19

consultation has been adequate merely because there is no negotiated agreement at this 20

time. The BCUC has before it a full evidentiary record which, in BC Hydro’s submission, 21

clearly demonstrates that consultation with Kwantlen have been adequate to this stage. 22

In para. 72, Kwantlen suggests that BC Hydro’s view was that Kwantlen ought to have 23

moved ahead with Benefits Agreement negotiations prior to having all of the information 24

required to consider how the Project may affect their asserted title and rights. This was not 25

BC Hydro’s view. BC Hydro provided a possible framework of a Benefits Agreement to 26

Kwantlen in a meeting on 5 November 2008 (along with a number of other key draft 27

documents including a CFA) not with the intention to settle an Benefits Agreement at that 28

130 Supra, note 45, para. 82.



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time, but to provide initial working documents with the intention of: advancing discussions, 1

ensuring that Kwantlen was aware of the possible structure of such agreements, and 2

demonstrating to Kwantlen that BC Hydro was committed to take all measures necessary to 3

consult and accommodate with regard to the Project. The meeting notes from 5 November 4

2008 show that after having been provided these documents, Kwantlen indicated that 5

Council appreciated the commitment that was being shown.131 6

Sections 3.5.2(a) and (b) above, and section 3.5.4 below with respect to 7

archaeological-related information, set out the timing of the environmental and technical 8

reports BC Hydro provided to Kwantlen, indicating that information that Kwantlen could have 9

used to evaluate the Project’s potential impacts had been provided to Kwantlen much earlier 10

than February 2011. In para. 73, Kwantlen claims that they were only in a position to fully 11

understand and evaluate Project impacts as of February 2011, when the last two reports – 12

which relate to: (1) terrestrial/vegetation/wildlife impacts for which PGL had limited 13

recommendations due the low and confined Project impact relating to the relocation of the 14

switchyard to previously disturbed land on BC Hydro fee simple property,132 and (2) to TDG, 15

a non-Project issue - were provided by BC Hydro. Notwithstanding the fact that the vast 16

majority of the information was provided to Kwantlen well in advance of February 2011, 17

including the draft SEIAM, Kwantlen’s position in argument is at odds with Kwantlen’s 18

response when asked in a meeting on 29 November 2010 whether Kwantlen required all of 19

the technical information before they were willing to proceed on Benefits Agreement 20

discussions, they responded that they did not.133 BC Hydro agrees that the last requested 21

report (terrestrial/vegetation/wildlife) was provided to Kwantlen on 10 February 2011 and the 22

last TDG report was provided on 8 February 2011, but also notes that at the 23

29 November 2010 meeting, BC Hydro asked Kwantlen to inform it which of the remaining 24

requests/outstanding reports were of most importance for Kwantlen to understand the 25

Project, and noted that those would receive BC Hydro’s attention first. Kwantlen did not take 26

advantage of this opportunity. 27

131 Ex. B-7-1, Confidential Attachment 1 to BCUC IR 1.17.2. 132 Refer to section 8.8, pg. 133 of 278 of the draft SEIAM, supra, note 117; and to the PGL Letter, supra, note 111, where the four recommendations which BC Hydro accepted relate to Kwantlen participation in monitoring and in the review of the final design of the Switchyard. 133 Ibid.



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Kwantlen claims at para. 75 that the Dam destroyed Kwantlen’s fishery and village site, and 1

that this is another reason why the CPCN must be delayed to permit further negotiations 2

with respect to the Benefits Agreement proposal. As noted at p 23 of Ex. B-16, BC Hydro 3

was first made aware of the claim that the original construction of the Dam destroyed a 4

Kwantlen village site in Kwantlen’s responses to BCUC IRs 1.2 and 1.4 on found at Ex. C3-9 5

on 14 September 2011. BC Hydro once again respectfully submits that this is not a 6

Project-related effect, but notes that BC Hydro intends to look into these allegations and will 7

respond to Kwantlen directly through a separate process. 8

The evidence provided in this proceeding demonstrates that there has been adequate time 9

for Benefit Agreements negotiations to take place, and that there is a reasonable offer on 10

the table considering the low to no incremental impacts of the Project.134 BC Hydro is 11

committed to continuing Benefit Agreement proposal/economic accommodation discussions 12

in an effort to come to a mutually agreeable resolution. BC Hydro respectfully submits that 13

the BCUC should continue with its past approach, most notable in the CVT proceeding, of 14

noting that a Benefits Agreement proposal has been tabled in good faith and not requiring 15

that negotiations be complete or even substantially complete prior to granting a CPCN. 16

3.5.4 Archaeology Plan 17

Kwantlen’s statement at para. 75 that “[s]ignificant Project-related archaeological issues 18

were not even identified prior to the CPCN Application being filed…” is simply not correct. In 19

this regard, BC Hydro refers the BCUC to pgs. 67 to 69 of the BCH Final Submission. The 20

Kwantlen statement ignores many facts in evidence, including: (1) BC Hydro use of 21

Kwantlen’s chosen archaeologist, Cordillera Archaeology, for all archaeological work related 22

to the Project and the Stage 1 Right Abutment Work; (2) Cordillera Archaeology completion 23

of AIAs for the entire Project area well before the Application was filed. Refer, for example, 24

to Ex. B-12, the two reports dated 19 February 2009 and 26 January 2009 respectively 25

found at Confidential Attachments 5 and 6 to BC Hydro’s IR 3.2 to Kwantlen; (3) the 26

BC Hydro-funded, jointly developed Stave and Hayward Reservoir Archaeology Program, 27

which at para. 75 Kwantlen agrees would inform the parties’ future steps in relation to the 28

Project; and (4) the Kwantlen statement overlooks the mitigation measures to further 29

134 As confirmed by BC Hydro in Ex. B-18, BC Hydro’s response to Kwantlen IR 3.1.1.



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minimize the risk of potential impacts to archaeological resources in the Project area as 1

summarized at pg. 68 of the BCH Final Submission. 2

BC Hydro is committed to working with Kwantlen on the development of an overall 3

Project-related archaeological plan, and as noted in Ex. B-16, section 2.6, and as set out in 4

Exhibit B-7-2, BC Hydro’s response to Kwantlen IR 1.6.1, BC Hydro is open to funding such 5

a plan, and will undertake these discussions with Kwantlen and/or their preferred 6

archaeologist prior to Project construction. However, BC Hydro does not agree that this plan 7

must be developed prior to the BCUC granting a CPCN for the reasons set out in Ex. B-16, 8

section 2.2. 9

3.5.5 Conclusion 10

(a) General Comments & Kwantlen Delays/Interest in Broader Relationship 11

BC Hydro disagrees with Kwantlen’s statement in para. 77 “…that in this case the 12

consultation process went through an extended period of generalized discussions from 2006 13

to the fall of 2010, and then was suddenly accelerated as BC Hydro began providing studies 14

and reports in rapid succession right up until the CPCN Application was made”. The record 15

clearly indicates that BC Hydro engaged in meaningful and substantive Project consultation 16

from November 2006 onward; and that the consultation process between 2006 and fall of 17

2010 did not consist of “generalized discussions”. Refer, for example, to section 3.5.2(a) 18

with respect to the amount of environmentally-related information BC Hydro provided 19

Kwantlen during this period such as ToRs, the 2009 Project Description Report, individual 20

environmental studies, the December 2009 Summary of Information with its detailed 21

description of alternatives to the Project and July 2010 Project alternatives information, 22

among other things, all of which were provided prior to the 13 October 2010 PGL request, 23

and to section 3.5.4 for the 2009 dates of the AIAs. 24

BC Hydro first approached Kwantlen concerning a CFA in November 2006. Through the 25

period 2007 to June 2010 BC Hydro attempted to negotiate a comprehensive CFA with 26

Kwantlen. With respect to claims made in para. 78(1), BC Hydro concurs that the parties 27

agreed to await a decision on the opt-in to BCEAA before completing the CFA, but as noted 28

in Ex. B-16, page 3, this only partly explains the delay from late February 2009 to June of 29



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2009 when EAO made its decision to reject BC Hydro’s voluntary opt-in application on the 1

basis that the Project did not warrant an EA. As noted in the consultation log, in September 2

of 2009, BC Hydro offered to advance a significant amount of funds to Kwantlen, and then to 3

cover any other expenses on a monthly basis in an effort to get the process moving ahead. 4

It is BC Hydro’s evidence that the delay between June 2009 and 28 June 2010 (the date of 5

the CFA execution) is partly attributable to Kwantlen’s desire to address broader relationship 6

issues.135 7

It is also clear that it was Kwantlen’s decision to wait until a CFA was executed to retain 8

PGL. BC Hydro understood that Kwantlen was going to retain a consultant prior to the fall of 9

2010. At the 25 November 2009 meeting, Kwantlen indicated that they would be deciding on 10

a consultant to assist them with a technical review of the Project. BC Hydro offered to 11

provide Kwantlen with a list of candidates. Kwantlen asserts in para. 78(2) that it is irrelevant 12

that BC Hydro offered pay for a consultant at least one year before Kwantlen actually 13

retained a consultant because “BC Hydro did not actually begin producing the relevant 14

environmental reports to Kwantlen until late summer of 2010”. BC Hydro respectfully 15

submits that given the amount of environmental information available prior to October 2010, 16

this Kwantlen assertion is entirely without merit. BC Hydro further submits that it is highly 17

relevant that while the parties were negotiating a CFA, BC Hydro specifically offered to 18

cover costs in advance of the conclusion of a CFA. To the best of BC Hydro’s knowledge, 19

from 2007 onward there was not a time or set of circumstances where the lack of a formal 20

CFA adversely affected Kwantlen’s ability to engage with BC Hydro on the Project due to 21

BC Hydro’s commitment to fund activities in advance of a CFA.136 22

Kwantlen’s statement in para. 78(2) that “…to the contrary, the record indicates that it was 23

BC Hydro that initiated a significant hiatus in the consultation process between the meeting 24

of December 2009 and the next meeting of July 2010” is completely erroneous and very 25

obviously not supported by the record. In fact, the record of meeting notes show that the 26

parties met in person on 27 January 2010 and again on 17 February 2010, and by 27

conference call on three further occasions. The log also shows significant correspondence 28

135 Ex. B-16, pg. 3. 136 Ibid, pgs. 8 to 9.



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between the parties in the first half of 2010 on issues such as concluding the CFA, 1

discussing procurement opportunities and advancing a relationship agreement.137 The 2

record also shows that during this time period BC Hydro sought approval of a mandate to 3

deal with the impacts to DhR059 discovered as part of the Stage 1 Right Abutment Work. 4

During that time Kwantlen indicated it would not have the support of its community to 5

participate in Project consultations until the archaeology site issue had been resolved. 6

BC Hydro also notes that the extensive Summary of Information was provided just prior to 7

this period in December 2009. 8

With respect to the broader Kwantlen claim in para. 78(2) concerning the effect of 9

Kwantlen’s desire for a broader relationship agreement, in BC Hydro’s respectful submission 10

there is ample evidence that at times Kwantlen did not continue discussions with respect to 11

Project issues because Kwantlen wanted to focus on broader relationship issues, and that 12

this is particularly the case with respect to the CFA and the Benefits Agreement. Refer to 13

section 2.1 of Ex. B-16 in this regard. 14

(b) BCUC as forum for advancing consultation 15

Kwantlen suggests that the BCUC process cannot supplement the consultation process. 16

(Kwantlen Final Submission, para. 78(3)). With respect, Kwantlen’s position is contrary to 17

established case law. In Brokenhead Ojibway First Nation v. Canada (Attorney General),138 18

the Court stated: 19

In determining whether and to what extent the Crown has a duty to 20 consult with Aboriginal peoples about projects or transactions that 21 may affect their interests, the Crown may fairly consider the 22 opportunities for Aboriginal consultation that are available within the 23 existing processes for regulatory or environmental review: 24 Hupacasath First Nation v. British Columbia, 2005 BCSC 1712, 51 25 B.C.L.R. (4th) 133 at para. 272. Those review processes may be 26 sufficient to address Aboriginal concerns, subject always to the 27 Crown’s overriding duty to consider their adequacy in any particular 28 situation. This is not a delegation of the Crown’s duty to consult but 29 only one means by which the Crown may be satisfied that Aboriginal 30 concerns have been heard and, where appropriate, accommodated: 31

137 Ex. B-7-1, Confidential Attachment 1 to BC Hydro’s response to BCUC IR 1.17.2. 138 2009 FC 484 at para. 25; copy at Tab 7 of the Reply Book of Authorities.



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see Haida, above, at para. 53 and Taku, above, at para. 40. 1 (emphasis added.) 2

The above statement was adopted as an accurate summary of the law by the Alberta Court 3

of Appeal in Tsuu T’ina Nation v. Alberta (Environment).139 4

BC Hydro refers the BCUC to section 5.2.2(b), pgs. 72 to 73, of the BCH Final Submission 5

which outlines the factors of the BCUC’s regulatory review process of the Project which 6

BC Hydro submits contributed to consultation with Kwantlen, including the modification of 7

the process itself to permit Kwantlen to file evidence, Kwantlen’s ability to provide input 8

directly to the decision-maker in this case, the BCUC, through such evidence and through 9

argument, an extension of the timeline to enable BC Hydro and Kwantlen to attempt to 10

narrow their differences, all of which indicate that the regulatory process has been applied 11

flexibly to respond to Kwantlen concerns. 12

3.6 Remedy 13

Kwantlen sets out three alternatives remedies. Kwantlen advances the first – deny BC Hydro 14

a CPCN for the Project – on the basis that BC Hydro must address Kwantlen identified 15

consultation deficiencies. BC Hydro respectfully submits that there is ample evidence for a 16

BCUC finding that consultation with Kwantlen with respect to the Project has been adequate 17

to this stage and that the Project is in the public interest. This is not a greenfield project, 18

there will be no changes to the use of BC Hydro’s fee simple land upon which the Project 19

will be carried out, appropriate mitigation measures (including those proposed by Kwantlen’s 20

consultant PGL which BC Hydro has accepted) have been contemplated and will be carried 21

out, the residual Project impacts are low to none, and BC Hydro submits there is no 22

evidence on the record that once implemented, the Project will result in unavoidable or 23

unmitigated impacts on Kwantlen asserted rights (including title). Regardless of the SoC 24

assessment, in the absence of high or even medium Project impacts there is no support for 25

any conclusion other than that the level of consultation required is in the medium range of 26

the Haida spectrum. Notwithstanding this, if the BCUC finds that consultation with Kwantlen 27

should have been at the high end of the Haida scale, BC Hydro submits that the consultation 28

that has occurred and the commitments which have been made meet this standard. While 29

139 2010 ABCA 137 at para. 104; copy at Tab 8 of the Reply Book of Authorities.



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consultation must be adequate, there is no requirement that Kwantlen support or agree to 1

the consultation conducted. As stated at para. 40 of Haida, the duty to consult does not give 2

rise to a veto over projects. BC Hydro submits that the issues and concerns raised by 3

Kwantlen have either been addressed (as in the case for example of almost all of the 4

expert-identified TDG mitigation measures), can be addressed as part of on-going 5

consultation (refer to the list at section 3.5), and that further delay after over five years of 6

consultation is outweighed by other elements of the public interest test such as the pressing 7

need to address significant public safety, worker safety and environmental risks posed by 8

the current condition of the Ruskin Facility. 9

The second request asks that the BCUC “direct BC Hydro to undertake remedial 10

consultations” on the issues of “Project alternatives, economic accommodation, fisheries 11

impacts including [TDG] and archaeological resources”. Leaving aside the very real legal 12

issue concerning economic accommodation reviewed in section 3.3.4(b), BC Hydro 13

respectively submits that for the reasons advance in respect of Kwantlen’s first relief request 14

there is nothing on the record that merits such directions. 15

The third alternative Kwantlen requests raises the jurisdictional issues canvassed in 16

section 2.2.3 of the BCH Final Submission by seeking the following CPCN conditions: (1) 17

BC Hydro is required to continue negotiation of a Benefits Agreement; (2) BC Hydro is 18

required to fund Kwantlen participation in the development of a site-specific TDG guideline, 19

including funding for technical assistance; (3) BC Hydro is required to fund the preparation 20

and implementation of an over-all Project archaeological plan with Kwantlen prior to any 21

drawdown of Hayward Lake Reservoir. These conditions are unnecessary; as discussed 22

above and as reflected in the record, BC Hydro is: committed to continuing negotiations with 23

Kwantlen with respect to a Benefits Agreement; willing to consider funding to enable 24

Kwantlen to participate in the development of site-specific TDG guideline, and that this 25

funding could include Kwantlen retaining technical and/or environmental consultants; and 26

committed to working with Kwantlen on the development of an overall Project-related 27

archaeological plan. However, BC Hydro respectfully submits that the BCUC does not have 28

the jurisdiction to condition a CPCN in the manner requested by Kwantlen. As set out in 29

section 2.2.3 of the BCH Final Submission, the BCUC’s role is to assess the adequacy of 30



Page 86

consultation, and the BCUC itself does not have a duty to consult. With respect, assuming a 1

supervisory role over future BC Hydro-Kwantlen Project-related consultation through the 2

requested Kwantlen CPCN conditions is inconsistent with the BCUC’s quasi-judicial nature 3

and with its mandate as part of the public interest to assess the adequacy of consultation to 4

the stage of the CPCN condition. Once a CPCN issues, the BCUC is, to use legal language, 5

functus officio with respect to its role of assessing the adequacy of consultation, that is, it 6

has discharged its duties pursuant to subsection 46(3) of the UCA in this regard. The policy 7

rationale underlying the functus officio principle favours the finality of proceedings. If the 8

BCUC were to direct BC Hydro to consult and/or fund Kwantlen on specific matters, and if 9

Kwantlen disagreed with how such consultation was carried out or the amount of the 10

funding, pursuant to what power in the UCA could the BCUC act on the Kwantlen 11

contention? BC Hydro respectfully submits there is no such power. 12

The BCUC can require BC Hydro to provide information with respect to consultations 13

pursuant to subsection 43(1)(b) of the UCA as part of BC Hydro’s proposed semi-annual 14

reporting with respect to the Project, but it cannot act on such information. BCOAPO notes 15

that the BCUC can make “non-binding suggestions in its Decision”. BC Hydro accepts that 16

the BCUC can make “non-binding suggestions”, but urges the BCUC to refrain from doing 17

so as the BCUC could inadvertently upset on-going negotiations and consultation with 18

Kwantlen, and blur the boundary between supervision and requirements on the one hand, 19

and suggestions and guidelines on the other. 20

4 Reply to Interveners that Oppose the Project as Proposed: AMPC, CEABC 21 and Mr. Quigley 22

BC Hydro’s reply to AMPC, CEABC and Mr. Quigley is set out in sections 4.1, 4.2 and 4.3. 23

In addition, AMPC supports BC Hydro’s position both legally and factually with respect to the 24

adequacy of consultation with Kwantlen to this stage; refer to section 4.1.7. 25

4.1 AMPC 26

AMPC is the only customer intervener that does not support the Project as proposed. In its 27

conclusions, AMPC makes the following requests with respect to the Application: 28



Page 87

First, that the BCUC re- open the record with respect to the Upper Dam, Right 1

Abutment and Left Abutment Work to require further evidence concerning the feasibility 2

of indemnifying the downstream population or removing that population through 3

buy-outs as a way of reducing the Extreme Consequence classification for the Dam, 4

the Right Abutment and the Left Abutment. BC Hydro’s view is that AMPC’s possible 5

option is flawed and unacceptable. Refer to section 4.1.2; 6

Second, that the BCUC “reduce the Authorized Amount” by the costs of the 7

Powerhouse Work, by the amount of a “deemed municipal contribution to” the Dam 8

Crossing and by the costs of the Switchyard Work. BC Hydro rejects this position as it 9

continues to expose BC Hydro employees to the significant worker safety issues 10

associated with the Powerhouse superstructure and equipment, does not address the 11

significant environmental risks posed by the unreliability of the Powerhouse, deprives 12

BC Hydro of the Ruskin Facility’s firm energy and dependable capacity output, leaves 13

unresolved the switchyard worker safety issues, and finally fails to recognize that the 14

Dam Crossing is required to implement the Project. Refer to sections 4.1.3 15

(Powerhouse Work); 4.1.4 (Dam Crossing); 4.1.5 (Switchyard Work); and 4.1.6 (Cost 16

Estimate); 17

Third, the BCUC find the following with respect to First Nation consultation: (1) the 18

assessment of consultation must occur up to the stage of the BCUC’s decision, and 19

should not focus on the Application filing date; (2) the BCUC’s own regulatory review 20

process is an input into the Project-related consultation; and (3) Project-related 21

consultation is on-going. BC Hydro strongly agrees with all three of these AMPC 22

requests. Refer to section 4.1.7. 23

Section 4.1.1 addresses miscellaneous remarks made by AMPC in the Introduction portion 24

of its Final Submission, and AMPC’s contention that the BCUC should “implement the 25

recommendations” of the June 2011 Government review panel report entitled “Review of 26

BC Hydro”140 (Panel Review Report). 27

140 Copy at Ex. A2-1.



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4.1.1 Reply to AMPC Introductory Remarks and Role of Panel Review Report 1

AMPC’s Final Submission consists in part of lengthy quotes from the Panel Review Report, 2

and concludes with a request that the BCUC “implement” the Review Panel Report 3

recommendations as part of this proceeding. BC Hydro does not agree that it is the BCUC’s 4

role to implement recommendations stemming from the Review Panel Report as part of 5

determining whether the Project is in the public interest. The Review Panel Report is by its 6

nature general as the Government review panel canvassed 20 generation and transmission 7

projects (including the Project),141 and is only one item in a large body of evidence that the 8

BCUC must consider, almost all of which, in contrast to the Review Panel Report, 9

specifically relate to the Project. BC Hydro notes that AMPC did not ask a single IR with 10

respect to Ex. B-15, which contained BC Hydro’s evidence as to how it addressed the 11

recommendations contained in the Review Panel Report. 12

At para. 1 of its Final Submission, AMPC states: “… it is important to the economics of 13

AMPC members’ operations that they continue to receive a reliable supply of low-cost 14

electricity at cost-based rates”. BC Hydro understands the need for a reliable supply of low 15

cost electricity for all BC Hydro customers. Indeed it is the need for a reliable supply of low 16

cost electricity that prompted BC Hydro’s Application. The Application clearly demonstrates 17

that the Powerhouse has reached the end of its economic life and is becoming increasingly 18

unreliable. The number of forced outages is increasing and the duration of forced outages is 19

also increasing.142 Due to the increasing unreliability, in the absence of the Project, 20

BC Hydro would be forced to remove the Ruskin Facility when determining LRBs after 21

November 2015.143 BC Hydro determined that the levelized unit cost of energy for the 22

Project was both lower than Alternatives A to E and lower than an IPP with the Ruskin 23

Facility’s firmness profile.144 Ratepayers will be paying lower rates if BC Hydro proceeds with 24

the Project than would be the case should BC Hydro not proceed with the Project and the 25

141 Ex. B-15, pg. 5, lines 2-3. 142 Ex. B-7, BC Hydro’s response to BCUC IR 1.2.2, Attachment 8, pg. 547; RW Beck Report, supra, note 39, pgs. 24 and 25 of 54. 143 Ex. B-1, pgs. 3-15. 144 Ibid, pgs. 3-27 and 3-28.



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Ruskin Facility energy and capacity output removed from BC Hydro’s resource stack in 1

November 2015.145 2

The assertion at para. 3 of its Final Submission - “Each unit is rated at 35 MW, although 3

typically only two are run at half load. This configuration offers multiple redundancies in the 4

event of unit outages” – is simply incorrect and not supported by the record. The Ruskin 5

Facility is operated as part of a cascade of three hydroelectric generating facilities (the Stave 6

River System). The Ruskin Facility is run as a peaking plant for approximately one half of 7

the year and is operated to meet minimum fisheries flow requirements or to pass water 8

during high inflow periods during the remainder of the year.146 When the Ruskin Facility is 9

operated as a peaking plant, as many units as are available are operated during high load 10

periods in the morning and evening while satisfying flow requirements during low load 11

periods. Due to the unreliability of the Ruskin Facility units, when the plant is operated to 12

meet fish flow requirements, as many units as are available are operated at approximately 13

equal load to enable fish flows to be restored quickly in the event a unit trips off line. During 14

high inflow periods all units are on line at high load to pass as much water through the units 15

are required to minimize spill. 16

While, from a purely hydraulic perspective, the total daily discharge from the Ruskin Facility 17

could be handled by two units for 90.0 per cent of the days between 1986 and 2009,147 such 18

operation would not be effective from a BC Hydro system operation perspective or in 19

meeting load demand that varies during each day. 20

4.1.2 Reducing Scope of Upper Dam Work, Right Abutment Work and Left 21 Abutment Work: AMPC’s Possible Solution for Downstream Mitigation 22

AMPC raises a possible option in argument for the first time that it suggests may lower the 23

consequence classification of the Dam, Right Abutment and Left Abutment and thus reduce 24

the MDE corresponding to a one in 10,000 return period (1/10,000 earthquake) to perhaps 25

a 1/2,475 earthquake, by either indemnifying downstream residents or relocating such 26

residents. In BC Hydro’s respectful submission, AMPC as a sophisticated intervener should 27

145 Ibid, pg. 2-38. 146 Ex. B-7, BC Hydro’s response to BCUC IR 1.2.2, Attachment 8 pg. 4 of 39 (pg. 533) and Ex. B-10-2 BC Hydro’s Response to CEABC IR 2.4.2 Table 1, Chart 1 and Attachment 1. 147 Ex. B-7-2, BC Hydro’s response to BCOAPO IR 1.9.1.



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have and could have put this idea forward as an IR to permit BC Hydro, other interveners 1

and the BCUC to properly respond to and test the information to be put on the evidentiary 2

record; AMPC did not do so. Re-opening a lengthy evidentiary phase which lasted nearly 3

nine months for the purpose of exploring an idea put forward for the first time in argument 4

does not accord with an efficient or effective hearing. Nevertheless, in BC Hydro’s view 5

AMPC’s proposal differs somewhat from CEABC’s attempt to have the record re-opened 6

based on a vague canal/pipeline/tunnel option because: (1) AMPC’s proposal does not 7

constitute a new project backed by attempts to introduce entirely new material; and (2) the 8

issue AMPC raises with respect to relocation was explored by BCUC staff in IR 1.81.2, 9

described further below. Thus BC Hydro is prepared to make submissions on why AMPC’s 10

option is neither acceptable nor feasible. 11

With respect, AMPC’s concepts of (1) indemnification and (2) relocation as a way of 12

potentially reducing the scope of the Upper Dam, Right Abutment and Left Abutment Work 13

through reduction in the MDE are not workable and are unacceptable: 14

Indemnification will not reduce the Extreme Consequence classification of the Dam, 15

Right Abutment and Left Abutment. As set out above in section 2.1.2, the rating of the 16

Dam, Right Abutment and Left Abutment is driven by the B.C. Dam Safety Regulation 17

classification system, and in particular the potential for: deaths of more than 100 18

people in a worst case earthquake scenario; property damage exceeding $100 million; 19

and likely damage to salmon spawning habitat. Indemnification will not reduce the 20

number of expected deaths should the Upper Dam, Left Abutment and/or the Right 21

Abutment fail in a low to moderate earthquake well below the MDE (or in the case of 22

the Right Abutment through seepage and piping issues). For this reason alone 23

indemnification will not reduce the legally mandated Extreme Consequence 24

classification. To reduce consequences and ensure fewer deaths, BC Hydro would 25

need to relocate the trailer park and all residents, as well as the industrial operations in 26

the lower Stave River and prevent access to that reach of the Stave River by 27

recreational users and members of Kwantlen exercising their asserted right to the 28

Stave River fishery, not simply provide indemnification against personal and property 29

damage; 30



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Indemnification is not workable given that some of the population at risk are 1

recreational and other periodic users of the lower Stave River and surrounding areas 2

and given the likely damage to salmon spawning habitat. How, for example, would 3

BC Hydro identify and indemnify users of the Lougheed Highway and Canadian Pacific 4

Railway bridges, or anglers and swimmers in the lower Stave River? It is also not clear 5

that DFO, the Canadian federal regulatory agency responsible for the fish protection 6

and fish habitat provisions (sections 32, 35, 36) of the Fisheries Act, would accept 7

indemnification in lieu of actual protection of salmon habitat; 8

Relocation has already been addressed in BC Hydro’s response to BCUC IR 1.81.2,148 9

the entire text of which is reproduced here for ease of reference: 10

Appropriation of the downstream properties at risk has not been 11 pursued because it would not address impacts to the downstream 12 locations affected by a Dam failure, listed in Exhibit B-1, page 3-4, 13 lines 1-10, other than the residences of Silvermere Lake, the two 14 trailer park areas and the industrial area. 15

In particular, purchasing downstream properties would not address 16 the risks to: 17

Recreational users (in particular in-stream users); 18

BC Hydro workers in the Powerhouse and office site; 19

The Hayward Street crossing, Lougheed Highway and 20 Canadian Pacific Railway bridges and users thereof; 21

Fish and fish habitat. 22

In addition, any alternative that did not include upgrades to the water 23 retaining capability of the site would provide no protection for 24 BC Hydro’s assets in even a moderate earthquake, which would lead 25 to loss of generation and would result in clean up and asset 26 replacement costs. 27

For example, Ex. B-10, BC Hydro’s response to BCUC IR 2.58.2 makes clear that 28

failure of one or more gates could cause significant impacts to not only permanent 29

residents, but also recreational users. To this response BC Hydro would add the 30

148 Ex. B-7.



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following. Relocation is not as simple as a one-off buying-out of: (1) the two trailer 1

parks located one km and two km downstream; (1) an industrial area 2.8 km 2

downstream; (3) residences at the shoreline of Silvermere Lake; and (4) moving the 3

Ruskin Dam Recreation Site, the BC Hydro Ruskin Site Office and the Powerhouse. In 4

BC Hydro’s view, the buy-out would need to be extended into land use restrictions that 5

effectively prohibited development on both banks of the Stave River below Ruskin 6

Dam and around Silvermere Lake due to the remaining seismic risk associated with 7

the Upper Dam, Right Abutment and Left Abutment. To use AMPC’s formulation, “it is 8

reasonable to speculate” that Mission would not accept such a low value land use. It is 9

also unclear where the Powerhouse would be located as there are significant 10

constraints on placement; 11

Overall, BC Hydro is of the view that AMPC’s statement that “[i]t is reasonable to 12

speculate that this could be cheaper than reinforcement, and the [BCUC] should be 13

certain that withstanding a one in 2,475 year seismic event is not a potentially 14

applicable standard before authorizing reinforcement to withstand a one in 10,000 year 15

event” is unlikely to be correct. The cutoff wall and downstream filter work on the Right 16

Abutment is required to protect against the 1/2,475 event, as well as larger events up 17

to the 1/10,000. There is no technically reasonable cost-effective “middle ground” 18

solution that would protect the Right Abutment against only the smaller, but not the 19

larger seismic event. 20

While AMPC floats the idea that somehow the BCUC has the discretion to choose seismic 21

standards, and that it “should be certain that withstanding a one in 2,475 year seismic event 22

is not an applicable standard before authorizing reinforcement to withstand a one in 23

10,000 year event” (AMPC Final Submission, pg. 16), AMPC cites no authority for this 24

proposition for the simple reason that the BCUC has no such authority. It is the CWR that 25

has the jurisdiction to administer the B.C. Dam Safety Regulation and its consequence 26

classification regime, and through section 4 of that regulation, to determine the seismic 27

criteria. BC Hydro respectfully submits that the BCUC ought to reject AMPC’s request that 28

the BCUC re-open the record to require further evidence concerning the feasibility of 29

indemnifying and/or relocating the downstream population as a way of reducing the Extreme 30



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Consequence classification. BC Hydro submits that mitigating the risk of uncontrolled 1

release of Hayward Lake Reservoir by improving the seismic withstand of the Upper Dam, 2

Right Abutment and Left Abutment, and rectifying the remaining Right Abutment 3

seepage/piping issues, is clearly preferable and is in the public interest. 4

4.1.3 Powerhouse Work 5

BC Hydro respectfully submits that AMPC’s claims concerning the Powerhouse Work, found 6

at paras. 24-36, are in places incorrect and not supported by the record, rely on fragmented 7

and selective quotes from the RW Beck Report to imply a meaning quite at odds with the 8

Report taken as a whole. Accordingly AMPC’s submissions ought to be rejected by the 9

BCUC. 10

(a) Powerhouse Superstructure 11

The AMPC assumption in para. 26 that “replacing the powerhouse superstructure is not 12

urgent” is not correct. BC Hydro initiated a project in 2000 to complete a design, in 13

preparation for construction and tendering, for replacement of U3 asbestos panels and 14

seismic strengthening of the Powerhouse. However, that work was not carried out as 15

BC Hydro determined that they should address all the Ruskin Facility issues and risks. If the 16

Project does not proceed, it is likely that BC Hydro will re-initiate a project to strengthen the 17

seismic stability of the Powerhouse to protect the safety of employees and the equipment in 18

the Powerhouse. There is nothing on the record to indicate that seismic strengthening of the 19

Powerhouse structure on a fragmentary basis as proposed by AMPC in para. 26 is 20

technically possible, or that it would address the existing seismic deficiency in the 21

Powerhouse. The Powerhouse superstructure work, as described in Ex. B-7, response to 22

BCUC IR 1.93.1, public Attachment 1, makes use of many of the existing superstructure 23

components and cannot, therefore, be characterized as “a reconstruction”. 24

In para. 27 AMPC advances air conditioning in the control room and replacing the overhead 25

crane as examples of “gold plating”. With respect, these assertions demonstrate the folly of 26

blindly applying Review Panel Report gold plating terminology without resort to the record. 27

Air Conditioning in Control Room 28



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BC Hydro would agree with the AMPC assertion at para. 27, that “air conditioning the control 1

room is simply not required”, if the air conditioning was just being installed for employee 2

comfort. While part of the function of the control room is to provide a location, remote from 3

the units, where the generating station can be operated, the other function of the control 4

room is to provide a clean and safe environment for a complex array of electronic control 5

and communications equipment. Like all electronics, this electronic control and 6

communications equipment gives off heat. And, given the concentration of electronic 7

equipment in the control room, considerable heat is produced which must be offset with 8

cooling (that is, air conditioning) to protect the electronic equipment failure. Heat is one of 9

the most common causes of electronic equipment failure. There is no air conditioning 10

anywhere else in the current Powerhouse and BC Hydro is not proposing as part of the 11

Project to add air conditioning to anywhere other than the control room. 12

Powerhouse Crane 13

There are three alternative means of addressing the current condition of the powerhouse 14

crane system: 15

1. Upgrade or rehabilitate the existing cranes; 16

2. BC Hydro’s proposal to replace the existing cranes with a 240 Ton crane; and 17

3. Replace the existing crane with a dual 120 Ton crane. 18

BC Hydro rejected upgrading or rehabilitating the existing cranes (which was $1 million less 19

than BC Hydro’s proposal in the Project) because this would not address all reliability risks, 20

such as motors and controls; electric feeds, existing wooden walkways, and mechanical 21

parts: responding to these issues is estimated at a further $1.9 million.149 22

Reliable operation of the Powerhouse cranes is a critical requirement both of the 23

implementation of the Powerhouse Work and of the ongoing operation of the Ruskin Facility. 24

There are significant worker safety and equipment issues with an unreliable crane. Further, 25

any delays resulting from a failure of the crane to safely operate, particularly during 26

installation of the generating units, will result in a delay in Project completion. In addition to 27

149 Ex. B-7, BC Hydro’s response to BCUC IR 1.4.1.



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equitable adjustment issues with contractors, additional IDC resulting from a delay in the 1

Powerhouse Work and these costs could more than offset the marginal cost of the new 2

crane.150 3

(b) Powerhouse Equipment 4

As part of a repeating pattern, at paras. 29 and 30 AMPC takes selected, fragmented 5

quotations from the RW Beck Report and attempts to convey a completely different meaning 6

than the Report intended. As cited by AMPC, RW Beck was “clear that the existing units 7

retain value and their lives can be extended” – omitted in this small excerpt is RW Beck’s 8

caveat that such life extension is a theoretical construct, that this life extension would come 9

at increasing financial and reliability cost, and that “all of the equipment has well exceeded 10

its useful life”. It is helpful to review the complete passage that AMPC’s carefully edited 11

reference draws from. The RW Beck Report reads: 12

In theory, the physical equipment life can be extended indefinitely with 13 increasing corrective maintenance activities, and associated 14 maintenance and operating costs. The equipment would continue to 15 have more frequent wear-out failures, but each failure could be 16 corrected, providing a nominal amount of equipment rejuvenation. 17

At some point, it becomes less expensive to spend capital to replace 18 the equipment rather than face increasing numbers and more frequent 19 maintenance and failure consequences, including environmental 20 impacts and potential safety issues. While we have not been tasked 21 with developing the supporting economic analyses, we believe the 22 Ruskin Plant is at the point at which it is less expensive to replace 23 than continue to maintain the asset.151 24

Based upon our observations from our site inspections, meetings with 25 Project plant personnel, and review of the information received about 26 the Project, the condition of most of the powerhouse equipment is, in 27 our opinion, fair to poor. Based on our experience and supporting 28 hydropower industry statistics, all of the equipment has well exceeded 29 its expected useful life. Part of the reason that the equipment has 30 lasted longer than average statistical life expectancies we believe is 31 because of the low plant factor, which has caused the equipment to 32 be operated below its ratings. Further, the generating units have been 33 operated with very few starts and stops, which have reduced thermal 34

150 Ex. B-10, BC Hydro’s response to BCUC IR 2.50.2. 151 RW Beck Report, supra, note 39, pg. 31 of 54.



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cycling of the units and thereby prolonged useful life. However, based 1 on our visual observations, engineering judgment, experience from 2 similar hydropower projects and our review of equipment test results1, 3 we are of the opinion that the generating units and their auxiliaries 4 should be replaced, or refurbished as determined during the design 5 phase, the power transformers should be replaced, the control and 6 protection systems should be replaced, and the switchyard should be 7 upgraded and possibly relocated.152 [Emphasis added]. 8

In this paragraph, AMPC goes on to cite a small portion of the RW Beck report reproduced 9

above, concerning the longevity of the three generating units at the Ruskin Facility. While 10

the citation is accurate, BC Hydro has difficulty in understanding the relevance: an 11

explanation of why equipment has “well exceeded its useful life” may be useful, but it carries 12

little predictive power when considering whether the equipment can continue to be used 13

even further past its expected life. This is particularly so when in the very next sentence the 14

author of the statement continues on to make an explicit recommendation for replacement or 15

refurbishment of every major system in the Powerhouse. 16

Continuing this pattern of selective and unrepresentative citation, in para. 29 AMPC seeks to 17

make much of the relative lack of surface contamination of the generator windings. While 18

this is an interesting observation, cracking and brittleness in the paint, voids in the insulation, 19

observed and expected partial discharge leading to eventual short-circuiting, and failed test 20

results are probably more relevant when considering the need for generator replacement or 21

refurbishment. All of these observations are recorded in the following passage and explicit 22

recommendation set out in the RW Beck Report: 23

The stator windings of the Ruskin generators all have the original 24 insulation system (micafolium for Unit Nos. 1 and 2 and asphalt mica 25 paper for Unit No. 3), which historically has proven to have a very long 26 life, often outlasting newer, modern insulation systems. We attribute 27 the very long life attained by the Ruskin generator stator windings to 28 an initial robust winding design and to relatively low and stable loading 29 of the generators, i.e., loads have been consistently below the full 30 capability of the generators and there have been very few starts and 31 stops of the machines. This is evidenced by the very low plant factor 32 of about 40 percent. Low loading levels result in reduced operating 33 temperatures, which in turn slow down aging of the winding insulation, 34 resulting in prolonged life. Visual observations of the winding shows 35

152 Ibid.



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some surface contamination, but not more than would be expected, 1 especially considering the open cooling systems. The paint of the end 2 windings and the circuit rings shows cracks and signs of brittleness. 3 Some parts of the insulation are soft, indicating internal voids. Voids in 4 the insulation create electrical field concentrations and resulting partial 5 discharges. This is one of the mechanisms that causes aging and will 6 ultimately lead to insulation breakdown and resulting short-circuiting of 7 the winding. There are some signs of white powder on parts of the 8 end turns and circuit rings, which is evidence of corona activity, i.e. 9 partial discharges. Partial discharge activity will accelerate insulation 10 aging and at some point cause insulation failure. We have reviewed 11 generator test results performed by BC Hydro in 1998, which showed 12 that Unit No. 1 failed the high potential test. The insulation failed at 23 13 kV dc, which is the test voltage typically used for aged insulation. 14 Historical high potential tests of Unit No. 3 shows an increase in the 15 leakage current from 1983 test results to the 1998 test results, 16 indicating the obvious – aging of the insulation system. Maintenance 17 records indicate that the generators have been rewedged (reduces 18 vibrations and discharge activity) and the windings reversed (to even 19 out voltage stress on the various parts of the windings, thereby 20 extending service lives), as well as cleaning and painting. The stator 21 windings should be replaced with new windings having Class F 22 insulation, as there is no practical method for refurbishing a stator 23 winding. Furthermore, the replacement of the existing Class B winding 24 insulation with Class F insulation has the potential to substantially 25 increase the output of the generator relative to the same hydraulic 26 flow regime.153 [Emphasis added]. 27

Summarizing the condition of the Ruskin powerhouse equipment, the RW Beck Report 28

states: 29

We are of the opinion that given the unreliable condition of many plant 30 elements and the overall poor condition of the equipment, all 31 equipment and systems need to be replaced or refurbished, to be 32 determined during detail design development. We do not recommend 33 to only perform rehabilitation or replacement of selected components 34 or systems if BC Hydro intends to continue operation of the Ruskin 35 plant into the future. We recommend that the rehabilitation work, once 36 the scope has been determined, be performed at the same time by 37 one or more contractors. Only where there is a safety issue, which 38 requires immediate attention and resolution, should, in our opinion, 39

153 Ibid, pg. 32 of 54.



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partial rehabilitation be considered. The step-up power transformers 1 fall into this category.154 2

Finally, in para. 30, after repeating an irrelevant citation from the RW Beck Report dealing 3

with the longevity of the existing Ruskin Facility stator windings, AMPC draws the 4

conclusion, presumably based on the citations in paras 29 and 30, that “there appears to be 5

some flexibility in the timing of replacing the powerhouse equipment”. This may be a 6

reasonable inference to draw from those carefully limited citations, but as shown above 7

those citations do not represent – or even approach – the state of the Powerhouse as 8

documented in the RW Beck Report, by BC Hydro’s Equipment Health Rating (EHR) 9

reports,155 or by any other evidence on the record of this proceeding. If the antecedents to 10

AMPC’s conclusion are false, then it follows that their conclusion is false. It is worthwhile to 11

note the conclusion actually drawn by RW Beck, who no doubt did bear in mind the entirety 12

of their Report when they wrote: 13

In conclusion, it is R. W. Beck’s opinion that the serious safety 14 concerns should be addressed immediately and that an overall life 15 extension program be formulated and initiated as soon as possible. In 16 our opinion, major replacement of the critical equipment and 17 reconstruction and refurbishment of the vital Project components will 18 be the best path to ensuring a continued and long Project life at the 19 Ruskin Hydroelectric Power Project.156 [Emphasis added]. 20

In BC Hydro’s submission, the assertion by AMPC that there is an opportunity to defer the 21

replacement and rehabilitation of the Powerhouse equipment is unsupportable. 22

After drawing this unjustified conclusion, AMPC continues by proposing an impractical 23

response: to defer the needed work on the Powerhouse equipment with “regular 24

maintenance and replacements where required”. BC Hydro analysed a deferral of the 25

Powerhouse equipment portion of the Project as the “Scenario 2” deferral discussed in 26

Ex. B-7-2, response to AMPC IR 1.5.2 (referred to as Deferral 2 at pgs. 38 to 39 of the BCH 27

Final Submission), in which the required seismic upgrades are performed on the Left 28

Abutment and Upper Dam to allow operation of Hayward Lake Reservoir at a 42.8 m 29

maximum elevation, but no work is performed in the Powerhouse other than required 30

154 Ibid. 155 Exhibit B-1, Appendix B-2 156 RW Beck Report, supra, note 39, pg. 33 of 54, emphasis added.



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seismic upgrades. AMPC seems to contemplate a similar deferral, except that the 1

Powerhouse equipment portion of the Project would be broken into three (or more) separate 2

projects to be undertaken on an “as needed” basis to gain a time-value of money benefit in 3

delaying expenditures. BC Hydro’s analysis assumed that equipment could be returned to 4

service at no cost other than lost generation during an outage, so the time-value benefits 5

anticipated by AMPC are already captured. In this analysis the potential saving by deferring 6

the Powerhouse Work was shown to be limited to roughly 6.5 per cent of the Project cost if 7

the deferral could be extended to ten years. Further, the potential savings are reduced to 8

approximately 2.5 percent of Project costs over that same time period given the reasonable 9

supposition that the unreliability of the equipment means that no value can be attributed to 10

Ruskin Facility dependable capacity.157 The deferral strategy was rejected by BC Hydro 11

given the current condition of the Powerhouse equipment, the risk of a failure in service and 12

the limited savings available by deferring the Project. 13

Even these minor opportunities for gains rest on several unrealistically optimistic 14

assumptions, in particular that there would be no cost to return a unit to service, and that the 15

Project could be halted and then resumed at some indeterminate future date with no delay 16

and with no real increase in costs. In fact, as noted in the response to AMPC IR 1.5.2, it is 17

more likely that on failure units will be put into a non-operational but safe state until the 18

Project is undertaken, and that when the Project is eventually undertaken there will be both 19

additional delays and increases in cost. Either of these factors will reduce or eliminate the 20

minor benefits anticipated by a ‘defer until required’ strategy as suggested in para 31. 21

Moreover, even if this strategy was economically attractive, it requires an unacceptable 22

indifference to worker safety; continued operation of the Powerhouse in its current condition 23

extends the safety risks identified in BC Hydro’s response to AMPC IR 1.5.2: 24

Worker safety issues: RW Beck concluded that there is a high 25 likelihood of equipment failure that could cause personnel injury. 26 There are significant worker safety risks associated with: (1) 27 Generator Bus; (2) Intake Stop Logs and Turbine Inlet Valves; (3) 28 Lack of fire systems and need to improve worker egress; (4) 29

157 Ex. B-7-2, BC Hydro’s response to AMPC IR 1.5.2, figure 1, pg. 7. The net benefits are asymptotic, approaching 13.6 per cent, and 2.9 per cent of Project costs, respectively, over an indefinite deferral term.



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Generator; (5) Oil filled transformers; (6) Confined spaces in turbine 1 scroll cases, draft tubes and penstocks; and (7) Exciters.158 2

There is no evidence to contradict BC Hydro’s analysis of the economic impact of this 3

deferral strategy summarized above, or to indicate that these worker safety issues would be 4

acceptable during the period of deferral or in the alternative, to indicate any means to 5

address them. 6

BC Hydro is unable to understand AMPC’s last comment in para. 31: the 2007 and 2010 7

upgrade work described in Ex. B-1, Table 2-3 was work done on the Dam which did not 8

impact unit operation. There is no reason to suppose that the schedule for replacing units 9

would in any way resemble the dam upgrade work. 10

In para. 32 AMPC seeks to distinguish between its preferred approach of ‘defer until 11

required’ and ‘run to failure’ as an operating strategy to apply at the Ruskin Facility, and then 12

goes on to make assertions that are not supported by the record. Dealing with the mistaken 13

assertions first, on an “average to average” basis the forced outage rates at the Ruskin 14

Facility are higher (worse) than North American Electric Reliability Corporation (NERC) 15

averages in all but one year from 2004 to 2009, as shown below: 16

Table 1 Forced Outage Rates - Ruskin Facility 17 and NERC159 18

Forced Outage/Generating Unit

U1 U2 U3 Ruskin

Average NERC

Average 2004 1 1 6 2.67 2.47 2005 1 17 8 8.67 2.93 2006 0 4 2 2.00 2.73 2007 1 4 6 3.67 2.48 2008 1 5 3 3.00 2.33 2009 0 3 7 3.33 2.03

As well as being higher than NERC forced outage rates, the trend of forced outages is 19

increasing at the Ruskin Facility if the recovery from the extraordinarily high outage count in 20

158 Ibid. 159 Ex. B-1, Appendix B-3, pgs. 25/54, calculation added.



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2005 is excluded. In addition, the duration of forced outages is higher than NERC averages 1

for three of the six years in that same time period: 2

Table 2 Forced Outage Duration – Ruskin Facility 3 and NERC 4

Forced Outage Duration/Generating Unit (Hours)

U1 U2 U3 Ruskin

Average NERC

Average 2004 6.85 0.30 60.05 22.40 218.65 2005 4.68 354.00 890.72 416.47 226.46 2006 0.00 33.47 63.40 32.29 188.89 2007 1.45 51.23 121.42 58.03 218.29 2008 14.20 210.82 1,147.35 457.46 298.98 2009 0.00 430.23 415.35 281.86 229.40

Again, the trend at the Ruskin Facility is negative over the period. 5

AMPC also asserts that U3 “does not run regularly”. Again, this is contradicted by the 6

evidence on the record: a casual inspection of the annual generation figures for the three 7

units at the Ruskin Facility160 shows that from F2000 to F2011 U3 generated from 45.9 to 8

161.1 GWh annually, representing 16 to 45 per cent of the energy generated at the Ruskin 9

Facility in any particular year. A more detailed examination would reveal that on average U3 10

generated 29 per cent of the total energy generated at the Ruskin Facility in each year, 11

which is not significantly below the 33 per cent expected if generation was produced by all 12

three units in equal measure. 13

AMPC claims in para. 32 that their ‘defer until required’ approach would simply represent 14

“running the units until their economic lives are finished”. There is no bright line test for when 15

equipment is in maintainable condition and should be retained, and when it must be 16

replaced – equipment condition is a continuum, and economic life is an estimate involving 17

professional judgement and experience. 18

The evidence on the record is clear, though, that the Powerhouse equipment has already 19

passed the end of its economic life, and all of the value has been captured. The EHR 20

160 Ex. B-10, BC Hydro’s response to BCUC IR 2.54.3, table 1.



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rating161 for virtually every major component in the Powerhouse is “unsatisfactory” – all three 1

turbines, all three generators, all three water passages, all three exciters, all single-phase 2

transformers for both U1 and U2, and one of three for U3. There is little that is not in 3

“unsatisfactory” condition: the governors are in “poor” condition, leaving the circuit-breakers 4

rated as “fair.” There are no anticipated changes in the equipment condition, and no 5

downgrades in the EHR ratings (there is no rating below “unsatisfactory”) that would trigger 6

the refurbishment of a unit “as needed” – it is overwhelmingly likely that the next intervention 7

will be in response to a failure in service. It is difficult to reconcile AMPC’s implied assertion 8

that the Project could be deferred and the existing equipment run for any meaningful length 9

of time, or that the full value of the Powerhouse equipment has not yet been captured with 10

the EHR observations or the findings in the RW Beck Report. RW Beck provided an 11

independent assessment of the Powerhouse equipment condition (note that its terminology 12

does not match BC Hydro’s EHR – “poor” is defined as “Equipment is not functioning well 13

and requires a high level of maintenance, and/or has greatly exceeded its statistical useful 14

life” – emphasis added) as well as the likelihood of a failure in the next year, the next five 15

years, and the next ten years. RW Beck’s professional opinion, as well as the likelihood of a 16

failure in the next five years (which is within the Project duration) is extracted below: 17

161 Ex. B-1, Appendix B-2 and Ex. B-7-2, Attachment 1 to BC Hydro’s response to BCSEA IR 1.1.2.



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Table 3 Summary of RW Beck’s Equipment 1 Condition Assessment and Probabilities 2 of Equipment Failure162 3

Component Condition Probability of Failure within 5 Years

U1 Turbine Poor 30% to 70% Generator Poor 70% to 100% Governor Poor 70% to 90% Exciter Poor 30% to 70% Unit Transformer Poor 70% to 90% Protection and Control Poor 90% to 100%

U2 Turbine Poor 30% to 70% Generator Poor 70% to 100% Governor Poor 70% to 90% Exciter Poor 30% to 70% Unit Transformer Poor 70% to 90% Protection and Control Poor 90% to 100%

U3 Turbine Poor 30% to 70% Generator Poor 70% to 100% Governor Poor 70% to 90% Exciter Poor 30% to 70%

The distinction AMPC seeks to establish is real, and BC Hydro’s general practice is to 4

maintain and refurbish equipment rather than replace it precisely to extract all possible value 5

from it. However, in the context of the Powerhouse this is a distinction without a difference: 6

continuing operation of the Ruskin Facility without the replacement and refurbishment 7

activities as contemplated in the Project is likely to lead to an in-service failure, and deferral 8

of the Powerhouse equipment-related portions of the Project is indeed a ‘run to failure’ 9

strategy. BC Hydro submits that it has, in fact, been operating the Ruskin Facility as 10

described by AMPC, “continuing to maintain the units and taking advantage of opportunities 11

to extend their lives”, for the past 10 years. However, the condition of the Powerhouse has 12

now deteriorated to the point where this can no longer be done economically. Without 13

162 RW Beck Report, supra, note 39, Appendix A.



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investment the Powerhouse will no longer be fit for its intended purpose. RW Beck agreed 1

with BC Hydro that deferring the Powerhouse Work was not the best option given the unsafe 2

condition of many plant components and the poor condition of the equipment.163 3

AMPC expresses its view in para. 33 that the ‘defer until required’ approach is preferable to 4

the Project as proposed and represents a more prudent approach. In BC Hydro’s view this 5

can only be based on a significant misunderstanding of, or a refusal to accept, the 6

conclusions of the RW Beck Report, which concluded that “serious safety concerns should 7

be addressed immediately and that an overall life extension program be formulated and 8

initiated as soon as possible” (emphasis added). This conclusion accords with the EHR 9

results and is consistent with all evidence on the record of this proceeding. In BC Hydro’s 10

view, a strategy of deferring the Project in favour of a de-facto run to failure strategy would 11

be to reduce reliability, increase costs, and extend unsafe conditions in the Powerhouse; this 12

is not prudent by any definition. BC Hydro is unsure on what basis AMPC disagrees with the 13

analysis of the ‘deferral 2’ scenario presented in the response to AMPC IR 1.5.2: the 14

adjustment for the risk of unit failure is based explicitly on the professional opinions 15

expressed in the RW Beck Report regarding the likelihood of component failures over the 16

next one, five, or ten years. 17

AMPC continues a pattern of selective citation in para. 35, in stating that BC Hydro “rejected 18

a suggestion by Pacific Liaicon to install all three generators at once on the basis that 19

‘[s]hutting down the Powerhouse does not… significantly increase laydown area to allow 20

multiple units in parallel.’” This is not incorrect, but it misses the additional comments by 21

BC Hydro regarding the reason for rejecting the suggestion by Pacific Liaicon - overall 22

schedule improvements are unlikely if parallel installation is not possible, and the 23

environmental risk of a continuous three-year spill is unacceptable. It is telling that not only 24

did BC Hydro reject this suggestion, after further discussion with BC Hydro so did Pacific 25

Liaicon, who wrote the following in their transmittal letter: 26

In the report we recommended a total facility shutdown for the 27 reasons stated. This recommendation is based primarily on 28 facility-related concerns. It has subsequently come to our attention, 29

163 Ex. B-1-1, pgs. 1-11 and 1-12.



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through discussions with BC Hydro’s specialist on total dissolved gas 1 and other down-stream issues, that there are significant down-stream 2 issues associated with a total facility shut-down. The most important 3 of these relates to the potential loss of fish resulting from a total facility 4 shut-down. This potential has very negative consequences for the 5 project either in the form of lost fish or lengthy project delays in 6 designing and proving mitigation measures that will result in no such 7 loss. Given this information and on the understanding that BC Hydro 8 have thoroughly investigated and confirmed the inability to adopt the 9 total facility shutdown alternative, we accept that BC Hydro should opt 10 for the proposed partial operation approach.164 11

BC Hydro assumes that in para. 35 AMPC agrees with BC Hydro that given the architectural 12

style of the Powerhouse there is [in]adequate laydown area to install three units in parallel, 13

since BC Hydro has never made any contrary statement. BC Hydro does not understand 14

why rejection of one course of action on schedule and environmental grounds should have 15

any bearing on rejection of a different course of action on different grounds, whether it 16

makes sense to the AMPC or not. Splitting the Powerhouse project into three separate 17

projects and attempting to implement them on an ‘as needed’ basis will increase costs and 18

risk for various reasons, as set out in BC Hydro’s response to AMPC 1.5.2.165 These 19

reasons include multiple mobilizations, as compared to the Project, which will require a 20

single mobilization for each major contract, which will add costs; uncertainty in supplier 21

timing if implementation is truly on an ‘as-needed’ basis, as compared to the Project which 22

presents a known schedule, which will attract a risk premium; a smaller scope of three single 23

Turbine-Generator and three single ancillary equipment and installation contracts, as 24

compared to the Project which requires one contract for each work package, and must 25

therefore increase procurement costs (both for BC Hydro and suppliers) which will 26

eventually be reflected in the capital costs incurred. 27

Finally, in para. 36 AMPC asserts in summary that its ‘defer until needed’ strategy is 28

reasonable and prudent. This summary, like rest of AMPC’s Final Submission with respect 29

to the Powerhouse Work is not based on evidence in the record. The condition of the 30

Powerhouse has now deteriorated to the point where maintenance of the Facility can no 31

longer be done economically. Without investment the Powerhouse will no longer be fit for its 32

164 Ex. B-10-2, BC Hydro’s response to BCOAPO IR 2.4.1 Attachment 1, pg. 2 of 21. 165 Exhibit B-7-2, Response to AMPC 1.5.2, pg. 8.



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intended purpose. This is not just BC Hydro’s opinion, but is also the professional opinion of 1

RW Beck cited above. The Application clearly demonstrates that the Ruskin facility has 2

reached the end of its economic life and is becoming increasingly unreliable. 3

4.1.4 Dam Crossing 4

AMPC’s submissions with respect to the Dam Crossing miss the salient fact that the Dam 5

Crossing work is required to carry out the Project as proposed. The Upper Dam portion of 6

the Project is designed to accommodate stop logs on the spillway gates to allow the required 7

periodic inspection and maintenance of the gates without drawing Hayward Lake Reservoir 8

below the sill elevation, which is the current practice as the gates are not equipped with stop 9

logs. This will reduce recreational impacts from drawdowns, as well as the small risk of flow 10

interruption should the Powerhouse trip off-line when the reservoir is below the sill, and 11

more importantly the environmental impacts of wetting and drying cycles in the riparian zone 12

of Hayward Lake Reservoir.166 Stop logs or maintenance gates have been a standard design 13

feature on BC Hydro spill and intake structures since the 1960s.167 Placement and removal 14

of stop logs will be by crane, which could be either a gantry crane (as has been selected for 15

the Project) or a mobile crane.168 In either case, the road deck must be wider than the 16

current roadway to accommodate the width of either a gantry crane or the outrigger 17

extensions of a mobile crane. The required width of the road deck is not driven by a two-lane 18

design requirement, but by the need for safe crane operation, which in turn allows a 19

two-lane roadway as an ancillary benefit. Given a road deck that can accommodate either 20

crane-type, the incremental cost to allow a two-lane roadway is minimal. BC Hydro notes 21

that the realignment of Wilson Street was required to implement the Right Abutment Work 22

included in the Project as the previous road alignment impinged on the work area and in 23

particular the upstream cut-off wall. 24

As part of a ‘good neighbour policy’ such as AMPC describes, BC Hydro does indeed 25

attempt to schedule closures of Hayward Road to take stakeholder concerns into account, 26

and anticipates that it will continue to do so in the future. At the same time, BC Hydro retains 27

166 Ex. B-7, BC Hydro’s response to BCUC IR 1.29.5. 167 Ex. B-7-2, BC Hydro’s response to AMPC IR 1.5.2, pg. 11. 168 Ex. B-7, BC Hydro’s response to BCUC IR 1.93.1, Attachment 4 pgs. 331 and 332 of 406 (Inter-Office memo: Ruskin Spillway Maintenance Barrier Design Options – attached as Appendix K to Preliminary Design Report).



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an absolute right to close the road or restrict use – it is not clear that this would remain the 1

case after accepting construction cost contributions. Equally, it is not clear that the 2

arrangement posited by the AMPC, with some sort of joint determination of roadway 3

closures subject to an annual review, will maintain BC Hydro’s right to manage the roadway 4

as part of Dam operations. 5

4.1.5 Switchyard Work 6

AMPC is the only customer intervener opposing including of the Switchyard Work as part of 7

the Project; as described above in section 2, BCOAPO, BCSEA and CECBC explicitly 8

support BC Hydro carrying out the Switchyard Work as part of the Project. In reply to 9

AMPC’s submissions, BC Hydro relies on pgs. 45 to 46 of the BCH Final Submission and 10

the evidentiary references contained therein. 11

4.1.6 Cost Estimates 12

In para. 37 AMPC asserts that BC Hydro has taken a “zero-risk” approach to estimating 13

costs based on its view that the Project contains a “generous as-built contingency estimate” 14

and also based upon three items taken from the Pacific Liaicon Report169 that AMPC 15

describes as “margins”: 16

a $25 million contract management and service fee; 17

a $20 million currency exchange fee, and 18

high equipment and materials mark-up rates. 19

BC Hydro rejects that it has taken a “zero-risk” approach to estimating Project costs. As 20

described above in section 2.1.6 in BC Hydro’s response to project cost concerns identified 21

by BCOAPO, BC Hydro has added treatment to the Project which it believes has reduced 22

cost uncertainty risk from high to medium.170 BC Hydro’s treatment activities have not been 23

designed to achieve “zero-risk” (a P100 cost estimate). BC Hydro developed an Expected 24

Amount that is equivalent to a P50 cost estimate while the Authorized Amount includes 25

additional treatment so as to ensure that it conforms to a P90 cost estimate plus 26

169 Supra, note 27. 170 Ex. B-1, section 5.3.1.



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Management Reserve. As BC Hydro is seeking a CPCN on the basis of the Expected 1

Amount, and as additional Board Capital Committee approval(s) are required to expend 2

funds in excess of the Expected Amount, BC Hydro disagrees with the claim that BC Hydro 3

is not incented to contain costs. On the contrary, treatment activities which include 4

BC Hydro’s use of and response to the Pacific Liaicon Report recommendations have 5

helped to ensure that BC Hydro’s cost estimates are reasonable. 6

AMPC’s selective quoting of the evidentiary record and in particular, recommendations 7

made in the Pacific Liaicon Report and BC Hydro’s response to those recommendations, are 8

disappointing in that no recognition is given to the efforts BC Hydro’s has taken to ensure 9

the reasonableness of its Project cost estimates. BC Hydro also notes that AMPC has not 10

distinguished between those costs included in the Authorized Amount but not included the 11

Expected Amount. With respect to Project costs, BC Hydro notes the following: 12

Contingency Level – In section (d) of its argument, AMPC asserts that the Project 13

contingency amounts are excessive and that the Project includes a generous built-in 14

contingency estimate. After considering the Pacific Liaicon Report recommendations, 15

BC Hydro accepted a number of recommendations, which ultimately led to the 16

reduction of the contingency amount for the Expected Amount by 5 per cent, from 17

19 per cent to 14 per cent of total construction cost.171 Measured another way, the 18

Expected Amount contingency represents 12.4 per cent of the total Expected Amount 19

excluding the contingency. As this 12.4 per cent contingency falls within the 20

10-20 per cent range deemed a “good practice” by the Government Review Panel for 21

“very difficult projects”, BC Hydro is following Panel Review Report recommendation 22

38 having appropriately reflected cost risk in the Expected Amount.172 23

Pacific Liaicon “Margin” Items of concern to AMPC - In its response to BCOAPO 24

IR 2.4.1, BC Hydro provided a comprehensive explanation describing all of Pacific 25

Liaicon’s material comments/recommendations and a summary of BC Hydro’s 26

response to each. With respect to the three specific items identified by AMPC as 27

additional margin items over and above the contingency, the following is BC Hydro’s 28

171 Ex. B-10-2, BC Hydro’s response to BCOAPO IR 2.4.1. 172 Ex. B-15, pg. 15, line 22 to pg. 16, line 19.



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explanation of these items and why they do not represent additional contingency or 1

excessive margin: 2

a) “a $25 Million contract management and service fee” – Pacific Liaicon incorrectly 3

characterized this cost as a mark-up. BC Hydro explained to Pacific Liaicon and 4

noted in the aforementioned IR response that these costs represent the 5

estimated cost of BC Hydro’s contract administration, including inspection, 6

testing, and all site service requirements (such as parking, lay down areas, 7

power supply, road maintenance, etc.). These costs are necessary and 8

appropriate given BC Hydro’s active management role and responsibility with 9

respect to the Powerhouse Work and Upper Dam Work.173 10

b) “a $20 Million [currency] exchange fee” – Firstly, BC Hydro notes that the 11

$20 million is not a fee but a discrete amount intended to militate against declines 12

in the Canadian dollar versus other relevant currencies over and above those 13

exchange rates factored into the cost estimates. Second, the $20 million is not 14

included in the Expected Amount and is only included as a specific Management 15

Reserve item in the Authorized Amount. As this is a discrete item in the 16

Management Reserve allocated specifically to currency exchange risk on the 17

Turbine and Generator contract, BC Hydro would only request approval for this 18

amount (or a portion thereof) if the dollar declines significantly from other relevant 19

currencies. As described in the aforementioned IR response, the Canadian dollar 20

remains near all-time highs versus other international currencies and the risk of 21

the dollar declining between the time of the estimate and the point of contractual 22

conversion from Canadian dollars to foreign currencies remains with BC Hydro 23

and it is not possible to transfer risk to the supplier over the pre-conversion 24

period. 25

c) “high equipment and materials mark-up rates” 26

With respect to equipment rates, the Pacific Liaicon Report actually noted 27

that with the exception of the 150 and 200 tonne crawler, equipment rental 28

rates for Contract B are reasonable. Pacific Liaicon specifically identified the 29

173 Ex. B-10-2, BC Hydro’s response to BCOAPO IR 2.4.1.



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150 and 200 tonne crawlers as having equipment rates substantially higher 1

than rates provided by SNC Lavalin. BC Hydro explained in the 2

aforementioned IR response that the item in question is a special crane for 3

using Kelly Bars and that the rental cost was provided by a specialist 4

contractor and its use is specific. BC Hydro further explained that the cost 5

implication is about 1,446 hours or $662,000. 6

With respect to materials rates, BC Hydro did agree with some 7

recommendations of Pacific Liaicon such as the avoidance of heavy welding 8

component for field connections in favour of more cost-effective bolted 9

connections and these recommendations are reflected in the Expected and 10

Authorized Amounts. With respect to Pacific Liaicon’s observation that rebar 11

costs are significantly higher ($4.87/kg versus $1.85/kg), BC Hydro explained 12

that the mark-up factor included the special craning system required for the 13

rebar installation throughout the job as well as overtime and safety items. 14

Contractor Strategy – AMPC states that BC Hydro has failed to target economies of 15

scale by selecting a general contractor and goes on to mention that BC Hydro did not 16

take up Pacific Liaicon’s recommendation to undertake a single general contractor for 17

the Upper Dam, Powerhouse and Switchyard Work with supply and erect contracts 18

also assigned to the contractor for coordination. As described in BC Hydro’s response 19

to BCOAPO IR 2.4.1, BC Hydro disagrees with the notion that BC Hydro is not 20

targeting economies of sale and did not accept Pacific Liaicon’s general contractor 21

recommendation for the following reasons: 22

BC Hydro is familiar with the hazards in working in its own generating facilities 23

and should assume the role as prime contractor to maintain overall co-ordination 24

and control; 25

The Ruskin Facility needs to operate during the construction period and so 26

BC Hydro needs to maintain the overall coordination and control of site; 27



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BC Hydro’s division of the major contract work into three distinct physical areas 1

both minimizes contractor interferences and reduces the need for a single 2

general contractor; 3

The divergence of skills required (heavy civil versus electrical and mechanical 4

installation) limits the number of firms able to act as general contractor. At the 5

same time, BC Hydro believes that in this instance, maintaining separate 6

contracts actually increases [not decreases] the pool of potential bidders. 7

In addition to the above, BC Hydro has taken a number of steps to manage its overall 8

procurement process and, in particular, to ensure bid margins are reasonable.174 9

AMPC at para. 42 quotes the Review Panel Report and cites the preparation of over 30 10

reports evaluating refurbishment of the Powerhouse as an example of what AMPC calls an 11

“excessive” approach. BC Hydro disagrees with the premise that the Project evaluation work 12

undertaken is excessive. Once again, this assertion highlights the weaknesses of simply 13

repeating a Review Panel Report general observation and applying it to the Project. As 14

described in Table 2-2 of Ex. B-1, BC Hydro scoped the Project to adequately address the 15

identified significant deficiencies and to ensure the longevity of newly installed or refurbished 16

equipment. To develop the Powerhouse Work, BC Hydro has had to carry out 17

component-by-component inspections to identify existing deficiencies, following which it 18

could develop a preferred approach to address the specific deficiencies. This inspection, 19

evaluation and design process is necessary to determine an appropriate scope of work for 20

each component. An example is the inspection and design work undertaken to determine 21

the preferred scope of work required for the intake structures. Following a finite element 22

analysis of all three intake structures to determine stability during a large seismic event, 23

Intakes 1 and 2 were found to be insufficiently stable against the MDE; however, Intake 3 24

was found to be stable enough to withstand the MDE and therefore no anchoring at Intake 3 25

was determined to be required. The extent of deficiencies at Intakes 1, 2 and 3 (or lack 26

thereof) could not be understood by BC Hydro and appropriate remediation proposed 27

without this work being undertaken. Another example is the work to evaluate the water 28

conveyance tunnels and penstocks (Ex. B-1, pg. 2-18). Following inspection, the three unit 29

174 Ex. B-15, pg. 22, line 16 to pg. 29, line 2.



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tunnels were each found to have unique deficiencies. Unlike the condition of the intake 1

structures where U3 was least in need of upgrading, the U1 tunnel was found to be in 2

generally satisfactory condition, U2 showed some rust and concrete erosion while U3 was 3

found to have experienced leakage with the steel liner showing signs of rust. The inspection 4

and assessment process also identified that the U3 tunnel is subjected to greater earth 5

loads and movement during a seismic event and that it would likely fail in a large 6

earthquake. 7

Overall, the evidentiary record demonstrates that when the nature and cost risk level of the 8

Project is considered, BC Hydro has taken actions throughout the development and 9

planning of this Project to ensure that costs are reasonable and prudent. 10

4.1.7 First Nation Consultation 11

AMPC submits that the record demonstrates that BC Hydro has adequately consulted with 12

Kwantlen with respect to the Project to this stage (AMPC Final Submission, paras. 52 and 13

55). In particular, AMPC submits that because there will be no changes to the operation of 14

the Ruskin Facility resulting in negative environmental impacts due to the implementation of 15

the Project, the SoC analysis and revenue sharing discussions “are not material to the 16

[BCUC’s] assessment of BC Hydro’s consultation activity”. BC Hydro agrees that given the 17

residual environmental effects of the Project are low to none, whether Kwantlen’s SoC is 18

reasonable or strong is not material to determining the scope of the consultation with 19

Kwantlen. Refer to section 3.3 above. AMPC also agrees with BC Hydro that BC Hydro has 20

adequately consulted with Kwantlen regarding alternatives to the Project. Finally, BC Hydro 21

adopts all of AMPC’s submissions regarding AMPC’s description of the legal issues found at 22

paras. 56 to 63 of the AMPC Final Submission. 23



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4.2 CEABC 1

CEABC represents IPPs and thus champions that particular form of energy. CEABC 2

requests that the BCUC “temporarily” put the Application “in abeyance” for a period of time 3

that is not specified based on claims that while the Project “appears to be cost-effective in 4

the context within which it has been evaluated, there are several considerable risks that it 5

might not be the most cost-effective project for BC Hydro at this time”. CEABC asserts that 6

the following may indicate that the Project is not cost-effective: 7

(1) Impacts of climate change. As set out in section 1.3 of this Reply, Hemerra evaluated 8

these potential impacts, and so this is not a reason for placing the Application in abeyance; 9

(2) Consideration of a possible canal/pipeline/tunnel alternative. Refer to section 1.3 for why 10

this is not a reason for placing the Application in abeyance; 11

(3) This leaves the following CEABC advanced “reasons” which are addressed in this 12

section, each of which BC Hydro submits has no merit as a basis for placing the Application 13

in abeyance or rejecting the Application: 14

CEABC’s unfounded pronouncements regarding the appropriateness of valuing firm 15

energy based on the 2010 Clean Power Call results, which in any event ignore the 16

sensitivity analysis that shows the Project is cost-effective under a wide range of 17

energy values, including using a $70/MWh value that CEABC advances without tested 18

evidence may be the future cost of wind generated energy (refer to section 4.2.1); 19

CEABC’s contention that the value of the Ruskin Facility-post Project’s dependable 20

capacity is zero, which is unsupportable and again disregards the sensitivity analysis 21

that shows the Project is cost-effective when given no capacity credit (dependable 22

capacity is valued at zero) (section 4.2.2); 23

CEABC’s mistaken observations concerning the costs of decommissioning, which are 24

blind to the fact that the basis for the decommissioning credit is Decommissioning 25

Alternative B, which has a lower cost than the media reported costs of the Elwha Dam 26

and Glines Canyon Dam removals in Washington State which CEABC inexplicably 27

favours as the basis for a decommissioning credit, and once again overlooks the 28



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evidence that the Project is cost-effective without a decommissioning credit 1

(section 4.2.3); and 2

CEABC’s questions concerning cost-effectiveness under capital rationing, which are 3

made without reference to the evidence on the record as to why BC Hydro has 4

prioritized the Project (section 4.2.4). 5

Each of these groundless “reasons” is addressed in turn. 6

4.2.1 Value of Firm Energy 7

CEABC asserts that there are four reasons why it is inappropriate and misleading to use the 8

2010 Clean Power Call-based $129/MWh value as the basis for a 50-year evaluation of the 9

Ruskin Facility-post Project’s firm energy: (1) the Clean Power Call represents a “snap shot 10

in time” and included adjustments that may not be needed in the future; (2) the differing 11

definitions of firm energy used in the Clean Power Call and in BC Hydro’s long-term 12

planning; (3) procured non-firm energy is lower cost than firm energy and should be 13

deducted from the $129/MWh value; and (4) the Clean Power Call results are unlikely to be 14

representative in the future based on new materials CEABC seeks to introduce in argument 15

with respect to wind energy costs. Leaving aside the new evidence that CEABC attempts to 16

introduce through argument which is addressed in section 1.3, none of the reasons 17

advanced by CEABC withstand scrutiny, and do not form a basis for granting CEABC’s 18

request that the Application be placed in abeyance for an unspecified period of time. 19

(a) “Snap Shot” and Adjustments 20

With respect to CEABC’s “snap shot” and adjustments argument, BC Hydro replies that the 21

2010 Clean Power Call price is the best current estimate of the Long Run Marginal Cost of 22

energy as it provides ‘real world’ prices for firm energy based on BC Hydro’s most recent 23

competitive procurement process for clean or renewable energy resources. The Clean 24

Power Call was open to any form of clean or renewable energy (excluding forest-based 25

biomass) with 25 Electricity Purchase Agreements (EPAs) awarded in spring/summer 2010 26

for a total of 3,266 GWh/year of firm energy.175 The Clean Power Call is considered to be the 27

175 Ex. B-7, BC Hydro’s response to BCUC IR 1.56.1.



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best comparator derived from BC Hydro’s power acquisition processes given that it reflects 1

current pricing, a large volume and a broad array of clean, renewable technologies, 2

including hydro-based power projects. 3

The Ruskin Facility is located in the Lower Mainland and it delivers energy to the Lower 4

Mainland, which is BC Hydro’s major load centre. Thus it is not relevant that in the future, 5

much of the new industrial load in B.C. may (or may not) be situated in the north of the 6

Province (CEABC Final Submission, pg. 5, which has not been tested). To permit a proper 7

comparison between the Ruskin Facility post-Project and IPPs, adjustments must be made 8

to account for delivery of energy to the Lower Mainland. Thus BC Hydro used the 9

weighted-average levelized firm energy price from the Clean Power Call adjusted to delivery 10

to Lower Mainland to fairly compare the value of firm energy generated by the Ruskin 11

Facility-post Project. 12

(b) Definition of Firm Energy 13

The determination of “firmness” for Clean Power Call EPA purposes is consistent with the 14

approach for determining firmness for long term planning purposes; that is, BC Hydro needs 15

to be confident that it can rely on the IPP supplier to reliably provide the specified quantity of 16

energy for each year of the contract. Given that IPPs do not have water availability records 17

in the same way that BC Hydro has for its Heritage Assets such as the Ruskin Facility or 18

storage capability to reduce the impact of flow variations, the firm energy delivery obligations 19

in the Clean Power Call EPA are aimed at ensuring that IPPs will be able to deliver the 20

contractual energy volumes throughout the term of the EPA. 21

(c) Non-Firm Energy 22

The non-firm energy assertion was squarely addressed in BC Hydro’s response to CEABC 23

IR 3.4.1.176 First, as set out in Ex. B-1, pg. 3-33, to allow a comparison to the levelized cost 24

of energy from the Ruskin Facility post-Project, BC Hydro adjusted this value to reflect the 25

firm/non-firm energy profile of the Ruskin Facility post-Project, using $129/MWh to value the 26

firm energy and $50/MWh to value the non-firm energy, resulting in a weighted average 27

176 Ex. B-18.



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value of energy of approximately $120/MWh. At all times, firm energy was valued at 1

$129/MWh. 2

Second, CEABC incorrectly asserts that non-firm energy may be contractually firm. This is 3

simply not the case; non-firm energy that may be delivered pursuant to 2010 Clean Power 4

Call EPAs is in fact contractually non-firm energy. IPP developers do not designate this 5

additional energy as firm energy (which attracts significantly higher pricing) because of the 6

freshet firm energy cap and because their water and wind resource data does not provide 7

adequate predictive certainty that this energy can be generated during each season 8

prescribed in the EPA. Furthermore, BC Hydro cannot treat such non-firm energy as 9

“statistically firm” for planning purposes given that there is no operational track record at the 10

time of contract award. 11

Third, blending the firm energy price and non-firm energy price in the way suggested by 12

CEABC into a total energy price does not reflect the true cost of delivered firm energy to 13

ratepayers. For planning purposes, non-firm energy from IPP purchases is surplus to 14

BC Hydro customers’ needs since BC Hydro must already have sufficient firm energy to 15

meet those needs. To the degree that non-firm energy is acquired under take-or-pay EPAs 16

with IPPs, such energy reduces BC Hydro’s storage capabilities and operational flexibility. 17

On a total cost perspective, the cost of the non-firm energy is additive to the cost of firm 18

energy. 19

(d) Future Prices for Wind Turbines 20

At pgs. 5 and 6 of its Final Submission CEABC makes several unsubstantiated claims 21

concerning the future prices of wind turbines with no evidence on the record to back up 22

these claims. What is on the record with respect to this issue are: (1) Ex. B-18 BC Hydro’s 23

response to CEABC IR 3.4.1; and (2) BC Hydro’s latest Resource Options Report (ROR) 24

data. Each of these evidentiary sources is addressed in turn. 25

In its response to CEABC IR 3.4.1, BC Hydro agreed that turbine prices have decreased 26

over the past two to three years as a result of, among other things, diminished demand due 27

to the economic downturn, as well as a decline in the cost of the raw materials such as steel 28

and copper. However, BC Hydro expects that as the economic situation improves, the 29



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demand for wind turbines and raw materials will increase again, which in turn will put upward 1

pressure on wind turbine prices. Also, future energy prices for renewable resources such as 2

wind are driven by a variety of factors, including capital and operating costs, financing costs, 3

competitive bid strategies and economies of scale. As such, BC Hydro cannot (nor in 4

BC Hydro’s view can CEABC) reliably predict what overall impact declining wind turbine 5

costs may have on energy price bids in future power procurement processes. 6

There is no evidence that future wind resources can provide firm energy at, for example, 7

$70/MWh. The evidence is to the contrary based on the two most recent, large-scale 8

BC Hydro power acquisition process results:177 9

a) The lowest accepted Levelized Firm Energy Price in the Clean Power Call was 10

$105.36/MWh, and the asserted $70/MWh future wind cost, assumes prices 11

34 per cent below the most recent B.C.-market price indicator; 12

b) The prior BC Hydro Open Call for Power (F2006 Call) yielded a weighted average 13

levelized price of $87.71/MWh as the Adjusted Bid Price for firm energy – stated in 14

2006$; the equivalent price in F2011$ is $95.41. The lowest Adjusted Bid Price of an 15

accepted EPA in that acquisition process was $74.96 (in F2011$). 16

Nor does the asserted $70/MWh future wind cost accord with BC Hydro’s most recent ROR 17

data. BC Hydro submits that the prices presented in the most recent ROR are a realistic 18

representation of the future wind generation prices, as they are based on the best current 19

forecasts and do not include short term market fluctuations, which are difficult to predict 20

accurately and should not be relied upon for a long-term (50+years) Project evaluation 21

exercise. The ROR shows that wind prices are likely to be in the range of $95/MWh to 22

$200/MWh or higher, as compared to the Clean Power Call firm energy prices of 23

$129/MWh.178 None of the CEABC’s assertions with respect to wind apply to run-of-river and 24

other clean or renewable resources awarded EPAs pursuant to the Clean Power Call 25

(50 per cent were run-of-river)179 and the F2006 Call (predominantly run-of-river),180 and 26

177 Ex. B-10-2, BC Hydro’s response to CEABC IR 2.6.1. 178 Refer to Ex. B-10, BC Hydro’s responses to BCUC IRs 2.65.1, Attachment 1, pg. 16 of 40; and to BCUC IR 2.65.2. 179 Ex. B-18, Attachment 1 to BC Hydro’s response to CEABC IR 3.4.1. 180 Ibid.



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there is nothing on the record to suggest that wind will become the economically dominant 1

form of clean or renewable resources mix in the future in B.C. 2

(e) Conclusion 3

As noted in section 4.2.1(a) of the BCH Final Submission, the sensitivity analysis 4

demonstrates that the Project is cost-effective if firm energy is valued below the Clean 5

Power Call firm energy value of $129/MWh. Refer to: (1) the use of the lowest accepted 6

Bioenergy Call for Power Phase I Request for Proposals firm energy price of $111/MWh;181 7

(2) the use of the lowest cost ROR-related 5,000 GWh/year ($74.21/MWh with clean and 8

renewable and natural gas-fired generation options, or $107.65/MWh based on clean or 9

renewable and no gas or geothermal resources) and 10,000 GWh/year resource options 10

($80.94/MWh with clean and renewable and natural gas-fired generation options, and 11

$102.12/MWh based on clean and renewable and no gas or geothermal resource 12

options);182 (3) the arbitrarily set (with no evidence) $100/MWh and $70/MWh values for firm 13

energy posed by CEABC in an IR;183 and (4) the use of “export market prices”, including the 14

lowest spot market forecast of about $30-$35/MWh.184 Accordingly, a dispute over the value 15

of firm energy is clearly not a reason for placing the Application in abeyance. 16

4.2.2 Value of Dependable Capacity 17

CEABC argues that the Ruskin Facility post-Project will only defer Revelstoke Unit 6 for “at 18

most, two years”, that if Revelstoke Unit 6 is developed, there is no need for capacity until 19

F2027 and that therefore the dependable capacity from the Ruskin Facility post-Project is of 20

no value. The two year deferral period assertion is not correct, and the CEABC position is 21

untenable for a number of reasons. 22

(a) Analysis of CEABC Argument 23

First, the LRB presented in Tables 2 and 4 in Ex. B-15 demonstrate a need for additional 24

capacity starting in F2016 under both: (1) the critical water conditions as currently required 25

181 Ex. B-7, BC Hydro’s response to BCUC IR 1.56.1. 182 Ex. B-10, BC Hydro’s responses to BCUC IRs 2.65.4 and 2.65.6. 183 Ex. B-10-2, BC Hydro’s response to CEABC IR 2.6.1. 184 Ex. B-10-2, BC Hydro’s response to BCOAPO IR 2.9.4; Ex. B-15, section 2.2.2.



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by CEA, the Electricity Self-Sufficiency Regulation185 and SD 10; and (2) average water 1

conditions. It is therefore appropriate to use possible future B.C.-based resources to value 2

the dependable capacity. If the Project fully comes into service in 2018, there is a need for 3

capacity in F2023, which is a deferral period of five and not two years.186 In any event, 4

employing CEABC’s methodology that the duration of the deferral period is the only 5

governing factor for valuing dependable capacity would lead to all resources being assigned 6

a low or zero capacity value. The assumed value of $55/kW-year for dependable capacity is 7

based on the UCC of Revelstoke Unit 6, the lowest cost B.C.-based capacity supply 8

alternative, on the basis that but for the Project, Revelstoke Unit 6 would be built in the year 9

the Project comes into service. The decision to proceed with the Project is being made now 10

based on the cost of the lowest cost alternative B.C.-based capacity resource, and the 11

Ruskin Facility post-Project has an expected life of over 50 years. 12

There is no guarantee that Revelstoke Unit 6 will be built. As set out in BC Hydro’s response 13

to CECBC IR 1.8.1,187 BC Hydro has not yet concluded that Revelstoke Unit 6 should be 14

advanced through the Definition phase. Revelstoke Unit 6 would require EA-related 15

authorizations, consultation with First Nations and engagement with stakeholders. The 16

Project may be deferring other, smaller and less cost-effective B.C.-based resources such 17

the 98 MW SCGT and the 38 MW SCGT listed in FortisBC Inc.’s 2009 Resource Plan with 18

UCCs of $75/kW-year and $120/kW-year respectively (converted to $F2011).188 Thus in 19

BC Hydro’s respectful submission BC Hydro has valued the dependable capacity of the 20

Ruskin Facility post-Project in a conservative way. 21

Second, even if one accepts that the Project’s short deferral of Revelstoke Unit 6 is a 22

sufficient basis for not using the $55 /kW-year value, that does not mean the dependable 23

capacity of the Ruskin Facility post-Project is worthless. There is a market for dependable 24

capacity. While the market value of capacity is uncertain, as the current market in the 25

Western Electricity Coordinating Council is illiquid and the value depends on trading 26

conditions and transmission access, there is an increasing penetration of intermittent 27

185 B.C. Reg. 315/2010, copy at Tab 4 of the FS Book of Authorities. 186 Refer to Ex. B-1, Appendix F-2, pg. 2 of 2. 187 Ex. B-7-2. 188 Ex. B-7, BC Hydro’s response to BCUC IR 1.64.1. Refer also to Ex. B-1, pg. 2-8, footnote 5, where the UCC of a SCGT is provided as between $70-$162/kW-year.



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renewable resources189 and thus a need for dependable capacity. For purposes of sensitivity 1

analysis, BC Hydro developed a range for the medium to long-term market value of capacity 2

of $75/kW-year to $107/kW-year, based on recent Bonneville Power Administration tariffs, 3

current transactions and market analysis. BC Hydro estimates that U.S. market access 4

transmission constraints could reduce the market value of capacity located in the Lower 5

Mainland to $37/kW-year for the low end of the market estimate range. As demonstrated in 6

Table 3-7 of Ex. B-1, the Project is cost-effective if the value of its dependable capacity is 7

$37/kW-year. 8

(b) Conclusion 9

As noted in section 4.2.1(a) of the BCH Final Submission, the sensitivity analysis also 10

demonstrates that even if there is no capacity credit (zero capacity value) the Project is 11

cost-effective; any assigned value of capacity simply increases the value of the Project. 12

Refer to the summary of the sensitivity analysis with the capacity values and NPVs shown in 13

Ex. B-1, Table 3-7, pg. 3-33. Accordingly, a dispute over the value of capacity is clearly not a 14

reason for placing the Application in abeyance. 15

4.2.3 Cost of Decommissioning 16

BC Hydro respectfully submits that CEABC’s complaint that U.S. dam decommissioning 17

comparisons should have been undertaken as part of the Application and not as responses 18

to IRs is not relevant to and does not in any way support its requested relief of placing the 19

Application in abeyance. 20

First, the Project is cost-effective even if no decommissioning credit is assigned. CEABC is 21

correct that the higher the estimated decommissioning cost, the more attractive the Project 22

and the Decommissioning Alternatives will appear compared to other sources of supply. 23

CEABC is incorrect that this is “a critically important element of the Project proposal”: the 24

Project and the two De-Rating Alternatives are all more economic than other sources of 25

supply when energy is valued at the firm energy price derived from the 2010 Clean Power 26

Call, even if no decommissioning credit is applied. BC Hydro notes that this point was 27

189 Ex. B-1, pg. 3-32, lines 10-11.



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explained in the Application, and this explanation was expanded-on in Ex. B-18, BC Hydro’s 1

response to CEABC IR 3.4.1, as follows: 2

As set out in Exhibit B-1, Table 3-4 on page 3-26, the NPV of the 3 Project, as well as Alternatives A and E (De-Rate 2 Units and De-Rate 4 3 Units, respectively) are all positive prior to applying the 5 Decommissioning Credit, with values of $153.3 million, $111.0 million, 6 and $81.8 million at the Expected Amount, respectively. This indicates 7 that the Project and Alternatives A and E are all economic, even if a 8 zero-cost decommissioning alternative is available. While the Project 9 and the Alternatives A and E are all economic without consideration of 10 a Decommissioning Credit, the economic preference for the Project 11 rather than the two De-Rating Alternatives is that the Project has the 12 highest NPV of the three development options… [Emphasis added]. 13

The decommissioning credit recognizes the benefit to BC Hydro and ratepayers of avoiding 14

the cost to decommission the Ruskin Facility if it is retained as a generating facility rather 15

than being decommissioned. This is recognized by BCSEA (pg. 2 of its Final Submission). If 16

the Project and the De-Rating Alternatives remain economic even if decommissioning is 17

free, then BC Hydro need not (and has not) set up a “straw man” to make the Project or the 18

De-Rating Alternatives look good: they already do. The decommissioning costs cannot be 19

negative190 which means that it is not possible for the avoidance of those costs to negatively 20

affect the economic results of the Project or the De-Rating Alternatives; this is a matter of 21

simple arithmetic. In passing, BC Hydro notes that when compared to other supply 22

alternatives the Project is economic even if no value is attributed to capacity and the 23

decommissioning credit is nil since the Project NPV before decommissioning credit is 24

$153.3 million, including a value of $72.7 million; setting the capacity credit to zero reduces 25

the NPV by that $72.7 million, to $80.6 million. This result can also be seen by the fact that 26

the Unit Energy Cost of Project energy before decommissioning and capacity credits is 27

$101.2/MWh,191 roughly 15 per cent less than the cost of IPP supply alternatives. 28

Second, CEABC falsely sets up a comparison of the media reported cost of $324 million 29

(USD) for the Elwha Dam and Glines Canyon Dam removals in Washington State to the 30

190 A negative decommissioning cost implies that retaining the Ruskin Facility as a generating station eliminates an opportunity for a better use. There is no information on the record that would indicate that such an opportunity exists. 191 Ex. B-1, table 3-5 – 6th line, captioned “UEC – before decommissioning credit”.



Page 122

highest Decommissioning Alternative capital cost of $430 million (CDN). The 1

decommissioning credit is conservatively calculated at the lowest cost Decommissioning 2

Alternative (Alternative B) at a nominal cost of $249.2 million, or $148.1 million in PV 3

terms.192 Thus the decommissioning credit is clearly based on a lower cost than that of the 4

Elwha Dam and Glines Canyon Dam removals. All of this and the effect on Project 5

economics was explained in detail in Ex. B-18, BC Hydro’s response to CEABC IR 3.1.4. 6

Most importantly, the relative costs of the Elwha Dam and Glines Canyon Dam removals 7

and the Decommissioning Alternatives are a distraction. BC Hydro sought estimates for the 8

costs of decommissioning as part of good management practice, which requires alternatives 9

to be identified and evaluated. Refer to pgs. 28 to 30 of the BCH Final Submission. 10

BC Hydro respectfully submits that a project estimate that contemplates this 11

decommissioning, of this facility, with this scope, on this river, in this jurisdiction is vastly 12

more relevant to that evaluation than a single quoted figure for the decommissioning of other 13

facilities, with other scopes, on other rivers, in other jurisdictions, with other mandates, 14

particularly when the estimate is prepared by an undoubted expert, and the single-valued 15

cost for the Elwha River Dam and Glines Dam decommissioning is picked up by CEABC 16

from a website very late in the evidentiary phase of the proceeding. In any event, the 17

CEABC’s third round IRs respecting U.S. dam decommissioning experience were 18

responded to; and demonstrate that the dams decommissioned to date experience in the 19

U.S. and Canada have been very small and in no way comparable to Decommissioning 20

Alternatives B, C and D.193 21

4.2.4 Capital Rationing 22

CEABC speculates that even if the Project is cost-effective, there is “a considerable risk of 23

[the Project] not being cost-effective … if capital rationing [was] imposed on BC Hydro” as it 24

is unclear that the Project “would be prioritized among the most cost-effective projects for 25

BC Hydro to proceed with at this time”. BC Hydro has been clear that the Project is being 26

advanced at this time because the results of BC Hydro’s EHRs for BC Hydro’s 15 strategic 27

192 Ex. B-1, tables 3-4 and 3-5, and Attachment C-2. 193 Ex. B-18, BC Hydro’s responses to CEABC IRs 3.1.1 and 3.1.3.



Page 123

generating facilities demonstrate that the Ruskin Facility is in the poorest shape.194 In 1

addition, as summarized in the BCH Final Submission at sections 4.1.1 and 4.1.2, the 2

Extreme Consequence Upper Dam, Right Abutment and Left Abutment, and the 3

Powerhouse superstructure, have a very low seismic withstands, especially when compared 4

to a B.C. Dam Safety Regulation-based MDE corresponding to 1/10,000 earthquake in the 5

case of the Upper Dam, Right Abutment and Left Abutment, and when compared to the 6

National Building Code of Canada standards in the case of the Powerhouse superstructure. 7

In summary, the current condition of the Ruskin Facility poses unacceptable public safety, 8

worker safety and environmental risks, and as recognized by BCOAPO, BCSEA and 9

CECBC, the Project is the most cost-effective solution to this demonstrated need. Therefore 10

BC Hydro respectfully submits that speculation regarding possible future capital rationing is 11

not a reason for placing the Application in abeyance. 12

4.2.5 Conclusion 13

CEABC has not advanced any reason that withstands scrutiny to support its position that: 14

(1) the Application should be placed in abeyance; or (2) in the words of CEABC “if BC Hydro 15

successfully argues that the BCUC does not have the authority” to place the Application in 16

abeyance, “then the Application should be rejected outright”. Given the paucity and 17

weakness of CEABC’s “reasons”, BC Hydro makes only a passing comment with respect to 18

the BCUC’s authority to place the Application in abeyance. The BCUC, as a quasi-judicial 19

body, owes a duty of procedural fairness to those participating in its process, including the 20

applicant: 21

[…] parties to a regulatory proceeding, including First Nations, are 22 under an obligation to raise issues in a timely way in order to allow the 23 applicant to respond. … As such, the Board has to weigh the lateness 24 of this submission against the rights of other parties, and in particular, 25 the right of the applicant to have its application heard in a timely 26 manner.195 27

194 Ex. B-7-2, BC Hydro’s response to BCSEA IR 1.1.2, and Attachment 1 to that response. 195 National Energy Board, Reasons for Decision in Terasen Pipelines (Trans Mountain) Inc., OH-1-2006, October 2009, Appendix II, pg. 60; excerpt at Tab 9 of the Reply Authorities.



Page 124

4.3 Mr. Quigley 1

In reading the Final Submission of Mr. Quigley it is unclear if in fact Mr. Quigley opposes the 2

Project or not. In any event, Mr. Quigley at pgs. 1 to 17 of his Final Submission concentrates 3

on EMF. BC Hydro’s replies as follows: 4

Mr. Quigley makes an assertion at pg. 8 that is not Project related: “BC Hydro has not 5

proactively advised the public and in fact their policies expose the public to [EMF]”. 6

This claim is without any evidentiary foundation and should be rejected by the BCUC 7

for the reasons set out in section 1.3 above; 8

Mr. Quigley’s chief EMF-related issues appear to relate to two matters canvassed at 9

pgs. 8 and 9 of his Final Submission that will not be impacted by the Project. The first 10

matter concerns the three transmission circuits (60L19, 60L2 and 60L23) located on a 11

Right of Way (RoW) over Mr. Quigley’s property that carry power between Stave Falls 12

Facility and substations in Maple Ridge, and are not part of the Project. The only 13

transmission line or RoW impacts associated with the Project will be realignment of the 14

circuits to connect to the new switchyard. No final decision has been made as to the 15

exact location of this new switchyard-related RoW, but in any event this RoW will not 16

be located over or adjacent to Mr. Quigley’s property.196 The second matter relates to 17

assertions concerning BC Hydro’s vegetation management programs in the area of Mr. 18

Quigley’s property and their impact on EMF. Mr. Quigley’s property is located 19

approximately 4 km away from the Ruskin Facility and therefore will not be impacted 20

by the Project or any vegetation programs tied to the Project;197 21

Mr. Quigley’s third EMF issue appears to be the contention at pg. 9 that the Project will 22

somehow materially impact existing EMF levels. The Project will not change the 23

voltage of the 69 kV circuits in or out of the Ruskin Facility.198 In addition, as the Project 24

would result in only a minor change to the amount of energy produced at the Ruskin 25

Facility, the EMF levels associated with these lines will not materially change. 26

BC Hydro compared calculated EMF levels for the Ruskin Facility post-Project to the 27

196 Ex. B-7-2, BC Hydro’s response to Quigley IR 1.1.1. 197 Ibid. 198 Ibid.



Page 125

calculated EMF levels for the current Ruskin Facility, and the Project results in a 1

maximum increase of less than 5 Milligauss (mG) directly under either of the two 2

transmission circuits coming out of the Ruskin Facility at maximum load. This level is 3

well below the EMF guidelines established by the International Commission on 4

Non-Ionizing Radiation Protection (ICNIRP). The ICNIRP is the organization 5

responsible for developing safety guidelines for non-ionizing radiation for the World 6

Health Organization, the International Labour Organization and the European Union. 7

The ICNIRP recommends a residential exposure limit of 833 mG and occupational 8

exposure limit of 4,200 mG. The ICNIRP guidelines have been accepted as the most 9

appropriate guidelines by the BCUC in several of its decisions, including Central 10

Vancouver Island Transmission Project.199 11

Based on the foregoing, BC Hydro respectfully submits that there is no evidence on the 12

record to justify Mr. Quigley’s concerns that would outweigh the use of the ICNIRP 13

guidelines for EMF exposure, and that the BCUC should accept BC Hydro’s evidence that 14

the Project-related EMF changes are not material and will be well below the ICNIRP 15

guidelines. 16

Mr. Quigley at pg. 18 addresses in miscellaneous issues. Mr. Quigley asserts that the local 17

organizations listed in section 6 of the BCH Final Submission only support the Dam 18

Crossing and not the overall Project. This assertion is not correct. Mission,200 MRCC201 and 19

the Fraser Valley Regional District202 all support the overall Project in addition to supporting 20

the Dam Crossing. Mr. Quigley also asserts that the Mission Royal Canadian Mounted 21

Police, the Mission Fire and Rescue Service, and the Mission early Childhood Development 22

Committee support the Dam Crossing because “BC Hydro obviously did not fully apprise the 23

organizations … as to the optional nature of the roadway”. This assertion is made without 24

any evidence whatsoever and should accordingly be disregarded by the BCUC. 25

199 In the Matter of British Columbia Transmission Corporation: Certificate of Public Convenience and Necessity – Central Vancouver Island Transmission Project, Decision, 10 December 2008, pg. 64); and Vancouver Island Transmission Reinforcement Project (the Matter of British Columbia Transmission Corporation: Certificate of Public Convenience and Necessity –Vancouver Island Transmission Reinforcement Project, Decision, 7 July 2006, pg. 70, as quoted in Ex. B-10-2, BC Hydro’s response to Quigley IR 2.7.1. 200 Refer to the Mission letter of support at Ex. B-1, Appendix I-1. 201 Ibid and MRCC Final Submission. 202 Ex. E-4-1.

BChydro In lUI

5 Conclusion

2 It is respectfully submitted that the overwhelming weight of the evidence supports the BCUC

3 granting the Order sought from it by BC Hydro. Three of the four customer interveners

4 (BCOAPO, BCSEA and CECBC) and all local organizations BC Hydro engaged with support

5 the Project as proposed. Opposition from AMPC and CEABC is based on reasons that do

6 not withstand scrutiny. BC Hydro also submits that the evidence demonstrates honourable

7 and good faith conduct in all BC Hydro dealings with Kwantlen, and that consultation with

8 Kwantlen has been adequate to this stage of the Project.

9 ALL OF WHICH IS RESPECTFULLY SUBMITTED 23 DECEMBER 2011

10 Per:

11 Craig Godsoe, Solicitor & Counsel, British Columbia Hydro and Power Authority


BC Hydro Written Reply Submission - 23 December 2011

Page 126

Ruskin Dam and Powerhouse Upgrade Project Application for a Certificate of Public Convenience

and Necessity

REPLY SUBMISSION

BOOK OF AUTHORITIES

CASE LAW AND BCUC DECISIONS Further excerpts from Section 5 Transmission Inquiry, Appendix A to Order G-108-09 .............. 1 Canada (Environment) v. Imperial Oil Resources Ventures Ltd, 2008 FCA 20 .............................................................................................................................. 2 Further excerpts form In the Matter of British Columbia Transmission Corporation: Reconsideration of the Interior to Lower Mainland Transmission Project, Decision, February 3, 2011. ....................................................................................................................... 3 BCUC, Order G-77-11 ................................................................................................................ 4 Excerpt from R. v. Marshall; R. v. Bernard, 2005 SCC ............................................................... 5 Tzeachten First Nation v. Canada (Attorney General) 2009 FCA 337 ........................................ 6 Brokenhead Ojibway Nation v. Canada (Attorney General), 2009 FC 484 ................................. 7 Tsuu T’ina Nation v. Alberta (Environment), 2010 ABCA 137 ..................................................... 8 Excerpt from National Energy Board, Reasons for Decision in Terasen Pipelines (Trans Mountain) Inc., October 2006, Appendix 11. ................................................................... 9

Date: 20080117

Docket:·A-113-06A-561-06

Citation: 2008 FCA 20

CORAM:

BETWEEN:

NOELJ.A.SHARLOW J.A.RYERJ.A.

.MINISTER OF ENVIRONMENT, MINISTER OF FISHERIES AND OCEANS,MINISTER OF INDIAN AND NORTHERN AFFAIRS CANADA,

and MINISTER OF TRANSPORTAppellants

and

DENE THAI FIRST NATIONRespondent

and

IMPERIAL OIL RESOURCES VENTURES LIMITED, on behalf of the Proponents of theMackenzie Gas Project, NATIONAL ENERGY BOARD, and ROBERT HORNAL, GINA

DOLPHUS, BARRY GREENLAND, PERCY HARDISTY, ROWLAND HARRISON,TYSON PERTSCHY AND PETER USHER, all in their capacity as panel members of a JointReview Panel established pursuant to the Canadian Environmental Assessment Act to conduct

an environmental review of the Mackenzie Gas Project

Respondentsand

ATTORNEY GENERAL OF ALBERTAIntervener

Heard at Edmonton, Alberta, on January 16,2008.

Judgment delivered from the Bench at Edmonton, Alberta, on January 17, 2008.

REASONS FOR JUDGMENT OF THE COURT

Date: 20080117

Docket: A-113-06A-561-06


CORAM:

BETWEEN:

NOELJ.A.SHARLOW J.A.RYERJ.A.

MINISTER OF ENVIRONMENT, MINISTER OF FISHERIES AND OCEANS,MINISTER OF INDIAN AND NORTHERN AFFAIRS CANADA,

and MINISTER OF TRANSPORTAppellants

and

DENE THA' FIRST NATIONRespondent

and

IMPERIAL OIL RESOURCES VENTURES LIMITED, on behalf of the Proponents of theMackenzie Gas Project, NATIONAL ENERGY BOARD, and ROBERT HORNAL, GINA

DOLPHUS, BARRY GREENLAND, PERCY HARDISTY, ROWLAND HARRISON,TYSON PERTSCHY AND PETER USHER, all in their capacity as panel members of a JointReview Panel established pursuant to the Canadian Environmental Assessment Act to conduct

an environmental review of the Mackenzie Gas Project

Respondentsand

ATTORNEY GENERAL OF ALBERTAIntervener

REASONS FOR JUDGMENT OF THE COURT(Delivered from the Bench at Edmonton, Alberta, on January 17,2008)

[1] On May 17,2007, the Dene Tha' First Nation applied for judicial review of certain

decisions of the appellants (the Ministers) relating to the design and creation of the regulatory and

Page: 2

environmental review process for the Mackenzie Gas Pipeline. The basis of the application was the

allegation that the Ministers had failed to fulfil their obligation under section 35 of the Constitution

Act, 1982 to consult with the Dene Tha' in relation to the creation ofthe process.

[2] On March 9, 2006, Justice Phelan rendered a judgment with elaborate reasons dismissing a

motion by the Ministers to stay the Federal Court proceedings (2006 FC 307). On November 10,

2006, he rendered a further judgment again with elaborate reasons granting the application for

judicial review (2006 FC 1354). The Ministers have appealed both judgments. The respondent

Imperial Oil Resources Ventures Limited supports the appeal, as does the intervener, the Attorney

General of Alberta.

[3] The parties have settled the dispute that led to the application for judicial review, rendering

these appeals moot. However, this Court ordered on October 10, 2007, that the appeals would be

heard on their merits despite being moot.

[4] Having considered the submissions in support of the appeal, we find no error on the part of

Justice Phelan, in relation to either decision, that warrants the intervention of this Court.

[5] The first appeal (A-113-06) is an appeal of the decision to dismiss the motion to stay the

proceedings. As that decision was discretionary, this Court will intervene only if the decision was

based on an error oflaw or if the discretion was exercised erroneously (that is, if the judge did not

place sufficient or any weight on relevant considerations), or ifhe had regard to irrelevant factors or

failed to have regard to relevant factors (Elders Grain Co. v. Ralph Misener (Ihe) (C.A.), [2005]

3 F.C.R. 367, at paragraph 13). Applying these tests, we find no basis for intervention in this case.

Page: 3

[6] The second appeal (A-56l-06) relates to the decision of Justice Phelan to allow the

application for judicial review. He concluded that a duty to consult arose at some point between

2002 (during the development of the Cooperation Plan) and 2004 when the planning of the

environmental and regulatory process was substantially completed by the execution of the Joint

Review Panel Agreement. He also concluded that the Crown had failed to consult with the Dene

Tha' during that period, with the result that concerns specific to the Dene Tha' in relation to the

process were not considered.

[7] A number of submissions were made to the effect that the decision of Justice Phelan to grant

the application for judicial review was based on one or more errors oflaw or fact. We do not

consider it necessary to recount those submissions in detail. It is enough tosay that we have been

unable to detect any error of law, or any palpable and overriding error of fact.

[8] In our view, this case does not establish a new principle relating to the determination of

when the duty to consult arises, or the content of the duty to consult. We do not agree with the

suggestion that this case imposes on the Crown an obligation that is different or more onerous than

is justified by the jurisprudence, including Haida Nation v. British Columbia (Minister of Forests),

[2004] 3 S.C.R. 511, Taku River Tlingit First Nation v. British Columbia (Project Assessment

Director), [2004] 3 S.C.R. 550, and Mikisew Cree First Nation v. Canada (Minister of Canadian

Heritage), [2005] 3 S.C.R 388.

[9] This case turns entirely on its own facts. Having regard to the evidence on the record, it

was open to Justice Phelan to find as a fact that, given the unique importance of the Mackenzie Gas

Pipeline, and the particular environmental and regulatory process under which the application for

Page: 4

approval of the Mackenzie Gas Pipeline would be considered by the Joint Review Panel and the

National Energy Board, the process itselfhad a potential impact on the rights of the Dene Tha'. It

was also open to him to find as a fact that, at some point during the period from 2002 and 2004, it

was sufficiently certain that there would be an application for approval of the Mackenzie Gas

Pipeline that the obligation to consult was triggered. He was not required, as a matter oflaw, to

conclude that no consultation obligation arose until the formal application for approval was filed.

The test framed by the Supreme Court of Canada in the cases cited above does not dictate such a

rigid or inflexible approach.

[10] We do not accept the submission of counsel for the Ministers that Justice Phelan, in

assessing whether there had been adequate consultation, applied a standard of correctness rather

than reasonableness. That argument is based essentially on the proposition that Justice Phelan failed

to appreciate the elements of the regulatory scheme, or the relevant facts relating to what was

intended or expected to occur in the course of the proceedings before the Joint Review Panel and the

National Energy Board. We find nothing in the record to support that argument. Once Justice

Phelan found, as he was entitled to do, that the obligation to consult arose in relation to the

development of the environmental and regulatory process, and that there had been no consultation at

all in that regard, he was bound to conclude that the Ministers had not fulfilled their duty.

[11] We should not be taken to agree with every statement made by Justice Phelan in his

reasons. For example, we do not agree with the suggestion (at paragraphs 53 and 61 of his reasons)

that adequate consultation in relation to an asserted Aboriginal right cannot be achieved unless the

person or agency representing the Crown is empowered to determine the validity of the right. Nor

Page: 5

do we agree that this case is "on all fours" with Mikisew Cree (paragraph 102 of his reasons),

although the facts of that case are similar to the facts of this case, in that in both instances the

Crown failed to respect the legitimate requests of the First Nation at the appropriate time. Counsel

for the Ministers argued that the reasons also contain a number of examples of imprecise language.

Any such errors are minor, and certainly are not serious enough to warrant reversing the decision.

[12] The appeals are accordingly dismissed.

"Marc Noel"lA.

"K. Sharlow"lA.

"C. Michael Ryer"lA.

FEDERAL COURT OF APPEAL

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:

STYLE OF CAUSE:

PLACE OF HEARING:

DATE OF HEARING:

REASONS FOR JUDGMENT OF THE COURT:

DELIVERED FROM THE BENCH BY:

APPEARANCES:

Mr. KirkN. Lambrecht, Q.C.Ms. Christine Ashcroft

Mr. Robert JanesMr. Robert Freedman

Ms. Mary ComeauMr. Ray Chartier

Mr. Andrew Hudson

Mr. Thomas Rothwell

SOLICITORS OF RECORD:

John H. Sims, Q.C.Deputy Attorney General of CanadaEdmonton, Alberta

A-1l3-06

Minister of Environment et alv. Dene Tha' FirstNation andImperial Oil Resources Ventures Ltd.

Edmonton, Alberta

January 16, 2008

(NOEL, SHARLOW, RYER JlA.)

NOELlA.

FOR THE APPELLANT -Department of Justice

FOR THE RESPONDENT -Dene Tha' First Nation

FOR THE RESPONDENT - ImperialOil Resources Ventures Ltd.

FOR THE RESPONDENT -National Energy Board

FOR THE INTERVENER

FOR THE APPELLANTDepartment of Justice

Cook Roberts LLPVictoria, British Columbia

Macleod DixonCalgary, Alberta

Andrew HudsonCalgary, Alberta

Terrence Matchett, Q.C.Deputy Attorney General of AlbertaEdmonton, Alberta

Page: 2


FOR THE RESPONDENT -Imperial Oil Resources VenturesLtd.


FOR THE INTERVENER



DOCKET:

STYLE OF CAUSE:

PLACE OF HEARING:

DATE OF HEARING:

REASONS FOR JUDGMENT OF THE COURT:

APPEARANCES:

Mr. KirkN. Lambrecht, Q.C.Ms. Christine Ashcroft

Mr. Robert JanesMr. Robert Freedman

Ms. Mary ComeauMr. Ray Chartier

Mr. Andrew Hudson

Mr. Thomas Rothwell


John H. Sims, Q.C.Deputy Attorney General of CanadaEdmonton, Alberta

Cook Roberts LLPVictoria, British ColumbiaMacleod Dixon

A-561-06

Minister of Environment et alv. Dene Tha' First Nation andImperial Oil Resources Ventures Ltd.

Edmonton, Alberta

January 16,2008

(NOEL, SHARLOW, RYER JJ.A.)

FOR THE APPELLANT -Department of Justice


FOR THE RESPONDENT - ImperialOil Resources Ventures Ltd.


FOR THE INTERVENER

FOR THE APPELLANTDepartment of Justice

FOR THE RESPONDENTS -Dene Tha' First NationFOR THE RESPONDENT -

Calgary, Alberta

Andrew HudsonCalgary, Alberta

Terrence Matchett, Q.C.Deputy Attorney General of AlbertaEdmonton, Alberta

Page: 2

Imperial Oil Resources VenturesLtd.


FOR THE INTERVENER

TELEPHONE: (604) 660-4700BC TOLL FREE: 1-800-663-1385. FACSIMilE: (604) 660-1102

BRITISH COLUMBIA

UTILITIES COMMISSION

SIXTH FLOOR, 900 HOWE STREET, BOX 250

VANCOUVER, BC V622N3 CANADAweb site: http://www.bcuc.com

IN THE MADER OFThe Utilities Commission Act, R.S.B.C.1996, Chapter 473

and

British Columbia Transmission CorporationInterior to Lower Mainlarid (ILM) Transmission Project

Certificate of Public Convenience and NecessityCourt of Appeal Reconsideration

Application for Reconsideration of ILM Decision

ORDER

NUMBER G-77-11

BEFORE:

WHEREAS:

A.1. Pullman, Panel Chair/CommissionerA.A. Rhodes, CommissionerP.E.Vivian, Commissioner

ORDER

May 6,2011

A. On February 3, 2011, the British Columbia Utilities Commission (Commission) issued Order G-15-11wherein it addressed the adequacy of British Columbia Transmission COr"poration's and British ColumbiaHydro and Power Authority's (BCHydro) consultation with First Nations on the Interior to Lower Mainlandtransmission project;

B. On March 2, 2011, the Nlaka'pamux Nation Tribal Council, Okanagan Nation Alliance and Upper NicolaIndian Band (NNTC/ONA/Upper Nicola) applied for reconsideration of Order G-15-11, asserting theCommission made errors of fact and law in its assessment of BCHydro's consultation;

C. On March 9, 2011, the Commission issued Letter L-l1-l1 establishing a written comment process forphase one of a reconsideration;

D. The Commission received submissions on NNTC/ONA/Upper Nicola's application from BCHydro, theAttorney General of British Columbia (Attorney General), Coldwater, Cook's Ferry, Siska and AshcroftIndian Bands (Coldwater et al.), St6:16Tribal Council (STC),and the Hwlitsum First Nation (Hwlitsum);

E. In response to the Coldwater et al. submissions, by letter dated March 21, 2011, BCHydro submitted thatColdwater et al. proposed additional grounds for reconsideration and requested an opportunity torespond to Coldwater et al.'s submission and those of any further Interveners who either supported theNNTC/ONA/Upper Nicola's application or who have additional grounds for reconsideration;

.../2

BRITISH COLUMBIA

UTILITIES COMMISSION

2

ORDER

NUMBER G-77-ll

F. By letter dated March 22, 2011, NNTC/ONA/Upper Nicola requested the Commission deny BC Hydro'srequest;

G. After reviewing the submissions, on March 24, 2011, the Commission issued Letter L-21-ll andestablished a written comment period on the submissions made by Coldwater et 01. and STC.On March29,2011, the Commission issued Letter L-24-ll establishing a written comment period on the submissionmade by Hwlitsum;

H. The Commission received submissions on the NNTC/ONA/Upper Nicola's application and the Coldwater etal.,STC, and Hwlitsum submissions from BC Hydro and the Attorney General. NNTC/ONA/Upper Nicola,Coldwater et 01., STC,and Hwlitsum filed Replies to the submissions of BC Hydro and the AttorneyGeneral;

I. The Commission has considered the application for reconsideration by NNTC/ONAjUpper Nicola, theadditional grounds for reconsideration alleged by Coldwater et 01., STCand Hwlitsum, and all submissionsmade on the application and on the additional grounds alleged for reconsideration;

J. The Commission has determined that NNTC/ONA/Upper Nicola, Coldwater et 01., STCand Hwlitsum havenot established the alleged errors of fact and/or law on a prima facie basis and have accordingly failed tomeet the Commission criteria for the second phase of reconsideration.

NOW THEREFORE the Commission orders as follows:

1. The application for reconsideration of Order G-15-ll by NNTC/ONA/Upper Nicola and the additionalgrounds for reconsideration alleged by Coldwater et 01., STCand Hwlitsum are denied.

2. The Reasons for Decision are attached as Appendix A.

DATED at the City of Vancouver, in the Province of British Columbia, this 6th

BY ORDER

Original signed by:

day of May 2011.

A.J. PullmanPanel Chair/Commissioner

Attachment

Orders/G-77-11-BCTC-Reconsideration of G-15-11-Reasons for Decision

IN THE MATTER OF

British Columbia Transmission Corporation

Interior to Lower Mainland (lLM) Transmission ProjectCertificate of Public Convenience and Necessity

Court of Appeal ReconsiderationApplication for Reconsideration of ILM Decision

REASONSFORDECISION

MAY 6,2011

BEFORE:

A. J. Pullman, Panel Chair/CommissionerA.A. Rhodes, CommissionerP.E. Vivian, Commissioner

BCTC-ILM Project-Reconsideration of ILM Decision

TABLE OF CONTENTS

Paae No.

1.0 INTRODUCTI ON •.•.......••.........................•..•...•..............•.•.................••.......................•.••.......•..........•.• 1

1.1 Order G-15-11 and the ILM Reconsideration Decision 1

2.0 RECONSI DERATION REGULATORY PROCESS ...•...........................................•.•..•...•.•.••......•.•.•............... 3

3.0 ERRORS ALLEGED BY THE FIRST NATION INTERVENERS .............•.•.....••...•.................................•.••....... 5

4.0 VIEWS ON THE RECONSIDERATION PROCESS .......•.....•.••.....•......•.......•.•.•.•.............................•.•........ 19

5.0 COMMISSION OVERALL DETERMINATION ON THE RECONSIDERATION APPLICATION .........•...•.•.•.•..... 19

ApPENDIX A

to Order G-77-11Page 1 of 19

1.0 INTRODUCTION

By Order G-15-11, dated February 3,2011, the British Columbia Utilities Commission (Commission) issued its

Decision in the ILM Reconsideration Proceeding. That Decision was a result of the BC Court of Appeal's direction

that the Commission consider and determine whether the Crown's duty to consult and accommodate First

Nations had been met up to the date on which the Commission granted a Certificate of Public Convenience and

Necessity (CPCN)for the Interior to Lower Mainland 500kV transmission line (ILM Project).

This reconsideration proceeding was initiated by an application dated March 2, 2011 by the Nlaka'pamux Nation

Tribal Council, Okanagan Nation Alliance and Upper Nicola Indian Band (NNTC/ONA/Upper Nicola) in which the

above-mentioned First Nations Interveners allege the Commission made two errors of fact and law. In the

course of this reconsideration process, the other First Nations Interveners filed submissions which supported the

NNTC/ONA/Upper Nicola's submissions and allege additional errors of fact and law. These First Nations

Interveners are:

• Coldwater, Cook's Ferry, Siska and Ashcroft Indian Bands (Coldwater et 01.);

• St6:16Tribal Council (STC);and

• Hwlitsum First Nation (Hwlitsum).

1.1 Order G-15-11and the IlM Reconsideration Decision

Commission Order G-15-11 sets out the findings of the Commission on the Reconsideration of the ILM Project .

and the accompanying Decision (Decision) addresses the adequacy of BCTransmission Corporation's (BCTC)and

BC Hydro and Power Authority's (BC Hydro) First Nations consultation on the ILM Project.

BCTCand BC Hydro merged on July 3,2010 pursuant to the Clean Energy Act.

The Decision dealt extensively with the choice made by BCTC'sBoard of Directors on May 23,2007 (Options

Decision) to proceed with the full scope of definition phase activities for a new 500 kV transmission line (5L83)

and to file an application for a CPCNfor 5L83 with the Commission.

The following table summarizes the Commission's findings of adequacy and inadequacy with respect to BC

Hydro's consultation with the First Nations Interveners:


ApPENDIX A

to Order G-77-llPage 2 of 19

NNTCjONAjUpperNicola

Coldwater et 0/.

STC

Hwlitsum

NNTCUpper NicolaSpuzzum First NationBoothroyd Indian BandSkuppah Indian BandLytton First NationOregon Jack Creek Indian Band

Coldwater Indian BandCook's Ferry Indian BandSiska Indian BandAshcroft Indian BandSTCShxw'ow'hamel First NationCheam First NationSeabird Island First Nation

ONAKanaka Bar Indian Band

Kwaw-kwaw-a-pilt First NationSoowahlie First NationSumas First Nation

Hwlitsum First Nation

For those First Nations Interveners for whom consultation was found inadequate, the Commission directed BC

Hydro to consult further and provide one or all of the following:

• an explanation of why BCTCselected SL83 as its preferred alternative over other contemplatedalternatives, namely to upgrade existing circuits and other "non-wires" options;

• an explanation ofthe potential adverse effects ofthe High Voltage Direct Current (HVDC) option versusAlternating Current (AC) technology and why BCTCchose AC technology over HVDC; and

• an explanation of BCHydro's inability to share revenues or make similar periodic payments for the ILMProject.

For all explanations, the Commission directed BCHydro to discuss and respond to any concerns the First Nations

might raise, to undertake the consultation within a reasonable and flexible timeline, and to offer appropriate

capacity funding.


ApPENDlxA


2.0 RECONSIDERATION REGULATORY PROCESS

The Commission's Participant's Guide sets out a two phase process for an application for reconsideration. The

first phase is an initial screening phase where an applicant must establish that a reasonable basis exists for

allowing reconsideration based on one or more ofthe following criteria:

• the Commission has made an error in fact or law;

• there has been a fundamental change in circumstances or facts since the Decision;

• a basic principle had not been raised in the original proceedings; or

• a new principle has arisen as a result ofthe Decision.

When an error of law orfact is alleged, the applicant must establish:

• the claim of error is substantiated on a prima facie basis; and

• the error has significant material implications.

(Understanding Utility Regulation: A Participant's Guide to the British Columbia Utilities Commission,1999, p. 35)

As noted earlier, the NNTC/ONA/Upper Nicola applied for reconsideration on the grounds that the Commission

made two errors offact and law (Exhibit B-1).

By Letter L-l1-l1 dated March 9, 2011, the Commission established the first phase of a reconsideration process,

with BC Hydro, Interveners and Interested Parties to submit comments by March 23, 2011 and

NNTC/ONA/Upper Nicola to reply by April 6, 2011 (Exhibit A-i).

By the dates stipulated BC Hydro, the Attorney General of BC (Attorney General), Coldwater et a/., STCand the

Hwlitsum provided submissions and NNTC/ONA/Upper Nicola submitted their Reply. All submissions addressed

whether the errors of fact and law alleged by NNTC/ONA/Upper Nicola were substantiated on a prima facie

basis and whether there were significant material implications to support advancing the reconsideration to the

second phase.

In addition, the submissions of Coldwater et a/., STCand the Hwlitsum allege a number of additional errors on

the part ofthe Commission.


ApPENDIX A


By letter dated March 21, 2011, BC Hydro requested the opportunity to respond to Coldwater et al.'s submission

(Exhibit (2-2).

By letter dated March 22, 2011 NNTC/ONA/Upper Nicola requested the Commission deny BC Hydro's request to

respond on the grounds that: i) there was no provision either in the Commission's Letter L-ll-11 or the

Commission's guidelines for BC Hydro having a right of reply to other Interveners; and ii) BC Hydro had not

offered any justification for such a modification of the Commission's established practice (Exhibit B-2).

By Letter L-21-11 dated March 24, 2011, in the interest of fully considering the issues involved in

reconsideration, the Commission allowed an opportunity for BC Hydro, Interveners and Interested Parties to

comment on the Coldwater et 01. and STCsubmissions and for Coldwater et 01. and STCto provide their Replies

(Exhibit A-2).

By the dates stipulated, BC Hydro and the Attorney General provided their comments and Coldwater et 01. and

STCsubmitted their Replies, all addressing whether the errors alleged by Coldwater et 01. and STCmet the

criteria to advance to the second phase ofthe reconsideration process.

By Letter L-24-11 (Exhibit A-3) dated March 29, 2011, the Commission allowed comments on the Hwlitsum's

submission from BC Hydro, Interveners and Interested Parties and Reply from the Hwlitsum. By the deadline,

BC Hydroand the Attorney General provided comments and, with a two day extension granted by Letter L-27-11

Dated April 12, 2011 (Exhibit A-4), the Hwlitsum filed its Reply.


ApPENDIX A


3.0 ERRORS ALLEGED BY THE FIRST NATION INTERVENERS

The First Nations allege the Commission made several errors offact and law. Three of the alleged errors are

common to more than one Intervener and are addressed in Section 3.1 as common errors. The remaining errors

are alleged by specific First Nations Interveners and are addressed in Section 3.2.

3.1 Common Alleged Errors

3.1.1 The Commission erred in law by issuing a remedy that fails to accord with the scope and contentof the duties to consult, as found by the Commission.

NNTC/ONA/Upper Nicola submit that the Commission erred in law by issuing a remedy that fails to accord with

the scope and content of the duty to consult owed to the NNTC and Upper Nicola as found by the Commission

(Exhibit B-1, p. 1).

NNTC/ONA/Upper Nicola note that the Commission's Decision found the scope of duty to consult NNTC

as medium-high, Spuzzum as high, and Upper Nicola as high and submit that:

J/[d]eep consultation concerning the selection of alternatives must include and maintain

the obligation of BC Hydro to accommodate the Applicants' concerns by, among other

things, making adjustments to its plans and negotiating a satisfactory interim solution.

Similarly, deep consultation concerning revenue sharing must preserve the ability of the

parties to develop, through an iterative process, a workable interim solution to address

and accommodate for the economic component of Aboriginal title.J/ (Exhibit B-1, p. 2)

NNTC/ONA/Upper Nicola further submit that J/[t]he remedy as determined by the majority of the Commission,

however, precludes either ofthese outcomes as it directs BCHydro to fulfil a de minimis process of information

sharing that reflects a Crown duty falling at the low, rather than high, end of the spectrumJ/ and that denies the

Applicants the possibility of meaningful, negotiated accommodation (Exhibit B-1, pp. 2-3).

NNTC/ONA!Upper Nicola assert that the error is material because J/ aremedy that falls far short of what is owed

denies the Applicants the rights and protections to which they are entitled, and reduces what is supposed to be

a meaningful, good faith attempt to negotiate interim solutions to a pro forma exchange of documents"

(Exhibit B-1, p. 4).


ApPENDIX A


BCHydro submits that the Commission's three directives are within its statutory powers, are an appropriate

remedy at law, and that NNTC/ONA/Upper Nicola's assertion confuses the granting of a remedy with the

consultation process itself. Consequently, BCHydro submits that NNTC/ONA/Upper Nicola have not

substantiated this alleged error on a prima facie basis (Exhibit C2-3, paras. 15-16).

Further to its point, BCHydro submits that the Commission found BCHydro had satisfied a medium-high and

high level of consultation with the exception of the fact that it did not provide the detailed explanations directed

by the Commission, findings which BCHydro states NNTC/ONA/Upper Nicola have not sought to reconsider.

Regarding revenue sharing, BCHydro submits that NNTC/ONAjUpper Nicola have not sought reconsideration of

the Commission's findings on the consultation on revenue sharing and that the direction to provide a

meaningful explanation of BCHydro's ability to revenue share was appropriate (Exhibit C2-3, paras. 30-35).

The Attorney General also submits that the error is not substantiated on aprima facie basis (Exhibit C4-1,

paras. 3-5).

In Reply, NNTC/ONA/Upper Nicola do not dispute that the Commission has the authority to issue a remedy but

rather that the Commission erred in "the exercise of its remedial discretion by denying the Applicants the depth

of consultation owed to them at law" by issuing a remedy that fails to meet the standard of deep consultation, a

standard which obliges the Crown to adjust its plans to substantially address Aboriginal concerns.

NNTC/ONA/Upper Nicola submit that "[a]dditionallow-Ievel consultation, regardless of how much, cannot

transform low consultation into high or deep consultation" (Exhibit B-4, pp. 1-2).

Coldwater et 01. adopt the submissions of NNTC/ONA/Upper Nicola and further submit that "the areas in which

the Commission found the Crown's consultation efforts to be inadequate are key to [the Options Decision] that

is central to this whole matter; yet the remedy granted by the Commission leaves no room for re-examining that

decision" and any comments or concerns raised by First Nations will be meaningless because they will have no

effect on the Options Decision (Exhibit Cl-2, p. 2).

On the remedy issue, STCtakes the position that the Commission erred in issuing a remedy that fails to accord

. with the scope and content ofthe duty to consult owed to STC,Shxw'ow'hamel, Cheam and Seabird Island First

Nations. STCadopts the submission of NNTC/ONA/Upper Nicola and Coldwater et 01. in this regard

(Exhibit C3-1, pp. 1-2).


ApPENDlxA


In response to both Coldwater et 01. and STC,BCHydro relies on its response to NNTC/ONA/Upper Nicola. For

Coldwater et 01. BCHydro further notes that none of the Commission's remedies preclude re-examining the

choice of the preferred alternative (Exhibit C2-5, paras. 11,36).

Commission Determination

The Commission finds that NNTC/ONAjUpper Nicola, Coldwater et 01. and STChave not substantiated their

alleged errors on a prima facie basis and thus have not met the criteria to proceed to the second phase of

reconsideration, for the following reasons:

• In the Decision, the Commission reviewed and documented the interactions between BCTC,BCHydroand the First Nations. It was on this basis that the Commission determined whether the scope of dutyto consult owed to each First Nation was fulfilled. The three directives enumerated at p. 236 of theDecision were intended to remedy the deficiencies found in BCHydro's consultation.

• In Directive 4 of Order G-15-11, the Commission provides First Nations, for whom consultation wasfound inadequate, an opportunity to file a written response to BCHydro's compliance report. It furtherprovides that the Commission will review the submissions and "if the deficiencies in consultation havebeen remedied to the Commission's satisfaction, [the Commission] will lift the suspension of theCPCN."

• In its review of submissions, the Commission will assessthe further consultation against the scope ofduty to consult owed each First Nation Intervener.

Consequently, the Commission rejects the premise that it has directed further low-level consultation and denies

the Interveners' application for reconsideration on this basis.

3.1.2 The Commission erred in its consideration of strength of claim analyses

The First Nations Interveners allege two errors were made by the Commission in its analysis of their strengths of

claim. The first relates to the Commission's finding that BCHydro's failure or refusal to provide its strength of

claim analysis to the First Nations did not constitute a breach of its constitutional obligations. The second

relates to the Commission's finding that it is appropriate to assessthe strength of an Aboriginal rights or title

claim at the Band level rather than at the Nation level. The Commission will address these allegations of error in

turn.


ApPENDIX A


3.1.2.1 The Commission erred in finding that BC Hydro's failure or refusal to provide its strength of claimanalysis to the First Nations did not constitute a breach of its constitutional obligations.

Coldwater et 01. and STCboth cite Adams Lake Indian Band v. British Columbia 2011 BCSC266 (Adams Lake) at

para. 131 in support of this alleged error. Coldwater et 01. further allege that the Commission erred in finding

that a First Nation must specifically ask to receive a strength of claim analysis (Exhibit Cl-3, p. 2, and

Exhibit C3-1, p. 2).

BCHydro submits that the comments in Adams Lake on sharing the strength of claim were obiter dicta because

in the circumstances ofthat case no assessment of strength of claim had been made so there was no

assessment to share with First Nations. BCHydro also submits that the strength of claim assessments were

provided to Coldwater et 01. during the course of the ILM Reconsideration proceeding and that any requirement

for BCHydro to share its assessments was superseded by Coldwater et al.'s opportunity to review and address

the assessments during that proceeding (Exhibit C2-5, paras. 13-17).

The Attorney General submits that the Supreme Court of Canada has not mandated a constitutional

requirement on the Crown to share strength of claim analyses with First Nations and that in a definition phase of

a project, when it is uncertain which First Nations may be affected by the final project choice, it is unreasonable

to require the Crown to produce strength of claim assessments for each First Nation (Exhibit C4-2, para. 3).

In Reply, Coldwater et 01. submit that whether the comments in Adams Lake are obiter dicta or not, the case

provides a summary of other case law which supports Coldwater et al.'s alleged error. As well, Coldwater et 01.

submit that although the Supreme Court of Canada has not commented on the sharing of strength of claim

assessments, lower courts have commented with the result that the Province and BCHydro are not relieved of

the obligation.

Regarding the sharing of strength of claim assessments during the ILM Reconsideration proceeding, Coldwater

et 01. assert that BCHydro never shared its analyses but only its conclusions. As well, the ILM Reconsideration

proceeding accepted evidence only up to August 5,2008, a fact which Coldwater et 01. assert precludes the

Crown from using the ILM Reconsideration proceeding to discharge its duty (Exhibit Cl-3, pp. 2-3).

BCTC-ILM Project-Reconsideration of ILM D€cision

ApPENDIX A


3.1.2.2 The Commission erred in finding that it is appropriate to assess the strength of an Aboriginalrights or title claim at the Band level rather than at the Nation level.

Coldwater et al. submit that this error leads to the Commission's further error in finding the strength of claim for

the Siska,Ashcroft and Cook's Ferry Indian Bands to be different than that of the Coldwater Indian Band

(Exhibit Cl-2, p. 2).

STCalso state that a strength of claim analysis must be done at the Nation level and cannot turn on the

proximity of an Indian Reserve [to the proposed location of a project] (Exhibit Cl-2, p. 2).

BCHydro submits that this error is a re-argument of factual issues and does not constitute a basis for

reconsideration (Exhibit C2-5, para. 18).

In Reply, STCasserts that it is an error of law to assessAboriginal rights at anything other than a Nation level

(Exhibit C3-2, p. 2).

In Reply, Coldwater et al. submit that reconsideration of the issue would involve re-argument of the issue and it

is thus more appropriately a subject for leave to appeal (Exhibit Cl-3, p. 3).

In their Reply, NNTC/ONA/Upper Nicola allege the Commission erred in assessing BCHydro's consultation with

the aNA. Specifically, they allege the Commission erred in concluding that it could assessthe strength of claim

for Aboriginal rights and title at the Band level rather than at the Nation level and the Commission erred in law

in concluding that the strength of claim and scope of the duty to consult owed to a Tribal Council, such as the

aNA, can be less than one of the member bands of the Tribal Council (Exhibit B-4, p. 3).


The Commission finds that NNTC/ONA/Upper Nicola, Coldwater et al. and STChave not substantiated their

alleged errors on a prima facie basis and thus have not met the criteria to proceed to the second phase of

reconsideration, for the following reasons:

• The issue of sharing strength of claim assessments was thoroughly canvassed in the ILMReconsideration proceeding. The Commission determined "[we] agree that that [sic] consultation mustinclude a sharing of relevant information between the parties engaged in consultation and that this


ApPENDIX A


could include the strength of claim assessments and scope of duty to consult, should a First Nationspecifically request such information" (Decision, p. 101).

It The Commission notes that, subsequent to the Decision, the BCSupreme Court has issued the AdamsLake decision which addresses the issue of sharing strength of claim determinations and which theInterveners rely on as support for their allegation of error.

It The Commission agrees with BCHydro that the comments in Adams Lake on sharing strength of claimanalysis are technically obiter dicta. The Commission's findings in the Decision are thus not contrary tothe principles set out in Adams Lake. The Commission has considered Coldwater et al.'s position thatthe Crown is precluded from using the ILM Reconsideration proceeding to discharge its duty to sharestrength of claim assessments because of the proceeding's August 5, 2008 cut-off date for evidence,but finds that in context ofthe ILM Reconsideration proceeding, where the assessments have now beenshared, the goal of effective, engagement or consultation is not served by finding BCHydro's failure toshare the preliminary assessments fatal to the overalilLM consultation process.

Accordingly, the Commission does not find that the First Nations Interveners have substantiated, on a prima

facie basis, that the Commission erred in finding that BCHydro's failure or refusal to provide its strength of claim

analysis to the First Nations did not constitute a breach of its constitutional obligations.

The issue of assessing strength of claim on a Band level as opposed to a Nation level was also extensively

canvassed in the ILM Reconsideration proceeding and the Commission determined:

" ...Aboriginal rights and title are communal and may be asserted collectively by an Aboriginal

Nation but that in the consultation for the ILM Project, Bands represented themselves both

individually and as part ofTribal Councils.

In this Proceeding, none ofthe Interveners that represented a number of Bands, with the

exception of aNA, represented their entire Aboriginal Nation ....

Therefore, given that BCHydro had to consult with individual Bands or Tribal Councils

representing a portion of the Bands of an Aboriginal Nation, the Commission finds that BC

Hydro's practice of making a strength of claim assessment for individual First Nations and Bands

was reasonable" (Decision, p. 99).


ApPENDlxA


The Commission therefore finds this issue is not substantiated on a prima facie basis and that the criteria to

proceed to the second phase of reconsideration have not been met.

3.1.3 The Commission erred in finding that consultation need only move towards ultimatereconciliation and may be found adequate without achieving reconciliation.

Both Coldwater et 01. and STCallege this error. STCfurther submits that consultation must reach reconciliation

and that this was one of four specific errors that caused the Commission to err in finding consultation adequate

with three of its member Bands (Exhibit Cl-2, p. 3 and Exhibit C3-1, p. 2).

BCHydro submits that the alleged error was fully addressed in the ILM Reconsideration proceeding and that the

Commission's conclusion is supported by case law (Exhibit C2-5, paras. 30-35).

The Attorney General submits that there is no requirement for reconciliation to be achieved for consultation to

be found adequate and that the Supreme Court of Canada has made it clear that the reconciliation process

continues even after treaties have been negotiated (Exhibit C4-2, para. 5).

STCsubmits that BCHydro and the Attorney General misunderstand STC'sargument and that it is STC'sposition

that reconciliation need not be achieved but rather that consultation must reach a stage where the parties are in

a position to discuss how reconciliation might be achieved. STCsubmits that the consultation process never

reached that point (Exhibit C3-2, p. 2).

Coldwater et 01. replies that this issue was addressed in the ILM Reconsideration proceeding and submits that

the most efficient course of action is for the Commission to decline the reconsideration and permit the

appellants to pursue their leave to appeal (Exhibit Cl-3, p. 5).


The Commission finds that Coldwater et 01. and STChave not substantiated this error on a prima facie basis

because the issue of reconciliation was addressed in the Decision. The Commission found "reconciliation of

Aboriginal rights with Crown sovereignty is the ultimate goal and the Commission finds that while consultation

moves towards that goal, there is no requirement that reconciliation be achieved before consultation can be

determined to be adequate" (Decision, p. 69). In their submissions, the First Nation Interveners have


ApPENDIX A


established no basis for reconsideration of this finding. Thus, the criteria to proceed to the second phase of

reconsideration have not been met.

3.2 Errors Alleged by Specific First Nations Interveners

3.2.1 NNTC/ONA/Upper NicolaJs Submission

Apart from the three common errors alleged, NNTC/ONA/Upper Nicola assert:

"[t]he Commission erred in concluding that BCHydro had, with the exception of consultations

concerning the alternative of a high voltage direct current (HVDe) transmission line, fulfilled its

duty to consult with and, where appropriate, accommodate the Upper Nicola Indian Band in

relation to the selection of the ILM Project as the preferred alternative." (Exhibit B-1, p. 3)

NNTC/ONA/Upper Nicola cite the Commission's finding that BCHydro had adequately explained why and when

the options were removed from consideration at a July 19, 2007 meeting between BCHydro and Upper Nicola,

the minutes of which are in evidence. NNTC/ONA/Upper Nicola assert that the evidence and meeting minutes

show BCHydro provided information that falls short of what is required to meet the duty to consult.

NNTC/ONA/Upper Nicola assert that this error has significant material implications because it denies Upper

Nicola the right of input and accommodation on the selection ofthe preferred alternative (Exhibit B-1, p. 3).

BCHydro submits that NNTC/ONA/Upper Nicola is alleging the Commission made an error of fact but that the

Commission did not rely solely on meeting minutes but also on BCHydro's response to an information request

wherein BCHydro described what happened at the meeting. BCHydro states that the evidence on the meeting

was adopted by its witnesses in the oral public hearing and was never challenged by Upper Nicola. BCHydro

concludes that NNTC/ONA/Upper Nicola have not met the threshold for reconsideration by establishing an error

on a prima facie basis (Exhibit C2-3, paras. 40-44).

NNTC/ONA/Upper Nicola reply that there is "simply no evidence in the record to show what information was

provided, when it was provided, or what form it took" and that there is insufficient evidence to show that BC

Hydro consulted at a deep level on how BCTC'sproject alternatives were assessed and removed from

consideration (Exhibit B-4, p. 3).


ApPENDIX A

~oOrder G-77-11Page 13 of 19


The Commission considers the evidence upon which it relied, being the meeting minutes and BCHydro's

response to an information request, provide sufficient basis for its determination that "BC Hydro explained why

and when options were removed from consideration and the reasons why BCTCselected the 5L83 Alternative at

the meeting held with Upper Nicola on July 19, 2007" (Decision, p. 132). Specifically, the meeting minute. notes

show BCTC/BCHydro's response to Upper Nicola's question about whether there are other options to 5L83 as

" ...BCTCexecutive decided on the new line based on several things such as capacity, cost, losses, reliability, First

Nations input/public input" (Exhibit B-20, ILM Reconsideration proceeding, Attachment C-l, p. 3). Accordingly,

the Commission finds that the NNTC/ONA/Upper Nicola have not substantiated this alleged error on a prima

facie basis and have not met the criteria to proceed to the second phase of reconsideration.

3.2.2 Coldwater et 01. 's Submission

In addition to the three common errors alleged, Coldwater et 01. allege the Commission made a further six

errors:

3.2.2.1 The Commission erred in finding that the Coldwater Indian Band (Coldwater) does not dispute BCHydro's assessment of a high strength of claim and a medium scope of duty to consult becauseColdwater at no time accepted a medium scope of duty to consult.

BCHydro submits that in the ILM Reconsideration proceeding, Coldwater et 01. accepted BCHydro's strength of

claim analysis for Coldwater and did not comment on BCHydro's assessment of the scope of duty to consult.

Therefore, BCHydro submits that the Commission was correct in saying that Coldwater et 01. does not dispute

the assessment of the scope of duty to consult (Exhibit C2-5, para. 19).

In Reply, Coldwater et 01. submit that they made extensive submissions challenging BCHydro's assessment of

the scope of duty to consult (Exhibit Cl-3, p.3).

Commission Determination·

The Commission reviewed the evidence and found that Coldwater et 01. did not comment on BCHydro's

assessment of the scope of its duty to consult with Coldwater while it expressly disputed BCHydro's assessment

of the scope of its duty to consult with Cook's Ferry Indian Band (Cook's Ferry) (Decision, pp. 136-154).


ApPENDIX A


Therefore, the Commission finds Coldwater et 01. have not substantiated this alleged error on a prima facie basis

and the criteria to proceed to the second phase of reconsideration have not been met.

3.2.2.2 The Commission's conclusion that Coldwater has a medium scope of duty to consult isinconsistent with its finding that the potential impact on Cook's Ferry is medium to high becausethe impact on Coldwater must be at least equal to that on Cook's Ferry. Coldwater et 01.submitsthat a high strength of claim and at least a medium to high potential impact cannot result in amedium scope of duty to consult.

BC Hydro submits that the Commission's approach of only making an assessment of strength of claim where a

First Nation disputes BC Hydro's assessment was reasonable and provides no basis for reconsideration

(Exhibit C2-5, para. 21).


The Commission does not find Coldwater et 01. have substantiated this alleged error on a prima facie basis

because the approach used by the Commission, namely to determine the scope of duty to consult only when the

First Nation and BC Hydro were in dispute, was reasonable in the circumstances of the ILM Reconsideration

proceeding. The criteria to proceed to the second phase of reconsideration have not been met.

3.2.2.3 The Commission erred in concluding that a screening analysis can relieve the Crown of theobligation to consult on an option.

BC Hydro submits that this issue was addressed in the ILM Reconsideration proceeding and that an infeasible

option [one that is screened out] is not contemplated in such a way as to give rise to the duty to consult

(Exhibit C2-5, paras. 23-25).

In Reply, Coldwater et 01. submit that the Crown has a duty to consider feasible options even if they are inferior

because an inferior option may become superior in light of First Nations' concerns. Coldwater et 01. conclude

that the Commission erred in finding that the Crown is not obligated to consult on options it considers inferior

but that this issue has been argued before and is most efficiently dealt with by the Court of Appeal if the

Commission declines the reconsideration (Exhibit Cl-3, p. 4).


ApPENDIX A



The Commission agrees with BCHydro and Coldwater et al. that the issue was addressed in the ILM

Reconsideration proceeding. In that proceeding the Commission found that "the performance of a screening

analysis at an early stage in the definition process can, under most circumstances, relieve the Crown of the

obligation to consult on an option that is found to be infeasible or inferior to other options" (Decision, p. 62).

The Commission remains ofthe view that the duty to consult arises only in respect of options that are seriously

contemplated. Otherwise, the Crown would be obliged to consult on projects that are not technically feasible or

economically viable. The Commission finds, therefore, that Coldwater et al. have not substantiated this alleged

error on a prima facie basis. Thus, the criteria to proceed to the second phase of reconsideration have not been

met.

3.2.2.4 The Commission erred in finding that reference to rights and title in aCTe's Consultation Report issufficient to establish that aCTCconsulted about aboriginal title and that considering aboriginaltitle in this way fulfills the Crown's duty.

BCHydro submits that the Commission's 'conclusion is supported by the evidence cited and that Coldwater et al.

have neither adduced, nor sought to adduce new information that would cast any doubt upon that evidence

(Exhibit C2-5, para. 29).

Coldwater et al. acknowledge that this issue was argued before the Commission and that it is thus more efficient

for the Commission to decline to reconsider the matter and allow Coldwater et al. to pursue their leave to

appeal application.

3.2.2.5 The Commission erred in finding that prior to the Options Decision, aCTC had sufficientinformation about Aboriginal concerns, that is was unnecessary to complete Traditional UseStudies and that sufficient time was provided to fully identify and articulate aboriginal concerns.

BCHydro submits that these issues were fully argued in the ILM Reconsideration proceeding and that Coldwater

et al. simply disagree with the Commission's conclusions (Exhibit C2-5, para. 26).

Coldwater et al. also acknowledge that this issue was argued before the Commission and submit that it is thus

more efficient for the Commission to decline to reconsider the matter and allow Coldwater et al. to pursue their

leave to appeal application.


ApPENDIX A


3.2.2.6 The Commission erred in finding that the Crown could still fulfill its consultation obligation withrespect to the Options Decision after the Options Decision was taken.

BC Hydro submits that Coldwater et 01. fail to explain or support the alleged error and they mischaracterize the

Options Decision (Exhibit C2-5, para. 27).

Coldwater et 01. also acknowledge that this issue was argued before the Commission and submits that it is thus

more efficient for the Commission to decline to reconsider the matter and allow Coldwater et 01. to pursue their

leave to appeal application.


The Commission finds that Coldwater et 01.have not substantiated alleged errors 3.2.2.4-3.2.2.6 on a prima facie

basis because, as acknowledged by Coldwater et 01., these issues were fully addressed. in the ILM

Reconsideration proceeding. The criteria to proceed to the second phase of reconsideration have not been met.

3.2.3 STC's Submission

In addition to alleging that the Commission erred in issuing remedies that do not accord with the determined

scope of duty to consult, STCsubmits that the Commission erred in finding that BC Hydro fulfilled its duty to

consult with the Kwaw-kwaw-a-pilt, Soowahlie and Sumas First Nations. It bases this error on four underlying

errors:

• the duty to consult cannot be fulfilled without preparing and sharing a strength of claim analysis;

• a strength of claim assessment must be performed at the Nation level and cannot turn on the proximityof an Indian reserve;

• the duty to consult cannot be fulfilled when there was no opportunity for input on an earlier, higherlevel strategic decision; and

• consultation must reach reconciliation.

(Exhibit C3-1, p. 2)

BC Hydro submits that the scope of duty to consult these three Bands was determined to be low, which requires

providing notice, disclosing information and discussing relevant issues. BC Hydro's view is that STCdoes not


ApPENDIX A


raise any suggestion that this duty was not discharged for the three Bands and thus STChas not proposed

grounds which meet the Commission's reconsideration criteria (Exhibit C2-5, paras. 37-40).

In Reply, STCstates that it takes the position that the Commission erred in concluding the Bands had a low scope

of duty to consult because, as there was no proper strength of claim analysis and the First Nations did not have a

chance to discuss their asserted Aboriginal rights and title with BC Hydro, the Commission did not have a basis

on which to make any conclusion about a scope of duty to consult (Exhibit C3-2, p. 1).


The Commission considers that STChas not substantiated this error on a prima facie basis and thus the criteria

to proceed to the second phase of reconsideration have not been met. The only issue that has not been

addressed elsewhere in these Reasons for Decision is the STC'sallegation that the duty to consult cannot be

fulfilled when there was no opportunity for input on an earlier, higher level strategic decision. This issue was

addressed at pages 57-8 of the Decision.

In the Decision, the Commission reviewed the evidence before it and determined that Kwaw-kwaw-a-pilt,

Soowahlie and Sumas have a low duty to consult in respect of the ILM Project and that that duty was met by

BCTCand BC Hydro's actions (Decision, pp. 214-8).

The Commission considers that STChas not substantiated this alleged error on a prima facie basis and thus the

criteria to proceed to the second phase of reconsideration have not been met.

3.2.4 Hwlitsum's Submission

The Hwlitsum submits the Commission erred in:

• finding consultation with the Hwlitsum adequate; and

• narrowly defining the scope of the Hwlitsum's section 35 rights, limiting it to an Aboriginal right to fish.

Specifically, the Hwlitsum assert BC Hydro failed to meet the minimum standard of consultation because it did

not make a preliminary assessment of the scope of duty to consult the Hwlitsum, it did not offer capacity


ApPENDIX A


funding, and it only met with the Hwlitsum at two BCEnvironmental Assessment Office (EAO) Working Group

meetings.

In addition, the Hwlitsum assert their section 35 rights include use ofthe land for harvesting plants for medicinal

and food purposes, harvesting salmon and sturgeon and hunting and trapping in a watershed in the ILM Project

area and submit that the Commission made a critical error in defining their Aboriginal right as a right to fish.

The Hwlitsum submit that the errors are significant and material because they determine whether a

constitutional duty has been fulfilled and whether a remedy is needed (Exhibit C5-1, pp. 1-3).

BCHydro submits that the Hwlitsum's allegation that the Commission erred in finding consultation adequate is

simply an attempt to re-argue their case, does not provide basis for reconsideration, and should be rejected.

Specifically, BCHydro submits that its assessment of the scope of duty to consult was shared with the Hwlitsum

during the ILM Reconsideration proceeding, that it did offer capacity funding to the Hwlitsum for attendance at

the EAOWorking Group meetings and that the Commission Panel majority found that BCHydro did meet with

the Hwlitsum at the EAOWorking Group.

In response to the allegation that the Commission narrowly defined the Hwlitsum's section 35 rights, BCHydro

submits there was very little evidence upon which the Commission could rely in the ILM Reconsideration

proceeding and there was no evidence before the Commission that any ofthe Hwlitsum's harvesting of plants,

hunting and trapping practices would be potentially impacted by the ILM Project. BCHydro further asserts that

the Hwlitsum fail to establish a material impact from this alleged error.

In summary, BCHydro submits that the Hwlitsum have not substantiated the alleged errors on a prima facie

basis (Exhibit C2-6, paras. 14-34).

In Reply, the Hwlitsum submit that BCHydro provided a "post-assessment" but did not make a preliminary

assessment of strength of claim and that sharing a "post-assessment" does not correct the fundamental error

made by BCHydro. As well, the Hwlitsum characterize the funding received for attendance at the EAOWorking

Group meetings as a reimbursement of expenses but not capacity funding. Regarding the scope of Aboriginal

rights, the Hwlitsum assert that the Commission did review the evidence but interpreted it narrowly

(Exhibit C5-3, pp. 1-3).


ApPENDIX Ato Order G-77-11

Page 19 of 19


The Commission considers that the matters raised by the Hwlitsum were canvassed in detail during the ILM

Reconsideration proceeding and that the Hwlitsum have not substantiated the alleged errors on a prima facie

basis. Thus the criteria to proceed to the second phase of reconsideration have not been met.

4.0 VIEWS ON THE RECONSIDERATION PROCESS

Both Coldwater et 0/. and STCsubmit that reconsideration is unnecessary as Coldwater et 0/. have filed a Notice

of Application for Leave to Appeal and reconsideration appears unnecessary when the issues for reconsideration

will be addressed by the BC Court of Appeal if leave is granted.

BC Hydro submits that the grounds for reconsideration proposed by Coldwater et 0/., STCshould be rejected as

many ofthe alleged errors are in fact disagreements with the Commission's conclusions on issues that have

been extensively canvassed in the ILM Reconsideration Proceeding. BC Hydro submits that the alleged errors do

not meet the criteria for reconsideration (Exhibit (2-5, paras. 8-9).

5.0 COMMISSION OVERALL DETERMINATION ON THE RECONSIDERATION APPLICATION

The Commission finds that NNTC/ONA/Upper Nicola, Coldwater et 0/., STCand the Hwlitsum have not

established the alleged errors of fact and/or law on a prima facie basis. In conclusion, the Commission finds that

the criteria to proceed to the second phase of reconsideration have not been met by the submissions of any of

the First Nations Interveners. The application for reconsideration of Order G-15-11 by NNTC/ONA/Upper Nicola

and the additional grounds for reconsideration alleged by Coldwater et 0/., STCand the Hwlitsum are denied.


SUPREME COURT OF CANADA

CITATION: R. v. Marshall; R. v. Bernard, [2005] 2 S.e.R. 220,2005 see 43

BETWEEN:

DATE: 20050720DOCKET: 30005, 30063

Her Majesty The QueenAppellant/Respondent on the cross-appeal

v.Stephen Frederick Marshall, Keith Lawrence Julien,

Christopher James Paul, Jason Wayne Marr,Simon Joseph Wilmot, Donald Thomas Peterson,

Stephen John Knockwood, Ivan Alexander Knockwood,Leander Philip Paul, William John Nevin, Roger Allan Ward,

Mike Gordon Peter-Paul, John Michael Marr,Carl Joseph Sack, Matthew Emmett Peters,

Stephen John Bernard, William Gould, Camillius Alex Jr.,John Allan Bernard, Peter Alexander Bernard,

Eric Stephen Knockwood, Gary Hirtle,Jerry Wayne Hirtle, Edward Joseph Peter-Paul,

Angus Michael Googoo, Lawrence Eric Hammond,Thomas M. Howe, Daniel Joseph Johnson,

Dominic George Johnson, James Bernard Johnson,Preston Macdonald, Kenneth M. Marshall,

Stephen Maurice Peter-Paul, Leon R. Robinsonand Phillip F. Young

Respondents/Appellants on the cross-appeal- and-

Attorney General of Canada, Attorney General of Ontario,Attorney General of Quebec, Attorney General of New Brunswick,

Attorney General of British Columbia, Attorney General of Alberta,Attorney General of Newfoundland and Labrador,

Forest Products Association of Nova Scotia,Keptin John Joe Sark and Keptin Frank Nevin

(of the Mi'kmaq Grand Council), Native Councilof Nova Scotia, New Brunswick Aboriginal

Peoples Council, Congress of Aboriginal Peoples,Assembly of First Nations and Songhees Indian Band,

Malahat First Nation, T'Sou-ke First Nation,Snaw-naw-as (Nanoose) First Nation and

Beecher Bay Indian Band (collectively the Te'mexw Nations)Interveners

- 28 -

40 These principles were canvassed at length in Delgamuukw v. British

Columbia, [1997] 3 S.C.R. 1010, whiCh enunciated a test for aboriginal title based on

exclusive occupation at the time of British sovereignty. Many of the details of how

this principle applies to particular circumstances remain to be fully developed. In the

cases now before us, issues arise as to the standard of occupation required to prove

title, including the related issues of exclusivity of occupation, application of this

requirement to nomadic peoples, and continuity. Iftitle is found, issues also arise as

to extinguishment, infringement and justification. Underlying all these questions are

issues as to the type of evidence required, notably when and how orally transmitted

evidence can be used.

B. Standard of Occupation for Title: The Law

41 The trial judges in each of Bernard and Marshall required proof of regular

and exclusive use of the cutting sites to establish aboriginal title. The Courts of

Appeal held that this test was too strict and applied a less onerous standard of

incidental or proximate occupancy.

42 Cromwell J.A. in Marshall ((2003), 218 N.S.R. (2d) 78, 2003 NSCA 105)

adopted in general terms Professor McNeil's "third category" of occupation (Common

Law Aboriginal Title (1989)), "actual entry, and some act or acts from which an

intention to occupy the land could be inferred" (para. 136). Acts of "cutting trees or

grass, fishing in tracts of water, .and even perambulation, may be relied upon"

(para. 136).

43

- 29 -

Daigle lA. in Bernard ((2003), 262 N.B.R. (2d) 1, 2003 NBCA 55)

similarly concluded that it was not necessary to prove specific acts of occupation and

regular use of the logged area in order to ground aboriginal title. It was enough to

show that the Mi'krnaq had used and occupied an area near the cutting site at the

confluence of the Northwest Miramichi and the Little Southwest Miramichi. This

proximity permitted the inference that the cutting site would have been within the

range of seasonal use. and occupation by the Mi'kmaq (para. 119).

44 The question before us is which of these standards of occupation is

appropriate to determine aboriginal title: the strict standard applied by the trialjudges;

the looser standard applied by the Courts of Appeal; or some other standard?

Interwoven is the question of what standard of evidence suffices; Daigle lA. criticized

the trial judge for failing to give enough weight to evidence of the pattern oflanduse

and for discounting the evidence of oral traditions.

45 Two concepts central to determining aboriginal rights must be considered

before embarking on the analysis of whether the right claimed has been established.

The first is the requirement that both aboriginal and European common law

perspectives must be considered. The sycond relates to the variety of aboriginal rights

that may be affirmed. Both concepts are critical to analyzing a claim for an aboriginal

right, and merit preliminary consideration.

46 Delgamuukw requires that in analyzing a claim for aboriginal title, the

Court must consider both the aboriginal perspective and the common law perspective.

Only in this way can the honour of the Crown be upheld.

- 30 -

47 The difference between the common law and aboriginal perspectives on

issues of aboriginal title is real. But it is important to understand what we mean when

we say that in determining aboriginal title we must consider both the common law and

the aboriginal perspective.

48 The Court's task in evaluating a claim for an aboriginal right is to examine

the. pre-sovereignty aboriginal practice and translate that practice, as faithfully and

objectively as it can, into a modem legal right. The question is whether the aboriginal

practice at the time of assertion of European sovereignty (not, unlike treaties, when a

document was signed) translates into a modem legal right, and if so, what right? This

exercise involves both aboriginal and European perspectives. The Court must

consider the pre-sovereignty practice from the perspective of the aboriginal people.

But in translating it to a common law right, the Court must also consider the European

perspective; the nature of the right at common law must be examined to determine

whether a particular aboriginal practice fits it. This exercise in translating aboriginal

practices to modem rights must not be conducted in a formalistic or narrow way. The

Court should take a generous view of the aboriginal practice and should not insist on

exact conformity to the precise legal parameters of the common law right. The

question is whether the practice corresponds to the core concepts of the legal right

claimed .

. 49 To determine aboriginal entitlement, one looks to aboriginal practices

rather than imposing a European template: "In considering whether occupation

sufficien,t to ground title is established, 'one must take into account the group's size,

manner oflife, material resources, and technological abilities, and the character of the

50

51

52

- 31 -

lands claimed'" (Delgamuukw, per Lamer C.l, at para. 149). The application of

"manner of life" was elaborated by La Forest J. who stated that:

... when dealing with a claim of "aboriginal title", the court will focus onthe occupation and use of the land as part of the aboriginal society'straditional way of life. In pragmatic terms, this means looking at themanner in which the society used the land to live, namely to establishvillages, to work, to get to work, to hunt, to travel to hunting grounds, tofish, to get to fishing pools, to conduct religious rites, etc. [Emphasis inoriginal; para. 194.]

Thus, to insist that the pre-sovereignty practices correspond in some broad

sense to the modern right claimed, is not to ignore the aboriginal perspective. The

aboriginal perspective grounds the analysis and imbues its every step. It must be

considered in evaluating the practice at issue, and a generous approach must be taken

in matching it to the appropriate modern right. Absolute congruity is not required, so

long as the practices engage the core idea ofthe modern right. But as this Court stated

in Marshall 2, a pre-sovereignty aboriginal practice cannot be transformed into a

different modern right.

In summary, the court must examme the pre-sovereignty aboriginal

practice and translate that practice into a modern right. The process begins by

examining the nature and extent of the pre-sovereignty aboriginal practice in question.

It goes on to seek a corresponding common law right. In this way, the process

determines the nature and extent of the modern right and reconciles the aboriginal and

European perspectives.

The second underlying concept - the range of aboriginal rights - flows

from the process of reconciliation just described. Taking the aboriginal perspective

- 32-

into account does not mean that a particular right, like title to the land, is established.

The question is what modern right best corresponds to the pre-sovereignty aboriginal

practice, examined from the aboriginal perspective.

53 Different aboriginal practices correspond to different modern rights. This

Court has rejected the view of a dominant right to title to the land, from which other

rights, like the right to hunt or fish, flow: R. v. Adams, [1996] 3 S.C.R. 101, at para.

26; R. v. Cote, [1996] 3 S.C.R. 139, at paras. 35-39. It is more accurate to speak of a

variety of independent aboriginal rights.

54 One ofthese rights is aboriginal title to land. It is established by aboriginal

practices that indicate possession similar t'othat associated with title at common law.

In matching common law property rules to aboriginal practice we must be sensitive to

the context-specific nature of common law title, as well as the aboriginal perspective.

The common law recognizes that possession sufficient to ground title is a matter of

fact, depending on all the circumstances, in particular the nature of the land and the

manner in which the land is commonly enjoyed: Powell v. McFarlane (1977), 38 P. &

C.R. 452 (Ch. D.), at p. 471. For example, where marshy land is virtually useless

except for shooting, shooting over it may amount to adverse possession: Red House

Farms (Thorndon) Ltd. v. Catchpole, [1977] E.G.D. 798 (Eng. C.A.). 'The common

law also recognizes that a person with adequate possession for title may choose to use

it intermittently or sporadically: Keefer v. Arillotta (1976), 13 O.R. (2d) 680 (C.A.),

per Wilson J.A. Finally, the common law recognizes that exclusivity does not

preclude consensual arrangements that recognize shared title to the same parcel of

land: Delgamuukw, at para. 158.

- 33 -

55 This review of the general principles underlying the issue of aboriginal title

to land brings us to the specific requirements for title set out in Delgamuukw. To

establish title, claimants must prove "exclusive" pre-sovereignty "occupation" of the

land by their forebears: per Lamer C.J., at para. 143.

56 "Occupation" means "physical occupation". This "may be established in

a variety of ways, ranging from the construction of dwellings through cultivation and

enclosure of fields to regular use of definite tracts of land for hunting, fishing or

otherwise exploiting its resources": Delgamuukw, per Lamer C.J., at para. 149.

57 "Exclusive" occupation flows from the definition of aboriginal title as "the

right to exclusive use and occupation ofland": Delgamuukw, per Lamer C.J., at para.

155 (emphasis in original). It is consistent with the concept of title to land at common

law. Exclusive occupation means "the intention and capacity to retain exclusive

control", and is not negated by occasional acts of trespass or the presence of other

aboriginal groups with consent (Delgamuukw, at para. 156, citing McNeil, at p. 204).

Shared exclusivity may result injoint title (para. 158). Non-exclusive occupation may

establish aboriginal rights "short of title" (para. 159).

58 It follows from the requirement of exclusive occupation that exploiting the

land, rivers or seaside for hunting, fishing or other resources may translate into

aboriginal title to the land if the activity was sufficiently regular and exclusive to

comport with title at common law. However, more typically, seasonal hunting and

fishing rights exercised in a particular area will translate to a hunting or fishing right.

This is plain from this Court's decisions in Van der Peet, Nikal, Adams and Cote. In

those cases, aboriginal peoples asserted and proved ancestral utilization of particular

- 34 -

sites for fishing and harvesting the products ofthe sea. Their forebears had come back

to the same place to fish or harvest each year since time immemorial. However, the

season over, they left, and the land could be traversed and used by anyone. These facts

gave rise not to·aboriginal title, but to aboriginal hunting and fishing rights.

59 The distinction between the requirements for a finding of aboriginal title

and the requirements for more restricted rights was affirmed in Cote, where the Court

held the right to fish was an independent right (para. 38). Similarly in Adams, the

Court held that rights short of title could exist in the absence of occupation and use of

the land sufficient to support a claim of title to the land: see Adams, at para. 26; Cote,

at para. 39; Delgamuukw, at para. 159. To say that title flows from occasional entry

and use is inconsistent with these cases and the approach to aboriginal title which this

Court has consistently maintained.

60 In this case, the only claim is to title in the land. The issue therefore is

whether the pre-sovereignty practices established on the evidence correspond to the

right oftitle to land. These practices must be assessed from the aboriginal perspective.

But, as discussed above, the right claimed also invokes the common law perspective.

The question is whether the practices established by the evidence, viewed from the

aboriginal perspective, correspond to the core of the common law right claimed.

61 The common law, over the centuries, has formalized title through a

complicated matrix of legal edicts and conventions. The search for aboriginal title, by

contrast, takes us back to the beginnings of the notion of title. Unaided by formal legal

documents and written edicts, we are required to consider whether the practices of

aboriginal peoples at the time of sovereignty compare with the core notions of

- 35 -

common law title to land. It would be wrong to look for indicia of aboriginal title in

deeds or Euro-centric assertions of ownership. Rather, we must look for the equivalent

in the aboriginal culture at issue.

62 Aboriginal societies were not strangers to the notions of exclusive physical

possession equivalent to common law notions oftit1e: Delgamuukw, at para. 156. They

often exercised such control over their village sites and larger areas ofland which they

exploited for agriculture, hunting, fishing or gathering. The question is whether the

evidence here establishes this sort of possession.

63 Having laid out the broad picture, it may be useful to examine more closely

three issues that evoked particular discussion here - what is meant by exclusion, or

what I have referred to as exclusive control; whether nomadic and semi-nomadic

peoples can ever claim title to land, as opposed to more restricted rights; and the

requirement of continuity.

64 The first of these sub-issues is the concept of exclusion. The right to

control the land and, ifnecessary, to exclude others from using it is basic to the notion

of title at common law. In European-based systems, this right is assumed by dint of

law. Determining whether it was present in a pre-sovereignty aboriginal society,

however, can pose difficulties. Often, no right to exclude arises by convention or law.

So one must look to evidence. But evidence may be hard to find. The area may have

been sparsely populated, with the result that clashes and the need to exclude strangers

seldom if ever occurred. Or the people may have been peaceful and have chosen to

exercise their control by sharing rather than exclusion. It is therefore critical to view

the question of exclusion from the aboriginal perspective. To insist on evidence of

- 36 -

overt acts of exclusion in such circumstances may, depending on the circumstances,

be unfair. The problem is compounded by the difficulty of producing evidence of what

happened hundreds of years ago where no tradition of written history exists.

65 It follows that evidence of acts of exclusion is not required to establish

aboriginal title. All that is required is demonstration of effective control of the land

by the group, from which a reasonable inference can be drawn that it could have

excluded others had it chosen to do so. The fact that history, insofar as it can be

ascertained, discloses no adverse claimants may support this inference. This is what

is meant by the requirement of aboriginal title that the lands have been occupied in an

exclusive manner.

66 The second sub-issue is whether nomadic and semi-nomadic peoples can

ever claim title to aboriginal land, as distinguished from rights to use the land in

traditional ways. The answer is that it depends on the evidence. As noted above,

possession at common law is a contextual, nuanced concept. Whether a nomadic

people enjoyed sufficient "physical possession" to give them title to the land, is a

question of fact, depending on all the circumstances, in particular the nature of the land

and the manner in which it is commonly used. Not every nomadic passage or use will

ground title to land; thus this Court in Adams asserts that one of the reasons that

aboriginal rights cannot be dependent on aboriginal title is that this would deny any

aboriginal rights to nomadic peoples (para. 27). On the other hand, Delgamuukw

contemplates that "physical occupation" sufficient to ground title to land may be

established by "regular use of definite tracts of land for hunting, fishing or otherwise

exploiting its resources" (para. 149). In each case, the question is whether a degree

of physical occupation or use equivalent to common law title has been made out.

- 37 -

67 The third sub-issue is continuity. The requirement of continuity in its most

basic sense simply means that claimants must establish they are right holders.

Modern-day claimants must establish a connection with the pre-sovereignty group

upon whose practices they rely to assert title or claim to a more restricted aboriginal

right. The right is based on pre-sovereignty aboriginal practices. To claim it, a

modern people must show that the right is the descendant of those practices.

Continuity may also be raised in this sense. To claim title, the group's connection

with the land must be shown to have been "of a central significance to their distinctive

culture": Adams, at para. 26. If the group has "maintained a substantial connection"

with the land since sovereignty, this establishes the required "central significance":

De 19am uukw, per Lamer C.J., at paras. 150-51.

68 Underlying all these issues is the need for a sensit~ve and generous

approach to the evidence tendered to establish aboriginal rights, be they the right to

title or lesser rights to fish, hunt or gather. Aboriginal peoples did not write down

events in their pre-sovereignty histories. Therefore, orally transmitted history must

be accepted, provided the conditions of usefulness and reasonable reliability set out

in Mitchell v.MNR., [2001] 1 S.C.R. 911, 2001 SCC 33, are respected. Usefulness

asks whether the oral history provides evidence that would not otherwise be available

or evidence of the aboriginal perspective on the right claimed. Reasonable reliability

ensures that the witness represents a credible source ofthe particular.people' s history.

In determining the usefulness and reliability of oral histories, judges must resist facile

assumptions based on Eurocentric traditions of gathering and passing on historical

facts.

- 38 -

69 The evidence, oral and documentary, must be evaluated from the aboriginal

perspective. What would a certain practice or event have signified in their world and

value system? Having evaluated the evidence, the final step is to translate the facts

found and thus interpreted into a modern common law right. The right must be

accurately delineated in a way that reflects common law traditions, while respecting

the aboriginal perspective.

70 In summary, exclusive possession in the sense of intention and capacity to

control is required to establish aboriginal title. Typically, this is established by

showing regular occupancy or use of definite tracts of land for hunting, fishing or

exploiting resources: Delgamuukw, at para. 149. Less intensive uses may give rise

to different rights. The requirement of physical occupation must be generously

interpreted taking into account both the aboriginal perspective and the perspective of

the common law: Delgamuukw, at para. 156. These principles apply to nomadic and

semi-nomadic aboriginal groups; the right in each case depends on what the evidence

establishes. Continuity is required, in the sense of showing the group's descent from

the pre-sovereignty group whose practices are relied on for the right. On all these

matters, evidence of oral history is admissible, provided it meets the requisite

standards of usefulness and reasonable reliability. The ultimate goal is to translate the

pre-sovereignty aboriginal right to a modern common law right. This must be

approached with sensitivity to the aboriginal perspective as well as fidelity to the

common law concepts involved.

C. Application of the Legal Test

Federal Courtof Appeal

CORAM: SEXTON J.A.SHARLOW J.A.RYERJ.A.

BETWEEN:

CANADA

Cour d'appelfederale

Date: 20091119

Docket: A-480-08


THE TZEACHTEN FIRST NATION,THE SKOWKALE FIRST NATION, and

THE YAKWEAKWIOOSE FIRST NATION

Appellants

and

THE ATTORNEY GENERAL OF CANADA,CANADA LANDS COMPANY LIMITED, andCANADA LANDS COMPANY CLC LIMITED

Respondents

Heard at Vancouver, British Columbia, on September 30, 2009.

Judgment delivered at Ottawa, Ontario, on November 19,2009.

REASONS FOR JUDGMENT BY:

CONCURRED IN BY:

SHARLOW J.A.

SEXTON J.A.RYERJ.A.

Federal Courtof Appeal

CANADA

Cour d'appelfederale

Date: 20091119

Docket: A-480-08


CORAM:

BETWEEN:

SEXTON J.A.SHARLOW J.A.RYERJ.A.

THE TZEACHTEN FIRST NATION,THE SKOWKALE FIRST NATION, and

THE YAKWEAKWIOOSE FIRST NATION

Appellants

and

THE ATTORNEY GENERAL OF CANADA,CANADA LANDS COMPANY LIMITED, andCANADA LANDS COMPANY CLC LIMITED

Respondents

REASONS FOR JUDGMENT

SHARLOW J.A.

[1] The issue in this case is whether the Crown had a duty, after 2000, to consult with the

Tzeachten First Nation, the Skowkale First Nation, and the Yakweakwioose First Nation (which for

simplicity I will refer to collectively as "the Tzeachten") before deciding to transfer certain land to

Canada Lands Company CLC Limited ("CLC") in 2003. The land, referred to as the Rifle Range

and Promontory Heights, is part ofthe site of former CFB Chilliwack. Justice Tremblay-Lamer

determined that no such duty arose, for reasons reported as Tzeachten First Nation v. Canada

Page: 2

(Attorney General), 2008 FC 928. The Tzeachten have appealed that judgment. They seek an order

setting aside the judgment, a declaration that the 2003 decision to transfer the land was invalid or

unlawful, and a declaration that the Crown has and continues to have a legal obligation to consult

with the Tzeachten and properly accommodate their interests with respect to the Rifle Range and

Promontory Heights.

Facts

[2] The Tzeachten are three communities of the Sto:lo Nation descended from the Chilliwack

Tribe, a subgroup of the Sto:lo Nation and a part of the Coast Salish people. They have reserves

within the municipal boundaries of Chilliwack, British Columbia. Their evidence is that their

reserves are too small to accommodate their needs for housing and community infrastructure.

[3] The Rifle Range and Promontory Heights comprise part of former CFB Chilliwack and are

adjacent to the Tzeachten First Nation reserve. The Tzeachten assert an interest in the Rifle Range

and Promontory Heights, and indeed on the entire area formerly occupied by CFB Chilliwack, on

two alternative bases.

[4] The fIrst basis relates to the allegation of thirteen Sto:lo communities, including the

Tzeachten, that the land upon which CFB Chilliwack was located formed part of two Indian

Reserves, IR 13 and 14, created for them in 1864 under the authority of James Douglas, then

Governor of the Colony of British Columbia. They allege that in 1868, British Columbia unlawfully

removed land from IR 13 and 14 and then, in the 1880s, transferred part ofthe removed land to

Page: 3

Canada in connection with the construction of the national railway. Between 1892 and 1915 Canada

transferred some ofthe land to private individuals and later reacquired some of the land, including

the Rifle Range and Promontory Heights, to establish CFB Chilliwack. In 1988 and 1997, the

thirteen Sto:lo communities submitted a specific claim to IR 13 and 14 pursuant to Canada's

Specific Claims Policy. In July 1999, the Crown declined to recommend this claim for negotiation

under the Specific Claims Policy because, in their view, the legal steps required to create the two

reserves were never completed by Governor Douglas or by his successor, Frederick Seymour, who

did not assent to the creation of the reserves. That decision was appealed to the Indian Claims

Commission. In September of2003, the appeal was placed in abeyance, where it remains pending

the conclusion of litigation involving the Douglas Reserve claims.

[5] The second basis relates to the assertion of a claim by eighteen communities of the Sto:lo

Nation (including the Tzeachten) to unextinguished Aboriginal title to an area that includes the

former CFB Chilliwack land. In 1995, those eighteen Sto:lo communities filed a statement of intent

to negotiate a treaty under the auspices of the British Columbia Treaty Commission. The treaty has

not been concluded. The treaty negotiations include discussions about additional reserve land.

[6] In 1995, the Crown announced its intention to close CFB Chilliwack. Between September of

1995 and June of2000, there were approximately 26 meetings between representatives of the

Crown and representatives of the Tzeachten. A partial summary of those meetings is provided by

Justice Tremblay-Lamer at paragraphs 57 to 61 of her reasons:

~57 During 1996 and 1997, consultations between the applicants and Canada were

focused on two proposals. The first involved Canada continuing to own the Base but its

management/administration would fall jointly to CLC and the applicants while their

Specific Claim was resolved and/or land selection under the BCTP occurred. The second

proposal involved 25% of the Base being disposed of to CLC and of the remaining 75%,

approximately half would be managed by a trust controlled equally by CLC and the

applicants and the remainder would continue to be held by Canada.

~58 No agreement was reached moving forward with the first proposal and the second

was eventually rejected by the applicants as they would not accept a transfer of any

portion of the CFB Chilliwack to CLC.

~59 From late 1997 onwards, two major options were discussed. The first option being

that 60% ofthe lands would be retained for possible treaty land selection with the

remaining lands transferred to CLC. The applicants rejected this proposal as they were of

the view that since they owned all the lands, they should be compensated for lands they

were giving up. The second option involved a transfer oflands to be identified by the

applicants to the Department ofIndian Affairs and Northern Development, which would

then be leased back to them for a period of between 4-9 years with the applicants

subsequently obtaining the lands at the conclusion of any treaty. The remaining lands not

identified by the applicants would be transferred to CLC for disposal. An agreement could

not be reached on this proposal.

~60 In 1998, the discussions focused on another two options. Pursuant to the first

proposal the applicants would select lands within the Base and DND lands outside, but

near the Base that would accommodate their various needs, which would ultimately be

transferred to them. The second option envisioned a joint venture arrangement between

CLC and the applicants. The idea put forward by Canada was that part or all of the Base

would be transferred to a CLC/applicants joint venture which would be outside the treaty

process, and the joint venture would proceed to develop the lands transferred.

~61 The applicants rejected the first option and while they were interested in the second

option, they wished to have a portion ofthe Base excluded from the joint venture and

Page: 4

Page: 5

transferred to them. The exclusion ofland from the joint venture was a concern to CLC

since, depending on the amount ofland excluded, the joint venture might no longer be

financially viable. The applicants indicated that they would bring the joint venture

proposal to the Chiefs Council on November 16, 1998 to seek directions, but never

returned with an answer and the option lapsed.

[7] The position of the Tzeachten throughout the period of the meetings and discussions

referred to above was that they have a pressing need for additional land for housing and other

community purposes, they have an unresolved specific claim as well as an unresolved claim of

Aboriginal title to the CFB Chilliwack lands, and that restoring the CFB Chilliwack lands to them

would be the only just and appropriate resolution of their specific claim. According to the affidavit

ofChiefJoseph Leonard Hall sworn June 14,2007, the Tzeachten considered none of the Crown's

proposals to be meaningful responses to their claims.

[8] Chief Hall also deposes that the Tzeachten tabled a proposal, based on their position that the

CFB Chilliwack land had originally been set aside for them as IR 13 and 14, that the Crown buy the

CFB Chilliwack land from them at fair market value. Chief Hall stated that after that proposal was

made, Canada essentially ended the discussions. Chief Hall does not say when that proposal was

made, but it appears from the affidavit of Paul Gono, who represented the Crown in most of the

meetings with the Tzeachten, that it occurred at a meeting in late 1999 .

[9] In the spring of2000, a submission was made to the Treasury Board (I assume by either;

Public Works and Government Services Canada or the Department of National Defence ("DND"))

relating to the disposition of the former CFB Chilliwack land. In the proposal, the land was divided

Page: 6

into parcels designated A through 1. The Rifle Range and Promontory Heights were designated

Parcel C. The proposal was as follows:

a. Parcel A would be transferred immediately to CLC, with the intention that it be

improved or sold.

b. Parcels B, C, E, F and G would be retained for a two-year period from June 2000 to

allow the Chief Federal Treaty Negotiator an opportunity to engage in treaty land

selection negotiations with the Sto:lo Nation, and upon the conclusion of those two

years to return to the Treasury Board to obtain the authority to transfer to CLC any

lands not selected for treaty purposes.

c. Parcel D would be protected as a nature conservancy.

d. Parcel H would be used by the Royal Canadian Mounted Police for training purposes.

e. Parcel I would be retained by DND for a military cenotaph and area support unit for the

Canadian Forces.

[10] In May of2000, the Tzeachten and Soowahlie (another Sto:lo community) also made a

submission to the Treasury Board, consisting of a detailed study setting out the importance to them

of the CFB Chilliwack land, and a plan for its development, including band housing, band

infrastructure, and some commercial and mixed use for revenue generation.

[11] On June 16,2000, an Order in Council (P.C. 2000-925) was made to authorize the transfer

of Parcel A to CLC. On the same date, the Treasury Board informed the Tzeachten and Soowahlie

that their submission had been considered, but the Treasury Board had decided to accept the Crown

Page: 7

proposal. With specific reference to item (b) of the proposal (referring to Parcels B, C, E, F and G),

the letter says this:

Finally, approximately two-thirds of the site will be retained in the federal inventory for

two years to permit further discussion with the Sto:Lo Nation on possible land selection

under the treaty process.

[12] After the June 2000 discussions, the Chief Federal Negotiator for the Sto:lo treaty

negotiations, Mr. Robin Dodson, indicated an interest in discussing the held back lands with the

Sto:lo treaty negotiator, Mr. David Joe, in the context of a set-off in the final treaty settlement.

Mr. Joe advised Mr. Dodson that he had no mandate to discuss these lands as a set-off since they

were subject to a specific reserve interest (referring to the specific claims of the Tzeachtento IR 13

and 14). Mr. Joe also advised the Crown negotiator to contact the Sto:lo communities with an

interest in the CFB Chilliwack lands directly with a view to resolving the specific claims.

[13] No further discussions occurred, and no agreement was reached between the Crown and the

Tzeachten with respect to the disposition of any of the former CFB Chilliwack land.

[14] In July of2000, the Tzeachten and Soowahlie commenced an application in the Federal

Court for judicial review ofthe decision to transfer Parcel A to CLC. Meanwhile, CLC began

selling parts of Parcel A. The Tzeachten and Soowahlie moved for an order staying any further

transfers pending the disposition of their application, but their motion was dismissed by the Federal

Court and their appeal to this Court was dismissed. The Federal Court proceeding was discontinued.

Page: 8

[15] On June 7, 2002, Mr. Dodson informed Mr. Joe that that the Minister of National Defence

was about to return to the Treasury Board to seek additional instructions on the disposition of the

held back portions of the former CFB Chilliwack land. Mr. Dodson indicated that Indian and

Northern Affairs Canada ("INAC") would advise the Minister that it had no interest in acquiring

any of that land for possible use in treaties.

[16] On June 26, 2002, DND wrote to the Tzeachten about the held back land. That letter reads

in relevant part as follows:

The two-year hold period has now expired and INAC has recently advised that they will

not be acquiring any of the former CFB Chilliwack lands for treaty settlement purposes.

This same decision was provided to Mr. Dave Joe, 8to:10Nation Chief Negotiator from

Mr. Robin Dobson [sic], the Chief Federal Negotiator on 7 June 2002.

With this letter I wish to advise that the Department of National Defence is now preparing

to return to the Treasury Board.ofMinisters, in accordance with the June 2000 disposal

plan, for further direction regarding the disposal ofthe remainder ofthe Chilliwack lands.

[17] On August 8, 2003, the DND informed the Tzeachten that the Crown had authorized the

sale of the remainder of the held back land to CLC. That transfer was completed on March 31,

2004. By the time of the commencement of the proceedings leading to his appeal, CLC had sold 14

acres of the Rifle Range to the Chilliwack School District

[18] From the perspective of the Tzeachten, the transfer of the Rifle Range and Promontory

Heights to CLC removed that land from the federal inventory potentially available to settle either

Page: 9

the Sto:lo treaty or the Tzeachten specific claims. Because they considered those particular parcels

of land to be among the best possible choice for any expansion of their current reserves, especially

the Tzeachten First Nation reserve that is adjacent to the Rifle Range and Promontory Heights, they

see the transfer as a substantial and possibly permanent loss. The position of the Tzeachten is that

the Crown was obliged to engage in further consultations with them after 2000 and before dealing

with any of the land that was subject to the two-year hold period.

[19] The Tzeachten commenced an application for judicial review to seek a declaration that the

2003 decision to transfer that land to CLC was unlawful, a declaration that the Treasury Board, the

Minister of National Defence, CLC and its parent corporation, Canada Lands Company Limited

("Canada Lands"), had it legal obligation to consult with the Tzeachten before selling or developing

the Rifle Range and Promontory Heights, and an order in the nature of mandamus directing the

Minister, Canada Lands and CLC to consult with the Tzeachten and accommodate their interests.

The Tzeachten did not assert any claim in respect of 14 acres within the Rifle Range land that had

been sold to the Chilliwack School District.

[20] The application for judicial review was dismissed by Justice Tremblay-Lamer, for reasons

that she explained at length. I summarize her principal conclusions as follows:

a. The Tzeachten have a moderately strong Aboriginal claim to the Rifle Range and

Promontory Heights, and the Crown's transfer of that land represents an

infringement of their potential Aboriginal title. However, the damage is

Page: 10

compensable, monetarily or otherwise, in the course oftreaty negotiations. In these

circumstances, there was a duty to consult that was more than minimal, requiring

good faith consultation and a process addressing the concerns of the Tzeachten.

b. The 2003 authorization ofthe transfer of the Rifle Range and Promontory Heights

put into effect the disposal strategy for the former CFB Chilliwack land that was

adopted in 2000. Accordingly, the relevant period for the purposes of determining

whether Canada fulfilled its duty to consult is between 1995 when the closure of

CFB Chilliwack was announced and 2003 when the transfer of the Rifle Range and

Promontory Heights was authorized.

c. From 1995 to 2000, Canada engaged in significant consultation with the Tzeachten

which at times rose to the level of deep consultation (referring to Haida Nation v.

British Columbia (Minister of Forests), [2004] 3 S.C.R. 511, 2004 SCC 73, at

paragraph 44). During those consultations, Canada attempted to address the

concerns of the Tzeachten by tabling various proposals that would either see

portions ofthe land retained by the Crown, or have the Tzeachten co-manage a

portion of the lands. These were good faith attempts by Canada to harmonize

conflicting interests and move toward reconciliation (referring to Haida Nation,

paragraphs,45 to 49, and Taku River Tlingit First Nation v. British Columbia

(Project Assessment Director), [2004] 3 S.C.R. 550, 2004 SCC 74, at paragraph 25).

Page: 11

d. The Tzeachten participated in the discussions in good faith, and their unwillingness

to compromise what they perceived to be their strong legal claims was not

unreasonable. They fulfilled their reciprocal duty, as described in HalfWay River

First Nation v. British Columbia (Ministry of Forests), 1999 BCCA 470 at

paragraph 161.

e. In spite of the good faith efforts on both sides, no agreement was reached. However,

that does not indicate that the Crown breached any duty to consult or failed to act

honourably. The law does not require parties to agree.

Issues on appeal

[21] There are four grounds of appeal stated in the Tzeachten memorandum of fact and law.

They are discussed separately below.

Did the Federal Court err in treating the 2003 decision to transfer lands as the second stage of anearlier discussion and therefore one that did not require further consultation?

[22] Justice Tremblay-Lamer conceived the 2000 disposal strategy as a decision made by the

Crown that, given the negotiations between 1995 and 2000, the Crown could reasonably be

expected to implement in accordance with its terms. The disposal strategy called for a two-year hold

period for a large part of former CFB Chilliwack, including the Rifle Range and Promontory

Heights, and contemplated that the land subject to the two-year hold period would be removed from

Page: 12

the federal inventory unless, within that two-year period, there was an indication that the land was

required for the settlement of a Sto:lo treaty.

[23] This understanding of the facts is consistent with all of the evidence on the record. In my

view it was reasonably open to Justice Tremblay-Lamer to conclude, as she did, that the 2003

disposal decision could not be separated from the adoption in 2000 ofthe disposal strategy, and that

the extent and quality of the consultations between the Crown and the Tzeachten had to be assessed

on that basis. I would therefore reject this ground of appeal.

Did the failure to reach an agreement relieve the Crown of its duty to accommodate the Tzeachten?

[24] This ground of appeal, as I understand it, is closely connected to the previous one. The

Tzeachten argues that the Crown was not free to implement the 2000 disposal strategy in relation to

the Rifle Range and Promontory Heights without continuing to consult with the Tzeachten. More

specifically, the position of the Tzeachten is that the honour ofthe Crown precluded the Crown

from removing the Rifle Range and Promontory Heights from its inventory after the two-year hold

period without further consultation with the Tzeachten. In support of this argument, the Tzeachten

rely on the following factors: (1) the Tzeachten have a moderately strong Aboriginal title claim to

the Rifle Range and Promontory Heights as well as an unresolved specific claim to IR 13 and 14,

(2) the Rifle Range and Promontory Heights are adjacent to the current Tzeachten First Nation

reserve, which would give it a unique value as potential Tzeachten reserve land, and (3) the Crown

had demonstrated its willingness over a period of years to table a number of proposals for the use

and management of the Rifle Range and Promontory Heights that could have saved it from

Page: 13

permanently being removed from inventory of land that could form part of an eventual settlement of

the Tzeachten claims.

[25] Given Justice Tremblay-Lamer's understanding ofthe facts, which in my view is

unimpeachable, it seems to me that the question is what, if anything, the Crown was required to do

during the two-year hold period. The answer to that question depends mainly on the stated purpose

of the hold period, which was to keep the land available for a two-year period for the purpose of

settling the Sto:lo treaty.

[26] The Tzeachten point out that a two year period is not a realistic time frame for concluding

an Aboriginal treaty'. I agree. However, the terms of the two-year hold period did not necessarily

require that the Sto:lo treaty be concluded within the two years. It contemplated only that the land

be selected for treaty purposes. I take that to mean that the land would continue to be held back as

long as sufficient progress was made in the negotiation of the Sto:lo treaty that INAC would be in a

position to indicate that the land might be required to settle that treaty.

[27] However, the Tzeachten took no steps after 2000 to move the treaty negotiations forward in

relation to the Rifle Range and Promontory Heights. On the contrary, the record indicates that the

8to:lo treaty negotiator told the Chief Federal Negotiator that he had no mandate to discuss the Rifle

Range and Promontory Heights in the context of the treaty negotiations, apparently because the

Tzeachtert wanted their specific claim to IR 13 and 14 resolved first. The record discloses no change

in that situation by 2003.

Page: 14

[28] The Tzeachten were aware of the existence and purpose of the two-year hold period, and

must have been aware that no steps had been taken to include the Rifle Range and Promontory

Heights in the treaty negotiations. All parties knew that the Crown and the Tzeachten had engaged

in many years of negotiations without success, and the Tzeachten had consistently rejected every

Crown proposal relating to the Rifle Range and Promontory Heights because of its strongly held

belief in the strength of its specific claim.

[29] There is no doubt that the Crown could at any time have decided to extend the hold period

beyond the two years stipulated in the 2000 disposal strategy. However, given the circumstances, it

would in my view be unreasonable to require the Crown to extend the hold period in order to

undertake further consultations with the Tzeachten. Iagree with Justice Tremblay-Lamer that, with

respect to the adoption and implementation of the 2000 disposal strategy, the Crown's duty to

consult had been met by June of2000 when the disposal strategy was adopted and that no further

duty to consult arose after 2000 when the Crown implemented the disposal strategy in accordance

with its terms.

Did the Federal Court err in applyingfrom injunction law the tests of "uniqueness" and"compensability" in determining the extent of the duty to consult?

[30] This ground of appeal is focussed on Justice Tremblay-Lamer's conclusion that the

Tzeachten's loss of the Rifle Range and Promontory Heights would be compensable (see

paragraphs 42 to 51 of her reasons). In my view, there is no merit to this ground of appeal.

Page: 15

[31] As I understand Justice Tremblay-Lamer's reasons, she was not applying the law of

injunctions when she considered the question of compensability. She was applying the principle

from Haida Nation (at paragraph 44) that it is relevant, when assessing the seriousness of the

potentially adverse effect of a decision on an Aboriginal title claim, to consider whether the adverse

effect is compensable in money, or whether it is not compensable in money because the subject of

the claim is unique in some substantial way relating to an unrecognized Aboriginal claim. I see no

error in her analysis of that issue.

[32] The Tzeachten are understandably concerned that, despite the conclusion of Justice

Tremblay-Lamer that the transfer of the Rifle Range and Promontory Heights is a compensable loss,

the Crown will take the contrary position in the context of treaty negotiations or in proceedings

relating to the unresolved specific claim to IR 13 and 14. However, the Crown conceded in

argument, correctly in my view, that the decision in this case does not dispose of any claim the

Tzeachten may assert for compensation based on its claim to IR 13 and 14 or its claim to Aboriginal

title. Therefore, the matter of compensation remains open to negotiation or litigation in relation to

either of those claims.

Did the Federal Court err infailing to consider the effect of the assertion of Cab inet privilege overthe 2003 decision, in assessing whether that was a decision that required consultation?

Page: 16

[33] In my view this ground of appeal is not properly raised. The Tzeachten did not take steps to

challenge the assertion of Cabinet privilege, nor did they seek to cross examine the deponents of any

of Canada's affidavit.

The position of Canada Lands and CLC

[34] Canada Lands is a Crown corporation and, by virtue of the Government Corporations

Operation Act, R.S.C. 1985, c. 0-4, an agent ofthe Crown. CLC is a wholly owned subsidiary of

Canada Lands. There is no statute designating CLC as an agent of the Crown. However, the

Tzeachten argued in the Federal Court that CLC is an agent of the Crown and was a proper

respondent because of its mandate to receive and dispose of the land in issue.

[35] Both corporations were named as respondents in Federal Court proceedings. They did not

seek to be removed as respondents. However, they argued in the Federal Court that, because CLC is

not a "federal board, commission or other tribunal" as defined in the Federal Courts Act, R.S.C.

1985, c. F-7, the Federal Court has no jurisdiction to make an order against it pursuant to section

18.1 of the Federal Courts Act. Justice Tremblay-Lamer accepted that argument, and the point was

not contested in this appeal. Justice Tremblay-Lamer declined to determine whether CLC was an

agent of the Crown.

[36] Despite their success on the question of jurisdiction of the Federal Court, Canada Lands and

CLC made written and oral submissions on the merits of the appeal. All but one ofthe arguments of

Page: 17

Canada Lands and CLC cover the same ground as the Crown arguments. The exception was the

alternative argument of Canada Lands and CLC that no duty to consult ever arose in relation to the

former CFB Chilliwack lands. This argument is not consistent with Canada's position that it had a

duty to consult but had discharged that duty, and for that reason it is not an argument that should be

entertained in this appeal. In my view, none of the arguments of CLC and Canada Lands assisted

the Court in resolving this appeal.

Conclusion

[37] For these reasons, I would dismiss this appeal. I would award costs to the Attorney General

of Canada but not to the other respondents.

"K. Sharlow"lA.

"1. agree.1Edgar Sexton l.A."

"I agree.C. Michael Ryer lA."



DOCKET: A-480-08

(APPEAL FROM REASONS FOR JUDGMENT AND JUDGMENT OF MADAMJUSTICE TREMBLAY-LAMER OF THE FEDERAL COURT DATED JULY 30,2008,DOCKET NO. T-745-07)

STYLE OF CAUSE:

PLACE OF HEARING:

DATE OF HEARING:

REASONS FOR JUDGMENT BY:

CONCURRED IN BY:

DATED:

APPEARANCES:

Gregory I McDade, Q.C.Elisabeth A Finney

Robin S. WhittakerSteven C. Postman

Simon B. MargolisRyan D.W. Dalziel

The Tzeachten First Nation et al v.The Attorney General of Canadaet al

Vancouver, British Columbia

September 30,2009

SHARLOW IA.

SEXTON l.A.RYERIA.

November 19,2009

FOR THE APPELLANTS

FOR THE RESPONDENT,Attorney General of Canada

FOR THE RESPONDENTS,Canada Lands Company Limited andCanada Lands Company CLC Limited

Federal Court

Ottawa, Ontario, May 12, 2009

Cour f6d6rale

Date: 20090512

Dockets: T-225-08T-921-08T-925-08

Citation: 2009 FC 484

PRESENT: The Honourable Mr. Justice Barnes

BETWEEN:

Docket: T-225-08

BROKENHEAD OJIBWAY NATION, LONG PLAIN FIRST NATION,SWAN LAKE FIRST NATION, FORT ALEXANDER FIRST NATION, also known as"SAGKEENG FIRST NATION", RO~EAU RIVER ANISHINABE FIRST NATION,

PEGUIS FIRST NATION AND SANDY BAY FIRST NATION, known collectively as theTREATY ONE FIRST NATIONS

Applicants

and

THE ATTORNEY GENERAL OF CANADA,THE NATIONAL ENERGY BOARD

andTRANSCANADA KEYSTONE PIPELINE GP LTD.

Respondents

Docket: T-921-08

BETWEEN:

BROKENHEAD OJIBWAY NATION, LONG PLAIN FIRST NATION,SWAN LAKE FIRST NATION, FORT ALEXANDER FIRST NATION, also known as"SAGKEENG FIRST NATION", ROSEAU RIVER ANISHINABE FIRST NATION,

Page: 2PEGUIS FIRST NATION AND SANDY BAY FIRST NATION, known collectively as the

TREATY ONE FIRST NATIONS

Applicants

and


andENBRIDGE PIPELINES INC.

Respondents

T-925-08

BETWEEN:

BROKENHEAD OJIBWAY NATION, LONG PLAIN FIRST NATION,SWAN LAKE FIRST NATION, FORT ALEXANDER FIRST NATION, also known as"SAGKEENG FIRST NATION", ROSEAU RIVER ANISHINABE FIRST NATION,

PEGUIS FIRST NATION AND SANDY BAY FIRST NATION, known collectively as theTREATY ONE FIRST NATIONS

Applicantsand


and

ENBRIDGE PIPELINES INC.

Respondents

REASONS FOR JUDGMENT AND JUDGMENT

[1] The Applicants are the seven First Nations who are the successors to those Ojibway First

Nations who entered into what is known as Treaty One with the federal Crown on August 3,

18711. They are today organized collectively as the Treaty One First Nations and they assert

1 Treaty One was the first of several treaties entered into from 1871 to 1877 between the federal Crown and the FirstNations peoples who then occupied much ofthe lands of the southern prairies and the south-western comer of what isnow Ontario.

Page: 3treaty, treaty-protected inherent rights and indigenous cultural rights over a wide expanse of

land in southern Manitoba. By these applications the Treaty One First Nations seek declaratory

and other prerogative relief against the Respondents in connection with three decisions of the

Governor in Council (Gle) to approve the issuance by the National Energy Board (NEB) of

Certificates of Public Convenience and Necessity for the construction respectively of the

Keystone Pipeline Project, the Southern Lights Pipeline Project and the Alberta Clipper Pipeline

Expansion Project (collectively, "the Pipeline Projects"). All of the Pipeline Projects involve the

use or taking up of land in southern Manitoba for pipeline construction by the corporate

Respondents. Because the material facts and the legal principles that apply are the same for all

three of the decisions under review, it is appropriate to issue a single set of reasons.

I. Regulatory Background

The Keystone Pipeline Project

[2] On December 12,2006 TransCanada Keystone Pipeline GP Ltd. (Keystone) applied to the

NEB for approvals related to the construction and operation of the Keystone Pipeline Project (the

Keystone Project).

[3] The Keystone Project consists of a 1235 kilometer pipeline running from Hardisty, Alberta

to a location near Haskett, Manitoba on the Canada-United States border. In Manitoba all new

pipeline construction is on privately owned land with the balance of258 kilometers running over

existing rights-of-way (including 4 kilometers on leased Crown land and 2 kilometers on

unoccupied Crown land). The width of the permanent easement in Manitoba is 20 metres and the

pipeline is buried.

Page: 4[4] During its hearings, the NEB considered submissions from Standing Buffalo First Nation

near FOrt Qu' Appelle, Saskatchewan and from five First Nations in southern Manitoba known

collectively as the Dakota Nations of Manitoba. Keystone also engaged a number of Aboriginal

communities located within 50 kilometers ofthe pipeline right-of-way including Long Plain First

Nation, Swan Lake First Nation and the Roseau River Anishinabe First Nation.

[5] In its Reasons for Decision dated September 6, 2007 the NEB approved the Keystone

Project subject to conditions. Included in those reasons are the following findings concerning

project impacts on Aboriginal peoples:

Although discussions with Standing Buffalo and the Dakota Nationsof Manitoba began somewhat later than they could have, overall, theBoard is satisfied that Keystone meaningfully engaged Aboriginalgroups potentially impacted by the Project. Aboriginal groups wereprovided with details of the Project as well as an opportunity toexpress their concerns to Keystone regarding Project impacts.Keystone considered the concerns and made Project modificationswhere appropriate. Keystone also worked within establishedagreements which TransCanada had with Aboriginal groups in thearea of the Project and persisted in its attempts to engage certainAboriginal groups. The Board is also satisfied that Keystone has.committed to ongoing consultation through TransCanada.

The evidence before the Board is that TransCanada, on behalf ofKeystone, was not aware that Standing Buffalo and the DakotaNations of Manitoba had asserted claims to land in the Project area.The Board is of the view that, since TransCanada has a long historyof working in the area of the Keystone Project, it should have knownor could have done more due diligence to determine claims that mayexist in the area of the Keystone Project. The Board acknowledgesthat as soon as Keystone became aware that Standing Buffalo and theDakota Nations of Manitoba had an interest in the Project area, it didtake action and initiated consultation activities. The Board furthernotes that consultation with Carry the Kettle and Treaty 4 was basedupon TransCanada's established protocol agreements and thatKeystone is willing to establish similar agreements and work planswith other Aboriginal groups, including Standing Buffalo and theDakota Nations of Manitoba.

Once an application is filed, all interested parties, includingAboriginal persons, have the opportunity to participate in the Board'sprocesses to make their views known so they can be factored into thedecision-making. With respect to the Keystone Project, the Boardnotes that Standing Buffalo and the Dakota Nations of Manitoba tookthe opportunity to participate in the proceeding and the Boardundertook efforts to facilitate their application. The Board agreed tolate filings by Standing Buffalo and the Elders had an opportunity toprovide oral testimony in their own language at the hearing. Inaddition, the Board held two hearing days in Regina to facilitate theparticipation of Standing Buffalo and was prepared to considerhearing time in Winnipeg for the benefit of the Dakota Nations ofManitoba. The Board notes it undertook to ensure it understood theconcerns of Standing Buffalo by hearing the testimony of the Elders,making an Information Request and asking questions at the hearing.

The Board is satisfied that Standing Buffalo and the Dakota Nationsof Manitoba were provided with an opportunity to participate fully inits process and to bring to the Board's attention all their concerns.The hearing process provided all parties with a forum in which theycould receive further information, were able to question andchallenge the evidence put forward by the parties, and present theirown views and concerns with respect to the Keystone Project.Standing Buffalo and the Dakota Nations of Manitoba had theopportunity to present evidence, including any evidence of potentialinfringement the Project could have on their rights and interests. TheDakota Nations of Manitoba did not provide evidence at the hearing.

Standing Buffalo filed affidavit evidence and gave oral evidence atthe hearing, which was carefully considered by the Board in thedecision-making process. Standing Buffalo also suggested that theProject would further limit the Crown lands that would be availableto meet the terms of its flood compensation agreement and anyTreaty claim. In the Board's view, the evidence on this point is toospeculative to warrant the Board's consideration of it as an impactgiven there are Crown lands available for selection and private landsavailable for purchase within the traditional territory claimed byStanding Buffalo.

It is not within the jurisdiction ofthe Board to deal with land claimmatters. Accordingly, to the extent that the evidence provided byStanding Buffalo relates to its asserted land claim rather than theeffects ofthis particular Project on its interests, it is of limitedprobative value to the consideration of the application before theBoard.

Standing Buffalo presented evidence of a general nature as to theexistence of sacred sites along the existing and proposed RoW. The

Page: 5

Page: 6Board notes Keystone's commitment to discuss with StandingBuffalo the potential for the Project to impact sacred sites, develop awork plan and incorporate mitigation to address specific impacts tosacred sites into its Environment Protection Plan. The Board wouldencourage Standing Buffalo to bring to the attention of TransCanadaits concerns with respect to impacts to sacred sites from existingprojects and to involve their Elders in these discussions.

The Board notes that almost all the lands required for the Project arepreviously disturbed, are generally privately owned and are usedprimarily for ranching and agricultural purposes. Project impacts aretherefore expected to be minimal and the Board is satisfied thatpotential impacts identified by Standing Buffalo which can beconsidered in respect of this application will be appropriatelymitigated.

With respect to the request by the Dakota Nations of Manitoba foradditional conditions, the Board notes that Keystone and the DakotaNations of Manitoba have initiated consultations and that both partieshave committed to continue these discussions. In addition, the Boardnotes Keystone's commitment to address concerns that are raisedthrough all its ongoing consultation activities and its interest indeveloping agreements and work plans with Aboriginal groups in thearea of the Project. The Board strongly supports the development ofsuch arrangements and encourages project proponents to buildrelationships with Aboriginal groups with interests in the area of theirprojects. Given the commitments both parties have made to ongoingdialogue, the Board does not see a need to impose the conditions asoutlined.

[6] On the recommendation of the NEB the GIC issued Order in Council No. P.C. 2007-1786

dated November 22,2007 approving the issuance of a Certificate of Public Convenience and

Necessity authorizing the construction and operation of the Keystone Project. This is the decision

which is the subject of the Applicants' claim for relief in T -225-08.

The Southern Lights Pipeline Project and the Alberta Clipper Pipeline Expansion Project

[7] In March 2007 and May 2007 respectively, Enbridge applied to the NEB for approval ofthe

Southern Lights Pipeline Project (Southern Lights Project) and the Alberta Clipper Pipeline

Expansion Project (Alberta Clipper Project). These two projects are related. The Alberta Clipper

Page: 7Project consists of 1078 kilometers of new oil pipeline beginning at Hardisty, Alberta and ending

at the Canada-United States border near Gretna, Manitoba.

[8] The Southern Lights Project uses the same corridor as the Alberta Clipper Project. Both are

constructed within or contiguous to existing pipeline rights-of-way which run almost entirely over

private and previously disturbed land2.

[9] The record discloses that Enbridge consulted widely with interested Aboriginal communities

about their project concerns. This included communities located within an 80-kilometer radius of

the pipeline right-of-way and, where other interest was expressed, beyond that limit. There were

discussions with Long Plain First Nation, Swan Lake First Nation, Roseau River Anishinabe First

Nation and collectively with the Treaty One First Nations. Enbridge also provided funding to the

Treaty One First Nations to facilitate the consultation process.

[10] Furthermore, the NEB received representations from interested Aboriginal parties during its

hearings. This included discussions with Standing Buffalo First Nation, the Dakota Nations of

Manitoba, Roseau River Anishinabe First Nation and Peepeekisis First Nation. Among other

concerns, Standing Buffalo raised the issue of unresolved land claims which the NEB characterized

as follows:

Chief Redman stated in his written evidence that Standing Buffalohas been involved in extensive meetings with the Government ofCanada and the Office of the Treaty Commissioner regardingoutstandmg issues concerning unextinguished Aboriginal title andgovernance rights of the Dakota/Lakota. Chief Redman also statedthat there have been 70 meetings and yet the Government of Canadahas not acknowledged its lawful obligation and continues todiscriminate against Standing Buffalo regarding its lawful

2 See Affidavit of Lyle Neis sworn September 19,2008 at paras. 6 to 9.

Page: 8obligations concerning Aboriginal title, sovereign rights andallyship status by failing to resolve these outstanding issues.

Despite sending a number of letters to the Government of Canada"regarding the discussions with the Government of Canadaconcerning the Board interventions and how they relate tooutstanding DakotalLakota issues," Chief Redman stated that he hasreceived no response.

Chief Redman alleges the consultation listed in the Applicants'evidence relates to the Alida to Cromer Capacity Expansion hearingand the Applicants and Canada have failed to consult StandingBuffalo in breach of lawful obligation to the First Nation. He statedthat the route of the pipeline is through traditional territories ofStanding Buffalo and suggested that the Project would further limitthe Crown lands that would be available to meet the terms of itsflood compensation agreement and any Treaty claim. StandingBuffalo also presented evidence of a general nature as to theexistence of sacred sites along the existing and proposed RoW for theProject.

[11] The NEB's Reasons for Decision by which it approved the Alberta Clipper Project include

the following findings:

In the case of the Project, the Board notes that fourteen Aboriginalgroups participated in various ways in the proceeding. The Board issatisfied that the Aboriginal groups were provided with anopportunity to participate fully in its process, and bring theirconcerns to the Board's attention.

A number of Aboriginal intervenors expressed concerns regardinghow the proposed Project could impact undiscovered historical,archaeological and sacred burial sites. The Board notes Enbridge'scommitments to work with Aboriginal communities in the event thatsuch sites are discovered and the implementation of a HeritageResource Discovery Contingency Plan which includes specificprocedures for the discovery and protection of archaeological,palaeontological and historical sites including the evaluation andimplementation of appropriate mitigation measures. The Board alsonotes Enbridge's decision to route the pipeline path to avoid theThornhill Burial Mounds site. However, in view ofthe importanceof these sites, should the Project be approved, the Board wouldinclude a condition to direct Enbridge to immediately cease all workin the area of any archaeological discoveries and to contact theresponsible provincial authorities. This would ensure the protection

Page: 9and proper handling of any archaeological discoveries and potentialimpacts to traditional use. If the Project were to be approved, theBoard would also direct Enbridge to file with the Board, and makeavailable on its website, reports on its consultation with Aboriginalgroups concerning the Thornhill Burial Mounds.

In terms of the potential adverse impacts of the Project to currenttraditional use, the Board notes that there were suggestions of currenttraditional use over the proposed route, but no specific evidence wasprovided. The large majority of the facilities would be buried andwould be completed within a short construction window and a largemajority of the land required for the Project has been previouslydisturbed and is generally privately owned and used for agriculturalpurposes. In view of these facts and Enbridge's commitment toongoing consultation with Aboriginal people throughout the lifecycle of the Project, the Board is ofthe view that potential Projectimpacts to Aboriginal interests, particularly with regard to traditionaluse over the RoW would be minimal and would be appropriatelymitigated. The Board is satisfied that ongoing discussions betweenthe Applicant and Aboriginal people, together with the HeritageResource Discovery Contingency Plan, would minimize potentialimpacts to traditional use sites, if encountered.

The Board considers that Enbridge's Aboriginal engagementprogram was appropriate to the nature and scope of the Project. Inview ofEnbridge's demonstrated understanding that Aboriginalengagement is an ongoing process, its commitments and theproposed conditions, the Board finds that Enbridge's Aboriginalengagement program would fulfill the consultation requirements forAlberta Clipper.

[12] The NEB's [mdings concerning the impact of the Southern Lights Project on Aboriginal

peoples included the following:

The Applicants indicated that they were not aware of any potentialimpacts on Aboriginal interests that had not been identified in theSouthern Lights applications or subsequent filings. The Applicantssubmitted that, in the event that there are more interests that areidentified that may be impacted, they would meet with theAboriginal organization or community that has identified an interestand work with that community to jointly develop a course of action.

The Board is of the view that those Aboriginal people with aninterest in the Southern Lights applications were provided with thedetails ofthe Project and were given the opportunity to make their

Page: 10views known to the Board in a timely manner so that they could befactored into the decision-making process.

Further, the Board is of the view that the Applicants' consultationprogram was effective in identifying the impacts of the Project onAboriginal people.

The Project would involve a relatively brief window of construction,with the vast majority of the facilities being buried. As almost all thelands required for the Project are previously disturbed, are generallyprivately owned, are used primarily for agricultural purposes and areadjacent to an existing pipeline RoW, the Board is of the view thatpotential Project impacts on Aboriginal interests could beappropriately mitigated. The Board is therefore of the view thatimpacts on Aboriginal interests are likely to be minimal.

[13] On the recommendation of the NEB the GlC issued Order in Council Nos. P.C. 2008-856

and P.C. 2008-857, both dated May 8, 2008, approving the issuance of Certificates of Public

Convenience and Necessity authorizing the construction and operation respectively of the Southern

Lights Project and the Alberta Clipper Project. These are the decisions which are the subject of the

Applicants' claims for relief in T-921-08 and in T-925-08.

[14] In 2006 and 2007 the Treaty One First Nations attempted to directly engage the federal

Crown in "a meaningful consultation and accommodation" concerning the Pipeline Projects and

their impact upon their "constitutionally protected Aboriginal and Treaty rights and title" but those

efforts were ignored.

II. Issues

[15] It is.the position of the Treaty One First Nations in these proceedings that the federal Crown

failed to fulfill its legal obligations of consultation and accommodation before granting the

necessary approvals for the construction of the Pipeline Projects in their traditional territory.

Page: 11Although the Treaty One First Nations acknowledge that the corporate Respondents and the NEB

have engaged in consultations in connection with the Pipeline Projects and have accommodated

some of their concerns, those efforts they say, are not a substitute for the larger obligations of the

Crown. Indeed, while the NEB and the corporate Respondents appear to have been quite attentive

to the remediation of Aboriginal construction or project-related concerns, they acknowledge an

inability to resolve outstanding land claims3.

[16] At the root of these proceedings is the issue of the Treaty One First Nations' outstanding

land claims in southern Manitoba. The primary issue before the Court is whether the Pipeline

Projects have a sufficient impact on the interests of the Treaty One First Nations such that a duty to

consult on the part of the Crown was engaged. If a duty to consult was engaged, the Court must

also determine its content and consider whether and to what extent the duty may be fulfilled by the

NEB acting essentially as a surrogate for the Crown.

III. Analysis

Standard of Review

[17] With respect to the issue of the standard of review that applies in these proceedings, I would

adopt the view of my colleague Justice Daniele Tremblay-Lamer in Tzeachten First Nation v.

Canada (Attorney General), 2008 FC 928, 297 D.L.R. (4th) 300 at paras. 23-24:

23 In Ka'a'Gee Tu First Nation v. Canada (Attorney General),2007 FC 763, 315 F.T.R. 178 at paras. 91-93, my colleagueJustice Edmond Blanchard, following the general principlesespoused in Haida Nation v. British Columbia (Minister of Forests),

The NEB Reasons for Decision by which the Keystone Pipeline Project was approved clearly acknowledge thislimitation in the following passage: "It is not within the jurisdiction ofthe Board to deal with land claim matters.Accordingly, to the extent that the evidence provided by Standing Buffalo relates to its asserted land claim rather than theeffects ofthis particular Project on its interests, it is oflimited probative value to the consideration ofthe applicationbefore the Board." The same limitation was noted by the Federal Court of Appeal in Standing Buffalo Dakota FirstNation et at. v. Canada and Enbridge, 2008 PCA 222 at para. 15.

Page: 122004 sce 73, [2004] 3 S.C.R. 511 at paras. 61-63, indicated that aquestion as to the existence and content of the duty to consult andaccommodate is a question of law reviewable on the standard ofcorrectness and further that a question as to whether the Crowndischarged this duty to consult and accommodate is reviewable onthe standard of reasonableness.

24 Accordingly, when it falls to determine whether the duty toconsult is owed and the content of that duty, no deference will beafforded. However, where a determination as to whether that dutywas discharged is required, the analysis will be concerned with "theexistence of justification, transparency and intelligibility within thedecision-making process [and also with] [...] whether the decisionfalls within a range of possible, acceptable outcomes which aredefensible in respect of the facts and law" (Dunsmuir, above, atpara. 47).

Also see: Ahousaht Indian Band v. Canada (Minister of Fisheries and Oceans), 2008 FCA 212,

297 D.L.R. (4th) 722 at paras. 33 and 34.

[18] In the result the question of the existence and content of a Crown duty to consult in this case

will be assessed on the basis of correctness. The question of whether any such duty or duties were

discharged by the Crown will be determined on a standard of reasonableness.

To What Extent Was the Crown on Notice o/the Applicants' Concerns?

[19] The Crown makes the preliminary point that much of the evidence tendered in this

proceeding to establish a foundation for the asserted duty to consult was not placed before the GIC

by the Treaty One First Nations. While that is true, the GIC was made aware and must be taken to

have known of the Treaty One First Nations' primary concern that the Pipeline Projects traversed

land that was at one time within their traditional territory and, as well, that the Treaty One First

Nations have asserted a long-standing claim to additional land in southern Manitoba. In addition,

Page: 13the Crown is always presumed to know the content of its treaties: see Mikisew Cree First Nation v.

Canada (Minister of Canadian Heritage), 2005 SCC 69, [2005] 3 S.c.R. 388 at para. 34.

[20] The record before me establishes very clearly that the Treaty One First Nations diligently

attempted to directly engage the Crown in a dialogue about the impact of the Pipeline Projects on

their unresolved treaty claims. Over several months in 2007 letters were sent from Treaty One First

Nations' Chiefs to the Prime Minister, to the Minister ofIndian Affairs, to other Ministers, and to

the Secretary to the GIC seeking consultation, but their letters were never answered even to the

extent of a simple acknowledgement. The frustration engendered by the Crown's refusal to open a

dialogue with the Treaty One First Nations prior to the commencement of this litigation is reflected

in the following passage from the affidavit of Chief Dennis Meeches of the Long Plain First Nation

Reserve:

38. As Chief, I had been conducting myself under the belief thatthe federal government, on behalf of Her Majesty the Queenin Right of Canada, has a legal duty to consult with my FirstNation before making any decisions related to lands in ourtraditional territory inside the boundaries of Treaty 1. I knowalso the Crown has a Duty to seek workable accommodationsof our concerns and protect our interests, title, and rights.

39. I have no doubt that throughout all this time, the federalgovernment, acting on behalf of the crown, has been aware ofthe existence of my First Nation's rights, title, and interests inthe (sic) our traditional territory. I have brought this to theattention of federal ministers and the Canadian public manytimes over the years, and particularly in relation to theproposed construction of pipelines through our Territory.

40. The events in this process regarding consultation on pipelineconstruction have added to my serious concerns about theFederal Government's respect for me, our First Nation, mypeople, and our Treaty. We raised concerns about thepipelines crossing our territory and our rights, title, andinterest being affected. We asked to be consulted about thesematters, we told the government we would suffer seriousadverse effects if the pipelines were constructed without

Page: 14accommodating our interests and rights. We warned that ifthe pipelines proceeded without our being consulted, wewould have no alternative except to appeal to the Courts forrelief, and that this could cause unfortunate delays with thepotential to cause damages for the companies involved andthe Canadian economy in general. Nonetheless the federalMinisters have ignored us to this day, and with respect to theKeystone pipeline, made their decision without anyconsultation whatsoever. I feel frustrated, angry, saddenedand disappointed about being ignored and treated this way.

To the extent noted above the GIC was well aware of the Treaty One First Nations' broad concerns

about the potential impact of the Pipeline Projects. From the NEB Reasons for Decision issued in

connection with the Pipeline Projects, the GIC was also aware of the specific concerns of the

Aboriginal peoples who were either consulted or who made representations at the NEB hearings.

Against this evidentiary background, it is disingenuous for the Crown to assert that it was unaware

of the concerns raised by the Treaty One First Nations in these proceedings. The evidence the

Crown objects to adds nothing of significance to what it already knew or would be taken to have

understood.

Duty to Consult - Legal Principles

[21] For the sake of argument, I am prepared to accept that an approval given by the GIC under

s. 52 of the National Energy BoardAct, R.S.C. 1985, c. N-7 (NEB Act) may, in an appropriate

context, be open to judicial review in accordance with the test established in Thorne's Hardware

Ltd. v. Canada, [1983] 1 S.C.R. 106, [1983] S.C.J. No.1 0 on the basis of a failure to consult. It is

enough for present purposes to say that where a duty to consult arises in connection with projects

such as these it must be fulfilled at some point before the GIC has given its final approval for the

issuance of a Certificate of Public Convenience and Necessity by the NEB.

Page: 15[22] The Crown's duties to consult and accommodate were thoroughly discussed in Haida

Nation v. British Columbia (Minister of Forests), 2004 SCC 73, [2004] 3 S.C.R. 511 and in Taku

River Tlingit First Nation v. British Columbia, 2004 SCC 74, [2004] 3 S.C.R. 550. More recently in

Ka'a'Gee Tu First Nation v. Canada (Attorney General), 2007 FC 763, [2007] F.C,J. No. 1006,

Justice Edmond Blanchard provided the following helpful summary of those and other relevant

authorities:

94 The duty to consult was first held to arise from the fiduciaryduty owed by the Crown toward Aboriginal peoples (see Guerin v.Canada, [1984] 2 S.C.R. 335,13 D.L.R. (4th) 321 andR. v.Sparrow, [1990] 1 S.C.R. 1075). In more recent cases, the SupremeCourt has held that the duty to consult and accommodate is foundedupon the honour of the Crown, which requires that the Crown, actinghonourably, participate in processes of negotiation with the view toeffect reconciliation between the Crown and the Aboriginal peopleswith respect to the interests at stake (see Haida, supra; Taku, supra,and Mikisew Cree First Nation v. Canada (Minister of CanadianHeritage), 2005 SCC 69, [2005] S.C.J. No. 71).

95 In Haida, Chief Justice McLachlin sets out the circumstanceswhich give rise to the duty to consult. At paragraph 35 of the reasonsfor decision, she wrote:

But, when precisely does a duty to consult arise? Thefoundation of the duty in the Crown's honour and thegoal of reconciliation suggest that the duty ariseswhen the Crown has knowledge, real or constructive,ofthe potential existence of the Aboriginal right ortitle and contemplates conduct that might adverselyaffect it: see Halfway River First Nation v. BritishColumbia (Minister of Forests), [1997] 4 C.N.L.R. 45(B.C.S.C), at p. 71, per Dorgan 1.

96 F or the duty to arise there must, first, be either an existing orpotentially existing Aboriginal right or title that might be adverselyaffected by the Crown's contemplated conduct. Second, the Crownmust have knowledge (either subjective or objective) ofthispotentially existing right or title and that the contemplated conductmight adversely affect those rights. While the facts in Haida did notconcern treaties, there is nothing in that decision which wouldindicate that the same principles would not find application in Treatycases. Indeed in Mikisew, the Supreme Court essentially decided thatthe Haida principles apply to Treaties.

97 While knowledge of a credible but unproven claim suffices totrigger a duty to consult and, if appropriate, accommodate, thecontent of the duty varies with the circumstances. Precisely what isrequired of the government may vary with the strength of the claimand the impact ofthe contemplated government conduct on the rightsat issue. However, at a minimum, it must be consistent with thehonour of the Crown. At paragraph 37 of Haida, the Chief Justicewrote:

...Precisely what duties arise in different situationswill be defined as the case law in this emerging areadevelops. In general terms, however, it may beasserted that the scope of the duty is proportionate toa preliminary assessment of the strength of the casesupporting the existence of the right or title, and tothe seriousness of the potentially adverse effect uponthe right or title claimed. Hence, unlike the questionof whether there is or is not a duty to consult, whichattracts a yes or no answer, the question of what thisduty consists, is inherently variable. Both the strengthof the right asserted and the seriousness of thepotential impact on this right are the factors used todetermine the content of the duty to consult.

98 At paragraphs 43 to 45, the Chief Justice invokes the concept ofa spectrum to assist in determining the kind of duties that may arisein different situations.

Against this background, I turn to the kind of dutiesthat may arise in different situations. In this respect,the concept of a spectrum may be helpful, not tosuggest watertight legal compartments but rather toindicate what the honour of the Crown may require inparticular circumstances. At one end ofthe spectrumlie cases where the claim to title is weak, theAboriginal right limited, or the potential forinfringement minor. In such cases, the only duty onthe Crown may be to give notice, discloseinformation, and discuss any issues raised in responseto the notice. '''[C]onsultation' in its least technicaldefinition is talking together for mutualunderstanding": T. Isaac and A. Knox, "The Crown'sDuty to Consult Aboriginal People" (2003), 41 Alta.L. Rev. 49, at p. 61.

At the other end of the spectrum lie cases where astrong prima facie case for the claim is established,

Page: 16

Page: 17the right and potential infringement is of highsignificance to the Aboriginal peoples, and the risk ofnon-compensable damage is high. In such cases deepconsultation, aimed at finding a satisfactory interimsolution, may be required. While preciserequirements will vary with the circumstances, theconsultation required at this stage may entail theopportunity to make submissions for consideration,formal participation in the decision- making process,and provision of written reasons to show thatAboriginal concerns were considered and to revealthe impact they had on the decision. This list isneither exhaustive, nor mandatory for every case. Thegovernment may wish to adopt dispute resolutionprocedures like mediation or administrative regimeswith impartial decision-makers in complex ordifficult cases.

Between these two extremes of the spectrum justdescribed, will lie other situations. Every case mustbe approached individually. Each must also beapproached flexibly, since the level of consultationrequired may change as the process goes on and newinformation comes to light. The controlling questionin all situations is what is required to maintain thehonour of the Crown and to effect reconciliationbetween the Crown and the Aboriginal peoples withrespect to the interests at stake. Pending settlement,the Crown is bound by its honour to balance societaland Aboriginal interests in making decisions that mayaffect Aboriginal claims. The Crown may be requiredto make decisions in the face of disagreement as tothe adequacy of its response to Aboriginal concerns.Balance and compromise will then be necessary.

99 The kind of duty and level of consultation will therefore vary indifferent circumstances.

[23] These are the general principles by which the issues raised in these proceeding must be

determined. Of particular importance in this case is the principle that the content of the duty to

consult with First Nations is proportionate to both the potential strength of the claim or right

asserted and the anticipated impact of a development or project on those asserted interests.

Page: 18

Was a Duty to Consult Engaged and, if so, Was that Obligation Fulfilled?

[24] I do not intend nor do I need to determine the validity of the Treaty One First Nations'

outstanding treaty claims and on a historical and evidentiary record as limited as this one, it would

be inappropriate to do so: see Ka'a/Gee, above, at para. 107. Suffice it to say that I do not agree

with Enbridge when it states that "Treaty One is clear on its terms that the Aboriginal parties cede

all lands except those specifically set aside for reserves". The exercise of treaty interpretation is not

constrained by a strict literal approach to the text or by rigid rules of construction. What the Court

must look for is the natural common understanding of the parties at the time the treaty was entered

into which may well be informed by evidence extraneous to the text: see Mikisew, above, at paras.

28-32. From the evidence before me there could well have been an understanding or expectation at

the time of signing Treaty One that the First Nations' parties would continue to enjoy full access to

unallocated land beyond the confines of the reserves, that additional reserve lands would be later

made available and that further large scale immigrant encroachment on those lands was not

contemplated. I am proceeding on the assumption, therefore, that the Applicants' claim to

additional treaty lands and the right to continued traditional use of those lands within Manitoba is

credible. The more significant issue presented by this case concerns the impact of the Pipeline

Projects on the interests and claims asserted by the Treaty One First Nations and the extent to which

those concerns were adequately addressed through the NEB regulatory processes.

[25] In determining whether and to what extent the Crown has a duty to consult with Aboriginal

peoples about projects or transactions that may affect their interests, the Crown may fairly consider

the opportunities for Aboriginal consultation that are available within the existing processes for

regulatory or environmental review: Hupacasath First Nation v. British Columbia, 2005 BCSC

Page: 191712,51 B.C.L.R. (4th) 133 at para. 272. Those review processes may be sufficient to address

Aboriginal concerns, subject always to the Crown's overriding duty to consider their adequacy in

any particular situation. This is not a delegation of the Crown's duty to consult but only one means

by which the Crown may be satisfied that Aboriginal concerns have been heard and, where

appropriate, accommodated: see Haida, above, at para. 53 and Taku, above, at para. 40.

[26] The NEB process appears well-suited to address mitigation, avoidance and environmental

issues that are site or project specific. The record before me establishes that the specific project

concerns of the Aboriginal groups who were consulted by the corporate Respondents or who made

representations to the NEB (including, to some extent, the Treaty One First Nations) were well-

received and largely resolved.

[27] These regulatory processes appear not to be designed, however, to address the larger issue of

unresolved land claims. As already noted in these reasons, the NEB and the corporate Respondents

have acknowledged that obvious limitation.

[28] From the perspective of the Treaty One First Nations, the remediation of their project

specific concerns may not answer the problem presented by the incremental encroachment of

development upon lands which they claim or which they have enjoyed for traditional purposes.

While the environmental footprint of anyone project might appear quite modest, the eventual

cumulative impact of development on the rights and traditional interests of Aboriginal peoples can

be quite profound.

Page: 20[29] It follows from this that the NEB process may not be a substitute for the Crown's duty to

consult where a project under review directly affects an area of un allocated land which is the subject

of a land claim or which is being used by Aboriginal peoples for traditional purposes.

[30] The fundamental problem with the claims advanced in these proceedings by the Treaty One

First Nations is that the evidence to support them is expressed in generalities. Except for the issue

of their unresolved land claims in southern Manitoba that evidence fails to identify any interference

with a specific or tangible interest that was not capable of being resolved within the regulatory

process. Even to the extent that cultural, environmental and traditional land use issues were raised

in the evidence, they were not linked specifically to the projects themselves. This is not surprising

because the evidence was clear that the Pipeline Projects were constructed on land that had been

previously exploited and which was almost all held under private ownership. For example, the

evidence is clear that the Alberta Clipper and Southern Lights projects will have negligible, if any,

impact upon the Treaty One First Nations outstanding land claims in southern Manitoba. The

Southern Lights Pipeline uses the same corridor as the Alberta Clipper Pipeline. Both are

constructed within or contiguous to existing pipeline rights-of-way which run almost entirely over

private and previously disturbed land. With the exception of 700 meters of pipeline corridor

crossing the Swan Lake Reserve (with that Band's consent) the Aboriginal representatives consulted

by Enbridge indicated that the affected lands were not the subject of any land claim or the site of

any traditional activity4.

[31] Although Enbridge and the NEB did receive representations from Aboriginal leaders about

specific impacts upon known and unidentified archaeological, sacred, historical, and paleontological

4 See affidavit ofLyJe Neis sworn September 19,2008 at paras. 36-37.

Page: 21sites, the record indicates that those concerns were considered and accommodated including, in one

instance, the relocation of the right-of-way to protect a burial ground. The level of engagement

between Enbridge and Aboriginal communities and Band Councils (including the Treaty One First

Nations) was, in fact, extensive and quite thorough. The NEB findings in relation to the Aboriginal

concerns raised before it are reasonably supported by the record before me and the Treaty One First

Nations have not argued otherwise except to say that they do not necessarily agree.

[32] The NEB findings concerning the Keystone Pipeline were to the same general effect and are

reasonably supported by the evidence in that record. In fact, the Treaty One First Nations do not

dispute the NEB findings that the land affected by the Keystone Pipeline was almost all in private

ownership and previously utilized for pipeline, agricultural and ranching purposes5. Once buried it

is reasonable to conclude that this pipeline would have a minimal impact on the surrounding

environment.

[33] The inability of the Treaty One First Nations to make a case for a substantial interference

with a treaty or a traditional land use claim around these projects becomes evident from the

affidavits they submitted. The affidavit of Chief Terrance Nelson offers one example of this at

paras. 29-34:

29. We are located near the proposed pipeline, maybe 18 milesaway. Our traditional community are very concerned thattheir culture, which involves the use of traditional herbs andmedicines, will be affected by the pipeline. They are worriedabout spiritual aspects of having a pipeline running throughthe ground.

5 Paragraph 4 of the Applicants' Memorandum of Fact and Law in T-225-08 states: "While the lands required for theproject are generally 'previously disturbed' agricultural lands and generally privately owned, the NEB determined thatthe project 'has the potential to adversely affect several components ofthe environment, as detailed in the ESR"'.An almost identical passage is set out at para. 12 ofthe Applicants' Memorandum of Fact and Law in T-92l-08.

Page: 2230. The rivers are already quite polluted, and our people are

concerned about further pollution ifthere would be a leak ofthe pipeline that would spread through the water ways in thislow and flat area. There are tributaries of the Red Riverwhich flow south and then flow back north into LakeWinnipeg.

31. Our people do considerable hunting. There is a concern thatthe pipelines could affect animal migration, or that animalswould abandon the area completely.

32. Our people have been in this are for centuries. There arenumerous burial sites in the area. Our elders also know ofsacred sites. Our people engage in many traditional activitiesthroughout the year. They gather many herbs, and manyplants are becoming very scarce and are at risk

33. Our First Nation has no knowledge that at any time anyTreaty One First Nation, including our own First Nation, hassurrendered our Treaty, Treaty-protected inherent rights ortitle to our traditional territory within the boundaries ofTreaty 1. Our only agreement was to share lands for"immigration and settlement".

34. As Chief, I had been conducting myself under the belief thatthe federal government, on behalf of Her Majesty the Queenin Right of Canada, has a legal duty to consult with my FirstNation before making any decisions related to lands in ourtraditional territory inside the boundaries of Treaty 1. I knowalso the federal government, on behalf of the Crown, has aDuty to seek workable accommodations of our concerns andprotect our interests, title, and rights.

[34] I do not question that the above statements reflect a profoundly held concern not only of

Chief Nelson but of others in the Manitoba Aboriginal community. The problem is that to establish

a procedural breach around projects such as these there must be some evidence presented which

establishes both an adverse impact on a credible claim to land or to Aboriginal rights accompanied

by a failure to adequately consult. The Treaty One First Nations are simply not correct when they

assert in their evidence that a duty to consult is engaged whenever the Government of Canada

Page: 23makes "any decision related to lands in our traditional territory inside the boundaries of Treaty 1,,6.

There is no at-large duty to consult that is triggered solely by the development of land for public

purposes. There must be some unresolved non-negligible impact arising from such a development

to engage the Crown's duty to consult.

[35] Moreover, in a number of respects, the arguments advanced by Treaty One First Nations for

a duty to consult outside of the NEB process exceeded the scope of the evidence they adduced in

support.

[36] For example, the Treaty One First Nations assert that, had the Crown engaged in a separate

consultation, it would have been told that the Pipeline Projects would disrupt "their ongoing

harvesting activities" and that they were also concerned about "environmental pollution". The

Treaty One First Nations also claim that they needed to be consulted about previously unidentified

sacred or cultural sites which might have been threatened by the Pipeline Projects .. At the same time

they acknowledge that these were matters that were brought before the NEB or raised with the

corporate Respondents and largely accommodated or mitigated. The advantage of a separate

consultation with the Crown about such matters is not explained beyond making the point that

where mitigation measures are adequate but unilaterally imposed there must still be a consultation

to meet the goal of reconciliation. This argument effectively ignores the fact that the mitigatory

measures adopted here by the NEB were not unilaterally created but were the product of an

extensive dialogue with interested Aboriginal communities including some of the Treaty One First

Nations.

6 See affidavit of Chief Francine Meeches at para. 36.

Page: 24[37] The Treaty One First Nations maintain that there must always be an overarching

consultation regardless of the validity of the mitigation measures that emerge from a relevant

regulatory revi,ew. This duty is said to exist notwithstanding the fact that Aboriginal communities

have been given an unfettered opportunity to be heard. This assertion seems to me to represent an

impoverished view of the consultation obligation because it would involve a repetitive and

essentially pointless exercise. Except to the extent that Aboriginal concerns c~nnot be dealt with,

the appropriate place to deal with project-related matters is before the NEB and not in a collateral

discussion with either the GIC or some arguably relevant Ministry.

[38] The authorities relied upon by the Treaty One First Nations to support their separate

argument for a duty to consult with respect to their land claims are distinguishable because each of

those cases involved fresh impacts that were, to use the words of Justice Ian Binnie in Mikisew,

above, "clear, established and demonstrably adverse" to the rights in issue. That cannot be fairly

said of the relationship between the Pipeline Projects and the Treaty One First Nations' land claims

in this case where no meaningful linkage is apparent on the evidence before me.

[39] This is not a case like Mikisew where there was compelling evidence of injurious affection

to the interests of local hunters and trappers notwithstanding the limited footprint of the proposed

winter road. This is made clear at para. 55 of the decision:

55 The Crown has a treaty right to "take up" surrendered lands forregional transportation purposes, but the Crown is nevertheless underan obligation to inform itself of the impact its project will have on theexercise by' the Mikisew of their hunting and trapping rights, and tocommunicate its findings to the Mikisew. The Crown must thenattempt to deal with the Mikisew "in good faith, and with theintention of substantially addressing" Mikisew concerns(Delgamuukw, at para. 168). This does not mean that whenever agovernment proposes to do anything in the Treaty 8 surrenderedlands it must consult with all signatory First Nations, no matter how

Page: 25remote or unsubstantial the impact. The duty to consult is, as statedin Haida Nation, triggered at a low threshold, but adverse impact is amatter of degree, as is the extent ofthe Crown's duty. Here theimpacts were clear, established and demonstrably adverse to thecontinued exercise of the Mikisew hunting and trapping rights overthe lands in question.

Even though the project considered in Mikisew involved direct and immediate interference with

identified Aboriginal interests, the Court said that the Crown's consultation duty was at the lower

end of the spectrum requiring notice to the Mikisew and the careful consideration of their concerns

with a view to minimizing adverse impacts.

[40] The development that was of concern in Taku, above, similarly involved the construction of

an access road. Although the road was said to represent a small intrusion relative to the size of the

outstanding land claim it would nonetheless "pass through an area critical to the [Taku River First

Nation's] domestic economy". This was held sufficient to trigger a duty to consult that was

significantly deeper than minimum requirement. Because the environmental assessment for the

road mandated consultation with affected Aboriginal peoples and because the Taku River First

Nation was consulted throughout the certification process, the Crown's duty was found to have been

met.

[41] In Ka'a 'Gee, above, Justice Blanchard dealt with an application for judicial review from a

decision by the federal Crown to approve an oil and gas development in the Northwest Territories.

That project was extensive and involved the drilling of up to 50 wells, the excavation of733

kilometers of seismic lines, the construction of temporary camps, the use of water from area lakes

and the disposal of drill waste. Justice Blanchard found that the project would have significant and

lasting impact on an area over which the affected First Nation asserted Aboriginal title and where

Page: 26they carried out harvesting activity. This, he said, triggered a duty to consult that was higher than

the minimum described in Mikisew. Up to a point, Justice Blanchard was satisfied that the

comprehensive regulatory process was sufficient to fulfill the Crown's duty to consult. It was only

when the Crown unilaterally modified the process and made fundamental changes to important

recommendations that had come out of the earlier consultations that the duty to consult was found to

have been breached.

[42] I am satisfied that the process of consultation and accommodation employed by the NEB

was sufficient to address the specific concerns of Aboriginal communities potentially affected by

the Pipeline Projects including the Treaty One First Nations. The fact that the Treaty One First

Nations may not have availed themselves fully of the opportunity to be heard before the NEB does

notjustify the demand for a separate or discrete consultation with the Crown. To the extent that

regulatory procedures are readily accessible to Aboriginal communities to address their concerns

about development projects like these, there is a responsibility to use them. First Nations cannot

complain about a failure by the Crown to consult where they have failed to avail themselves of

reasonable avenues for seeking relief. That is so because the consultation process is reciprocal and

cannot be frustrated by the refusal of either party to meet or participate: see Ahousaht v. Canada,

2008 FCA 212, [2008] F.C.J. No. 946 at paras. 52-53. This presupposes, of course, that available

regulatory processes are accessible, adequate and provide First Nations an opportunity to participate

in a meaningful way.

[43] It cannot be seriously disputed that the Pipeline Projects have been built on rights-of-way

that are not legally or practically available for the settlement of any outstanding land claims in

southern Manitoba. Even the Treaty One First Nations acknowledge that the additional lands they

Page: 27claim were intended to be taken from those lands not already taken up by settlement and

immigration? In the result, if the Crown had any duty to consult with the Treaty One First Nations

with respect to the impact ofthe Pipeline Projects on their umesolved land claims, it was at the

extreme low end ofthe spectrum involving a peripheral claim attracting no more than an obligation

to give notice: see Haida Nation, above, at para. 37. Here the relationship between the land claims

and the Pipeline Projects is simply too remote to support anything more: also see Ahousaht v.

Canada, 2007 FC 567, [2007] F.C.J. No. 827 at para. 32, affd 2008 FCA 212, [2008] F.C.J. No

946 at para. 37.

[44] I have no doubt, however, that had any of the Pipeline Projects crossed or significantly

impacted areas of unallocated Crown land which formed a part of an outstanding land claim a much

deeper duty to consult would have been triggered. Because this is also the type of issue that the

NEB process is not designed to address, the Crown would almost certainly have had an independent

obligation to consult in such a context.

IV. Conclusion

[45] The consultation duty owed by the Crown to the Treaty One First Nations has been met.

This is not to say that the Treaty One First Nations do not have a credible land claim but only that

the impact these Pipeline Projects have upon those claims is negligible. The Pipeline Projects have

been built almost completely over existing rights-of-way and on privately owned and actively

utilized land not now nor likely in the future to be available for land claims settlement. The

pipelines in question are also largely below ground and are reasonably unobtrusive. There is no

evidence before me or, more importantly that was before the NEB or the GIC, to prove that the

7 See para. 52 ofthe Applicants' Memorandum of Fact and Law in T-225-08.

Page: 28Pipeline Projects would be likely to interfere with traditional Aboriginal land use or would

represent a meaningful interference with the future settlement of outstanding land claims in southern

Manitoba. To the extent that any duty to consult was engaged, it was fulfilled by the notices that

were provided to the Treaty One First Nations and to other Aboriginal communities in the context

of the NEB proceedings and by the opportunities that were afforded there for consultation and

accommodation.

[46] These applications are, accordingly, dismissed. If any of the Respondents are seeking costs

against the Applicants, I will receive further submissions in that regard. Any such submissions shall

not exceed 5 pages in length and must be submitted within 7 days of this Judgment. I will then

allow the Applicants an additional! 0 days to respond with their own submissions which

individually shall not exceed 5 pages in length.

Page: 29

JUDGMENT

TillS COURT ADJUDGES that these applications are dismissed with the matter of costs

to be reserved pending further submissions, if any, from the parties.

" R. L. Barnes"Judge

FEDERAL COURT

SOLICITORS OF RECORD

DOCKET:

STYLE OF CAUSE:

PLACE OF HEARING:

DATE OF HEARING:

REASONS FOR JUDGMENTAND JUDGMENT BY:

DATED:

APPEARANCES:

T-225-08, T-921-08 and T-925-08

Brokenhead Ojibway Nation, et al.v.AGC, et al.

Winnipeg, ME

September 2 to 4, 2008 and January 16,2009

Mr. Justice Barnes

May 12,2009

Peter W. Hutchins(514) 849-2403 / Fax: (514) 849-4907Jameela Jeeroburkhan(514) 849-2403 ext. 233 /Fax: (514) 849-4907David Kalmakoff(514) 849-2403 / Fax: (514) 849-4907Wina SiouiPh: 778.327.4744 Fx: 778.327.4757

Harry Glinter(204) 983-4589Dayna Anderson(204) 984-6961 /Fax: (204) 984-6488

Maria Yuzda(403) 299-3643 / Fax: (403) 292-5503

FOR THE APPLICANTS

FOR THE RESPONDENT-THE ATTORNEY GENERAL OF CANADA

FOR THE RESPONDENT-THE NATIONAL ENERGY BOARD

Laurent Fortier(514) 397-3139/ Fax: (514) 397-3411

Steven MasonPh: 416.362.1812 Fx: 416.868.0673Harry UnderwoodPh: 416.362.1812 Fx: 416.868.0673

Lewis L. Manning(403) 269-6900 / Fax: (403) 269-9494


FOR THE RESPONDENT-TRANSCANADA KEYSTONE

PIPELINE GP LTD.

FOR THE RESPONDENT-ENBRIDGE PIPELINES INC.

FOR THE INTERVENOR

Page: 2

Hutchins, Caron & Associes FOR THE APPLICANTS485 rue McGill, Suite 700Montreal, PQ, my 2H4

John H. Sims, Q.C. FOR THE RESPONDENT-Deputy Attorney General of Canada THE ATTORNEY GENERAL OF CANADA

National Energy Board FOR THE RESPONDENT-4447 Ave. S.W. THE NATIONAL ENERGY BOARDCalgary, AB, T2P OX8

Stikeman Elliott LLP FOR THE RESPONDENT-Bureau 4000 TRANSCANADA KEYSTONE1155 boul. Rene-Levesque o. PIPELINE GP LTD.Montreal, PQ, H3B 3V2

McCarthy Tetrault LLP FOR THE RESPONDENT-Box 48, 5300-66 Wellington St. W. ENBRIDGE PIPELINES INC.Toronto Dominion Bank TowerToronto, ON, M5K 1E6

Lawson Lundell LLP FOR THE INTERVENOR3700 Bow Valley Square 22055 Avenue S.W.Calgary, AB, T2P 2V7 '

In the Court of Appeal of Alberta

Citation: Tsuu T'ina Nation v. Alberta (Environment), 2010 ABCA 137

Date: 20100428Docket: 0801-0272-AC

Registry: Calgary

Between:

The Tsuu T'ina Nation and Chief Sandford Big Plume on behalf of himself and all othermembers of the Tsuu T'ina Nation

Appellant(Applicant)

- and-

Her Majesty the Queen In Right of Alberta, as Represented by the Minister ofEnvironment, the Lieutenant Governor In Council and the Attorney General of Alberta

Respondents(Respondents)

And Between:

The Samson Cree Nation and Chief Victor Buffalo, on behalf of himself and all othermembers of the Samson Cree Nation

Appellant(Applicant)

- and-

Her Majesty the Queen In Right of Alberta, as Represented by the Minister ofEnvironment, the Lieutenant Governor In Council and the Attorney General of Alberta

Respondents(Respondents)

Corrected judgment: A corrigendum was issued on May 3, 2010; thecorrections have been made to the text and the corrigendum is appended to thisjudgment.

The Court:The Honourable Madam Justice Ellen PicardThe Honourable Mr. Justice Clifton O'Brien

The Honourable Madam Justice Patricia Rowbotham

Reasons for Judgment Reserved of The Honourable Mr. Justice O'Brien

Concurred in by The Honourable Madam Justice PicardConcurred in by The Honourable Madam Justice Rowbotham

Appeal from the Judgment byThe Honourable Mr. Justice S. 1. LoVecchio

Dated the 4th day of September, 2008(2008 ABQB 547, Docket: 0701-02169; 0701-02170)

TABLE OF CONTENTS

[Paragraph]

I. INTRODUCTION 1

II. FACTS AND LEGISLATNE FRAMEWORK 4

III. PROCEEDINGS 13

N. JUDGMENT ON THE JUDICIAL REVIEW APPLICATIONS 19

V. GROUNDS OF APPEAL. 25

VI. STANDARD OF REVIEW 27

VII. ANALYSIS 30A. General Nature of the Duty to Consult. 30B. Did the Duty to Consult Arise in this Case? ; 41

1. Was the Crown's action Legislative and therefore not reviewable? 482. The Crown's knowledge of the potential existence of aboriginal right or title

.......................................................... 58(a) The Tsuu T'ina 59(b) The Samson Cree 64

3. Potential adverse impacts 674. Conclusion as to whether the duty to consult arose 70

C. What was the Scope and Level of the Duty to Consult? 711. Seriousness of the claims 73

(a) The Tsuu T'ina 73(b) The Samson Cree 77(c) Conclusion on seriousness of the claims 79

2. Potential adverse impacts of the SSRB Plan 803. Conclusion on the scope and level of the duty to consult. 95

D. Was the Duty to Consult Satisfied? 961. The Tsuu T'ina 982. The Samson Cree 132

E. Declaratory Relief. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140

VIII. CONCLUSION 142

Reasons for Judgment Reserved ofThe Honourable Mr. Justice O'Brien

I. INTRODUCTION[1] The legal duty of government to consult with First Nations and, if appropriate, toaccommodate their concerns with respect to actions affecting them, is now well established. The lawin this regard, however, is of relative recent evolution and is not yet fully developed in all aspectsof its application.

[2] The appellants, the Tsuu rina Nation, and Chief Sandford Big Plume on behalf of himselfand all other members of the Tsuu T'ina Nation (sometimes collectively referred to as the TsuuT'ina), and the Samson Cree Nation and Chief Victor Buffalo on behalf of himself and all othermembers of the Samson Cree Nation (sometimes collectively referred to as the Samson Cree),submit they were not consulted and accommodated by the Province of Alberta with respect to thedevelopment of the Water Management Plan for the South Saskatchewan River Basin, approved bythe Lieutenant Governor in Council on August 30, 2006.

[3] This appeal raises issues of whether the duty to consult and accommodate arose in thecircumstances, and, if so, what the scope of the duty was and whether it was satisfied. For thereasons that follow, I have concluded that the appeal must be dismissed. The Tsuu T'ina and SamsonCree have each demonstrated the Crown's knowledge of the existence of proven rights and potentialrights possessed and claimed by them that could be adversely affected by the government plan.However, the scope and level of the duty was towards the low end of the scale, having regard to thenature of the claims and the potential adverse impacts of the government action. The consultationthat was carried out was adequate to discharge the duty in the circumstances of this case.

II. FACTS AND LEGISLATIVE FRAMEWORK[4] The background facts are set out at length in the Reasons for Judgment of the chambersjudge, 2008 ABQB 547, and are summarized for purposes herein.

[5] Rapid growth in population and economic development in southern Alberta have resultedin increased water consumption. While there has been exponential growth in demand, the watersupply is relatively fixed. Planning is essential both to meet projected needs and to preserve theaquatic environment.

[6] For more than a century, Alberta has regulated water usage by means of a system oflicencing. Priority is based on the principle of first in time, first in right. The greatest volume ofusage has been granted under licences for irrigation. Significant volumes are also required formunicipal, industrial, and other agricultural purposes.

[7] .The South Saskatchewan River Basin (SSRB) comprises the Red Deer, Bow, Oldman andSouth Saskatchewan River Sub-basins within southern Alberta. In area, the SSRB covers about 25

Page: 2

per cent of Alberta's total area. The cities of Calgary, Red Deer, Lethbridge and Medicine Hat arewithin the SSRB. Pursuant to an interprovincial Master Agreement on Apportionment, at least 50per cent of the total natural discharge of the SSRB must be available to Saskatchewan.

[8] The Water Act, R.S.A. 2000, c-3 (the Act) governs the conservation, use and allocation ofwater in Alberta. Section 7 of the Act states that the Minister of the Environment must establish aframework for water management planning by December 31,2001. The Minister complied with thisrequirement. The Framework for Water Management Planning contemplates that public consultationshould be an essential element of future planning.

[9] Section 9 oftheAct allows the Minister of Environment to require that a water managementplan be developed by a Director or another person. The Minister asked a Director to develop sucha plan for the SSRB. The Director was required to engage in such public consultation as the Ministerconsidered to be appropriate, in accordance with subsection 9(2)(f) of the Act.

[10] The water management plan for the SSRB was developed in two phases. The first phase,which dealt, amongst other things, with the transfers of water allocations, was approved in June2002, and constituted an approved Water Management Plan. The second phase, dealing largely withwater conservation objectives, effectively amended the earlier approved plan and was approved inAugust 2006, and thereupon constituted the approved Water Management Plan for the SSRB (thePlan).

[11] Water conservation objectives (WCO) are defined bytheActto mean the amount and qualityof water established by the Director to be necessary, amongst other things, for the protection of anatural water body or its aquatic environment, and for the management of fish and wildlife. A WCOmay include water necessary for the rate of flow of water, or water level requirements (s.l (hhh)).

[12] The contacts and dealings between Alberta Environment - the Department of governmentresponsible for the Plan - and the appellant First Nations relative to the Plan are outlined in the bodyof this judgment.

III. PROCEEDINGS[13] The appellant First Nations each brought applications for judicial review, by separateoriginating notices issued on February 27, 2007. The applications were heard and dealt withconcurrently by a chambers judge. The applications sought Declarations that Alberta had aconstitutional duty to consult with and accommodate the First Nations' existing and claimed Treatyand Aboriginal rights; that Alberta had failed to discharge such duty; and for an order setting asidethe Order in Council approving the Plan.

[14] The Tsuu T'ina Nation signed Treaty No.7 in 1877, and its reserve lands are located withinthe SSRB. The Tsuu T'ina exercise and claim Treaty and Aboriginal rights on its reserve andthroughout their traditional territory, which is largely located within the SSRB.

Page: 3

[15] The proceedings giving rise to this appeal are not vehicles for determining the appellants'water rights. The nature and extent of the Treaty and Aboriginal rights of the Tsuu T'ina, at leastas they pertain to water rights and water management, are the subject of separate proceedingscommenced by Statement of Claim issued on September 7,2007. In those proceedings, the TsuuT'ina, as plaintiffs, claim against Alberta the following, amongst other things:

1. A declaration that the Plaintiffs have a Treaty water right to appropriate waterfrom the Elbow River, Fish Creek and all other water courses and all sources ofground water, within, adjacent to, and in the vicinity ofthe Reserve in quantities thatare sufficient to meet the Plaintiffs' reasonable economic, residential, governmental,recreational and cultural needs, both now and in the future.

2. A determination ... of the amount of water the Tsuu T'ina Nation is entitledpursuant to its Treaty water rights.

3. A declaration that the Plaintiffs have a Treaty water right to sufficient quantitiesand quality of water in the water courses and water bodies ofthe Treaty No.7 regionto sustain their Treaty rights to hunt, fish and trap.

4. A declaration that the Plaintiffs have a property interest in all water resources andthe beds and foreshores of the water courses and water bodies within and adjacentto the boundaries of the Reserve.

5. A declaration that the Treaty is an "agreement or undertaking" within themeaning of ss. 5 and 6 of the North-west Irrigation Act, 1894, and all subsequentamendments thereto.

6. A declaration that the Plaintiffs' Treaty water rights have priority over allstatutory grants, permits and licences granted under the North-west Irrigation Act,the Water Act and all predecessor legislation.

7. A declaration that the Plaintiff's [sic] Treaty water rights and property rights andinterests in the beds and foreshores of the water courses and all water resourceswithin and adjacent to the Reserve were not affected by the transfer of Crown landsin 1930 as these rights and interests constitute an "interest other than of the Crown"as contemplated in s.l of Schedule (2) of the Constitution Act, 1930.

8. A declaration that the Water Act and all predecessor iegislation enacted by theProvince of Alberta since 1930 do not apply to all water resources within andadjacent to the boundaries ofthe Plaintiff's Reserve in accordance with the doctrineof interjurisdictional immunity.

Page: 4

9. A declaration that the Water Act, and all subsequent regulations, orders andpolicies enacted pursuant to the Water Act, do not apply to the Plaintiffs and thePlaintiffs' Reserve because the Crown in Right of Alberta failed to satisfy itsconstitutional duty to consult with and accommodate the Plaintiffs' Treaty rights,including but not limited to the Plaintiffs Treaty water rights, prior to enacting theWaterAct and all subsequent regulations, orders and policies enacted pursuant to theWater Act.

10. A declaration that the Plaintiffs possesses [sic] a Treaty, Aboriginal and inherentright of self-government in relation to the use, allocation and management of allwater resources, water courses and water bodies within and adjacent to theboundaries of the Reserve, including, at least, the authority to permit or prohibit theuse of water for commercial, industrial, agricultural, recreational, cultural,governmental and domestic purposes on the Reserve.

11. A declaration that the Defendant's assertion that the Water Act and allpredecessor legislation enacted by the Province of Alberta since 1930 constitutes anunjustified infringement of the Plaintiff s Treaty water rights and Treaty, Aboriginaland inherent right of self-government in relation to the use, allocation andmanagement of all water resources, water courses and water bodies within andadjacent to the boundaries of the Reserve.

12. A declaration that the Plaintiffs possess Aboriginal rights to water.

[16] The Samson Cree Nation signed Treaty No.6 in 1876, and its reserve lands lie approximately50 kilometres north of the SSRB. The Samson Cree, likewise, claim and exercise Treaty andAboriginal rights on its reserve and throughout its traditional territory. It alleges that its traditionalterritory includes the Red Deer River Sub-basin.

[17] The Samson Cree have also advanced a separate action against Alberta, with respect to waterrights and water management. Its Statement of Claim was issued on June 13,2007 and, for the mostpart, mirrors the.claims advanced by the Tsuu T'ina. However, it is relevant to quote the first claimmade by the Samson Cree in their action:

1. A declaration that the Plaintiffs have a Treaty water right to appropriate waterfrom the Battle River, Samson Lake, Pigeon Lake and all other water courses andwater bodies within, adjacent to and in the vicinity of the Reserves in quantities thatare sufficient to meetthe Plaintiff s reasonab Ie economic, residential, governmental,recreational, domestic and cultural needs, both now and in the future.

The specifically named water bodies are not within the SSRB.

Page: 5

[18] The actions commenced by the appellant First Nations, by way of Statements of Claim, arein their early stages.

IV. JUDGMENT ON THE JUDICIAL REVIEW APPLICATIONS[19] The applications were heard in Apri12008. The chambers judge noted that the first phase ofthe SSRB Plan had considered water licence transfers, and that the second phase "focussed on theneed to balance water consumption and environmental protection" (para 10).

[20] He summarized the Plan, encompassing both Phases I and II, as being "a collection ofrecommendations to the Director under the Water· Act." He summarized the principalrecommendations, as follows, at para 12:

1. Close the Bow, Oldman and South Saskatchewan River basins to furtherallocations, except for the purposes specified in a Crown Reservation;

2. Create a Crown Reservation of unallocated water in the above basins. Permitwater allocated from the Crown Reservation only for Treaty 7 First NationsReserves, water conservation objectives, storage, and pending licence applicationsas of the date of the Crown Reservation;

3. Set water conservation objectives to improve the flow in the rivers for the Bow,Oldman and South Saskatchewan basins;

4. Set a water conservation objective for the Red Deer River; and,

5. Authorize the Director to consider applications to transfer all or a portion of thewater allocation under existing licences in the SSRB.

[21] The chambers judge considered that there was a difference in the tests for determining theexistence of a duty to consult depending upon the circumstances before the court (paras. 43-44). Heobserved that the test in Haida "dealt with an anticipated government action which threatened toinfringe upon an unproven Aboriginal right": Haida Nation v. British Columbia (Minister ofForests), 2004 SCC 73, [2004] 3 S.C.R. 511. In contrast, the test articulated in Sparrow involved"a completed government action and a proven right": R. v. Sparrow, [1990] 1 S.C.R. 1075, 70D.L.R. (4th) 385. He found that the circumstances in this case were different than those either inHaida or Sparrow. On the one hand, the Plan had been approved by Order in Council, at the timethe applications were brought, and was, therefore, "a completed action", engaging the Sparrow test.On the other hand, the claims of the First Nations involved "unproven substantive rights", involvingthe Haida test. He therefore made separate analyses invoking each of the Sparrow and Haida tests.

[22] The chambers judge concluded that under the Sparrow test any infringement was justified,as the Plan had a valid legislative objective, namely, conservation and protection of the aquatic

Page: 6

health within Southern Alberta, and that sufficient consultation had taken place, such that the honourof the Crown was maintained in the circumstances (paras. 101-104).

[23] Employing theHaida test, the chambers judge found that the Plan did not adversely affectthe applicants' water use, and that the merits of the claims for water rights were far from beingestablished. He determined that the absence of adverse impact, along with his determination of thepotential merits ofthe claims, placed the duty to consult "at the very low end ofthe scale". He foundthat, in the circumstances of the case therefore, the Government had met that duty (para. 131).

. [24] The chambers judge also discussed the contention of Alberta that the Order in Councilapproving the Plan was legislative in nature and, thereby, immune from judicial review. However,he did not conclude on that issue, as he considered that his two-pronged analysis (using both theSparrow and Haida tests) made it unnecessary to do so (paras. 66-68).

V. GROUNDS OF APPEAL[25] The appellant First Nations essentially challenge both the findings that the duty to consultin the circumstances of that case was at the low end of the scale, and that it was met. They submitthat the chambers judge erred in his interpretation and application of the duty to consult andaccommodate, and further argue that, in making his findings, he ignored or failed to considerrelevant matters and evidence.

[26] It is significant to note that the appellants on the appeal have withdrawn their request to setaside the Order in Council approving the Plan. Rather, they only seek from this Court a Declarationthat:

1. The SSRB Plan gave rise to the Crown's constitutional duty to consult with andaccommodate the Appellants; and

2. The Crown failed to satisfy its constitutional duty to consult with andaccommodate the Appellants regarding the SSRB Plan and the measures set outtherein.

VI. STANDARD OF REVIEW[27] Whether there is a duty to consult and, if appropriate, to accommodate, is essentially aquestion oflegal duty, and consequently governed by a standard of correctness. However, deferenceis owed to the fact findings upon which such a duty might be premised. To the extent that the dutyis inextricably intertwined with findings offact, then the standard is reasonableness: Haida at para.61.

[28] Correctness will also govern the assessment of the seriousness of the claims advanced foraboriginal and treaty rights, as well as the degree of adversity the government action will have onthose rights: Haida at para. 63. Once again, deference will be owed to any underlying findings offact.

Page: 7

[29] The process of consultation and accommodation is examined on a standard ofreasonableness. Perfect satisfaction is not required. Rather, the reasonableness ofthe steps taken bythe government as a whole, and in all of the circumstances, must be examined: Haida at para. 62.Put another way, if a duty arose, it is a question of mixed law and fact whether Alberta's actionssatisfied such duty, with the result that the appropriate standard of review is reasonableness.

VII. ANALYSISA. General Nature of the Duty to Consult[30] The duty to consult and, if appropriate, accommodate, has evolved through case law overthe past two decades, and continues to evolve through consideration of its application in differingcontexts and circumstances.

[31] A duty to consult was first specifically referenced by the Supreme Court of Canada inSparrow, as an aspect of possible justification for the breach or infringement of a proven aboriginalright. In that case, the aboriginal appellant resisted the application of federal fishing regulations, onthe basis that they infringed upon his aboriginal right to fish. He argued that the "recognition andaffirmation" of aboriginal rights in section 35(1) of the Constitution Act, 1982, gave those rights aconstitutional status, such that any legal act affecting them was of no force and effect.

[32] The Court acknowledged that the recognition and affirmation of aboriginal rights undersection 35(1) did limit the exercise oflegislative power, but only to the extent that the Crown wasobliged to justify its actions when a legislative action abrogated an aboriginal right. Thus, it held atparas. 61-62:

In response to the appellant's submission that s. 35(1) rights are more securelyprotected than the rights guaranteed by the Charter, it is true that s. 35(1) is notsubject to s. 1 of the Charter. In our opinion, this does not mean that any law orregulation affecting aboriginal rights will automatically be of no force or effect bythe operation of s. 52 of the Constitution Act, 1982. Legislation that affects theexercise of aboriginal rights will nonetheless be valid, if it meets the test forjustifying an interference with a right recognized and affirmed under s. 35(1).

There is no explicit language in the provision that authorizes this Court or any courtto assess the legitimacy of any government legislation that restricts aboriginal rights.Yet, we find that the words "recognition and affirmation" incorporate the fiduciaryrelationship referred to earlier and so import some restraint on the exercise ofsovereign power. Rights that are recognized and affirmed are not absolute. Federallegislative powers continue, including, of course, the right to legislate with respectto Indians pursuant to s. 91(24) of the Constitution Act, 1867. These powers must,however, now be read together with s. 35(1). In other words, federal power must bereconciled with federal duty and the best way to achieve that reconciliation is todemand the justification of any government regulation that infringes upon or denies

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aboriginal rights. Such scrutiny is in keeping with the liberal interpretive principleenunciated in Nowegijick, supra, and the concept of holding the Crown to a highstandard of honourable dealing with respect to the aboriginal peoples of Canada assuggested by Guerin v. The Queen, supra.

[33] The Court prescribed a two-part test in situations where it is alleged there is legislativeinfringement of an aboriginal right. The initial obligation falls on the applicant to demonstrate aprima facie infringement. If this test is met, the onus then shifts to the Crown to justify theinfringement (Sparrow test). In describing the process of justification, the Court held it wasimportant to consider whether there was a reasonable legislative objective, along with a number ofother factors, including the one that is most relevant to the present appeal- "whether the aboriginalgroup in question has been consulted with respect to the conservation measures being implemented":para. 82. The Court continued in that regard to state: .

The aboriginal peoples, with their history of conservation-consciousness andinterdependence with natural resources, would surely be expected, at the least, to beinformed regarding the determination of an appropriate scheme for the regulation ofthe fisheries.

[34] In cases that followed, the Court further developed the concept of consultation, discussing,among other things, its scope and timing. In Delgamuukw v. British Columbia, [1997] 3 S.C.R.1010, 153 D.L.R. (4th) 193, Lamer c.J. discussed the duty to consult in the context oflegislativedecisions infringing upon proven claims of aboriginal title. He found that the duty was imperative,but subject to wide variations in scope, depending on the extent of the infringement. He stated atpara. 168:

There is always a duty of consultation. Whether the aboriginal group has beenconsulted is relevant to determining whether the infringement of aboriginal title isjustified, in the same way that the Crown's failure to consult an aboriginal group withrespect to the terms by which reserve land is leased may breach its fiduciary duty atcommon law: Guerin. The nature and scope of the duty of consultation will varywith the circumstances. In occasional cases, when the breach is less serious orrelatively minor, it will be no more than a duty to discuss important decisions thatwill be taken with respect to lands held pursuant to aboriginal title. Of course, evenin these rare cases when the minimum acceptable standard is consultation, thisconsultation must be in good faith, and with the intention of substantially addressingthe concerns ofthe aboriginal peoples whose lands are at issue. In most cases, it willbe significantly deeper than mere consultation. Some cases may even require the full .consent of an aboriginal nation, particularly when provinces enact hunting andfishing regulations in relation to aboriginal lands.

[35] The duty to consult moved beyond the post-legislative justification process in Haida. In thatcase, the Supreme Court held that the Crown owed a duty to consult, even at the stage where an

Page: 9

aboriginal right had not yet been properly defined and proven. Speaking for the Court, McLach1inC.J. traced the duty to consult back through Sparrow and Delgamuukw, and then stated at para. 35:

But, when precisely does a duty to consult arise? The foundation of the duty in theCrown's honour and the goal of reconciliation suggest that the duty arises when theCrown has knowledge, real or constructive, of the potential existence of theAboriginal right or title and contemplates conduct that might adversely affectit: see Halfway River First Nation v.British Columbia (Ministry of Forests), [1997]4 C.N.L.R. 45 (B.C.S.C.), at p. 71,per Dorgan J. [emphasis added]

[36] ill the remainder ofthe judgment, the Chief Justice expanded on the nature ofthis duty. Sheheld, inter alia, and here I summarize her findings:

1. The duty to consult has a constitutional dimension in that the Crown's duty to acthonourably in defining the rights and guarantees found in section 35(1) of theConstitution Act, 1982, implies a "duty to consult and, if appropriate, accommodate"(para. 20). Despite the fact that the duty to consult is derived from section 35(1),however, it does not give aboriginal groups a right of veto pending final resolutionof a claim. "What is required is a process of balancing interests, of give and take"(para. 48).

2. The duty to consult and accommodate is not based on the common law duty offairness. It is a duty based on "a process of fair dealing and reconciliation that beginswith the assertion of sovereignty and continues beyond formal claims resolution";para. 31. Thus, aboriginal groups can challenge "government conduct" on the basisof a failure to consult and accommodate pending claims resolution. The basis of thechallenge is independent of the usual procedures for challenging administrativeaction, although principles of administrative law may be helpful in determining theproper standard of review (paras. 60-61).

3. Based on the passage from Delgamuukw, cited above, the scope ofthe duty willdepend on the facts of each case. The initial threshold invoking the duty, however,is low. McLach1in C.J. stated at para. 37:

There is a distinction between knowledge sufficient to trigger a dutyto consult and, if appropriate, accommodate, and the content or scopeof the duty in a particular case. Knowledge of a credible butunproven claim suffices to trigger a duty to consult andaccommodate. The content of the duty, however, varies with thecircumstances, as discussed more fully below. A dubious orperipheral claim may attract a mere duty of notice, while a strongerclaim may attract more stringent duties. The law is capable of

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differentiating between tenuous claims, claims possessing a strongprima facie case, and established claims.

[37] The Chief Justice did not discuss the issue of remedy when there is a breach of the duty toconsult, but some guidance on this subject can be gleaned from the eventual result in the case. Thecourt did not quash the tree farm licence issued by the government to the forest company,Weyerhauser. However, it upheld the declaratory relief granted by the lower court.

[38] The duty to consult was again considered and further developed in Mikisew Cree FirstNation v. Canada (Minister of Canadian Heritage), 2005 SCC 69, [2005] 3 S.C.R. 388. In that case,the Supreme Court held that the duty to consult also arose when the Crown exercised a right to takeup land, and thereby adversely affected a treaty right to hunt, fish and trap. In Mikisew, the federalMinister of Heritage had given formal approval, by ministerial order, to the building of awinter roadin Wood Buffalo National Park. The road, as planned, was designed to skirt the Mikisew's reservelands, but the Mikisew argued it would interfere with the exercise of their right to hunt, fish and trapupon their ceded traditional lands - a right guaranteed under Treaty 8.

[39] The Court was required to determine the duties which flowed from the honour ofthe Crownin the context of Treaty 8, including the history of the negotiations leading to Treaty 8 (para. 56).Binnie J., for the Court, noted that both the historical context and the inevitable tensions underlyingthe implementation of the treaty, whereby lands were transferred from a category to which theaboriginals had rights to hunt, fish and trap to lands of another category in which they had no suchrights, demanded aprocess (para. 33). The procedural duty to consult was an obligation separate andapart from the Crown's substantive right to take up the lands.

[40] Binnie J., in Mikisew Cree, elaborated upon both the nature of the right to consultation andthe consequences of its breach, at paras. 57 and 59:

As stated at the outset, the honour of the Crown infuses every treaty and theperformance of every treaty obligation. Treaty 8 therefore gives rise to Mikisewprocedural rights (e.g. consultation) as well as substantive rights (e.g. hunting,fishing and trapping rights). Were the Crown to have barrelled ahead withimplementation ofthe winter road without adequate consultation, it would have beenin violation of its procedural obligations, quite apart from whether or not theMikisew could have established that the winter road breached the Crown'ssubstantive treaty obligations as well.

Where, as here, the Court is dealing with a proposed "taking up" it is not correct(even if it is concluded that the proposed measure if implemented would infringe thetreaty hunting and trapping rights) to move directly to a Sparrow analysis. The Courtmust first consider the process by which the "taking up" is planned to go ahead, andwhether that process is compatible with the honour of the Crown. If not, the First

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Nation may be entitled to succeed in setting aside the Minister's order on the processground whether or not the facts of the case would otherwise support a finding ofinfringement of the hunting, fishing and trapping rights. [emphasis in the original]

B. Did the Duty to Consult Arise in this Case?[41] The appellant First Nations submit that the duty to consult in this case arose in circumstancesakin to those in Haida. I accept that the circumstances here more closely resemble those in Haidathan the circumstances in Sparrow and Mikisew Cree. There are certain elements of this case,however, that resemble the facts in these other cases. More particularly, certain treaty rights to huntand fish are undisputed and, in that sense, are proven. The Plan has been approved by Order inCouncil and, in that limited sense, is complete. The appellant First Nations are suing Alberta in anattempt to establish claims, as yet unproven, to water and water management, which claims arefounded on treaty and aboriginal rights. Finally, the implementation of the Plan may affect bothproven and disputed treaty claims. In short, there is a mixture of circumstances, with some beinganalogous to circumstances in each of Sparrow, Haida, and Mikisew Cree.

[42] This mixture of circumstances presents difficulties in applying anyone of these casesdirectly here. The Sparrow analysis does not fit well. In that test, an applicant has a preliminaryburden of showing a prima facie infringement. The originating motions brought here by theappellant First Nations do not rely upon infringement, nor do they attempt to establish aprima faciebreach. The Tsuu T'ina Nation asserts that its treaty and aboriginal rights "are or may be affectedby the SSRB Plan". The Samson Cree Nation merely asserts that its treaty and aboriginal rights"may" be affected.

[43] Although the chambers judge conducted a Sparrow analysis here as part of his decision, todo so he had to assume that the claimed water rights would be proven (para. 76), and further that theappellant First Nations would have proven aprima facie infringement (para. 92). His purpose inmaking the analysis was to demonstrate that even if such assumptions were made, ,the SSRB Planwas justified and the honour ofthe Crown maintained, in the circumstances ofthis case (para. 104).

[44] The Mikisew Cree analysis is similarly difficult to apply. This is not a case of the Crowntaking up land pursuant to a treaty right, thereby clearly, demonstrably, and adversely affectingtreaty rights. While I do not suggest that the principles underlying Mikisew Cree are necessarilyconfined to cases where land is taken up, the particular facts and historical context which gave riseto the duty in that case are very different from the situation here. Thus, broad statements, properlyapplicable to the circumstances in that case, are not easily transported and applied here.

[45] There are also difficulties with the Haida analysis. The duty in Haida arises when the Crownhas knowledge, real or constructive, of the potential existence of a claimed aboriginal right or title,and contemplates conduct that might adversely affect it: Haida at para. 71. The threshold fortriggering the duty is low, and the purpose of the consultation is to preserve the aboriginal right orinterest pending resolution of the claim. Here, although the appellants are in litigation with Alberta

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attempting to establish water and water management rights, the case also deals with rights andclaims of a proven nature.

[46] In my view, there should not be three separate tests to determine whether a duty to consultexists, and it is inappropriate to try to define the test by simply referring to the circumstances of aparticular case in which the duty was found to exist. The underlying theme of the cases in which aduty to cons:ulthas been found is that the honour of the Crown is always at stake when it deals withaboriginal peoples. In other words, the question is always whether the honour of the Crown requiresthat consultation and appropriate accommodation take place when a proposed government actionthreatens to adversely affect aboriginal peoples. The test is broad and sensitive to differing factualcircumstances. The particular circumstances in the earlier cases are but examples of instances wherethe duty exists. These circumstances, of course, may usefully be examined to provide analogies tothe circumstances of the case before the court. However, the existence of the duty does not dependupon the exact correspondence to the circumstances in other cases.

[47] Alberta argues that no duty to consult arose in this case, as the appellant First Nations hadnot established that the government action had potential adverse impacts. Further, it was submittedthat Alberta did not recognize the potential existence of any credible claim for aboriginal waterrights, and, therefore, had neither real nor constructive notice of such right. In addition, the Crownargued that the duty to consult was not engaged in this instance, as the Order in Council approvingthe Plan was legislative in nature and, therefore, not affected by any duty to consult. I will firstdiscuss this latter contention and then move on to consider whether the honour of the Crownrequired consultation in the circumstances of this case.

1. Was the Crown's action Legislative and therefore not reviewable?[48] The chambers judge discussed this issue at some length, but concluded he did not need toresolve it (para. 68). I agree, especially since the appellant First Nations have withdrawn theiroriginal request that the Order in Council be set aside. At this stage, they seek only declaratoryrelief. As the point was strenuously argued on the appeal, however, I will elaborate on the reasonswhy the issue need not be determined.

[49] The gist of the Crown's argument is that legislation cannot be invalidated because of a.failure to consult. It relies upon a passage from the judgment of Slatter lA. in R. v. Lefthand, 2007ABCA 206, [2007] 10 W.W.R. 1, leave to appeal to the Supreme Court of Canada denied, 2008CarswelIAlta 196. Slatter lA. stated at para. 38:

The duty to consult is of course a duty to consult collectively; there is no duty toconsult with any individual. There can however be no duty to consult prior to thepassage of legislation, even where aboriginal rights will be affected: Authorson v.Canada (Attorney Genera!), [2003] 2 S.C.R. 40. It cannot be suggested there are anylimits on Parliament's right to amend the Indian Act. It would be an unwarrantedinterference with the proper functioning of the House of Commons and theProvincial Legislatures to require that they engage in any particular processes prior

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to the passage of legislation. The same is true of the passage of regulations andOrders in Council by the appropriate Executive Council. Enactments must stand orfall based on their compliance with the constitution, not based on the processes usedto enact them. Once enactments are in place, consultation only becomes an issue ifaprima facie breach of an aboriginal right is sought to be justified: Mikisew Cree atpara. 59.

[50] In Authorson, cited by Slatter lA., the Supreme Court of Canada held that the right of due.process found in the Canadian Bill of Rights, S.C. 1960, c. 44, did not require that Parliament givenotice, and opportunity to speak, to veterans whose right to monetary interest had been taken awayby legislation. Major J., for the Court, stated at para. 37:

The respondent claimed a right to notice and hearing to contest the passage of s.5.1(4) of the Department of Veterans Affairs Act. However, in 1960, and today, nosuch right exists. Long-standing parliamentary tradition makes it clear that the onlyprocedure due any citizen of Canada is that proposed legislation receive threereadings in the Senate and House of Commons and that it receive Royal Assent.Once that process is completed, legislation within Parliament's competence isunassailable.

[51] Binnie l, in Mikisew Cree, characterized the duty to consult as being procedural. It is aninteresting question as to whether a free-standing duty to consult is a constitutional imperative undersection 35 of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (U.K.), 1982,c. 11, such as to invalidate legislation made in breach thereof. However, as earlier pointed out, theappellants no longer seek to quash the Order in Council. This also removes the need to answerwhether the Order in Council, approving the plan, is legislative.

[52] In my view, the argument raised by the Crown does not go beyond consideration of whetheror not the quashing of the Order in Council is a proper remedy. An inability to quash legislation, ifthat be the case, does not mean that consultation is not required when drafting plans for development.of natural resources, nor does it preclude the availability of declaratory relief in appropriatecircumstances.

[53] In Haida, the decision to issue a Tree Farm Licence (T.F.L.) gave rise to a duty to consult.The licence did not itself authorize timber harvesting, but required an additional cutting permit. TheChief Justice stated at para. 76:

The T.F.L. decision reflects the strategic planning for utilization of the resource.Decisions made during strategic planning may have potentially serious impacts onAboriginal right and title. The holder ofT.F.L. 39 must submit a management planto the Chief Forester every five years, to include inventories of the licence area'sresources, a timber supply analysis, and a "20-Year Plan" setting out a hypotheticalsequence of cutblocks. The inventories and the timber supply analysis form the basis

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of the determination of the allowable annual cut ("AAC.") for the licence. Thelicensee thus develops the technical information based upon which the AAC. iscalculated. Consultation at the operational level thus has little effect on the quantityof the annual allowable cut, which in turn determines cutting permit terms. Ifconsultation is to be meaningful, it must take place at the stage of granting orrenewing Tree Farm Licences.

[54] Likewise, Slatter IA in Lefthand recognized the desirability of consultation at the planningstage, before any legislative action on the part of government. Immediately following the passagerelied upon by the Crown and quoted above, he continued and qualified his remarks to state, at para.39:

Beyond the passage of legislation and regulations, the matter becomes less welldefmed. Administrative tribunals often do have a duty to consult when their orderswill have an impact on aboriginal rights. There may also be a duty on study groupsthat are formed by governments to report on matters that may affect aboriginalrights. For example, in this case the Eastern Slopes Regulation Review Committeewas established in 1997 to make regulations respecting the fisheries covered byTreaty No.7. When it is anticipated that such a study group might recommendamendments to a regulatory regime, consultation is generally appropriate.

[55] Accordingly, even if the Legislature itself does not have a duty to consult prior to passinglegislation, the duty may still fall upon those assigned the task of developing the policy behind thelegislation, or upon those who are charged with making recommendations concerning future policiesand actions. Here, the Director and the Department of the Environment were directed to develop awater management plan for the purpose of making recommendations to the Lieutenant Governor inCouncil for his approval. The Water Act requires consultation with stakeholders in developing aplan. The situation appears similar to that spoken of by Slatter IA above, where he recognized thatconsultation may be appropriate in the case of a study group established to make regulationsrespecting the fisheries covered in Treaty 7.

[56] Further, the adoption of a plan is at the outset of government action, and is intended to guidesuch action. This is to be contrasted with situations where the Crown has already completed itssubstantive action, as discussed by Comad I.A in Lefthand at paras. 161-163. Her consideration inthis regard related to appropriate remedy. As already adverted to, the appellant First Nations nolonger seek to quash the Order in Council in question. Rather, the situation is comparable to that inHaida, where the court gave declaratory relief, but did not quash the Tree Farm Licence.

[57] In short, I am of the view that the fact that the plan was adopted by an order in council doesnot immunize the persons developing the plan from a duty to consult, if such a duty otherwise arisesin the circumstances of the case.

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2. The Crown's knowledge of the potential existence of aboriginal right or title[58] The chambers judge did not distinguish between the claims of the Tsuu T'ina and theSamson Cree in relation to the Plan. In my view, the circumstances of each First Nation are verydifferent and need to be examined separately.

(a) The Tsuu Tina .[59] The reserve lands of the Tsuu T'ina's were set aside pursuant to Treaty 7. The Elbow Riverand the Fish Creek flow through the reserve lands, which are located in the SSRB. The Tsuu T'inaexercise treaty rights within the area. They have treaty rights, some of which are undisputed andothers of which are in issue. They also claim aboriginal rights.

[60] The Tsuu T'ina assert fishing and hunting rights, pursuant to Treaty 7, albeit that treaty doesnot mention fishing rights, which omission will be discussed later in this judgment. They also claimtreaty water rights, although any such rights are not expressly dealt with in the treaty. They relyupon an implied water right to meet the needs of the reserve, a right which has been implied andacknowledged in certain American jurisprudence: Winters v. United States, 207 U.S. 564 (1908).

[61] The aboriginal rights claimed by the Tsuu T'ina are of ownership and title to the beds oftheElbow River, Fish Creek, and all other water courses and water bodies within the reserve lands.They claim the right to usage, allocation, and management of all water resources within or adj acentto the boundaries of the reserve, including the authority to permit or prohibit the use of water forcommercial, industrial, agricultural, recreational, cultural, governmental, and domestic purposeswithin or adjacent to the reserve lands.

[62] The chambers judge found that Alberta had knowledge of these claimed rights (para. 112).The record supports that finding. With respect to the claimed treaty rights, the Crown, of course,always has notice of the contents of the treaty: Mikisew Cree at para. 34. While Alberta seeks tolimit the rights to those expressly granted by the treaty, and disputes the implied rights here assertedby the Tsuu T'ina, the record Clearly shows that Alberta had knowledge of the claimed rights formany years prior to the development of the Plan.

[63] While the claims may be of varying degrees of merit (as I will discuss later in Part C.1), itcannot be reasonably asserted that none of the claims are credible so as to make consultationunnecessary. Indeed, the record shows that at all material times the government recognized,correctly in my view, that the Tsuu T'ina had interests requiring consultation. Even if Alberta didnot have knowledge of all of the claimed rights, its knowledge of the express treaty rights issufficient to show knowledge of rights and claims that may be adversely affected by its intendedaction.

(b) The Samson Cree[64] The situation with respect to the Samson Cree is quite different. While Treaty No.6 doesexpressly grant hunting and fishing rights, the reserve lands are not within the SSRB. None of therivers within the basin flow through, or are adjacent to, the reserve lands. Rather, the SamsonCree's

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reserve is located in the Battle River Basin, which is the subject of a separate and distinct watermanagement plan for that basin.

[65] The Samson Cree claim that they will require water from the Red Deer River in the futureto meet their needs, and that their right to hunt and fish may be affected by the SSRB Plan insofaras it impactsupon the Red Deer River Sub-basin. The Red Deer River is within the SSRB, and, aswill be more fully discussed herein, the Plan does contain certain water conservation objectivesrelative to that river. While the Crown had prior lmowledge ofthe water claims ofthe Samson Cree,similar in nature ofthe claims of the Tsuu T'ina, and further, the Crown had knowledge of TreatyNo. 6 rights, the record falls short of demonstrating lmowledge of the rights and claims of theSamson Cree relative to the SSRB, at least until such time as the Plan was in the course of itsdevelopment.

[66] In these circumstances, I am dubious that Alberta at the time it undertook the study had therequisite lmowledge of the potential claims of the Samson Cree in relation to the SSRB. However,some concerns of the Samson Cree, albeit not fleshed out at the time, did come to the attention ofthe Crown during development of the Plan. Iwill, therefore, proceed on the basis that the Crown hadlmowledge of the claims of the Samson Cree relative to the SSRB. As will be seen, the ultimateresult is not affected by the acceptance of the Samson Crees' assertion that the Crown possessedlmowledge of its potential claim in relation to the subject Plan.

3. Potential adverse impacts[67] The threshold for this prerequisite to consultation is very low. Binnie J., in Mikisew Cree,stated at para 34: "The flexibility lies not in the trigger ('might adversely affect it') but in thevariable content of the duty once triggered."

[68] Alberta submits that since the chambers judge found that the Plan did not, in fact, have anadverse impact on either treaty or aboriginal rights (paras. 122 and 136), that finding is dispositivein negating any duty to consult. I do not accept this proposition.

[69] The operative word is "might". It seems obvious that a Plan intended to manage waterresources, including the protection of the aquatic environment, has the potential for adverselyaffecting the express treaty rights of the appellant First Nations, as well as water rights claimed bythem within the subject area. It was reasonable for the chambers judge to infer from thegovernment's desire to consult the Tsuu T'ina from the outset of Phase II of the Plan, that thegovernment lmew that the Plan had potential to adversely affect them. With respect to the SamsonCree, the concerns which they voiced during the development of the Plan relative to its impact onthe Red Deer River Sub-basin, indicated potential adverse impacts in relation to their claims. Thefact that the Plan ultimately might not have had adverse imp-acts,as found by the chambers judge,does not eliminate the need to consult in the development of the Plan. Further, it is at least arguablethat some ofthe elements ofthe Plan, as ultimately adopted, arose from the consultation, and playeda part in the finding ofthe chambers judge that there was thereby no adverse effect.

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4. Conclusion as to whether the duty to consult arose[70] My analysis leads to the same result as that reached by the chambers judge. I am satisfiedboth that the Crown had knowledge' of express treaty rights and the existence of the aboriginal andtreaty claims of the Tsuu T'ina, and that the SSRB Plan might in its development adversely affectthem. For reasons already stated, I am less sure on this record that any duty to consult arose withrespect to the Samson Cree. For purposes of further analysis, however, I will proceed on the basisthat the duty was owed to all the appellants.

C. What was the Scope and Level of the Duty to Consult?[71] The Chief Justice in Haida commented in regard to the level of consultation required tomaintain the honour of the Crown that: "every case must be approached individually" and that "eachmust also be approached flexibly ... as the process goes on and new information comes to light"(para. 45).

[72] Here, the chambers judge placed the duty to consult "at the very low end of the scale",having regard to his assessment both of the merits of the claims of the appellant First Nations andthe potential for adverse impact. The appellants urge that the chambers judge was wrong in hisassessment both of merits and impact. I will address their arguments.

1. Seriousness of the claims(a) The Tsuu Tina

[73] The Tsuu T'ina have an express treaty right to hunt. The subject Plan does not deal withhunting rights. It is conceivable, however, that the exercise of such rights may be affected by watermanagement, as a deterioration in the aquatic environment may be expected to reduce the populationof the hunted animals. Accordingly, the claim is serious, as the right is recognized. However, itsimpact upon the scope and level of the duty to consult is best measured when considering thepotential adverse effects of the intended government action.

[74] As explained in Lefthand, it is open to question whether Treaty 7 is the source of anyaboriginal right to fish (paras. 52-68). Once again, a serious claim is disclosed. However that maybe, the effect of any right to fish upon the scope and level of the duty to consult is again betterassessed, in the circumstances of this case, when considering potential adverse impacts.

[75] As observed by the chambers judge, the Winters doctrine, which implies the right of reservelands to water rights, has not been applied in Canada. It is doubtful that the doctrine is applicablein Canada, as its application in the United States has been limited to states that regulate waterthrough a system of prior appropriation - a system which has never existed in Canada: see ScottHopley and Susan Ross, "Aboriginal Claims to Water Rights Grounded in the Principle Ad MediumFilum Aquae, Riparian Rights and the Winters Doctrine" (2009), 19 Journal of Environmental Lawand Practice, at 21-23. The ad mediumjilum aquae presumption, which is rebuttable, is a commonlaw rule by which ownership of the bed of a non-tidal river or stream belongs in equal halves to theowners of riparian lands.

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[76] The claim for ownership and title to the river beds, based either upon aboriginal or treatyrights, is likewise unproven and faces many obstacles, some of which are alluded to in the majorityjudgment of Cory J. in R. v. Nikal, [1996] 1 S.C.R. 1013, 133 D.L.R. (4th) 658. See also thediscussion ofIacobucci 1. relative to the ad mediumfilum aquae presumption with respect to reservelands inR. v. Lewis, [1996] 1 S.C.R. 921,133 D.L.R. (4th) 700 at paras. 55-62.

(b) The Samson Cree[77] Treaty No.6 expressly grants the Samson Cree the right both to hunt and fish in the tract oflands surrendered thereunder. However, the record does not demonstrate what portion of thesurrendered territory, if any, lies within the SSRB. In any event, in measuring the scope and levelofthe duty to consult, the impact of such treaty rights as do exist in this regard is once again betterassessed when considering potential adverse impacts of the SSRB Plan.

[78] The Samson Cree claim water and water management rights of the same nature as thoseclaimed by the Tsuu T'ina. It is not readily apparent, however, that the reach ofthose claimed rightsextends to the SSRB; i.e., the rivers and water bodies, of which neither flow through nor are adjacentto the reserve lands. In any event, even if such claimed water rights reach into the SSRB, theSamson Cree face the same difficulties in establishing those rights as do the Tsuu T'ina.

(c) Conclusion on seriousness of the claims[79] The claims range from proven, and thereby serious, to unproven and very much challengedones. In my view, the chambers judge's assessment of the merits of the claims to water andmanagement rights, whether based on aboriginal or treaty rights, was correct. These claims will "notbe an easy case to win" (para. 129). In any event, there is a significant contrast with thecircumstances in Haida, where the evidence grounded "aprima facie case in support of Aboriginaltitle, and a strong prima fade case for the Aboriginal right to harvest red cedar" (para. 71).

2. Potential adverse impacts of the SSRB Plan[80] It is necessary to first identify the proposed government action that could potentiallyadversely impact the treaty and aboriginal rights claimed by the appellant First Nations. In thisinstance, the proposed action was Phase IIof the Water Management Plan. Phase I, dealt with thetransfer of water under existing licences, and it was developed in 2001-2. Phase I was approved byO.C. 321/2002 and constituted the then approved water management plan under section 11 of theWater Act.

[81] Phase IIconsisted of developing a plan to balance water consumption and environmentalprotection within the SSRB. It does not identify water needs of ,a specific user or sector. Theprincipal recommendations contained in the Plan are set out in its Executive Summary at p. V:

Alberta Environment (AENV) no longer accept applications for new waterallocations in the Bow, Oldman and South Saskatchewan River Sub-basinsuntil the Minister of Environment specifies, through a Crown Reservation,how water not currently allocated is to be used.

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Water be allocated from the Crown Reservation only for:

Water conservation objectives;

Storage of peak flows to mitigate impacts on the aquaticenvironment and to support existing licences. (AlbertaEnvironment will assist the Watershed Planning andAdvisory Councils in evaluations of the potential for on-stream and off-stream storage.);

Licences and registrations that may be issued for applicationsand registrations pending at the date of the CrownReservation. (This does not necessarily imply approval; butthe pending applications and registration will be reviewed.);

First Nations Reserves.

When allocations in the Red Deer River Sub-basin reach 550,000 cubicdecametres, a thorough review be conducted to identify the maximumallocation limit.

[82] For the greater part, the concerns of the appellant First Nations related to the existing waterpriority system and the water market that may develop from the transfer of water licences. Thesewere "not on the table" for discussion in Phase II. This led the chambers judge to conclude at para.122:

The SSRB Plan is aimed at improving the overall health of the basin and does notdeal with the right to hunt and fish. If there is presently any adverse impact on thewater use of the Application, (either directly or as an adjunct their other rights) it isa result of the priority system as set out in the Water Act and the licences alreadygranted. These are historical facts and not the result of the decisions under review orthe SSRB Plan.

[83] The appellants intimate that the chambers judge, in assessing potential adverse impacts (atpara. 138) overlooked his observation that, as a result of transfers by existing licence holders ofunder-utilized allocations, it is likely "that more water will be consumed, exacerbating the watershortage". The appellants point to the expected reduced flows as seriously impacting on the fishpopulation, and thereby adversely affecting their right to fish.

[84] As already noted, the provisions for transferring licences were part ofthe existing Water Planapproved in 2002 (prior to the Phase II planning), and consequently were not part of the proposedgovernment action during the relevant time frame. In any event, the transfers are subject to

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holdbacks by the Director, which the chambers judge commented may "partially offset" anynegative impact of transfers that are approved (para. 138). In that event, the holdbacks may providea future source of water to the First Nations.

[85] Finally, with respect to the transfer of water licences, the Plan, incorporating both Phases Iand IT, contemplates public review and requires an applicant for a transfer to give public notice. Afurther requirement was added to the Plan - that the concerns of the First Nations must beconsidered as part of the review. It should not be supposed that every transfer of a water licence isadverse to the interests of the First Nations. However, with respect to transfers which the FirstNations may consider adverse, they will have opportunity to have their concerns considered. In myview, the chambers judge was correct in refusing to "speculate" as to "the scope of any duty toconsult which mayor may not arise in those transfer approval applications" (para. 140). Such willdepend upon the particular circumstances surrounding an application.

[86] The appellant First Nations submit that the Plan further adversely affected their rights, byrecommending that the 1991 Crown reservation be repealed and replaced. It is argued that the 1991Crown reservation was an instrument used to address First Nation water needs that would providethem with a 1991 priority. In result, it is said that the First Nations will thereby be lower in prioritythan thousands of other licences for approximately 4 to 4.5 million acre feet granted between 1991and 1999.

[87] This submission with respect to the repeal of the SSRB Water Allocation Regulation, A.R.307/91, was not commented upon by the chambers judge and, in any event, appears to bemisconceived. The 1991 Regulation reserved all water in the SSRB to the Crown under section 12of the Water Resources Act, R.S.A. 1980, c. W-5. All licences issued thereafter come out of thewater reserved under that Regulation.

[88] Priorities under the Water Resources Act were assigned according to the date of thecompleted application for a licence. Accordingly, any priorities obtained under the Regulation werebased upon application date, and not the date of the 1991 Regulation. The new Water Act made nochange affecting priorities under the 1991 Regulation.

[89] In short, the overall effect of Phase II that constituted the proposed government action is toenhance conservation and to improve aquatic environment. The adverse impacts alleged by theappellants are not attributable to the Plan. The focus of their concerns originates with the regime,as existing at the time that Phase II was put forward by Alberta Environment. At worst, the Plan didnot change the status quo relative to those concerns, although these concerns were beyond the scopeof the mandate of Phase II. In any event, it is difficult to construe the maintenance ofthe status quowith respect to the concerns of the appellants as constituting an adverse impact arising from theproposed government action.

[90] Finally, with respect to adverse impact, it is useful to consider the object ofthe consultation.In Haida, the duty to consult was aimed at finding an "interim" solution (para. 44) in order "to

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preserve" the Haida interest pending resolution ofthe claim to aboriginal rights, including title (para.77). It was clear, in that case, that if the forests were logged out pending determination of theirclaim, they would "find themselves deprived of forests that are vital to their economy and theirculture", which could never be replaced (para. 7).

[91] The situation in this case is very different. The rivers and water bodies are not likely todisappear pending the resolution ofthe claims ofthe appellant First Nations, even ifthe time framefor determination is many years. In fact, ifthe Plan is successful, the environment and aquatic healthwill be improved, and the exercise of the treaty hunting rights will be enhanced rather than impaired.This is to be contrasted with the situation in Mikisew Cree, where the court found that the impactsofthe road in that case "were clear, established and demonstrably adverse to the continued exerciseofthe Mikisew hunting and trapping rights over the lands in question", (para. 55). Even then, it washeld that the Crown's duty to consult lay "at the lower end of the spectrum" (para. 64).

[92] At the heart of the concern of the appellant First Nations is that other water users will gainpriorities to water and thereby deprive the appellants ofthe control ofthe management ofthe waters,which they claim to own, and to have priority for their uses. However, if the appellants should.succeed in their litigation presently before the courts and they are found to possess aboriginal rightsto water, and it is further found that the Water Act and all predecessor legislation enacted by theProvince of Alberta since 1930 constitutes an unjustified infringement oftheir treaty and aboriginalrights, then the priorities under the existing regime will be in issue and required to be re-addressed.In other words, the government and third parties may bear the risks. In any event, the appellants arenot facing a peril similar to that faced in Haida. The degree of irreparable harm, if any, to the FirstNations, pending resolution oftheir claims, is an appropriate consideration in determining the scopeand level of consultation that should take place for the purpose of preserving rights in the interim.

[93] While the above analysis of potential adverse impacts ofthe SSRB Plan applies to both theTsuu T'ina and the Samson Cree, it applies to the rights and claims of the Samson Cree with evengreater force. The Red Deer River was identified as being hydrologically the healthiest of the SSRBRivers. The Plan recommends that a cap be placed when allocations reach a certain level, and forfurther review at that time. In the meantime, the Plan recommends a water conservation objectivethat will leave more water in the river than the in-stream objective that existed before the Plan.

[94] The Samson Cree seek to protect a claimed right to take and transport water from the RedDeer River, to meet their future needs where they reside. To the extent that the Samson Cree havehunting and fishing rights in the Red Deer River Sub-basin (and may ultimately be able to establishwater and water management rights relative to the river), the Plan is more likely to enhance andpreserve such rights than if no Plan at all were undertaken. Thus, it is unlikely that there are anyfuture adverse impacts to the Samson Cree arising from the Plan which constitutes the governmentaction in question.

3. Conclusion on the scope and level of the duty to consult

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[95] I am satisfied that the chambers judge did not err in holding that the duty to consult in thiscase was at the very low end of the scale, having regard to the nature of proposed governmentaction, the seriousness of the appellants' rights and claims, and the potential adverse impacts uponthose rights and claims.

D. Was the Duty to Consult Satisfied?[96] Having found that the duty to consult was at the very low end of the consultation spectrum,the chambers judge held that, in the circumstances of the case, the duty was satisfied (para. 131).He adverted to certain meetings and other steps taken in the consultation process. However, he didnot consider it necessary to provide details of the consultation, which were sufficient, in his view,to discharge the obligation (paras. 101-103).

[97] The appellants challenge the finding that the duty was met as being unreasonable andcontrary to the evidence, which, in this case, consisted of many thousands of pages of a return recordas supplemented by affidavits and exhibits. While the discussion of the evidence relative to theconsultation is brief, to the point of being cryptic, it is not dismissive. In my view, the recordcontains evidence to support the fmding, and the appellants have not shown that it was wrong orunreasonable such as to overcome the deference owed to the chambers judge with respect to hisfinding that the duty was discharged. I will now explain my reasons for reaching this conclusion.Once again, I will make separate analysis of the consultation with each of the appellant FirstNations.

1. The Tsuu T'ina[98] The Water Act provides that the responsible Minister may require a water management planto be developed, and stipulates that the Director or other person developing such plans must engagein public consultation that the Minister considers appropriate (section 9). In this instance,consultation was contemplated to be obtained through four Basin Advisory Committees (BACs).In late 2000 and early 2001, a BAC was formed for each of the Red Deer, Bow, Oldman andSaskatchewan Rivers.

[99] The BACs were created from representatives of Municipalities, major water-user industries,recreational groups with an interest in water, fish and game, environmental organizations, irrigationdistricts, and agricultural organizations in the SSRB who sent representatives in response toinvitations from Alberta Environment. A Tsuu T'ina member participated in the Bow River BACfor Phase I, but not in any "official" capacity.

[100] It should be noted that even before the formation of the BACs, and in preparation for watermanagement planning, Alberta Environment had sought information from the Tsuu T'ina in 2000,and again in 2002, by means of surveys. No response was made to the questionnaires. Theexplanation for the lack of response, provided years later in the course of this litigation, was that theTsuu T'ina did not have the internal capacity to provide the data sought by the surveys.

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[101] During the final months of Phase I, and for a period thereafter, preparatory studies wereundertaken by Alberta Environment, which were thereafter provided to the BACs. In October 2002,Alberta Environment requested the Tsuu T'ina participate as full members in the Bow River BACfor Phase ll. The letter was addressed to Chief Sandford Big Plume, one of the appellants herein.It stated, in part:

Work on Phase Two of the plan is now underway. We believe that this phase will beof importance to you because it sets the stage for long-term planning in the SouthSaskatchewan River Basin. The main purpose of the second phase is to recommendwater conservation objectives. These objective will determine the quantity andquality of water that should [sic] in rivers in the basin to protect the aquaticenvironment. Phase Two will also update the South Saskatchewan River Basin 1990Water Management Policy. For your information, draft terms of reference of PhaseTwo are attached.

We are formally inviting you to participate as full members of Bow River BasinAdvisory Committee. For more information and to confirm the committeerepresentative(s), please contact the Bow River Basin Advisory CommitteeCoordinator Rob Wolfe at (403) 297-5383.

As indicated, draft Terms of Reference were also provided with this letter. The evidence disclosesno response to the invitation.

[102] The preparatory studies undertaken by Alberta Environment were completed in June 2003and provided to the BACs. Once again, a Tsuu T'ina member participated to some extent in the BowRiver BAC process, but not in any official capacity. In July 2004, the BACs submitted a report oftheir recommendations to the Steering Committee for the planning proj ect, which were used to drafta water management plan.

[103] The Tsuu T'ina dismiss these early attempts to obtain their participation, on the basis thatfrom the outset they were entitled to a separate and discrete consultation. They rely upon a passagefrom Mikisew Cree, which states that, in the circumstances of that case, the Crown "was requiredto provide notice to the Mikisew and to engage directly with them and not ... as an afterthought toa general public consultation with Park users", (para. 64).

[104] The duty to engage separately is not absolute. In my view, Barnes J. accurately states the lawin this regard in Brokenhead Ojibway Nation v. Canada (Attorney General), 2009 FC 484, [2009]3 C.N.L.R. 36 at para. 25:

In determining whether and to what extent the Crown has a duty to consult withAboriginal peoples about projects or transactions that may affect their interests, theCrown may fairly consider the opportunities for Aboriginal consultation that areavailable within the existing processes for regulatory or environmental review:

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Hupacasath First Nation v. British Columbia, 2005 BCSC 1712,51 B.C.L.R. (4th)133 at para. 272. Those review processes may be sufficient to address Aboriginalconcerns, subject always to the Crown's overriding duty to consider their adequacyin any particular situation. This is not a delegation of the Crown's duty to consult butonly one means by which the Crown may be satisfied that Aboriginal concerns havebeen heard and, where appropriate, accommodated: seeHaida, above, at para. 53 andTaku, above, at para. 40.

[105] In this case, the Tsuu T'ina were not prepared to participate through the public consultationprocess, so that it cannot be known as to whether that process may have accommodated, at least tosome degree, their concerns. I do not suggest that consultation through the public process necessarilywould have been sufficient in the circumstances of this case. However, these early attempts atinvolving the appellant Tsuu T'ina do demonstrate a sensitivity to First Nation concerns, and agenuine desire by Alberta Environment for their participation in the process.

[106] It should also be borne in mind that the judgment of the Supreme Court of Canada in Haidawas only released in the latter part of 2004, and Alberta, in a sense, was feeling its way in the newenvironment. A consultation policy was being developed, which ultimately was issued on May 15,2005, entitled: The Government of Alberta's First Nations Consultation Policy on LandManagement and Resource Development. The policy statement adopted by the government was that"Alberta will consult with First Nations where Land Management and Resource Development onprovincial land may infringe First Nations Rights and Traditional Uses".

[107] In this case, Alberta also sought to meet the concerns of the Tsuu T'ina through a separateprocess. In the latter part of 2004, Alberta Environment contacted members of the Tsuu T'ina toinquire of the appropriate means to engage discussion. By letter dated AprilS, 2005, addressed tothe Tsuu T'ina Nation, Alberta Environment stated, in part:

[P]lease accept this letter as a formal request from Alberta Environment to meet withChief and Council.

Alberta Environment would like to request an audience with Chief and Council todiscuss the South Saskatchewan River Basin Water Management Plan. The sessionrequested will require an hour to provide the presentation and time for discussion.

The purpose of the meeting is to discuss the issues related to water management inthe SSRB and how that might impact the Nation. If at all possible, we would like tomeet in April 2005 to provide the time necessary for discussion. Attached please findadditional information about the Plan.

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[108] By this point in time, the government was becoming anxious to get on with the plan, in aneffort to have the conservation measures recommended by the BACs put into effect. AlbertaEnvironment targeted completing consultation with the First Nations by the summer of 2005.

[109] A meeting was held on June 3, 2005, with Chief Sandford Big Plume of the Tsuu T'inaNation, as well as with Chiefs of other Treaty 7 Nations. At the outset, the Chiefs remonstrated thatthings were getting off on the wrong foot, because a Deputy Minister led on behalf of AlbertaEnvironment, rather than the Minister himself being in attendance. At that meeting, the Chiefsadvised that a lack of capacity and resources was preventing Treaty 7 First Nations from engagingin meaningful dialogue about the proposed plan.

[110] The Tsuu T'ina Chief was invited to meet directly with the Minister on July 12,2005. Hedid not attend. The record does not disclose the reason.

[111] In this time frame, Alberta Environment proposed that a technical expert be hired to assistthe Treaty 7 Nations in their understanding of the Plan, identify the concerns of the First Nations,and to permit dialogue.

[112] In September and October 2005, Alberta Environment met a number of times withrepresentatives of the Tsuu T'ina about selecting a consultant. Ultimately, the consulting firm ofGartner Lee was hired, at the expense of the government, in the fall of2005, to assist the Treaty 7First Nations. Alberta Environment also undertook the expense of a Tsuu T'ina technician to assistGartner Lee.

[113] On October 20, 2005, Alberta Environment announced that a draft of the proposed planwould be released for public consideration and input. This announcement elicited a letter from theTreaty 7 Chiefs, including the Tsuu T'ina Chief, to the Minister of Environment, dated October 12,2005. The letter states, in part:

Since time immemorial we have exercised our inherent right to use the rivers andlakes of our traditional territories to satisfy the water needs of our people. The rightto sufficient supplies of water is integrally tied to the use and enjoyment of thereserve. It is promised to our Nations under Treaty 7. This statement is made withoutprejudice to any First Nation's claims within or over water within their respectivereserve lands. The Government of Alberta is obliged to meaningfully consult withTreaty 7 First Nations on this issue and to accommodate our Treaty water rightswithin the SSRB Plan and any related amendments to the Water Act or other relevantlegislation. If Alberta fails to comply with its constitutional duty to consult andaccommodate, the SSRB Plan will constitute an unjustifiable infringement of ourTreaty and Aboriginal rights.

[114] The Minister responded by letter dated November 29,2005, stating, in part:

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I am pleased to advise that Alberta Environment contracted a qualified consultant toprovide technical support and expertise to Treaty 7 First Nations in your review ofthe Draft SSRB Water Management Plan. I understand that my Ministry staff and aFirst Nations Steering Committee, consisting of representatives from Treaty 7 FirstNations, conducted meetings to review the several applications submitted for theproject. After a thorough review, the committee chose Gartner Lee Limited to be thesuccessful consultant. It is in the spirit of positive relations with First Nations thatmy Ministry has arranged for this assistance in ensuring that the plan is understoodand that First Nations can provide informed input.

The release of the SSRB Water Management Plan is in draft form to ensure that allstakeholders have the opportunity to review and provide comments prior to finalizingthe plan. In addition, the consultant will be arranging for a series of individualmeetings with each First Nation in Treaty 7 to ensure they learn more about the planand provide comments. I encourage you to designate representatives to attend thosemeetings. The Draft SSRB Water Management Plan is not meant to address specificstakeholder concerns; however, my Ministry is prepared to discuss any First Nationconcerns within the South Saskatchewan River Basin at your convenience.

[115] On November 30, 2005, the Tsuu T'ina, through an e-mail from legal counsel to AlbertaEnvironment, requested:

An expansion of the consultation process to include talks about waterallocation for the T7 Nations with a view to meeting their future needs.

• An extension of the time for consultation to occur.

• Funding for legal opinion for the Nations on consultation and their waterrights so they can act from a fully informed position.

• A meeting of the Chiefs and Minister of Environment to start this process.

[116] Gartner Lee conducted community meetings with the Treaty 7 First Nations, from Januaryto March 2006. The Steering Committee formed by Alberta Environment for the planning projectextended the time for receipt of the Gartner Lee report until the end of March 2006.

[117] Alberta Environment consequently extended the target date for completion and approval ofthe Plan. Applications for new water allocations were piling up, and Alberta Environment wasconcerned that it would have to temporarily close the Bow and Oldman Sub-basins to protect theaquatic environment pending completion of the Plan.

[118] Gartner Lee provided its final draft to the Tsuu T'ina, by letter dated March 31, 2006.N either the draft report nor concerns arising therefrom were provided at or about that time to Alberta

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Environment. Rather, the Treaty 7 First Nations advised that they would set out their concerns onlyin a meeting with the Minister.

[119] On April 11, 2006, Treaty 7 representatives met with Alberta Environment, which suggesteda bifurcated process to allow the Plan to go forward, while subsequently addressing particularconcerns raised by the First Nations concerning their water needs, which matters were not withinthe terms of reference of the Plan.

[120] By letter dated April 21, 2006, the Chiefofthe Tsuu T'ina Nation, on its behalf, rejected anyprocess that would see the Plan approved before consultation had been completed with respect toall concerns ofthe First Nations. The letter stated that the Plan "cannot be implemented without theNation's consent", and continued by asserting that the Water Act itself was passed without properconsultation with the Treaty 7 First Nations. It concluded, as follows:

Notwithstanding Alberta's failure to consult and accommodate and our rejection ofthe Proposal, Tsuu T'ina is prepared to engage in a process of meaningfulconsultation and accommodation with Environment regarding the matters addressedby the SSRBPlan, and generally regarding the management and allocation of wateras it impacts Tsuu T'ina. Wewish to be clear, however, that such consultationscannot be constrained by the provisions and recommendations ofthe SSRB Plan, orindeed, by the provisions of the Water Act in its present form. Further, Tsuu T'inais not prepared to waive its objection to the lack of adequate consultation andaccommodation noted above pending the conclusion of such consultations. If Albertais not prepared to consult on that basis, and to accommodate the Nation's concerns,Tsuu T'ina shall have no choice but to consider other optidns in responding to theSSRB Plan. [emphasis added]

[121] On May 1, 2006, the Steering Committee considered the above letter and rejected itsconditions. However, it did not directly confront the Treaty 7 First Nations. Rather, by letter datedMay 16, 2006, the Minister advised Chief Sandford Big Plume as follows:

Alberta Environment is committed to consultation with First Nations who may beaffected by the draft South Saskatchewan River Basin Water Management Plan. Tothat end, my Ministry is will [sic] awaiting your response to the draft plan, outlininghow the plan will affect the Tsuu T'ina First Nation. This will begin the process ofaddressing your Nation's concerns with the plan, and identifying how AlbertaEnvironment and the Tsuu T'ina First Nation can move forward together.

I would like to meet with you and the other Treaty 7 Chiefs at your earliestconvenience to further discuss your concerns. I have asked my Ministry staff tocontact your office to make the appropriate arrangements.

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[122] A meeting with Treaty 7 Chiefs was subsequently held on July 6, 2006. A representativeattended on behalf ofthe Tsuu T'ina and, apparently, hand delivered a letter ofthat date from ChiefBig Plume. The letter provided the Gartner Lee Report to Alberta Environment. However, the Chiefstated that the Tsuu T'ina did not endorse the Report, on the basis that it was "an inadequate andincomplete piece of work", because Munrealistic guidelines imposed by Alberta Environment. Inhis letter, the Chief reiterated that the Tsuu T'ina were prepared to engage in consultations, but thatthey could not be constrained by the SSRB or the WaterAct, "and must respect Tsuu T'ina's Treatyand Aboriginal water rights." The letter concluded, as follows:

If Alberta is not prepared to consult on this basis, and to accommodate Tsuu T'ina,we-shall have no choice but to take whatever steps are necessary, including legalaction, against the Government of Alberta, in response to the SSRB Plan.

[123] In the meantime, the draft SSRB Plan had been endorsed by the legislative Standing PolicyCommittee and was scheduled to go before the Cabinet on July 11, 2006, for potential approval. Itappears that shortly before the meeting with the Chiefs on July 6, the referral of the draft plan to theCabinet for approval had been delayed. Ultimately, the Plan was approved by Cabinet on August29, and by the Lieutenant Governor in Council on August 30,2006.

[124] Alberta Environment's dealings with the Tsuu T'ina between July 6, 2006 and the Cabinetapproval of the plan several weeks later led to an unfortunate misunderstanding, and created anexpectation on the part of the appellant First Nations that there would be further direct consultationbefore the Plan was approved.

[125] At the meeting with the Chiefs on July 6, 2006, Alberta Environment explained what itperceived to be an emergent situation requiring the immediate closure of the Bow and SouthSaskatchewan Sub-basins, excepting allocations to First Nations. There appears to have beenagreement on this part. The Minutes of the meeting indicate that the Plan would be delayed untilfurther discussion took place with the Treaty 7 First Nations.

[126] By letter to Chief Big Plume, dated August 4,2008, the Minister pointed out that the SSRBplan was not designed "to identify and resolve all water management components in the basin", andthen proceeded to state:

Given your concerns regarding the draft SSRB plan, I propose the following:

1. The Government of Alberta and Treaty #7 work together to develop a planto resolve SSRB plan concerns on the topics other than allocations.

2. Regarding allocations, Alberta Environment will commit to jointly arrivingat a Terms of Reference for the continuing discussions on this topic. This willinclude an assessment of reasonable water needs.

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3. Alberta Environment commits to meeting with each of the Treaty #7 FirstNations to discuss if it is possible to arrive at an acceptable water allocationunder the Water Act.

The SSRB plan is delayed at the present time; however, there is a need to take stepsto provide protection to the river. As we discussed, a means of not accepting newapplications for licences is also being considered.

[127] It does not appear that any further discussions were held with the First Nations prior toapproval of the Plan. The Minister's Recommendations to Cabinet to approve the Plan were madeon August 17, 2006. By letter dated August 30,2006, the Minister advised Chief Big Plume that thePlan had been approved.

[128] The Minister's letter of August 30 advised that a Crown Reservation had been established"to reserve any remaining unallocated surface water in the Bow, Oldman, and SSRB Sub-basins forspecific purposes, including water allocations for First Nations". The Minister stated that theProvince had to take definite and immediate action to safeguard the watersheds and to protectaquatic environment. The letter continues, as follows:

I assure you that Alberta Environment is committed to working with the Treaty #7First Nations to address your concerns with the plan, including your water allocationconcerns.

Regarding your concerns with the plan, I assure you the Government of Albertarecognizes the plan is dynamic and may be amended to better protect and manage thebasin. Alberta is committed to working with Treaty #7 First Nations to define theirwater needs and take steps towards addressing them. In my letter of August 4, 2006,I proposed three approaches to addressing your water concerns. I have instructedMinistry staff to proceed on these three approaches immediately. As I stated at ourrecent meeting, Alberta is willing to consider the insertion of anon -derogation clausein the SSRB Plan regarding Treaty and Aboriginal rights. Alberta Environmentawaits the proposed language for such a clause.

[129] It is difficult to resist the inference that during the summer of2006 the Tsuu T'ina were ledalong with the idea that there would be further consultation before the Plan was approved, whichhappened at the end of August 2006. Rather than being straightforward by disclosing that the Planwas in the final stages of preparation and approval, the Minister, under threat oflitigation, allowedthe Treaty 7 First Nations to think that further meaningful consultation with respect to the Plan couldoccur before it was approved. In fact, it would seem that Alberta Environment was thinking ofconsultation after approval, which would deal with matters not within the terms of reference, but byno means made this clear to the Tsuu T'ina.

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[130] The actions of Alberta Environment during the summer of 2006, however, do not defineeither the scope ofthe legal duty to consult, nor do they determine whether, as a matter oflaw, suchduty has been satisfied. The chambers judge, on the record before him, was entitled to conclude thatthe duty to consult, which he had identified as being at the low end ofthe scale, had been satisfied,having regard to the following circumstances:

1. The time frame for completion and approval of the Plan was extended for manymonths in order to allow for consultation.

2. The government, at the request of the Treaty 7 First Nations, funded the provisionof expert assistance to enable them to better understand and respond to the Plan.

3. Some consultation occurred. Certainly, the concerns of the Treaty 7 First Nationswere listened to. However, their principal concerns related to aboriginal and treatywater rights which were not recognized by the Province and not within the scope ofthe proposed government action; i.e., Phase II of the Plan.

4. The consultation was inhibited by the dictates of the First Nations who proscribedthe manner of consultation in some instances to meetings between the Minister andthe Chiefs, and, more importantly, who proscribed terms which were far beyond thescope of the proposed government action. While it is understandable that the FirstNations would desire consultation and negotiation on all issues raised in theirlitigation regarding their claims to treaty and aboriginal water rights, theymisconceived the limited purpose of the consultation with respect to the claims theywere pursuing by way oflitigation; i.e., consultation to preserve those claims on aninterim basis pending resolution of the litigation, which may take many years toconclude. In short, the terms of the consultation, insisted upon by the First Nationsin this case, could not reasonably have been accepted by the government, and wouldhave delayed and prolonged the process indefinitely.

I would add that consultation and negotiation with respect to all ofthe claims of theappellant First Nations is highly desirable and should be encouraged. Consultationwith respect to these issues outside the scope of the intended government action inquestion, however, cannot halt all action relating to water and water management insouthern Alberta. Further, it is inherent in the concept of meaningful consultationthat the parties facilitate it through cooperation and good faith efforts.

5. Alberta Environment was facing an emergent situation that required action. Therecord supports the finding of the chambers judge in this regard (para. 132-133).Moreover, the Tsuu T'ina were aware of the need for urgent action.

6. Alberta Environment did make some accommodation of the First Nations byproviding for water allocation to the First Nations through the Crown Reservation.

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7. Alberta Environment committed to further consultation to meet the water needs ofthe First Nations. In other words, the adoption of the Plan did not end theconsultation process with respect to the concerns expressed by the First Nations,which, I reiterate, were largely outside of the scope of the proposed governmentaction in this instance.

[131] I have not overlooked the submission of the appellant First Nations that the above notedaccommodation, by means of the Crown Reservation, was worthless - something said to have beenadmitted by David McGee, the Senior Water Policy and Implementation Manager in the Departmentof Environment. However, the chambers judge had before him the affidavit ofMr. McGee, whichexplained his comments to representatives of the Tsuu T'ina, and which clearly supports theproposition that there is some value to any new licences which may be issued to the First Nations,notwithstanding existing over-allocation of water on some ofthe rivers within the SSRB. While thechambers judge did not expressly comment on this evidence, he was entitled to have regard to it inreaching his conclusion that the duty had been satisfied.

2. The Samson Cree[132] The chambers judge, in concluding that there had been adequate consultation, did not dealseparately with the Samson Cree. They submit that Alberta Environment engaged in no consultationwhatsoever with them, and, thereby, breached the duty to consult. In my view, the record does notsupport this contention.

[133] I have already pointed out the very different circumstances of the Samson Cree to those ofthe Tsuu T'ina First Nation. The Samson Cree reserve is not within the South Saskatchewan RiverBasin, but lies some distance north, in the Battle River Basin. This basin is the subject of a separatewater management plan, with respect to which Alberta Environment has more recently been indiscussion with the Samson Cree. As remarked upon earlier in this judgment, the action commencedby the Samson Cree, claiming water and water management rights, does not name the Red DeerRiver as part of the claim.

[134] In March 2004, ata meeting between Alberta Environment and representatives of Treaty 6First Nations about water issues relative to Battle River and Pigeon Lake, the Samson Creeexpressed an interest in the SSRB, in which the Red Deer River was located.

[135] In December 2005, Alberta Environment sent the draft Plan and a related informationpackage to the Samson Cree, and invited input. The Samson Cree did not attend a subsequentmeeting in February 2006 with Alberta Environment and other Treaty 6 First Nations, at which timethey would have had opportunity to raise concerns or express the need for assistance, as did theTreaty 7 First Nations.

[136] InHaida at para. 43, the Chief Justice discussed the concept of a spectrum, and indicated thatin certain instances that the duty of the Crown to consult may be satisfied by providing notice,

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information and thorough discussion of any issues raised in response to the notice. Here, the SamsonCree were provided with information and opportunity to express their concerns.

[137] It is also relevant to note that to the extent that the Samson Cree had interests in the SSRB,its interest was not of a different nature than the interests of the Treaty 7 First Nations, whoseinterests were more immediate and substantial. The record discloses that there were communicationsover the relevant time frame between representatives of the Treaty 6 and Treaty 7 First Nations,relative to advancing their claims for water rights and management.

[138] In particular, a unanimous resolution was passed at an Assembly of Treaty Chiefs of TreatyNos. 6,7 and 8 First Nations, held at Lake Louise on May 15-16,2006, in "support for Treaty 7 FirstNations on the issue of the South Saskatchewan River Basin Water Management Plan". Thepreamble of the resolution states, amongst other things, that the Government of Alberta had "failedto discharge its constitutional duty to consult with and accommodate the concerns of affected Treaty7 First Nations" in relation to the SSRB Plan. The resolution called upon Alberta to consult anddevelop a process with respect to the "concerns of Treaty 7 First Nations"; and the Assembly furtherresolved that the Treaty Chiefs would support all such further actions considered necessary by theTreaty 7 chiefs to maintain reserve lands, traditional territories, and other treaty and aboriginal rights"in the Treaty 7 Region". The appellant, Chief Victor Buffalo, attended that assembly on behalf ofthe Samson Cree. No reference was made inthe resolution to any concerns of Treaty 6 First Nations.It is reasonable to infer that the Samson Cree were content to rely upon the activities undertaken bythe Treaty 7 First Nations in regard to the Plan.

[139] While the chambers judge did not deal separately with the manner in which the duty toconsult was discharged in relation to the Samson Cree, I am satisfied that his fmding that there wassufficient consultation was reasonable and justified in the circumstances before the court.

E. Declaratory Relief[140] The appellants seek declarations concerning the nature of the duty to consult which arose inthis case, and a declaration that the Crown failed to satisfy such duty. For the reasons set out above,I would not disturb the finding of the chambers judge that the duty had arisen and was met in thecircumstances of this case.

[141] The chambers judge declined to grant a declaration as to the nature of the duty to consult,and, in particular, that it was a constitutional duty. He pointed out that the duty to consult wasevolving, and found it unnecessary to make any declaration, albeit he did fmd that a duty existed inthe particular facts before him. Declaratory relief is discretionary, and I see no good reason to granta declaration in circumstances where the chambers judge, exercising his judicial discretion, declinedto do so. Moreover, it is relevant to the exercise of discretion to note that these same issues andclaims for relief are presently before the Court of Queen's Bench in the existing litigationcommenced by the appellant First Nations. It seems reasonable that these issues, including thedetermination of appropriate relief, should be left to be dealt with in the context of the broaderlitigation.

VIII. CONCLUSION[142] The appeal is dismissed.

Appeal heard on November 3, 2009

Reasons filed at Calgary, Albertathis 28th day of April, 20 I0

I concur:

I concur:

As authorized by:

Page: 33

O'Brien lA.

Picard lA.

Rowbotham J.A.

Appearances:

L.D. Andrychuk, Q.C.C.D. Leonard

for the Appellants

8.M.C. FolkinsA.L. EdgingtonW. Gierulski

for the Respondents

Page: 34

Appendix II

NEB Ruling on the Motion by the SFN

National EnergyBoard

File A-FP-PA-TTM 2006 I (3200-T099-2)24 August 2006

To: All Parties to OH-I-2006

Office nationalde I'emergie

Re: Hearing Order OH-I-2006 - Ruling No.1Boai'll decision on the Motion filed by Simpcw Fir~iNationand CEAA processcomlJlaint letter

Background

On 17 February 2006, Terasen Pipelines (Trans Mountain) Inc. (Terasen) filed an applicationwith the National Energy Board (NEB or Board) under section 52 of the National Energy BoardAct (NEB Act) for a certificate of public convenience and necessity for the TMX- Anchor LoopProject (the Project). Intended to. alleviate capacity constraints and increase the ability ofCanadian producers and marketers to access West Coast markets, the Project would consist of apipeline loop and associated facilities and would extend from Hinton; Alberta to a location nearRearguard, British Columbia. The Project would essentially follo.w the existing Trans Mo.untainright-of-way thro.ugh Jasper National Park and Mount Robson Provincial Park.

On 19 Apri12006, the Board issued Hearing Order OH-I-2006 in respect of the application,. setting out the timelines and procedure to be followed leading up to the oral hearing of theapplication. Specific to intervenors, the Board set out 10 May 2006 as the deadline fprintervention. The deadline for information requests by intervenors to the Applicant was30 May 2006. The deadline for intervenors to :file their evidence was 26 June 2006. The oralportion of the hearing was scheduled for and proceeded, as scheduled, o.n 8 August 2006.

The Project is subject to an environmental assessment under the Canadian EnvironmentalAsses,sInentAct (CEAA). Based on a project description filed by Terasen in April 2005, theBoard and other Responsible Authorities each determined that the Project was subject to aScreening under that Act. Terasen, having so.ught comments from interested groups, and inconsultation ,vith Responsible Autho.rities other than the Board, submitted the Terms ofReference for the Screening to the Canadian Environmental Assessment Agency on16 November 2005. COnClllTentto the timelines set out in the Hearing Order, the Board alsoincluded timelines for comments by Responsible Authorities and the public on the Screening .

... /2

44

444 Seventn Avenue SWCalgary, AibertaT2P aX8

444, SepUeme Avenue S.-O.Calgary {Alberta} T2P oxa Canada

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Letter of Complaint on CEAA Process

On 31 July 2006, theSimpcw First Nation (SFN) filed a letter with the Board and sent copies toall other Responsible Authorities for the Project. In that letter, the SFN set out their objection tothe environmental assessment process set by the Responsible Authorities. The SFN set out thatno offers of resources for assistance to advise the SFN of their rights and interests regarding theProject had been made from any ofthe Responsible Authorities.

The SFN specifically objected to:a) the decision to proceed by way of Screening as opposed to a Comprehensive Study

or Panel Review;b) the decision to set the scope for the environmental assessment; andc) the decision to setthe Terms of Reference for the environmental assessment.

The SFN set out that the Project would pass through land subject to the SFN's claim ofaboriginal rights and title. As a result ofthe asserted rights and title and the proposed activityrelated to the Project, the SFN stated that there are proposed work and activities in respect of:

a) fish, fish habitat and potential fish habitat;b) significant activities that will severely affect the environment in a National Park,

including the potential removal or damage of SFN traditional uses and structureswithin that Park;

c) the requirement of an electrical transmission line for the Project;d) a gas pipeline, including a line of more than 75 km in length; ande) significant impact on the existing aboriginal rights and title affected by all of the

above.

To that end, the SFNrequested an immediate end to all environmental assessment proceedingsand undertakings and that an environmental assessment be re-commenced as a Panel Review.Further, the SFN required that the Crown commence actively fulfilling its duties related to thehonour ofthe Crown and its fiduciary duties and to engage in informed and resourcedconsultation and accommodation. The SFN requested that the Responsible Authorities attend atthe SFN Nation, in Chu-chua, British Columbia on 14 August 2006 to discuss the proper andmore expanded environmental assessment that, in the SFN's view, must take place for theProject.

On3 August 2006 the Board issued a letter to all patties to OH-1-2006 stating that it would hearfrom all parties on this CEAA process complaint at the start of the OH-1-2006Hearing, on8 August 2006.

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Notice of Motion

On 3 August 2006, the SFN filed a Notice of Motion with the Board and served copies on allparties to OH-1-2006. The Motion sought:

a) an order from the Board to re-open and extend the deadlines set out in Hearing OrderOH-1-2006 by six months to allow the SFN to:

i. make information requests to Kinder Morgan Canada Inc.; andii. make information requests of other parties;

b) leave to collect and file written evidence;c) leave to cross-examine the other parties;d) a decision by the Board to convene a hearing at the Simpcw First Nation to allow

SFN to call its own witnesses and to cross-examine the witnesses of the otherpatiieswho will have already appeared before the Board; and

e) an order from the Board that it will not grant any regulatory approvals under the NEBAct or the CEAA until the SFN has concluded its submissions to the NEB and had anopportunity to cross-examine the other pat1ies.

In its Notice of Motion, the SFN cited sections 18, 19, and 20 ofthe NEB Act and subsection 4(1)of the National Energy BoardRules of Practice and Procedure, 1995 as grounds for the Motion.As background to the Motion, the SFN set out that the hearing could not proceed because:

1. a Joint Working Agreement, contemplated in a Memorandum of Understanding, hadnot been signed between the SFN and Terasen prior to Terasen filing its applicationwith the Board;

2. the SFN had been faced with unreasonable opposition by Terasen in the SFN'sattempts to protect its aboriginal rights and title in Jasper National Park byparticipating in studies in the Park;

3. the scope of environmental assessment was insufficient because no governmentdepartment offered the SFN resources to advocate for a comprehensive study or apanel review and as such, a Screening would not be appropriate; and

4. the SFN lacked the capacity and funding to carry out environmental impact andtraditional use studies or to even retain legal counsel.

On 4 August 2006, the Board sent a letter to all parties stating that it would hear the Motion atthe beginning of the OH~1-2006Hearing on 8 August 2006.

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Views of Parties

Simpcw First Nation

In oral argument, counsel for the SFN focused on procedural faimess as the basis for the Motion.Relying on the Supreme Court of Canada case Bakerv. Canada (Minister of Immigration), 1

counsel raised the issue of procedural faimess with respect to a Memorandum of Understanding(MOU) between Terasen and the SFN and the SFN's ability to tully participate in theenvironmental assessment process instituted by the Applicant and by regulatory authorities.

Counsel argued that an MOU signed in August 2005 between Terasen and the SFN contemplatedthe signing of a Joint Working Agreement by December 2005 which, as at the date of hearing theMotion, had not been concluded. According to counsel, the SFN need more time to work furtherwith Terasen in order to conclude a Joint Working Agreement. Counsel cited the Baker case forthe proposition that where one party creates, for others, the legitimate expectation that it willfollow a course of action, then another party has the right to expect that course of action toindeed be followed. In other words, the MOD contemplated that a Joint Working Agreement beconcluded by a certain date which has come and gone. This agreement has not yet been signed,and the SFN have a legitimate expectation that it will be so, but the parties need time in order toconclude that agreement.

Furthermore, the SFN's Consultation and Accommodation Guidelines for the Crown and thirdparties 2 has not been met and until it is, the hearing should not proceed. Counsel noted that,should the Joint Working Agreement be signed prior to the six month hearing extensiondeadline, the need for the extension may be eliminated and the Joint Working Agreement mayaccommodate the SFN's concems.

Counsel set out that the second ground for the six month extension lies in the SFN's need for fullparticipation in environmental assessment processes instituted by Terasen and the regulatoryauthorities. The SFN have not been able to fully participate. Counsel stated that, regarding theenvironmental assessment process established by the regulatory authorities, the SFN objected tothe level of assessment and are of the view that they had not been adequately funded toparticipate in determining that level of assessment and nor did they have capacity to do so.Furthennore, according to counsel, the Terms of Reference agreed to by the regulatoryauthorities, exceptforthe Board, only make minimal reference to First Nations at page 20.

Given the lack of capacity and scant reference in the Terms of Reference, the SFN would havewanted to fully appreciate what they were being asked to comment on when the Terms ofReference were being circulated for consideration. It is only now that the SFN have been able toretain counsel that they have been informed of their rights.

1Eaken. Canada (Minister afImmigration), [1999] S.C.J. 39.2 Filed by the SFN as the evidence in the proceeding and marked as exhibit C-5-2. Also attached to the Notice ofMotion marked as exhibit C-5-5. Titled "Sirnpcw First Nation Consultation and Accommodation Guidelines 2006".

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It was also argued by counsel that the environmental assessment process set out by Terasen doesnot reflect the SFN's traditional land and resource use. He submitted that the Parks CanadaAgency has only just stated that it is willing to talk with the SFN about access to Jasper NationalPark and, the SFN will need time to collect and present their evidence to the Board with respectto the traditional land and resource use claimed in the Parle Counsel submitted thatthe SFN arein the best position to detennine their traditional land and resource use and they were not givenenough opportunity to do so.

Counsel directed the Board to the Mikisew3 and Haida4 cases for the proposition that, where astrong prima facie case of Aboriginal rights and title has been established, a First Nation myst beconsulted. In the case before the Board, according to counsel, the SFN do have a strong primafacie case of Aboriginal rights and titles and, must be consulted. In sum, there needs to bereconciliation between the SFN, Terasen and the Crown and to achieve this, the SFN need timeto articulate their concerns and submit studies for the Board's consideration. Again, counselnoted that if the Joint Working Agreement is signed within the six month extension the SFN'sissues may disappear.

Terasen

Counsel for Terasen asked that the Board, in considering the Motion, keep in mind what the SFNare asking for and weigh that against what the SFN have already received. Counsel outlinedchronology, dating back to September 2004, with respectto five elements ofthe applicationprocess in which the SFN participated: environmental data collection; development ofthe Termsof Reference; the MOU; development of the Traditional Land Use Study; and Terasen'senvironmental assessment process.

With respect to the collection of environmental data, counsel outlined that nine qualified SFNmembers participated fully in field assessment teams collecting fisheries, wildlife, vegetation andarchaeological data. Counsel invited parties to cross-examine Terasen's environmental panel onthis participation. The SFN members were qualified for the work they performed and they werepaid. One SFN member is a qualified archaeologist and participated in the Traditional Land UseStudy. These SFN members were, at Terasen's request, retained by Terasen's environmentalconsultants on a contract basis and paid for their services and reimbursed for their expenses.

Counsel set out the chronology of he termed the SFN participation and approval of theTraditional Land Use Study, which is intended to allow a First Nation to identify their interestsin land and resources that could be affected by a project. Counsel submitted that the SFN, alongwith other Aboriginal groups, participated in the Traditional Land Use Study for the Project atTerasen's expense. In addition to being involved in preparation, all Aboriginal groups whoparticipated were asked to provide comments on the study. Counsel set out that the TraditionalLand Use Study was not submitted until the SFN had indicated thatthere were no concerns withthe repOlt beJng submitted to the Board.

3 Mikisew Cree First Nation v. Canada (]vlinister of Canadian Heritage), [2005] 3 S.c.R. 388, 2005 S.C.C. 69.4 Hedda Nation v. British Columbia (Minister of Forests), [2004] 3 S.c.R. 511,2004 S.C.C. 73.

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Regarding the consultation process for the environmental assessment prepared by Terasen,counsel pointed the Board to Terasen's application and specifically, Volume one, Part IV of theenvironmental assessment dealing with public consultation and Aboriginal engagement. Thatdocument shows that a representative of the SFN attended each ofthe four enviromnental impactconsultation meetings held by Terasen and for which Terasen paid all costs associated for eachparticipant. Counsel argued that at those meetings, Terasen offered funding for third-partyreview of the environmental assessment and the SFN never sought that funding.

Furthermore, submitted counsel, a draft of the environmental assessment was circulated in June.2005 for comments and that, while the final draft was considered complete in November 2005,Terasen had indicated that it would accept and incorporate furiher comments until January 2006.No comments from the SFN were received.

Turning to the SFN's participation in the drafting of the Tenus of Reference, which lead to thescope of the Project for environmental assessment, counsel for Terasen submitted that thedocument was circulated to the SFN for comments but that, when no comments were received,Terasen extended the deadline for comments by 10 days. The final Terms of Reference and arequest that the SFN (and others) review the environmental assessment was e-mailed to theSFN's band manager. Parties were advised to direct any further questions regarding the TernlSof Reference to the canadian Enviromnental Assessment Agency. A fmiher e-mail was sent tothe SFN enclosing the environmental assessment and a DVD of the application. Counsel set outthat, in sum, the SFN participated in the TernlS of Reference and had the opportunity to maketheir views known and to now say none of this matters because they have only just retainedcounsel is unfair in the extreme.

Specific to the SFN's participation in the Board's process, counsel set out that the Hearing Orderwas issued on 19 April 2006 and the SFN intervened. According to counsel, the SFN had theopportunity to ask information requests of Terasen by 30 May 2006. They also had theopportunity to file evidence by 30 June 2006 which they did. However, the evidence that theSFN filed in this hearing contained no hint of any concern with the issues now raised in theirMotion or the CEAA process complaint letter. Had the SFN raised concerns then, .parties and theBoard could have asked information requests of the SFN to explore the issues.

In counsel's submission, the chronology demonstrated participation and sophistication ontheputi of the SFN.

Counsel then addressed the main issues that were outlined in the Notice of Motion. One of theallegations in the Notice set out that Terasen blocked the SFN's attempts to protect theirAboriginal rights and title in JNP. Tersasen's counsel pointed out that this argument "vas noteven addressed by counsel for the SFN in oral argument. Furthermore, according to counsel, thechronology outlined demonstrates that Terasen and its consultants went to extremes to ensure theSFN's participation in archeological studies, for which the SFN were reasonably compensated.

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With respect to the MOD, Terasen's counsel argued that the MOD outlines objectives, notobligations. One of those objectives is a Joint Working Agreement. Counsel submitted thatTerasen would be willing to discuss the steps it has taken to live up to the MOD if the SFNagreed to remove any confidentiality under which discussions took place and Terasen proposalswere made, Otherwise, in counsel's submission, the Board should view those submissions in theNotice of IVIotionas nothing more than unsubstantiated allegations.

Regardless, according to counsel, the MOD is irrelevant to the Board's decision because noagreement is needed in order for Terasen to consult with the SFN and to obtain the SFN's viewsor to ensure SFN participation leading up to the environmental assessment. Counsel for Terasenpointed out that the MOD pre-dates the SFN's Consultation and Accommodation Guidelines.

As for the SFN argument regarding funding and capacity, counsel submitted that the SFN havenever taken that position up until their 31 July 2006 letter complaining about the CEAA process.According to counsel, the SFN professed to have a full understanding of the CEAA process as aresult of involvement in CEAA-relatedprojects in British Columbia and should not now bepennitted to say that they are unfamiliar with the CEAA process and thus deserve specialconsideration because they lacked funding that had been put on the table and not accepted orbecause they lacked counsel that they have obviously obtained shortly before the Notice ofMotion was filed.

As to the CEAA process complaint, counsel submitted that a Panel Review is still a possibility,as is Crown consultation. In Terasen's view, the project is not on the Compr~h~nsiv~Study Listand as such a Comprehensive Study is not needed. Even if it were, counsel asked, "what wouldit change?" All ofthe factors listed in section 16 of the CEAA appear in Terms of Referenceeven though they did not have to be included. Thus, even though the project is subject to aScreening, the level of review is a Comprehensive Study level of review.

As to the number of references to First Nations in the TemlS of Reference, counsel argued thatthere are several references to First Nations in that document. Furthennore, CEAA defines anenvironmental effect to include the current use of lands and resources for traditional purposes byAboriginal persons and the effects on physical and cultural heritage or on historical orarchaeological issues and thus requires consideration of Aborigirtal traditional land and resourceuse. Furthermore, according to counsel, the SFN participated in the Terms of Reference whichpreceded the decision to assess the Project by way of Screening and the scope ofthe factors. Inshort, argued counsel, the SFN had the opportunity to participate.

Last, counsel argued that the Board must balance the public interest which favours anexpeditious addition of pipeline capacity with Aboriginal interests and that, in this instance, thebalance lies with recognizing the active participation of the SFN today and the opportunities stillavailable for participation and consultation.

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Other Parties

In opposing the Motion, counsel for the Canadian Association of Petroleum Producers (CAPP)argued that the process has not failed the SFN. Counsel set out several examples of where theSFN were invited to participate. He pointed to the record, filed in the application, whichdemonstrates the SFN's contact with the Applicant as early as 22 months prior; to the Board'swillingness to accept the SFN's late intervention and evidence; and to the SFN's stated capabilityof accessing the Board's electronic registry.

In CAPP's view, there will be no incentive for anyone to properly engage interested groups if, atlast moment, someone could stop the Board's process. Counsel argued that there is establishedlegal precedentthat objections must be raised in a tinlely fashion and if a party participates in theprocess without raising an objection, then that party waives its right to object.

As for consultation, counsel stated that the Mikisew5 case stands for the proposition that theCrown cannot treat First Nation's with indifference and that is not what we have here. Counselcited the Delgamuukw6 case, which clarifies the Gladstone 7 case to say that the limits placed onAboriginal rights in order to further objectives that are sufficiently important to the broadercommunity, such as infrastructure development, are a necessary part of the reconciliation ofAboriginal interests with the interests of the broader political society. In citing the H aida8 case,counsel highlighted the spectrum available for consultation and accommodation and though, incounsel's submission, no primafacie case has been established by the SFN, procedural faimessin the NEB process and other processes is evident. Regardless, submitted counsel, Crownconsultation is collateral to this process and will continue.

Counsel continued on to argue that both the Haida9 case and the TaktjlO case set out thatAboriginal groups do not hold a veto right nor is there a need to reach agreement between theCrown and Aboriginal groups prior to the Crown proceeding. Furtheml0re, the Crown canincorporate into its own obligation other regulatory processes. In counsel's view, both theprocess under CEAA and NEB process meetthe requirements in H aidall and in Taku,12 wherethe process was upheld. Last, counsel noted that the SFN did not support with caselaw theirargument that there is an obligation, either by the proponent or by the Crown, to provide fundingor capacity.

5 Supra note 3.6 Delgamuukw v. British Columbia, [1997J 3 S.c.R. 1010.'1R. v. Gladstone, [1996J 2 S.C.R. 723.8 Supra note 4.9 Ibid.10 Taku River Tlingit First Nation v. British Columbia (project Assessment Director), [2oo4J 3 S.C.R. 550, 2004S.C.c. 74.11 Supra note 4.12 Supra note 10.

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Counsel for the Parks Canada Agency characterized the issue raised by the Motion as.one ofprocedural fairness. Counsel submitted that it is not appropriate or necessary to attempt to assessthe SFN's asselted rights or the adequacy of Crown consultation in this process. Counselarguedthat, on several occasions, Parks requested information to assess SFN's asserted rights in JasperNational Park and that no infonnation has been forthcoming. In any event, according to counselfor Parks, Parks' position is that the SFN's rights that have been surrendered or otherwiseextinguished prior to 1982. Regardless, regulatory decisions from the federal authorities haveyet to occur and any existing consultation obligations would therefore continue outside oftheBoard's process. Counsel for Parks encouraged the Board to focus on what the Applicant hasdone and what the Board's process is in deciding upon the Motion.

As for the environmental assessment under CEAA, counsel for Parks argued that the CEAAprocess has been correctly followed as outlined in the letter dated 3 August 2006 from theResponsible Authorities. Essentially, section 18 ofCEAA requires that a project not on theComprehensive Study List Regulation must proceed by way of a Screening; this is not adiscretionary decision and that, on an initial assessment of the facts, the Project did not fit withinthe Comprehensive Study List Regulation so a Screening is what was required. With respect to aPanel Review, that request is premature given that, under section 25 of CEAA, a ResponsibleAuthority can request such a review in appropriate circumstances. In counsel's view, noextension in the Board's process is required.

The Board also heard argument from each of the following palties, all of whom were inopposition to the Motion: Chevron; ConocoPhillips; Imperial Oil; Nexen Inc.; and Shell Canada.These patties were either producers or refiners of oil and shippers on the TransMountain system.These parties argued that the process has been ongoing for quite some time atld that no furtherdelay is justified especially when considered against the need for oil pipeline capacity.

ReplybySFN

Many points were raised in reply by counsel for the SFN. At times, the assertions made were inthe nature of what should have been, in the Board's view, sworn or adopted evidence, thoughwere disclaimed by counsel for the SFN as being provided for context as part of reply argument.To that extent, where those assertions were made, but not supported by the record, the Board hasnot considered them.

According to counsel, the Traditional Land Use Study is incomplete because of concerns raisedby the SFN. In support of this assertion, counsel pointed to section 4.3.6 ofthe Traditional LandUse Study which deals with the limits of the study. Furthermore, the Net Benefits workinggroup participation for that study was inadequate. Counsel also argued that the Traditional LandUse Study was conducted only in respect of Jasper National Park. As well, according to counsel,a one day helicopter tour with the SFN tagging along cannot be considered adequateparticipation in a Traditional Land Use Study which, in and of itselt~was not adequate toconsider impact on traditional use. Participation in the Traditional Land Use Study was curtailedbecause the SFN did not have its own researcher. FurthernlOre, the company's process is

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problematic because no chance has been afforded to the SFN to address the concems raised inthe Traditional Land Use Study.

In essence, the SFN has tried its best to pat1icipate but there have been capacity considerationsall along. As well, there have been time constraints in considering the Terms of Reference andother regulatory processes. Counsel argued that the SFN tried its best to contribute, but therewere not enough resources and, more importatltly, there was not enough time to conductindependent studies and make reasonable contributions to Terasen's environmental assessmentand the Terms of Reference.

Counsel raised the issue of other parties, notably Terasen, saying that the SFN had been askedfor their input but remained silent. Counsel submitted to the Board that silence in the SFNculture is not acquiescence. In the SFN's view, there needed to be active engagement, byTerasen and others, in the face of silence. At the end ofthe day, the Board must balance theSFN's interests and the public's interests and find in favour of the SFN.

Counsel for the SFN responded to Terasen's argument regarding the offer offunding made byTerasen. In the SFN's view, that offer was made to environmental non-govemmentalorganizations and not specifically to Aboriginal First Nations As for the MOU, counsel asked"why was there a signing ceremony"?, presumably to imply that there would not have been oneif it had not been the intention of the SFN to create obligations, not just objectives. Furthermore,according to counsel, the objective ofthe MOU was to ensure that development adheres totraditional land use by the SFN.

hI reply to CAPP, counsel argued that Crown consultati()l1 must be meaningful and in order forthat to occur, theSFN need a chance to provide more information to the Board. In the Taku13

case, the First Nation hired their own expelt. hl the case before the Board, the SFN did not havetheir own expert, atld therefore the Traditional Land Use Study was not shaped by SFN concemsas it was in the Taku14 case. Furthermore, there is a process for the land in British Columbia tobe dealt with by that province's legislature at the earliest in the spring of 2007, such that a delayin this process would allow for the Simpcw to ensure that information is put before this Board.

As for capacity and funding, in response to counsel for CAPP, counsel cited the Okanagan15

case in which the coUtts of British Columbia ordered interim costs to a First Nation whodemonstrated poverty so that its members could participate in litigation to defend their right tolog on Crown land over which they asselted Aboriginal rights and title.

Counsel then conimended to the Board its own Mat'ch 2006 Q&A document entitled"Consideration of Aboriginal Concerns in National Energy Board Decisions" and submitted thatthe document would be fully engaged and met ifthe Board were to grant the SFN's Motion fortime to provide more evidence.

13 Supra note 10.14 Ibid15 British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 S,C.C. 71, [2003] 3 S,c.R. 371.

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Views of the Board

The Board heard many and varied arguments both in SUPPOltof and against the Motion. While ithas taken all of these arguments into account in coming to its decision on the Motion, the Boardis of the view that, in essence, it is being asked to extend the timelines by six months on the basisof procedural fairness for the following reasons: Terasen has not afforded enough opportunity tothe SFN to participate in Terasen's section 52 application; the SFN have had insufficient time topatticipate in the Board's regulatory process; and the SFN have not had enough opportunity toparticipate in the CEAA environmental assessment process. The Board points out that itsassessment of the facts here is only for the purposes ofthe Motion. TIle Board must assessevidence for Terasen's section 52 application separately and it will do so.

Burden of Proof

While no party raised the issue of burden of proof in a fOlmal way, as a preliminary issue, theBoard must decide whether or not the SFN have fulfilled the burden of proving their case on theMotion. In the Board's GH-2-87 Reasons for Decision,16 and more recently in RH-R-2-2005,17the Board set out as follows:

"Burden of proof' is a fundamental concept in proceedings before a Court.If a patty is unable to satisfy the burden cast upon it, the Couti has no optionbut to deny the relief sought by that patty, thereby ruling in favour of thatpatty's adversary.

In tIns instance, the Board is of the view that the SFN have not met that burden on the basis thatthe SFN did not file any sworn or affinned evidence in support of the Motion to delay theproceedings. The SFN filed no affidavit in support of the Motion setting out why the processeswere not procedurally fair, nor was any evidence led on the hearing record to that effect.

After argument on the Motion concluded, counsel for Terasen noted for the Board that issuesboth he and counsel for the SFN raised in argument are issues that would be ordinarily bediscussed by witnesses in cross-exatl1ination and that such witnesses would be available to speakto those issues when the evidence on the section 52 application was being heard. A witness forthe SFN, Chief Matthew, took the stand and adopted the only document submitted as evidenceby the SFN in the proceeding, that being the SFN Consultation and Accommodation Guidelines(and attached Referrals Processing System and map of the SFN Traditional Territory). In cross-examination, counsel for Terasen asked Chief Matthew if there were any other documents filedby the SFN on the record as evidence, to which Chief Matthew responded not a<; far as he knew.Counsel for Terasen then asked if Chief Matthew had anything else he wished to add to the fileddocument, to which the Chief replied "not at this time."

16 TransCanada Pipelines Limited, GH-2-87, Applications for Facilities and Approval of Toll Methodology andRelated Tariff JvIatters, Reasons for Decision, July 1988.17 Coral Energy Canada Inc. and the Cogenerators Alliance, RH-R-2-2005, Review ofRH-2-2004 Phase I Decision,Reasons for Decision, May 2005.

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As well, the Board heard counsel for the SFN cross-examine Terasen's environmental panel onseveral ofthe issues raised in the Motion, however in the Board's view, such cross-examinationfailed to SUPPOltthe SFN's case. If anything, such a cross-examination only resulted inconfirmation of Terasen's attempts to engage the SFN in its processes. No evidence waspresented to the contrary.

The Board is ofthe view that because no evidence in support ofthe Motion was filed, nothinghas changed as a result ofthe Motion. Therefore, the Board can come to no other conclusionthan that the SFNhas not met the burden of proof in establishing that procedural faimess has notbeen followed justifying a six month delay in the proceeding. On that basis alone, the SFNMotion is denied.

Having determined that the SFN has not met its burden of proof, and that the Motion is deniedon that basis, the Board could end the matter here. However, for the sake of completeness, theBoard will continue on with views of the Motion.

Procedural Fairness as Against Terasen

The Board notes, at the outset, that counsel forthe SFN cited no case law for the proposition thatan applicant is under a duty to provide procedural faimess. The Board sets out its expectationsof companies through the criteria found in the Board's Filing Manual and generic InfolmationRequest18 it issues and did issue to Terasen in March 2006. These criteria, if followed by acompany, require early engagement with groups that may be affected by a project. The Boardalso notes counsel for the SFN set out that the SFN did participate in the process for theTraditional Land Use Study.

Beginning with the Terms of Reference leading up to the CEAA process, it is not clear to theBoard, from the SFN's submission, why only minimal mention of First Nations in the Terms ofReference is relevant to support an argument that the SFN were not meaningfully engaged in theprocess. The Board notes that of several mentions of First Nations or traditional use made in theTelms of Reference, one is taken directly from the definition of environmental effects in theCEAA. As part of the definition of environmental effects, traditional land and resource use byFirst Nations must be taken into consideration when assessing a project, as was pointed out byTerasen's counsel. FUlthermore, the Board notes that the Terms of Reference, in addition tosetting out requirements of Responsible Authorities other than the Board, is based on Board'sFiling Manual, which sets out the Board's expectations for environmental assessment includingconsideration of traditional land and resource use by Aboriginals.

However, the real issue, in the Board's view, is the SFN's ability to participate in setting theTemlS of Reference. The SFN led no evidence to demonstrate to the Board what more the SFNwould have liked to see in the Terms of Reference that was not already included or what they

18 Attachment titled "Infonnation to be Filed with Applications Where there May be an Aboriginal Interest" toBoard letter dated 3 August 2005, "Implications of Supreme Court of Canada Decisions on the National EnergyBoard's Memorandum of Guidance on Consultation with Aboriginal People".

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would have liked to have seen done differently. The Board notes that, from the evidence on therecord, on at least two occasions, participants to the environmental issues consultation meetings,of which SFN was one, were invited to comment on the Terms of Reference. The evidencedemonstrates that when the SFN did not comment on the Tenns of Reference by the firstdeadline of 15 July 2005, Terasen extended the deadline to 25 July 2005. Still no comments orconcems were raised. The evidence further shows that when a final copy of the Terms ofReference was sent to the SFN, Terasen indicated that comments or concems could be directedto the CEA Agency. There was no evidence to show that comments were ever made or received.

Counsei for the SFN alleged time constraints in considering the Terms of Reference but noevidence was led to support this allegation. As well, while counsel for SFN argued that silencedoes not mean acquiescence in SFN culture, with respect, no evidence was lead to support thisassertion and there is nothing that SFN counsel pointed to on record to show that the SFNinformed Terasen of this tradition such that Terasen would have been made aware. Last, counselmounted the argument that the SFN have only just retained counsel, but no evidence waspresented to show why counsel could not have been retained earlier.

Tuming to the MOU, in considering the Baker19 case, the Board is of the view that this case doesnot support the SFN's legitimate expectation argument. Rather, the doctrine oflegitimateexpectations, as dealt with in Baker,20 is based on the principle that the circumstances affectingprocedural faimess must take into account the promises or regular practices of administrativedecision-makers. In this instance, the SFN have not shown how a duty imposed on anadministrative decision-maker is transposed onto a party to an MOU that, itself, creates noobligations but rather sets out objectives which each party desires to achieve.

In any event, the Board is of the view that an MOU signed between two parties to a regulatoryproceeding and which sets out future intentions to conclude agreements is not determinative ofthe Board's decision on an application. The fact that there is an MOU between the SFN andTerasen can be one indicator of engagement. However, in the Board's view, there is nopre-condition that a Joint Working Agreement contemplated in the MOU be concluded for theBoard to carry out its regulatory assessment.

It is apparent to the Board, from what is contained on the record before it, that the SFNparticipated in the Traditional Land Use Study. The SFN provided a description ofland andresource use and proposed the mitigation in the traditional land use for Terasen to incorporate.Additionally, evidence was given in cross-examination thatthe SFN had no concems with theTraditional Land Use Study, as it was drafted, being forwarded to the National Energy Board.N o evidence to the contrary was presented.On cross-examination by SFN counsel, Terasen's environmental witness panel set out thatconsultation with the SFN on base data collection goes back to September 2004. They clarifiedthat a helicopter ride was done to accommodate elders because some of the areas examined were

19 Supra note 1.20 Ibid

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difficult to reach. However, according to the Terasen witnesses, there was more participationthan just the helicopter ride. Terasen witnesses set out that there was ground recOlmaissancefrom the East gate of Jasper all the way through the route. As well, one representative of theSFN participated in archaeological studies in which he wrote 25 days of infonnation that wasgathered through archaeological investigation.

The Board notes that counsel for the SFN stated that the Traditional Land Use Study only tookinto account the proposed right-of-way in Jasper National Park. The Board can only concludethat counsel misspoke himself, because the evidence on the record indicates that the TraditionalLand Use Study follows the entire proposed right-of-way and no evidence to the contralY wasled.

Absent evidence to the contrary, there is nothing to lead Board to conclude that the SFN were notable to participate in the Traditional Land Use Study.

Considering now the issue ofthe enviro1Unental assessment process, the Board looked at severalaspects. First, the evidence commended to the BOal'd demonstrates that the SFN were involved,as early as September 2004, in data collection along the proposed right-of-way that they haveclaimed as traditional territory. Terasen's witnesses gave evidence that on 30 September 2004when Terasen employees met with the SFN, the SFN emphasized the technical expertise thattheir conm1Unity could offer to the environmental assessment component, and it was at that timethat they highlighted that they would have capacity to offer in fisheries, vegetation, and inwildlife. Between 20 September 2004 and 15 October 2004, two oftheir experts were engaged inthe fisheries data collection, and one of their experts was engaged in the wildlife fall datacollection. Following that, in 2005, there were nine technical experts that participated in theenvironmental field studies. The evidence showed that certain SFN members were retained andpaid by Terasen for that expertise.

Additionally, the SFN participated in each ofthe four envirolUnental issues consultationmeetings. The evidence shows that a representative ofthe SFN was present when environmentalnon-government organizations raised the issue of participating more fully in Terasen'senvironmental assessment process by having their own experts funded by Terasen. The evidencein cross-examination shows that the SFN were considered by Terasen to be environmental non-government organizations for the purpose of addressing enviromnental issues. Terasen witnessesfurther' stated on cross-examination that, at the last ellvironmental issues consultation meetingwhen independent reports were presented, it would have been apparent to parties that one grouphad been offered opportunity and took advantage of retaining outside expertise funded byTerasen.

When asked by SFN counsel if Terasen would have provided funding to the SFN had the SFNasked, the Terasen witness responded in the affinnative. Moreover, the evidence demonstratedthat the SFN were asked for comments on environmental assessment 011several occasions, and,that, at the SFN's request, Terasen created a separate engagement process to discuss other areas

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of interest to the SFN such as the MOD and the positive and negative impacts of the Project onlocal communities.

For the purposes ofthe Motion, the Board can only conclude, based on the evidence before it,that the SFN were provided numerous opportunities to not only pa11icipatein the envirolmlentalassessment process set out by Terasen, but to also raise any concems about how the process wasunfolding and that they did not to do so.

Procedural Fairness as Against the Regulatory Authorities

The SFN also allege that they have not been treated in a procedurally fair manner in regulatoryprocesses, though there was no specific elaboration on what processes were being referred to.To the extent that counsel was referring to the establishment ofthe Terms of Reference byResponsible Authorities, the Board has already disposed ofthe issue. To the ex1:entthat theprocess referred to is the process related to the Screening ofthe Project, it will be dealt with inthe following section ofthis Ruling.

To the extent that the process referred to is the Board's own regulatory process, the Board'sviews are as follows. At the opening of his argument, counsel cited the Baker21 case for theproposition that the values underlying the duty of procedural faimess relate to the principle thatthe individual or individuals affected should have the opportunity to present their case fully andfairly, and have decisions affecting their rights, interests, or privileges made using a fair,impartial and open process, appropriate to the statutory, institutional and social context ofthedecision.

The Board notes that, as a quasi-judicial tribunal, its processes are designed to comply with therules of natural justice one of which is procedural faimess. These processes have stood the testoftime. In the circumstances of this case, in all instances save two the Board has followed itsusual process as set out at the beginning ofthisdecision. The two instances where it deviatedwere, in the first instance, to allow the SFN to file its intervention late, because the Boarddetemlined that no party would be prejudiced and, in the second instance, to allow the SFN tofile its evidence late. In both instance, the Board granted this relief on its own motion.

The SFN were given the oppo11unityto participate in the Board's process. The Board set out, atthe begitming of this Ruling, the relevant dates for intervenors to participate in the Hearing. TheSFN did take the opportunity to participate: the SFN intervened, filed evidence, cross-examinedTerasen's witnesses and argued against the section 52 application being granted at this time.

21 Supra note 1.

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Furthermore, the Board asked infonnation requests of Teras en specific to concel11Sraised by theSFN in Terasen's Traditional Land Use Study. In particular, the Board noted mention by theSFN in the Traditional Land Use Study ofthe need for fmiher study and the desire to be involvedin planning and monitoring related to resources in their territory. In accordance with the its ownstandard practice, the Board followed up with Terasen on these comments by asking, inInformation Requests 1.37 and 1.38, how Terasen intended to address those concerns.

In response, Terasen answered that Aboriginal groups would be involved in additional field workrelated to, or other mitigation, for each specific issue raised, including Aboriginal historic sitesand Aboriginal medicinal plants and berries, avoiding wetlands and Aboriginal hunting outsideof parks. Terasen also answered that they were involved in discussions with the SFN regardingthe level. of involvement by the SFN in aspects of monitoring during construction, restorationand operation.

CEAA process complaint

As with other Responsible Authorities, the Board is ofthe view that a Comprehensive Study isnot a discretion left open to the Board for detennination. In other words, a project must fitwithin the CEAA Comprehensive Study List Regulations to be subject to a ComprehensiveStudy. In this instance, a preliminary assessment ofthe Project by Responsible Authorities

, indicated that the Project did not fall within the requirements ofthose Regulations. Thus, aScreening level of assessment is what is required.

In any event, as counsel for Terasen noted, the Terms of Reference set out that the Project issubject to the factors required for a Comprehensive Study which are found in subsections 16(1)and 16(2) of the CEAA despite the fact that the Project is subject to a Screening and thus wouldotherwise only subject to the factors set out in subsection 16(1) of that Act.

With respect to the argument that the environmental assessment should have been considered byPanel Review, the Board notes that at the time consideration was given to establishing theappropriate process, no pruiy raised concerns which would have suggested that a Panel Reviewwas wan-anted. The Board notes that the CEAA contemplates that where a ResponsibleAuthority cannot make a detennination as to the significance of an environmental effect or is ofthe opinion that public participation warrants a Panel Review that responsible authority mustrefer the project to the Minister for either a mediation process or a review panel process. Withrespect to its own environmental assessment process, the Board notes that there is still theoppoliunity for public comment on the Screening. After that period has elapsed, the possibilityof a Review Panel is not foreclosed.

Regarding the SFN's complaint about the Terms ofReferellce and scope of the Project, theBoard has dealt with that issue earlier in this ruling.

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Documents

RE: Project No. 3698623 British Columbia Utilities ... · 12/23/2011 · BC Hydro Written Reply Submission – 23 December 2011 Page 2 1 Ruskin Townsite Residents Association (RTRA)