On October 10, 2014, in Western Canada Wilderness Committee v. British Columbia (Oil and Gas Commission), 2014 BCSC 1919 the B.C. Supreme Court dismissed a judicial review proceeding commenced by the Western Canada Wilderness Committee and the Sierra Club of British Columbia (collectively, the "Petitioners"). The Petitioners challenged the validity of B.C. Oil and Gas Commission's ("OGC") practice of issuing recurrent short-term water use approvals to oil and gas companies (in this case, Encana Corporation ("Encana")).
The Petitioners argued that the OGC's practice of routinely granting multiple, short-term water use approvals to the same company, for the same purpose, at the same location, allowed applicants to evade the more strenuous and transparent requirements for a long-term water licence. In particular, the Petitioners maintained that the OGC's practice of granting repeated short-term water approvals effectively precluded interested stakeholders from objecting to the issuance of them. The Court disagreed.
As a preliminary issue, Encana disputed the Petitioners' standing to seek judicial review of the OGC's decision. In granting the Petitioners standing, the Court held that questions concerning the application of legislation governing the use of valuable public resources, such as water, constituted a serious issue; that in their capacity as environmental groups involved in research and public education on environmental issues, the petitioners had a demonstrated interest in the outcome of the litigation; and that the proceeding was an effective way to decide the issue in question.
With respect to the appropriate standard of review, the Court concluded that it should afford deference to the administrative decision makers in this case (the OGC), and review this type of decision on the reasonableness standard owing to their industry experience and institutional expertise in the interpretation of the Water Act.
The Court considered the plain meaning of section 8 in the context of the Water Act, and legislative intent. The Court found no express prohibition on the practice of issuing consecutive short-term water use approvals. Nor was the Court able to identify an implied intention on the part of the legislature to prohibit an applicant from re-applying for the same or similar permission to use water. The Court noted that it is difficult to distinguish between circumstances in which a short-term water use approval holder re-applies for the same approval, and those in which a new entity applies for the same approval. Finally, the Court cited a decision of the B.C. Court of Appeal, Telus Corporation v. Mason Capital Management LLC, 2012 BCCA 403, in which it was held that a Court should not read-in a prohibition against recurrent approvals when the language of a statutory provision is clear and unequivocal.
The Court also invoked the legislative history of the Water Act in support of its conclusion that recurrent short-term water use approvals should be permitted. It noted that earlier versions of what is now section 8 of the Water Act referred to the "non-recurrent use of water" and that the phrase "non-recurrent" was removed from the Water Act in 1992. The Court concluded that the effect of that amendment was to permit the recurrent use of water. The Court found further support for its conclusion in legislative debates from 2010 when section 8 of the Water Act was amended to increase the short-term use period from 12 months to 24 months. At that time, the Minister of Environment stated that part of the reason for the extension was to reduce the administrative burden associated with renewing short-term water use approvals. He went on to note that the existing one-year approvals were insufficient for the longer-term needs of many applicants, and that government agencies were already extending them to two years.
The Court also considered the distinction between short-term approvals and licences in the Water Act. The petitioners argued that differences in the application process for approvals and licences suggested that the former types of authorizations were only intended to be granted for one-time, short-term uses. In rejecting this argument, the Court noted that while the distinction in question might be well-founded, there was still nothing in the legislation itself preventing the extension or re-issue of an approval, if the required process was followed. Further, the Court noted the similarity between short-term water use approvals and a number of different types of statutory licences.
For all of the above reasons, the Court concluded that the Water Act endowed the OGC and the Minister with broad discretion in determining how to carry out their respective mandates.
In an increasingly common practice in environmental law cases brought by public interest litigants, the Court declined to award any costs against the Petitioners, notwithstanding its complete dismissal of their application. In doing so, the Court cited the importance of the issues raised by the proceeding.
While this case has been closely followed by many in the natural resource industries, the issue will be rendered moot in the very near future. The new B.C. Water Sustainability Act S.B.C. 2014, c. 15 (the "WSA"), (which has received royal assent, but not yet been brought into force), will repeal and replace the Water Act. Unlike the Water Act, the WSA specifically provides for the recurrent issuance of short-term approvals. The WSA will be brought into force by regulation. Originally the B.C. government was anticipating that the WSA would come into effect by spring 2015, but we understand this may have been delayed to January 2016. In the meantime, the decision is important, as it confirms and validates the practice of renewing short term approvals under the current legislation.