2012 ABEAB 26                                                  Appeal Nos. 11-060, 064-067, 072-074, 077-96,

113-146, 151-155, 166-168, and 174-ID2

ALBERTA ENVIRONMENTAL APPEALS BOARD   Decision

Date of Decision – August 27, 2012

 

 

 

 

IN THE MATTER OF sections 91, 92, 95, and 97 of the Environmental Protection and Enhancement Act, R.S.A. 2000, c. E-12 and section 115 of the Water Act, R.S.A. 2000, c. W-3;

 

 

-and-

 

 

IN THE MATTER OF seventy-one appeals filed with respect to Water Act Licence No. 00285465-00-00 issued to Matt Schultz by the Director, Central Region, Operations Division, Alberta Environment and Sustainable Resource Development.

 

 

 

 

Cite as:            Stay Decision:  Wilkening et al. v. Director, Central Region, Operations Division, Alberta Environment and Sustainable Resource Development, re: Matt Schultz (27 August 2012), Appeal Nos. 11-060, 064-067, 072-074, 077-096, 113-146, 151-155, 166-168, and 174-ID2 (A.E.A.B.).

 

 

BEFORE:	Justice D.W. Perras (ret.), Board Chair.
PARTICIPANTS:
Appellants:	Joanne Wilkening, Marcel and Colleen Lapointe, Russell Blair, Arthur Frey, Elizabeth Frey, Debbie Kluk, Ronald Kluk, Rene Lemay, Aurora Murray, Ryan Hamilton, Betty Hamilton, Randall Hamilton, Ken Eberle, Sandra Wright, Lloyd Wright, Kevin Wright, James Harvey, Trisha Atkinson, Lyle Gamblin, Helmut Amelang, Beatrice Berezowski, John Berezowski, Marc Poissant, Lara Goertz, Patrick David Goertz, Robert Horne, Karl Graetz, Shauna Graetz, Leonard and Carol Ulmer, Nathan Wright, Michelle Dionne, Sheri Reich, Barney Reich, Bruce O’Brien and Lorraine Beamish, Danny and Janice Kos, Dayne and Danelle Majeau, Merlin G. Seely, Jerrod Seely, Karin Ellen Ness, Barry Ness, Shannon and Bill Davie, Melina and John Cameron, Pearl Graham-Smith, Danny Steven Smith, Sharon Darragh, Pat Darragh, James Strickland, Gary Edwards, George Cook, Keith Carpenter, Teresa Shaw, Brady Hamilton, Debra Herold, Keith Stec, Shann Vick, Donna Johnson, Wesley R. Davidson, John Luchyk, Dwight Dancey, Denise Godin, Milo Meston, Denis Poissant, Petra Smithinsky, David Smithinsky, Jessie Dryden, Garett Swap, Larry Henderson, Everett Ness, Dan and Colene Davie, Tom Cameron, Tina and Len Hein, represented by Albert Orban, Alberta Water Watch Association.
Licence Holder:	Matt Schultz.
Director:	Neil Hollands, Director, Central Region, Operations Division, Alberta Environment and Sustainable Resource Development, represented by Andrew Bachelder, Alberta Justice and Solicitor General.

EXECUTIVE SUMMARY

 

Alberta Environment and Sustainable Resource Development issued a Licence under the Water Act to Mr. Matt Schultz allowing him to divert up to 70,000 cubic metres of water annually for commercial purposes (hauling heated water).

The Board received 71 Notices of Appeal.  The Alberta Water Watch Association, who represented 69 of the appellants in this application, requested a stay of the Licence. 

Even though there were serious issues to be heard at a hearing, if one was held, the appellants did not demonstrate they would suffer irreparable harm during the time it would take to hear the appeals.  Neither the appellants nor the licence holder would suffer a greater harm if the stay was denied or granted.  Although the number of appeals signified the concerns of the residents living in the area, the appellants did not demonstrate the public interest warranted a stay.

The Board denied the stay request. 

                                                       TABLE OF CONTENTS

I.      INTRODUCTION................................................................................................................ 1

II.    BACKGROUND................................................................................................................. 1

III.   STAY TEST.......................................................................................................................... 2

A.            Legal Basis for a Stay.................................................................................................................................. 2

IV.   ANALYSIS.......................................................................................................................... 5

A.            Serious Issue.................................................................................................................................................. 5

1.          Submissions................................................................................................................................... 5

2.          Discussion...................................................................................................................................... 6

B.            Irreparable Harm.......................................................................................................................................... 6

1.          Submissions................................................................................................................................... 6

2.          Discussion...................................................................................................................................... 7

C.            Who Would Suffer Greater Harm............................................................................................................. 8

1.          Submissions................................................................................................................................... 8

2.          Discussion...................................................................................................................................... 9

D.            Public Interest Warrant a Stay................................................................................................................. 10

1.          Submissions................................................................................................................................. 10

2.          Discussion.................................................................................................................................... 10

E.            Directly Affected........................................................................................................................................ 11

1.          Submissions................................................................................................................................. 11

2.          Discussion.................................................................................................................................... 12

V.    CONCLUSION.................................................................................................................. 12

 

I.                                          INTRODUCTION

[1]                                       The Director, Central Region, Operations Division, Alberta Environment and Sustainable Resource Development^* (the “Director”), issued a Water Act Licence to Mr. Matt Schultz (the “Licence Holder”).   The Licence allows the Licence Holder to divert up to 70,000 cubic metres of water annually from an aquifer accessed in 6-23-48-8-W5M, near Drayton Valley, for commercial purposes (hauling heated water).

[2]                                       Seventy-one Notices of Appeal were filed.  The Alberta Water Watch Association (“AWWA”), which represents the appellants, filed a stay application.  The Environmental Appeals Board (the “Board”) denied the Stay application.  The AWWA requested full reasons as to why the Stay application was denied.  These are the Board’s reasons.

II.                                       BACKGROUND

[3]                                       On August 30, 2011, the Director issued Licence No. 00285465-00-00 (the “Licence”) under the Water Act, R.S.A. 2000, c. W-3, to the Licence Holder.

[4]                                       Between September 29 and November 7, 2011, the Board received 71 Notices of Appeal (collectively, the “Appellants”) appealing the Licence.^[1]  The Board acknowledged the appeals and notified the Licence Holder and Director of the appeals.  The Board requested the Appellants, Licence Holder, and Director (collectively, the “Participants”) provide available dates for a mediation meeting, preliminary motions hearing, or hearing.

[5]                                       On November 25, 2011, the Board notified the Participants that the Stay requests of Mr. Dan Smith, filed on November 14, 2011, Mr. Denis Poissant and Ms. Denise Godin, filed on November 18, 2011, and Ms. Debra Herold, filed on November 24, 2011, were dismissed because they did not demonstrate that irreparable harm would occur during the time it takes for the appeals to be addressed.

[6]                                       On November 9, 2011, the AWWA^[2] requested a Stay of the Licence.  The Board received submissions from the AWWA on November 29, 2011.  On December 5, 2011, the Board notified the Participants the Stay request was denied.

[7]                                       On December 5, 2011, the AWWA requested the Board provide full reasons for denying the Stay application.  As stated, these are the Board’s reasons.

III.                                   STAY TEST

A.                                        Legal Basis for a Stay

 

[8]                                       The Board is empowered to grant a Stay pursuant to section 97 of EPEA.  This section provides, in part:

“(1)      Subject to subsection (2), submitting a notice of appeal does not operate to stay the decision objected to.

(2)        The Board may, on the application of a party to a proceeding before the Board, stay a decision in respect of which a notice of appeal has been submitted.”^[3]

[9]                                       The Board’s test for a Stay, as stated in its previous decisions of Pryzbylski^[4] and Stelter,^[5] is adapted from the Supreme Court of Canada case of RJR MacDonald.^[6]  The steps in the test, as stated in RJR MacDonald, are:

“First, a preliminary assessment must be made of the merits of the case that there is a serious question to be tried.  Secondly, it must be determined whether the applicant would suffer irreparable harm if the application were refused.  Finally, an assessment must be made as to which of the parties would suffer greater harm from the granting or refusal of the remedy pending a decision on the merits.”^[7]

[10]                                   The first step of the test requires the applicant to show there is a serious issue to be tried.  The applicant has to demonstrate through the evidence submitted that there is some basis on which to present an argument.  As not all of the evidence will be before the Board at the time the decision is made regarding a Stay application, “…a prolonged examination of the merits is generally neither necessary nor desirable.”^[8]

[11]                                   The second step in the test requires the decision-maker to decide whether the applicant seeking the Stay would suffer irreparable harm if the Stay is not granted.^[9]  Irreparable harm will occur when the applicant would be adversely affected to the extent that the harm could not be remedied if the applicant should succeed at the hearing. It is the nature of the harm that is relevant, not its magnitude.  The harm must not be quantifiable; that is, the harm to the applicant could not be satisfied in monetary terms, or one party could not collect damages from the other.  In Ominayak v. Norcen Energy Resources,^[10] the Alberta Court of Appeal defined irreparable harm by stating:

            “By irreparable injury it is not meant that the injury is beyond the possibility of repair by money compensation but it must be of such a nature that no fair and reasonable redress may be had in a court of law and that to refuse the injunction would be a denial of justice.”^[11]

The party claiming that damages awarded as a remedy would be inadequate compensation for the harm done must show there is a real risk that harm will occur.  It cannot be mere conjecture.^[12]  The damage that may be suffered by third parties may also be taken into consideration.^[13]

[12]                                   The third step in the test is the balance of convenience: “…which of the parties will suffer the greater harm from the granting or refusal of an interlocutory injunction, pending a decision on the merits.”^[14]  The decision-maker is required to weigh the burden that the remedy would impose on the respondent against the benefit the applicant would receive.  This is not strictly a cost-benefit analysis but rather a weighing of significant factors.  The courts have considered factors such as the cumulative effect of granting a Stay,^[15] third parties who may suffer damage,^[16] or if the reputation and goodwill of a party will be affected.^[17] 

[13]                                   It has also been recognized that any alleged harm to the public is to be assessed at the third stage of the test.

[14]                                   The environmental mandate of this Board requires the public interest be considered in appeals before the Board.  Therefore, the Board has assessed the public interest as a separate step in the test.  The applicant and the respondent are given the opportunity to show the Board how granting or refusing the Stay would affect the public interest.  Public interest includes the “…concerns of society generally and the particular interests of identifiable groups.”^[18]  The effect on the public may sway the balance for one party over the other.

 

 

IV.                                   ANALYSIS

A.                                        Serious Issue

1.                                          Submissions

 

[15]                                   The Appellants listed a number of issues to demonstrate there are serious issues to be heard, including:

1.                  The Director did not exercise adequate caution with respect to the water diversion.  The region has a serious water issue.  The aquifer may not behave as expected in the theoretical models so more caution should be exercised in approving a diversion.

2.                  According to Alberta guidelines, the pumping rate should vary plus or minus 5 percent, but the variation in flow was 20 percent.  No adjustments were made in the calculations to compensate for the variation and it could affect data interpretation and long term predictions.  The Licence was approved for 387.5 litres/minute, but the testing showed the flow rate decreased to 310 litres/minute, which violates the guidelines that require the flow rate cannot be less than the anticipated maximum production rate.

3.                  Water levels did not recover to pre-production levels, indicating the boundaries may not be homogeneous, isotropic, and infinite.

4.                  Fractures may close with reduced water pressure, thereby reducing the open spaces for water to flow through.  This may be irreversible.  The presence of fractures might impact the model predictions.

5.                  No justification was provided for the transmissivity rate used to predict drawdowns at various distances and times.

6.                  No justification was provided for the storativity rate used.  The rate chosen could alter predictions and ultimately conditions in the Licence.

7.                  Data used in the prediction of the long term yield could lead to faulty estimations.

8.                  The short term water shortage emergency plan to provide water to residents and livestock that experience a water shortage or loss due to the diversion is inadequate.

9.                  Monitoring systems are inadequate.

2.                                          Discussion

 

[16]                                   At this stage of the appeal process the Board does not have all of the technical and legal arguments before it.  The Board must base its analysis on the information provided by the Participants and what is available in the Director’s record.  It is clear from the Appellants’ Statements of Concern and Notices of Appeal they have concerns regarding the impacts the water withdrawal will have on the Appellants’ water sources.  The Appellants questioned the analysis completed by the Licence Holder’s consultant and whether it was an accurate representation of the aquifer in the area and the potential impacts on neighbouring wells.  The Board considers these as serious issues that need to be heard, should a hearing be held, and the first part of the Stay test has been met.

B.                                         Irreparable Harm

1.                                          Submissions

 

[17]                                   The Appellants argued they would suffer irreparable harm if the Stay is not granted.  They challenged the 1.6 kilometre area of concern based on the report prepared by their consultant.

[18]                                   The Appellants stated those living outside the area of concern would not have the same security as those within the area of concern.  They would suffer irreparable harm because professional monitoring would not be done prior to the start of the diversion and would not be available if a claim was made in the future, thereby impairing their ability to seek compensation for adverse effects to their water supply.  The Appellants argued the harm would be done as soon as the diversion begins.  They stated the Appellants living over 1.6 kilometres away will be in constant fear that their water sources may be in jeopardy, and it is not possible to compensate for mental anguish.

[19]                                   The Appellants explained the area of concern would be different if the water does not travel to the wellhead equally from all directions.  They stated there is evidence the well is not drawing in a perfectly radial pattern due to differences in permeability, the heterogeneity of the formation, and a possible channel favouring a certain direction of water flow.  Therefore, the 1.6 kilometre area of concern would be violated.

[20]                                   The Appellants noted the connectivity and permeability are not equal in all directions and, therefore, determining radial influence in a non-ideal system can lead to erroneous values or assumptions in the models. 

[21]                                   The Appellants argued it is important to understand the system behavior on a regional scale, so the area of concern should be enlarged to compensate for the lack of supporting data.

[22]                                   The Appellants argued permanent damage to the aquifer would result in irreparable harm to the Appellants and the environment, and no amount of compensation would remedy that.  They noted the Licence Holder could withdraw his legal yearly limit in 125 days, well within the time for the appeals to be heard.

[23]                                   The Appellants argued that an “abundance of caution” suggests a Stay be granted.

[24]                                   The Appellants argued the diversion may adversely affect the aquatic environment and, if people are without water, their health is at risk.  The Appellants stated they provided scientifically justifiable evidence that they will be irreversibly harmed by the diversion in the near future.  The Appellants argued the Director and Licence Holder should provide scientifically justifiable evidence to prove the Appellants will not be irreversibly harmed.

2.                                          Discussion

 

[25]                                   The Appellants argued the Licence Holder and Director must demonstrate the Appellants will not suffer irreparable harm.  It was the Appellants who made the application and, therefore, the onus is on the Appellants to demonstrate they will suffer irreparable harm. 

[26]                                   In determining if the Appellants will suffer irreparable harm, the Board looks at whether the Appellants could be compensated monetarily for any damages that may occur. The Appellants argued the Appellants living outside the 1.6 kilometre area of concern would suffer irreparable because they would have to retain a consultant to monitor their wells to obtain baseline data.  They stated they would need the baseline data in case the Licence Holder’s operations impact them in the future and the data are required to prove the impact.  The Board does not accept this is irreparable harm.  Irreparable harm is harm that cannot be compensated for monetarily.  The costs incurred by these Appellants is easily determined and, if necessary, repaid by the Licence Holder. 

[27]                                   If the Licence Holder’s operations cause an impact to the Appellants during the time the appeal is heard, the Licence Holder can compensate the Appellants in different ways.  For example, if the Appellants’ water supplies are affected and it can be shown it is the result of the Licence Holder’s activities, the Licence Holder can provide alternative water supplies, whether it requires trucking in water or drilling new wells.  These are examples of how the Appellants can be compensated if their water sources are impacted.  Although these alternatives may not be the Appellants’ preference, it demonstrates the Appellants can be compensated for any impacts the project may have on them while the appeals are heard.

[28]                                   Based on the information available before the Board at this time, the Appellants have not met the onus of demonstrating they, or the environment, will be irreparably harmed by the issuance of the Approval during the time the appeal is heard and a decision issued by the Minister.  The Appellants have not demonstrated irreparable harm and they do not meet the second part of the Stay test.

[29]                                   Therefore, the Stay application is denied.

C.                                        Who Would Suffer Greater Harm

1.                                          Submissions

 

[30]                                   The Appellants acknowledged they did not understand what financial pressure the Licence Holder was under to generate income.

[31]                                   The Appellants stated those Appellants who live outside the 1.6 kilometre area of concern could suffer financially and emotionally.  Any claims may be limited if a professional does not collect baseline monitoring data.  Those Appellants living outside the 1.6 kilometre area of concern would have to retain a professional to conduct the baseline monitoring, which would be an inconvenience and an unnecessary expense.  The Appellants argued the Licence Holder should be financially responsible.

[32]                                   The Appellants stated the damage to the aquifer for those Appellants living within the 1.6 area of concern could result in a decrease in production and available head in their wells.  The diversion may have varying degrees of impact during the length of the appeal process.  The Appellants argued the possibility of water shortage is apparent and, if it becomes a reality, an adequate emergency response plan is not in place to provide immediate assistance to those affected.

2.                                          Discussion

 

[33]                                   The third step in the Stay test is to assess who will suffer the greater harm, the Appellants if the Stay is not granted or the Licence Holder if the Stay is granted.  If the Stay was granted, the Licence Holder could be delayed from starting to withdraw water.  There may be monetary consequences for not being able to start the project when planned.  Although this may be an inconvenience, it is not the type of harm that would support denying the Stay. 

[34]                                   In determining who will suffer the greater harm, the Board considers the timeframe in which the appeal would be resolved.  Essentially, would the Appellants suffer a greater harm during the time their appeal is considered and the Minister’s decision released?  The hearing, should one be held, will determine if there will be actual harm to the environment and if the Licence adequately reflects what must be done to minimize impacts.

[35]                                   If the Stay was not granted, the Appellants argued they would suffer financially and emotionally.  They stated those outside the 1.6 kilometre area of concern would have to pay a professional to obtain baseline data.  The Appellants stated the emotional stress would result from concerns their water wells may be impacted.  Baseline data can be obtained by retaining a consultant to conduct the water well monitoring.  Although the Appellants may be required to pay the costs associated with obtaining the data on their own water wells, they would have the benefit and security of having the information.  Requiring to pay these types of costs is not a basis to grant a Stay.

[36]                                   Although the issues raised by the Appellants indicate they might be impacted by the water withdrawal under the Licence, it is speculation that the impact would occur during the time the appeals are heard.   

[37]                                    If the Licence Holder decides to start operations under the Licence prior to the resolution of the appeals, he is required to comply with the terms and conditions of the Licence.  This includes measuring water levels in monitoring wells.  If there is a change in water levels, it will be detected in the monitoring wells before it will impact neighbouring wells.  Under the Licence, the Licence Holder is required to remediate and mitigate any impacts to other water users.  Therefore, the Board does not believe the Appellants will suffer a greater harm if the Stay was denied than the Licence Holder would suffer if the Stay was granted.  It has been generally accepted that, in situations where neither party demonstrates a greater harm, the status quo remains in effect.  Therefore, the Stay will not be granted.

D.                                        Public Interest Warrant a Stay

1.                                          Submissions

 

[38]                                   The Appellants argued the overall public interest warrants a Stay because the public expects the regulatory bodies to govern water resources with caution given potable water is essential for life.  The Appellants noted the Licence is for non-essential industrial uses and other sources of water for industry are available.  Therefore, the public would not suffer if a Stay was granted.  The Appellants argued that, if reasonable doubt exists, part of being accountable to the public is short term sacrifice of profits to ensure security of those who may be affected by the diversion by no fault of their own.

2.                                          Discussion

 

[39]                                   The fourth step in the Stay test is whether the public interest favours the granting of the Stay.  In this case, based on the number of appeals received, there is genuine public interest in the issuance of the Licence.   However, the arguments provided by the Appellants did not demonstrate the public interest supports the Stay. The alleged harm the Appellants raised is too speculative.  They stated their water wells could be impacted by the licenced water withdrawal.  In this case, time is required for the impact, if any, to reach the Appellants.  There are measures in place to minimize the risk to the public and, if they are impacted, the Licence Holder is required to remediate or mitigate the impacts under Clause 5.0 of the Licence.^[19]

[40]                                   There are other water sources in the area for industrial uses.  Therefore, the Board does not believe the public who supports the Licence would be impacted significantly, if the Stay was granted, for the period of time required to hear the appeals.

[41]                                   However, the onus is on the Appellants to show the public interest favours the granting of the Stay.  The Appellants have not met the onus, and the Stay is not granted.

E.                                         Directly Affected

1.                                          Submissions

 

[42]                                   The Appellants stated those living within the 1.6 kilometre area of concern have been acknowledged to be potentially directly affected by the Director, and this was reiterated by the Appellants’ consultant.  The Appellants stated the 1.6 kilometre radius for the area of concern was challenged with scientifically justified facts and evidence and, therefore, all the Appellants should be considered directly affected.  The Appellants stated their wells are within the same member as the diversion well.  They argued the Director and Licence Holder should provide scientifically justifiable evidence to prove the Appellants are not directly affected.

2.                                          Discussion

 

[43]                                   Under section 97 of EPEA, a party to an appeal can apply for a stay.  At this stage the Board has not made any final determination of who is directly affected and is a party to the appeals.  However, in reviewing the Director’s record and the submission provided by the Appellants, it appears there are a number of Appellants who live near the proposed withdrawal site.  Based on the limited information available, the Board considers at least some, if not all of the Appellants, could potentially be directly affected.  It is not necessary to have all of the Appellants be found directly affected in order for the Board to grant a Stay.  The Stay would be in effect in the same manner even if one appellant successfully demonstrated a Stay should be granted.

[44]                                   In this case the Board is not granting the Stay application, therefore, it does not have to make a determination of who is directly affected.

V.                                       CONCLUSION

[45]                                   There is insufficient evidence to support the Stay.  Although the Appellants raised serious issues, they did not demonstrate they would be irreparably harmed if the Stay was not granted.  The concerns raised by the Appellants can be compensated for monetarily.  The Appellants did not show they would suffer a greater harm if the Stay was not granted than the Licence Holder would suffer if the Stay was granted.  Therefore, the status quo prevails.  Although the issuance of the Licence is a public concern in the area, the Appellants did not show there was a reasonable possibility they would be impacted by the Licence while the appeals are heard.

Dated on August 27, 2012, at Edmonton, Alberta.

 

 

“original signed by”

_______________________

D.W. Perras

Board Chair

 

Appendix A

 

 

Joanne Wilkening (11-060) Marcel and Colleen Lapointe (11-064) Russell Blair (11-065) Arthur Frey (11-066) Elizabeth Frey (11-067) Debbie Kluk (11-072) Ronald Kluk (11-073) Rene Lemay (11-074) Aurora Murray (11-077) Ryan Hamilton (11-078) Betty Hamilton (11-079) Randall Hamilton (11-080) Ken Eberle (11-081) Sandra Wright (11-082) Lloyd Wright (11-083) Kevin Wright (11-084) James Harvey (11-085) Trisha Atkinson (11-086) Lyle Gamblin (11-087) Helmut Amelang (11-088) Beatrice Berezowski (11-089) John Berezowski (11-090) Marc Poissant (11-091) Lara Goertz (11-092) Patrick David Goertz (11-093) Robert Horne (11-094) Karl Graetz (11-095) Shauna Graetz (11-096) Leonard and Carol Ulmer (11-113) Nathan Wright (11-114) Michelle Dionne (11-115) Sheri Reich (11-116) Barney Reich (11-117) Bruce O’Brien & Lorraine Beamish (11-118) Danny and Janice Kos (11-119)

Dayne and Danelle Majeau (11-120) Merlin G. Seely (11-121) Jerrod Seely (11-122) Karin Ellen Ness (11-123) Barry Ness (11-124) Shannon and Bill Davie (11-125) Melina and John Cameron (11-126) Pearl Graham-Smith (11-127) Danny Steven Smith (11-128) Sharon Darragh (11-129) Pat Darragh (11-130) James Strickland (11-131) Gary Edwards (11-132) George Cook (11-133) Keith Carpenter  (11-134) Teresa Shaw (11-135) Brady Hamilton (11-136) Debra Herold (11-137) Keith Stec (11-138) Shann Vick (11-139) Donna Johnson (11-140) Wesley R. Davidson (11-141) John Luchyk (11-142) Dwight Dancey (11-143) Denise Godin (11-144) Milo Meston (11-145) Denis Poissant (11-146) Petra Smithinsky (11-151) David Smithinsky (11-152) Jessie Dryden  (11-153) Garett Swap (11-154) Larry Henderson (11-155) Everett Ness (11-166) Dan and Colene Davie (11-167) Tom Cameron (11-168) Tina and Len Hein (11-174)