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B.C. ordered to pay $10M for denying Squamish power project

Justice Kevin Loo said Greengen Holdings Ltd lost an opportunity to achieve a completed and profitable hydro-electric project.
Fries Creek as seen from Fisherman's Park in Squamish.

A B.C. Supreme Court judge has ordered the provincial government to pay $10.125 million after it denied permits to a company that wanted to build a run-of-the river power project near Squamish.

In his Oct. 10 decision, Justice Kevin Loo said the plaintiff, Greengen Holdings Ltd., “lost an opportunity to achieve a completed and profitable hydro-electric project” after government representatives wrongfully exercised their legal authority, a transgression described in the ruling as “misfeasance.”

Between 2003 and 2009, the company sought to develop a hydro-electric project on and around Fries Creek, which sits opposite the Brackendale neighbourhood on the other side of the Squamish River. To do so, Greengen Holdings Ltd. required a water licence from the Minister of the Environment and tenure over Crown land from the Minister of Agriculture.

After a lengthy process involving extensive communications between Greengen and various provincial and other ministries and regulatory agencies, the permits were denied, according to Loo. Both decisions cited impacts on Squamish Nation cultural sites that could not be mitigated.

Greengen asserted that the decisions were not made for reasons set out in the permit denials “but for collateral political purposes related to the Province’s relationship with the Squamish Nation (SN) and its desire to avoid a lawsuit from the SN,” Loo said in the ruling.

40-year electricity plan relied on Crown land

The case dates back to December 2005, when BC Hydro issued an open call for power with Greengen. The company submitted a tender several months later.

On July 26, 2006, BC Hydro awarded Greengen an energy purchase agreement under which Greengen would be entitled to supply electricity at a fixed price for 40 years.

Unlike conventional hydroelectric projects, which store large volumes of water in reservoirs, and in so doing flood large tracts of land, a run of the river project often requires little or no water storage. Instead, from a high elevation, they divert water from a stream or river channel.

Water is then sent into a pressured pipeline known as a penstock, and later passed through turbines to generate electricity, Loo explained. The system returns water to the original stream or river, or into another body of water. 

The project called for most of that infrastructure to be built on Crown land, according to the ruling.

All sides seemed to support the project, said head of company

In early 2005, company principle Terry Sonderhoff discussed the Fries Creek project in a preliminary meeting with Squamish Nation Chief Ian Campbell.

“Mr. Sonderhoff testified that Chief Campbell seemed supportive of the project at the time,” Loo said.

Another meeting was held with Campbell and Dave Ingleson of the Integrated Land Management Bureau (ILMB), part of the Ministry of Agriculture and Lands.

“Ingleson recalled the tenor of this meeting as being positive, constructive, and businesslike,” Loo said.

In April 2007, Greengen submitted a development plan to the province regarding its land tenure and water license applications.

“This was a voluminous document which included, among other things, information regarding the expected environmental impact of the project, hydrology, and an archaeological assessment, Loo said.

Squamish Nation refuses project

On April 27, 2007, the Squamish Nation wrote to the ILMB saying it did not agree with the proposal, that it had a right to consultation on use of the “sensitive ecological and spiritual area.”

The nation later rejected the proposal.

In court, the province said various witnesses were not called, and asked the court to draw adverse inferences against the company.

In his ruling, Loo said the province submitted that former Minister of Environment, Barry Penner, “‘could have resolved any suggestion that any minister committed misfeasance.’”

In the end, Loo found the province's actions wrongfully led to Greengen Holdings Ltd. missing out on a profitable hydro-electric project.

“I have concluded that the value of this loss of opportunity is $10.125 million,” Loo ruled.

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