Executive Summary: Key Legal and Evidentiary Issues

• Lil'Wat Nation and Rockford Energy Corporation applied for an injunction to extend the terms of an expiring Energy Purchase Agreement with BC Hydro pending the hearing of an underlying petition alleging a failure of the Crown's duty to consult.
   
• Central to the application was whether the injunction was mandatory or prohibitory in nature, as a mandatory injunction requires the petitioners to demonstrate a strong prima facie case rather than merely a serious question to be tried.
   
• Rockford's standing was challenged on the basis that the duty to consult is owed to collective rights-bearing Indigenous groups, not to corporate entities, and that Rockford does not assert it represents such a collective.
   
• The court found that the petitioners had not established a strong prima facie case that BC Hydro's refusal to renew the EPA at above-market rates adversely affects an Aboriginal claim or right of the Lil'Wat Nation.
   
• Irreparable harm was not established, as the Lil'Wat Nation acquired its interest in Rockford with knowledge that the EPA renewal process was already underway, and any short-term economic losses could be remedied in damages.
   
• Costs of the application were ordered in the cause for both BC Hydro and the Attorney General of British Columbia.
   

Facts of the case

Lil'Wat Nation and Rockford Energy Corporation ("Rockford") petitioned the Supreme Court of British Columbia for an injunction pending the hearing of an underlying petition against British Columbia Hydro and Power Authority ("BC Hydro") and the Attorney General of British Columbia. The injunction sought would order the continuation of an Energy Purchase Agreement ("EPA") between BC Hydro and Rockford, which was set to expire on May 6, 2026.

Rockford owns and operates the Brandywine project, a run-of-the-river hydroelectric facility generating power from Brandywine Creek, located on the traditional lands of the Lil'Wat and Squamish Nations. Rockford is wholly owned by Eco Flow Energy Corporation ("Eco Flow"). In July 2023, Lil'Wat Capital Assets LP purchased a 51% ownership interest in Eco Flow, making Lil'Wat Nation the indirect majority owner of Rockford. BC Hydro and Rockford had originally entered into the Brandywine EPA in December 2001. The Lil'Wat Nation confirmed its approval of the Brandywine project through a participation agreement with Rockford in June 2005, which provided the Lil'Wat Nation with royalties.

In 2021, BC Hydro began an EPA renewal program for existing independent power producer ("IPP") EPAs set to expire before April 1, 2026. Discussions with IPPs and Indigenous nations, including the Lil'Wat Nation, ensued. The EPA renewal program rules were posted on the BC Hydro website in January 2023. In May 2023, Lil'Wat Capital Assets LP acquired a 51% interest in Rockford and notified BC Hydro of the acquisition. Under the renewal program, BC Hydro offered two options: Option A, a five-year contract with a variable price based on the day-ahead mid-C index; or Option B, a 20-year term contract with a fixed price of $58 per megawatt hour plus a 50% consumer price index escalation. BC Hydro entered into 11 EPAs under this program, including some involving Indigenous groups. Rockford and the Lil'Wat Nation maintained that BC Hydro had offered them a "take it or leave it" price and that a higher rate was needed to maintain the Lil'Wat Nation's ownership interest in Rockford.

The Brandywine EPA expired on October 11, 2025. On November 7, 2025, the parties entered into a four-month interim EPA, retroactive to October 11, 2025, providing for $50 per megawatt hour — above current market prices at the time. The interim EPA was subsequently extended to April 15, 2026, and then again to May 6, 2026, to allow the petitioners' injunction application to be heard. The underlying petition is based on an allegation that BC Hydro failed in its duty to consult with Indigenous stakeholders.

Policy and legislative provisions at issue

The duty to consult arises under s. 35 of the Constitution Act, 1867 (U.K.), 30 & 31 Vict., c. 3. The respondents challenged Rockford's standing under s. 35, maintaining it is not a collective rights-bearing Indigenous entity as required by the jurisprudence, citing Behn v. Moulton Contracting Ltd., 2013 SCC 26. Rockford also does not assert that it represents a rights-bearing Indigenous collective for the purposes of consultation or in relation to the Declaration on the Rights of Indigenous Peoples Act, S.B.C. 2019, c. 44 (DRIPA). The duty to consult rests on three mandatory elements: the Crown's knowledge, actual or constructive, of a potential Aboriginal claim or right; contemplated Crown conduct; and the potential that the contemplated conduct may adversely affect an Aboriginal claim or right, as set out in Haida Nation v. British Columbia (Minister of Forests), 2004 SCC 73, and Rio Tinto Alcan v. Carrier Sekani Tribal Council, 2010 SCC 43.

Reasoning and analysis

The court first addressed the nature of the injunction. Madam Justice Duncan was satisfied that this was an application for a mandatory injunction, as the petitioners sought to compel BC Hydro to continue with a contract that had expired and contained no renewal clause. Relying on R. v. Canadian Broadcasting Corp., [2018] 1 S.C.R. 196 and FPMG Hospitality Inc. v. Recipe Unlimited Corporation, 2021 ONSC 7156, the court held that a strong prima facie case — a higher threshold — was required at the first stage of the RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311 test.

On the first branch of the RJR test, the court found that Rockford lacked standing to seek injunctive relief because it does not have s. 35 standing; the duty to consult is owed to collective rights-bearing Indigenous groups, not to corporate entities. As for the Lil'Wat Nation, while it was found to have standing given that the relevant river flows through lands over which it claims title, the court was not satisfied that a strong prima facie case had been demonstrated. BC Hydro's refusal to renew the EPA at a price higher than what was offered to other IPPs was found not to constitute conduct that may adversely affect an Aboriginal claim or right of the Lil'Wat Nation. The court accepted the respondents' submission — grounded in Rio Tinto — that the duty to consult is not engaged by commercial negotiations that merely affect a party's negotiating position, and that the Lil'Wat Nation's access to and control over its resources remained unaffected.

On the second branch of the RJR test, the court was not satisfied that irreparable harm had been established. The Lil'Wat Nation acquired its interest in Rockford knowing that the EPA renewal process was already underway and that the contract would need to be renewed. The court reasoned that any short-term economic losses could, at worst, amount to a few months of lost revenue if the petitioners were ultimately successful on the petition, and that such losses do not constitute irreparable harm. The court further noted that BC Hydro had not refused to purchase electricity from Rockford, and that other IPPs had successfully exported electricity to alternative buyers.

On the third branch — the balance of convenience — the court found that the petitioners' claim was weak. Granting the injunction would compel BC Hydro to purchase electricity at above-market rates during the freshet season, when there is a surplus of energy, to the detriment of ratepayers. The court also observed that rewarding Rockford for holding out would be unfair to IPPs who had already renewed EPAs on the same terms offered to Rockford. The court characterized the claim as one seeking the court to dictate the specific outcome of consultation — dictating a commercial contract on the petitioners' terms — which it found contrary to the proper role of courts in the consultation process.

Ruling and overall outcome

Madam Justice Duncan dismissed the application for injunctive relief. The petitioners failed to satisfy all three branches of the RJR-MacDonald test: they did not demonstrate a strong prima facie case, irreparable harm, or a balance of convenience in their favour. BC Hydro and the Attorney General of British Columbia were the successful respondents. Costs of the application were ordered in the cause for both BC Hydro and the Attorney General of British Columbia, meaning the costs issue will be determined at the conclusion of the underlying petition.

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