Environmental Appeal Board

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1 Environmental Appeal Board Fourth Floor 747 Fort Street Victoria British Columbia Telephone: (250) Facsimile: (250) Mailing Address: PO Box 9425 Stn Prov Govt Victoria BC V8W 9V1 Website: DECISION NOS WIL-016(c), 017(c), 018(c), 019(c), 020(c) (Grouped as: 2012-WIL-G01) In the matter of five appeals under section of the Wildlife Act, R.S.B.C. 1996, c BETWEEN: AND: Walter Faetz, Stan Doll, Dustin Kovacvich, Brad Zeerip and Daniel Daigle Regional Manager, Recreational Fisheries and Wildlife Program APPELLANTS RESPONDENT AND: Guide Outfitters Association of British Columbia PARTICIPANT BEFORE: A Panel of the Environmental Appeal Board Tony Fogarassy, Panel Chair Les Gyug, Member Ken Long, Member DATE: November 19, 21 to 23, 2012 PLACE: APPEARING: Terrace, BC For the Appellants: For the Respondent: For the Participant: Dustin Kovacvich and Walter Faetz Pamela Manhas, Counsel Not appearing APPEALS [1] The Appellants are angling guides who submitted applications for angler day quotas on the class 2 section of the Zymoetz River (the Zymoetz 2 ), in the Skeena Region of British Columbia. The applications were submitted in response to a February 2012 offering by the Ministry of Forests, Lands and Natural Resource Operations (the Ministry ), of angler day for the Zymoetz 2. The Zymoetz River is a tributary to the Skeena River. [2] In separate decisions dated May 17, 2012, Dana Atagi, Regional Manager of the Recreational Fisheries and Wildlife Program (the Regional Manager ), refused to allocate angler day quotas for the Zymoetz 2 to the Appellants. [3] On May 31, 2012, the Appellants appealed the Regional Manager s refusal decisions to the Environmental Appeal Board (the Board ). [4] The Board has the authority to hear these appeals under Part 8 of the Environmental Management Act and section of the Wildlife Act. Section 101.1(5) of the Wildlife Act provides:

2 DECISION NOS WIL-016(c), 017(c), 018(c), 019(c), 020(c) Page 2 (5) On an appeal, the appeal board may (a) send the matter back to the regional manager or director, with directions, (b) confirm, reverse or vary the decision being appealed, or (c) make any decision that the person whose decision is appealed could have made, and that the board considers appropriate in the circumstances. [5] The Appellants maintain that the Regional Manager had no jurisdiction to issue the quota through the chosen process because there is no angling management plan in place for the Zymoetz River. If there is a plan, the Appellants submit that the quota allocation process chosen by the Regional Manager was flawed and the Board should grant them angler days on the Zymoetz 2 to allow them to operate their businesses as they have done in the past. [6] The Zymoetz 2 appeals have many similarities to two appeals filed against the Regional Manager s angler day quota decisions on a different part of the Zymoetz River, the Zymoetz 1. In fact, two of the Appellants in the present appeals, Mr. Doll and Mr. Kovacvich, are the Appellants in the Zymoetz 1 appeals. The Board grouped together the five Zymoetz 2 appeals (2012-WIL-G01) and scheduled them to be heard immediately after the Zymoetz 1 appeals (2012-WIL- heard concurrently. Although the Panel heard these G02), with one exception. [7] As both sets of appeals raise the common issue of whether an angling management plan exists for the River, to avoid duplication, the Board directed that the evidence on this issue be Appellants submissions on the management plan issue later, during their closing arguments, the Panel s entire findings and decision on the angling management plan issue (identified as Issue #1), has been set out in the decision on the Zymoetz 1 appeals (see Doll and Kovacvich v. Regional Manager Recreational Fisheries and Wildlife Program, Decision Nos WIL-021(b) and 022(b)). For clarity, the Panel s decision in the Zymoetz 1 appeals will be referred to as the Companion Decision. [8] Finally, in a decision dated July 31, 2012, the Board granted, in part, an application by the Guide Outfitters Association of British Columbia ( GOABC ) for participant status in these appeals (see Faetz et al v. Regional Manager Recreational Fisheries and Wildlife Program, Decision Nos WIL-016(b), 017(b), 018(b), 019(b), 020(b)). The GOABC was unable to attend the hearing, but provided a written submission prior to the hearing. BACKGROUND The Legislative Framework [9] The Wildlife Act, R.S.B.C. 1996, c. 488 and its regulations require angling guides to apply for a licence to act as a guide. Under section 52(1) of the Wildlife Act, a regional manager may issue an angling guide licence to a person who meets

3 DECISION NOS WIL-016(c), 017(c), 018(c), 019(c), 020(c) Page 3 certain criteria. The Appellants are licensed angling guides and have taken clients to fish on the Zymoetz 2 in past years. The Zymoetz 2 is a classified water. Management of Classified Waters [10] To address issues of overcrowding on certain highly productive streams and rivers in BC and preserve the unique fishing opportunities provided by those waters, the government introduced a province-wide classified waters sport-fishery management system in The system sought to address overcrowding by classifying waters according to the quality of angling experiences they offer, and capping the number of angler days (also referred to as rod days ) available to angling guides. [11] Waters are classified as either Class I or Class II, and are designated in Schedule A of the Angling and Scientific Collection Regulation, B.C. Reg. 125/90 (the Regulation ) for each region. Schedule A also limits the number of guides on the particular water and the number of guided angler days 1 available on that water during the specified or classified - period. [12] The Zymoetz River, like many rivers in the Skeena River watershed, offers excellent fishing opportunities for anglers. Under Schedule A, the Zymoetz River downstream of Limonite Creek (i.e., Zymoetz 2) is designated as a Class 2 Coastal Water (anadromous). 2 Angler Day Quotas [13] A regional manager has the authority to determine which guides will have angler days on a classified water during the classified period, and determine the number of days. This is done by issuing a quota. [14] Under the Regulation, a regional manager may allocate angler day quotas to angling guides for classified waters. Sections 11(1.1) and (1.2) of the Regulation state as follows: 11 (1.1) Subject to subsection (1.2), a regional manager may allocate angler day quota to an angling guide by issuing a certificate to the angling guide only if 1 Section 1(1) of the Wildlife Act defines angler day to mean a unit representing one person angling during any part of a day and is used to determine the extent to which a stream, lake or area specified under section 53 [the regulation making section] may be used for angling, for example, a limit of angler days means that the total obtained by adding together the number of anglers using the stream, lake or area on each day of a specified period must not exceed The Panel notes the range of names used for the Zymoetz River system. Zymoetz 1 is Zymoetz A in the Regulation and Zymoetz 2 is Zymoetz B in the Regulation. Further, the Zymoetz River is locally known as the Copper River.

4 DECISION NOS WIL-016(c), 017(c), 018(c), 019(c), 020(c) Page 4 (a) a management plan applies to the classified water for which angler day quota is to be issued, 3 (b) the allocation is in accordance with (i) the management plan, and (ii) the requirements of this section, and (c) the period for which the angler day quota allocated is 20 years or less. (1.2) A regional manager must use one of the following processes for allocating angler day quota for classified waters: (a) a process that requires an angling guide to bid for angler day quota for one or more classified waters by sealed tender or auction; (b) a process that requires an angling guide to submit a written proposal for the use of angler day quota; (c) a process that requires an angling guide to submit a sealed tender referred to in paragraph (a), together with a written proposal, as referred to in paragraph (b). [Emphasis added] Changes to the allocation of guided angler days on the Zymoetz 2 [15] In the mid 2000s, the Skeena Quality Waters Strategy (the Skeena QWS ) was introduced in the Skeena River watershed. The Skeena QWS involved the creation of location-specific angling management plans. The Appellants participated actively in, or monitored, the West Skeena Working Group ( West Working Group ). The West Working Group was to develop angling management plans for several rivers in the Skeena region, including the Zymoetz 2. However, according to the Appellants, the development process was flawed and resulted in no consensus among participants in the West Working Group. They submit that no angling management plan for the Zymoetz 2 has been completed or approved. [16] On March 7, 2011, the Ministry (formerly the Ministry of Environment which had previously contained the Fish and Wildlife branch) issued an Information Bulletin titled No Changes to Skeena Steelhead Regulations. The bulletin stated that the Province had opted to maintain the current regulations in the Skeena River Steelhead Fishery for pending the outcome of a tourism and economic impacts study. It stated that the study will inform the next set of regulation changes for the angling season. [17] At that time, Schedule A of the Regulation only restricted the number of guides and the number of angler days on the Zymoetz 2 during the months of September and October. Schedule A stated as follows in relation to the Zymoetz 2: 3 The management plan in the Regulation is often referred to by the Parties as the angling management plan.

5 DECISION NOS WIL-016(c), 017(c), 018(c), 019(c), 020(c) Page 5 Column 2 Column 3 Column 4 NO. OF GUIDES ANGLER DAY QUOTA FROM TO LIMIT Sept. 1 Oct. 31 [18] Although the above table from Schedule A indicates that up to 200 guided angler days were available for allocation amongst fi ve guides on the Zymoetz 2, not all of the available days were allocated in recent years. Based on the evidence, it appears that, in recent years, only 117 guided angler days were allocated among the five angling guides. [19] Eight months after the Ministry issued the Information Bulletin titled No Changes to Skeena Steelhead Regulations, the Regional Manager sent a registered letter dated November 9, 2011 to the five guides, advising that the government had decided to make amendments to the Regulation. The letter states, in part: on October 12, 2011, [the] Government of British Columbia approved regulation changes as part of the Skeena Quality Waters Strategy process. These changes will be implemented on April 1, 2012, an important date to note as you plan your bookings for next year.. The regulation changes include angling guide restrictions on the Zymoetz (Class I and II sections), and allocation of shoulder period rod days on the Zymoetz River (Class I and II sections). As per the Angling and Scientific Collection Regulation under the Wildlife Act, guiding opportunities will be allocated through competitive process this winter. We will keep you apprised as this process moves forward.. [20] For the Zymoetz 2, the Regulation changes referred to in this letter are as follows: SCHEDULE A Column 2 Column 3 Column 4 NO. OF GUIDES ANGLER DAY QUOTA LIMIT FROM TO July 24. Aug Sept. 1 Oct Nov. 1 May 31

6 DECISION NOS WIL-016(c), 017(c), 018(c), 019(c), 020(c) Page 6 [21] Essentially, Schedule A increased the total angler days to 267 and extended the angling season to include shoulder periods (July-August and November- May). 4 [22] Registered letters dated January 12, 2012, were sent by the Regional Manager to each of the Appellants informing them of the upcoming process to dispose of angler day quota for Zymoetz 2 resulting from the Skeena QWS process. Further the disposition would be through a competitive process of a bid and a written submission. [23] In February 2012, the Appellants received a package of documents from the Ministry titled Application Requirements for Angler Day Quota Zymoetz River Class 2 section (the Application Package ). The Application Package required the existing angling guides on the Zymoetz 2 to submit bids for guided angler day quotas to the Ministry by March 14, The Application Package preamble states, in part: New angler day quota (rod days) are being offered through a written proposal and bid process. This process is consistent with section 11(1.2)(c) of the Angling and Scientific Collection Regulation (BC Regulation 125/90). The Ministry of Forests, Lands and Natural Resource Operations (the Ministry) has selected this approach as it allows for unallocated angler days to be made available to angling guides in a fair, consistent and equitable manner and allows the Province to recover reasonable economic rent for the use of the resource. Only existing Zymoetz River Class 2 Section angling guides are eligible to apply for these new rod days. This follows recommendations of the Skeena Quality Waters Strategy and subsequent amendments to the Angling and Scientific Collection Regulation to maintain the current number of angling guides operating on the river and increase the number of allocated rod days from 117 to 267 to accommodate the Classified Waters period extension from July 24 to May 31. Of these 150 new rod days, 100 days will be available from July 24 to August 31 and 50 days will be available from November 1 to May 31. [24] Page 5 of the Application Package explains that new guided angler days were available for allocation through the bidding process. Page 5 states, in part, as follows: Recommendations of the Skeena Quality Waters Strategy (supported by amendments to the Angling and Scientific Collection Regulation) prescribe an increase to the allocated angler day quota from 117 to 267 rod days on the Zymoetz River Class 2 Section. These 150 new days are being offered in ten lots, including five lots of 20 days for the period July 24 to August 31 and five lots of 10 days for the period of November 1 to May 31. Applicants with the 10 highest ranking application scores will be provided first opportunity to purchase new rod days. 4 These amendments to the Regulation were brought into force on April 1, 2012 by B.C. Reg. 178/2011.

7 DECISION NOS WIL-016(c), 017(c), 018(c), 019(c), 020(c) Page 7 If an applicant is successful, the one-time payment (i.e. the bid amount) will secure a 20 year access term to rod day quota.. [25] The Appellants submitted their applications by the March 14, 2012 deadline. The Regional Manager s Decisions and the Appeals [26] On May 17, 2012, the Regional Manager issued his decisions regarding the Applicants applications for the allocation of new guided angler days on the Zymoetz 2. The reasons given in each decision are identical and state, in part: I am writing to inform you of my decision with respect to the proposed disposition of angler day quota for the class 2 section of the Zymoetz River pursuant to the bid process which closed on March 14, I have reviewed the submissions and determine that I will not be allocating any angler day quota on the Zymoetz River section 2 pursuant to that process. I make this determination taking into account the following: Sections 11(1) to 11(1.2) of the Angling and Scientific Collection Regulation (BC Regulation 125/90) were followed in the process. Based on my review of all five bid and proposal submissions I conclude that the economic return to the government of accepting any of the bids for the privilege being offered would be too low to justify accepting any of them. Accepting any would fail to meet the intent of the competitive bid and proposal process. I base this conclusion on the large disparity between the submitted bid prices and the appraised value(s): o The submitted bids ranged from 0.6% to 20% of the highest and lowest appraised values for the November-May angler day lots and from 0.02% to 5% for the July-August angler day lots. o Although not completely comparable, the bid prices for two other concurrently running rod day allocation processes yielded much higher bid prices compared to their respective appraised value. For Zymoetz A (class 1 section) submitted bids ranged from 16% to 800% of the appraised values and for Skeena River IV the submitted bids ranged from 33% to 600% of the appraised value. [27] On May 31, 2012, the Appellants filed a joint Notice of Appeal against the Regional Manager s decisions not to allocate any of the new guided angler days to them. The grounds for appeal are summarized as follows: the Regional Manager erred in using the allocation process under section 11(1.2)(c) of the Regulation because section 11(1.1) requires there to be a management plan for the classified water for which angler day quota is to be issued, and there was no approved angling management plan for the Zymoetz 2; valuation of Zymoetz 2 angler days without a policy or method to do so;

8 DECISION NOS WIL-016(c), 017(c), 018(c), 019(c), 020(c) Page 8 the Regional Manager disregarded the Applicants historic use of the Zymoetz 2 as a factor in allocating guided angler days, yet all previous guided angler days were allocated with historic use as the determining factor; and the Regional Manager disregarded the precedent set by the Dean River angling management plan, which allocated guided angler days without a bid process based on the guides demonstrating their historic use of that river. [28] In their Notice of Appeal, the Appellants seek various remedies from the Board, including that the matters be sent back to the Regional Manager with certain directions. [29] The Respondent submits that the Regional Manager s decisions should be upheld. [30] The GOABC s submission focuses on the importance of stability and certainty in the regulatory process. It contends that the Regional Manager should not have used a bid process to allocate the new angler days. Rather, he should have relied upon the Appellants historical use of the Zymoetz 2 as the basis upon which to allocate the new days. ISSUES [31] The Panel must decide three issues in this appeal: 1. Does an angling management plan exist for the Zymoetz 1 and 2? 2. If an angling management plan exists for the Zymoetz 2, then was the Regional Manager s choice of the sealed tender and written proposal process for allocating angler day quota reasonable? 3. If the process used by the Regional Manager was reasonable, was the Regional Manager s refusal of the Appellants applications for angler day quotas on the Zymoetz 2 reasonable? DISCUSSION AND ANALYSIS 1. Does an angling management plan exist for the Zymoetz 1 and 2? [32] As noted earlier, a joint hearing of the evidence on this issue took place. The Panel also received submissions and arguments from these Appellants during their course of their own appeals. In the Companion Decision, the Panel determined that an angling management plan exists for the Zymoetz 1 and 2 and provided full reasons. The Panel applies the evidence and reasoning from the Companion Decision to these appeals. [33] Therefore, the Panel finds that an angling management plan exists for the Zymoetz 2, satisfying section 11(1.1)(a) of the Regulation.

9 DECISION NOS WIL-016(c), 017(c), 018(c), 019(c), 020(c) Page 9 2. If an angling management plan exists for the Zymoetz 2, then was the Regional Manager s choice of the sealed tender and written proposal process for allocating angler day quota reasonable? [34] In the Companion Decision, the Panel determined the Regional Manager exercised his discretion reasonably in his decision to use an allocation process by sealed tender and written proposal for the Zymoetz 1. In the context of the present appeals regarding the Zymoetz 2, the Panel received an additional submission from the GOABC. [35] The GOABC submits that angler days should be allocated in a manner that is fair and transparent. The allocation process should foster strong small businesses, as they will benefit the government by providing a consistent economic return to government in the long-term. [36] The GOABC notes that, in the past, angler days were based on historical use. It submits that historical use, rather than the bid process, should continue as the main factor to be considered when issuing new angler days to newly expanded class 2 seasons. This type of grandfathering will provide business certainty and investor confidence for the freshwater angling industry. The GOABC notes that the Appellants have significant historical use on the Zymoetz 2. However, as the Regional Manager has found that the economic return to government was too low, no angler days were issued to the Appellants. [37] To ensure that the Appellants businesses remain strong, the GOABC suggests that the Panel instruct the Regional Manager to grandfather in the existing guides based on historical use levels, at no additional cost. [38] The Panel has considered these submissions but notes that the legislation expressly states in section 11(1.2) that a regional manager must use one of the following processes for allocating angler day quota for classified waters. [Emphasis added]. Three processes are listed; none of them allow the Regional Manager to allocate angler day quota on the basis of historical use. In light of the clear language in the Regulation, the Panel cannot accept the GOABC s position or suggested remedy. [39] The Panel finds that the evidence and reasoning from the Companion Decision (including the Minority Reasons) applies to these appeals, with necessary modifications to the section of the river, and so on. [40] Therefore, the Panel finds that the Regional Manager exercised his discretion reasonably when he chose a sealed tender and written proposal process for allocating angler days on the Zymoetz If the process used by the Regional Manager was reasonable, was the Regional Manager s refusal of the Appellants applications for angler day quotas on the Zymoetz 2 reasonable? Facts not in dispute [41] In an dated October 31, 2011, Jane Lloyd-Smith, Director of Resource Management, Skeena Region of the Ministry, advised the Appellants, and other

10 DECISION NOS WIL-016(c), 017(c), 018(c), 019(c), 020(c) Page 10 participants in the Skeena QWS process, that the government had approved the endorsed recommendations for Angling Management Plans. [42] By way of registered mail, the Appellants each received a letter from the Regional Manager dated November 9, 2011 regarding the Regulation changes. The Appellants were informed that the changes included angling guide restrictions to the Zymoetz 2. The Regional Manager stated that a competitive bid process was to be used to allocate angler guide opportunities, and that the Appellants would be kept apprised of the allocation process. [43] In a letter dated January 12, 2012, the Regional Manager wrote to the Appellants individually, informing them of the process to allocate angler day quota for the Zymoetz 2. The Regional Manager states: This winter, the Ministry of Forests, Lands and Natural Resource Operations will be seeking proposals to apply for new rod days on the Zymoetz River Class 2 section. This is consistent with the QWS recommendations to increase the allocated angler day quota on this river from 117 to 267 days to accommodate the Classified Waters period extension. New rod days will be available as follows: Up to 100 days for the period of July 24 to August 31; Maintain current allocation of 117 days for the period of September 1 to October 31; and Up to 50 days for the period of November 1 to May 31 Only existing angling guides will be eligible to apply. these new guiding opportunities will be allocated through competitive process and will be term limited to less than 20 years in duration. The proposal process for these rod days will involve submitting a bid and written submission to the Regional Manager for consideration. Proposal packages will be mailed to existing Zymoetz River Class 2 angling guides near the end of January [44] The Appellants are the only existing angling guides who may guide on the Zymoetz 2. [45] In February 2012, the Application Package for Zymoetz 2 was issued to the Appellants. All five guides submitted bids and written proposals by the application submission deadline of March 14, [46] The Application Package contained a number of conditions and information as to the application process, requirements and evaluation of applications. It stated that an applicant must submit a written proposal and a bid (a dollar amount) supporting his submission. It also stated that a background check will also be used by the Ministry to evaluate the applicant s compliance with applicable legislation (via Conservation Officer Online Reporting System) and Angling Guide Operating Plan reporting requirements. [47] In terms of scoring and evaluation, the package explained that each application would be evaluated and scored to a maximum of 100 points: 40 points for the written proposal, 40 points for the bid amount, and 20 points for the

11 DECISION NOS WIL-016(c), 017(c), 018(c), 019(c), 020(c) Page 11 background check. Further information about these three components (written proposal, bid and background check) was set out under specific headings. [48] Under the heading Part 1 Written Proposal (40 points), the Application Package stated that it must include: 1. Personal Information: completion of a form on personal information. 2. Experience: number of years of licensed angling guiding. 3. Residency: number of years of residing on a full-time basis in the Skeena Region. 4. Qualifications: such as training and safety designations. 5. Infrastructure: a listing of assets to carry out guiding operations such as boats, fishing equipment. 6. Value: what the acquisition of angler days means to the applicant, his business operating plan and his community. [49] Applicants were also permitted to provide information describing their historical and intended future use of their angler day quota. [50] Under the heading Part 2 Bid (40 points), the Application Package required submission of a completed bid form. It also stated that the Applicant(s) with the ten highest ranking application scores will be provided first opportunity to purchase new rod days. [51] Finally, under Part 3 Background Check (20 points), the Application Package stated: As part of application evaluation, the applicant s history as an angler, hunter, or guide will be investigated. A query of the Conservation Officer Online Reporting System (COORS) will be conducted as will past reporting compliance with Angling Guide Operating Plan requirements. This information is considered sensitive and will not be disclosed. [52] Of relevance to these appeals, on page 3 of the Application Package, the following condition is set out: The Ministry reserves the right to reject any or all applications. Opinion of Value for the Zymoetz 2 [53] Prior to distributing the Application Package to the Appellants, the Regional Manager retained Harry J. McCowan to provide information on the potential monetary value of angler days on the Zymoetz 2 waters (and also the Zymoetz 1 and Skeena 4 waters between Chimdemash River and Flint Creek). The Regional Manager testified that he provided oral direction in retaining Mr. McCowan that included the following information regarding the Zymoetz 2: (1) the number of rod days to be allocated, (2) the time periods for allocations, (3) confirmation that the Zymoetz waters were Class 2,

12 DECISION NOS WIL-016(c), 017(c), 018(c), 019(c), 020(c) Page 12 (4) the Zymoetz is marketed for steelhead angling, (5) the Zymoetz has good logging road access, and (6) that rod days are the property of the Crown and issued for a term of 20 years. [54] Mr. McCowan submitted a letter dated February 15, 2012 to the Regional Manager, setting out an Opinion of Value for angler days on each of the three waters. [55] For the Zymoetz 2, the Opinion of Value set a narrow band of upper and lower values in an open market for the July 24 to August 31 period of between $9,000 and $10,000; in a restricted market, between $4,000 and $5,000. [56] For the period of November 1 to May 31 the Opinion of Value set a similarly narrow band of upper and lower value. In an open market, he found the fair market value to be between $1,150 and $1,750; in a restricted market, between $500 and $1,000. [57] In his Opinion of Value, Mr. McCowan stated that the offerings on the Zymoetz 2 qualified as a restricted market because there were only a limited number of angling guides qualified to bid on the angler days being offered. [58] Nowhere in Mr. McCowan s letter does he use the word appraisal to value the angler days for the Zymoetz 2. Mr. McCowan was not called as a witness at the appeal hearing, nor was he qualified as an expert. There is no evidence that he is a certified or licensed appraiser of Crown tenures. There is also no evidence that he has an established, verifiable skill set in the subject of valuing angler day quota. Further, there is no evidence as to exactly what Mr. McCowan s Opinion of Value was based upon, beyond the skeletal information provided by the Regional Manager as set out as numbers (1)-(6), above. Thus, it is unclear how much weight should be applied to Mr. McCowan s Opinion of Value for the Zymoetz 2. [59] The Panel asked the Regional Manager whether he had received any documentation setting out the basis of Mr. McCowan s calculations. The Regional Manager stated that he received no documentation from Mr. McCowan, except for the one-page Opinion of Value for the Zymoetz 2 angler day bid lots. [60] The Panel also questioned the Regional Manager on the bid ranges set out in his May 17, 2012 denial letters. The Regional Manager agreed with the Panel that the bid ranges in the letters were incorrect. That is, the bid range set out in the letters of 0.6% to 20% of the Opinion Values (for the November 1 to May 31 period) was actually 10% to 20% of such values in a restricted market. Further, the bid range of 0.02% to 5% of the Opinion Values (for the July 24 to August 31 period) was actually 4% to 5% of such values in a restricted market. The Parties Submissions [61] All parties made numerous submissions regarding the reasonableness, or lack thereof, of the Zymoetz 2 angler day quota disposition process, and the reasonableness of the Regional Manager s decisions.

13 DECISION NOS WIL-016(c), 017(c), 018(c), 019(c), 020(c) Page 13 [62] The Appellants submit that the Zymoetz 2 angler day allocation process was unreasonable. They contend that the Regional Manager committed numerous errors in the evaluation and scoring of their Zymoetz 2 applications. The errors include: not considering their historical use of the Zymoetz 2, incorrect usage and weighing of background check information of each Appellant, and not following the Ministry s own internal disposition policy and procedures. [63] The Regional Manager submits that the Zymoetz 2 angler allocation was reasonable, and that no error was committed by the Regional Manager. The Regional Manager submits that, upon assessing the bid amounts of each Appellant, he properly terminated the bid process and denied the Appellants an allocation of Zymoetz 2 angler day quota. The Panel s Findings [64] As noted earlier, on page 3 of the Application Package, the following express term is set out: The Ministry reserves the right to reject any or all applications. [65] This type of term is referred to in the law governing tenders as a privilege clause the right not to accept the lowest bid or, in this case, any bid. It is a common term found in tenders, used in order to reject bids or cancel the tender. These clauses have been interpreted to mean that the tenderer can reject bids for financial reasons, such as a construction bid that is too high. For instance, in Rockwood v. Eastern Newfoundland and Labrador Regional Health and Community Services Board (2004), 238 Nfld. & P.E.I.R. 291 (NLTD), relying on the privilege clause, Orsborn J. concluded that the tenderer (the Board in that case) had the authority to cancel the tender and refuse to award the contract. The only bid submitted was substantially more than was anticipated by the Board. [This is a construction case so the Board was looking for a bid within its spending budget.] Orsborn J. wrote: [42] The Board was quite entitled not to award any contract. Assuming that its reasons for cancelling the tender are reviewable by the Court, the Board's reason here - that the price was too high - is not assailable. The Board was under no legal obligation to any tenderer to pay more than it felt that it could afford, to investigate other sources of financing, or to in any way rework its objectives to give some contract to a particular tenderer. [Emphasis added] [66] Similarly, the Regional Manager in this case was not under any legal obligation to allocate any or all of the angler days if the bids did not allow the Crown to recover reasonable economic rent for the use of the resource. [67] The Panel finds that, once the Regional Manager determined that the bid amounts for each of the 10 lots were excessively low, he was permitted under the terms of the Application Package to reject the Appellants applications. [68] The Regional Manager, as the decision-maker for the Ministry, rejected the applications on grounds that he believed were reasonable. Specifically, based on the Opinion of Values for the two sets of bid lots, the Appellants bid amounts were excessively low. The Regional Manager wrote:

14 DECISION NOS WIL-016(c), 017(c), 018(c), 019(c), 020(c) Page The submitted bids ranged from 0.6% to 20% of the highest and lowest appraised values for the November-May angler day lots and from 0.02% to 5% for the July-August angler day lots. 2. Although not completely comparable, the bid prices for two other concurrently running rod day allocation processes yielded much higher bid prices compared to their respective appraised value. For Zymoetz A (class 1 section) submitted bids ranged from 16% to 800% of the appraised values and for Skeena River IV the submitted bids ranged from 33% to 600% of the appraised value. [69] At the hearing, the Regional Manager confirmed that the bid ranges in his decisions were incorrect, in that the range of 0.6% to 20% (for the November 1 to May 31 period) was actually 10% to 20% of the Opinion Value in a restricted market, and that the bid range of 0.02% to 5% (for the July 24 to August 31 period) was actually 4% to 5% of the Opinion of Value in a restricted market. [70] There was no evidence as to the definition of an open market or closed market for the purposes of the Zymoetz 2 allocation process. The Panel understands that the Regional Manager viewed the bids as being submitted in a restricted market. [71] The question for the Panel is whether the concerns raised about the weight to be given to the Opinion of Value, and the calculation errors in the denial letters, are sufficient to make the Regional Manager s reliance on the privilege clause unreasonable. [72] The Panel finds that, regardless of the calculation errors in the decision letters, and even if Mr. McCowan s Opinion of Value for the Zymoetz 2 is given less weight than a properly qualified expert appraisal would be given, the Regional Manager had the power, as set out in the tender documents (the Application Package), to reject all applications for Zymoetz 2 angler days. The Regional Manager s evidence was that the Appellants bids were simply too low based on the information before him. The Panel finds that, even if Mr. McCowan s opinion of the value of the angler days in a restricted market is high, he clearly has some knowledge of the value of angler days on the river and his Opinion of Value took into consideration other comparable sales within British Columbia and the local area. The Panel finds that it cannot be totally disregarded. [73] Even if the value given to the angler days by Mr. McCowan is significantly reduced, the Panel notes that the applicants bids were all the same. Further, they were so far below the Opinion of Value that the Panel agrees with the Regional Manager that the applicants failed to provide competitive bids for the resource. [74] Like the construction cases, there is nothing in law or policy that would allow the Panel to force the Regional Manager to accept the submitted bids, if such bids do not meet the objectives of the original tender which are to make unallocated angler days available to angling guides in a fair, consistent and equitable manner and allow the Province to recover reasonable economic rent for the use of the resource. [Application Preamble, emphasis added]. [75] These appeals are distinguishable from the Zymoetz 1 (the Companion Decision) appeals where the Panel found there was unfairness in relation to the

15 DECISION NOS WIL-016(c), 017(c), 018(c), 019(c), 020(c) Page 15 background check disclosure and scoring. However, in the present appeals, the bids were not acceptable as they were simply too low. Therefore, the background check did not come into play. [76] For all of these reasons, the Panel finds that the Regional Manager s decision to reject all of Appellants bids was authorized by the terms of the tender, and was reasonable. DECISIONS [77] In making these decisions, the Panel of the Environmental Appeal Board has carefully considered all of the submissions and arguments before it, whether or not specifically reiterated here. [78] The Panel finds that an angling management plan exists, that the process used by the Regional Manager to allocate Zymoetz 2 angler day quota was reasonable, and that the terms of the Application Package allowed the Regional Manager to terminate the bid allocation process upon review of the bid amounts of each Appellant. [79] The Panel confirms the Regional Manager s decisions to refuse angler day quota to the Appellants for the Zymoetz 2. [80] Accordingly, the appeals are dismissed. Tony Fogarassy Tony Fogarassy, Panel Chair Environmental Appeal Board Ken Long Ken Long, Member Environmental Appeal Board Les Gyug Les Gyug, Member Environmental Appeal Board April 18, 2013