Kitsumkalum Agreement-in-Principle 20. Storage, diversion, extraction or use of water will be in accordance with Federal Law and Provincial Law. 21. British Columbia may negotiate with Kitsumkalum the role of Kitsumkalum in the management and administration of Water Licences issued under Kitsumkalum’s water reservation. Law-Making 22. The Kitsumkalum Government may make laws in respect of: a) the consent of Kitsumkalum under subparagraph 6(a) to applications; and b) the supply and the use of water from a Water Licence issued in accordance with paragraph 6. 23. A Kitsumkalum Law under subparagraph 22.a) prevails to the extent of a Conflict with a Federal Law or Provincial Law. 24. A Federal Law or Provincial Law prevails to the extent of a Conflict with a Kitsumkalum Law under subparagraph 22.b). Other 25. If Federal Law or Provincial Law permits the sale of water, Kitsumkalum may sell water in accordance with those laws. 26. Nothing in the Final Agreement will alter Federal Law or Provincial Law in respect of property in water. 27. Before the Final Agreement the Parties will address the issue of groundwater. Hydro Power Reservation 28. In addition to the Kitsumkalum water reservation established under paragraph 1, British Columbia will, subject to Available Flow, establish a water reservation of the unrecorded water of specific Streams identified in the Final Agreement in favour of Kitsumkalum after the Effective Date to enable Kitsumkalum to investigate the suitability of those Streams for hydro power purposes, including related storage purposes. 29. If Kitsumkalum applies for a water reservation for hydro power purposes on a Stream subject to the Kitsumkalum hydro power reservation under paragraph 28, British Columbia, after considering the results of any investigation referred to in paragraph 28 and subject to Available Flow, will establish a Kitsumkalum hydro power reservation for hydro power purposes and any related storage purposes on that Stream if it considers that Stream to be suitable for hydro power purposes. 30. If British Columbia establishes a water reservation for hydro power purposes on a Stream under paragraph 29, the Kitsumkalum hydro power reservation under paragraph 28 will terminate in respect of that Stream. 31. If, after British Columbia establishes a water reservation for hydro power purposes under paragraph 29, Kitsumkalum applies for a Water Licence for hydro power purposes and any related storage purposes for a volume of flow from the Stream subject to that water reservation, British Columbia will grant the Water Licence if the proposed hydro power project conforms to Federal Law and Provincial Law, and there is sufficient Available Flow in the Stream. Page 49 of 140

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