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A sign indicating a portage trail and another prohibiting public use of the land stand beside the Bala Falls in the township of Bala in Muskoka Lakes on Saturday, June 7, 2014. A controversial hydro-electric dam is proposed to be built on the north Bala Falls, resulting in closure of the heavily-used trail.

Matthew Sherwood/The Globe and Mail

A township in the heart of Ontario cottage country has asked the province's top court to overturn a government ban and recognize the public's right to portage a historic canoe route at Bala Falls.

The Ontario Court of Appeal heard arguments in the case on Monday. Its decision, expected this summer, could have far-reaching consequences for public projects that intersect with portages on Crown land.

In Canada, the ability to navigate rivers and lakes is protected by federal legislation. The Canadian courts, however, have rarely examined whether the act of carrying a canoe between waterways is also a public right in a nation explored and settled by paddlers.

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The Township of Muskoka Lakes' lawyer, Harold Elston, told the Appeal Court that the province has an obligation under its Public Lands Act to safeguard historic portages and to protect portions of Crown land along water for people to use. He contended the Ontario government's move last year to ban a portage once traversed by acclaimed surveyor David Thompson lacked transparency and wasn't justified.

The Ministry of Natural Resources maintains it blocked off the area because of risks posed by the north Bala Falls, rapids and dam. Two inexperienced swimmers drowned in 2009 after they dove in to save a child.

The township counters that other measures, such as warning signs and fences, have addressed safety concerns. The municipality also notes a review commissioned by the province after the drownings did not recommend prohibiting access to the shore and portage.

"This is a very historic, almost iconic part of Muskoka and the town of Bala," Mr. Elston told a panel of three judges. "It [portaging] is important to our history."

The township's portage battle is intertwined with a long-standing fight against the Ontario government's proposal to erect a hydroelectric plant at Bala Falls. If the appeal of a Divisional Court decision is successful, it could scuttle the water power project – awarded to Swift River Energy in 2005.

In ruling against the township last year, the Divisional Court determined that the province's ban was not unreasonable and that "public safety is an objective that will often trump other policy goals." Government lawyer Ronald Carr noted on Monday that the Natural Resources Minister has an obligation to protect the public and contended the township jeopardized safety when it put up a yellow portage sign in 2012, encouraging canoeists to use the route.

Mr. Carr pointed out that other portage routes exist, although they are less convenient and longer.

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For Swift River Energy, the court case is the latest hurdle to constructing its 4.5-megawatt hydroelectric facility. The company still needs a land lease from the province and other approvals.

In court, Swift River's lawyer, Neil Finkelstein, accused the township of using the portage issue to thwart the development. He argued the protection of portages does not trump the province's authority to harness water power or protect public safety under the Public Lands Act.

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