A successful Manitoba developer has been ordered to back off by provincial and federal officials after digging a 1.68-kilometre channel without approvals, a significant part of which is on land he doesn't own.

Gilles Gauthier is the developer and one of several investors in the Granite Hills Golf Club & Estates in the Rural Municipality of Lac du Bonnet, which boasts a scenic golf course, restaurant, cottages and a recreation park.

A significant part of the unauthorized dredging happened on Crown land with treaty entitlements belonging to the Brokenhead Ojibway First Nation.

"It has to be taken very [seriously]. Why did he proceed without permission?" Brokenhead Chief Jim Bear said in an interview with the CBC News I-Team.

Granite Hills Golf Club & Estates

An aerial view of the Granite Hills Golf Club & Estates, located in the Rural Municipality of Lac Du Bonnet. (granitehills.ca)

Provincial officials believe the channel was dredged as a waterway for campers and cottagers with small boats.  

"We asked first that he stop," said Geoff Reimer, a manager with the provincial Water Control Works and Drainage Licensing Program.

Reimer issued a letter to Gauthier on behalf of Manitoba Conservation and Water Stewardship on Oct. 12, 2012, threatening "fines and enforcement."

"Conservation and Water Stewardship staff have searched our records, and consulted with all applicable provincial and federal agencies and have determined that no approvals or authority was granted … significant mitigation works will be required to rectify the substantial damage done to the Crown Reserve," the letter stated in part.

According to the letter, Gauthier needed approvals under the Water Rights Act, the Environment Act, the Water Power Act, the Crown Lands Act and the federal Fisheries Act.

Without them, the work was "illegal" and Gauthier could face up to $300,000 in fines or could be ordered to restore the area "to its preconstruction condition."

When the province asked Gauthier why he did not apply for licences, "He indicated that he wasn't aware that he needed the permits," Reimer said.

"This is what he told my staff when he met them initially — he felt the works were internal to his land," Reimer added.

CBC News scheduled an interview with Gauthier to discuss the matter, but he did not show up. The I-Team has not been able to reach him since.

'I'll burn it down if I have to'

However, Gauthier did show up at an RM of Lac du Bonnet council meeting last year, seeking approval for the second phase of his campground development. When councillors requested that he take additional steps, Gauthier expressed frustration.

"I don't know what's happening around here, but it better pick up because I’m closing the golf course, I’m closing the campground, and there'll be nothing left in there," Gauthier said at the meeting on May 14, 2013.

"I'll burn it down if I have to," he said.

RAW: Gilles Gauthier threatens to burn down development1:01

Last month, the RM of Lac du Bonnet council approved the second phase of the campground Gauthier had requested, subject to his getting all the necessary approvals from government agencies.

Council also imposed conditions, including one that Gauthier pay fees and penalties under the RM's trailer bylaw.

Meeting minutes noted that the campground had "been occupied since 2013 without authorization from council," and there were 26 trailers on site at the Granite Hills Recreational Seasonal RV Park.

'This is serious stuff,' says chief

Meanwhile, Bear said he has been in discussions with the government and Gauthier to find a solution.

"This is serious stuff…. He has to be dealt with and dealt with harshly," Bear said.

Despite the potential for charges and fines under provincial laws, the province has decided not to lay any charges.

Gilles Gauthier

Gilles Gauthier is shown in this CBC-TV story from 2007, when the Granite Hills Golf Club officially opened. (CBC)

"I wouldn't say he's getting off lightly. The requirements from a drainage perspective that we've made him adhere to are the same as we would any developer or any landowner," Reimer said.

"He gave a somewhat reasonable explanation … he didn't know that something like this would apply."

Reimer added that Gauthier has been co-operative.

CBC News has learned that dredging is not a foreign concept to Gilles Gauthier. He owns and operates Crown Utilities Corp., a company that does dredging projects across the province, often for utility companies.

Currently, Gauthier is applying for a Water Rights Licence, but that requires sign-off or approval from affected neighbours including the rural municipality, the province and the Brokenhead Ojibway First Nation.

If you have a tip for the CBC News I-Team, please call our confidential tip line at (204) 788-3744 or email iteam@cbc.ca. You can also send a tweet to @cbciteam.