A soil–vegetation–atmosphere transfer model (SVAT), interactions between the soil–biosphere–atmosphere (ISBA) of Météo France, is modified and applied to the Athabasca River Basin (ARB) to model its water and energy fluxes. Two meteorological datasets are used: the archived forecasts from the Meteorological Survey of Canada’s Global Environmental Multiscale Model (GEM) and the European Centre for Mid-range Weather Forecasts global re-analysis (ERA-40), representing spatial scales typical of a weather forecasting model and a global circulation model (GCM), respectively. The original treatment of soil moisture and rainfall in ISBA (OISBA) is modified to statistically account for sub-grid heterogeneity of soil moisture and rainfall to produce new, highly non-linear formulations for surface and sub-surface runoff (MISBA). These new formulations can be readily applied to most existing SVATs. Stand alone mode simulations using the GEM data demonstrate that MISBA significantly improves streamflow predictions despite requiring two fewer parameters than OISBA. Simulations using the ERA-40 data show that it is possible to reproduce the annual variation in monthly, mean annual, and annual minimum flows at GCM scales without using downscaling techniques. Finally, simulations using a simple downscaling scheme show that the better performance of higher resolution datasets can be primarily attributed to improved representation of local variation of land cover, topography, and climate.