You can use either floatflt package or wrapfig package.

For example:

\begin{floatingfigure}[r]{0.4textwidth}
\centering
\includegraphics[width=0.4textwidth]{lake1}
\caption{Text wrap around figure}
\noindent \hrulefill
\label{test}
\end{floatingfigure}

and

\begin{wrapfigure}{r}{0.4textwidth}
\centering
\includegraphics[width=0.4textwidth]{lake1}
\caption{Text wrap around figure}
\noindent \hrulefill
\label{test}
\end{wrapfigure}

The difference between floatingfigure and wrapfigure is that the text typed after end{floatingfigure} will be forced to be a new paragraph.

For more information, please refer to floatflt manual and a webpage about wrapfig.

There is a class file for LaTeX2e that helps you produce a properly formatted UBC thesis. It's not officially supported by UBC but has been endorsed by FoGS as mentioned on their webpage. The download link can be found in the LaTeX section there.

Just in case the FoGS website is down here is a direct download link provided by Michael McNeil Forbes, the author of the class file and a former UBC graduate student.