Sustainability shift: The evolution of Canadian water policy

11 minute read
01 September 2015



Water is essential to life. Up until very recently, however, Canadians have taken their water resources for granted. With the bounty of the Great Lakes and several large river systems, water protection and conservation took a back seat to more immediate environmental concerns.

New provincial regulations may change all this. From BC's Water Sustainability Act scheduled to come into force in 2016 to PEI's announcement of plans to develop a comprehensive water act, water is becoming increasingly regulated.1

Why the flurry of regulatory activity? Simply put, Canadian attitudes towards water are changing. Recent droughts and flooding have underscored that despite Canada's total water riches, these resources are unevenly distributed - with potentially devastating results. Moreover, the recognition that aquatic ecosystems provide useful services to humans (think of the value of wetlands in filtering water or sport-fishing in streams) has changed the way we look at water.

This article explores how the sustainability shift is affecting Canadian water policy and, ultimately, the implications for the way individuals and industry can use water resources.

Managing water for ecosystem health

The sustainability shift in water policy was first seen through in changes in policy goals. While previous water acts harkened back to the pioneer days and encouraged water use for development and agriculture, the new brand of water policies have broader goals.

Alberta's 2008 Water for Life strategy recognized that "healthy aquatic ecosystems are vital to a high quality of life for Albertans and must be preserved".2 Quebec's water policy goes even further, recognizing water as part of Quebec's collective heritage and requiring integrated water management to protect ecosystems. 3

BC's forthcoming Water Sustainability Act has also been crafted over years of public consultation to implement water sustainability and bring the province's outdated water regulations in line with the 21st century.4 The Act serves as a detailed framework which in early 2016 will come into force and be supplemented by regulations (now being drafted). The Act introduces many new requirements for approval applicants and further authorizes regulators to impose new post-approval conditions. The Act has a pronounced focus on water planning and regional fisheries and land use issues, going beyond the narrower historic focus on specific withdrawals. The Act also fills significant gaps in groundwater policy. Prior to the Act, for instance, BC did not license groundwater withdrawals. New groundwater licensing provisions enable regulators to scrutinize connections between surface water and groundwater to better consider the entire hydrologic system.

Stewarding aquatic and riparian ecosystems - mitigation and restoration

In addition to changing the stated goals of water policy, the sustainability shift is occurring on the ground through requirements to conserve aquatic and riparian ecosystems.

Most provinces have adopted a "mitigation and offset" approach to water resources. In these provinces, harm to a stream or wetland in one place can be offset by environmental remediation in another.

For instance, Alberta's 2013 Wetland Policy5 evaluates wetlands in terms of their "relative wetland value" or the contribution of the individual wetland to water quality improvement, hydrology, biodiversity and various human uses. Wetlands of the highest value are protected in the long-term, whereas wetlands with lower relative value are permitted be changed or developed if the "lost" wetland value is offset elsewhere. 6

While these mitigation strategies may balance different interests in water, this approach has been criticized by environmental groups for impoverishing local water resources. 7 The worry is that wetland offsets could compromise the majority of wetlands in densely populated or agricultural areas. Only wetlands in undeveloped regions would be saved. Given that wetlands provide several ecosystem services, allowing entire regions to lose most of their wetlands could be problematic for humans and the natural environment.

Quebec, however, has tried to address this issue by promoting the repair of water resources in place. Unlike other provinces which simply levy monetary fines for non-compliance with water regulations, Quebec regulators may require individuals or industries that harm water resources to restore those resources to their original state. 8

If regional wetland and stream conservation cannot be managed under existing mitigation policies, we may see more provinces following Quebec's lead.

Allocating water sustainably - from water licensing to water markets

One of the most important aspects of water regulation is allocating water among competing uses.

Historically, Canadian water extraction regulation differed by region. In Ontario and the Atlantic Provinces, the common law doctrine of riparian rights initially prevailed, granting those bordering streams with the right to use surface water. Later, riparian rights gave way to administrative licensing programs in which water users had to apply to government bodies to receive water licenses or permits.

In contrast, most western provinces relied on the "first-in-time, first in right" policy when it came to water resources. Reflecting the ethos of the frontier and policies to promote agriculture, those who arrived to an area first and continued to use a stream or aquifer would have priority over new users.

Neither system recognized the need to conserve water resources for the sake of ecosystems. If a water permit had been issued, you had every right to continue to exploit the water, regardless of the impact. Similarly, in the western system, there was little incentive to conserve. Given that water rights were only valid so long as an individual or business put the water to a "beneficial use" (usually synonymous with agriculture or development), users would be penalized for water frugality. After all, if you didn't use the water, your neighbour most certainly would!

While these strategies continue to dominate water governance in Canada, the tide is slowly turning. Alberta, for instance, is unique in Canada with its development of a market for water. In the Alberta scheme, water licenses have been separated from land rights and water license transfers may take place.

Although there is continued debate about whether water should be viewed as a commodity at all, well-regulated water markets have the potential to promote environmental goals. Putting a price on water creates an incentive among users to conserve the resource and results in reallocating water to higher valued uses. Furthermore, in the Alberta case, the government is still involved in water markets by capping the amount of water that can be traded. The government sets a Water Conservation Objective, which is the amount of water necessary to support river ecology.9 If there are concerns that a transfer will negatively impact ecosystems and fail to meet the Water Conservation Objective, the government may prevent the transfer or withhold 10% of a transferred volume for conservation.10

While Alberta is the only true water market in the country, small changes are being made to recognize water scarcity elsewhere. As part of BC's Water Sustainability Act, water pricing for industries will likely increase to promote conservation (previously, BC industrial water users paid even less than drinking water customers). In early 2015, BC proposed new sector-specific water fee and rental rates to be enacted in January 2016. 11 Similarly, in Quebec, while a low rate of $0.0025 per cubic metre is standard for most uses of water, more intensive water uses, such as water bottling and beverage production, oil and gas extraction and certain manufacturing operations, are subject to a higher rate of $0.07 per cubic metre.12 In PEI, given water scarcity concerns on the island, there is even a moratorium on new high capacity wells.13


Canadian water policy is undergoing significant changes. Following the initial recognition of the value of healthy aquatic and riparian ecosystems, provincial water policies increasingly require users to consider ecosystem needs, mitigate or restore the water resources they harm and allocate water in a more sustainable way, often through market mechanisms. Together, these policies are changing the way Canadians use water resources. We can only wait and see whether this sustainability shift achieves its intended goal - balancing water needs for human consumption, industry and ecosystems.

1 Government of British Columbia, Water Sustainability Act (June 2014), online: Government of British Columbia; CBC News.

2 Government of Alberta, Water for Life: A Renewal (2008), online: Government of Alberta at 7.

3 Government of Quebec, Quebec Water Policy: Highlights (2002), online: Government of Quebec; La loi affirmant le caractère collectif des ressources en eau et visant à renforcer leur protection, 2009, c. 21.

4 Government of British Columbia, Water Sustainability Act (June 2014), online: Government of British Columbia; CBC News, "Water act to be introduced by PEI government" CBC News (18 June 2014).

5 Government of Alberta, Alberta Wetland Policy (September 2013).

6 Government of Alberta, Alberta Wetland Policy (September 2013).

7 Andrew Gage, "The Strengths and Weaknesses of the New Water Sustainability Act" Resources (14 March 2014), online: West Coast Environmental Law.

8 La loi affirmant le caractère collectif des ressources en eau et visant à renforcer leur protection, 2009, c. 21

9 Government of Alberta, Water for Life: A Renewal (2008), online: Government of Alberta.

10 Water Act, 83(1)

11 See Government of British Columbia, Fee Changes to Ensure Long-term Protection of B.C. Water, and Government of British Columbia, Pricing BC's Water (2014).

12 Règlement sur la redevance exigible pour l'utilisation de l'eau, C Q-2, r. 42.1, s.5.

13 PEI Department of Environment, Labour and Justice, Water Extraction Permitting Policy (January 2013), online: Government of PEI at 2.

NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Gowling WLG professionals will be pleased to discuss resolutions to specific legal concerns you may have.