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Changing Currents – Chapter 3: Water Governance and Management in Canada

Chapter 3

Water Governance and Management in Canada

Water governance and management are central to ensuring sustainable water use by Canada’s natural resource sectors. Water governance refers to the processes and institutions through which decisions are made about water. This includes the range of political, organizational, and administrative processes used to make and implement decisions, as well as how decision makers are held accountable. Management refers to the operational, on-the-ground activity to regulate the water resource and the conditions of its use.[27] In the past century, formal water governance models have increasingly centred on a top-down approach where governments made all the decisions. There is a movement now toward collaborative governance models where the authority and responsibility for decision making is shared among levels of government, individuals, firms, and non-governmental organizations. This chapter describes the governance and management of water relative to quantitative uses, not qualitative, and largely focuses on water allocation and permitting/licensing roles and responsibilities.

Division of Responsibility for Water Management

The Constitution Act does not refer directly to responsibilities pertaining to water resources, although the constitutional authority for water belongs primarily to the provinces as they exercise direct control over the natural resources — including water resources — within their borders. Responsibility for water management is shared between the provinces/territories and the federal government, which retains authority over fisheries, navigation, transboundary issues, federal lands, and Aboriginal matters. The federal government also shares jurisdiction with the provinces/territories on other water-related issues such as agriculture, health, and environmental protection. In some areas of federal jurisdiction, such as fisheries management and fish habitat protection, the federal government has entered into agreements with certain provinces, delegating some of its authority to the provincial governments. This has necessarily led to a very complex legislative and policy water management framework across Canada, with shared and sometimes duplicative authorities.

Aboriginal water rights are increasingly considered in water management in Canada. Aboriginal rights and treaty rights became constitutionally protected in 1982. This means that any rights, including water rights, that have not been extinguished before 1982 cannot be infringed upon by governments. Any activity that could potentially infringe on Aboriginal rights requires consultations with the Aboriginal rights holders, and this includes water management decisionmaking processes.

In many regions across Canada, First Nations are engaging directly in water governance, working with or encouraging collaboration with other governments and partners through watershed planning, water source protection planning, and water management initiatives. For example, a very successful collaboration has been in place in the Northwest Territories (NWT) since 2006 when Aboriginal peoples formally asserted the need for, and have since been integrally involved in, the development of the NWT government’s Water Stewardship Strategy. First Nations and Indigenous knowledge can contribute to our understanding of the health and workings of the watershed, to our approaches for effective collaboration, to identification of values and priorities, and to successful, cooperative implementation of actions and solutions.

Federal jurisdiction and responsibilities

The federal government exercises its constitutional authority on water through a number of legislative, regulatory, and policy instruments. At least 20 federal agencies have responsibilities regarding water management, covered under 11 different pieces of federal legislation. Environment Canada is the lead federal department responsible for water. Natural Resources Canada, Fisheries and Oceans Canada, and Indian and Northern Affairs Canada also have central responsibilities.

One of the key federal documents on water management is the 1987 Federal Water Policy. The overall objective of this policy is to encourage the use of freshwater in an efficient and equitable manner consistent with the social, economic, and environmental needs of present and future generations. The policy identifies five strategies to reach its stated objective: water pricing, science leadership, integrated planning, legislation, and public awareness.

A recurring criticism of the federal water strategy is that, while the federal government has expended substantial resources in the past 25 years to define and develop the strategy, few actual policies or actions on the ground have been implemented.[28] It has been suggested that the challenge of coordinating the work of many federal agencies and the lack of political will may be the main reasons for the limited action from the federal government. Some successful initiatives must be noted, however, such as the recent Canada-wide Strategy for the Management of Municipal Wastewater Effluents, which was developed under the leadership of the federal government through the Canadian Council of Ministers of the Environment (CCME).

Provincial jurisdiction and responsibilities

Provinces are mainly responsible for water management in Canada. Three frameworks in Canada define the principles under which water allocations are determined (Figure 4):

1. The First in Time, First in Right (FIT-FIR) approach is in effect in British Columbia, Alberta, Saskatchewan, and Manitoba. This approach is based on the principle of prior appropriation, which gives the licensee exclusive rights to use the water in a system of seniority based on the age of the licence. In Yukon, the Northwest Territories, and Nunavut, where a public authority (various Water Boards across the territories) makes the decisions about water, priorities are also established through the FIT-FIR principle.

2. The principles of the Common Law of Riparian Rights are the basis of the water-user permit systems in Ontario, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador. Under the common law, which was developed before water rights were legislated, individuals who own or occupy land beside lakes and rivers have the right to the natural flow of the water adjacent or through their property, unchanged in quantity or quality. The provinces have responsibility for administering water and supervising its allocation; their legislative jurisdiction over water is to be exercised in a manner equitable to all.

3. In Québec, water use permitting is based on Civil Law principles. Québec’s civil law states that water is not owned by anyone, but rather its use is common to all. The province therefore has a guardianship role to play to ensure the common good.

All provincial and territorial water allocation systems involve either a licensing or permitting system, for both surface and groundwater in all jurisdictions, except in British Columbia where there are no provisions for groundwater.

Water-use licence fees exist in all provinces and territories but they differ significantly. In most cases, these are one-time fees payable at the time of the application, supplemented with annual fees in certain situations. Some provinces have fixed prices while others have variable fees, depending on the volume of water used and type of use, such as: industrial, power generation, or agriculture. Generally speaking, fees are low, ranging from $20 to a few thousand dollars. In certain cases, such as in Ontario and Saskatchewan, some specific activities including agriculture are exempted from the fees. Revenues from water-use fees generally go into provincial general revenue funds. One notable exception is in Prince Edward Island, where the revenue from water withdrawal permits is used to offset the costs associated with the administration and implementation of the government’s water-monitoring program.

FIGURE 4

All jurisdictions have the legal framework to require water licensees to report on the amount of water actually used. However, this does not appear to be a common requirement of licences and permits across the country. In reality, water use reporting requirements vary greatly among provinces and territories in terms of the obligation to report and the expectations for the accuracy of reporting. Reporting requirements are specified through legislation and/or regulations (in Ontario, Québec, the Northwest Territories, and Yukon) or as conditions in permits or licences (in the rest of Canada, except in New Brunswick where there are no reporting requirements). Prince Edward Island has reporting requirements only for groundwater. The requirements for accuracy also vary greatly across Canada, making the interpretation and comparison of data quite difficult.

In regions where water allocation is based on prior appropriation, there has been recent progress on developing a water market, or transferrable water rights. Alberta has incorporated water transfers into its water-use legislation and is now exploring an expansion of this system more broadly in the province. In British Columbia, the “transfer of appurtenance” provision, which allows licence holders to change the location of use of their water right, has been interpreted to allow some water transfers. Currently no such water markets are permitted in other provinces; however, both Manitoba and Saskatchewan are considering this option. In the Territories, water licences are transferrable with approval from the Water Boards that issue the licence.

In recent years, a number of provincial governments have invested significant resources in the development of comprehensive water policy frameworks, including the Québec Water Policy (2002); Alberta’s Water for Life Strategy (2003); Ontario’s Clean Water Act (2006), enabling source water protection; British Columbia’s Living Water Smart (2008); Northwest Territories’ Water Stewardship Strategy (2009); and Nova Scotia’s Water Strategy (to be released in 2010). These attempts to revise existing water management differ in the details but they all call for the following principles to be broadly recognized and incorporated into water decision-making processes:

• water management at the watershed scale
• shared authority/collaborative governance models allowing greater stakeholder engagement and accountability
• integration of water management planning with land use planning
• integration of surface water management with groundwater management
• inclusion of environmental water requirements as part of the water allocation schemes

Moving from such broad concepts to specific targeted actions requires a significant amount of human and financial resources, which do not seem to be readily available. In most cases, progress has been slow, as water managers and stakeholders are still struggling to translate those well-intended strategies into concrete action.

Ecosystem needs, or the allocation of water for environmental requirements, are a key feature of modern water management schemes around the world. In Canada, this concept is increasingly embedded in provincial/territorial water management systems. Some provinces, such as British Columbia, Alberta, Manitoba, Ontario, and Québec, have requirements for environmental water allocations in their licensing systems. These requirements sometimes apply only in certain designated areas or watersheds. In most provinces, environmental requirements are not automatically part of the allocation or licensing system, but are secured through other environmental statutes that must be triggered before issuing a new water licence (for example, environmental assessment requirements). Ecosystem needs may also be incorporated into water management systems through general provisions allowing the regulator to take any appropriate action deemed necessary to protect the public interest.

Water allocations in Canada are usually done in isolation of land use planning. Not only do the government agencies involved in both processes differ in most cases, but the geographic scales upon which water management and land use planning are conducted are often dissimilar.

Inter-jurisdictional water management

All Canadian provinces and territories (with the exception of Prince Edward Island) share freshwater resources with other provinces/territories and sometimes with the United States. In some cases, inter-jurisdictional arrangements have been put in place in Canada, addressing interprovincial or international boundaries. Provincial boundaries rarely overlap with watershed boundaries.

As a result, most major water bodies and hundreds of streams cross jurisdictional boundaries within Canada. This may give rise to disputes over water uses and who decides how water will be allocated. The Master Agreement on Apportionment, signed in 1969 by the Prairies provinces and the federal government, is an example of a successful coordination of water management systems involving several provinces. Under this Agreement, Alberta and Saskatchewan may each take up to one-half of the natural flow of water originating within their boundaries and one-half of the flow entering the province. The remainder is left to flow into Manitoba. The Prairie Provinces Water Board manages the agreement. It is composed of one representative each from Alberta, Saskatchewan, and Manitoba, and two representatives from the federal government.

A recent review of contemporary international transboundary water governance showed that while apportionment of transboundary water resources between countries has the potential for conflict, it has, for the most part, been a basis for cooperation.[29] This is also true in the North American context. Canada and the United States have a long and successful history of jointly managing their transboundary water resources under the auspices of the 1909 Boundary Waters Treaty and the International Joint Commission (IJC) created by the treaty. In setting limitations on the freedom with which each country can use water, the Treaty provides controls on water levels and flows. Over time, the IJC has evolved into an institution providing sound science available to governments of both countries to support the management of Canada-U.S. transboundary waters and joint decision making.

Despite the existence of these institutions and governance mechanisms, the potential for conflicts still exists. Recent disagreements involving surface water illustrate the variety of issues that might arise, such as: the Devils Lake dispute between Manitoba and North Dakota; the potential transboundary pollution in the Flathead River originating from a proposed coal mine in British Columbia and flowing into Montana; and the continuing pollution and water-level issues in the Great Lakes.[30] The challenge of managing transboundary water is even more acute when dealing with groundwater. Situations where two or more provinces share groundwater from the same aquifer (sometimes in addition to neighbouring U.S. states) may give rise to water disputes and governance challenges. The case of the Abbotsford-Sumas aquifer on the West Coast is an example of how nitrate contamination migrates from Canada to American wells. Aquifers generally do not follow the same boundaries as surface watersheds. Therefore, watershed-based management, which is increasingly used in order to better address local and regional issues, may not be the best governance tool for groundwater. In recent years, a number of multi-stakeholder working groups have emerged in the interest of coordinated groundwater strategies.[31] However, formal multilateral governance bodies having the authority to make decisions about groundwater do not currently exist in Canada.

The Canadian Council of Ministers of the Environment (CCME) also plays a role in water governance in Canada. In 2009 the CCME adopted a Canada-wide vision for water, entitled Setting Strategic Directions for Water. It provides a strategic, forward-looking framework to guide its members in all future actions and activities related to water. In addition, the Council of the Federation, an intergovernmental initiative consisting of all provincial and territorial premiers, agreed to create a Water Stewardship Council in 2009. This initiative is to be based upon the existing Western Water Stewardship Council. Its initial focus is on water efficiency and conservation.

Emerging role of collaborative governance structures

Recent global trends show that governments are moving toward a less centralized approach to water management and governance. New approaches promote flexible policy processes that are open, adaptive, and collaborative. In Canada, several provinces are experimenting with various types of collaborative governance models and enhanced stakeholder engagement. For the natural resource sectors, this shift requires more intense engagement with stakeholders.

Collaborative water governance may be broadly defined as the involvement of both governments and non-government organizations in water management decision making. This frequently implies the delegation of decision making to lower scales of governance stemming from the watershed, municipality, or region.[32] This concept has increased in popularity over the past few years and is now considered an essential component of modern water governance. Collaborative governance structures are often associated with watershed management, as the watershed offers a relevant scale for the involvement of local and regional stakeholders.

In Canada, various collaborative governance models have been or are being put in place. The numerous watershed organizations in Québec, the water source protection committees in Ontario, Alberta’s water planning advisory committees, and the Fraser River Basin Council in British Columbia are notable examples. The various Water Boards in the Northwest Territories, Nunavut, and Yukon could also be considered collaborative governance structures.

In February, 2010, an NRTEE workshop [e] on the evolving role of natural resource sectors in Canadian water governance shed some light on the benefits and challenges of collaborative water governance models in Canada, and highlighted the importance of several key factors to making collaborative models successful. Some of the key factors noted were addressing divergent values and perspectives, ensuring clear roles and responsibilities, creating shared knowledge between stakeholders, ensuring accountability and legitimacy, addressing capacity issues, and overcoming the jurisdictional complexity. Collaborative water governance models will succeed and be seen as legitimate only if a number of conditions are met:

• they focus on a clear scope and clear outcomes;
• the right people are brought together, with the right convener;
• participants agree to fully get engaged and there is real commitment to the process;
• clear roles are identified for participants;
• the processes foster shared ownership and accountability; and
• an ongoing dialogue is built.

Collaborative water governance is a tool that can improve water management in Canada, as it allows a more regional or local planning process, which promotes better-informed place-based decisions and facilitates the involvement of regional stakeholders. It must, however, follow all principles of good governance, be used under appropriate circumstances, and involve the right actors. Any attempt to implement collaborative governance models without putting in place such conditions will only raise expectations, waste precious time and financial resources, and result in a loss of credibility and legitimacy of the government agencies involved.

Key challenges, gaps, and opportunities

Canada’s water management is complex and fragmented, and lacks coordination. Water allocation systems in place across Canada are archaic and have not adapted to more collaborative approaches. In several provinces, water rights are granted based on prior appropriation principles (First in Time, First in Right). While certain provinces and territories have made progress over the past few years to renew their water management schemes, a systematic review of water allocation schemes in Canada is needed. Most of the systems still rest on a strong regulatory framework with limited use of economic incentives and marketbased instruments. Another major problem is the lack of a reliable and accurate water-use data collection in most provinces, as well as a comprehensive information management system.

Water management, governed by political boundaries, can be a significant challenge as many issues are of a cross-boundary nature. Upstream and downstream impacts of surface and groundwater cross political jurisdictions, further emphasizing the need for multi-jurisdictional collaboration.

Inter-jurisdictional water management is based on a number of agreements dealing with specific water bodies or regions of the country. The large variations between provincial water management regimes, however, make inter-jurisdictional water management a challenging task. There are no overall direction or principles in Canada that provide guidance to the various water managers in a way that would facilitate the collection and exchange of comparable data throughout the country, or facilitate the integration of interests from all water users.

The emergence of collaborative governance models provides a potential opportunity to improve the way we manage water in Canada and brings the flexibility required for addressing regional and local particularities. It will require, however, strong leadership from governments to create the conditions necessary for these collaborative arrangements to be successful. Lessons learned from governance models in Canada and elsewhere call for effective processes to be put in place, including clear and achievable desired outcomes, clear roles and responsibilities, and the choice of the right convener. Currently, the role of the federal government in water management in Canada is discreet, unclear for most actors involved in water governance and sometimes at odds with stakeholders’ expectations. A renewed and more effective water governance model in Canada will require a review of the role of each level of government.

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(e) Workshop coordinated in collaboration with the Water Policy and Governance Group.

27 L. Nowlan & K. Bakker, “Delegating Water Governance: Issue and Challenges in the BC Context,” Report for BC Water Governance Project prepared by UBC Program on Water Governance (2007).

28 Gordon Water Group of Concerned Scientists and Citizens, Changing the Flow: A Blueprint for Federal Action on Freshwater (2007).

29 R. C. de Loë, Sharing the waters of the Red River Basin : a review of options for transboundary water governance. Report prepared for the International Red River Board of the International Joint Commission (2009).

30 International Joint Commission, Draft report on the status of groundwater in the Great Lakes Basin, ed. Science Advisory Board to the International Joint Commission (2008).

31 Council of Canadian Academies, The Sustainable Management of Groundwater in Canada, (2009). Accessed from http://www.scienceadvice.ca/en/assessments/completed/ groundwater.aspx.

32 L. Nowlan & K. Bakker, “Delegating Water Governance: Issue and Challenges in the BC Context.” Report for BC Water Governance Project prepared by UBC Program on Water Governance (2007).