Making Waves: Examining the Case for Sustainable Water ... · Bom barded with alarm ist claims of wide spread wa ter de ple tion and deg ra da tion, cit i zens un der stand ably feel

Risk & RegulationStudies in

June 2010

Making Waves: Examining the Case for

Sustainable Water Exports from Canada

by Diane Katz

FRASERINST I TUTE

Stud ies inRisk and Regulation

June 2010

Making Waves:Examining the Case for Sustainable

Water Exports from Canada

by Diane Katz

Fra ser Insti tute 4 www.fraserinstitute.org

2 4 Making Waves: Examining the Case for Sustainable Water Exports from Canada 4 June 2010

Contents

Executive summary 4 5

Introduction 4 8

The Case for Exporting Can ada’s Water 4 10

Hydrol ogy 4 14

Can ada’s Water Sup ply 4 16

Water Uses 4 21

Pric ing and Con sump tion 4 25

Water Law and Reg u la tion 4 28

Water Export Recon sid ered 4 35

Con clu sion 4 39

Recommendations 4 40

Ref er ences 4 42

About the Author 4 49

Publishing information 4 50

Sup port ing the Fra ser In sti tute 4 51

About the Fraser Institute 4 52

Editorial Advisory Board 4 52


Making Waves: Examining the Case for Sustainable Water Exports from Canada 4 June 2010 4 3



Exec u tive Sum mary

Ca na dian op po si tion to bulk wa ter ex ports1 runs deep. Bom barded with alarm istclaims of wide spread wa ter de ple tion and deg ra da tion, cit i zens un der stand ably feelpro tec tive of the nat u ral re source they value most.2 But as this re port doc u ments, Can -ada is blessed with abun dant sup plies of un spoiled sur face wa ter and ground wa ter,and bulk ex ports can be en vi ron men tally sus tain able. Given the po ten tial ben e fits ofen gag ing in wa ter trade, a fact-based re con sid er a tion of the is sue is warranted.3

Mil lions of peo ple the world over lack access to pota ble water, mak ing a stronghuman i tar ian case for water exports. There also are com pel ling domes tic rea sons thatmerit consideration. In par tic u lar, bulk exports would advance mar ket pric ing ofwater in Can ada, thereby rationalizing resource allo ca tion. At pres ent, gov ern mentmis man age ment, includ ing price reg u la tion and sub si dies, encour ages inef fi cientwater con sump tion and inhibits conservation.

Oppo nents claim that per mit ting exports would induce Amer ica to “suck Can -ada dry.” But water exports can be under taken respon si bly. Given the wide vari a tion in annual vol umes of renew able water, water rights can be “unit ized” i.e., defined as apro por tion of water vol ume based upon spe cific envi ron men tal stan dards, such asin-stream flows for fish and vol umes suf fi cient for dilu tion of con tam i nants. Such cal -cu la tions would nec es sar ily be cus tom ized to the par tic u lar water bodies from whichwater is to be with drawn. Dis tinc tions can be made between renew able andnon-renew able vol umes in lakes, rivers, and groundwater.

Water rights also can be appor tioned based upon the vol ume of water con served. For exam ple, those who hold water rights can be autho rized to sell the water they con -serve from their allot ment. The tort sys tem would pro vide relief to those whose waterrights were abridged by ille gal with draw als.

Water export and atten dant resource pric ing also would improve mon i tor ing ofwater lev els and water qual ity. That is, pre cise hydrologic data are required to allo cateand enforce water rights. And water export would pro mote eco nomic growth.



1 Envi ron ment Can ada (2009a) defines bulk water exports as “the removal and trans fer of water out of itsbasin of ori gin by man-made diver sions (e.g., canals), tanker ships or trucks, and pipe lines.”

2 In a poll con ducted for Pol icy Options jour nal, nearly 62% of respon dents cited water as Can ada’s mostimpor tant resource. See Nanos, 2009.

3 Econ o mist Mar cel Boyer prompted debate on the issue in Que bec with the pub li ca tion of his 2008 studyFresh wa ter Exports for the Development of Que bec’s Blue Gold (Boyer, 2008).

Nat u ral resource devel op ment already is a main stay of the Cana dian econ omy,gen er at ing 12 per cent of GDP, or $147.5 bil lion, in 2008 (Nat u ral Resources Can ada,2010). The profit poten tial from bulk water sales is slim, at pres ent, given the highcosts of trans port. But long stand ing pro hi bi tions on water exports don’t invite R&Dinvest ment. There’s rea son to expect trans port inno va tions will be achieved if gov ern -men tal bar ri ers to water export are lifted. There af ter, eco nomic ben e fits would flow toboth the pri vate and pub lic sec tors, includ ing roy alty and tax pay ments, and job cre -ation. Given the dete ri o ra tion of munic i pal water sys tems across Can ada—with repaircost esti mates rou tinely exceed ing $80 bil lion—an injec tion of water export revenuecertainly could be useful.

There may be rea sons Cana di ans will con tinue to oppose water export, but theissue should be decided on the facts and not on the basis of pro tec tion ism orunfounded claims of envi ron men tal destruc tion. In the inter ests of improv ing waterval u a tion and con ser va tion in Can ada, as well as assist ing water-poor regions, thereport offers the fol low ing recommendations:

1 Improve pub lic under stand ing of water issues. Ottawa and the prov inces shouldcon tract for an inde pend ent infor ma tion “audit” of gov ern ment web sites, cur ric u lummate ri als and other doc u ments to iden tify inac cu ra cies about water resources in Can -ada. Inac cu ra cies should be replaced with sci ence-based facts.

2 Con duct ground wa ter map ping and fresh wa ter inven to ries. An accu rate assess -ment of sur face water and ground wa ter loca tions and vol umes is nec es sary to deter -mine the sus tain able allo ca tion of water for trade and/or export. The avail abil ity andreli abil ity of water inven to ries vary across the prov inces, which raises the costs ofobtain ing the infor ma tion nec es sary to cal cu late accu rately sus tain able water with -draw als and con sump tion lev els. A cen tral ized pri vate sec tor data base should befunded by reprioritizing cur rent expen di tures (such as elim i nat ing doz ens of costlypro jects pre mised on hypo thet i cal global warm ing sce nar ios) as well as the impo si tionof user fees.

3 Deter mine sus tain able water lev els. Estab lish a pro cess by which water rights areunit ized and adjusted peri od i cally for nat u ral vari a tions in water yields. The cal cu la -tions should account for both in-stream and out-stream uses and his tor i cal vari a tions,and be deter mined by an inde pend ent third party awarded a con ces sion through com -pet i tive bid ding.

4 Reform pub lic sub si dies of water use. While the elim i na tion of all such sub si dieswould ratio nal ize water pric ing and thus encour age the high est and best uses of water,that’s not likely a real is tic option at pres ent. How ever, arti fi cially low res i den tial andindus trial water rates should be phased out in favor of full-cost recov ery, at the very



least. As for agri cul ture, irri ga tion sub si dies should require adop tion of water con ser -va tion mea sures such as water-sen sor tech nol ogy.

5 Repeal pro hi bi tions against water exports. Myr iad fed eral and pro vin cial stat utesand reg u la tions effec tively bar water export. These should be elim i nated and replacedwith insti tu tional mech a nisms for assign ing pri vate water rights. As an interim mea -sure, such mech a nisms could dupli cate pro ce dures for leas ing crown land and roy altypay ments for devel op ment of min er als, tim ber and other nat u ral resources. (Rightsexer cised to main tain in-stream flows should be per mit ted.)



Intro duc tion

Ca na di ans re gard wa ter as the nat u ral re source of great est im por tance to the coun try’s fu ture (Nanos, 2009). In a poll 4 con ducted for Pol icy Op tions jour nal, nearly 62% of re -spon dents cited wa ter as the coun try’s most im por tant re source com pared to 22% foroil and gas, 11% for for estry and 4% for fish er ies. Trea sured as wa ter is, how ever, mis -con cep tions about its sup ply, qual ity, and gov er nance abound. To a large ex tent, thepub lic gen er ally re gards Can ada’s wa ter re sources as de spoiled and di min ished(Nanos, 2009).

These pub lic per cep tions, inac cu rate though they may be, drive gov ern ment pol -icy. It is hardly sur pris ing, then, that a major ity of Cana di ans and their elected rep re -sen ta tives oppose any con sid er ation of bulk water exports.5 When asked what shouldbe gov ern ment’s top pol icy pri or ity for water, “for bid ding bulk water export” rankedsec ond among five options, sur passed only by “adopt ing a national water strat egy” 6

(Nanos, 2009). In the con text of global water issues, Cana di ans’ gen eral refusal to con sider bulk

water export defies logic. World wide demand for pota ble water is sig nif i cant; an esti -mated one bil lion peo ple lack access to safe drink ing water (Envi ron ment Can ada,2006). The num ber of peo ple in water “stressed”7 coun tries is expected to increase bymore than a bil lion by 20258 (Ayoubi and McNiven, 2006).

Where clean water is scarce, the human toll of con tam i na tion is tragic. Patho -gens in water induce chol era, typhoid, hep a ti tis, dys en tery, tra choma, hook worm, anda slew of other dread ful mal a dies. Of the 3 mil lion to 4 mil lion peo ple who die ofwaterborne dis eases annu ally (Envi ron ment Can ada, 2009, Nov. 19), most are chil dren in devel op ing coun tries (World Health Orga ni za tion, 2010), where more than 90% of



4 The poll of 1,001 Cana di ans was con ducted by tele phone between May 26, 2009, and June 1, 2009, andhas a mar gin of error of 3.1 per cent, 19 times out of 20.

5 Envi ron ment Can ada (2009a) defines bulk water exports as “the removal and trans fer of water out of itsbasin of ori gin by man-made diver sions (e.g., canals), tanker ships, or trucks, and pipe lines.”

6 The last com pre hen sive national water strat egy was pro posed in 1999 by the Lib eral gov ern ment of JeanChrétien.

7 “Water stress” is defined as less than 1,700 m3 per capita annu ally (Envi ron ment Can ada, 2009, Nov. 19).

8 Some of the more alarm ist pre dic tions of water scar city are based upon exag ger ated claims related to thehypo thet i cal effects of global warm ing.

sew age and 70% of indus trial wastes are sim ply dumped into sur face waters9 (Envi ron -ment Canada, 2009, Nov. 19).

Water sys tems through out East ern Europe and Cen tral Asia also are inad e -quate—dete ri o rated infra struc ture being a leg acy of com mu nist regimes (OECD,2006a). As noted by Roy Herndon, direc tor of the Insti tute for Inter na tional Coop er a -tive Envi ron men tal Research: “When the Iron Cur tain finally col lapsed… the worldsaw for the first time the great envi ron men tal cost of decades of com mu nist rule”(Herndon, 1999).

Even wealthy coun tries are not immune from water short ages, albeit less severethan in poorer nations. The pri mary cul prit is gov ern ment mis man age ment of waterallo ca tions. As in Can ada, for exam ple, agri cul tural sub si dies have encour aged the cul -ti va tion of mar ginal soils and increased water demand in areas oth er wise unsuit ablefor water-inten sive crops10 (Edwards, 2007). Arti fi cially low water rates also fos terinef fi cient water use. Indeed, water rates in only a third of OECD coun tries actu allycover the costs of oper at ing and main tain ing water facil i ties (OECD, 2006a). As econ -o mists Terry Ander son and Clay Lan dry explain, “Low prices pro vide lit tle incen tivefor con sum ers to con serve, and low rev e nues pro vide lit tle incen tive for pro duc ers toincrease sup ply. It is not sur pris ing that classic shortages arise” (Anderson and Landry, 2001).

Not with stand ing rel a tively minor short ages, Can ada is blessed with abun dantsup plies of both sur face water and ground wa ter, and the coun try enjoys an over allwater sur plus (Ayoubi and McNiven, 2006). The 30-year aver age annual water yield11

for Can ada is an envi able 3,435 km3 (Bemrose, et al., 2009). Mean while, the econ omywith draws a mere 1.4% of the fresh water renewed annu ally in the coun try—the vastmajor ity of which is dis charged back, gen er ally in the same watershed (Soulard andHenry, 2009).



9 This fact raises ques tions about whether the prob lem actu ally is water scar city or the deg ra da tion of exist -ing sup plies.

10 In recent years, the mas sive sub si di za tion of eth a nol is putt ing enor mous pres sure on both water sup pliesand ara ble land.

11 Water yield rep re sents the amount of renew able water from ground wa ter recharge (i.e., the pre cip i ta tionthat seeps into the ground) and run off from pre cip i ta tion.

The Case for Exporting Can ada’s Water

Wa ter ex port can be en vi ron men tally sus tain able. The level of al low able ex ports canbe based on a pro por tion of re new able flow (as op posed to ab so lute vol ume), or a pro -por tion of wa ter con served, to ad just for vari a tions in wa ter lev els and to en sure thesustainability of aquatic eco sys tems, fish er ies, and rec re ational uses. Al lo ca tions alsocan be based on sea sonal vari a tions in wa ter lev els and do mes tic de mands on sup plies.

Nat u ral resource devel op ment already is a main stay of the Cana dian econ omy,gen er at ing 12 per cent of GDP, or $147.5 bil lion, in 2008 (Nat u ral Resources Can ada,2010). Both of these broad facts have led pro po nents of water export, such as JackLindsay, chief exec u tive offi cer of the water mar ket ing firm Sun Belt Water, Inc., toques tion why water should be off lim its. “Can ada chops down its trees so we can buildhouses in Cal i for nia,” Lindsay has pointed out. “Can ada drills holes to deliver oil to theUnited States. These resources take decades or mil lions of years to renew them selves.Water is renewable every year.”

The profit poten tial from bulk water sales is slim at pres ent, given the high costsof trans port. But long stand ing pro hi bi tions on water exports don’t invite R&D invest -ment. There’s rea son to expect trans port inno va tions will be devel oped if gov ern men -tal bar ri ers to water export are lifted. There af ter, eco nomic ben e fits would flow toboth the pri vate and pub lic sec tors, includ ing roy alty and tax pay ments, and job cre -ation. Given the dete ri o ra tion of munic i pal water sys tems across Can ada—with repaircost esti mates rou tinely exceed ing $80 bil lion—an injec tion of water export rev e nuecer tainly could be use ful.12

For Can ada, in par tic u lar, the ini ti a tion of bulk water exports also would help todrive much-needed reforms in water pric ing, infra struc ture main te nance, and con ser -va tion. Thus, there are both human i tar ian and eco nomic grounds for Can ada to con -sider water exports. Indeed, nat u ral resource trade and coop er a tion between coun tries has been the his tor i cal norm (Yoffee and Wolf, 1999), and a main stay of peace ful rela -tions between coun tries.



12 This is not to sug gest that gov ern ment man age water exports, but water auc tion rev e nue or roy al ties could finance infra struc ture improve ments.

In some respects, Can ada already exports water.13 Water moves out side thecoun try in “embed ded” or “vir tual” form, i.e., as an input in the man u fac ture of foodand bev er ages, pulp and paper, dura ble goods, and petro leum.14 Cana dian exports ofbot tled water, pri mar ily to the US, Tai wan, and Japan, more than dou bled in valuefrom 1996 to 2002, increas ing from $130.5 mil lion to $284.3 mil lion, and the indus tryexpects dou ble digit growth for the next five years (Agri cul ture and Agri-Food Can -ada, 2009). As researcher Cynthia Baumann has noted, “it is some what mis lead ing tosay that Can ada wants to ban water export when it already exports large quan ti ties ofits water world wide in bot tles rather than in tank ers, trucks, and pipelines” (Baumann,2001).

A num ber of pro pos als for water export have been floated over the years, butnone has actu ally tran spired. In some instances, gov ern ment offi cials rejected per mitrequests out right, while in oth ers the ini tial approval was rescinded in the face of pub -lic oppo si tion.

The oppo si tion to water exports

Op po nents of wa ter ex port con tend that Can ada is not ac tu ally a wa ter-rich coun tryde spite rank ing third world wide in the most “re new able” fresh wa ter, be hind Braziland Rus sia (En vi ron ment Can ada, 2009, Nov. 19). The prob lem, they claim, is that 60% of Can ada’s fresh wa ter drains to the north, but three-quar ters of the pop u la tion iscon cen trated within 160 km of Can ada’s south ern bor der with the United States (En -vi ron ment Can ada, 2009, Nov. 19). There fore, wa ter short ages loom in Ca na dian pop -u la tion cen ters.

Bulk export of water would only be prob lem atic if there was insuf fi cient water intotal to meet domes tic needs. How ever, water can be rechanneled between drain agebas ins, which already occurs in con sid er able quan ti ties for hydro-elec tric power(Envi ron ment Can ada, 2004). Although costly, the eco nomic fea si bil ity wouldimprove as demand increases. The coun try’s topog ra phy is par tic u larly well-suited forsuch diver sions, although care must be taken in the exe cu tion to min i mize envi ron -men tal impacts. Accord ing to Envi ron ment Can ada (2004), “Nature has pro vided anenvi ron ment ame na ble to sur face water manip u la tion in Can ada. More impres sive



13 Can ada exports munic i pal water from Brit ish Colum bia to Point Rob erts, Wash ing ton, and from Coutts,Alberta, to Sweetgrass, Montana, but that is viewed as a neigh borly arrange ment for the effi cient deliv eryof munic i pal ser vices rather than water export.

14 Accord ing to research com mis sioned by the Neth er lands National Insti tute of Pub lic Health and theEnvi ron ment, Can ada ranked sec ond (behind the United States) among the top five coun tries in net vir -tual water exports for crops in the period 1995-1999 (Hoekstra and Hung, 2002).

even than the gen eral abun dance of fresh sur face water is the den sity of inter con -nected and almost-con nected lakes and rivers that make up our drain age net work.”

Many of the tem po rary short ages that do occur in Can ada are largely a result ofwater sys tem mis man age ment (Ander son and Hill, 1997). For exam ple, up to 30% ofthe total water enter ing sup ply lines is lost to leaks from poorly main tained infra struc -ture (Envi ron ment Can ada, 2009b); older sys tems may lose as much as 50% (Hunaidi,2000). Water sub si dies and inad e quate pric ing pro mote care less water use by house -holds, indus try and agri cul ture. Indeed, Can ada ranks as sec ond world wide in percapita water con sump tion (Envi ron ment Canada, 2009, Nov. 19).

Finally, the pros pect of water export evi dently stokes fears that the United Stateswill suck Can ada dry if given the oppor tu nity. Such views reflect, in part, pro tec tion istforces within Can ada that long have opposed free trade with the United States. Globalwarm ing alarmism also is to blame. For exam ple, the release of the United NationsFourth Assess ment report on global warm ing prompted one Cana dian aca demic toannounce: “We need to start hav ing pol icy dis cus sions about how we’re going to getfresh water to the US. How do we do that before they say to us ‘we want it and we’recom ing to get it?’” (Weaver, 2007).

Man ag ing water exports

If ex ports were ini ti ated, Can ada sup pos edly would be pow er less to re strict wa ter sales to the US un der ex ist ing trade agree ments. But that is largely a mis rep re sen ta tion ofthe North Amer i can Free Trade Agree ment. NAFTA does not pro hibit sig na to riesfrom reg u lat ing re source use as long as the re stric tions are ap plied equally to do mes -tic and for eign firms. The treaty also per mits trade lim i ta tions for en vi ron men talpro tec tion.

It also is ques tion able that the US would risk spoil ing rela tions with its most sig -nif i cant trad ing part ner when enor mous vol umes of renew able water sup ply are avail -able from Alaska (United States Geo log i cal Service).

His tory is replete with exam ples of the supe ri or ity of trade to opti mize resourceallo ca tion. Indeed, mar ket pric ing is the most pow er ful means of equal iz ing demandand sup ply (Ander son and Lan dry, 2001), as well as gen er at ing funds for infra struc ture devel op ment, renewal, and main te nance (OECD, 2006a).

Cana dian exports of water will not solve all the world’s water prob lems, ofcourse. Ensur ing sus tain able sup plies of safe water requires func tional local water sys -tems where none cur rently exist, and upgrades to those in dis re pair. Improve ments indesa li na tion tech nol ogy and wastewater treat ment sys tems also are nec es sary to



reduce the costs of pro cess ing water into pota ble form.15 All of these improve mentswill take time, lead er ship16 and a great deal of money. For exam ple, to real ize theUnited Nations’ goal of reduc ing by half the pro por tion of peo ple with out access tosafe drink ing water and san i ta tion will cost an esti mated $21 bil lion annu ally for adecade, over and above cur rent aid (Devarajan et al., 2002).

How ever, water exports can alle vi ate spot short ages, aug ment sup plies in regions with lim ited avail abil ity, and meet demand where san i ta tion facil i ties are under go ingrepair.

Over view of this report

These and other wa ter ex port is sues are ex am ined in this re port, and com mon mis -con cep tions are cor rected. It be gins with an over view of global wa ter sup plies, fol -lowed by an ex am i na tion of Can ada’s hy drol ogy, cur rent pat terns of wa ter use, and the laws and reg u la tions that gov ern the re source. Wa ter di ver sions and trans fers, bothpast and pres ent, are sum ma rized, as are the ben e fits and chal lenges to wa ter ex port.The pa per con cludes with rec om men da tions for pol icy reforms.

Crit ics argue that water, as the basis of life, is too pre cious a resource tocommoditize. The Coun cil of Cana di ans, for exam ple, con tends that because water isessen tial to life, “no one should be able to con trol it or expro pri ate it for profit” (Coun -cil of Cana di ans, 2009). A num ber of activ ist groups are lob by ing the gov ern ment todeclare water a “human right” for pur poses of guar an tee ing water access to all; ensur -ing that water sys tems are “dem o crat i cally owned and con trolled”; and, to pro hibit any inter fer ence by gov ern ment or indus try to indi vid ual water access (Blue PlanetProject).

If water commoditization vio lates human rights, what pos si ble jus ti fi ca tion canthere be for depriv ing those in need of a por tion of Can ada’s sur plus?



15 Research ers at Dalhousie Uni ver sity esti mated the cost of export ing water from Nova Sco tia toBrownsville, Texas, via ocean tanker to be nearly $90 mil lion. How ever, the use of float ing poly ure thanebags would reduce the cost of trans port to one-eighth that of the tanker, or com pa ra ble to the cost of acon struct ing a desa li na tion plant (El Ayoubi and McNiven, 2006).

16 Often in short sup ply among the des pots of the most water plagued regions, such as Africa.

Hydrol ogy

The vol ume of wa ter on Earth re mains con stant over time, al though the form in whichit ex ists con tin u ously changes. With out be gin ning or end, wa ter moves through theHy dro log i cal Cy cle, evap o rat ing from oceans and tran spir ing from plants, con dens inginto clouds, and pre cip i tat ing as rain and snow. This trans for ma tion be tween liq uid,solid, and va por states is pow ered by so lar ra di a tion and gravity.

The total amount of water on Earth is esti mated to be 1.4 bil lion km3, of which97.5% is salt water and 2.5% is fresh water (Envi ron ment Can ada, 2009, Nov. 19). Astable 1 indi cates, most fresh water—about 69%—exists as gla ciers and polar ice caps; ifmelted, sea lev els would rise some 70 metres (USGS, 2009). Ground wa ter com prisesthe sec ond larg est vol ume of fresh water, fol lowed by sur face water in lakes and rivers.

Both ground wa ter and sur face water are con stantly replen ished through pre cip i -ta tion. About 505,000 km3 of water evap o rates from ocean sur faces annu ally, and72,000 km3 evap o rates from land sur faces (Envi ron ment Can ada, 2009, Nov. 19). Inreturn, some 458,000 km3 of water (in pre cip i ta tion) falls back to the oceans, and119,000 km3 falls to land (Envi ron ment Can ada, 2009, Nov. 19). The dif fer encebetween the amount of evap o ra tion from land and pre cip i ta tion over land—47,000km3 annu ally—con sti tutes “ground wa ter recharge” (i.e., the pre cip i ta tion that seepsinto the ground) and “run off” (i.e., the pre cip i ta tion that does not per me ate the landsur face, but which flows into streams, rivers, and lakes, and ulti mately the ocean)(Envi ron ment Can ada, 2009, Nov. 19).17

Taken together, this flow of sur face water and ground wa ter recharge con sti -tutes the “renew able” sup ply of water. Esti mated vol umes of renew able fresh wa ter



Table 1: Freshwater Sources Worldwide by Volume (in km3)

Glacial Ice/Permafrost/Permanent Snow 24.4 million

Groundwater/Soil Moisture 10.7 million

Lakes/Marshlands 0.1 million

Rivers 0.002 million

Source: Envi ron ment Can ada, 2009, Nov. 19.

17 Rates of recharge and run off vary by soil type, topog ra phy, and geol ogy, among other fac tors.

vary dra mat i cally among coun tries, with Can ada rank ing third world wide, as indi -cated in table 2.

Water alarm ists, such as Maude Barlow of the Coun cil of Cana di ans, repeat edlyassert that “the world is run ning out of fresh water” (Barlow and Clarke, 2002). That iserro ne ous. To be sure, water is not evenly dis trib uted, nor is it uni formly pris tine, andthe draw-down of ground wa ter in some areas is unsus tain able. How ever, vastimprove ments in water effi ciency and water qual ity have been made. As the GlobalEnvi ron men tal Man age ment Ini tia tive has summarized:

Sig nif i cant prog ress has been made in de vel op ing tech nol o gies and best prac -tices for con serv ing, pu ri fy ing, re cy cling, and de sa li nat ing wa ter, all ac tions thatef fec tively in crease fresh wa ter avail abil ity. In the de vel oped world, ba sic ef fi -ciency mea sures are now widely prac ticed in the in dus trial and com mer cial sec -tors and in clude the use of low-vol ume plumb ing fix tures, re duc tion of ir ri ga tion sched ules, and ef fi ciency im prove ments for wa ter-cool ing tech nol o gies andequip ment. In dus trial dis charg ers gen er ally em ploy best avail able pol lu tion con -trol tech nol o gies. Ba sic drink ing wa ter and sew age treat ment are in placethrough out the de vel oped world and some de vel op ing na tions. More ef fi cientand ef fec tive tech nol o gies are grad u ally emerg ing (Global En vi ron men tal Man -age ment Ini tia tive).



Table 2: Annual Renewable Water Resources (in km3/yr)

Brazil 8,233.00

Russia 4,498.00

Canada 3,300.00

United States of America 3,069.00

China 2,829.60

Cape Verde 0.3

United Arab Emirates 0.2

Qatar 0.1

Malta 0.07

St. Kitts and Nevis 0.02

Source: Gleick, 2008.

Can ada’s Water Sup ply

Can ada is rich in wa ter wealth, with nearly 1.2 mil lion square kilo metres of wa terarea,18 or 37,151 square metres per ca pita (Sta tis tics Can ada, 2009). The 30-year av er -age an nual wa ter yield19 for Can ada is 3,435 km3 (Bemrose, et al., 2009), or the equiv a -lent of about 100,000 cu bic metres per ca pita (Soulard and Henry, 2009). Even greatervol umes of ground wa ter lie be neath the land sur face (En vi ron ment Can ada, 2006), al -though it has not been sys tem at i cally mapped or mea sured. Com pared with other na -tions, Can ada en joys a large wa ter in ven tory rel a tive to pop u la tion, as in di cated infigure 1.

Water resources vary across Can ada’s vast expanse. As noted ear lier, about 60%of Can ada’s fresh water drains north (Envi ron ment Can ada, 2006) while three-quar -ters of the pop u la tion is con cen trated within 160 km of the Can ada-US bor der (Envi -



0

10

20

30

40

50

60

70

North & CentralAmerica

South America Europe Africa Asia Australia &Oceania

Region

Perc

enta

ge

Population (%)

Water ((%)

Fig ure 1: Pop u la tion and Water Sup plies

Source: Envi ron ment Can ada, 2009, Nov. 19

18 Water area rep re sents the geo graphic mea sure of lakes, rivers, streams, and var i ous other inland water -ways.

19 Water yield rep re sents the flows in streams, rivers, and lakes, includ ing water that orig i nates fromground wa ter as well as rain and melted snow.

ron ment Can ada, 2009, Nov. 19). By exten sion, then, great quan ti ties of Can ada’srenew able fresh water go unused by humans.

There is sig nif i cant vari a tion in water resources among the prov inces and withinprov inces, as indi cated in fig ure 2 (Sta tis tics Can ada, 2005b). Water flow vari a tion isgreat est in the Prai rie prov inces and parts of cen tral and south east ern Brit ish Colum -bia (Soulard and Henry, 2009). In the North west Ter ri to ries and Nunavut, sur facewaters are cov ered in ice for six to 10 months of the year. The ice cover lasts five toeight months in the Yukon.

Can ada is com posed of five major “drain age bas ins” that direct the flow of waterto the ocean: the Atlan tic basin encom passes the Great Lakes and St. Law rence Riverregion; the Pacific basin extends west from the Rocky Moun tains, con tain ing theYukon and Colum bia rivers; the Hud son Bay basin drains eastwards from the con ti -nen tal divide; the Arc tic basin is dom i nated by the Mac ken zie River region; and theGulf of Mex ico basin drains a por tion of south ern Alberta and Sas katch e wan (Envi -ron ment Can ada, 2006). The area and vol ume of flow within each drain age basin var -ies con sid er ably, as table 3 indi cates.



0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000

Newfoundland & Labrador

Prince Edward Island

Nova Scotia

New Brunswick

Quebec

Ontario

Manitoba

Saskatchewan

Alberta

British Columbia

Yukon

Northwest Territories

Nunavut

Square kilometres

Fig ure 2: Fresh Water Area by Province or Territory

Source: Statistics Canada, 2005b.

Enor mous quan ti ties of water run through Cana dian rivers, which dis charge aremark able 105,000 cubic metres of water per sec ond. One cubic metre per sec ond(m3/s) would fill 1,000 rail tank cars in a sin gle day (Envi ron ment Can ada, 2006).

Can ada also fea tures more lake area than any other coun try on Earth (Envi ron -ment Can ada, 2009, Nov. 19)—some two mil lion lakes in total, and 563 that span more than 100 square kilo metres (Envi ron ment Can ada, 2006). Chief among them, ofcourse, are the Great Lakes, which hold an aston ish ing one-fifth of the world’s totalfresh sur face water, as quan ti fied in table 4 (Envi ron ment Canada, 2006).

Lake lev els have fluc tu ated dra mat i cally for mil len nia, and may rise or fall inmere hours depend ing on fac tors such as wind veloc ity and direc tion. Vari a tions inpre cip i ta tion and tem per a ture, not water use, are the pri mary fac tors influ enc ing lakelev els. Ambi ent tem per a tures affect rates of evap o ra tion which, in turn, cause waterlev els to rise or fall. The same holds true for pre cip i ta tion volumes, as indicated intable 5.

Human impacts on lake lev els are rel a tively minor com pared to the effects ofnat u ral fac tors. In fact, more water is now diverted into the Great Lakes basin forhydropower, nav i ga tion and other uses than is siphoned away for use in areas out side



Table 3: North American Basin Drainage Areas (million km2)

Arctic Ocean 3.9

Hudson Bay 3.5

Atlantic Ocean 1.4

Pacific Ocean 1

Gulf of Mexico 0.03

Source: Environment Canada, 2006.

Table 4: Quantity of Water in Canada’s Great Lakes

MaximumDepth (m)

Total Area(km2)

Volume (Low WaterDatum; km3)

Superior 406 82,100 12,100

Michigan 282 57,800 4,920

Huron 229 59,600 3,540

Erie 64 25,700 484

Ontario 244 18,960 1,640


the basin (Mich i gan Dept. of Envi ron men tal Qual ity, 2000). With draw als and con -sump tion of Great Lakes water actu ally have decreased by 48 per cent in recentdecades (Inter na tional Joint Com mis sion, 2000). The decrease is largely a result oftech no log i cal inno va tions, many of which also improve the qual ity of water dis charged back to the basin. All man ner of water-effi cient appli ances—toi lets, wash ingmachines, and dish wash ers, for exam ple—have come to mar ket, along with a vari ety of leak-detec tion and pres sure-con trol equip ment.



Table 5: Precipitation Volume in Various North American DrainageRegions (in km3)

Pacific Coastal 451

Fraser—Lower Mainland 156

Okanagan—Similkameen 7

Columbia 68

Yukon 115

Peace—Athabasca 241

Lower Mackenzie 486

Arctic Coast—Islands 333

Missouri 11

North Saskatchewan 67

South Saskatchewan 74

Assiniboine—Red 86

Winnipeg 74

Lower Saskatchewan—Nelson 183

Churchill 151

Keewatin—Southern Baffin Island 310

Northern Ontario 466

Northern Quebec 656

Great Lakes—Ottawa—St. Lawrence 556

North Shore—Gaspe 367

St. John—St. Croix 48

Maritime Coastal 153

Newfoundland & Labrador 392

Canada Total 5,451

Source: Statistics Canada, 2009.

Even with draw als for bot tled water are quan ti ta tively insig nif i cant. The GreatLakes basin actu ally imports more bot tled water than it exports—37 mil lion gal lonsimported com pared to just 2.6 mil lion gal lons exported (Inter na tional Joint Com mis -sion, 2000). In its lat est report on the Great Lakes, the Inter na tional Joint Com mis sion(IJC) con cluded:

[B]ottled wa ter ap pears to have no ef fect on wa ter lev els in the Great Lakes Ba sin. (In ter na tional Joint Com mis sion, 2000)

New tech nol o gies and effi ciency improve ments also have dra mat i cally reducedthe amount of pol lu tion dis charged into the lakes. In the past two decades, for exam -ple, dis charges into the St. Law rence River by 50 of the most pol lut ing indus trial plants had been reduced by 96% (Envi ron ment Can ada, 2009, Nov. 19). A total of 11 “per sis -tent bioaccumulative toxic sub stances” have been elim i nated entirely (Envi ron mentCan ada, 2009, Nov. 19).

The sin gle larg est “point source” of nitro gen and phos pho rus releases to thelakes is munic i pal wastewater, which also ranks among the larg est sources of pol lu tion(by vol ume) in Cana dian waters (Envi ron ment 2009, Nov. 19). None the less,eutrophication20 in the Great Lakes is largely under con trol (Envi ron ment Canada,2006).

The most vex ing prob lem of the Great Lakes is unre lated to either water with -draw als or con tam i nated dis charges. Since the 1800s, more than 140 “exotic” plants,fish, algae, and mol lusks have been intro duced into the Great Lakes (GLIN, 2009).These non-native spe cies can rad i cally change eco sys tem dynam ics through increased pre da tion and com pe ti tion, dis ease, hab i tat destruc tion, and genetic stock alter ations(US EPA, 2010). Approx i mately 68% of the losses of fish spe cies in North Amer ica over the last cen tury were due to exotic spe cies (EPA, 2010). The eco nomic impacts are also sub stan tial; the rapid repro duc tion of the zebra mus sel, for exam ple, has cre atedblock ages in indus trial and munic i pal water pipes that are costly to rem edy, whileother spe cies dis place or elim i nate fish prized for commercial and sport fishing.



20 Eutrophication results when run off of nutri ents, such as nitro gen fer til iz ers and sew age effluents, stim u -late exces sive growth of algae in lakes. Decom po si tion of the algae reduces dis solved oxy gen in the water,caus ing other organ isms in the water to die.

Water Uses

Ca na di ans use wa ter in two ways: it is with drawn for ir ri ga tion, man u fac tur ing, andhouse hold uses, and it also is man aged “in stream” for hy dro elec tric power, fish er ies,and trans por ta tion. Ei ther way, only a min ute pro por tion of the wa ter with drawn isnot dis charged back into the ba sin from which it was taken (Soulard and Henry, 2009).

The dif fer ence between the amount of water with drawn and the amount dis -charged is referred to as “con sump tion.” The Cana dian econ omy with draws only 1.4%of the coun try’s renew able fresh water: some 40 km3 is with drawn for indus trial uses(energy pro duc tion, min ing, and man u fac tur ing); agri cul ture uses 4 km3; and another4 km3 is with drawn for house hold and insti tu tional uses, as fig ure 3 illus trates (Soulardand Henry, 2009).



Agriculture8%

Thermal Power60%

Manufacturing19%

Municipal9%

Mining4%

Toilet30%

Bathing/showering35%

Laundry20%

Kitchen & Drinking10%

Cleaning5%

Fig ure 4: House hold Uses of WaterFig ure 3: Water Uses by Type in Can ada

Source: Envi ron ment Can ada, 2006.Source: Envi ron ment Can ada, 2006.

House holds

On av er age, each Ca na dian uses 329 li ters of fresh wa ter for do mes tic uses each day, asde tailed in fig ure 4 (En vi ron ment Can ada, 2010, June 3). Can ada thus ranks as sec ondworld wide in ur ban do mes tic wa ter use per ca pita, lag ging be hind only the UnitedStates (En vi ron ment Can ada, 2009, Nov. 19).

About eight mil lion Cana di ans rely on ground wa ter for house hold uses—fourmil lion peo ple in urban areas and four mil lion in rural areas (Envi ron ment Can ada,2006). The major ity of urban house holds—92%—obtain water from munic i pal sys -tems (Envi ron ment Canada, 2006).

The mean price in Can ada for res i den tial munic i pal water ser vices (25 cubicmetres per month) was $22.92 per month in 2004, the lat est year for which fig ures areavail able (Envi ron ment Can ada, 2009, Nov. 26). The mean price for munic i pal sew er -age ser vices was $19.95 per month in 2004 (Envi ron ment Can ada, 2009, Nov. 26).Thus, Cana di ans pay among the low est water rates among com pa ra ble coun tries(Envi ron ment Can ada, 2009, Nov. 26)—about one-quar ter of the aver age Euro pean



$0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60

Canada (national average)

Mexico City

Akron, Ohio

Tokyo, Japan

Sydney, Australia

Paris, France

Hamburg, Germany

Rome, Italy

Amsterdam, Netherlands

Madrid, Spain

London, UK

Per cubic metre ($US; PPP)

Figure 5: Prices of Water Supply in Major Cities

Source: OECD, 2006b.

rate and three-quar ters of the aver age US rate (Envi ron ment Can ada, 2006)—as fig ure5 indi cates.

Real prices have increased in recent years, but remain low com pared to the actual cost of sup ply ing the water (Envi ron ment Can ada, 2009, Nov. 26). It is no sur prise,then, that the rate of water use by Cana di ans is high.

Agri cul ture

Plants re quire wa ter to grow, of course, but wa ter also is an in te gral com po nent ofother as pects of ag ri cul ture, in clud ing frost pro tec tion, pes ti cide ap pli ca tion, and foodpro cess ing. Ir ri ga tion is nec es sary when nat u ral pre cip i ta tion is in suf fi cient to sus taincrops and live stock, or to in crease yields.

Water use for Cana dian agri cul ture totaled an esti mated 4.8 bil lion cubic metresin 2001 (Beaulieu et al., 2007). The larg est pro por tion—92.4% —was used for irri ga -tion, fol lowed by live stock water ing (5.4%), and mis cel la neous uses such as spray ingand crop wash ing (2.2%) (Beaulieu et al., 2007). Alberta, Sas katch e wan, and Brit ishColum bia accounted for 92% of the agri cul tural water use in Can ada (Beaulieu et al.,2007).

Among all water uses, agri cul ture “con sumes” the larg est pro por tion ofwater—some 70% of all the water used in irri ga tion is con sumed (Envi ron ment Can -ada, 2006). With most irri ga tion fees based on land area, as opposed to water vol ume,there’s lit tle incen tive for farm ers to reduce water consumption.

Man u fac tur ing/Indus trial

In 2005, five in dus tries ac counted for more than 92% of wa ter with draw als re lated toman u fac tur ing: 44.8% by pa per in dus tries; 27.7% by metal in dus tries; 8.7% by chem i cal in dus tries; 6.2% by pe tro leum and coal; and 5.2% by food pro cess ing (Sta tis tics Can -ada, 2008).

More than 85% of the water used for man u fac tur ing and indus try is dis charged.As fig ure 6 shows, met als man u fac tur ing con sumes the sin gle larg est pro por tion ofwater in the indus trial sec tor, fol lowed in descend ing order by paper, chem i cals, andpetro leum/coal.

In most devel oped coun tries, water use by indus try has been decreas ing for thepast three decades, a con se quence of the decline of water-inten sive heavy indus try and tech no log i cal advances (OECD, 2006b).



Energy

Wa ter is cru cial to the gen er a tion of en ergy in Can ada,where hy dro elec tric ity sup plies 62% of the coun try’spower (En vi ron ment Can ada, 2006). Hy dro elec tric util i -ties rou tinely are cited as among the larg est us ers ofGreat Lakes wa ter. In fact, all but about 1 per cent of thebil lions of gal lons of wa ter used to drive tur bine gen er a -tors is re turned to the ba sin (Great Lakes Com mis sion,2004), as fig ure 7 shows.

The rate of water con sump tion for all types ofenergy pro duc tion totals just 2.8% of energy-relatedwater with draw als (Sta tis tics Can ada, 2008).



Paper, 20.4

Petroleum & Coal, 6.4

Chemicals, 20.3

Primary Metals, 36.1

Food, 4.5

Transportation Equipment, 0.3

Machinery, 0.1

Textile Mills, 0.3

Plastics & Rubber, 0.6

Non-metallic Minerals, 3.2

Other, 0.4

Textile Products, 0.1

Wood, 4.8

Beverage & Tobacco, 2.3

Fabricated Metals, 0.3

Fig ure 6: Water Consumption by Industry

Source: Sta tis tics Can ada, 2010.

Consumption3%

Discharge97%

Fig ure 7: Water Use in Thermal-Electric Power Generation

Source: Sta tis tics Can ada, 2008.

Pric ing and Con sump tion

Gov ern ment pol icy has a huge im pact on wa ter use. Rates that do not re flect the ac tualcosts of sup ply ing wa ter, in clud ing the op er a tion and main te nance of wa ter lines andwastewater treat ment, ef fec tively dis suade wa ter con ser va tion. Pric ing pol i cies acrossthe coun try ac tu ally value wa ter be low its cost, and thus un der mine its con ser va tion.In ter na tional trade in bulk wa ter would lead to more ra tio nal pric ing and, there fore,en cour age con ser va tion and in crease the over all sustainability of Can ada’s watersupplies.

His tor i cally, water rates in Can ada have ranked among the low est found in com -pa ra ble coun tries. For exam ple, a sur vey of 12 OECD-mem ber coun tries revealedhouse hold water rates in Can ada to be sec ond low est, with only Hun gary charg ing lessper cubic metre. Water rates in the Neth er lands, France, and the United King domwere up to four times higher than the Cana dian aver age, while the rates in the otherseven coun tries were at least one and a half times higher (Envi ron ment Can ada,2008a).

Not only do Can ada’s abso lute water rates under value the resource, but the pric -ing mech a nism does so as well. Nearly one-third of res i den tial rate pay ers werecharged flat rates for water in 2004 (Envi ron ment Can ada, 2009, Nov. 26). Becauseflat-rate bill ing fails to encour age effi ciency, water con sump tion can run 70% to 80%higher than it does under vol ume-based rates (Envi ron ment Can ada, 2009, Nov. 26),whereby rate pay ers are charged for the quan tity of water they use. Thus, Can ada, withroughly one-tenth of the US pop u la tion, accounts for 35% of the water with draw als inthe Great Lakes basin, com pared to 65 per cent by the United States. Fig ure 8 illus -trates the dif fer ences in water use per capita in Can ada between those billed by flat rate com pared with those who pay vol ume-based rates.

A num ber of Cana dian munic i pal i ties have elim i nated flat-rate pric ing. Forexam ple, in 1991, 46.7% of res i den tial rate pay ers were billed with flat rates com paredto 23% in 2004 (Envi ron ment Can ada, 2009, Nov. 26). Some 46% of rate pay ers are nowbilled by “con stant unit charges,” which apply a set rate for each unit of water used(Envi ron ment Can ada, 2009, Nov. 26). Eight per cent are billed accord ing to “declin ingblock rates,” whereby the price of water drops as suc ces sive vol umes of use increase,while only 23% of rate pay ers pay increas ing block rates (Envi ron ment Can ada, 2009,Nov. 26).

An effi cient pric ing sys tem would ensure that all users pay rates that reflect theactual cost of ser vice for every unit of water con sumed. Unless pric ing reflects the



actual cost of ser vice, there is no incen tive to con serve, nor is there suf fi cient rev e nueto main tain and upgrade infra struc ture.

Among con ser va tion mea sures recently adopted by munic i pal i ties, vol ume-based pric ing was used least, accord ing to the lat est fed eral sur vey of water sys tems(Envi ron ment Can ada, 2009, Nov. 26). Nearly 40% of Cana dian res i den tial cli ents lackwater metres by which to cal cu late water use (Envi ron ment Can ada, 2009, Nov. 26).Yet areas with water meter ing use less water than areas lack ing meters (Sta tis tics Can -ada, 2009b).

The waste ful con sump tion of water is only one of the con se quences of inad e -quate pric ing. Another is the short fall in rev e nues needed to cover the costs of oper at -ing and main tain ing water sys tems. The National Research Coun cil of Can adachar ac ter izes the repair def i cit as “stag ger ing” (National Research Coun cil Can ada,2009a). Indeed, the price to clear the back log of repairs and upgrades for munic i palsys tems in Can ada is esti mated to be $23 bil lion over a decade (Envi ron ment Can -ada, 2006).

Anti quated sys tems rou tinely lose large vol umes of water from leaks, as table 6reveals. Leak detec tion sys tems have been imple mented in only 73 munic i pal i ties, rep -re sent ing a mere 5.3 mil lion peo ple (Envi ron ment Can ada, 2009, Nov. 26).



0

50

100

150

200

250

300

350

400

450

500

1991 1994 1996 1999 2001 2004

Year

Litr

es/c

apit

aFlat Rate Volume-based Rat e

Figure 8: Water Use by Flat Rate vs. Volume-based Rates (litres per capita)

Source: Environment Canada, 2009, Nov. 26.

The oppor tu ni ties for leak age run through the entire water net work, includ ingtrans mis sion pipes, dis tri bu tion pipes, ser vice con nec tion pipes, joints, valves, and firehydrants (Hunaidi, 2000). The causes of leaks are numer ous: cor ro sion; mate rialdefects; faulty instal la tion; exces sive water pres sure; ground move ment; and exces siveloads and vibra tion from traf fic (Hunaidi, 2000). Fur ther more, leaks beget worse leaks.

Leaks also increase the risk of water con tam i na tion (National Research Coun cilCan ada, 2009b). Con tam i nants enter the water lines through leak open ings whenwater pres sure drops.

Water that leaks from the dis tri bu tion net work is referred to as “non-rev e nuewater,” i.e., the costs of water treat ment and dis tri bu tion go uncol lected. In Torontoalone, the level of non-rev e nue water was cal cu lated to be 52,433,000 m3—the equiv a -lent of ser vic ing a pop u la tion of 250,000 peo ple or fill ing more than 15,000 Olym picsized swim ming pools every day (LaLonde). The water sys tem in met ro pol i tan Mon -treal loses a whop ping 40% of its water to leaks and water pipe breaks (Cham pagne,2009; Ville de Montréal, 2009). This equates to a water loss of 800,000 m3 per day, or62% more than the total daily con sump tion by the cit i zens of Paris.



Table 6: Water Loss from Leaks

Province/Territory Rate of Loss (%)

Newfoundland and Labrador 7.1

Prince Edward Island 14

Nova Scotia 12.7

New Brunswick 9.8

Quebec 19.1

Ontario 12

Manitoba 12

Saskatchewan 12

Alberta 7.2

British Columbia 9.1

Yukon 0

Northwest Territories 10.8

Nunavut 5.9

SOURCE: Envi ron ment Canada, 2010.

Water Law and Reg u la tion

Wa ter takes no no tice of po lit i cal bound aries, and his tory is re plete with con flicts overcon trol of the re source. Dat ing back some 4,500 years, the Sumer ian city-states ofLagash and Umma fought over di ver sions from the bound ary chan nels of the TigrisRiver (Coo per, 1983). But from that dis pute emerged the first re corded wa ter treaty,af ter which have come thou sands of oth ers—“many show ing tre men dous el e ganceand cre ativ ity” (Yoffee and Wolf, 1999).

Owing to water’s impor tance, nations of the world have coop er ated far morethan warred over its use. Not with stand ing alarm ist claims about the loom ing threat of“water wars,” there’s lit tle rea son to fear that the future will devi ate dra mat i cally fromthe past. Indeed, Jerome Delli Priscoli, a US senior advi sor on inter na tional waterissues, describes water as “one of human ity’s great learn ing grounds for build ing com -mu nity” (Delli Priscoli, 1997).

Accord ing to research by Yoffee and Wolf, “shared inter ests along a water wayseem to over whelm water’s con flict-induc ing char ac ter is tics.” In mod ern times, theynote, only seven minor skir mishes have been waged over inter na tional waters. Con -versely, more than 3,600 trea ties have been signed his tor i cally over dif fer ent aspects ofinter na tional waters—145 in this cen tury (Yoffee and Wolf, 1999).

Mul ti ple juris dic tions exer cise author ity over Cana dian waters. The fed eral gov -ern ment holds juris dic tion over water in national parks and fed eral lands, on Indianreserves, in the North west Ter ri to ries and Nunavut, as well as trans-bound ary watersbetween Can ada and the United States. The prov inces over see waters con fined withintheir bound aries. Munic i pal i ties pri mar ily are respon si ble for the deliv ery of water and wastewater treat ment. Bar ri ers to water export exist at every level of gov ern ment,although pro vin cial laws, in par tic u lar, pro vide gov ern ment offi cials with somediscretion in permitting allocations.

Inter na tional trea ties

The his tory of Can ada-US co op er a tion in wa ter stew ard ship dates back a cen tury dur -ing which both coun tries have adapted to chang ing cir cum stances (Yoffee and Wolf,1999). In the fu ture, pro vi sions to pro tect both wa ter qual ity and quan ti ties could bene go ti ated to fa cil i tate wa ter ex port. The ex ist ing trea ties and bi lat eral in sti tu tionsinclude:



4 The Bound ary Waters Treaty (1909) between the United States and Can ada, signed byPres i dent The o dore Roo se velt and King Edward VII, estab lished the Inter na tionalJoint Com mis sion to pre vent or set tle dis putes over the bound ary waters between theUnited States and Can ada. Arti cle III of the treaty requires com mis sion approval forany diver sion or obstruc tion that would “affect … the nat u ral level or flow of bound arywaters.” (The IJC does not exer cise juris dic tion over Lake Mich i gan because it liesentirely within the United States.)

4 The Inter na tional Joint Com mis sion over sees imple men ta tion of the Bound aryWaters Treaty, and is autho rized to reg u late, under take sur veil lance, inves ti gate, andarbi trate. IJC approval must be obtained for the use, obstruc tion, or diver sion ofbound ary and trans-bound ary waters that affect the water’s nat u ral level or flow (Envi -ron ment Canada, 2006).

4 Niag ara River Treaty (1950) lim its the amount of water that may be diverted from theNiag ara River by Can ada and the US for power gen er a tion pur poses

4 Great Lakes Water Qual ity Agree ment (1972) estab lishes goals for pol lu tion con trol,research, and lake mon i tor ing.

4 The Great Lakes Char ter (1985) is a “good-faith” agree ment (legally unen force able)between eight gov er nors and two pre miers of the Great Lakes-St. Law rence Riverregion to man age water resources. Under the char ter, “diver sions of Basin waterresources will not be allowed if indi vid u ally or cumu la tively they would have any sig -nif i cant adverse impacts on lake lev els, in-basin uses, and the Great Lakes Eco sys tem.”Nor are diver sions per mit ted with out “the con sent and con cur rence of all affectedGreat Lakes States and Prov inces.” In 2001, the gov er nors and pre miers of the sig na -tory states and prov inces pro posed amend ing the char ter to incor po rate more strin -gent con trols over withdrawals and diversions.

4 Great Lakes Water Resources Com pact (2005) signed by the gov er nors and pre miersof the Great Lakes region pro hib its most new diver sions and exports of water out ofthe basin. Per mis sion for a diver sion may be sought by a com mu nity that strad dles thebasin if it has no rea son able water sup ply alter na tive, includ ing con ser va tion, and thediverted water will be used only for pub lic sup ply and returned treated to the water -shed. Per mis sion is only granted by unanimous approval.

4 St. Croix Water way Com mis sion (1987) is an agree ment between the prov ince of NewBruns wick and the state of Maine for mutual man age ment and pro tec tion of the St.Croix bound ary cor ri dor, includ ing “resource shar ing and com pat i ble devel op mentwithin an inte grated, on-going man age ment process.”

In recent years, the debate about water export has focused on whether water inits nat u ral state is a “good” under the terms of the North Amer i can Free Trade Agree -



ment (NAFTA). If so, per mit ting any export would require Can ada to accord allfirms—domes tic and for eign—the same rights. Con se quently, oppo nents con tend,the United States would have “unprec e dented and irre vo ca ble access rights to Can -ada’s water resources in per pe tu ity” (Holm, 1993).

The issue is com plex—all the more so because Can ada did not nego ti ate anexemp tion for water in the agree ment, as it did for “cul tural” indus tries such as newsmedia and film.21 How ever, NAFTA does incor po rate the exemp tion pro vi sionswithin the Gen eral Agree ment on Tar iffs and Trade (GATT), which rec og nize traderestric tions “relat ing to the con ser va tion of exhaust ible nat u ral resources, if such mea -sures are made effec tive in con junc tion with restric tions on domes tic pro duc tion orcon sump tion” (Baumann, 2001). GATT also allows trade lim i ta tions “to pre serve cer -tain com mod i ties in short sup ply,” as well as mea sures “nec es sary to pro tect human,ani mal, or plant life or health.”

In an attempt to set tle the mat ter, Can ada, the US, and Mex ico issued a jointstate ment in 1993 assert ing that NAFTA does not apply to fresh water unless it “hasentered into com merce and become a good or prod uct.” Whether the state ment actu -ally car ries legal weight is a mat ter of debate.

Cana dian law

All prov inces, with the ex cep tion of New Bruns wick, pro hibit bulk wa ter ex ports.How ever, there ex ist a va ri ety of ex cep tions. For ex am ple, Que bec law al lows bulk ex -ports for the pro duc tion of elec tric ity. The var i ous wa ter stat utes in Al berta, Man i -toba, and Nova Sco tia also al low ex cep tions to be granted by the cab i net or leg is la ture,as ta ble 7 in di cates. Given that the en vi ron men tal im pacts of wa ter re moval are thesame if wa ter is bot tled, used for ir ri ga tion, or oth er wise trans ferred “vir tu ally,” op po -si tion to wa ter ex port per se thus ap pears to be largely sym bolic (McNiven, 2005).



21 Mex ico nego ti ated an exemp tion for energy resources such as oil.



Table 7: Various Canadian Water Acts and their Exceptions

Alberta Water Act (2000) A special Act of the Legislature is required for any transport of water out of the province, orany transfer of water between major river basins.

Exceptions: “municipal water” and “processed water” (i.e., water packaged in Alberta as abeverage and water used in food processing or in manufacturing).

British Columbia WaterProtection Act (1996)

Prohibits water removal from British Columbia, and construction of any large-scale projectcapable of transferring water from one major watershed to another.

Exceptions: water packaged in British Columbia in containers with a capacity of not morethan 20 liters each; water carried in vehicles, vessels or aircraft for the use of persons oranimals while in transport; registered license holders.

Quebec Water ResourcesPreservation Act

No water taken in Quebec may be transferred outside Quebec.

Exceptions: water taken to produce electric power; water for human consumption andpackaged in Quebec in containers with a capacity of not more than 20 liters; water to supply establishments or dwellings in a bordering zone; water carried in vehicles, vessels or aircraftfor the needs of the persons or animals being transported or for ballast or other needsrelated to the operation of the vehicles. An exception may also be granted by the Quebecgovernment for humanitarian or other reasons considered to be in the public interest.

New Brunswick CleanEnvironment Act

Approval required to construct, modify or operate any waterworks (a private, public,commercial or industrial works for the collection, production, treatment, storage, supply ordistribution of water). Any transfer of water between drainage basins requires anenvironmental impact assessment.

Manitoba Water ResourcesConservation Act

Prohibits any removal of water as well as drilling, diverting, extracting taking or storingwater for removal, or transporting water for removal.

Exceptions: water packaged in a container of not more than 25 liters; water used in theordinary operation of a vehicle, vessel or aircraft or for the use of persons or animals or thetransportation of food or products on such forms of transport; water removed to meetshort-term safety, security or humanitarian needs (with the approval of the minister); waterused in Manitoba to manufacture or produce a product. Further exceptions may be madeby the Lieutenant Governor in Council.

Yukon Devolution TransferAgreement

As of April 2003, the federal government empowered the Yukon government withprovincial-type responsibilities for water management in the territory. It is now theresponsibility of the Yukon government to decide whether to prohibit bulk water removalsin the territory.

Northern Territories/Nunavut NorthwestTerritories Waters Act;Nunavut Waters andNunavut Surface RightsTribunal Act

The federal government is responsible for water management (except for health aspects ofdrinking water). Any major diversion or use of water requires a license issued by a waterlicensing board and approval by the minister of Indian Affairs and Northern Development.(The minister has stated he will not approve, under the current legislation, any licenseissued to allow bulk water removal out of a major river basin.)



Table 7: Various Canadian Water Acts and their Exceptions

Saskatchewan WatershedAuthority Act (2005)

Prohibits any license or approval to construct or operate works for the transferring waterout of a watershed.

Exceptions: water packaged in containers; water for transfer between watersheds withinSaskatchewan; water used for the ordinary operation of a vehicle, vessel or aircraft, or forthe use of persons or animals or for the transportation of food or products on such forms oftransport.

Ontario Water Resources Act(1990)

Prohibits the transfer of water out of the water basins; prohibits new and increased watertransfers of 379,000 liters per day from one Great Lakes watershed to another.

Exceptions: water packaged in a container having a volume of 20 liters or less; water used inthe basin to manufacture or produce a product that is transferred out of the water basin; atransfer of water that is necessary for the operation of the vehicle, vessel or other form oftransport it is being transferred in, including water that is for the use of people, livestock orpoultry in or on the vehicle, vessel or other form of transport; a transfer for firefighting orother emergency purposes; transfers commenced before January 1, 1998 (subject tolimitations); water taken pursuant to an Order of the Lieutenant Governor in Council datedOctober 2, 1913 respecting the Greater Winnipeg Water District.

Nova Scotia Water ResourcesProtection Act (2000)

Prohibits drilling for, diverting, extracting, taking or storing water for removal or sale.

Exceptions: water packaged in a container of not more than 25 liters; water transported in a motor vehicle, vessel or aircraft and that is necessary for the operation of the motor vehicle,vessel or aircraft or is intended for the use of animals or persons; water used to transportfish or any other product; water used for a non-commercial purpose approved by theMinister of the Environment, e.g., for short-term safety, security, fire-fighting orhumanitarian needs; water included in manufactured, produced or packaged foods or other products.

Newfoundland & LabradorWater Resources Act (2002)

Prohibits removal of water from the province.

Exceptions: water in containers of not more than 30 liters in volume; water used in theoperation of, or for the use by or consumption of persons in, a motor vehicle, vessel oraircraft; water used to transport food or an industrial product out of the province; waterremoved for a non-commercial purpose approved by the Minister of Environment,including for safety or humanitarian purposes.

Prince Edward IslandEnvironmental Protection Act (1988)

Prohibits extracting, taking or using surface water or groundwater for the transfer orremoval from the Province.

Exceptions: water used for drinking purposes and packaged in Prince Edward Island incontainers having a capacity of not more than 25 liters; water in a vehicle, vessel, or aircraftused by persons or animals while they are being transported or for the operation of thevehicle, vessel or aircraft; to transport food or products; water removed, with the writtenpermission of the minister of Environment and Energy for short-term safety, security orhumanitarian needs.

Source: Library of Parliament, 2008.

Water diver sions and trans fers

Wa ter re sources have been man aged for a va ri ety of uses through out Can ada’s his tory. Wa ter from the Ni ag ara River was first di verted to gen er ate elec tric ity in 1893, for ex -am ple (US Army Corps of En gi neers, 2006), and hun dreds of di ver sions and trans fersboth big and small have been ex e cuted since for hy dro elec tric pro jects, ir ri ga tion, mu -nic i pal wa ter sup plies, and in dus trial out put, among other pur poses (Quinn, 2007).

Can ada also ranks among the top 10 dam build ers in the world (Envi ron mentCan ada, 2009, Nov 27). As fig ure 9 shows, there are nearly 600 large dams in the coun -try in addi tion to many thou sands of small dams.

There cur rently exist 12 diver sions of Great Lakes waters of vary ing size: sixmove water within the basin; three divert water out of the basin; two draw water intothe basin; and one diverts water both into and out of the basin. The fol low ing five arethe larg est of the 12 by a sig nif i cant degree:

4 Welland Canal (5,946 mil lion gal lons per day). Water from the Lake Erie basin isdiverted to the Lake Ontario basin. Orig i nally con structed to sup port nav i ga tion, the

diver sion now facil i tates hydropower gen er -a tion. The pro ject was com pleted in 1932.

4 The Long Lac and Ogoki diver sions (3,606mil lion gal lons per day). Both diver sionssend water from Hud son Bay to Lake Supe -rior for hydropower gen er a tion and logtrans port. The Long Lac was com pleted in1941, and Ogoki was com pleted in 1943.

4 Chi cago (2,068 mil lion gal lons per day). In1889, the Illi nois leg is la ture approved con -struc tion of a 28-mile canal to replace thepuny Chi cago River to trans port the city’sgrow ing loads of sew age to the Mis sis sippi.The canal was engi neered to draw waterfrom Lake Mich i gan with which to wash thediluted waste west ward (in effect, cre at ingthe world’s only back ward-flow ing river).The canal was com pleted in 1900. (BecauseLake Mich i gan does not share a bound arywith Can ada, this diver sion is not under thejuris dic tion of the Inter na tional Joint Com -mis sion.)



Multi-purpose, 86

Tailings, 82

Water Supply, 57

Irrigation, 51

Flood Control, 19

Recreation, 7

Other, 35

Hydroelectric Power, 596

Figure 9: Number of Large Dams inCanada (higher than 15 meters), and their Purpose


4 The New York State Barge Canal (450 mil lion gal lons per day). Water from the upperNiag ara River at Buf falo is diverted to Lake Ontario to facil i tate nav i ga tion betweenLake Erie, Lake Ontario, and the Erie Canal. The pro ject was com pleted in 1918.

More recent pro pos als for large-scale diver sions and water export pro jects havefailed to secure gov ern ment approv als. Crit ics have rid i culed most as unfea si ble andunaf ford able. But then, some of North Amer ica’s most remark able feats of engi neer ing like wise once met with scorn. Some of the more dra matic pro pos als include:

4 Great Recy cling and North ern Devel op ment Canal. This pro posal called for build ing adyke across James Bay to sep a rate it from Hud son Bay. The sep a ra tion would trans -form James Bay from salt water to fresh water, which would then be pumpedincrementally into the Great Lakes and, from there, diverted to parched regions of theUnited States and Can ada.

4 North Amer i can Water and Power Alli ance (NAWAPA). First pro posed in 1964 bythe Ralph Par sons Engi neer ing Co. of Pas a dena, Cal i for nia, the pro ject would entailthe damm ing of eight major rivers: the Yukon, Susitna, Tanana, Skeena, Peace, Chur -chill, Mac Ken zie, and Fra ser. The “excess” water would be diverted into the nat u raldepres sion of the Rocky Moun tain Trench. Water would then be diverted throughvar i ous chan nels, includ ing south east to the Great Lakes and the Mis sis sippi River toaug ment hydropower and ship ping; some to the Colum bia basin for hydropower;most to Idaho, Texas, Cal i for nia, and Mex ico.

4 Sun Belt Water/Snowcap Waters. In 1986, the Brit ish Colum bia gov ern mentapproved plans to per mit the export by tanker of small vol umes of water from coastalstreams. In 1991, Sun Belt Water con tracted with BC-based Snowcap Waters to shipwater from the prov ince to Cal i for nia. But before the export could take place, theprov ince effec tively rescinded the per mit. Sun Belt sued and won $220 mil lion in dam -ages.

4 In 1998, a regional office of the Ontario Min is try of the Envi ron ment actu ally granteda per mit to the Nova Group to export 10 mil lion liters of water per day for up to 60days a year from Lake Supe rior to Asia. Reg u la tors across both Can ada and the UnitedStates pro tested until the prov ince rescinded the per mit.

4 The Cana dian firm of Global Water Corp. has nego ti ated an agree ment with the city of Sitka, Alaska, to ship 18 bil lion gal lons of gla cier water by tanker to China for bot tling.Sitka is pro jected to reap between $30 mil lion and $80 mil lion per year, depend ingupon the actual vol ume exported. The city acquired the rights to the water through aper mit trans fer from a for mer pulp mill.



Water Export Recon sid ered

Two myths largely drive op po si tion to wa ter ex port: the no tion that the en vi ron mentwould be ir rep a ra bly harmed, and the claim that Can ada does not pos sess ad e quatesup plies of wa ter to sell.

The oppo si tion to the pro posed export of water from New found land’s Gis borneLake typ i fies the mis un der stand ings that con fuse the issue. Entre pre neur Gerry White had pro posed to draw 500,000 cubic metres of water from the lake each week for saleover seas. The with drawal would have low ered the lake level by about an inch—a lossthat would be replen ished nat u rally within 10 hours, accord ing to pro po nents. Withunem ploy ment run ning at 40%, offi cials of Grand Le Pierre embraced the plan. AsMayor Edward Fizzard said at the time, “The water is just run ning into the Atlan ticOcean. No one is get ting one nickel out of it. Why should n’t it help us?” (CBC, 2004).But pub lic oppo si tion, largely fueled by alarm ists’ con tempt for the commoditizationof water, killed the pro posed ven ture.

Despite the volu mi nous sup ply of water in Can ada, a good many pol i ti ciansprop a gate mis un der stand ing by claim ing the coun try is beset by water short ages. Forexam ple, in his intro duc tion to the 1987 release of the Fed eral Water Pol icy,then-Envi ron ment Min is ter Tom McMillan said: “(T)o the extent that we Cana di anshave lots of water, most of it is not where it is needed, in the pop u lated areas of thecountry.”

By the same logic, enor mous quan ti ties of water exist else where that are not inuse.

It also is rea son able to con sider that the absence of water export evi dently hasnot pre vented spot short ages in Can ada from occur ring. There fore, short ages will notbe pre vented or rem e died by pro hib it ing uses of water where it is abun dant.

Oppo nents also claim that exports should be pro hib ited because water is one ofCan ada’s most pre cious resources and is an inte gral part of Cana dian her i tage andnational iden tity. It also is argued that water is essen tial to life and, there fore, nationalsup plies should be pre served intact. For exam ple, Meera Karunananthan, the nationalwater cam paigner for the Coun cil of Cana di ans, says: “Mar kets are anti thet i cal to theprin ci ples of water as a human right and a pub lic resource” (Karunananthan, 2010).

But water export would not pre clude assis tance to any Cana dian unable to paymar ket prices for water. Just as assis tance for food and shel ter is widely avail able, so,too, can water assis tance be pro vided.



Our anal y sis of water sup plies and demand sug gests there are sub stan tial oppor -tu ni ties for the sus tain able export of renew able fresh water, as well as for the redis tri -bu tion of water from con ven tional uses through increased efficiencies.

Sup port for water commoditization is grow ing else where as the envi ron men talfea si bil ity and eco nomic ben e fits increas ingly are rec og nized. The “Dub lin State ment,”issued from the Inter na tional Con fer ence of Water and the Envi ron ment (ICWE) held in Dub lin, Ire land, in Jan u ary of 1992, included within it the prin ci ple that, “Water hasan eco nomic value in all its com pet ing uses and should be rec og nized as an eco nomicgood” (ICWE, 1992, Guid ing Prin ci ple No. 4).

But oppo si tion will con tinue as long as water is not prop erly val ued, e.g., pricedvia mar ket mech a nisms. As explained by econ o mists Terry Ander son and Clay Lan -dry, the resis tance to water export will con tinue until Cana di ans are able reap the value of water sales and, con versely, bear the costs of not sell ing water (Ander son andLandry, 2001).

Such a change requires full-cost recov ery for water ser vices.22 An anal y sis by theEuro pean Union (Water Infor ma tion Sys tem for Europe, 2008) iden ti fied the fol low -ing ele ments as inte gral to such cost ing:

4 Oper a tional and main te nance costs

4 Cap i tal costs

4 Oppor tu nity costs

4 Resource costs

4 Social costs

4 Envi ron men tal dam age costs

4 Long run mar ginal costs

The basic prem ise of full-cost recov ery is that the rep re sen ta tion of the true costs of water in all sec tors will cause users to value water at its real cost and will help to allo -cate it where it is most val ued nation ally and inter na tion ally. As noted pre vi ously,full-cost recov ery has been endorsed by orga ni za tions such as the OECD23 and the



22 Full-cost recov ery refers to the pric ing of a good in such a way that the entire cost of that good isrecov ered.

23 “(I)n terms of both quan tity and qual ity, water resources have not been given a high enough value. Con se -quently, the con cept of water as an eco nomic good is becom ing more widely accepted in OECD coun tries,as increased empha sis is placed on the need to allo cate water resources effi ciently and to oper ate waterser vices cost-effec tively” (OECD, 2006b).

United Nations,24 which his tor i cally have not advo cated mar ket-based approaches tothe stew ard ship of natural resources.

The only accu rate means of pric ing is estab lish ment of a mar ket. Accord ing toEliz a beth Brubaker, “There’s noth ing like a mar ket to give us a better under stand ing of a resource’s value to com pet ing users” (Brown, 2009).

There exists a vari ety of means for appor tion ing water rights to max i mizesustainability of the resource. Whether by leas ing, auc tion, or pri vat iza tion,well-defined prop erty rights to water are fun da men tal to giv ing peo ple the properincen tives for sus tain able man age ment” (Lan dry and Phoenix, 2003).

Given the wide vari a tion in annual vol umes of renew able water, water rights canbe defined in terms of “unit iza tion,” i.e., a pro por tion of water vol ume based upon spe -cific envi ron men tal stan dards such as in stream flows for fish and vol umes suf fi cientfor dilu tion of con tam i nants. Such a cal cu la tion would nec es sar ily be cus tom ized tothe par tic u lar body from which water is to be with drawn. Dis tinc tions can be drawnbetween renew able and non-renew able vol umes in lakes, rivers, glaciers, andgroundwater.

Water rights also can be appor tioned based upon the vol ume of water con served. For exam ple, those who hold water rights can be autho rized to sell the water they con -serve from their allot ment. The tort sys tem would pro vide relief to those whose waterrights were abridged by pol lu tion or ille gal with draw als.

Water export and atten dant ratio nal pric ing of the resource also would improvemon i tor ing of water lev els and water qual ity. That is, pre cise hydrologic data arerequired to allo cate and enforce water rights.

Water export exam ples

There are nu mer ous ex am ples from around the globe where wa ter has been tradedsuc cess fully. For ex am ple:

4 The Port of Mar seille moved 45,000 m3 to drought-stricken areas in Spain and Italy inthe 1980s (Cope, 2005).

4 The Baha mas Water and Sew er age Corp., after prob lems with desa li na tion in 1976,began using barges to ship 20,000 m3 of water per day from Andros Island, 60 km away(Cope, 2005).



24 In sim i lar fash ion, the United Nations also is advo cat ing mar ket mech a nisms to “accord water its propereco nomic value” (United Nations [n.d.]).

4 Aquar ius Water Trad ing and Trans por ta tion Ltd. fills water blad ders at the Greekport of Piraeus for tow ing by tugs to islands suf fer ing sum mer droughts (Cope, 2005).

4 Korea and Tai wan import some of their water through tanker ship ments.

4 Dur ing a severe drought in 1994, Japan imported water by tank ers from Alaska, Viet -nam, South Korea, Hong Kong and China (Gleick, 2002).

4 Sin ga pore and Hong Kong buy water from neigh bor ing ter ri to ries.

4 Carib bean islands import fresh water by tank ers/barges.

4 Water trad ing among Aus tra lian states is exten sive, total ing nearly 3,500 megalitressince 1998.

4 Cal i for nia insti tuted a “water bank” to allow water trans fers from farms todrought-plagued areas of the state.

4 Montana allows prop erty own ers adja cent to water ways to lease their water rights toany one wish ing to main tain stream flows for fish.

4 Inter state water trad ing has been estab lished for the Col o rado River Basin, whichallows Ari zona to bank its allo ca tion of water for Cal i for nia and Nevada. The upperbasin states of Col o rado, Utah, New Mex ico, and Wyo ming, which are not cur rentlyusing their full river allot ment pro vided under the Col o rado River Com pact, wouldlike to see the inter state bank ing program include them.



Con clu sion

Can ada pos sesses re mark able stores of fresh wa ter, of which it uses only a frac tion.Com pared to the ef fects of nat u ral forces, Ca na di ans’ use of wa ter has lim ited im pacton sup plies. There fore, Can ada’s re luc tance to en gage in wa ter ex port ap pears to besymp tom atic of a gen er al ized aver sion to pri vate sec tor par tic i pa tion in wa ter ser vices. Such an aver sion to bulk ex ports is based on flawed, emo tion ally driven ar gu ments and in ac cu rate facts. Ar gu ments based on fu ture risks are highly spec u la tive and ap ply toall types of nat u ral re source ex ports. Proper clauses in the con tracts can pro tect thepub lic should those risks oc cur.

Gov ern ment can hardly be con sid ered a model stew ard of water resources. Thesorry state of so many Cana dian water sys tems exposes the inad e quacy of con ven -tional water pol icy, and high lights the need for better val u a tion of the resource, i.e.,mar ket pricing.

That short ages do exist does not reflect an over all water def i cit; they are largely acon se quence of gov ern ment mis man age ment and the absence of mar ket pric ing thatoth er wise would sig nal the need for allo ca tion adjust ments due to poten tial scarcity.

Expe ri ence else where sug gests a vari ety of means by which water exports can beunder taken in sus tain able ways. Thus, the myr iad ben e fits of water export merit ratio -nal re-eval u a tion.



Rec om men da tions

1 Improve pub lic under stand ing of water issues. Pub lic pol i cies based on mis in for ma tion are inher ently unsound. Ottawa and the prov inces should con tract for an inde pend ent infor ma tion “audit” of gov ern ment web sites, cur ric u lum mate ri als, and other doc u -ments to iden tify inac cu ra cies about water resources in Can ada. Inac cu ra cies shouldbe removed and replaced with sci ence-based facts. There may be a host of rea sonsCana di ans oppose bulk water exports, but the issue should not be decided on the basisof envi ron men tal pro pa ganda.

2 Con duct ground wa ter mapping and fresh water inven to ries. An accu rate assess ment of sur face water and ground wa ter loca tions and vol umes is nec es sary to deter mine thesus tain able allo ca tion of water for trade and/or export. The avail abil ity and reli abil ityof water inven to ries vary across the prov inces, which raises the costs of obtain ing theinfor ma tion nec es sary to cal cu late accu rately sus tain able water with draw als and con -sump tion lev els. A cen tral ized pri vate sec tor data base should be funded byreprioritizing cur rent expen di tures (such as elim i nat ing pro jects pre mised on hypo -thet i cal global warm ing sce nar ios) as well as the impo si tion of user fees.

3 Deter mine sus tain able water lev els. Estab lish pro cesses by which water rights are unit -ized and adjusted peri od i cally for nat u ral vari a tions in water yields. The cal cu la tionsshould account for both in-stream and out-stream uses and his tor i cal vari a tions, andbe deter mined by an inde pend ent third party awarded a con ces sion through com pet i -tive bid ding.

4 Reform pub lic sub si dies of water use. Water users of every type—res i den tial, indus trialand agri cul tural—ben e fit in vary ing degrees from water sub si dies. In some cases, thesub si dies take the form of low water rates con trolled through reg u la tion, while othertypes involve pub licly financed infra struc ture and water ser vices for select groups,such as farm ers. These sub si dies were well-intended, but the con se quences are prob -lem atic, e.g., highly inef fi cient water use that con trib utes to ground wa ter deple tion,con tam i nated run-off, and soil salin ity. While the elim i na tion of all such sub si dieswould ratio nal ize water pric ing and thus encour age the high est and best uses of water,that option is not real is tic at pres ent. How ever, arti fi cially low res i den tial and indus -trial rates should be phased out in favor of full-cost recov ery, at the very least. As foragri cul ture, irri ga tion sub si dies should require adop tion of water con ser va tion mea -sures such as water-sen sor tech nol ogy.



5 Repeal pro hi bi tions against water exports. Myr iad fed eral and pro vin cial stat utes andreg u la tions bar water export. These should be elim i nated and replaced with insti tu -tional mech a nisms for assign ing pri vate water rights. As an interim mea sure, suchmech a nisms could dupli cate the exist ing pro ce dures for leas ing of crown land androy alty pay ments for devel op ment of min er als, tim ber, and other nat u ral resources.(Rights exer cised to main tain in-stream flows should be per mit ted.) Ulti mately, how -ever, the ben e fits of water exports will be fully real ized only when water rights aremade secure, i.e., per pet ual, enforce able, and trans fer able.



Ref er ences

Adler, Jon a than (2008-2009). Warm ing Up to Wa ter Mar kets. Reg u la tion (Win ter2008-2009). <http://www.cato.org/pubs/regulation/regv31n4/v31n4-3.pdf>, as ofFeb. 2, 2010.

Ag ri cul ture and Agri-Food Can ada (2009, March 25). The Ca na dian Bot tled Wa terIn dus try. Web page. <http://www4.agr.gc.ca/AAFC-AAC/display-afficher.do?id=1171644581795&lang=eng>, as of March 25, 2010.

An der son, Terry, and Clay Lan dry (2001). Ex port ing Wa ter to the World. Wa ter Re -sources Up date, 118 (Jan u ary). <http://www.ucowr.siu.edu/updates/pdf/V118_A8.pdf>, as of Feb. 2, 2010.

An der son, Terry and Pe ter Hill, eds. (1997). Wa ter Mar ket ing: The Next Generation.Rowman and Littlefield.

Barlow, Maude and Tony Clarke (2002). Who Owns Wa ter? The Na tion (Sept. 2-9).<http://www.thirdworldtraveler.com/Water/Who_Owns_Water.html>, as of April1, 2010.

Baumann, Cynthia (2001). Wa ter Wars: Can ada’s Up stream Bat tle to Ban Bulk Wa terEx port. Min ne sota Jour nal of Global Trade, vol. 10.

Beaulieu, Mar tin, Caro line Fric, and Francois Soulard (2007). Es ti ma tion of Wa terUse in Ca na dian Ag ri cul ture in 2001. Sta tis tics Can ada, Cat a logue No. 21-601-M.Gov ern ment of Can ada. <http://www.statcan.gc.ca/pub/21-601-m/21-601-m2007087-eng.pdf>, as of Nov. 30, 2009.

Bemrose, R., L. Kemp, M. Henry, and F. Soulard (2009). The Wa ter Yield for Can ada as a Thirty-year Av er age (1971 to 2000): Con cepts, Meth od ol ogy and Ini tial Re sults.Sta tis tics Can ada, Cat a logue No. 16-001-M, no. 7. Gov ern ment of Can ada.<http://www.statcan.gc.ca/pub/16-001-m/16-001-m2009007-eng.pdf>, as of Dec. 1,2009.

Blue Planet Pro ject. Right to Wa ter. Web page. <http://www.blueplanetproject.net/RightToWater/index.html>, as of May 10, 2010.

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About the Author

Di ane S. Katz is Di rec tor of Risk, En vi ron ment, and En ergy Pol icy for the Fra ser In sti -tute. She has more than two de cades of ex pe ri ence in re search and writ ing about pub -lic pol icy, in clud ing six years as Di rec tor of Sci ence, En vi ron ment, and Tech nol ogy forthe Mackinac Cen ter for Pub lic Pol icy and nine years as a mem ber of the De troit Newsed i to rial board spe cial iz ing in sci ence and the en vi ron ment, tele com mu ni ca tions andtech nol ogy, and the auto in dus try. Di ane has been awarded sev eral fel low ships, in -clud ing the Jack R. Howard Sci ence Re port ing In sti tute at the Cal i for nia In sti tute ofTech nol ogy; the Paul Miller Wash ing ton Re port ing Pro gram; the Kin ship Con ser va -tion In sti tute; and the Po lit i cal Econ omy Re search Cen ter. She has tes ti fied be foreCon gress as well as a num ber of state leg is la tures, and was ap pointed to rep re sent theState Pol icy Net work, a co ali tion of more than 50 think tanks across the United States,on the Amer i can Leg is la tive Ex change Coun cil. She has been pub lished by the WallStreet Jour nal; the Wash ing ton Times; Na tional Re view; the Weekly Stan dard; Rea sonMag a zine and doz ens of re gional and lo cal news pa pers. Di ane grad u ated with a B.Ph.from Thomas Jef fer son Col lege and a M.A.from the Uni ver sity of Mich i gan.



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ISSN1918-8323 (on line ver sion)

Date of issueJune 2010

Editing and pro duc tionKristin McCahon

DesignLindsey Thomas Mar tin

Cover designBill Ray

Cover imagesSous les dos siers © Karl Bolf, Fotolia;red tape © Stockbyte, Punchstock;Bal ance © Alon Othnay, Fotolia;Ques tion mark © Ste phen Coburn, Fotolia;Treehugger © Leah-Anne Thomp son, Fotolia;Stop © Al ex an der Samoilov, Fotolia

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About the Fraser Institute

Our vi sion is a free and pros per ous world where in di vid u als benefit from greaterchoice, com pet i tive mar kets, and per sonal re spon si bil ity. Our mis sion is to mea sure,study, and com mu ni cate the im pact of com pet i tive mar kets and gov ern ment in ter -ven tions on the wel fare of in di vid u als. Founded in 1974, we are an in de pend ent Ca na -dian re search and ed u ca tional or ga ni za tion. Our work is fi nanced by tax-de duct iblecon tri bu tions from thou sands of in di vid u als, or ga ni za tions, and foun da tions. In or der to pro tect its in de pend ence, the In sti tute does not ac cept grants from gov ern ment or con -tracts for re search.

Nous envisageons un monde li bre et prospère, où chaque personne bénéficie d’un plusgrand choix, de marchés concurrentiels et de responsabilités individuelles. No tre mis -sion consiste à mesurer, à étudier et à communiquer l’effet des marchés concurrentielset des in ter ven tions gouvernementales sur le bien-être des individus.

Ed i to rial Ad vi sory Board



Prof. Armen AlchianProf. Terry Ander sonProf. Rob ert BarroProf. Michael BlissProf. James M. Buchanan†Prof. Jean-Pierre CentiProf. John ChantProf. Bev DahlbyProf. Erwin DiewertProf. Ste phen EastonProf. J.C. Her bert EmeryProf. Jack L. GranatsteinProf. Her bert G. GrubelProf. Friedrich A. Hayek*†

Prof. James GwartneyProf. H.G. John son*Prof. Ron ald W. JonesDr. Jerry Jor danProf. Ross McKitrickProf. Michael ParkinProf. F.G. Pennance*Prof. Friedrich Schnei derProf. L.B. SmithProf. George Stigler*†Mr. Vito TanziSir Alan WaltersProf. Edwin G. West*

* De ceased

† No bel Lau re ate

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