075-07 Water Research Report

8/6/2019 075-07 Water Research Report

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Report April 2007

Navigating the Shoals

Assessing Water Governanceand Management in Canada

ENERGY, ENVIRONMENT AND TRANSPORTATION POLICY


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Preface

Navigating the Shoals: Assessing Water Management

and Governance in Canada is based on the results of acase study investigation of current institutional arrange-

ments and the incentives, both positive and negative,

used to achieve water management goals. It presents the

results of this research in a series of recommendations

that are likely to be required to enable managers to

effectively deliver water services into the future.

This is the first report published under the banner of the

Leaders Forum on Water Resource Management and

Governance, a three-year initiative with a mandate to

help resolve policy challenges and conflicts related towater resource management as well as to improve North

American governance of this important resource.

Navigating the Shoals: Assessing Water Governance and Management in Canada

by Greg Hoover, Al Howatson, Jason Churchill andJohn Roberts

About The ConferenceBoard of Canada

We are:

A not-for-profit Canadian organization that takes

a business-like approach to its operations.

Objective and non-partisan. We do not lobby

for specific interests.

Funded exclusively through the fees we charge

for services to the private and public sectors.

Experts in running conferences but also at con-

ducting, publishing and disseminating research,

helping people network, developing individual

leadership skills and building organizational

capacity.

Specialists in economic trends, as well

as organizational performance and public

policy issues.

Not a government department or agency,

although we are often hired to provide

services for all levels of government.

Independent from, but affiliated with, The

Conference Board, Inc. of New York, which

serves nearly 2,000 companies in 60 nations

and has offices in Brussels and Hong Kong.

2007 The Conference Board of Canada*Printed in Canada All rights reservedISSN 0827-1070 ISBN 0-88763-769-8Agreement No. 40063028*Incorporated as AERIC Inc.

Forecasts and research often involve numerous assumptions and data

sources, and are subject to inherent risks and uncertainties. This informationis not intended as specific investment, accounting, legal or tax advice.


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CONTENTS

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i

Navigating the Shoals: Assessing Water Governance and Management in Canada . . . . . . . . . . . . . . . . . . . 1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Governance and Management in Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Positioning the Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Appendix ABibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Appendix BRelated Products and Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20


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North Americas abundant freshwater resources

have long supported human development. The

rivers and lakes have been navigated for trade

and exploration. Theyve been harnessed to provide power

for our economies. Theyve helped to feed us and washed

away our waste. But the availability of fresh water in

boundless quantities can no longer be taken for granted.

In many regions of Canada, water quality and quantity are

under stress. And in one notable public policy decision,

the Government of Alberta recently announced that itwould no longer accept applications for new water allo-

cations in the Bow, Oldman and South Saskatchewan

River sub-basins.

Population pressures, economic growth and a changing

climate that is expected to alter the distribution of pre-

cipitation in Canada are some of the challenges facing

the countrys water institutions. Are these institutions

adequately equipped to cope with these and other chal-

lenges? Or are we bearing headlong toward the shallows,

ill-equipped to navigate the shoals?

Our water institutions arent ready for the challenges

ahead, including economic growth and a changing climate.

The Conference Board of Canadas Leaders Forum

on Water Resource Management and Governance was

formed to study these questions. And the members

focused their first research efforts on identifying what

works well in Canadaand what needs to be improved.

The research looked at five Canadian watersheds. It

identified problems and found that water managers do

not always have the required policy clarity, mandates

for action or information resources they need to deter-

mine the optimal method of delivering water services

into the future.

Navigating the ShoalsAssessing Water Governance

and Management in Canada

EXECUTIVE SUMMARY

At a Glance

The basic services we demand from our

water resources are water for drinking, for

economic development and for maintaining

robust aquatic ecosystems. These needs will

determine the policy objectives of water gov-

ernance and management into the future.

Case study research on five Canadian water-

sheds indicates that water managers do not

always have the required policy clarity, man-

dates for action or information resources to

determine the optimal method of delivering

water services into the future.

This report presents six recommendations for

improving Canadian water governance and

management practices, citing examples from

the case studies.


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ii | The Conference Board of Canada

The result is six recommendations aimed at improving

governance and management of water in Canada. They

include clarifying governance structures, improving inter-

agency cooperation and integrating groundwater and

surface water management. They encourage greater use

of market-based instruments (such as pricing) to promotemore efficient use of water resources. They call for a

nested approach to watershed governance. (Nesting

tributary governance frameworks within a basin-wide

governance framework allows decisions to be made at

the most appropriate level by managers who are closest

to the issues.) And they call for better prioritizing and

budgeting to collect the information water managers

need if they are to make better decisions. All of these

recommendations are explored in detail in this report.

Managing the expected hydrologic effects of climate

change and the resource needs of a robust ecosystem

in addition to managing the growing demographic and

economic pressureswill prove even more challenging

in the coming decades. Canadas current system of insti-

tutions and incentives is leaving watershed managerswithout the resources they need to navigate the shoals

ahead. But the forums research also found that policy-

makers nationwide recognize the challenge and are

initiating change. The implementation of the six recom-

mendations outlined in this report will help tomorrows

water managers steward Canadas freshwater resources

in a manner that can sustain the ecosystem and support

economic growth.


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Smooth runs the water where the brook

is deep.

William Shakespeare,Henry VI, Part II

INTRODUCTION

North Americas abundant freshwater resources

have supported human development for ages.

They have been navigated for trade and

exploration, been harnessed to power our economies,

fed our hunger and washed away our waste. With few

exceptions, these freshwater resources have provided

human settlement in North America with a bounty of

water for drinking and economic development and have

maintained robust aquatic ecosystems. These remain the

basic services that water resources provide today and

will underlie the policy objectives of water governance

and management into the future.

But the availability of fresh water in boundless quantities

can no longer be taken for granted. In a most notable

public policy decision, the Government of Alberta

announced in 2006 that it is no longer accepting appli-

cations for new water allocations in the Bow, Oldman

and South Saskatchewan River sub-basins. Furthermore,

a changing climate is expected to alter the distribution

of annual precipitation in Canada, leading to floods

along some river systems and increased droughts inWestern Canada.1 Are we bearing headlong toward

the shallows, ill-equipped to navigate the shoals?

The Conference Board of Canadas Leaders Forum on

Water Resource Management and Governance questions

whether Canadas current water institutions and system

of incentives are adequately equipped to cope with the

multitude of challenges facing them in the near future.

Accordingly, forum members have focused the first

research efforts of this initiative on identifying what

works well in Canada and what needs to be improved.

1 Fiona J. Warren et al., Climate Change Impacts and Adaptation,p. 36.

Navigating the ShoalsAssessing Water Governance

and Management in Canada

The Leaders Forum on Water Resource Management

and Governance is a three-year initiative with a mandate

to help resolve policy challenges and conflicts related to

water resource management as well as to improve the

North American governance of this important resource.

Specifically, the Forum brings together business and

government participantspolicy-makers, regulators and

usersthat have a stake in this important resource. Forumparticipants enjoy the opportunity to build mutual under-

standing of the issues and to identify their priorities, guide

the Conference Board in its choice of research topics, and

review the research in progress.

The Leaders Forum on Water ResourceManagement and Governance


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2 | The Conference Board of Canada

This report translates the findings of case study

research involving five Canadian watersheds (see box

Research Methodology and Case Study Selection)

into six recommendations to improve the governance

and management of water in Canada:

clarify governance structures;encourage a nested approach to watershed

governance;

improve interagency coordination;

integrate groundwater and surface water management;

prioritize and budget for adequate information to

support decision-making; and

explore greater use of market-based instruments.

The report begins with an outline of the fundamental

challenges that exist with water governance and man-

agement in Canada, continues with a schematic outline

of where and how the recommendations affect Canadian

water managers, and concludes with a detailed discus-

sion of the recommendations, citing illustrations fromCanadian watersheds.

GOVERNANCE

Governance involves the interactions

among structures, processes and traditions

that determine how power is exercised,

how decisions are taken, and how citizens

or other stakeholders have their say.

Institute on Governance 2

The concept of governance embraces the process and

structure of decision-making. The three definitions

presented in this report (see quotations in this section)

contain three fundamentals: power, relationships and

accountability.3 It is the interaction of these fundamen-

tals that defines the governance structure of any organ-

ization or group of organizations. Fundamentally, by

establishing the systems for decision-making and the

rights of stakeholders,4 good governance is the platform

upon which effective water resource management is

built. It establishes the policy objectives that water

managers are tasked to achieve and the set of funda-

mental values and decision-making processes through

which to achieve them.

2 Tim Plumptre and John Graham, Governance and Good GovernanceInternational and Aboriginal Perspectives, p. 3.

3 Ibid.

4 The Canadian Oxford Dictionarydefines stakeholder as a personwith an interest or concern in something. In the context of thisreport, stakeholders is an inclusive term to represent persons ororganizations such as, but not limited to, governments, farmers,the tourism industry, municipal utilities, hydro-power generators,the ecosystem, watershed managers, Aboriginals and industry.

The recommendations in this report have been generated fromConference Board case study research on five distinct Canadian

watersheds. Using national and international literature in addition

to in-house and Leaders Forum on Water expertise, the Conference

Board developed an interview guide to both qualitatively and quan-

titatively assess the water resource governance and management

framework in Canada. The Conference Board interviewed a number

of experts from a broad range of stakeholders in each jurisdiction

in order to generate insights into the governance and management

framework of each watershed.

The selection of the five case studies was also a cooperative exercise

between the Conference Board and the members of the Leaders

Forum on Water. The research project is designed to understand the

adjustments that need to be made to Canadian water institutions

and incentives to foster the efficient, effective and equitable delivery

of future water services. The five watersheds chosen for case study

analysis collectively:

Illustrate the range of water governance and management problems

in Canada, with specific attention to:

transboundary challenges,

methods of apportioning water supply,

maintaining water quality, and

groundwater-surface water interactions;

Illustrate failures as well as successes in water governance and

management;

Illustrate water governance and management over a range of

geographic densities (rural to urban);

Illustrate a range of conflicting demands on the water supply; and

Represent the regional diversity of Canada.

Ultimately, the five watersheds chosen for detailed case study research

are the AbbotsfordSumas Aquifer, Grand River Watershed, South

Saskatchewan River Basin, Okanagan Basin and Ottawa River Basin.

Research Methodology and Case Study Selection


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The Conference Board of Canada | 3

Water governance refers to the range of

political, social, economic and admin-

istrative systems that are in place to

regulate the development and manage-

ment of water resources and provision

of water services at different levels of

society.

United Nations Development Programme5

In practice, establishing a clear, consistent framework

for decision-making that incorporates the rights and

values of all stakeholders is a formidable challenge.

Governors of water resourceswhich in Canada are

the provincial and federal governments and the Yukon

Territory on behalf of Canadian citizensmust estab-

lish the framework in the context of three jurisdictional

challenges:

Intragovernmental Policy Coordination. Government

departments and public sector agencies at all levels of

government create policies and programs that affect

water supply and quality. The sometimes competing

interests of these departments and agencies create

difficulties with respect to achieving clear and con-

sistent watershed-level goals and policy.

Fundamentally, good governance is the platform upon

which effective water resource management is built.

Federal/Provincial Coordination. The provincial gov-

ernments and one territorial government have the

constitutional right and responsibility for managing

water in Canada. However, the federal government

has responsibility for, and jurisdiction pertaining

5 United Nations Development Programme, Energy and Environment:Water Governance.

to, water including navigable waters, federal lands,

international transboundary issues, the Fisheries

Act, and the Canadian Environmental Protection

Act. These overlapping responsibilities can create

tensions and difficulties with respect to relationships

and accountability.Alignment of Governance Frameworks With Watershed

Boundaries.Watersheds do not always fall neatly

into one province or nation. For example, the

South Saskatchewan River and subsequently the

Saskatchewan River traverses three Prairie provinces

and one U.S. state. And the Ottawa River forms part

of the OntarioQuebec boundary. Special governance

arrangements and a willingness to work coopera-

tively and collaboratively are required to establish

effective watershed-level governance systems in

these and other cases.

Governance emphasizes process.

It recognizes that decisions are made

based on complex relationships between

many actors with different priorities. It

is the reconciliation of these competing

priorities that is at the heart of the con-

cept of governance.

United Nations Human Settlements Programme6

MANAGEMENT

Water management involves planning, implementing and

measuring to achieve policy objectives defined by the

governors of water resources. It is at the management

level that direct action with respect to water quality and

quantity is taken.

6 United Nations Human Settlement Programme, Shelter for All.


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As defined in the Canadian Oxford Dictionary,manage-

mentis the process or an instance of managing or being

managed and manage is defined as organize; regulate;

be in charge of.7 In the context of this report, manage-

mentwill refer to physical and administrative actions

taken by the public and private sectors to implementthe policy directives of the governors.

Most of the challenges that Canadian water managers

face are policy- rather than technology-related and thus

a function of the effectiveness of the governance structure

of the watershed. In many instances, managers greatest

difficulties are 1) identifying clear policy goals for the

watershed, and 2) having the mandate to take action.

This case study research analysisidentifies challenges

to water resource management in Canada, such as:Regional Versus Local Interests. In the Okanagan Basin,

for example, the watershed is the natural governing

region. But the three major municipalitiesVernon,

Kelowna and Pentictonview water as a necessity

for municipal development. They are therefore wary

of ceding their existing authority over the distribu-

tion and use of water resources to a regional body.

7 Katherine Barber, ed., The Canadian Oxford Dictionary.

As a result, efforts to manage the Okanagan Basin

at the watershed level are constrained by the lack of

an agency with watershed-wide authority.

Competing Users. Public managers of a water juris-

diction must allocate water among agricultural users,

municipalities, industrial plants, hydroelectricityfacilities, recreational users and needs of the eco-

system. When water is plentiful, allocation decisions

are not difficult. But when water becomes scarce,

allocation can become problematic.

Groundwater and Surface Water. Both are integral

components of a watersheds resource capacity (i.e.,

the quality and quantity of water resources). It is

therefore vital that they be managed in an integrated

manner for the long-term health of the resource. But

in many jurisdictions, they are managed by differ-

ent legislation, and sometimes different entities. Forexample, in B.C., Crown licences for the withdrawal

of surface water have been in effect for a very long

time, but the provinces Water Actdid not apply to

groundwater resources until 2004, when the Ground

Water Protection Regulation provisions were passed

A phased implementation approach meant that these

water quality regulations did not come into full force

until the end of 2005. Unfortunately, these regula-

tions do not yet cover groundwater allocation issues

The long-term health of groundwater and surface water

requires that they be managed in an integrated manner.

But in many jurisdictions, this is not the case.

Data. Decision-makers need requisite data and infor-

mation for the decisions they make, whether for

allocation decisions at the watershed level or policy

decisions within provincial departments. But in many

cases, these data are not available, or are not in a

usable form. In the case studies examined, there

tends to be sufficient information on either water

quality or quantity, but rarely on both. For example,

there is extensive information on water quantity in

the main stem within the Ottawa River Basin, but

little on quality. In contrast, for the AbbotsfordSumas

Aquifer there is substantial water quality information

(because of concerns about nitrate levels), but data

are lacking on water quantity.

Already, a number of populated areas in southern Canada

particularlyin the Westare experiencing stress on water quantity and quality:

The South Saskatchewan River drains most of the southern

Prairies and is used extensively for irrigation. But the South

Saskatchewan is reaching the limits of its available supply.

Forecast population growth in Alberta is expected to increase

unconstrained water demand by about 50 per cent by 2021, and

100 per cent by 2046.1 Action is required now to avoid severe

shortages later.

In the Fraser Valley of B.C., the AbbotsfordSumas Aquifer under-

lies the British ColumbiaWashington State boundary. On the

ground, fertilizer use and livestock manures leach nitrates into the

aquifer, creating water quality problems. Washington State has

enforced groundwater regulations for decades, but B.C. is only

now beginning to regulate groundwater.

1 Alberta Environment, South Saskatchewan River Basin Non-IrrigationWater Use Forecasts[online]. (Edmonton: March 2002), [citedMarch 16, 2007]. p. 5.6 www3.gov.ab.ca/env/water/regions/ssrb/PDF_documents/SSRB_Non-Irrigation%20_Water_Use_Forecasts.pdf.

Water Quality and Quantity Under Stress


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GOVERNANCE AND MANAGEMENTIN ACTION

How do these two concepts of governance and manage-

ment relate to each other? Consider the workings of the

Nechako Watershed Council in B.C.s Upper FraserBasin.8 The governance of the watershed is set out in

the constitution of the Council. The constitution emerged

after 18 months of sometimes difficultbut invaluable

discussion. During that time, decisions were made on who

holds the power to make decisions in the watershed,

who is accountable for the well-being of the watershed,

and how the relationships among stakeholders in the

watershed are defined. Ultimately, a process for decision-

making (i.e., a governance framework) was established.

Nechako River reservoir operations had maintained the

quantity of water needed for spawning, but not the quality.

Management activity in the Nechako Watershed is

illustrated by the following action. Strategically, the

governors had already agreed that improving spawning

conditions in the watershed was an important policy

goal of the Council. To this end, Council management was

charged with accomplishing this goal, which required

dam operators to manage the flow of water downstream

andthe temperature of the water. Previous reservoir

operations to manage the flow rate of the Nechako

Rivercharacterized by a mass spill of surface water

from the reservoirhad been sufficient to maintain the

quantity of water needed for spawning, but not the quality

of water (which in this instance was the required temper-

ature of the water). Also, the large volumes of released

water had caused significant riparian damage downstream.

However, by communicating information about the

quantity and quality of the water, and about the down-

stream stakeholders perspectives, at the appropriate level

8 As presented by Hugh Porteous, Alcan Inc., during a meeting of theLeaders Forum on Water Resource Management and Governance.

of water resource governance, the Council provided the

regions water managers with a clear goal. This example

of revised reservoir operationscharacterized by the

strategic purge of lesser quantities of much colder water

from the depths of the reservoirshows how clarity in

governance and policy directivefacilitates improvedwatershed management.

POSITIONING THE RECOMMENDATIONS

The six recommendations outlined in this report advocate

change at many different stages of decision-making. To

help communicate how each recommendation relates to

the others, and to help the reader place these recommen-

dations in the context of a day-in-the-life of a water

manager, the Conference Board designed the exhibitDecision-Making in Watershed Management: Pressures

and Actions. This simplified flow diagram indicates

where the project recommendations (the numbers) most

affect the elements of the diagram, and depict the:

organizational guidance and pressures on water

managers (the ovals);

the actions taken by water managers (the rect-

angles); and

the decisions water managers must make (the dia-

monds).

Water resource governance and management involve

a complex web of interjurisdictional, economic, and

environmental policies and priorities.

As revealed by the interviews, and highlighted often

in the text of this report, water resource governance

and management involve a complex web of inter-

jurisdictional, economic and environmental policies

and priorities.


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Exhibit 1Decision-Making in Watershed Management: Pressures and Actions

Source: The Conference Board of Canada.

The project recommenda-tions on the following pageare noted in this exhibitwhere they most affect theorganizational guidance andpressures on water managers(ovals), the actions thatmanagers take (rectangles)

and the decisions they make(diamonds.)

WatershedGovernanceFramework Public policy and

regulatory framework

Competing interests(anthropogenic,

ecologic, economic)

Clarify and confirmManagement goals

Acquire data and informationfor decision-making

Treat and return

Usemarket-based

instruments forallocation?

Allocate water tocompeting demands

Water Manager

Use

Design anappropriateframework

Yes

No

#6

#5

#4

#3

#2

#1

Source

Tap

Source


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RECOMMENDATION #1: CLARIFY GOVERNANCE STRUCTURES

Clarifying governance structures is vital to effective resource management

because clarity in governance establishes what the policy directive is.

To operationalize the consensus view that the watershed is the most

appropriate level for managing water resources, a clear understanding

of the roles, responsibilities and powers of the governors is crucial. This

is especially important for Canada: regional, provincial, federal and inter-

national bodies may have different authorities in a given watershed. In

all situations, the respective governors of water resources should develop

a robust governance framework to establish clear lines of accountability

and authority within the watershed.

RECOMMENDATION #2: ENCOURAGE A NESTED APPROACH TO

WATERSHED GOVERNANCE

Extending the concept of clear lines of accountability and authority in a

watershed is the recommendation to develop governance frameworks

based on nested watersheds. Effectively, nesting tributary governance

frameworks within basin-wide governance frameworks allows decisions

to be made at the most appropriate level by the managers who are closest

to the issue. A nested approach allows users at the tributary level to

communicatethrough community advisory bodieslocal concerns

and knowledge to regional water managers.

RECOMMENDATION #3: IMPROVE INTER-AGENCY COORDINATION

Improved coordination among the many public sector agencies that

have a vested interest in the distribution and use of water resources

should assist in the development of consistent policy goals. A clear

public policy and regulatory framework will promote better water man-

agement decisions. The scale of this inter-agency cooperation should

include all the agencies in the watershed, in order to enhance the water

managers ability to make decisions for the watershed as a whole.

Consider the potential conflict between the views of agencies respon-

sible for environmental protection and industrial development. In the

absence of coordinated policy between those agencies, the water

managers will be pushed and pulled from different sides. However, if

those agencieson a watershed basiscould identify and agree on the

balance between the in-stream flow needs and economic development

needs of the region, the water managers would have more certainty

about the policy directives when making allocation decisions.

RECOMMENDATION #4: INTEGRATE GROUNDWATER AND SURFACE

WATER MANAGEMENT

To maximize the use of resources of any kind in a manner consistent

with sustainable development, decision-makers must understand the

long-term availability of and relationships among the resource inputs.

Water managers must therefore have the knowledge, authority and cap-

acity to manage jointly groundwater and surface water extraction and

use. This is fundamental for identifying the sustainable level of water

resource development in a watershed and crucial for enabling water

managers to make optimal allocation decisions.

RECOMMENDATION #5: PRIORITIZE AND BUDGET FOR ADEQUATE

INFORMATION TO SUPPORT DECISION-MAKING

Good information facilitates good decision-making. Without adequate

information, water managers cannot understand the implications of their

decisions for the health of the watershed. To support the sustainability

of the watershed, information such as the following is required: the

annual recharge rate of underground aquifers, the seasonal flows of sur-

face waters, the seasonal consumptive patterns of users, the in-stream

needs of the ecosystem, the quality of water upon extraction and return,

and the long-term economic growth prospects of the watershed. With

limited financial resources available, water managers must prioritize the

information collection activities.

RECOMMENDATION #6: EXPLORE GREATER USE OF MARKET-BASED

INSTRUMENTS

Market-based instruments (i.e., tools to encourage efficient use of

resources through price) have the potential to assist water managers in

allocating an increasingly scarce resource to its highest value use. After

the basic needs of the ecosystem and people have been met, utilizing

market-based instruments in regions of water scarcity will identify thosecommercial and industrial interests that place the highest value on water

as an input to their operations. Furthermore, establishing a price for

water will create an incentive for users to be as efficient as possible,

thereby decreasing overall demand for water resources.

Project Recommendations


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RECOMMENDATION #1: CLARIFY GOVERNANCE

STRUCTURES

A watershed is the natural unit for governing and

managing water resources. Without a comprehensive

view of the watershed as an organic system, it is nearly

impossible to satisfy all the competing demands ofindustry, agriculture, commerce, municipalities and the

ecosystem. The first recommendation calls for clear

rules for coordination among existing bodies to be

established at the watershed level, to ensure effective

integrated watershed management approaches. Shifting

water governance and management to a watershed basis

will entail transitional costs in the short term. But the

potential long-term benefits of improved supply manage-

ment, expanded scope for information and data gathering,

and the ability to pool resources for watershed-level

investment may well be great enough to make it worth-while to incur such costs.

The public perceives the GRCA to be the watchdog of the

watershed and the single window to water issues therein.

Implementing this recommendation could be part of

the solution to the lack of inter-agency coordination, as

discussed further in Recommendation #3. The initial

step to clarifying the governance structure is achieving

agreement among the stakeholders to who:

owns the water resources;

will govern the water resources; and

will manage the water resources in a given watershed.

This is a difficult but invaluable discussion, as was

referenced earlier in the Nechako Watershed Council

example. Once the owners, governors and managers

are identified, they can begin to establish the decision-

making framework and information feedback process.

The ideal outcome of doing so is the creation of a

single water management agency with authority and

jurisdiction over all facets of water use, treatment and

conservation. However, the likelihood of establishing

such an authority in Canada is low because of the

multitude of stakeholders with a vested interest in water

governance. In practice, it is more likely that a key agency

would be established in a watershed and that it would become

the centre of watershed-level management activity.

The best example of such an agency from this case

study analysis of water governance and management

in Canada is in the Grand River Watershed in Ontario.

The interview results clearly identify that citizens and

stakeholders view the Grand River Conservation Authority

(GRCA) as the manager of water in that watershed. And

while the Authority does not have sweeping jurisdiction

over all activities that affect water quality and quantity

in the region, it has a clear mandate and specific roles

to play in the watershed. It is a facilitator of important

partnerships, the champion of consistent watershedpolicy, the focal point of successful water quality and

quantity protection initiatives, and a valuable source of

information for decision-makers both within and out-

side the boundaries of the watershed.

An example of the absence of clear mandates and coordin-

ated policies is found in the Okanagan Basin. Interview

results suggest that this situation stems from a failure to

implement the recommendation of the 1974 Okanagan

Basin Study 9 to create a single governance authority

for the entire basin, complete with requisite resources

and powers. This failure has had a major impact on the

Okanagan Basins ability to identify the watersheds

priority issues and to assign clear roles and responsibility

for action. The resulting absence of timely and accurate

basin-wide data is a consequence of a lack of centralized

authority, as is the failure of agreement on basin-wide

goals, principles and policies. Matters are made worse by

jurisdictional issues between the federal and provincial

governments, and competition among local governments

within the basin for economic development projects and

infrastructure funding.

9 At the time, the report was considered the most comprehensivewater basin plan ever developed, and the recommendations notimplemented continue to resonate and demand attention.


15/28


RECOMMENDATION #2: ENCOURAGE A NESTED

APPROACH TO WATERSHED GOVERNANCE

Development and action with respect to Recommenda-

tion #2that watershed governance arrangements and

management strategies be established via nested hydro-

logic units10enhance the benefits of Recommendation #1.(The map in Exhibit 2 conceptualizes a nested watershed

governance arrangement in the Ottawa River Watershed.)

In practice, this requires that a high-level governance

structure be agreed upon among the provincial and

international jurisdictions in order to establish a basis

and forum for the management of water resources in the

region. Next, management bodies should be established

at the appropriate level of the watershed to execute the

directives of the governors and to meet the needs of

competing demands on the water resource. Further, sub-

basin working groups or advisory bodies should form

the divisions of management to identify, monitor and

address priorities in the watershed. It is at this sub-basin

level that local groups should be engaged to assist the

management agency in viewing the watershed from the

bottom up.

Two examples of this effort to nest hydrologic units in

the same governance structure can be found in the case

study regions.

At the highest level, the Grand River Watershed is part of

the Great Lakes Basin, which on the whole is governed

by the International Joint Commission (a creation of the

Canadian and U.S. federal governments). The next level

of governance is the province of Ontario, which passed

the Conservation Authorities Act, 1946, in response to

water quality and broader environmental concerns arising

from natural resource extraction and industrial growth.

While supported by key Ontario ministries, the GRCA11

is the management body responsible for the watershed.

Within this authority there are a number of programs

and projects to engage local interests and to seek infor-

mation from the grassroots levels.

10 For example, management of a tributary river is nested withinthe governance and management of the main river system.

11 Formed in 1966 as it exists today, via the merger of the GrandValley Conservation Authority and the Grand River ConservationCommission.

The second example from the case studies is the gov-

ernance arrangement of the Prairie watersheds. With

the provincial jurisdictional overlap addressed via the

Prairie Provinces Water Board (PPWB), Alberta and

Saskatchewan are both establishing water management

agencies along nested hydrologic units. (See Exhibit 3.)

In this nested agency approach, local stakeholder partici-

pation and knowledge is as valuable in the stewardship

and strategic planning for watersheds as the knowledge,

analytical capacity and financial resources of the sup-

porting levels of government.

Achieving an effective level of coordination and cooper-

ation among public sector agencies is fundamental to

addressing the water resource governance challenges inCanada. Most watersheds in populated southern regions

of the country contain multiple political jurisdictions

RECOMMENDATION #3: IMPROVE INTER-AGENCY

COORDINATION

Achieving an effective level of coordination and cooper-

ation among public sector agencies is fundamental to

addressing the water resource governance challenges in

Canada. Most watersheds in populated southern regions

of the country contain multiple political jurisdictions,

be they municipal, provincial or international. Notable

examples of this challenge are the watersheds that cross

the Canadian Prairies, but this may also be the region in

which the challenge has been met most successfully.

Prior to 1930 in the Prairies, water was a federal respon-

sibility and the principle of first in time, first in right

(FITFIR) was applied regardless of provincial bound-

aries as they now exist. However, after jurisdiction over

water resources was transferred to the provinces, there

was no longer a single manager of water on the Prairies.

This led to the establishment of an agreement among

the Canadian, Alberta, Saskatchewan and Manitoba

governments to form the PPWB in 1948. The original

purpose of the PPWB was to recommend the best use


16/28


Exhibit 2Why a Nested Approach to Watershed Governance?

The exhibit below shows the major sub-basins of the Ottawa River watershed and helps illustrate how a nested approach to governance could

be established. The water quality and quantity in the Blanche sub-basin, for example, influence the quality and quantity of the water in the Upper

OttawaKipawa sub-basin, the Ottawa River downstream, the St. Lawrence River and, ultimately, the Atlantic Ocean.It follows that the governance and management of water resources in the St. Lawrence River should be informed by the circumstances in the Blanche

sub-basin, and vice versa. This could be accomplished by the creation of a single management body at the level of the Ottawa River watershedwith

authority and jurisdiction over all facets of water managementor by the creation of mandatory communication requirements, information feedback

loops, and stakeholder engagement protocols among the existing conservation authorities and provincial departments. However it is accomplished,

nesting water governance and management according to watershed boundaries will facilitate the development of consistent policy direction and

better integrated watershed management.

Sources: The Conference Board of Canada; Map courtesy of Ottawa Riverkeeper.


17/28


18/28


of interprovincial water and recommend water alloca-

tions between the provinces.12 Changes to its mandate

were made in the 1960s as requests for water alloca-

tions exceeded the ability of the PPWB to execute

long-term planning.

As a result, the respective governments developed a

Master Agreement on Apportionment in 1969. This

agreement states that each jurisdiction is responsible for

passing through to its eastern neighbour 50 per cent of

the natural eastward flow of water in its region. Broadly

defined, natural flow is the volume of water that would

flow in a particular river if that river had never been

affected by human activity. While calculating this amount

can be difficult, the result is straightforwardall three

provinces end up with approximately equal shares of

the total water flow, even in drought periods.

Unfortunately, the type of interagency collaboration

witnessed in the Prairies is not the norm.

Perhaps the greatest strength of the PPWB governance

arrangement is the duty to cooperate.13 Meeting twice

a year and composed of one representative from each of

the provinces and two representatives from the federal

government, the PPWB is a mechanism that demands

participation, and with participation comes knowledge

and understanding. Each region recognizes that water

development activities can impact its neighbours and

that its own prosperity is strengthened by the prosperity

of those neighbours.

There are provisions in the mandate of the PPWB that

call for coordination and planning across the watershed.

For example, if one party to the agreement plans to

dam a river, there is an obligation to ensure that the

construction and operation of the infrastructure would

not adversely affect other parties in the watershed.

The PPWB has the additional responsibility to ensure

that the impacts of any development in the watershed

12 Prairie Provinces Water Board, home page.

13 Wayne Dybvig, Prairie Provinces Water Board. Personal com-munication. August 2005.

are clearly communicated among the partners so that

the PPWB can monitor compliance with the Master

Agreement on Apportionment.

Unfortunately, the type of collaboration witnessed in

the Prairies is not the norm; inter-agency cooperationneeds to be improved in other Canadian watersheds.

One example is the Ottawa River Basin. While there is a

very effective agency to manage the flow of water on the

riverthe Ottawa River Regulation and Planning Board

was created primarily to prevent flooding in Montral

there has been a notable lack of cooperation to date

between the governments of Ontario and Quebec with

respect to water quality. This may be turning around,

however, as the Agreement between the Government

of Quebec and Ontario concerning Transboundary

Environmental Impactsestablishes a formal informationexchange and joint cooperation between the provinces

on transboundary pollution issues.14

The Okanagan Basin is another region of Canada in

which improved coordination between agencies could

substantially benefit the watershed. The basin is sub-

divided into three regional districtsNorth Okanagan,

Central Okanagan and OkanaganSimilkameencentred

respectively on the regions three major cities: Vernon,

Kelowna and Penticton. The regional groups have com-

bined their efforts to create the Okanagan Basin Water

Board (OBWB) consisting of three representatives (who

are elected local government officials) from each regional

district.15 The current and historical focus of the OBWB

has been primarily on controlling the invasive Eurasian

milfoil and providing grants to local governments for

liquid waste treatment infrastructure. But the OBWB,

with agreement from the three regional districts, has

broadened its focus to include water conservation and

water quality. For example, these districts have empow-

ered the OBWB to initiate a regional water management

approach by forming the Water Stewardship Council.

This groupmade up of government, private sector and

non-governmental organization (NGO) membersacts

14 Ministry of the Environment of Ontario and Ministre duDveloppement durable, de lEnvironnement et des Parcs duQubec. Ontario and Quebec Pledge to Cooperate.

15 Okanagan Basin Water Board, Board of Directors: 19 August 2003.


19/28


in an advisory role, and provides technical and policy

recommendations to the OBWB on the management of

basin water resources.16 However, the municipal govern-

ments of Vernon, Kelowna and Penticton (in competition

with each other) view access to water as critical to their

urban development. They are therefore unwilling to cede tothe OBWB the authority and resources necessary to fully

manage the basins water resources on a watershed basis.

The Grand River Watershed could also benefit from

improved inter-agency coordination, in this instance

between the Grand River Conservation Authority (GRCA)

and the Ontario Ministry of the Environment. For example,

there is an absence of formal mechanisms for stake-

holder engagement in policy-making. The interviewees

reported that while the GRCAs insight and experience

are often sought by provincial departments, in this casethe GRCA must attempt to lead from behind. Ideally,

the local expertise and knowledge generated through

the work of the GRCA would be communicated to the

relevant provincial departments during regular policy

reviews. Unfortunately, the last time the Ministry of the

Environment completed a watershed strategy for the

Grand River was 1982.

RECOMMENDATION #4: INTEGRATE GROUNDWATER

AND SURFACE WATER MANAGEMENT

The fourth recommendation that emerges from the case

study investigations encourages the integration of ground-

water and surface water management in both the allocation

and source water protection activities for the watershed.

In a watershed, the quality and quantity of surface water

and groundwater are interdependent. For example, in an

agricultural region such as B.C.s Fraser Valley, water

quality problems can frequently be traced to excessive

nitrates leaching into groundwater and surface water

from animal manure storage and field application of

chemical fertilizers.

In the AbbotsfordSumas Aquifer, the aquifer (ground-

water) underlies the international border between B.C. and

Washington State; thus the management of the surface

water and groundwater resources on both sides of the

border could naturally be considered a joint responsibility.

16 Okanagan Basin Water Board, www.obwb.ca/.

However this has not been the case historically, though

recent legislation in B.C. is beginning to equip water

managers to further the integration of water resource

management. New groundwater and drinking water

protection regulations are in the developmental stages

under the Water ActandDrinking Water Protection Act,and the Ground Water Protection Regulationswhich

came into force in late 2005represent the first phase

of an envisioned three-phase legislative framework to

protect water quality and to improve hydrologic data

collection and reporting. In Washington State, by way

of contrast, state management of the resource is strictly

governed by permitting both annual and instantaneous

quantities through a long-established water rights system

that applies to both groundwater and surface water. The

state has enforced groundwater regulations since 1945.

Management of the surface water and groundwater

resources should be integrated because their quality

and quantity are interdependent.

With respect to source water protection, one risk to the

Grand River Watershed that has not been mitigated is

the potential destruction of its moraines (i.e., the dis-

ruption of moraine water recharge areas from economic

development). Though covering a relatively small area,

these moraines are significant recharge zones for the

groundwater of the region and are therefore critical

to the watersheds long-term health. At the moment,

OntariosAggregate Resources Actprovides little assur-

ance that the ecological importance of the moraines will

be a significant consideration in any land-use decision.

RECOMMENDATION #5: PRIORITIZE AND BUDGET

FOR ADEQUATE INFORMATION TO SUPPORT

DECISION-MAKING

The fifth recommendation is that priorities for data collec-

tion, and adequate budgets for such collection, need to be

set. Watershed managers and provincial policy-makers

need adequate data and information to support the deci-

sions they make since monitoring and measuring tasks

are critical to achieving management goals. The adequacy

of information available to water managers varies across

provinces and watersheds. A number of examples from

the case studies illustrate this variability.


20/28


In Saskatchewan, performance measures are clearly set

out in the annual performance plans of the Saskatchewan

Watershed Authority. Monitoring of and information on

water quantity is adequate, but Saskatchewan Environment

is working on improvements to water quality measures.

In Alberta, the watershed planning advisory councils have

begun to develop outcome and indicator measures for

planning; for example, the Bow and Oldman councils

have released state of reports. Alberta has established

effective monitoring programs and, by using watershed

planning advisory councils, has arms-length groups

responsible for reporting to the public. A great deal of

socio-economic information on water use is available to

policy-makers and managers. The province is working

to improve measures of aquatic health.

In B.C., the fact that only limited data are available

in the AbbotsfordSumas Aquifer has hampered the

development of water management plans. In the past,

there has been a significant bias in data collection toward

water quality over quantity. Ideally, the groundwater

and drinking water protection regulations that have

come into force via the Water ActandDrinking Water

Protection Actwill improve the timeliness and accuracy

of information needed for managing the aquifer and

will help in transforming historical raw data into a

usable form.

Perhaps due to high expectations within the GRCA,

interviewees do not feel that a robust system of indicators

and outcome benchmarks is in place for the quality and

quantity of water in the Grand River Watershed. Part of

the reason is that it can be very difficult to isolate and then

quantify cause-and-effect results for some management

actionsfor example, the effect of planting 2 million

trees in the watershed. Established indicators have been

measured and reported for over 30 years, yet interviewees

express discontent with the quality of information that

these provide. At the same time, interviewees note that

the region has an excellent high- and low-flow indicator

set, and highly effective response plans. Interviewees also

note that stakeholders in the watershed are well aware

of the limitations of the current system and are taking

measures to improve it.

In the Ottawa River Basin, although data documenting

and evaluating take place, there is little integration of

information or development of benchmarks for the entire

basin. Federal, provincial and municipal monitoring

operations, combined with the efforts of NGOs such

as the Ottawa Riverkeeper and the Conseil rgionalde lenvironnement et du dveloppement durable de

lOutaouais, provide monitoring of water quality and

quantity. However, these NGOs do not offer formal

third-party audits on monitoring. The Ottawa River

Regulation and Planning Board collects and dissemin-

ates high-quality data on water quantity and flows, but

does not have the budget or the jurisdiction to collect

water quality information. To some degree, quality

information is collected by the respective provinces for

tributaries of the Ottawa River, but to date no formal

mechanism exists to share that information basin-widefor the purpose of developing a comprehensive picture

of water quality in the Ottawa River.

The adequacy of information available to water managers

varies across provinces and watersheds.

To assist water managers in their efforts to prioritize and

budget for adequate information, the field of decision

analysis can help managers estimate the value of infor-

mation in different decision contexts. Decision analysis

may be useful to provincial policy-makers and watershed

managers as they consider the information they need,

and the costs and benefits of acquiring it.

RECOMMENDATION #6: EXPLORE GREATER USE

OF MARKET-BASED INSTRUMENTS

The final recommendation from the work of the Leaders

Forum on Water Resource Management and Governance

is a call for greater use of market-based instruments in

watersheds facing scarcity, in order to reveal the economic

value of water and to allocate water to its use of highest

value. Currently, permits to take water are the dominant

allocation tool in Canada. (See Table 1.) In many respects

this reflects the reality that water scarcity has not been

an issue in the past. Scarcity is, however, creeping up

on Canadian watersheds and new tools are needed to

aid in the allocation of water for the greatest net benefit

to society.


21/28


Table1

UseofWaterAllocationInst

rumentsintheCaseStudyWatersheds

OttawaRiverBa

sin

SouthSaskatchewan

RiverBasin

Instrument

AbbotsfordSumas

Aquifer(B.

C.)

GrandRiverWatershed

(Ont.)

OkanaganBasin

(B.C.)

Ontario

Quebec

Alberta

Sa

skatchewan

Withdrawal

permits

NoRegionalhe

alth

authoritype

rmits

watersystems

(includingw

ells),

withafocuson

waterqualit

y

concernsan

d

treatment

Allocationtool

usedthroughout

theprovince

Licen

cesfor

surfa

cewaterbut

notg

roundwater

Onlyforlarge

amounts,over

50,000litres

Littlemacro-level

analysis

Us

edfor:

underground

waterserving

morethan

20people

orover

75m3/day

bottledwater

Usedexten-

sively

Basedon

historical

patterns:

FITFIR

The

Saskatchewan

Wa

terAuthority

(SW

A)approves

allo

cationsfor

mu

nicipal,indus-

tria

landagricul-

turaluses

FITFIRhasbeen

withdrawn(but

itstillappliesto

lice

ncesissued

pre

-1984)

Long-term

conservation

planning

Conservatio

nis

promoted,but

fewenforce

ment

mechanismsare

available

Frameworkofthe

GRCA

Levelofaggressive-

nessoftheseplans

varieswithinthe

watershed

Someuseof

long-term

plan-

ning,especially

forfisheries

management,but

gene

rallyunder-

utilized

Jurisdictionover

tributaries

Fewprotected

areas

Externalgroups

advocatingfor

greateraction

So

meactivity

Embedded

inthe2003

Waterfor

Lifestrategy

Seenasa

criticalneed

inthecoming

years

The

SWAhas

dev

elopedthe

Wa

terConservation

Strategy

Utility

full-cost

accounting

No

TheSustainable

WaterandSewage

SystemsAct,

2002,

makesitmandatory

formunicipalities

toassessandcost-

recoverthefull

amountforwater

andsewerservices

Oper

ationalcost

accountingis

typic

allyused

No

Us

edextensively

by

somemunici-

pa

lities,relatedto

infrastructure

Notexten-

sivelyused,

butbegin-

ninginsome

municipalities

IntheWater

forLife

strategy

Usedbysome

mu

nicipalities

(contdonnextpage)


22/28


Table1(cont

d)

UseofWaterAllocationInst

rumentsintheCaseStudyWatersheds

OttawaRiverBasin

SouthSaskatchewanRiverBasin

Instrument

AbbotsfordSumas

Aquifer(B.C.)

GrandRiver

Watershed

(Ont.)

OkanaganBasin

(B.C.)

Ontario

Q

uebec

Alberta

Sa

skatchewan

Demand-s

ide

management

programs

No

Programsatthe

municipallevel

Meteringisin

place

Vernonh

as100percentof

itsreside

ntialusersmetered,

usedwaterisreclaimed,

andallw

astewateris

subjectt

osecondaryand

tertiarytreatment

Kelowna

hasanactive

educationandconservation

program

andhaswitnessed

adecline

of19percentin

peakwaterdemand

Public

education

campaign

inOttawa

Pe

rsonalized

evaluations

andimpact

stu

dies

Municipalaction

TheDepartmentof

Agricultureworks

withirrigationpro-

jectsinruralareas

Meteringand

reportingformost

licences

For

largeindustrial

use

rs

Meteringformuni-

cipalandindustrial

use

s,andlarge

irrig

ationprojects

Pricingof

water(not

infrastruc-

ture)

Abbotsford

incurredthe

costofextend-

ingthemuni-

cipalsupply

system

into

ruralareas

primarilydueto

nitrateissu

es;

autilityfee

is

levied

No

Kelowna

hasintroduced

increasin

gblockratesfor

consume

rs,combinedwith

aneduca

tioncampaign

TheOBW

Bispromoting

moreme

teredwaterpricing

TheRegionalDistrictof

NorthOk

anaganisencour-

agingwa

terconservation

withahighcommodity

priceand

alowbaseprice

Metering

within

Ottawa-

proper,

butnot

therural

sectionsof

thecity

No

,butpos-

sib

leinthe

future

Notusedtoallo-

catewater

TheAlbertaWater

Councilisexploring

thepotentialuse

Not

usedtoallocate

wat

er

Industrialuserspay

avariableroyaltyto

the

province

Roy

altiesimposed

onhydroproducers

(Sa

skPower)pro-

videabout50per

cen

toftheSWAs

ann

ualbudget

Trading

ofwater

allocations

No

No,thepriority

allocationsystemis:

life(including

human,animal

andplant)

commerce

aesthetic

(washing

cars,watering

lawns)

Discussiononly,butthe

concept

haspotential

No,there

isnowater

scarcity

No

,there

isnowater

scarcity

Transfersof

licencescanbe

approved

Thereisaprivate

marketfortem-

porarytrading

betweenFITFIR

allocations

Nopricetranspar-

ency(sameasa

landtransaction)

Tradingofalloca-

tion

sbetween

lice

nseesisnot

permitted(but95

per

centofthepro-

vincialsupplyisnot

con

strained)

Source:LeadersForum

onWaterM

anagementandGovernance,TheConferenceBoardofCanada.


23/28


Canadas western provinces, where scarcity is especially

acute, are leading the way in utilizing market-based

instruments. The City of Kelowna in the Okanagan, for

example, has implemented an increasing block rate

scheme for water consumption. Although it is not direct

pricing of water, this scheme is a method of encouragingwater conservation, charging users morenot lessfor

increasing incremental use. In addition, the South East

Kelowna Irrigation District implemented a demand

management scheme for the agricultural community in

1994. The initial phase consisted of an education cam-

paign. This was followed by a conservation plan that

combined water allotments with metered rate penalties

for excessive water use. By 1998, the program had cost

$784,000 but had succeeded in freeing up $1.2 million

worth of water rights. By 2004, the strategy had suc-

ceeded in reducing average demand conditions to 27.4per cent below the 29-year average consumption rate.17

In the Alberta portion of the South Saskatchewan River

Basin, the use of market-based instruments is being taken

a step further. Largely due to the complete allocation of

water resources under FITFIR administration and allo-

cation principleswhich Alberta opted to retain under

its Water for Life strategythe provincialgovernment

allows some water users to temporarily trade or perma-

nently transfer water allocations within a river basin

(such as the Bow

Oldman). To date, six transfers have

been approved, with about 20 more in the process. The

recipients of the transfers have been three municipalities,

a large rural pipeline water cooperative, a cattle feedlot

and a specialty crop grower.18 Typically, there are two

or three licences per irrigation district, but hundreds of

users. Private contracts exist, with the knowledge of the

district, to allocate water to its highest value use. Although

these contracts are private, and contract values are not

required to be made public, knowledge of the contract

price per volume of traded water does reveal the value

of water to some rural users. Similar situations exist

when municipalities hold two or three licences and

provide water use contracts to industrial and domestic

users within their boundaries.

17 Toby Pike, Agricultural Water Conservation Program Review, pp. 3,6, 10.

18 Alan Pentney, Alberta Environment. Personal communication.November 20, 2005.

In addition, a process called assignments provides for

the temporary sharing of water allocations between licen-

sees to mitigate the impacts of drought and supply short-

age due to the application of FITFIR. In 2001 this was

used successfully by eight irrigation districts, 10 munici-

palities, significant industries and water cooperatives tocollectively share a 40 per cent shortage in water supply.

Approximately 600,000 acre-feet of water were shared

over a 300-km wide district, from Waterton Lakes

National Park in the west to Medicine Hat in the east.

The assignments were privately constructed with Alberta

Environment overseeing the legal and environmental

issues.19 Although FITFIR has come under criticism, it

nevertheless resolves the issue of priority rights to water,

thus reducing court cases over water rights. True pricing

of water is being explored by the Alberta Water Council.

Canadas western provinces, where scarcity is especially

acute, are leading the way in utilizing market-based

instruments.

The Conference Board researchers discussed the prospect

of market-based water-trading in the Okanagan Basin

with project interviewees because of the particular stresses

and changing development profiles within the region.

Currently the agricultural base is allocated 70 per cent

of the available water, but a fast-growing urban popula-

tion displaying high per capita water use patterns is

placing significant stress on the remaining water in the

basin. By some estimates, all of the available water in

the basin will be allocated in the next 15 years. Similar

to the situation in the South Saskatchewan River Basin,

the reality of scarce resources requires new methods of

resource allocation that communicate the limited avail-

ability of the resource. In this situation, the Conference

Board considers market-based water pricing to be a tool

with potential. Price will identify those uses of water

that have the highest value and will provide an incentive

for all sectors to improve their efficiency of water con-

sumption. The first consideration of designing what will

be a very complex market is the in-stream needs of the

basin. The second consideration is the social priorities

of the basin.

19 Ibid.


24/28


Given a strong desire to support the agricultural founda-

tions of the region to maintain the traditional character

of the Okanagan Valley and its ability to produce food

locally amid continuing pressures of urban development,

one option may be to grant agricultural users tradable

water rights at, or near, their historical levels of use. Thesewater rights would then become an asset for farmers,

ensuring that they have sufficient water for their oper-

ations. At the same time, this arrangement would estab-

lish economic driversto agricultural users on the supply

side and to commercial, industrial and residential users

on the demand sideto conserve water. Farmers and

orchardists would have incentives to invest in conservation

practices in order to trade, permanently or temporarily,

any surplus water to the marketplace. And commercial,

industrial and residential users would have incentives to

conserve in order to decrease the cost pressure of wateron their financials. Ultimately, more water resources

would be available to all sectors in the basin as the

efficiency of water use improved. The party that offers

water to the marketplace today may also be the party

that buys water resources in the future.

Canadas current system of institutions and incentives

will force watershed managers to navigate the shoals

ahead without the resources to determine the best

course.

In contrast, the provinces of Ontario and Quebec, largely

due to an abundant supply of water, have not yet found

it necessary to propose the use of market-based instru-

ments to aid in the optimal allocation of water resources.

The priority system of allocation in Ontario is similar

to that in Saskatchewan. In the rare situations of water

scarcity, the primary goal is maintaining life (including

human, animal and plant life), the secondary considera-

tion is commerce, and aesthetic uses (for example, wash-

ing cars, watering lawns) are the last consideration.

Quebec currently manages its water resources through

permitting and some long-term conservation planning,

although pricing water at some point in the future,

according to interviewees, is not out of the question.

CONCLUSION

The implementation of the above six recommendations

for improving Canadas water governance and manage-

ment institutions and incentives will help tomorrows

water managers steward the nations freshwater resourcesin a manner that can sustain the ecosystem and economic

growth. To do this, water managers need:

clear governance structures to establish consistent

and consonant policy goals within a watershed;

a nested approach to watershed governance to

incorporate the knowledge and expertise of man-

agers at all levels into watershed decision-making;

improved inter-agency coordination to limit and cope

with the competing interests of government depart-

ments at all levels;

integrated management of groundwater and surface

water to establish the long-term availability and

limitations of a watersheds resources;

adequate information and sufficient budgets to conduct

the monitoring and measuring required for effective

and sustainable management and stewardship of

Canadas water resources; and

to explore greater use of market-based instruments as a

means of allocating increasingly scarce resources to

their highest social and economic value.

This case study research analysis reveals that Canadian

water managers face significant challenges in maintaining

Canadian water quantity and quality today. And manag-

ing the expected hydrologic effects of climate change

and the resource needs of a sustainable ecosystemin

addition to managing growing demographic and economic

pressureswill prove even more challenging as we

approach the second and third decades of the 21st century

It is clear that we are not bearing down the river of

plenty without the opportunity to map future hazards.

However, Canadas current system of institutions and

incentives will force watershed managers to navigate

the shoals ahead without the resources to determine the

best course. Fortunately, the case study research also

reveals that policy-makers nationwide are beginning to

initiate changes. But if these preliminary steps do not

adequately equip Canadian water managers to deliver

water services well into the future, our riverboat may

yet run aground in the decades ahead.


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Bibliography

APPENDIX A

Alberta Environment. South Saskatchewan River

Basin Non-Irrigation Water Use Forecasts [online].

Edmonton: March 2002 [cited March 16, 2007],

p. 5.6. www3.gov.ab.ca/env/water/regions/ssrb/PDF_

documents/SSRB_Non-Irrigation%20_Water_Use_

Forecasts.pdf.

Barber, Katherine (Ed.). The Canadian Oxford

Dictionary. Toronto: Oxford University Press, 1998.

Ministry of the Environment of Ontario and Ministre

du Dveloppement durable, de lEnvironnement et

des Parcs du Qubec. Ontario and Quebec Pledge to

Cooperate on Air Pollution, Smog and Climate Change.

Press release. Toronto: June 26, 2006.

Okanagan Basin Water Board. Board of Directors:

19 August 2003 [online]. [Cited December 16, 2005.]

http://nord.ca/services/obwb/docs/obwbdirectors.pdf.

Okanagan Basin Water Board [online]. [Cited

March 16, 2007.] www.obwb.ca/.

Ottawa Riverkeeper. Ottawa Riverkeepers River

Report, issue 1. Ottawa: Author, May 2006.

Pike, Toby.Agricultural Water Conservation Review.

Kelowna: South East Kelowna Irrigation District, 2005.

Plumptre, Tim, and John Graham. Governance and

Good Governance: International and Aboriginal

Perspectives. Ottawa: Institute on Governance,

December 3, 1999.

Prairie Provinces Water Board. Home page [online].

[Cited March 16, 2007.] www.pnr-rpn.ec.gc.ca/water/

fa01/fa01s01.en.html.

United Nations Development Programme. Energy and

Environment Water Governance [online]. Website

content. [Cited March 16, 2007]. www.undp.org/water/

about_us.html.

United Nations Human Settlement Programme. Shelter

for All [online]. Website content [cited March 16, 2007].

www.unhabitat.org/content.asp?typeid=19&catid=

25&cid=2097.

Warren, Fiona J., et al. Climate Change Impacts

and Adaptation: A Canadian Perspective. Ottawa:

Government of Canada, August 2004.


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Related Products and Services

APPENDIX B

Business Council for Sustainability

This cross-industry network is for senior executives

whose responsibilities include environmental management

and sustainability performance. Discover, by presenta-

tion and hands-on learning, cutting-edge practices in

environmental management and corporate sustainability.

Risk and Opportunity in the Gathering Climate

Change Storm

Converging trends and forces are raising the profile

of climate change and the need for carbon emissions

reduction. Find out what to do to minimize risks and

realize the opportunities.

Operationalizing Adaptation to Climate Change

In contrast to the healthy debate about the best way to

mitigate Canadas contribution to climate change, there

is a distinct lack of debate on how Canada will adapt to

its effects. The Conference Board of Canada gathered

some of the leading domestic adaptation thinkers for

the first Private Sector Roundtable on Adaptation to

Climate Change. This briefing reports on the Roundtable,

its discussions and its conclusions.

Carbon Disclosure Project 2007Canada Report

InitiativeThe Conference Board of Canada is pleased to announce

that in 2007 it will again be producing, in partnership

with the CDP Secretariat and other leading organizations

a CDP report focusing on the climate change risks and

actions of Canadas most valuable corporations.

Adapting to Climate Change: Is Canada Ready?

Future climate change will have a major impact on Canada

Are we prepared? This report focuses on strategies for

adapting to climate change.

Mission Possible: A Canadian Resources Strategy

for the Boom and Beyond

This volume ofMission Possible: Sustainable Prosperity

for Canada looks at how Canada can maximize its

opportunities in four major sectors (forest products,

agri-food, mineral products and energy) over the next

10 to 15 years in order to achieve longer-term prosperity

and well-being. It does so through the lens of a tenet

long advocated by The Conference Board of Canada:

that economic growth, environmental integrity and social

cohesion are inextricably linked. Boosting prosperity

via our resource sectors must therefore be balanced

with efforts to minimize or eliminate the negative

environmental and social impacts.

Go to www.e-library.ca to see other informative reports that would interest you.

Phone 1-866-242-0075 for information on related products and services.


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