Protecting Canada’s water resources with full and fair pricing

October 31, 2008

Dear friend:

“Whiskey,” Mark Twain famously said, “is for drinking, and water is for fighting over.” And increasingly, fighting over it we are.

Some of the biggest fights are occurring in Alberta – a province that is, its government has warned, “running out of water.” While demands for water are growing, supplies are shrinking. Summer flows in Southern Alberta’s rivers are just half what they were a century ago. Some rivers are fully allocated – no more water from these rivers will be made available to new residential developments, farms, or industries. As the population grows, and the thirsty oil industry expands, even water-rich northern Alberta can’t count on plentiful supplies in the future. The Minister of Environment recently predicted, “At some point in time, virtually every water system … very likely will be fully allocated.”

Ontario, which has in the last decade experienced some of the driest conditions ever on record for the province, is seeing it own water fights. Withdrawals for water bottling facilities have generated concerns about effects on both groundwater and surface water flows and about competition with municipal supplies. Last year, one firm’s application to renew its permit prompted an enormous outcry – the provincial environmental registry received more than 8,000 public submissions opposing the plan.

Threats to our water supplies don’t just come from bottlers, agriculture, or the oil industry – they also come from south of the border. It’s not just anti-trade nationalists sounding this alarm. In 2005, former Alberta premier Peter Lougheed predicted, “the United States will be coming after our fresh water aggressively within three to five years.” While export applications in Ontario and Newfoundland have gotten the most attention recently, projects have also been proposed for Western Canada, the Prairies, and Quebec.

But what if we were to put a price on water? It is extremely expensive (both economically and environmentally) to build and operate dams, pipelines, or other infrastructure required to move water long distances. If we charged an appropriate royalty for water, exports would become even less economic than they are now. American consumers would find cheaper alternatives, such as conservation and efficiency, trading, and desalination.

Indeed, proper pricing is key to solving many of our water problems. Across Canada, water prices are absurdly low – they’re some of the lowest in the developed world. We pay only a fraction of the costs of municipal water treatment, storage, and delivery. Not surprisingly, we waste water – our consumption is more than double that of Europeans, and second only to Americans. By not paying the full costs of our water, we’re also starving our municipal systems of needed revenues. Little wonder that our water infrastructure continues to deteriorate, and that boil water advisories remain common.

Some agricultural and industrial users pay modest administrative fees for water licences. But none pay a penny for the water itself. This isn’t fair – those who use a resource, or benefit from a service, should pay for it. It’s also not ecologically sustainable – those who get to use a resource for free have no incentive to conserve it.

Aware of these issues, Ontario promised several years ago that it “will no longer allow the province’s water to simply be given away for free.” The province plans to start charging some large water users next year. Although it hopes to encourage companies to conserve, that seems unlikely, given how insignificant the charge will be – at $3.71 per million litres, it will amount to a mere $0.0000037 (less than a thousandth of a cent) per litre.

We don’t need symbolic charges. We need real charges that reflect the full costs – and the full value – of the water used. Full and fair pricing is a goal worth fighting for.

Sincerely,

Elizabeth Brubaker
Executive Director

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