January 14, 2011

On December 17, 2010, the B.C. government released a policy proposal[1] on B.C.'s new Water Sustainability Act, which is intended to modernize and replace the province's current Water Act.[2]  Initial public comment was sought and considered by the Ministry of Environment (MOE) and a request for a second round of public consultations on the proposed legislation has now been issued.  Submissions are being encouraged on the Living Water Smart Blog[3] through January 2011.  The blog, an interactive conduit for communication between the government and interested stakeholders, will be the primary means of consultation on the proposed Act. Participants may submit specific questions and comments about the Act through the links provided in the blog; however, some in industry, including mining companies, are engaging directly with the MOE through written submissions outside the blog and through direct discussion.

Regulatory Framework for Water in B.C.

Established in 1909, the Water Act is the primary legislation in B.C.'s water governance framework for regulating the diversion, storage and use of water resources and managing water quality. The Water Act was amended several times since its introduction and is integrated with several other pieces of Provincial and Federal legislation.

Through the proposed Water Sustainability Act and Living Water Smart: B.C.'s Water Plan, the B.C. Government acknowledges that the social foundation of the now 100 year-old Water Act has changed with changes in environmental conditions, industry, and stakeholder needs. The current Water Act is considered not to be able to address challenges related to water demands, population growth, and related to climate change, among other factors. Furthermore, although groundwater use in B.C. is not currently regulated under the Water Act, groundwater resources are increasingly sought as the water source of choice, particularly in areas where surface water supplies are limited or fully allocated to existing users. The Living Water Smart initiative and associated proposed legislative changes are intended to create a new framework for water allocation and priority.

Living Water Smart: B.C.'s Water Plan

The proposed Water Sustainability Act is one component of Living Water Smart: B.C.'s Water Plan, a policy commitment by the Provincial government to manage and govern water in B.C.  The delivery of the plan involves eleven ministries and impacts a broad range of stakeholders. The MOE is responsible for overall coordination and reporting on its effectiveness, and the Government has appointed a Parliamentary Secretary for Water Supply and Allocation.

Through the Plan, the Government has committed to the following goals by 2012:

• Improved protection of ecological values, enhance community involvement, and provide water efficiency incentives;
• Legislative recognition of water flow requirements for ecosystems and species habitat;
• New approaches to water management which will address the impacts from a changing water cycle, increased drought risk and other impacts on water caused by climate change;
• Government regulation of large groundwater withdrawals and groundwater use in priority areas; and
• Water laws which are easier to understand, communicate, administer and enforce.

The creation of the Water Sustainability Act and the repeal of the Water Act are the key legislative actions that the Province proposes to take to meet these commitments.

Legislative Goals

The four proposed goals of the Water Sustainability Act are to:

1. Protect stream health and aquatic environments by regulating water flows: 

The proposal involves protecting water flows as an environmental value and setting guidelines for managing and allocating water as a tool to achieve this.  Instream flow requirements could reduce the amount of water available in some areas for new water licence applications.  Imposing additional restrictions in new licences could increase project costs, such as the costs associated with construction and maintenance of storage infrastructure. The need to maintain instream flows could also result in increased pressure to use groundwater.  The protection of instream flows and water use reduction during times of scarcity may result in periodic reduction or suspension of existing licences, or other regulatory action to protect minimum flow levels.

2. Improve water governance arrangements:

The ultimate accountability for environmental protection is proposed to remain with the Provincial government. However, an area-based approach is contemplated whereby responsibility for activities and decisions respecting water allocation is delegated to local or regional agencies.  The development of Provincial water objectives to guide permitting and project approval decisions is also contemplated.

3. Introduce more flexibility and efficiency in the water allocation system:

The Water Act establishes that the Province "owns" water in B.C.  Rights to use, divert, and store water are allocated through licences or approvals issued under the current legislation. Licences are currently granted according to the doctrine of "first in time, first in right", meaning that applications are dealt with in a chronological order with the date of the application establishing the priority of the licence. The purpose for which the water is used currently has no bearing on the priority for allocation. When water is scarce, the rights of those holding licences with earlier priority dates take precedence.

Incremental changes are proposed to alter the "first in time, first in right" allocation principle, so that in times of scarcity, the "importance of use" would be a key consideration for water allocation.  The use of economic instruments to improve water efficiency and encourage conservation is also proposed.  Economic instruments could include subsidies (e.g., interest-free loans to encourage investment in efficient irrigation systems), pricing (e.g., differential pricing to encourage water use efficiency), rebates (e.g., for water conservation), water markets and water trading.  The criteria underlying "importance of use" is to be determined.  

4. Regulate ground water use:

Ground water is heavily used by municipalities, primary industry and agriculture and is also a source of low temperature geothermal energy.  B.C. is the only Canadian jurisdiction that does not regulate ground water use except under the Environmental Assessment Act,[4] which requires a review of all ground water withdrawals designed to operate at a rate of 75 litres per second or more, and the Ground Water Protection Regulation,[5] which regulates the construction of new wells, the province does not regulate, license or limit ground water extraction and use.  It is proposed that large ground water withdrawals including large industrial uses be regulated and that requirements for monitoring and reporting be introduced. The definition and threshold of a "large ground water withdrawal" is to be determined.

Stakeholder Input

The above outlined policy, while still at the earlier stages of development, contains elements that, if enacted, would undoubtedly change the operational landscape and possibly project certainty for both existing and future operations that rely on water use.  Concerned stakeholders still have an opportunity to raise their interests with the MOE both through the Living Water Smart Blog and by otherwise providing submissions to the MOE.

Fasken Martineau's Mining and Environmental lawyers would be pleased to discuss the implications of the proposed legislation and plan and to support your organization with a submission to the MOE.  In the spring and summer of 2011, the MOE intends to submit its final proposals to Government for consideration and legislative drafting. At that time, final policy options will be drafted into a bill for introduction into the Legislature in 2012.

 

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[1] The policy proposal can be found at http://www.livingwatersmart.ca/water-act/docs/wam_wsa-policy-proposal.pdf.

[2] R.S.B.C. 1996, c. 483.

[3] The blog may be accessed at http://blog.gov.bc.ca/livingwatersmart.

[4] S.B.C. 2002, c. 43

[5] B.C. Reg. 299/2004