Water fee hike for industry recommended

Canadian provinces should consider charging higher fees for water to encourage its water-reliant natural resource industries to use the resource more efficiently, a new report suggests.
While a shortage of water isn't imminent, overall demand by natural resources sectors is increasing. This is Muskrat Falls on the Churchill River in Labrador. (REUTERS /Greg Locke/Files )

Canadian provinces should consider charging higher fees for water to encourage its water-reliant natural resource industries to use the resource more efficiently, a new report suggests.

The natural resource sectors — agriculture, manufacturing, mining, oil and gas, pulp and paper and thermal electricity generation — use more than four litres of water for every litre used by all other sectors combined, including drinking water, said the report released Thursday by the National Round Table on the Environment and the Economy.

"And many of them depend on water to do their business," said Marc Parent, vice-chair of the, round table.

"So how to make sure that that's water's there and available and sustainable in the future?"

The report recommends three main approaches:

  • Introducing mechanisms to drive water conservation, including economic incentives such as higher water fees and tradable water permits.
  • Improving data about Canada's current and future water supplies, which are currently "very spotty across the country," Parent said.
  • Improving governance of water, focussing on watersheds and supplies.

To pursue these issues, the round table has convened a meeting of experts in Ottawa for Jan. 12.

'Regional challenges'

While there are signs of improvement in water-use efficiency in most economic sectors — and that is expected to hold steady to 2030 — there are some "regional challenges," especially in areas where the growing agriculture and oil and gas industries are involved, the report found.

Water intake by oil and gas will rise 96 per cent, led by oilsands use, the report says. This is the Syncrude plant and tailings pond near Fort McMurray, Alta. (Todd Korol/Reuters)
In certain regions of Saskatchewan, Manitoba, Alberta and B.C., water is already being used to a maximum, Parent said: "There's not a lot of room for additional usage."

Between 2005 and 2030, water intake by agriculture is forecast to increase by 54 per cent, while intake by oil and gas is expected to rise 96 per cent, led by oilsands use. And while they respectively accounted for just 5.5 per cent and 0.6 per cent of natural resource industry water use in 2005, their growth could have a heavy impact on local watersheds.

"All these industries are concentrated in various geographic regions," Parent said. Meanwhile, he added, "All water is local, isn't it?"

In 2005, Canada's natural resource sectors accounted for 86 per cent of national water use. Of that, the biggest users were thermal electric power generation (77.7 per cent), manufacturing (7.8 per cent) and pulp and paper (7.2 per cent), which have all improved their water use efficiency over time and are not expected to increase their water use over the next two decades.

However, Parent said improvements in water conservation are uneven both regionally and by industry, so economic incentives are needed to level the field.

The report predicts that increasing water prices by $0.05 per cubic meter would reduce water intake by natural resource industries by 20 per cent. It predicted that would have a minimal impact on productivity, reducing output by less than 0.6 per cent for all industries except pulp and paper, which was expected to face a reduction of 1.1 per cent.

Current water-use costs range from $0.05 per cubic metre for animal and crop production to $0.60 per cubic metre in food manufacturing.

Pierre Guimond, president of the Canadian Electricity Association, said he was glad the round table produced the report because it will provide the tools to help Canadians be better stewards of their water.

But he said he was "surprised" by the numbers showing that the thermal electric power generation industry was one of the biggest water users. While the industry turns the water into steam to drive turbines and also uses water as a coolant, most of the water is not consumed but returned to the watershed after use, he said.

"I don't think they should boost water fees. We already pay water rentals," he said. "We're already there. We're efficient."

The Canadian Association of Petroleum Producers and the Forest Products Association of Canada were both asked by CBC News to comment on the report, but as of Friday morning, neither had responded with comments.

The report, entitled "Charting a Course — Sustainable Water Use by Canada's Natural Resource Sectors," says governments also need to develop protocols for transparent access to water data. 

The Ottawa-based round table was established in 1988 to advise governments and do research on the relationship between the environment and the economy. It is led by chief executive David McLaughlin and 13 other members appointed by the government of Canada.

People need better information

It says provinces and territories should continue establishing their own "water-data portals," to give people accurate information about water use and quality, but the federal government needs to develop a national, web-based water portal as well, collaborating with the provinces and territories.

That would give Canadians better and "transparent" information about their resource.

Governments must get much better at forecasting future water demands and quality, the report says.

"Looking ahead as far as 2030, we need to develop improved predictive capabilities that will allow us to understand better where regional water pressures may arise."