“Water exchange” vs. money for a licence – regardless the environment needs law and policy to evolve

“Water exchange” vs. money for a licence – regardless the environment needs law and policy to evolve

There has been a bit of a media fury around the idea of a “water exchange” in recent days.  First, the chairman of Nestle proclaimed Alberta a great place to have a water exchange, only to have the Environment Minister proclaim in the legislature that

Alberta’s water is not for sale and will not be for sale. The fact that Nestlé talked about being in discussions with Alberta: I have no reason to believe it’s wrong. There are all kinds of corporations and lobby groups that are constantly in discussion with the government on both sides of the issue. I can assure you, Mr. Speaker, that in addition to Nestlé, we’ve heard from literally hundreds and thousands of Albertans who do not share that opinion.

This statement by the Minister does little to shed any additional light on the fact that we already have the exchange of statutory rights to water for money in the South Saskatchewan River Basin (SSRB).  The system of water allocation transfers in the SSRB is essentially a form of market, albeit one that is subjected to a significant level of government control and regulation.  The idea of streamlining this market into a full blown “water exchange” is not new.  In 2010 a summary document of papers published by the Canada West Foundation and the Alberta Water Research Institute (AWRI) advocated the creation of a water exchange (see Toward a Unique Solution:  Sustainable Management of Alberta’s Water Resources).  Previous advice to the government had contemplated the opening of the water market while dealing with the contentious issues of environmental flows by suggesting that a set flow be protected outside the market (along with an allocation for basic human needs).   The difficulty with this approach is that in overallocated regions such as the SSRB successful protection of environmental flows is difficult to foresee unless the water allocation system itself is significantly revamped.

In my assessment, the current “first in time, first in right” allocation system, whereby senior licence holders get to divert all their water before other licence holders, significantly undermines or may completely bar substantive and progressive environmental gains in the SSRBThis is a function of the lack of senior Crown licences being held to maintain instream flows, the inability to curtail diversions from a large number of senior licence holders, the limited likelihood that the government would curtail diversions for environmental flows even when licence conditions allow for it and the expectation among licence holders to be compensated for conserving water, either through direct government payments or through the ability to sell the conserved water to other water users.

The reality is that water transfers continue to be the main tool for re-allocating water in the SSRB and they are occurring largely under the public’s radar.  So when the comment is made in the legislature that “Alberta’s water is not for sale”, the cynic might opine, “It’s true, Alberta’s water isn’t for sale, we already gave it away and now private interests are selling it”.

And with this, I come to the underlying concern:  The more we delay a full and robust debate around our water allocation system and how we should address degrading aquatic systems and the more the government delays substantively addressing the concerns surrounding our current system, the greater the losses to our environment are likely to be.

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