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National Round Table on the Environment and the Economy
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Changing Currents: Water Sustainability and the Future of Canada's Natural Resource Sectors
The Report
Findings, Conclusions and Next Steps Natural Resource Sectors Interactive Our Process
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As Canada?s largest water user, growth in our natural resource sectors means we must think fresh on how to ensure strong water management so that use of this precious resource is made sustainable for our environment and economy.

Access to clean, sustainable supplies of water is essential for the operation and growth of Canada?s major natural resource sectors ? energy, mining, forest, and agriculture. The health of our ecosystems is also dependent upon those same clean, sustainable water supplies, creating the potential for competing uses. With development of the natural resource sectors on the rise, does Canada have enough water to support economic growth while maintaining the health of our country?s ecosystems? And are we in a position to sustainably manage our water resources for future generations? Canada?s apparent water abundance masks a looming scarcity challenge for our important natural resource sectors and for certain regions of our country.


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The National Round Table on the Environment and the Economy (NRTEE) is conducting a two-year program on Water Sustainability and the Future of Canada?s Natural Resource Sectors. The overall goal of the program is to address the above questions while increasing public awareness of how our natural resource sectors use and manage water. Phase I of the program, the findings of which are included here, examined principal water uses by Canada?s natural resource sectors and identified the key water issues flowing from these. Phase II of the program will include research into the potential solutions to these critical issues. These efforts will result in recommendations to governments and industry on policies, approaches, and mechanisms through which water can be better managed to foster both ecosystem health and the natural resource sectors economic sustainability.

Changing Currents is the result of over a year of research and engagement involving some of the country?s leading experts on water management and policy, and collaboration with key industry representatives and associations. The focus and approach of the program was guided by the NRTEE?s Expert Advisory Committee. The NRTEE held seven consultation meetings across the country in 2009-2010, involving over 150 experts and stakeholders. Finally, the findings and conclusions of this report were peer-reviewed by specialists in the different areas of investigation.

Setting the Scene

Canada is blessed with a bounty of forests, minerals, metals, energy sources, and agricultural products, yet its most valuable natural resource is its water. In 2009, just over half of Canadians polled ranked freshwater as the country?s most important natural resource, ahead of forests, agriculture, oil, and fisheries.1 Water is a critical component of the development of the energy, forest, mining, and agricultural products that contribute to Canada?s economic wealth and social well-being.

There is a misperception that Canada?s water is a plentiful and secure resource. Canada, with one-half of one per cent of the world?s population, is fortunate to have 20% of the world?s freshwater, but this equates to only seven per cent of the world?s renewable supply. While approximately 60% of fresh surface water flows north, 85% of Canada?s population and many of our economic activities are present in the south. And so our water resources are not located where they are needed for many of our uses. Water scarcity is not a national problem in Canada, but it is certainly a regional one and this can be of national significance. One need only look to the prairies of Alberta and Saskatchewan and to British Columbia?s Okanagan Valley to witness clear examples of regions facing water shortages. Between now and 2050, Canada?s population is expected to increase by 25%, the Canadian economy is predicted to grow approximately 55% by 2030, and climate change is anticipated to increase temperatures, change precipitation patterns, and increase the frequency of extreme weather events such as floods and droughts. These stresses will impact Canada?s watersheds and create new pressures on the long-term sustainability of our water resources.

The natural resource sectors studied in this report are the greatest water users and consumers across Canada. In 2005, collectively, they accounted for approximately 84% of Canada?s gross water use ? the total volume withdrawn from water bodies. Of all the water consumed in Canada, the natural resource sectors accounted for 84% of the total ? that is, water that was withdrawn and not returned to a water body after use. The thermal power generating sector was responsible for the greatest gross water use, while agriculture accounted for the majority of national water consumption.

The natural resource sectors make a significant contribution to the Canadian economy. In 2009, these sectors accounted for approximately 12.5% of the country?s gross domestic product (GDP). The long-term economic growth of these sectors is anticipated to be substantial with growth forecast to be about 50% to 65% by 2030. This level of development will mean more pressure on our water resources. Overlay this projected growth with already existing pressures on water usage, and one can start to see the potential for future conflicts over water availability.

Further pressures exerted by climate change on water resources are also expected to be felt across the country. There is broad agreement from the scientific community in Canada and internationally, that we are now seeing global changes to the climate and hydrological cycle and that freshwater ecosystems are likely vulnerable.2 Climate models show that changes in temperature and precipitation are likely to continue affecting the following: run-off and evaporation patterns; the amount of water stored in glaciers, snowpack, lakes, wetlands; soil moisture; and groundwater. The key impact from climate change on water will come in the form of extreme events such as droughts and flooding, seasonal shifts in flow regimes, and reduced winter ice coverage. The impacts of climate change on water resources will vary across the country due to regional differences in hydrological characteristics, water demand, and management practices.3 The response of water users to climate change, including the implementation of adaptive management approaches, will be critically important to the future sustainability of our water.4

Water is a common good and governments have a duty and a responsibility to protect it and manage it for future generations. And so the sustainability of water resources relies on governance. The governance and management of water resources in Canada is complex and multi-jurisdictional involving all levels of government. In many cases, the laws and rules are outdated and in need of renewal. At the policy level, some governments are taking action by developing new approaches and strategies. For its part, industry is taking a lead to improve water management on an operational level, as is exemplified by the implementation of best management practices, technology development and deployment, public-private research, and sustainability reporting. However, at a national level, a concerted, strategic approach to water governance and management has not been undertaken.


In order to understand the linkage between water sustainability and Canada?s natural resource sectors, the NRTEE examined (1) the importance of freshwater to our ecosystems, (2) the governance structures managing water in Canada, and (3) the most important water uses and critical issues within each of the natural resource sectors.

In considering the sustainable development of our natural resources and water requirements, we must first recognize and accept the importance of ecosystem needs with respect to water. Water is essential for all living things. Canada?s ecosystems cannot function properly and deliver ecosystem services without adequate, reliable, and clean sources of freshwater. Second, we need to understand the complexity of governance around water in this country, so that we ensure it is managed sustainably. Water is one of the most challenging resources to govern and manage due to the division of power and shared responsibilities for management among all levels of government.

The natural resource sectors all rely heavily on reliable, clean supplies of freshwater. The use of water and the effects on it by the natural resource sectors vary considerably across the country, from a gross and consumptive use perspective. The sectors operate in different regions across this vast land, and this regional distribution directly influences where the pressures on water resources are felt. The complexity of this picture is complicated by the numerous and varied subsectors that operate in each region, each having differing uses and impacts on water resources. All things considered, these factors make for a very complex "water story."

Water Use and Canada's Natural Resource Sectors

In order to understand the complexity of this "water story" the NRTEE has examined the individual sectoral uses and highlighted the most important water issues.

The thermal electrical power generation sector is highly reliant on water availability. In 2005, this sector was responsible for withdrawing 64% of water across Canada, making it the greatest water user in the country. The sector was also the second largest consumer of water. Finally, this sector also has important effects on aquatic ecosystems they are located on, with concerns related to thermal and chemical discharges.

Similarly, the hydroelectric power generation sector is completely reliant on the availability of plentiful sources of water. Unlike the thermal power sector, hydro facilities are not significant consumers of water. But they do have important impacts on ecosystems and downstream users. Given the strong reliance of both hydro and thermal facilities on water availability, future expansions will need to give due consideration to this factor, especially in areas where competing uses for water are anticipated, and where water shortages may be expected.

On a national level, the oil and gas sector uses small overall volumes of water in comparison with the other sectors, leading to water quantity concerns being more localized. As with hydro power, quantitative water use at a national level is unknown, but is more likely understood on a provincial and operational basis. The key water issue for the oil and gas sector centres on the potential impacts on water quality and ecosystem integrity, particularly on a regional and watershed basis. With significant growth anticipated for the sector, particularly in oil sands and shale gas, issues of both water quantity and quality are likely to continue.

Next to the power generation sectors, agriculture is the most important user of water across the country. In 2005, it was responsible for 10% of the gross water use. It is the most significant water consumer in the country, accounting for 66% of water consumption, largely due to crop irrigation. Water availability is currently an issue for farms in water-scarce regions of Canada. As the sector?s need for irrigation increases, due to the demand for higher-value crops and efforts to convert dryland operations, the risks associated with water limitations will continue to rise and potentially spread to other regions of the country. The sector may also be at risk from climate change resulting in reduced spring runoff and prolonged cyclical drought. Water availability will continue to be a dominating issue for the sector, and as such, is a key driver for water efficiencies and conservation.

Finally, the mining and forest sectors are relatively small users of water in comparison with the other natural resource sectors. For both sectors, water availability does not appear to be a constraint to future operations. However, both sectors do have the ability to significantly impact water quality in the regions and watersheds where they are located, and this is one of the most important aspects of water management for both. The potential for long-term effects of operations on the health of the surrounding ecosystems is of particular concern, due to contaminants that may be introduced to the environment.

While the issues noted here are currently of a regional and/or sectoral scope, increasing pressures due to population and economic growth and a changing climate could transform them into national issues if not addressed now. Governments and industry still have many options available to them to resolve the problems in the most effective and efficient manner, before water availability and ecosystem degradation become national problems.


The NRTEE has identified four water sustainability issues that are of national importance, cutting across all natural resource sectors and jurisdictions. These are water governance and management, the impacts of climate change, the water-energy nexus, and the public licence to operate.

The governance and management of water is very complex, within which reside a number of challenges. First and foremost, water governance in Canada is a complicated and fragmented collection of statutes and policies, involving all levels of government. Second, the water allocation approaches in most of the country are outdated and may no longer be appropriate given the pressures and competing interests that now exist. Third, Canada currently uses a limited suite of policy instruments, largely restricted to regulations. Economic instruments could play a larger role, but this has generally not been explored in Canada. Fourth, knowledge of actual water use and access to data held by most of the natural resource sectors is limited. Finally, there is an overall lack of capacity and expertise across the country to effectively manage water resources. This is reflected in the reduction of scientific capacity as well policy expertise within governments.

Climate change is emerging as a key factor expected to transform the way we manage water resources. Impacts of climate change on water resources are likely to affect all regions of the country, but will manifest themselves in different ways. The uncertainty regarding the severity, timing, and frequency of events ? and their subsequent impacts ? is the main challenge. Having robust and adaptive water management plans will help prepare industry for the uncertainty and risks that lie ahead.

Another important issue for water policy development is the water-energy nexus. From the industrial processing and production side, water is needed to produce energy and energy is needed to produce useable water. Financial savings, gained through energy conservation and efficiency, is a key driver for improving water use for all of the natural resource sectors. Some opportunities, such as conservation practices, simultaneously reduce water and energy use. However water conservation may not always lead to energy savings. Climate change is often linked to discussions about the water-energy nexus due to the greenhouse gas emissions that result from energy production. Therefore, the linkage between future energy requirements and anticipated water uses warrants more analysis in Canada, especially as policies and approaches for reducing greenhouse gas emissions and exploring alternative energy sources are contemplated.

Public pressure to better manage water use is unanimously felt across all the natural resource sectors. Industry must assess various signals such as societal pressure, demands from other sectors in the value chain, future regulatory shifts, or price signals, in order to best integrate water considerations into strategic planning and operations. Responding to societal concerns is very important to businesses, not only from a public relations perspective but also as a means to address customer and shareholder expectations. Financial markets are also starting to examine the way in which companies address water-related risks, adding to this public pressure to sustainably manage natural resources.

Next Steps

The NRTEE believes that the opportunity is now to put Canada on a policy path to ensure sustainability of our water and natural resource sectors. We must ensure that Canada?s ecosystem services are protected to ensure the long-term health of our natural environment. At the same time, we need to ensure that our natural resources are developed in a sustainably responsible manner, and do not significantly impact upon our natural environments including our water resources. To do so, Canada needs to put in place a national framework for integrated water governance and management and should do so before water availability is constrained. Governments and water users are currently in a position to consider trade-offs of water use as well as future options.

Of the four national issues identified in our research, the NRTEE has decided to further explore the key challenges surrounding governance and water management. Governance at a national level is not currently positioned to respond to expected increasing pressure on our water resources. This is largely due to jurisdictional complexity, inconsistent approaches across the country, policy fragmentation, a lack of resources, and insufficient technical, scientific, and policy capacity. By addressing these specific challenges, governments will be able to establish more effective governance structures that will enable industry to develop solutions at the regional scales where they operate.

In order to provide advice that will assist in the development of a national water framework, the following key issues related to governance and water management will be explored: water allocation schemes, integrated collaborative governance approaches, collection and management of water data, and policy instruments. In Phase II of the NRTEE?s water program, we will undertake to:

  • Evaluate current water allocation approaches across the country to determine if they remain effective and appropriate means of managing water, and identify opportunities for improvement to water allocation going forward.

  • Explore collaborative governance approaches for integrated water management.

  • Investigate strategic approaches to the collection and management of water-use data.

  • Evaluate a full suite of policy instruments for water management in Canada, from traditional regulatory and voluntary conservation efforts to pricing and market-based instruments.
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