Report April 2007

Navigating the Shoals Assessing Water Governance and Management in Canada

ENERGY, ENVIRONMENT AND TRANSPORTATION POLICY

Navigating the Shoals: Assessing Water Governance and Management in Canada by Greg Hoover, Al Howatson, Jason Churchill and John Roberts

About The Conference Board of Canada

We are: A not-for-profit Canadian organization that takes a business-like approach to its operations. Objective and non-partisan. We do not lobby for specific interests. Funded exclusively through the fees we charge for services to the private and public sectors. Experts in running conferences but also at conducting, publishing and disseminating research, helping people network, developing individual leadership skills and building organizational capacity. Specialists in economic trends, as well as organizational performance and public policy issues. Not a government department or agency, although we are often hired to provide services for all levels of government. Independent from, but affiliated with, The Conference Board, Inc. of New York, which serves nearly 2,000 companies in 60 nations and has offices in Brussels and Hong Kong.

Preface
Navigating the Shoals: Assessing Water Management and Governance in Canada is based on the results of a case study investigation of current institutional arrangements and the incentives, both positive and negative, used to achieve water management goals. It presents the results of this research in a series of recommendations that are likely to be required to enable managers to effectively deliver water services into the future. This is the first report published under the banner of the Leaders Forum on Water Resource Management and Governance, a three-year initiative with a mandate to help resolve policy challenges and conflicts related to water resource management as well as to improve North American governance of this important resource.

2007 The Conference Board of Canada* Printed in Canada All rights reserved ISSN 0827-1070 ISBN 0-88763-769-8 Agreement No. 40063028 *Incorporated as AERIC Inc.
Forecasts and research often involve numerous assumptions and data sources, and are subject to inherent risks and uncertainties. This information is not intended as specific investment, accounting, legal or tax advice.

CONTENTS

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i Navigating the Shoals: Assessing Water Governance and Management in Canada . . . . . . . . . . . . . . . . . . . 1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Governance and Management in Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Positioning the Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Appendix ABibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Appendix BRelated Products and Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

EXECUTIVE SUMMARY

Navigating the Shoals Assessing Water Governance and Management in Canada

At a Glance
The basic services we demand from our water resources are water for drinking, for economic development and for maintaining robust aquatic ecosystems. These needs will determine the policy objectives of water governance and management into the future. Case study research on five Canadian watersheds indicates that water managers do not always have the required policy clarity, mandates for action or information resources to determine the optimal method of delivering water services into the future. This report presents six recommendations for improving Canadian water governance and management practices, citing examples from the case studies. under stress. And in one notable public policy decision, the Government of Alberta recently announced that it would no longer accept applications for new water allocations in the Bow, Oldman and South Saskatchewan River sub-basins. Population pressures, economic growth and a changing climate that is expected to alter the distribution of precipitation in Canada are some of the challenges facing the countrys water institutions. Are these institutions adequately equipped to cope with these and other challenges? Or are we bearing headlong toward the shallows, ill-equipped to navigate the shoals?

Our water institutions arent ready for the challenges ahead, including economic growth and a changing climate.

orth Americas abundant freshwater resources have long supported human development. The rivers and lakes have been navigated for trade and exploration. Theyve been harnessed to provide power for our economies. Theyve helped to feed us and washed away our waste. But the availability of fresh water in boundless quantities can no longer be taken for granted. In many regions of Canada, water quality and quantity are

The Conference Board of Canadas Leaders Forum on Water Resource Management and Governance was formed to study these questions. And the members focused their first research efforts on identifying what works well in Canadaand what needs to be improved. The research looked at five Canadian watersheds. It identified problems and found that water managers do not always have the required policy clarity, mandates for action or information resources they need to determine the optimal method of delivering water services into the future.

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The result is six recommendations aimed at improving governance and management of water in Canada. They include clarifying governance structures, improving interagency cooperation and integrating groundwater and surface water management. They encourage greater use of market-based instruments (such as pricing) to promote more efficient use of water resources. They call for a nested approach to watershed governance. (Nesting tributary governance frameworks within a basin-wide governance framework allows decisions to be made at the most appropriate level by managers who are closest to the issues.) And they call for better prioritizing and budgeting to collect the information water managers need if they are to make better decisions. All of these recommendations are explored in detail in this report.

Managing the expected hydrologic effects of climate change and the resource needs of a robust ecosystem in addition to managing the growing demographic and economic pressureswill prove even more challenging in the coming decades. Canadas current system of institutions and incentives is leaving watershed managers without the resources they need to navigate the shoals ahead. But the forums research also found that policymakers nationwide recognize the challenge and are initiating change. The implementation of the six recommendations outlined in this report will help tomorrows water managers steward Canadas freshwater resources in a manner that can sustain the ecosystem and support economic growth.

Navigating the Shoals Assessing Water Governance and Management in Canada

Smooth runs the water where the brook is deep.
William Shakespeare, Henry VI, Part II of annual precipitation in Canada, leading to floods along some river systems and increased droughts in Western Canada.1 Are we bearing headlong toward the shallows, ill-equipped to navigate the shoals? The Conference Board of Canadas Leaders Forum on Water Resource Management and Governance questions whether Canadas current water institutions and system of incentives are adequately equipped to cope with the multitude of challenges facing them in the near future. Accordingly, forum members have focused the first research efforts of this initiative on identifying what works well in Canada and what needs to be improved. The Leaders Forum on Water Resource Management and Governance
The Leaders Forum on Water Resource Management and Governance is a three-year initiative with a mandate to help resolve policy challenges and conflicts related to water resource management as well as to improve the North American governance of this important resource. Specifically, the Forum brings together business and government participantspolicy-makers, regulators and usersthat have a stake in this important resource. Forum participants enjoy the opportunity to build mutual understanding of the issues and to identify their priorities, guide the Conference Board in its choice of research topics, and review the research in progress.

INTRODUCTION
orth Americas abundant freshwater resources have supported human development for ages. They have been navigated for trade and exploration, been harnessed to power our economies, fed our hunger and washed away our waste. With few exceptions, these freshwater resources have provided human settlement in North America with a bounty of water for drinking and economic development and have maintained robust aquatic ecosystems. These remain the basic services that water resources provide today and will underlie the policy objectives of water governance and management into the future. But the availability of fresh water in boundless quantities can no longer be taken for granted. In a most notable public policy decision, the Government of Alberta announced in 2006 that it is no longer accepting applications for new water allocations in the Bow, Oldman and South Saskatchewan River sub-basins. Furthermore, a changing climate is expected to alter the distribution

Fiona J. Warren et al., Climate Change Impacts and Adaptation, p. 36.

2 | The Conference Board of Canada

This report translates the findings of case study research involving five Canadian watersheds (see box Research Methodology and Case Study Selection) into six recommendations to improve the governance and management of water in Canada: clarify governance structures; encourage a nested approach to watershed governance; improve interagency coordination; integrate groundwater and surface water management; prioritize and budget for adequate information to support decision-making; and explore greater use of market-based instruments. Research Methodology and Case Study Selection
The recommendations in this report have been generated from Conference Board case study research on five distinct Canadian watersheds. Using national and international literature in addition to in-house and Leaders Forum on Water expertise, the Conference Board developed an interview guide to both qualitatively and quantitatively assess the water resource governance and management framework in Canada. The Conference Board interviewed a number of experts from a broad range of stakeholders in each jurisdiction in order to generate insights into the governance and management framework of each watershed. The selection of the five case studies was also a cooperative exercise between the Conference Board and the members of the Leaders Forum on Water. The research project is designed to understand the adjustments that need to be made to Canadian water institutions and incentives to foster the efficient, effective and equitable delivery of future water services. The five watersheds chosen for case study analysis collectively: Illustrate the range of water governance and management problems in Canada, with specific attention to: transboundary challenges, methods of apportioning water supply, maintaining water quality, and groundwater-surface water interactions; Illustrate failures as well as successes in water governance and management; Illustrate water governance and management over a range of geographic densities (rural to urban); Illustrate a range of conflicting demands on the water supply; and Represent the regional diversity of Canada. Ultimately, the five watersheds chosen for detailed case study research are the AbbotsfordSumas Aquifer, Grand River Watershed, South Saskatchewan River Basin, Okanagan Basin and Ottawa River Basin.

The report begins with an outline of the fundamental challenges that exist with water governance and management in Canada, continues with a schematic outline of where and how the recommendations affect Canadian water managers, and concludes with a detailed discussion of the recommendations, citing illustrations from Canadian watersheds.

GOVERNANCE

Governance involves the interactions among structures, processes and traditions that determine how power is exercised, how decisions are taken, and how citizens or other stakeholders have their say.
Institute on Governance 2 The concept of governance embraces the process and structure of decision-making. The three definitions presented in this report (see quotations in this section) contain three fundamentals: power, relationships and accountability.3 It is the interaction of these fundamentals that defines the governance structure of any organization or group of organizations. Fundamentally, by establishing the systems for decision-making and the rights of stakeholders,4 good governance is the platform upon which effective water resource management is built. It establishes the policy objectives that water managers are tasked to achieve and the set of fundamental values and decision-making processes through which to achieve them.

2 3 4

Tim Plumptre and John Graham, Governance and Good Governance: International and Aboriginal Perspectives, p. 3. Ibid. The Canadian Oxford Dictionary defines stakeholder as a person with an interest or concern in something. In the context of this report, stakeholders is an inclusive term to represent persons or organizations such as, but not limited to, governments, farmers, the tourism industry, municipal utilities, hydro-power generators, the ecosystem, watershed managers, Aboriginals and industry.

The Conference Board of Canada | 3

Water governance refers to the range of political, social, economic and administrative systems that are in place to regulate the development and management of water resources and provision of water services at different levels of society.
United Nations Development Programme5 In practice, establishing a clear, consistent framework for decision-making that incorporates the rights and values of all stakeholders is a formidable challenge. Governors of water resourceswhich in Canada are the provincial and federal governments and the Yukon Territory on behalf of Canadian citizensmust establish the framework in the context of three jurisdictional challenges: Intragovernmental Policy Coordination. Government departments and public sector agencies at all levels of government create policies and programs that affect water supply and quality. The sometimes competing interests of these departments and agencies create difficulties with respect to achieving clear and consistent watershed-level goals and policy.

to, water including navigable waters, federal lands, international transboundary issues, the Fisheries Act, and the Canadian Environmental Protection Act. These overlapping responsibilities can create tensions and difficulties with respect to relationships and accountability.
Alignment of Governance Frameworks With Watershed Boundaries. Watersheds do not always fall neatly

into one province or nation. For example, the South Saskatchewan River and subsequently the Saskatchewan River traverses three Prairie provinces and one U.S. state. And the Ottawa River forms part of the OntarioQuebec boundary. Special governance arrangements and a willingness to work cooperatively and collaboratively are required to establish effective watershed-level governance systems in these and other cases.

Governance emphasizes process. It recognizes that decisions are made based on complex relationships between many actors with different priorities. It is the reconciliation of these competing priorities that is at the heart of the concept of governance.
United Nations Human Settlements Programme6

Fundamentally, good governance is the platform upon which effective water resource management is built.

MANAGEMENT
Federal/Provincial Coordination. The provincial gov-

ernments and one territorial government have the constitutional right and responsibility for managing water in Canada. However, the federal government has responsibility for, and jurisdiction pertaining
5 United Nations Development Programme, Energy and Environment: Water Governance.

Water management involves planning, implementing and measuring to achieve policy objectives defined by the governors of water resources. It is at the management level that direct action with respect to water quality and quantity is taken.

United Nations Human Settlement Programme, Shelter for All.

4 | The Conference Board of Canada

As defined in the Canadian Oxford Dictionary, management is the process or an instance of managing or being managed and manage is defined as organize; regulate; be in charge of.7 In the context of this report, management will refer to physical and administrative actions taken by the public and private sectors to implement the policy directives of the governors. Most of the challenges that Canadian water managers face are policy- rather than technology-related and thus a function of the effectiveness of the governance structure of the watershed. In many instances, managers greatest difficulties are 1) identifying clear policy goals for the watershed, and 2) having the mandate to take action. This case study research analysis identifies challenges to water resource management in Canada, such as: Regional Versus Local Interests. In the Okanagan Basin, for example, the watershed is the natural governing region. But the three major municipalitiesVernon, Kelowna and Pentictonview water as a necessity for municipal development. They are therefore wary of ceding their existing authority over the distribution and use of water resources to a regional body.

Water Quality and Quantity Under Stress

Already, a number of populated areas in southern Canadaparticularly in the Westare experiencing stress on water quantity and quality: The South Saskatchewan River drains most of the southern Prairies and is used extensively for irrigation. But the South Saskatchewan is reaching the limits of its available supply. Forecast population growth in Alberta is expected to increase unconstrained water demand by about 50 per cent by 2021, and 100 per cent by 2046.1 Action is required now to avoid severe shortages later. In the Fraser Valley of B.C., the AbbotsfordSumas Aquifer underlies the British ColumbiaWashington State boundary. On the ground, fertilizer use and livestock manures leach nitrates into the aquifer, creating water quality problems. Washington State has enforced groundwater regulations for decades, but B.C. is only now beginning to regulate groundwater.

As a result, efforts to manage the Okanagan Basin at the watershed level are constrained by the lack of an agency with watershed-wide authority. Competing Users. Public managers of a water jurisdiction must allocate water among agricultural users, municipalities, industrial plants, hydroelectricity facilities, recreational users and needs of the ecosystem. When water is plentiful, allocation decisions are not difficult. But when water becomes scarce, allocation can become problematic. Groundwater and Surface Water. Both are integral components of a watersheds resource capacity (i.e., the quality and quantity of water resources). It is therefore vital that they be managed in an integrated manner for the long-term health of the resource. But in many jurisdictions, they are managed by different legislation, and sometimes different entities. For example, in B.C., Crown licences for the withdrawal of surface water have been in effect for a very long time, but the provinces Water Act did not apply to groundwater resources until 2004, when the Ground Water Protection Regulation provisions were passed. A phased implementation approach meant that these water quality regulations did not come into full force until the end of 2005. Unfortunately, these regulations do not yet cover groundwater allocation issues.

The long-term health of groundwater and surface water requires that they be managed in an integrated manner. But in many jurisdictions, this is not the case.

Alberta Environment, South Saskatchewan River Basin Non-Irrigation Water Use Forecasts [online]. (Edmonton: March 2002), [cited March 16, 2007]. p. 5.6 www3.gov.ab.ca/env/water/regions/ssrb/PDF_ documents/SSRB_Non-Irrigation%20_Water_Use_Forecasts.pdf.

Katherine Barber, ed., The Canadian Oxford Dictionary.

Data. Decision-makers need requisite data and information for the decisions they make, whether for allocation decisions at the watershed level or policy decisions within provincial departments. But in many cases, these data are not available, or are not in a usable form. In the case studies examined, there tends to be sufficient information on either water quality or quantity, but rarely on both. For example, there is extensive information on water quantity in the main stem within the Ottawa River Basin, but little on quality. In contrast, for the AbbotsfordSumas Aquifer there is substantial water quality information (because of concerns about nitrate levels), but data are lacking on water quantity.

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GOVERNANCE AND MANAGEMENT IN ACTION

How do these two concepts of governance and management relate to each other? Consider the workings of the Nechako Watershed Council in B.C.s Upper Fraser Basin.8 The governance of the watershed is set out in the constitution of the Council. The constitution emerged after 18 months of sometimes difficultbut invaluable discussion. During that time, decisions were made on who holds the power to make decisions in the watershed, who is accountable for the well-being of the watershed, and how the relationships among stakeholders in the watershed are defined. Ultimately, a process for decisionmaking (i.e., a governance framework) was established.

of water resource governance, the Council provided the regions water managers with a clear goal. This example of revised reservoir operationscharacterized by the strategic purge of lesser quantities of much colder water from the depths of the reservoirshows how clarity in governance and policy directive facilitates improved watershed management.

POSITIONING THE RECOMMENDATIONS

The six recommendations outlined in this report advocate change at many different stages of decision-making. To help communicate how each recommendation relates to the others, and to help the reader place these recommendations in the context of a day-in-the-life of a water manager, the Conference Board designed the exhibit Decision-Making in Watershed Management: Pressures and Actions. This simplified flow diagram indicates where the project recommendations (the numbers) most affect the elements of the diagram, and depict the: organizational guidance and pressures on water managers (the ovals); the actions taken by water managers (the rectangles); and the decisions water managers must make (the diamonds).

Nechako River reservoir operations had maintained the quantity of water needed for spawning, but not the quality.

Management activity in the Nechako Watershed is illustrated by the following action. Strategically, the governors had already agreed that improving spawning conditions in the watershed was an important policy goal of the Council. To this end, Council management was charged with accomplishing this goal, which required dam operators to manage the flow of water downstream and the temperature of the water. Previous reservoir operations to manage the flow rate of the Nechako Rivercharacterized by a mass spill of surface water from the reservoirhad been sufficient to maintain the quantity of water needed for spawning, but not the quality of water (which in this instance was the required temperature of the water). Also, the large volumes of released water had caused significant riparian damage downstream. However, by communicating information about the quantity and quality of the water, and about the downstream stakeholders perspectives, at the appropriate level

Water resource governance and management involve a complex web of interjurisdictional, economic, and environmental policies and priorities.

As revealed by the interviews, and highlighted often in the text of this report, water resource governance and management involve a complex web of interjurisdictional, economic and environmental policies and priorities.

As presented by Hugh Porteous, Alcan Inc., during a meeting of the Leaders Forum on Water Resource Management and Governance.

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Exhibit 1 Decision-Making in Watershed Management: Pressures and Actions

#1 Competing interests (anthropogenic, ecologic, economic) Watershed Governance Framework #2 Public policy and regulatory framework

#3

The project recommendations on the following page are noted in this exhibit where they most affect the organizational guidance and pressures on water managers (ovals), the actions that managers take (rectangles) and the decisions they make (diamonds.)

Water Manager
Clarify and confirm Management goals #4 Acquire data and information for decision-making #5

Source

Design an appropriate framework

Yes

Use market-based instruments for allocation?

#6

No Allocate water to competing demands

Tap Use

Source

Treat and return

Source: The Conference Board of Canada.

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Project Recommendations
RECOMMENDATION #1: CLARIFY GOVERNANCE STRUCTURES

Clarifying governance structures is vital to effective resource management because clarity in governance establishes what the policy directive is. To operationalize the consensus view that the watershed is the most appropriate level for managing water resources, a clear understanding of the roles, responsibilities and powers of the governors is crucial. This is especially important for Canada: regional, provincial, federal and international bodies may have different authorities in a given watershed. In all situations, the respective governors of water resources should develop a robust governance framework to establish clear lines of accountability and authority within the watershed.
RECOMMENDATION #2: ENCOURAGE A NESTED APPROACH TO WATERSHED GOVERNANCE

RECOMMENDATION #4: INTEGRATE GROUNDWATER AND SURFACE WATER MANAGEMENT

To maximize the use of resources of any kind in a manner consistent with sustainable development, decision-makers must understand the long-term availability of and relationships among the resource inputs. Water managers must therefore have the knowledge, authority and capacity to manage jointly groundwater and surface water extraction and use. This is fundamental for identifying the sustainable level of water resource development in a watershed and crucial for enabling water managers to make optimal allocation decisions.
RECOMMENDATION #5: PRIORITIZE AND BUDGET FOR ADEQUATE INFORMATION TO SUPPORT DECISION-MAKING

Extending the concept of clear lines of accountability and authority in a watershed is the recommendation to develop governance frameworks based on nested watersheds. Effectively, nesting tributary governance frameworks within basin-wide governance frameworks allows decisions to be made at the most appropriate level by the managers who are closest to the issue. A nested approach allows users at the tributary level to communicatethrough community advisory bodieslocal concerns and knowledge to regional water managers.
RECOMMENDATION #3: IMPROVE INTER-AGENCY COORDINATION

Good information facilitates good decision-making. Without adequate information, water managers cannot understand the implications of their decisions for the health of the watershed. To support the sustainability of the watershed, information such as the following is required: the annual recharge rate of underground aquifers, the seasonal flows of surface waters, the seasonal consumptive patterns of users, the in-stream needs of the ecosystem, the quality of water upon extraction and return, and the long-term economic growth prospects of the watershed. With limited financial resources available, water managers must prioritize the information collection activities.
RECOMMENDATION #6: EXPLORE GREATER USE OF MARKET-BASED INSTRUMENTS

Improved coordination among the many public sector agencies that have a vested interest in the distribution and use of water resources should assist in the development of consistent policy goals. A clear public policy and regulatory framework will promote better water management decisions. The scale of this inter-agency cooperation should include all the agencies in the watershed, in order to enhance the water managers ability to make decisions for the watershed as a whole. Consider the potential conflict between the views of agencies responsible for environmental protection and industrial development. In the absence of coordinated policy between those agencies, the water managers will be pushed and pulled from different sides. However, if those agencieson a watershed basiscould identify and agree on the balance between the in-stream flow needs and economic development needs of the region, the water managers would have more certainty about the policy directives when making allocation decisions.

Market-based instruments (i.e., tools to encourage efficient use of resources through price) have the potential to assist water managers in allocating an increasingly scarce resource to its highest value use. After the basic needs of the ecosystem and people have been met, utilizing market-based instruments in regions of water scarcity will identify those commercial and industrial interests that place the highest value on water as an input to their operations. Furthermore, establishing a price for water will create an incentive for users to be as efficient as possible, thereby decreasing overall demand for water resources.

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RECOMMENDATION #1: CLARIFY GOVERNANCE STRUCTURES A watershed is the natural unit for governing and managing water resources. Without a comprehensive view of the watershed as an organic system, it is nearly impossible to satisfy all the competing demands of industry, agriculture, commerce, municipalities and the ecosystem. The first recommendation calls for clear rules for coordination among existing bodies to be established at the watershed level, to ensure effective integrated watershed management approaches. Shifting water governance and management to a watershed basis will entail transitional costs in the short term. But the potential long-term benefits of improved supply management, expanded scope for information and data gathering, and the ability to pool resources for watershed-level investment may well be great enough to make it worthwhile to incur such costs.

such an authority in Canada is low because of the multitude of stakeholders with a vested interest in water governance. In practice, it is more likely that a key agency would be established in a watershed and that it would become the centre of watershed-level management activity. The best example of such an agency from this case study analysis of water governance and management in Canada is in the Grand River Watershed in Ontario. The interview results clearly identify that citizens and stakeholders view the Grand River Conservation Authority (GRCA) as the manager of water in that watershed. And while the Authority does not have sweeping jurisdiction over all activities that affect water quality and quantity in the region, it has a clear mandate and specific roles to play in the watershed. It is a facilitator of important partnerships, the champion of consistent watershed policy, the focal point of successful water quality and quantity protection initiatives, and a valuable source of information for decision-makers both within and outside the boundaries of the watershed. An example of the absence of clear mandates and coordinated policies is found in the Okanagan Basin. Interview results suggest that this situation stems from a failure to implement the recommendation of the 1974 Okanagan Basin Study 9 to create a single governance authority for the entire basin, complete with requisite resources and powers. This failure has had a major impact on the Okanagan Basins ability to identify the watersheds priority issues and to assign clear roles and responsibility for action. The resulting absence of timely and accurate basin-wide data is a consequence of a lack of centralized authority, as is the failure of agreement on basin-wide goals, principles and policies. Matters are made worse by jurisdictional issues between the federal and provincial governments, and competition among local governments within the basin for economic development projects and infrastructure funding.
9 At the time, the report was considered the most comprehensive water basin plan ever developed, and the recommendations not implemented continue to resonate and demand attention.

The public perceives the GRCA to be the watchdog of the watershed and the single window to water issues therein.

Implementing this recommendation could be part of the solution to the lack of inter-agency coordination, as discussed further in Recommendation #3. The initial step to clarifying the governance structure is achieving agreement among the stakeholders to who: owns the water resources; will govern the water resources; and will manage the water resources in a given watershed. This is a difficult but invaluable discussion, as was referenced earlier in the Nechako Watershed Council example. Once the owners, governors and managers are identified, they can begin to establish the decisionmaking framework and information feedback process. The ideal outcome of doing so is the creation of a single water management agency with authority and jurisdiction over all facets of water use, treatment and conservation. However, the likelihood of establishing

The Conference Board of Canada | 9

RECOMMENDATION #2: ENCOURAGE A NESTED APPROACH TO WATERSHED GOVERNANCE Development and action with respect to Recommendation #2that watershed governance arrangements and management strategies be established via nested hydrologic units10enhance the benefits of Recommendation #1. (The map in Exhibit 2 conceptualizes a nested watershed governance arrangement in the Ottawa River Watershed.) In practice, this requires that a high-level governance structure be agreed upon among the provincial and international jurisdictions in order to establish a basis and forum for the management of water resources in the region. Next, management bodies should be established at the appropriate level of the watershed to execute the directives of the governors and to meet the needs of competing demands on the water resource. Further, subbasin working groups or advisory bodies should form the divisions of management to identify, monitor and address priorities in the watershed. It is at this sub-basin level that local groups should be engaged to assist the management agency in viewing the watershed from the bottom up. Two examples of this effort to nest hydrologic units in the same governance structure can be found in the case study regions. At the highest level, the Grand River Watershed is part of the Great Lakes Basin, which on the whole is governed by the International Joint Commission (a creation of the Canadian and U.S. federal governments). The next level of governance is the province of Ontario, which passed the Conservation Authorities Act, 1946, in response to water quality and broader environmental concerns arising from natural resource extraction and industrial growth. While supported by key Ontario ministries, the GRCA11 is the management body responsible for the watershed. Within this authority there are a number of programs and projects to engage local interests and to seek information from the grassroots levels.
10 For example, management of a tributary river is nested within the governance and management of the main river system. 11 Formed in 1966 as it exists today, via the merger of the Grand Valley Conservation Authority and the Grand River Conservation Commission.

The second example from the case studies is the governance arrangement of the Prairie watersheds. With the provincial jurisdictional overlap addressed via the Prairie Provinces Water Board (PPWB), Alberta and Saskatchewan are both establishing water management agencies along nested hydrologic units. (See Exhibit 3.) In this nested agency approach, local stakeholder participation and knowledge is as valuable in the stewardship and strategic planning for watersheds as the knowledge, analytical capacity and financial resources of the supporting levels of government.

Achieving an effective level of coordination and cooperation among public sector agencies is fundamental to addressing the water resource governance challenges in Canada. Most watersheds in populated southern regions of the country contain multiple political jurisdictions

RECOMMENDATION #3: IMPROVE INTER-AGENCY COORDINATION Achieving an effective level of coordination and cooperation among public sector agencies is fundamental to addressing the water resource governance challenges in Canada. Most watersheds in populated southern regions of the country contain multiple political jurisdictions, be they municipal, provincial or international. Notable examples of this challenge are the watersheds that cross the Canadian Prairies, but this may also be the region in which the challenge has been met most successfully. Prior to 1930 in the Prairies, water was a federal responsibility and the principle of first in time, first in right (FITFIR) was applied regardless of provincial boundaries as they now exist. However, after jurisdiction over water resources was transferred to the provinces, there was no longer a single manager of water on the Prairies. This led to the establishment of an agreement among the Canadian, Alberta, Saskatchewan and Manitoba governments to form the PPWB in 1948. The original purpose of the PPWB was to recommend the best use

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Exhibit 2 Why a Nested Approach to Watershed Governance?

The exhibit below shows the major sub-basins of the Ottawa River watershed and helps illustrate how a nested approach to governance could be established. The water quality and quantity in the Blanche sub-basin, for example, influence the quality and quantity of the water in the Upper OttawaKipawa sub-basin, the Ottawa River downstream, the St. Lawrence River and, ultimately, the Atlantic Ocean. It follows that the governance and management of water resources in the St. Lawrence River should be informed by the circumstances in the Blanche sub-basin, and vice versa. This could be accomplished by the creation of a single management body at the level of the Ottawa River watershedwith authority and jurisdiction over all facets of water managementor by the creation of mandatory communication requirements, information feedback loops, and stakeholder engagement protocols among the existing conservation authorities and provincial departments. However it is accomplished, nesting water governance and management according to watershed boundaries will facilitate the development of consistent policy direction and better integrated watershed management.

Sources: The Conference Board of Canada; Map courtesy of Ottawa Riverkeeper.

Exhibit 3 Alberta and Saskatchewan Water Governance

Prairie Provinces Water Board

Province of Saskatchewan Province of Manitoba Government of Canada

Province of Alberta

Alberta Environment

Saskatchewan Environment

Alberta Water Council Mandate: To provide a platform of excellence where governments and stakeholders apply their combined knowledge and expertise to issues affecting the management of water resources in Alberta. The Council will also provide guidance on the implementation of Water for Life: Albertas Strategy for Sustainability.

Watershed Planning Advisory Councils Mandate: To engage governments, stakeholders, other partnerships, and the public in watershed assessment and watershed management planning, considering existing land and resource management planning processes to advise decision-making authorities.

Watershed Stewardship Groups Role: Community groups (often with the support of municipal and Aboriginal governments, conservation agencies and local stakeholders) carry out water stewardship activities. These activities are the foundation of watershed management and include improving water quality by relocating livestock off the creek, improving fish and other wildlife habitat, restoring riparian and wetland areas for enhanced water storage, and participating in land-use planning initiatives.

Saskatchewan Watershed Authority Mandate: To manage and protect water quantity and quality. The Authority is responsible for the allocation of ground and surface water inventory and analysis of water sources and the administration and control of all water infrastructure including operations and planning and the maintenance of provincially owned water management infrastructure. The Authority is also responsible for managing watershed and aquifer planning, developing partnerships and projects that help provide healthy watersheds and providing assessment and monitoring practices that ensure the protection and restoration of the provinces water sources.

Watershed Planning Groups Role: These groups have begun to be established in Saskatchewan watersheds since the formation of the Saskatchewan Watershed Authority in 2002. Grassroots stewardship of Saskatchewans water resources is just beginning to make a contribution to the implementation of the provinces long-term water resource strategy.

The Conference Board of Canada | 11

Sources: The Conference Board of Canada; Government of Alberta, Enabling Partnerships: A Framework in Support of Water for Life: Albertas Strategy for Sustainability, www.waterforlife.gov.ab.ca/docs/EnablingPartnerships.pdf [cited March 16, 2007]; Saskatchewan Watershed Authority website, www.swa.ca/AboutUs/WhatWeDo.asp [cited March 16, 2007].

12 | The Conference Board of Canada

of interprovincial water and recommend water allocations between the provinces.12 Changes to its mandate were made in the 1960s as requests for water allocations exceeded the ability of the PPWB to execute long-term planning. As a result, the respective governments developed a Master Agreement on Apportionment in 1969. This agreement states that each jurisdiction is responsible for passing through to its eastern neighbour 50 per cent of the natural eastward flow of water in its region. Broadly defined, natural flow is the volume of water that would flow in a particular river if that river had never been affected by human activity. While calculating this amount can be difficult, the result is straightforwardall three provinces end up with approximately equal shares of the total water flow, even in drought periods.

are clearly communicated among the partners so that the PPWB can monitor compliance with the Master Agreement on Apportionment. Unfortunately, the type of collaboration witnessed in the Prairies is not the norm; inter-agency cooperation needs to be improved in other Canadian watersheds. One example is the Ottawa River Basin. While there is a very effective agency to manage the flow of water on the riverthe Ottawa River Regulation and Planning Board was created primarily to prevent flooding in Montral there has been a notable lack of cooperation to date between the governments of Ontario and Quebec with respect to water quality. This may be turning around, however, as the Agreement between the Government of Quebec and Ontario concerning Transboundary Environmental Impacts establishes a formal information exchange and joint cooperation between the provinces on transboundary pollution issues.14 The Okanagan Basin is another region of Canada in which improved coordination between agencies could substantially benefit the watershed. The basin is subdivided into three regional districtsNorth Okanagan, Central Okanagan and OkanaganSimilkameencentred respectively on the regions three major cities: Vernon, Kelowna and Penticton. The regional groups have combined their efforts to create the Okanagan Basin Water Board (OBWB) consisting of three representatives (who are elected local government officials) from each regional district.15 The current and historical focus of the OBWB has been primarily on controlling the invasive Eurasian milfoil and providing grants to local governments for liquid waste treatment infrastructure. But the OBWB, with agreement from the three regional districts, has broadened its focus to include water conservation and water quality. For example, these districts have empowered the OBWB to initiate a regional water management approach by forming the Water Stewardship Council. This groupmade up of government, private sector and non-governmental organization (NGO) membersacts

Unfortunately, the type of interagency collaboration witnessed in the Prairies is not the norm.

Perhaps the greatest strength of the PPWB governance arrangement is the duty to cooperate.13 Meeting twice a year and composed of one representative from each of the provinces and two representatives from the federal government, the PPWB is a mechanism that demands participation, and with participation comes knowledge and understanding. Each region recognizes that water development activities can impact its neighbours and that its own prosperity is strengthened by the prosperity of those neighbours. There are provisions in the mandate of the PPWB that call for coordination and planning across the watershed. For example, if one party to the agreement plans to dam a river, there is an obligation to ensure that the construction and operation of the infrastructure would not adversely affect other parties in the watershed. The PPWB has the additional responsibility to ensure that the impacts of any development in the watershed
12 Prairie Provinces Water Board, home page. 13 Wayne Dybvig, Prairie Provinces Water Board. Personal communication. August 2005.

14 Ministry of the Environment of Ontario and Ministre du Dveloppement durable, de lEnvironnement et des Parcs du Qubec. Ontario and Quebec Pledge to Cooperate. 15 Okanagan Basin Water Board, Board of Directors: 19 August 2003.

The Conference Board of Canada | 13

in an advisory role, and provides technical and policy recommendations to the OBWB on the management of basin water resources.16 However, the municipal governments of Vernon, Kelowna and Penticton (in competition with each other) view access to water as critical to their urban development. They are therefore unwilling to cede to the OBWB the authority and resources necessary to fully manage the basins water resources on a watershed basis. The Grand River Watershed could also benefit from improved inter-agency coordination, in this instance between the Grand River Conservation Authority (GRCA) and the Ontario Ministry of the Environment. For example, there is an absence of formal mechanisms for stakeholder engagement in policy-making. The interviewees reported that while the GRCAs insight and experience are often sought by provincial departments, in this case the GRCA must attempt to lead from behind. Ideally, the local expertise and knowledge generated through the work of the GRCA would be communicated to the relevant provincial departments during regular policy reviews. Unfortunately, the last time the Ministry of the Environment completed a watershed strategy for the Grand River was 1982. RECOMMENDATION #4: INTEGRATE GROUNDWATER AND SURFACE WATER MANAGEMENT The fourth recommendation that emerges from the case study investigations encourages the integration of groundwater and surface water management in both the allocation and source water protection activities for the watershed. In a watershed, the quality and quantity of surface water and groundwater are interdependent. For example, in an agricultural region such as B.C.s Fraser Valley, water quality problems can frequently be traced to excessive nitrates leaching into groundwater and surface water from animal manure storage and field application of chemical fertilizers. In the AbbotsfordSumas Aquifer, the aquifer (groundwater) underlies the international border between B.C. and Washington State; thus the management of the surface water and groundwater resources on both sides of the border could naturally be considered a joint responsibility.
16 Okanagan Basin Water Board, www.obwb.ca/.

However this has not been the case historically, though recent legislation in B.C. is beginning to equip water managers to further the integration of water resource management. New groundwater and drinking water protection regulations are in the developmental stages under the Water Act and Drinking Water Protection Act, and the Ground Water Protection Regulationswhich came into force in late 2005represent the first phase of an envisioned three-phase legislative framework to protect water quality and to improve hydrologic data collection and reporting. In Washington State, by way of contrast, state management of the resource is strictly governed by permitting both annual and instantaneous quantities through a long-established water rights system that applies to both groundwater and surface water. The state has enforced groundwater regulations since 1945.

Management of the surface water and groundwater resources should be integrated because their quality and quantity are interdependent.

With respect to source water protection, one risk to the Grand River Watershed that has not been mitigated is the potential destruction of its moraines (i.e., the disruption of moraine water recharge areas from economic development). Though covering a relatively small area, these moraines are significant recharge zones for the groundwater of the region and are therefore critical to the watersheds long-term health. At the moment, Ontarios Aggregate Resources Act provides little assurance that the ecological importance of the moraines will be a significant consideration in any land-use decision. RECOMMENDATION #5: PRIORITIZE AND BUDGET FOR ADEQUATE INFORMATION TO SUPPORT DECISION-MAKING The fifth recommendation is that priorities for data collection, and adequate budgets for such collection, need to be set. Watershed managers and provincial policy-makers need adequate data and information to support the decisions they make since monitoring and measuring tasks are critical to achieving management goals. The adequacy of information available to water managers varies across provinces and watersheds. A number of examples from the case studies illustrate this variability.

14 | The Conference Board of Canada

In Saskatchewan, performance measures are clearly set out in the annual performance plans of the Saskatchewan Watershed Authority. Monitoring of and information on water quantity is adequate, but Saskatchewan Environment is working on improvements to water quality measures. In Alberta, the watershed planning advisory councils have begun to develop outcome and indicator measures for planning; for example, the Bow and Oldman councils have released state of reports. Alberta has established effective monitoring programs and, by using watershed planning advisory councils, has arms-length groups responsible for reporting to the public. A great deal of socio-economic information on water use is available to policy-makers and managers. The province is working to improve measures of aquatic health. In B.C., the fact that only limited data are available in the AbbotsfordSumas Aquifer has hampered the development of water management plans. In the past, there has been a significant bias in data collection toward water quality over quantity. Ideally, the groundwater and drinking water protection regulations that have come into force via the Water Act and Drinking Water Protection Act will improve the timeliness and accuracy of information needed for managing the aquifer and will help in transforming historical raw data into a usable form. Perhaps due to high expectations within the GRCA, interviewees do not feel that a robust system of indicators and outcome benchmarks is in place for the quality and quantity of water in the Grand River Watershed. Part of the reason is that it can be very difficult to isolate and then quantify cause-and-effect results for some management actionsfor example, the effect of planting 2 million trees in the watershed. Established indicators have been measured and reported for over 30 years, yet interviewees express discontent with the quality of information that these provide. At the same time, interviewees note that the region has an excellent high- and low-flow indicator set, and highly effective response plans. Interviewees also note that stakeholders in the watershed are well aware of the limitations of the current system and are taking measures to improve it.

In the Ottawa River Basin, although data documenting and evaluating take place, there is little integration of information or development of benchmarks for the entire basin. Federal, provincial and municipal monitoring operations, combined with the efforts of NGOs such as the Ottawa Riverkeeper and the Conseil rgional de lenvironnement et du dveloppement durable de lOutaouais, provide monitoring of water quality and quantity. However, these NGOs do not offer formal third-party audits on monitoring. The Ottawa River Regulation and Planning Board collects and disseminates high-quality data on water quantity and flows, but does not have the budget or the jurisdiction to collect water quality information. To some degree, quality information is collected by the respective provinces for tributaries of the Ottawa River, but to date no formal mechanism exists to share that information basin-wide for the purpose of developing a comprehensive picture of water quality in the Ottawa River.

The adequacy of information available to water managers varies across provinces and watersheds.

To assist water managers in their efforts to prioritize and budget for adequate information, the field of decision analysis can help managers estimate the value of information in different decision contexts. Decision analysis may be useful to provincial policy-makers and watershed managers as they consider the information they need, and the costs and benefits of acquiring it. RECOMMENDATION #6: EXPLORE GREATER USE OF MARKET-BASED INSTRUMENTS The final recommendation from the work of the Leaders Forum on Water Resource Management and Governance is a call for greater use of market-based instruments in watersheds facing scarcity, in order to reveal the economic value of water and to allocate water to its use of highest value. Currently, permits to take water are the dominant allocation tool in Canada. (See Table 1.) In many respects, this reflects the reality that water scarcity has not been an issue in the past. Scarcity is, however, creeping up on Canadian watersheds and new tools are needed to aid in the allocation of water for the greatest net benefit to society.

Table 1 Use of Water Allocation Instruments in the Case Study Watersheds

Ottawa River Basin Grand River Watershed (Ont.) Ontario
Only for large amounts, over 50,000 litres Little macro-level analysis Used extensively Based on historical patterns: FITFIR Used for: underground water serving more than 20 people or over 75 m3/day bottled water

South Saskatchewan River Basin Alberta Saskatchewan

The Saskatchewan Water Authority (SWA) approves allocations for municipal, industrial and agricultural uses FITFIR has been withdrawn (but it still applies to licences issued pre-1984) Embedded in the 2003 Water for Life strategy Seen as a critical need in the coming years The SWA has developed the Water Conservation Strategy

Instrument
Allocation tool used throughout the province Licences for surface water but not groundwater

Abbotsford Sumas Aquifer (B.C.) Quebec

Okanagan Basin (B.C.)

Withdrawal permits

No Regional health authority permits water systems (including wells), with a focus on water quality concerns and treatment

Long-term conservation planning

Conservation is promoted, but few enforcement mechanisms are available

Framework of the GRCA Level of aggressiveness of these plans varies within the watershed

Some use of long-term planning, especially for fisheries management, but generally underutilized

Jurisdiction over tributaries Few protected areas External groups advocating for greater action

Some activity

The Conference Board of Canada | 15

Utility full-cost accounting

No

The Sustainable Water and Sewage Systems Act, 2002, makes it mandatory for municipalities to assess and costrecover the full amount for water and sewer services

Operational cost accounting is typically used

No

Used extensively by some municipalities, related to infrastructure

Not extensively used, but beginning in some municipalities In the Water for Life strategy

Used by some municipalities

(contd on next page)

Table 1 (contd) Use of Water Allocation Instruments in the Case Study Watersheds
Ottawa River Basin South Saskatchewan River Basin

Instrument
Programs at the municipal level Metering is in place Vernon has 100 per cent of its residential users metered, used water is reclaimed, and all waste water is subject to secondary and tertiary treatment Kelowna has an active education and conservation program and has witnessed a decline of 19 per cent in peak water demand Kelowna has introduced increasing block rates for consumers, combined with an education campaign The OBWB is promoting more metered water pricing The Regional District of North Okanagan is encouraging water conservation with a high commodity price and a low base price Discussion only, but the concept has potential No, there is no water scarcity No, there is no water scarcity Metering within Ottawaproper, but not the rural sections of the city No, but possible in the future Not used to allocate water The Alberta Water Council is exploring the potential use Public education campaign in Ottawa Personalized evaluations and impact studies Municipal action The Department of Agriculture works with irrigation projects in rural areas Metering and reporting for most licences

Abbotsford Sumas Aquifer (B.C.) Ontario Quebec Alberta Saskatchewan

Grand River Watershed (Ont.) Okanagan Basin (B.C.)

For large industrial users Metering for municipal and industrial uses, and large irrigation projects

16 | The Conference Board of Canada

Demand-side management programs

No

Pricing of water (not infrastructure)

Abbotsford incurred the cost of extending the municipal supply system into rural areas primarily due to nitrate issues; a utility fee is levied No, the priority allocation system is: life (including human, animal and plant) commerce aesthetic (washing cars, watering lawns)

No

Not used to allocate water Industrial users pay a variable royalty to the province Royalties imposed on hydro producers (SaskPower) provide about 50 per cent of the SWAs annual budget Transfers of licences can be approved There is a private market for temporary trading between FITFIR allocations No price transparency (same as a land transaction) Trading of allocations between licensees is not permitted (but 95 per cent of the provincial supply is not constrained)

Trading of water allocations

No

Source: Leaders Forum on Water Management and Governance, The Conference Board of Canada.

The Conference Board of Canada | 17

Canadas western provinces, where scarcity is especially acute, are leading the way in utilizing market-based instruments. The City of Kelowna in the Okanagan, for example, has implemented an increasing block rate scheme for water consumption. Although it is not direct pricing of water, this scheme is a method of encouraging water conservation, charging users morenot lessfor increasing incremental use. In addition, the South East Kelowna Irrigation District implemented a demand management scheme for the agricultural community in 1994. The initial phase consisted of an education campaign. This was followed by a conservation plan that combined water allotments with metered rate penalties for excessive water use. By 1998, the program had cost $784,000 but had succeeded in freeing up $1.2 million worth of water rights. By 2004, the strategy had succeeded in reducing average demand conditions to 27.4 per cent below the 29-year average consumption rate.17 In the Alberta portion of the South Saskatchewan River Basin, the use of market-based instruments is being taken a step further. Largely due to the complete allocation of water resources under FITFIR administration and allocation principleswhich Alberta opted to retain under its Water for Life strategythe provincial government allows some water users to temporarily trade or permanently transfer water allocations within a river basin (such as the BowOldman). To date, six transfers have been approved, with about 20 more in the process. The recipients of the transfers have been three municipalities, a large rural pipeline water cooperative, a cattle feedlot and a specialty crop grower.18 Typically, there are two or three licences per irrigation district, but hundreds of users. Private contracts exist, with the knowledge of the district, to allocate water to its highest value use. Although these contracts are private, and contract values are not required to be made public, knowledge of the contract price per volume of traded water does reveal the value of water to some rural users. Similar situations exist when municipalities hold two or three licences and provide water use contracts to industrial and domestic users within their boundaries.

In addition, a process called assignments provides for the temporary sharing of water allocations between licensees to mitigate the impacts of drought and supply shortage due to the application of FITFIR. In 2001 this was used successfully by eight irrigation districts, 10 municipalities, significant industries and water cooperatives to collectively share a 40 per cent shortage in water supply. Approximately 600,000 acre-feet of water were shared over a 300-km wide district, from Waterton Lakes National Park in the west to Medicine Hat in the east. The assignments were privately constructed with Alberta Environment overseeing the legal and environmental issues.19 Although FITFIR has come under criticism, it nevertheless resolves the issue of priority rights to water, thus reducing court cases over water rights. True pricing of water is being explored by the Alberta Water Council.

Canadas western provinces, where scarcity is especially acute, are leading the way in utilizing market-based instruments.

17 Toby Pike, Agricultural Water Conservation Program Review, pp. 3, 6, 10. 18 Alan Pentney, Alberta Environment. Personal communication. November 20, 2005.

The Conference Board researchers discussed the prospect of market-based water-trading in the Okanagan Basin with project interviewees because of the particular stresses and changing development profiles within the region. Currently the agricultural base is allocated 70 per cent of the available water, but a fast-growing urban population displaying high per capita water use patterns is placing significant stress on the remaining water in the basin. By some estimates, all of the available water in the basin will be allocated in the next 15 years. Similar to the situation in the South Saskatchewan River Basin, the reality of scarce resources requires new methods of resource allocation that communicate the limited availability of the resource. In this situation, the Conference Board considers market-based water pricing to be a tool with potential. Price will identify those uses of water that have the highest value and will provide an incentive for all sectors to improve their efficiency of water consumption. The first consideration of designing what will be a very complex market is the in-stream needs of the basin. The second consideration is the social priorities of the basin.
19 Ibid.

18 | The Conference Board of Canada

Given a strong desire to support the agricultural foundations of the region to maintain the traditional character of the Okanagan Valley and its ability to produce food locally amid continuing pressures of urban development, one option may be to grant agricultural users tradable water rights at, or near, their historical levels of use. These water rights would then become an asset for farmers, ensuring that they have sufficient water for their operations. At the same time, this arrangement would establish economic driversto agricultural users on the supply side and to commercial, industrial and residential users on the demand sideto conserve water. Farmers and orchardists would have incentives to invest in conservation practices in order to trade, permanently or temporarily, any surplus water to the marketplace. And commercial, industrial and residential users would have incentives to conserve in order to decrease the cost pressure of water on their financials. Ultimately, more water resources would be available to all sectors in the basin as the efficiency of water use improved. The party that offers water to the marketplace today may also be the party that buys water resources in the future.

CONCLUSION
The implementation of the above six recommendations for improving Canadas water governance and management institutions and incentives will help tomorrows water managers steward the nations freshwater resources in a manner that can sustain the ecosystem and economic growth. To do this, water managers need: clear governance structures to establish consistent and consonant policy goals within a watershed; a nested approach to watershed governance to incorporate the knowledge and expertise of managers at all levels into watershed decision-making; improved inter-agency coordination to limit and cope with the competing interests of government departments at all levels;
integrated management of groundwater and surface water to establish the long-term availability and limitations of a watersheds resources; adequate information and sufficient budgets to conduct the monitoring and measuring required for effective and sustainable management and stewardship of Canadas water resources; and to explore greater use of market-based instruments as a means of allocating increasingly scarce resources to their highest social and economic value.

Canadas current system of institutions and incentives will force watershed managers to navigate the shoals ahead without the resources to determine the best course.

In contrast, the provinces of Ontario and Quebec, largely due to an abundant supply of water, have not yet found it necessary to propose the use of market-based instruments to aid in the optimal allocation of water resources. The priority system of allocation in Ontario is similar to that in Saskatchewan. In the rare situations of water scarcity, the primary goal is maintaining life (including human, animal and plant life), the secondary consideration is commerce, and aesthetic uses (for example, washing cars, watering lawns) are the last consideration. Quebec currently manages its water resources through permitting and some long-term conservation planning, although pricing water at some point in the future, according to interviewees, is not out of the question.

This case study research analysis reveals that Canadian water managers face significant challenges in maintaining Canadian water quantity and quality today. And managing the expected hydrologic effects of climate change and the resource needs of a sustainable ecosystemin addition to managing growing demographic and economic pressureswill prove even more challenging as we approach the second and third decades of the 21st century. It is clear that we are not bearing down the river of plenty without the opportunity to map future hazards. However, Canadas current system of institutions and incentives will force watershed managers to navigate the shoals ahead without the resources to determine the best course. Fortunately, the case study research also reveals that policy-makers nationwide are beginning to initiate changes. But if these preliminary steps do not adequately equip Canadian water managers to deliver water services well into the future, our riverboat may yet run aground in the decades ahead.

APPENDIX A

Bibliography
Alberta Environment. South Saskatchewan River Basin Non-Irrigation Water Use Forecasts [online]. Edmonton: March 2002 [cited March 16, 2007], p. 5.6. www3.gov.ab.ca/env/water/regions/ssrb/PDF_ documents/SSRB_Non-Irrigation%20_Water_Use_ Forecasts.pdf. Barber, Katherine (Ed.). The Canadian Oxford Dictionary. Toronto: Oxford University Press, 1998. Ministry of the Environment of Ontario and Ministre du Dveloppement durable, de lEnvironnement et des Parcs du Qubec. Ontario and Quebec Pledge to Cooperate on Air Pollution, Smog and Climate Change. Press release. Toronto: June 26, 2006. Okanagan Basin Water Board. Board of Directors: 19 August 2003 [online]. [Cited December 16, 2005.] http://nord.ca/services/obwb/docs/obwbdirectors.pdf. Okanagan Basin Water Board [online]. [Cited March 16, 2007.] www.obwb.ca/. Ottawa Riverkeeper. Ottawa Riverkeepers River Report, issue 1. Ottawa: Author, May 2006. Pike, Toby. Agricultural Water Conservation Review. Kelowna: South East Kelowna Irrigation District, 2005. Plumptre, Tim, and John Graham. Governance and Good Governance: International and Aboriginal Perspectives. Ottawa: Institute on Governance, December 3, 1999. Prairie Provinces Water Board. Home page [online]. [Cited March 16, 2007.] www.pnr-rpn.ec.gc.ca/water/ fa01/fa01s01.en.html. United Nations Development Programme. Energy and Environment Water Governance [online]. Website content. [Cited March 16, 2007]. www.undp.org/water/ about_us.html. United Nations Human Settlement Programme. Shelter for All [online]. Website content [cited March 16, 2007]. www.unhabitat.org/content.asp?typeid=19&catid= 25&cid=2097. Warren, Fiona J., et al. Climate Change Impacts and Adaptation: A Canadian Perspective. Ottawa: Government of Canada, August 2004.

APPENDIX B

Related Products and Services

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Go to www.e-library.ca to see other informative reports that would interest you. Phone 1-866-242-0075 for information on related products and services.

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