Over the last two decades, sales of bottled water have spectacularly flourished and many countries have experienced increasing agricultural and sanitation water shortage.1 In this context, water exportation represents a lucrative opportunity in Canada. Indeed, while the country’s inhabitants account for less than 1% of the world’s population, its rivers discharge close to 9% of the globe’s renewable water supply.2
Several attempts to export Canadian water in bulk (e.g.: British Columbia 1991 Sun Belt project and Ontario 1998 Nova Group project) have been struck down by provincial authorities following strong public opposition. The Federal Government and every Canadian province have enacted legislation preventing or regulating bulk exportation of water.3 Hence, on February 10, 1999, Ottawa announced its strategy to ban bulk withdrawal of water from international boundary waters, a prohibition that came into force on December 9, 2002.4
More recently, together with eight U.S. states5, Québec and Ontario signed the Great Lakes—St. Lawrence River Basin Sustainable Water Resources Agreement which prevents significant water withdrawals from the basin common to these jurisdictions. Following this agreement, Queen’s Park adopted on June 4, 2007 the Safeguarding and Sustaining Ontario’s Water Act, which modernizes the province’s water withdrawal permit system and empowers the Government to require the payment of charges from water users. In Québec, the legislative response to this agreement was tabled on June 5, 2008.
With 20% of Canada’s freshwater surface area, Québec enjoys more freshwater area than any other province in the country.6 In 1999, the province enforced a temporary moratorium on the exportation of water. The Water Resources Preservation Act prohibited the transfer of water outside of Québec, with a notable exception for "water taken […] to be marketed as water intended for human consumption, insofar as the water is packaged in Québec in containers of 20 litres capacity or less".7 The moratorium was renewed on a permanent basis in 2001. Moreover, Québec adopted in 2002 the Groundwater Catchment Regulation, which requires groundwater catchment project to be authorized either by the Minister of Sustainable Development, Environment and Parks ("Minister of Environment") or by the municipality of the territory in which the project will be conducted.8
Bill 92 authorization scheme
On June 5, 2008, Québec Minister of Environment tabled Bill 92 - An Act to affirm the collective nature of water resources and provide for increased water resource protection ("Bill 92") in the National Assembly. This Bill would replace the Water Resources Preservation Act and maintain the moratorium on the exportation of water. Under Bill 92, both surface and groundwater withdrawal projects would be subject to conditional authorization from the Minister of Environment. Ongoing projects would also need to be authorized starting 10 years following the Bill’s entry into force.
Various water withdrawal activities would be exempt from authorization, such as those temporarily required for emergency, humanitarian or civil protection purposes, as well as other activities to be determined by regulation. Bill 92 also exempts from authorization withdrawals of less than 75,000 litres (the equivalent of 2 above ground swimming pools) per day, except under specific circumstances including when the water extracted is to be sold or used in the processing of food or beverages or transferred out of the St. Lawrence River Basin.
In defining the conditions of authorization, Bill 92 requires the Minister of Environment to give priority to satisfying public health, sanitation, civil protection and drinking water supply needs over any other consideration. The Bill provides that the Minister’s decision "must also aim to reconcile" the needs of aquatic ecosystems with those of the economy.
Water withdrawal authorizations would be issued for 10 years, except when the Minister of Environment deems that a longer term would serve public interest or in cases prescribed by regulation. The renewal may be subject to a new environmental impact assessments and/or additional conditions or prohibitions.
A potential source of concern for industries is the proposal to grant Québec Government with the power to unilaterally and discretionarily modify the conditions of the authorization or even order permanent cessation of water withdrawal projects without any possibility of compensation for the concerned industry. This power, however, is limited to cases where the Minister of Environment, based on new or additional information that became available after the authorization was issued, is of the opinion that the water withdrawal presents a serious risk for public health or aquatic ecosystems.
Bill 92 civil liability regime
Bill 92 would also institute a new civil liability scheme with respect to water pollution. Section 7 of the Bill provides that the Attorney General of Québec may institute an action against any person who damages water resources with a view to obtaining, at the Government’s discretion, either restoration of the natural resource, reparation through compensatory measures or reparation by compensation to be paid to the province’s Green Fund. Liability could be triggered when damage "is caused by a person or through a person’s fault or illegal act", which could potentially allow actions to be brought even against industries that have impacted a water resource through authorized activities. This liability regime could generate significant legal insecurity for the industry.
In an attempt to reduce this uncertainty, Bill 92 allows Québec Government to regulate the criteria to be considered when determining what constitutes a damage to water resources and the compensation payable in relation thereto. The Attorney General of Québec would also have to file his action within 10 years from the date on which the Minister of Environment became aware of the environmental damage.
Bill 92 is currently under study by the National Assembly’s Committee on Transportation and the Environment. It is to be expected that several modifications may be proposed to this Bill. Following its adoption, Quebec Ministry of Environment plans on harmonizing Bill 92 with the Groundwater Catchment Regulation by broadening the latter so as to cover both groundwater and surface water withdrawal. Québec Minister of Environment has also publicly announced that the Government will consider imposing royalties on the bottling industry in 2009 pursuant to a new regulation. These royalties are expected to provide the province’s Green Fund with $ 5,5 million annually.
Québec’s Bill 92 is the latest in a series of provincial and federal legislation that aims at more stringently regulating water withdrawal activities. While the proposed Bill may be a source of concern for water-consuming industries, its severity has yet to be determined. Indeed, the strictness of the forthcoming regulatory scheme could greatly depend on whether Québec Minister of Environment decides to exercise its discretionary powers timidly or forcefully.