On October 18, 2013 the BC government released a long-awaited “proposal” to replace the 100+ year-old Water Act. Four years in the making, the lengthy description of what the new Water Sustainability Act would be and how it would work is available here. No draft legislation has been provided, and the Province continues to seek public input until November 15, 2013. However, in light of the Province’s plan to enact the new statute in spring 2014, it seems clear that a number of key elements of the new regime have been largely if not conclusively decided. This blog summarizes some of them.
BC continues to be one of the few jurisdictions that does not comprehensively regulate groundwater, so it is not surprising that a centrepiece of the new Act would be the establishment of a framework to regulate the extraction and use of groundwater. The proposed framework for groundwater regulation would largely parallel the framework for surface water, thus recognizing the common interactions between both. In particular, many groundwater uses would be made unlawful in the absence of a groundwater use license for which annual fees would be assessed, thereby establishing a statutory basis for groundwater rights. As with surface water rights, groundwater rights would be prioritized on a “first in time, first in right” basis (FITFIR) and not, for example, on the basis of the purpose to which the water would be used (but see FITFIR heading below). Categories of groundwater use that would be captured by the new regime would include water supply wells, dewatering wells and shallow water source wells. Exempted categories of groundwater use under the new regime would include domestic use (except as part of a water sustainability plan or area-based regulation), geothermal and remediation wells, and deep saline groundwater often used in oil and gas operations.
Environmental Flow Needs
The proposed Water Sustainability Act would require more consistent and transparent consideration of the timing and quantity of stream flows necessary to sustain freshwater ecosystems (referred to as “environmental flow needs”) in the course of considering water allocation decisions, including applications to amend existing water licenses. While speaking to the virtues of substantive consistency, the proposal also would also allow for different processes, to be determined by regulation, depending on circumstances.
To ensure consistent consideration of water-related issues across the spectrum of provincial resource decisions, it is proposed that the Water Sustainability Act establish “water objectives”. Water objectives would guide decision-making under the new Water Sustainability Act and under enactments that are land-use focussed. Examples of “water objectives” are provided, but not proposed; are qualitative; and on their face do not provide a means to resolve conflicts between competing objectives. This element of the proposal, while having potentially far-reaching effects, is still rather embryonic.
Exception to FITFIR
The existing surface water prioritization scheme, FITFIR, provides that when water supplies are insufficient to meet all licensed uses, the earliest water license holder takes priority over more recent holders. This scheme would be extended to groundwater, but in both cases would now be subject to an “essential household use” allowance, that would prioritize water use for human, domestic animal and potentially livestock purposes ahead of earlier-in-time licenses. While not entirely clear on the point, the proposal suggests that an “essential household use” allowance would be established on an ad hoc discretionary basis, rather than enshrined generally and directly in law.
30-Year Review of License Terms
Currently the Water Act does not, except implicitly in the case of power purpose licenses, provide a default term after which terms and conditions of a water license would be reviewed. The proposed Water Sustainability Act would establish a 30 year default period after which water licenses would be reviewed and could be subject to amendment, depending on circumstances. Power purposes licences would maintain a 40 year maximum term and would be exempted from the review process since they are already subject to a renewal process. The new Act would also provide licensing for a project development period of up to five years (with the potential to extend the development period for a further five years) prior to the start of a power project’s operations. Power purposes licences subject to water use planning or granted under the Industrial Development Act would also be exempted from the 30 year review.
Compliance: Administrative Penalties
The use of administrative penalty regimes to ensure regulatory compliance has become increasing popular in North America the last 25 years or so. Consistent with this trend, the new Act would establish an administrative penalty regime that avoids criminal sanctions and implicitly, but by design, would make it easier to pursue enforcement measures.
In its pricing discussion the proposal emphasises the critical role that economic pricing can have in encouraging the efficient and innovative use of water resources, as well as its conservation. However, only pricing regimes that would provide for recovery of direct provincial costs associated with regulating water use are given any air time, and that in the context of potential future changes. It would seem that value-based pricing of water resources, or more general royalty schemes, to take just two examples, have been rejected.
Other stakeholder proposals that are more-or-less expressly rejected in the Water Sustainability Act proposal include the establishment of a market in short-term water rights; the establishment or inclusion of the “public trust doctrine” regarding water use in BC; and the use of the “precautionary principle” in decision-making under the new Act.
The comment period on the Water Sustainability Act proposal remains open until November 15, 2013. Comments may be posted on the Province’s website.
Jeff is a litigation partner practicing exclusively in the energy, utility and natural resource sectors. He represents clients before regulatory tribunals such as the BC Oil and Gas Commission, Canada Energy Regulator, and ...
Laura Duke is a partner in our Vancouver office and has experience in environmental law, Indigenous law, civil litigation, administrative and constitutional law. She represents clients with environmental assessments ...
Lawson Lundell's Environmental, Indigenous and Natural Resources Blog focuses on environmental, indigenous and natural resources law, as well as related litigation. Included are summaries of significant cases from Canadian appellate courts, changes in the legal framework governing resource development including energy and climate change policy, and key decisions from the more influential regulatory bodies in Canada.
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