Wil Andruschak

In Alberta, water rights go to whoever got their licence first — a system that’s “no longer appropriate,” says former environment minister Lorne Taylor

The provincial government is poised to develop a full-fledged water market — the first of its kind in Canada — making water rights easier to buy and sell, sparking a politically charged debate on whether or not water should be a commodity.

The government says everything is on the table as it reviews its century-old water licensing system, but those familiar with the discussions say the province is heading towards an expanded, more fully developed market. “But before you have an appropriate market, you’ve got to fix the allocation system,” says former environment minister Lorne Taylor, who chairs the Alberta Water Research Institute.

That fix could spark a showdown between the province and the agricultural irrigation industry, which holds massive water licences acquired in the early 1900s. Alberta’s current “first-in-time, first-in-right” licensing system gives priority to whoever got water licences first. “First-in-time, first-in-right is no longer appropriate,” says Taylor, whose group is preparing a report on water allocation for the provincial government.

Alberta already has a small water market that sprung up in 2006, when the provincial government, realizing it had over-allocated water, closed southern Alberta river basins to new licences. The move forced growing municipalities with junior licences to look to irrigators and other senior licensees for water, but both buyers and sellers say the transfer process is laborious and needs streamlining. (Fewer than 30 licence transfers have occurred since 2006, according to Alberta Environment.)

“I’d like to see a water licence transfer system environment and marketplace that’s responsive, that’s available, that works,” says Okotoks municipal manager Rick Quail. Rapidly approaching the limit of its water licence, Okotoks is “aggressively” looking to buy water, Quail says. “We’ve been told, ‘Here’s the system, Albertans.’ And the system is: Go on out, find an available licence and negotiate a commercial arrangement.”

The irrigators, meanwhile, don’t want to see the end of first-in-time, first-in-right. “Our access to the river with priority is extremely important to us,” says Jim Webber, general manager of the Western Irrigation District. “Not to have it would be an economic disaster for us.” The Western Irrigation District provides water to more than 400 farms east of Calgary and a handful of communities, including Strathmore.

The Council of Canadians plans to oppose an expanded Alberta water market. “The water market system is absolutely not the solution,” says Meera Karunananthan, the group’s national water campaigner. “We consider water to be a human right. When you allocate according to the laws of the market, then you see water going to those who can pay the most. So it goes to the highest bidder.”

Karunananthan says the government should instead create a hierarchy of water use, allocating to those who need it most — including the environment.

Taylor agrees that water is a public resource, but he also believes that with proper regulatory oversight, the market can ensure the resource will go to the best public use. “If you have a high-value utilization, you can pay more for the water than somebody that does not have a high-value utilization because your high-value utilization should give you more money to pay for it.” He dismisses the Council of Canadians’ concerns about the market as “scare tactics” intended to raise money for the organization.

Danielle Droitsch of local environmental NGO Water Matters suggests a middle-road arrangement whereby some water is open to the market, but a portion is exempted from the marketplace and left in the river. “We need water to be set aside by this government for the public interest, which includes the environment,” says Droitsch. “Right now, we’re in a completely imbalanced situation where all the water is with the licensees, so they hold the power.”

Conservation organizations have also heard that depending on what the government decides, they may find themselves buying licences to keep water in the river for the aquatic ecosystem. “That would be a positive thing, but it would be unfortunate that we’d have to raise money to ensure that nature is normal,” says Brian Meagher, a provincial biologist for Trout Unlimited.

The Water Research Institute is set to submit its report to the government this fall, and the Alberta Water Council is also submitting recommendations on the allocation and transfer system. As well, earlier this year the government created a panel headed by University of Alberta law dean David Percy to advise the government on the water licensing system. (Percy couldn’t be reached for comment.)

The government won’t reveal who’s on the advisory panel, citing privacy concerns. The secrecy surrounding the panel is “very strange,” says University of Calgary law professor Nigel Bankes. “The question is: Why? What’s the agenda there? The whole process starts to lack transparency when you see that happening.”

The government eventually plans to hold a public consultation on the issue, but Alberta Environment hasn’t yet set a date. “I would be surprised if it happened this year,” says department spokesperson Cara Van Marck.