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Managing Water in a Federal State: The Canadian Experience

Managing Water in a Federal State: The Canadian Experience
Saunders, J. Owen1
Canada faces special challenges as a federal state in managing its vast water resources,
many of which are transjurisdictional in nature, shared either with the United States or
amongst Canadian provinces and territories. Although the federal government possesses
an array of potentially powerful constitutional levers with which to influence specific
aspects of water management, it lacks the plenary jurisdiction that would enable it to
address water management in an integrated fashion. Under the Canadian constitution,
provinces are vested with most of the proprietary and legislative responsibility for natural
resources management, including water management, subject to some specific federal
interests. However, even recognising the primacy of the provincial role, the federal level
of government has taken an exceedingly modest view of its powers. The federal reticence
to exercise its authority in waters that are clearly of national interest – especially
transjurisdictional watercourses – has arguably hampered the development of effective
basin management regimes in Canada. As these waters come increasingly under stress in
coming decades, especially in light of the expected effects of climate change, a
continuing failure by the federal government to assert a clear role for itself in articulating
the national interest in water management may well hamper the effective resolution of
emerging water management challenges.
Key words: federalism, law, water
Managing Water in a Federal State: The Canadian Experience
I. Introduction
1. General
The governance of water resources in the Canadian federation reflects generally a
highly decentralised approach to federalism and specifically an approach to natural
resources management under which the national government largely defers to the
provinces as the primary resource managers. This paper, first, explores the constitutional
and political roots of provincial supremacy in water resources management; second,
illustrates through two case studies how this supremacy may lead to poor policy
outcomes for the management of shared water basins; and finally, offers some
suggestions as to how the decentralised approach to federalism as practiced in Canada
can be reconciled with the need to reflect national interests in interjurisdictional water
2. Canada’s Freshwater Endowment
On the face of it Canada is one of the most richly-endowed countries in the world
with respect to its freshwater resources: approximately one-half of 1% of the world’s
population enjoys 20% of its freshwater resources. This picture is, however, misleading.
First, much of its freshwater endowment is non-renewable (although Canada still has
access to 7% of the world’s renewable freshwater resources). Additionally, much of
Canada’s freshwater endowment is located far from the major centres of population, with
60% of its rivers flowing north – while between 80 and 90% of its population live in a
southern band within 300 km of the border with the United States (NOWLAN, 2005).
Both the nature of water resources and the management challenges they present
vary significantly from region to region. Canada’s five major drainage basins (there are
numerous, sometimes significant, sub-basins) are those flowing into the Pacific, the
western Arctic Ocean, Hudson Bay, the Atlantic and (of very minor significance) the
Mississippi system (eventually feeding into the Gulf of Mexico). The six eastern
Managing Water in a Federal State: The Canadian Experience
provinces rely primarily on the Atlantic Basin (including notably the Great Lakes and St.
Lawrence River), although northern rivers in the provinces of Québec and Ontario which
flow towards Hudson Bay have great significance for hydroelectric development. The
population centres of the three Prairie Provinces (Alberta, Saskatchewan and Manitoba)
are also located primarily in the Hudson Bay Basin, although the Arctic Basin (dominated
by the Mackenzie and its tributaries) is of growing significance because of the pace of
resource development in the north – and in particular energy development associated with
the rapid expansion of the Alberta oilsands. Finally, the west coast province of British
Columbia is dominated by its reliance on the Pacific Drainage Basin, although in the
northeast of the province the Arctic Basin holds important hydroelectric capacity. It
should also be noted that the legal character of water rights varies across the country,
with the regimes in the eastern provinces (other than Québec) rooted in riparian rights
doctrine, while Québec relies on a civil code and the western provinces have adopted
regimes based on prior allocation (a situation not unlike the United States, where the
riparian approach is the dominant influence in eastern states and prior apportionment
dominates the western states).
In addition to the 10 provinces, Canada comprises three federal territories –
Yukon, the Northwest Territories and Nunavut, the latter of which is in the Hudson Bay
Drainage Basin and the former two which lie within the Arctic Basin. The three
territories are at different stages of constitutional devolution, including with respect to
water management responsibilities. While in many respects the territories enjoy
responsibilities broadly comparable to the provinces, this is not true in some key areas;
moreover, what responsibilities they do enjoy is as the result of federal legislation, and
are not constitutionally guaranteed. Therefore, the primary emphasis in this paper is on
the provincial and federal roles in water management.
Apart from its surface water endowment, Canada also has significant groundwater
resources, which, again, are not evenly distributed across the country. Nevertheless,
approximately 30% of Canadians depend upon groundwater to provide their drinking
water. Two-thirds of these are people living in rural areas (CÔTÉ, 2006). Despite its
Managing Water in a Federal State: The Canadian Experience
importance, Canada’s groundwater endowment is in many respects poorly understood,
and the knowledge varies significantly as between regions and aquifers. Similarly there
is a wide range of management approaches to groundwater – including with respect to
such fundamental issues as to whether to charge for extraction of the resource.
Just as the nature of Canada’s water resources varies significantly from region to
region, so not surprisingly do its water management challenges. In eastern Canada and
British Columbia, water quantity has not typically figured as a major worry, although in
the Great Lakes region variations in lake levels have from time to time generated
concerns related especially to recreational and navigation uses. Generally, though,
concerns in these provinces have focused on water quality issues, including a spike in
concern in recent years over the safety of drinking water, largely as the result of a major
problem with water contamination in an Ontario municipality that resulted in a number of
deaths and focused national attention on the safety of drinking water supplies (it should
also be noted that the problem of drinking water quality has been identified as a particular
challenge for Aboriginal communities across Canada).
In the three Prairie Provinces, especially in the southern parts located in
the Hudson Bay drainage system, the challenges posed to water managers have
traditionally been associated with concerns relating to water quantity, although in recent
years water quality has also emerged as an issue, especially as the result of the growing
number of large feedlots, especially in southern Alberta. This primary focus on water
quantity reflects in part the arid nature of the Prairie region, and in part the significance
of agriculture to the regional economy, although even here the challenges vary as
between provinces. For example, while Manitoba depends very little on irrigation for its
agricultural sector, and Saskatchewan only modestly when compared to the national total,
Alberta makes heavy use of irrigation to support its southern agricultural sector, with the
province accounting for over 60% of the Canadian total of irrigated land – almost all of
this devoted to field crops, hay and pasture. In the event of future reductions in flow
rates on Prairie rivers – which are widely anticipated as a likely result of climate change –
Managing Water in a Federal State: The Canadian Experience
Alberta may be forced to make difficult decisions between its own needs and those of its
downstream neighbours.
The Arctic Basin – and in particular the Mackenzie system – faces challenges
relating to both water quality and water quantity. These challenges are aggravated by the
differing needs of the various jurisdictions in the Basin – with British Columbia having a
special interest in the use of the basin for hydroelectricity generation, Alberta relying on
the Basin for the development of other natural resources (especially petroleum and
forestry) and the Northwest Territories relying on the Mackenzie for instream uses
associated with the preservation of Aboriginal lifestyles. These challenges are discussed
further on in this paper.
As a final note, the one unifying theme that does seem to characterise Canadians’
use of their freshwater resources is profligacy. Canadians rank among the highest users
of freshwater in the world. Amongst OECD members, for example, Canada ranks second
only to the United States in its per capita use of water, and consumes at a rate 65% above
the average in the OECD (NOWLAN, 2005).
II. The Constitutional Context for Water Management in Canada
Canada was created as a federation out of four British Colonies in 1867. As the
result of subsequent additions, the federation now consists of 10 provinces and three
northern federal territories. The latter, while not formally recognised under the
Constitution (Constitution Act, 1867, 30 & 31 Vict. (U.K.), c. 3]), are at different stages
of political development, but for many purposes are treated much the same as provinces;
this is especially the case with respect to the conduct of intergovernmental relations. The
Canadian Constitution in general attempts to divide legislative powers of the federal and
provincial levels of government into two discrete lists, with each level of government
sovereign in its own sphere, and with any residual powers resting with the federal
government (there are also a few shared powers in the Constitution, but only one of these,
agriculture, has relevance to water management).
Managing Water in a Federal State: The Canadian Experience
On the face of it the Constitution provides important powers to the federal
government through which it may influence water management. The most obvious heads
of federal authority in the Constitution relevant to water management are those relating to
navigation and fisheries, although important levers are also found in the federal
responsibility for criminal law (especially relevant in the case of pollution that may be
injurious to human health), trade and commerce, interprovincial and international works
and undertakings (for example, canals), and the implementation of treaties concluded by
the British Empire on Canada’s behalf.
While there is no one plenary head of legislative power available to the federal
government that would enable it to legislate comprehensively with respect to water
resources management, one could imagine that as the result of either an expansive
reading of individual powers or the consideration of the collective weight of the various
specific heads of power, there might be considerable room for the federal government to
act. In Canadian federalism, however, the tendency of constitutional jurisprudence,
especially in recent decades, has been to give a narrow reading to the specific powers and
to restrict them to their most obvious intent. So, for example, federal pollution-related
legislation passed under the authority of the fisheries power has been struck down as
overreaching where there was no demonstrated link between the water pollution and
harm to fish or fish habitat (Fowler v R [1980] 2 S.C.R. 213). A similar demonstrable
link between the water policy measure and the specific head of power has been demanded
by the Supreme Court with respect to the invocation of the navigation power (Northwest
Falling Contractors v R [1980] 2 S.C.R. 292). Even the apparent willingness of the
Supreme Court in recent years to use the criminal law power to support federal
environmental legislation (including legislation with respect to water quality) (R v Hydro-
Québec [1997] 3 S.C.R. 213) is arguably a mixed blessing, given the inflexible nature of
that power as a regulatory instrument, especially in addressing interjurisdictional
Managing Water in a Federal State: The Canadian Experience
In addition to the specific heads of legislative authority, the federal government is
also given other broad powers under the Constitution, the most important one of which is
the general power to legislate for the “peace, order and good government” of Canada.
This power has a chequered history of interpretation in the courts and has been
interpreted as embracing a number of branches, the most relevant one for water
management being the “national concern” doctrine. While this doctrine has been invoked
expressly by the Supreme Court with respect to water management – for example to
justify legislation relating to marine pollution (other than that falling under the fisheries
power) (R v Crown Zellerbach Canada Ltd [1988] 1 S.C.R. 401) – on other occasions it
is not always clear the extent to which the Court is relying on this general power or on
one of the specific heads of power. For example the Court has struck down provincial
water quality legislation that has interprovincial impacts (Interprovincial Cooperatives v
Manitoba [1976] 1 S.C.R. 477), but it is not fully clear the extent to which the judgment
relied on the fisheries power as opposed to a more general power with respect to
interjurisdictional water management.
Regardless of the theoretical potential for action under the peace, order and good
government power, the federal government, especially in recent decades, has in practice
been hesitant to invoke national concern explicitly as a basis for federal regulation of
natural resources management, and has demonstrated a strong preference for relying on
specific heads of power in the Constitution. Even in those cases where the federal
government has indicated a willingness to take a stronger role in water management, it
does not always follow through. For example, in the Canada Water Act of 1970 (R.S.C.
1985, c. C-11) the federal government asserted the authority to take strong and, where
necessary, unilateral water management measures in basins where water quality had
become a matter of national concern. In practice, however, those provisions of the Act
have never been invoked. Similarly, an ambitious agenda for federal action on water in
the Federal Water Policy of 1987 (ENVIRONMENT CANADA, 1987) has gone largely
unimplemented. More typically when the federal government wishes to pursue water
management goals, it employs its spending power – usually in the form of cost-shared
programs negotiated with the provinces.
Managing Water in a Federal State: The Canadian Experience
It is true that the Constitution also provides for other, even more sweeping powers
on the part of the federal government – including the power to essentially occupy a policy
area by declaring any works to be for the general advantage of Canada, and the power to
disallow any piece of provincial legislation within a specified period of its passing a
legislature. While there are many examples of the use of both these powers in the first
several decades of Confederation, however, today they have probably fallen into
desuetude; certainly, as a practical matter, their invocation would be regarded as, at a
minimum, politically explosive, and potentially even as breaching established
constitutional convention.
This last point – the political impossibility of invoking constitutional authority
that formally exists in the written Constitution – reflects a broader and vital dimension of
Canadian federalism: in many respects the actual mechanics of Canadian federalism are
influenced more by what has been termed the “political constitution” than by the written
Constitution. In this respect, it should be remembered that the core of Canada’s
Constitution is still the 1867 legislation passed by the British Parliament (and not
“patriated” to Canada until 1982), with all its peculiarities intact. Chief among these is
the formal emphasis on a strong federal government, an emphasis rooted in fresh
memories of the then-recent Civil War in the United States. While in the early days of
Confederation, the federal government behaved much as was anticipated in 1867, the
relative positions of the federal and provincial levels of government have changed
significantly over the years. The forces that have militated in favour of greater provincial
autonomy need not be related here. Suffice it to note that, despite the formal provisions of
the written Constitution, and in large measure because of political pressures (abetted in
some important respects by judicial interpretations of the Constitution), the Canadian
federal system has evolved into one of the most decentralised in the world. One of the
consequences of this evolution is the inability – or at least the unwillingness – of
successive federal governments to assert a strong voice in natural resources management,
including water management.
Managing Water in a Federal State: The Canadian Experience
In contrast to the important but discrete powers available to the federal
government to influence the management of water resources, the provincial governments
are seized with much broader authority. This authority is both proprietary and legislative
in nature. Unlike in the United States, where there are very significant federal lands,
especially in the western states, the great bulk of public lands within the provinces
belongs to the provinces (albeit there are some important federal proprietary interests as
the result of lands held for Aboriginal people and through ownership of national parks,
defence lands, etc). The proprietary rights that attach to provincial ownership are
buttressed by legislative rights, both specifically with respect to the management of
public lands (and resources), and more generally with respect to matters of a local or
private nature, including property and civil rights. In the result, it is at the provincial
level that one finds the necessary broad authority to manage water resources in a
comprehensive manner.
The dominant role of the provinces in natural resources management has been
strengthened in recent years as the result of a very practical consideration. As provinces
have engaged in management of their natural resources endowment, they have
necessarily acquired the associated expertise and personnel such management entails.
They are therefore the level of government that has the “boots on the ground” required to
implement resource management initiatives. By contrast, the federal government,
lacking a plenary mandate for resource management, has not developed the same level of
expertise to actually implement resource-related policies, and in many cases depends on
cooperation with provincial officials to effectively implement initiatives of its own. This
is especially the case over the past 15 years, where the federal government for fiscal
reasons has shed much of its policy expertise in a number of areas, including water
III. Challenges Posed by Provincial Dominance of Water Resource Management
While the dominance of the provinces in water management probably reflects a
consensus in Canada that provinces should in general be the masters of their resource
Managing Water in a Federal State: The Canadian Experience
endowments, it is at least questionable whether this hegemony has always resulted in
optimal policy outcomes. This is especially the case with respect to the management of
interjurisdictional waters; indeed, it has been pointed out in the literature on Canadian
federalism that the nature of interjurisdictional externalities in water use is such that
“there is a strong case for central authority to ensure integrated watershed management
and respect for the basis values of federalism related to criteria of democracy and
functional effectiveness” (KENNETT, 1992, at 48). Two practical examples of the
drawbacks posed by a high level of deference to provincial interests are provided by the
negotiations on the management of the Mackenzie Basin and the federal response to
public concerns over the threat of water exports.
1. Mackenzie Basin Management
The Mackenzie River system flows through three provinces and two territories for
over 4000 km in northern Canada before emptying into the Arctic Ocean. The major
portion of the Mackenzie Basin, however, is located in three jurisdictions: moving
roughly from upstream to downstream, these are the provinces of British Columbia and
Alberta, and the Northwest Territories (the other two jurisdictions are the Yukon
Territory and the province of Saskatchewan). It comprises the tenth largest river basin in
the world – 1.8 million km2 in area, or equal to about 20% of Canada’s landmass
(STATE OF THE ECOSYSTEM REPORT, 2003). The Basin, is however, sparsely
populated (about 400,000 people) and accounts for little more than 1% of Canada’s
population. A significant portion of this population, especially in the Northwest
Territories, is Aboriginal. There are obvious resource-use conflicts in the Basin, which is
the site of significant hydro-electric development (especially in British Columbia) and
increased pressures on both water quality and water quantity in the face of the rapid
development of Alberta’s massive oilsands deposits. At the same time, Aboriginal
populations in the north are highly dependent on the waters of the Mackenzie system for
maintenance of traditional subsistence lifestyles. Unfortunately these people find
themselves largely as the downstream users of the resource. In sum, the Mackenzie is
precisely the sort of interjurisdictional system with competing resource uses that is most
Managing Water in a Federal State: The Canadian Experience
in need of an overarching arrangement that would balance the interests of the various
resource users.
In reality, however, the actions that have been taken towards a comprehensive
plan for the management of the Mackenzie Basin can only be described as disappointing
– and the deficiencies in governmental measures in this respect are largely the result of
the unwillingness on the part of successive federal governments to articulate a strong
voice, even where it seems clearly appropriate. Multi-jurisdictional negotiations on the
Mackenzie began in the early 1970s but an intergovernmental agreement on the use of the
Basin did not come into effect until 1997 (Mackenzie River Basin Transboundary Waters
Master Agreement, entered into force 24 July 1997). The Agreement commits the parties
(which include the governments of Canada and the five Basin provinces and territories)
to several principles, that emphasise such worthwhile goals as maintenance of the
ecological integrity of the aquatic ecosystem, intergenerational sustainability, reasonable
use (or more precisely the avoidance of unreasonable harm) and duties to notify and
consult – in effect the core of what would be considered a “modern” instrument for
sharing the waters of an interjurisdictional basin. Beyond this general statement of
principles, however, the Agreement offers very little comfort to downstream
jurisdictions. For example, the Agreement lacks a process for binding dispute resolution
(it provides merely for a process that will at most generate recommendations for the
terms of settlement for disputes), and the articulation of any specific substantive
obligations is left to be negotiated through subsidiary agreements on a bilateral basis
between the parties. After over a decade, however, there has been only one such bilateral
agreement concluded – and that between the Yukon Territory and the Northwest
Territories, which have a very small number of shared waters of no great significance. It
should finally be noted that even in the event that other bilaterals are successfully
concluded, it is not anticipated that they will be legally binding on the parties.
Despite the fact that the federal government would almost certainly have the
constitutional authority – acting under its power in relation to peace, order and good
government – to intervene legislatively with respect to the Mackenzie, its role has largely
Managing Water in a Federal State: The Canadian Experience
been quiescent, and at most facilitative in encouraging negotiations. In a situation such
as that obtaining in the Mackenzie Basin, where upstream jurisdictions have no incentive
to act against their own self-interest in the development of the Basin’s water resources, it
can hardly come as a surprise that the negotiations have produced such unimpressive
results. Moreover, the prospects for significant commitments on the part of upstream
provinces on the Mackenzie in the future are even more daunting when one considers that
the Mackenzie is expected to suffer above-average adverse effects on flows as the result
of climate change.
While the challenges to interjurisdictional cooperation on shared water resources
in Canada are perhaps most pronounced in the case of the Mackenzie River system, they
are not unique to that Basin, and are likely to grow as these resources come under
increased stress as the result of both economic development and the expected significant
effects on river flows associated with climate change. The potential for such stresses is
most apparent in the Canadian Prairie Provinces (Alberta, Saskatchewan and Manitoba),
whose shared eastward-flowing watercourses (which flow into Hudson Bay) are already
strained by existing demands. While there is admittedly in place an interjurisdictional
agreement on the use of these waters, which does commit the parties to a specific
allocation formula, its legal status is ambiguous (SAUNDERS, 1988).
2. Water Exports
In addition to the challenges presented by interjurisdictional waters within
Canada, the operation of Canadian federalism also raises issues for water relations with
the United States. One might assume that the management of internationally shared
water resources is a matter that falls clearly within the authority of the national
government in a federation. However, the position in Canada is somewhat more
nuanced. The major treaty governing Canada’s water relations with the United States is
the International Boundary Waters Treaty (BWT) of 1909 (United States – Great Britain,
Treaty Relating to the Boundary Waters and Questions Arising Along the Boundary
Between the United States and Canada, signed 11 January 1909, entered into force 5 May
Managing Water in a Federal State: The Canadian Experience
1910, 36 Stat. 2448; TS 548; 12 Bevans 319). The BWT deals with the respective rights
and obligations of the parties both for boundary waters (that is, waters which form part of
the international boundary, including, most importantly, the Great Lakes) and their
tributaries, and for transboundary waters (that is, rivers that cross the international
boundary). It also establishes a binational commission, the International Joint
Commission (IJC), which is essentially vested with the responsibility for overseeing the
operation of the treaty.
In many respects the Treaty appears to modern eyes as dated in its approach to
water management. For example, it reflects the hierarchy of uses one would expect a
century ago; there is no explicit inclusion of groundwater in the Treaty; and there is an
asymmetric allocation of rights depending upon whether the waters are boundary (where
the applicable principle is equal and similar rights) or are transboundary or tributary to
boundary waters (where the applicable principle is exclusivity of rights in the upstream
riparian – the so called Harmon Doctrine). Moreover, pollution is dealt with in a cursory
sentence and there is lacking any reference to modern concepts of watershed management
or ecosystem integrity. Despite these apparent defects, the Treaty has demonstrated a
remarkable robustness in its accommodation of evolving challenges and new approaches
to water management. This is largely because of how the IJC operates; while it does
exercise some quasi-judicial powers, much of the Commission’s most important work is
of an investigative and recommendatory nature in response to references from the two
governments – references which are typically phrased broadly and have allowed for the
consideration of modern approaches to water management. So, for example, the
Commission has been able to address concerns related to groundwater both generally and
specifically. Similarly, it has for many years accepted the desirability of pursuing an
ecosystem approach in relation to water management.
Despite the many benefits that have accrued to both nations from the BWT, in so
far as intergovernmental relations within Canada are concerned the existence of the
Treaty has in some respects arguably tended to restrain the federal government from
taking initiatives that are consistent with the rational management of boundary and
Managing Water in a Federal State: The Canadian Experience
transboundary waters. One example of this is found in the federal government’s
approach to interbasin transfers of water. Before exploring this issue, however, it is first
necessary to describe briefly the unique constitutional context which provides the
backdrop to Canada’s transboundary management of water resources.
An important aspect of the BWT that affects how the federal government
approaches binational water management issues relates to the peculiarities of the
Canadian Constitution. Owing to its vintage, the Constitution does not adequately
address the role of the federal government in international relations; this is because at the
time of Confederation and for several decades thereafter, Canada’s foreign relations
effectively fell within the authority of the Imperial Cabinet in London. The Constitution
does, however, include a provision enabling the federal government to implement treaties
(regardless of whether this involves an intrusion on provincial powers) that have been
concluded on Canada’s behalf by the British Empire.
When Canada attained the power to conclude treaties in its own right (formally in
1931, but informally several years before this), it might have been expected that the
power to implement “Empire” treaties would also extend to treaties concluded by Canada
in its own right. In fact, however, this proposition was rejected by the courts (A-G
Canadaa v A-G Ontario (Labour Conventions) [1937] A.C. 326 (P.C.)), so that the
federal government is restricted in its implementation of treaty obligations to those treaty
provisions which fall within its normal legislative competence. Put differently, it cannot
rely on non-Empire-treaty obligations to justify legislating in violation of the division of
legislative powers established under the Constitution. This position is not only
anomalous in terms of federal states, it also creates significant practical problems for the
federal government, both generally and with specific reference to water management.
This means that while the federal government can rely on the Empire treaty clause to
justify its implementation of the BWT, it must look elsewhere (primarily the peace, order
and good government power) to justify its implementation of other post-Empire treaties
related to water management, such as the Niagara River Treaty of 1950 (Treaty Relating
to Uses of the Niagara River, signed 27 February 1950, entered into force 10 October
Managing Water in a Federal State: The Canadian Experience
1950, 1 UST 694; TIAS 2130; 132 UNTS 223) and the Columbia River Treaty of 1961
(Treaty Relating to Cooperative Development of the Water Resources of the Columbia
River Basin, signed 17 January 1961, entered into force 16 September 1964, with related
agreements effected by exchanges of notes at Washington 22 January 1964, and at
Ottawa 16 September 1964, 15 UST 1555; TIAS 5638; 542 UNTS 244).
One example of the consequences that arise for water management as the result of
federal reliance on the BWT is provided by a national debate that has emerged
sporadically over the past 20 years in Canada with respect to the implications of Canada’s
international trade agreements (including both World Trade Organisation obligations and
those under the North American Free Trade Agreement, but especially the latter) for
Canada’s ability to manage its water resources as it sees fit – and in particular the ability
to limit or prohibit exports of water. The incident that attracted the most public attention
in this respect was the granting of a provincial licence for tanker exports of water from
the Great Lakes (specifically, Lake Superior) in 1998. Despite the fact that the licence
was subsequently withdrawn – and that the export plan as conceived was both absurdly
naïve and never remotely likely to come to fruition – the very fact that such licences
could apparently be readily obtained created a national outcry for action on the part of the
federal government.
Eventually the federal government took a number of steps in response to this
public pressure, including the reference of the matter to the IJC for investigation and
recommendations, and an undertaking (ultimately unsuccessful) to work with the
provinces to achieve provincial moratoriums on the possibility of water exports. The step
of most interest in the context of this paper is, however, the legislation introduced by the
federal government to address the problem as a national issue. The core of the federal
legislation (which was accomplished through an amendment to the existing legislation
which implemented the BWT) provided for significant restrictions (essentially a
prohibition with some limited exceptions) on the removal of boundary waters out of the
basin in which they were located. In sum, then, the government felt able to address only
a part of the problem – the potential for exports of boundary as opposed to other waters
Managing Water in a Federal State: The Canadian Experience
(whether transboundary or purely domestic). Such a partial solution – regardless of how
one views its utility in any event – is clearly not consistent with what water managers
unconstrained by political considerations would consider an appropriate way to deal with
the problem. The federal response appears even more tepid when one considers that any
practical threat of water exports is – for reasons of simple geography – almost certainly to
come not from boundary waters but from coastal freshwater lakes and rivers that do not
fall within the ambit of the BWT and its implementing legislation.
What is most striking about the federal response to the potential threat of water
exports is the narrow way it was tailored to fit within a clear federal head of power (the
Empire treaty clause in the Constitution), even at the expense of policy coherence. Why
boundary waters are more in need of protection than others from the threat of interbasin
transfer is not something that was addressed by the federal government, despite a strong
feeling at the time in the Canadian public that there was indeed a need to protect
Canadian freshwater generally from potential export pressures. It should be noted finally
in this respect that there were other options available to the federal government –
including most obviously plenary legislation based on the federal peace, order and good
government power discussed earlier. The government’s unwillingness to exercise this
option, even when it might well have commanded public approval, is a reflection of the
unwillingness of federal governments to interfere with the prerogatives of provincial
governments in matters related to natural resources management generally and water
governance specifically.
IV. Emerging Policy Challenges and Options
There are significant new and emerging challenges that Canadian water managers
must confront. Some of these are conventional in nature but of a quantitatively different
magnitude than experienced in the past. One important example of this in Canada is the
increasingly apparent conflict between energy security and water security. The threat to
both water quality and quantity in the Mackenzie Basin as the result of rapid development
of the Alberta oilsands is fast becoming a national issue in Canada (as it has already
Managing Water in a Federal State: The Canadian Experience
generated a significant debate within the province itself). More generally, as the west
increasingly becomes a more dominant engine for economic growth in Canada, there will
be increasing pressure on water resources in what is (with the exception of British
Columbia) already an arid region. In addition to addressing the conventional challenges
for water resources policy that attend a growing population and economy, Canadian
water managers in the next several decades will also have to confront the impacts
associated with climate change. The outlook for Canadian water resources as the result
of climate change is for significant negative effects on river flows in the Prairie Provinces
(not only because of changes in patterns of precipitation, but also owing to the melting of
glaciers and snowcaps that currently feed eastward-flowing Prairie rivers); the outlook
for eastern Canada is more mixed, but again the forecast is for lower water levels in the
Great Lakes region (ENVIRONMENT CANADA, 2008). In light of these expectations,
it is increasingly important that the federal and provincial levels of government arrive at
an accommodation of responsibilities that allows for policy responses that are based on
sound principles of water management rather than on the protection of jurisdictional turf.
This section discusses some options that are designed to both satisfy the legitimate
jurisdictional concerns of both levels of government and meet the criteria of good water
One of the primary roles for a national government in most federations is in
facilitating, directly or indirectly, the resolution of disputes between sub-national entities.
In the context of water resource management, this may mean, for example, inducing or
requiring management structures for interjurisdictionally shared waters. Such an
approach may be attractive in light of the most likely alternative – the resolution of
disputes through intergovernmental litigation, which by its nature is arguably less likely
than a negotiated solution to generate an outcome that is acceptable to both parties. Both
options have been exercised in the United States; however, because of the peculiarities of
its federal system, neither of these has been pursued with any great vigour in Canada. In
Canada, however, there is not only a disinclination on the part of the federal government
to impose solutions, but also a tradition of not litigating interprovincial disputes (this
reluctance to engage in interjurisdictional litigation is further buttressed by the absence in
Managing Water in a Federal State: The Canadian Experience
Canada of a court with a constitutionally–embedded jurisdiction to arbitrate such
disputes, interjurisdictional litigation is indeed possible in Canada, but only because
provincial and federal governments maintain legislation providing for submission of such
disputes to the Federal Court – legislation which can, of course, be repealed at any time).
In the result, there is little incentive on the part of upstream provinces to seriously address
issues related to interjurisdictional sharing of water resources (and even, to some extent,
the quality of the water that is shared). As noted above in the context of the Mackenzie
Basin, this unwillingness on the part of upstream provinces to constrain their discretion to
use the resource as they see fit is likely to be exacerbated in coming decades as the full
effects of climate change are realised.
The important question in terms of water management, then, is how the federal
government can both act to resolve festering interprovincial (and provincial-territorial)
differences and at the same time respect the strong inclination in Canadian federalism
towards deference to the role of the provinces as managers of their own resources. The
preferable option in this respect is one that would both minimise federal intrusion and at
the same time provide a sufficient incentive for the parties (but especially upstream
provinces) to reach an agreement. The option that would appear to come closest to
satisfying these dual requirements is that proposed over two decades ago in the report of
the Inquiry on Federal Water Policy (ENVIRONMENT CANADA, 1985). Under this
proposal, the federal government would provide a fallback in the event that provincial or
territorial governments are unable to reach an agreement on shared water resources.
Where “reasonable efforts” at agreement have failed, and upon the receipt of a complaint
from one of the parties, the federal government would set up a board (including
representation from all affected parties) to make recommendations on the dispute; the
federal resolution of the dispute would then be based on these recommendations. The
constitutional authority for such an approach would be based on the federal peace, order
and good government power. Ideally of course the very existence of such a mechanism
would lead to a political resolution of the dispute and obviate the need for its invocation.
Unfortunately, this approach has yet to be adopted in Canada, with the negative
consequences in the Mackenzie Basin that have been discussed earlier. Nevertheless, it
Managing Water in a Federal State: The Canadian Experience
may be that the effects of climate change will ultimately force the federal government to
take a stronger role as the stresses on interjurisdictional waters make interprovincial (and
provincial-territorial) agreements more difficult to obtain, or even motivate some
provinces to question the legal force of existing commitments.
With respect to the federal government’s role in international water management,
the highly cautious federal response to assuming responsibilities for the protection of
water from extra-basin removal, described in the previous section of this paper, has also
been the subject of both criticisms and suggestions for change. In February 2008, the
Canadian Water Issues Council (CWIC), an independent and loosely affiliated group of
resource professionals with long-standing interests and backgrounds in various aspects of
water policy, proposed a role for the federal government which would both address the
public concern over potential future trade in bulk water and yet provide for only minimal
intrusion on the provinces’ roles as primary managers of their water resources (in the
interests of full disclosure, the author of this paper is a founding member of CWIC and
was directly involved in drafting the proposal described here).
The proposed federal role is articulated by CWIC through the vehicle of a draft
model act, the Canada Water Preservation Act – the essence of which is to prohibit most
extra-basin removals of water from Canada’s five major water basins (CANADIAN
WATER ISSUES COUNCIL, 2008). The Act bears a resemblance to the amendments to
federal legislation described in the previous section, but addresses only removals from
non-boundary waters (removals from boundary waters would be covered by the existing
federal legislation). The rationale for the Act is an environmental one; the Act is
predicated on the general principle that, with a few limited exceptions, interbasin
transfers are inconsistent with the application of ecosystem and watershed approaches to
resource management. This approach also has the benefit of avoiding potential conflicts
with Canada’s international trade obligations, since the Act is directed at interbasin
transfers generally, rather than discriminating against those that cross the international
boundary (although as a practical matter the Act would effectively preclude water
Managing Water in a Federal State: The Canadian Experience
Apart from ensuring consistency with any international trade obligations, the
model Act also minimises federal intrusion on provincial water management
prerogatives. This is accomplished by providing that where a province has equivalent
regulatory restrictions on the interbasin transfer of water, the federal legislation will be
inoperative and the provincial regime will apply. In fact, some provinces already have
such legislation in place.
As a final word on the federal-provincial relationship, the discussion in this paper
has concentrated on the challenges to sound water management posed by a federal system
that in practice concentrates authority in the sub-national level of government. Not
surprisingly, in such a situation there is a danger that the legitimate national interest in
management of the resource will be lost as the national government – whether for
political or legal reasons – defers to the other order of government. The converse may
also be true, however: that local nuances and interests are poorly accounted for, or that
better, locally-developed solutions to water-use conflicts are ignored, when the federal
government exercises policy hegemony. This is most likely to be the case in those areas
where the national voice is considered to be most legitimate – for example, in the area of
international water relations. The deference to the national government as the natural
candidate to manage internationally shared waters is intuitively attractive, and indeed is
often desirable, as indicated in the above discussion. It is also true, however, that simple
deference to the national government as the regulator may leave unexplored the
possibility of creative regional trans-border cooperative solutions. It is certainly
arguable, for example, that the water management challenges facing the population of the
Great Lakes Basin are more likely to be understood and resolved by residents of the
Great Lakes states and provinces than they are by their respective co-citizens in the arid
west of the continent, where both the legal and management issues are significantly
different. In such an environment, it may be desirable then to look for ways to increase
the provincial role in water resource management vis-à-vis the national government. This
is especially the case as water resources come under increasing, but regionally
differential, stresses, and the need for appropriately tailored local solutions becomes more
Managing Water in a Federal State: The Canadian Experience
apparent. One approach that builds on this insight is found in the management of the
internationally-shared Great Lakes Basin.
The Great Lakes Basin embraces eight American states and two Canadian
provinces (this includes Québec, which, although it does not border the Great Lakes, is
directly affected by management decisions in the Basin because of the impact on the St.
Lawrence River). With the exception of Lake Michigan, all the lakes (Superior, Huron,
Ontario and Erie) are shared between Canada and the United States. The Great Lakes
Charter of 1985 (COUNCIL OF GREAT LAKES GOVERNORS, 1985) is attractive as a
cross-border regional initiative that facilitates local solutions to internationally shared
challenges. It is also legally interesting as a “soft law” instrument – which is to say that,
while it contains a number of important undertakings, it is not legally binding as such
(reflecting the constitutional restriction on both states and provinces with respect to
entering into treaties).
The Charter originated in the work of the Great Lakes Governors, who were
concerned over possible new diversions from the basin (one of the issues of most concern
in this respect lakes relates to Lake Michigan, where the Basin boundary comes very
close to the Lake itself in places, including at Chicago, thus raising the question of
whether “straddling communities” should have rights to the use of the Basin’s water).
This work also attracted the interest of the two Basin provinces in Canada, and the
Charter signatories include all the Basin states and provinces. The Charter sets out
several major purposes, and, flowing from these, several principles for the management
of the shared water resources of the Basin. The emphasis in the Charter is on an
ecosystem approach to management rather than one predicated on political boundaries.
This approach requires interjurisdictional cooperation on a range of matters; of special
importance is the commitment by each Great Lakes state and province to prior
notification and consultation in the event of new or increased diversions or uses above a
specified triggering limit. The Charter does not, then, provide a veto to states or
provinces on the use of water by another party, although it certainly opens up such
decisions to more scrutiny (under separate federal legislation in the United States, each
Managing Water in a Federal State: The Canadian Experience
Great Lakes state does effectively have such a veto on diversions outside the Basin by
other states; this does not of course apply to diversions undertaken by provinces in
The Charter process has evolved over time. In 2001, the parties agreed to an
Annex directed at providing more concrete implementation of the Charter principles. In
particular, the goal was “to develop and implement a new common, resource-based
conservation standard and apply it to new water withdrawals proposals” (COUNCIL OF
GREAT LAKES GOVERNORS, 2001). Following several years of intensive and
sometimes difficult negotiations, with significant public participation, in 2005 the parties
eventually adopted two agreements – one a “good-faith” agreement among all the parties
(Great Lakes – St. Lawrence Basin Sustainable Water Resources Agreement, 13
December 2005) (reflecting again the inability of the states and provinces to enter into
binding international agreements), and the second, a binding agreement (Great Lakes –
St. Lawrence Basin Sustainable Water Resources Compact, 13 December 2005)
including only United States states. The commitments under the international good-faith
agreement come into effect in different phases, and to some extent depend upon the
ability of the parties to enact the necessary legislation within their respective jurisdiction
so that they will be able to fulfill their undertakings. However, the key provisions in the
international good faith agreement relating to the common objectives of the parties and
the implementation of the decision-making standard (actually two standards – a general
decision-making standard for withdrawals and an exception standard, which applies to
those limited cases which constitute exceptions to the general prohibition on diversions)
came into effect on signature. With respect to the binding interstate compact, this
required ratification by each of the Basin states and by Congress, steps that were by no
means certain at the time, especially given the differing interests of the various basin
states. Ultimately, however, all the states ratified the Compact, which was subsequently
approved by Congress (the Senate on 1 August 2008 and the House of Representatives on
23 September 2008) and signed by President Bush on 3 October 2008.
Managing Water in a Federal State: The Canadian Experience
The success of the agreements remains to be seen, but certainly they represent a
remarkable example of the ability of sub-national units to engage in very substantive
cooperation across international boundaries. It should be noted finally that the Great
Lakes Charter process also provides a good example of how national governments can
sometimes serve a useful role by simply standing aside and letting regional processes
move ahead.
V. Conclusion
Canadian federalism is characterised by a high degree of decentralisation of
authority, especially with respect to natural resources management, including water
management. This decentralisation is not a necessary – or even intended – result of the
formal Constitution as originally adopted in 1867, but rather reflects a consensus that has
developed over time that provinces are in the best position to manage their own resources
as they see fit. One need not question the appropriateness of a strong provincial voice in
resource management in suggesting that there are also good reasons for the assertion of a
strong federal voice in relation to those aspects of resource management that have
national dimensions. This is most obviously the case for the management of waters that
cross provincial or international boundaries. Unfortunately, in Canada, successive
federal governments of differing political complexions have been consistent in pursuing a
timid approach to exercising a role in interjurisdictional water management. In
particular, they have tended to rely narrowly on specific heads of constitutional authority
such as the fisheries power or the Empire treaty clause. This has come at the expense of
sound water management principles.
Given the likelihood of increased stresses on Canadian water resources in coming
decades, the timid federal approach may well be tested as there is a growing need for the
assertion of a national voice in matters of interjurisdictional concern. This paper has
suggested that there are options available to the federal government to exercise this voice
in a way that is consistent with recognition of provincial primacy in water resources
management. Indeed, there is even room for some expansion of the provincial role in
Managing Water in a Federal State: The Canadian Experience
finding creative solutions to regional problems, even on a binational basis. However,
experience suggests that if provinces believe that the federal government is not willing to
intervene to articulate a national interest, there may well be little incentive for upstream
provinces to negotiate substantive constraints on their rights to use shared water resources
as they see fit, even where this may be to the detriment of the basin – and the nation – as
a whole.
1J. Owen Saunders is Executive Director, Canadian Institute of Resources Law, Faculty
of Law, University of Calgary, Calgary, Alberta, Canada T2N 1N4. E-mail: Tel.: (403) 220 3975 Fax: (403) 282 6182
VI. Bibliography
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Canada’s Waters, Munk Centre for International Studies, University of Toronto, Toronto,
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CÔTÉ, François (2006), Freshwater Management in Canada: IV. Groundwater, Library
of Parliament, Parliamentary Information and Research Service, PRB 05-54E.
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Governors Task Force, Final Report and Recommendations: Great Lakes Governors
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COUNCIL OF GREAT LAKES GOVERNORS (2001), The Great Lakes Charter Annex,
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Managing Water in a Federal State: The Canadian Experience
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Aquatic Ecosystem Report 2003, Mackenzie River Basin Board Secretariat, Fort Smith,
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