FITFIR Webinar


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The Alberta Government is considering amendments to water allocation and water licence transfer systems in the province. This review is being driven by issues of overallocation of water in some areas of the province and the economic and environmental issues that overallocation has caused.

Jason Unger, Staff Counsel with the Environmental Law Centre, presented a summary review of the three reports that are informing the government’s review, as well as issues that arise from a “First in Time, First in Right” (FITFIR) system, such as whether the licence transfer system is equitable and whether transfers and FITFIR adequately address environmental and economic concerns.

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FITFIR Webinar

  1. 1. Alberta’s Water Allocation Review: Who’s it “FITFIR”? January 13, 2010 Jason Unger, Staff Counsel
  2. 2. About the ELC <ul><li>Incorporated in 1982 </li></ul><ul><li>Registered charity </li></ul><ul><li>Mission: To ensure that laws, policies and legal processes protect the environment. </li></ul>
  3. 3. About the ELC <ul><li>Public Programs </li></ul><ul><li>Information and referral </li></ul><ul><li>Community outreach </li></ul><ul><li>Law reform </li></ul>
  4. 4. Outline <ul><li>A brief history of water allocation in Alberta </li></ul><ul><li>Where we are </li></ul><ul><li>Where we are headed – government review and advice </li></ul><ul><li>Who’s it FIT FIR? </li></ul><ul><li>Are there better fits? </li></ul>
  5. 5. Brief History Riparian rights NRTA (1930) (and amendments) Northwest Irrigation Act (1894) (federal) Water Resources Act (1931) Water Act (1996) Water Act amendments 2010??
  6. 6. The current framework <ul><li>Current licences </li></ul><ul><ul><li>priority - FIT FIR </li></ul></ul><ul><ul><ul><li>… but a variety of conditions may attach </li></ul></ul></ul><ul><ul><li>Statutory rights to alter licences are limited </li></ul></ul><ul><ul><ul><li>Emergencies, or </li></ul></ul></ul><ul><ul><ul><li>significant environmental affects (leading to compensation) </li></ul></ul></ul><ul><li>Transfers enabled by AWMP or by Cabinet order </li></ul>
  7. 7. Current framework -transfers Licence holder applies to Director for transfer of part or all of licence Director’s discretion directed by Water Act (s.82) and matters and factors in AWMP Notice and “public review” is required Triggers public participation and appeal rights Director may require a 10% holdback (s.83) <ul><li>Transfers prohibited – </li></ul><ul><li>Significant impact on the </li></ul><ul><li>environment </li></ul><ul><li>Impairs other users rights </li></ul>
  8. 8. The current situation <ul><li>Pressures on southern basins </li></ul><ul><ul><li>Master agreement on apportionment </li></ul></ul><ul><ul><li>Overallocation </li></ul></ul><ul><ul><li>Planning </li></ul></ul><ul><li>SSRB Approved Water Management Plan </li></ul><ul><ul><li>No more application for surface water licences (Red Deer exception) </li></ul></ul><ul><ul><li>Water Conservation Objectives (WCO) set at 45% of the natural rate of flow </li></ul></ul><ul><ul><ul><li>impacts new (at May 2005) and renewable licences </li></ul></ul></ul>
  9. 9. The current situation <ul><li>SSRB enables transfers </li></ul><ul><ul><ul><li>Matters and factors that must be considered (at p. 14 of AWMP) </li></ul></ul></ul><ul><li>SSRB closure - available water? </li></ul><ul><ul><li>Transfers </li></ul></ul><ul><ul><li>Purchase land with licence </li></ul></ul><ul><ul><li>Assignments in some instances </li></ul></ul><ul><li>Lower Athabasca – water management framework contemplates staged decreases in withdrawals </li></ul>
  10. 10. The government review <ul><li>Minister’s Advisory Group, Recommendations for Improving Alberta’s Water Management and Allocation </li></ul><ul><ul><li> </li></ul></ul><ul><li>Alberta Water Council (with non-consensus) Recommendations for Improving Alberta’s Water Allocation Transfer System </li></ul><ul><ul><li> </li></ul></ul><ul><li>Alberta Water Research Institute, Towards Sustainability: Phase I - Ideas and Opportunities for Improving Water Allocation and Management in Alberta </li></ul><ul><ul><li> </li></ul></ul>
  11. 11. Common themes <ul><li>Protected water </li></ul><ul><li>Transfer system streamlining </li></ul><ul><li>FIT FIR is accepted </li></ul>
  12. 12. Protected water <ul><li>What is it? </li></ul><ul><li>Water for the environment </li></ul><ul><li>Not available for allocation </li></ul><ul><li>How much? </li></ul><ul><li>Interim level to be set by department or cabinet </li></ul><ul><li>To be replaced by a level determined through the planning process </li></ul><ul><li>How is it reached and protected? </li></ul><ul><li>mechanism - WCO </li></ul><ul><ul><li>Licence them (MAG) </li></ul></ul><ul><ul><li>Use holdbacks </li></ul></ul>
  13. 13. Protected water -How is it reached and protected? <ul><li>Water trusts/private organizations could hold instream licences </li></ul><ul><ul><li>2% cap over WCO – AWC –non-consensus </li></ul></ul><ul><li>Transfers would be prohibited if there is a “significant harm to the aquatic environment” (currently in s.82) </li></ul><ul><li>WCOs - sub basins & “umbrella” </li></ul><ul><ul><li>Holdbacks would go toward specific WCOs (MAG) </li></ul></ul><ul><li>Operational changes </li></ul>
  14. 14. Transfers <ul><li>What is it we want? </li></ul><ul><li>Facilitate efficient and transparent transfers </li></ul><ul><li>Minimize transaction costs </li></ul><ul><li>How do we get there? </li></ul><ul><li>Independent facilitator (or body) to administer transfer system </li></ul><ul><li>Information systems & public registry </li></ul><ul><ul><li>An “MLS” for water licences </li></ul></ul><ul><ul><li>Reporting on actual use </li></ul></ul><ul><ul><li>Uniform documentation and conditions </li></ul></ul>
  15. 15. Transfer process -amendments <ul><li>Director’s discretion determined by level of risk and complexity </li></ul><ul><li>Would impact participatory rights in some cases </li></ul>
  16. 16. Approval of transfers <ul><li>AWC contemplates three classes </li></ul><ul><ul><li>Class 1 “no harm zone” – permitted – transfer is approved – no government discretion </li></ul></ul><ul><ul><li>Class 2 & 3– “do no significant harm” test </li></ul></ul><ul><ul><li>Class 3 “full review” </li></ul></ul><ul><ul><li>Class 2 “some discretion” </li></ul></ul><ul><ul><li>Class depends on potential harm & includes changes in the point of diversion, the provision of compensatory flows, rate of diversion. </li></ul></ul>
  17. 17. Transfers and unused water <ul><li>Allow for unused water to be available to others (MAG) </li></ul><ul><li>… depending on circumstances (AWC) with graduated holdbacks (non-consensus) </li></ul><ul><li>Should not penalize those who have reduced consumption (MAG) </li></ul><ul><li>Still must meet “no significant harm” test </li></ul><ul><ul><li>How will this be defined? </li></ul></ul><ul><ul><ul><li>In an overallocated basin when would a transfer of previously unused water do no harm? </li></ul></ul></ul>
  18. 18. Other advice <ul><li>Integration of groundwater </li></ul><ul><li>Drought/water shortage planning </li></ul><ul><li>AWRI </li></ul><ul><ul><li>Define an amount for “critical human use” </li></ul></ul><ul><ul><li>consider “right sizing” municipal licences or regionalize management of water </li></ul></ul><ul><ul><li>Consider collective approach to oilsands water management </li></ul></ul><ul><li>AWC </li></ul><ul><ul><li>Minimize amending purposes to 2% of original allocation </li></ul></ul><ul><ul><li>Approach to unused water and amnesty to cancellation (non-consensus) </li></ul></ul>
  19. 19. Who’s it FITFIR? <ul><li>Prior allocation system </li></ul><ul><ul><li>Certainty vs. flexibility for growth </li></ul></ul><ul><ul><li>Resolve by allowing transfers </li></ul></ul><ul><ul><ul><li>Higher valued uses will obtain the water </li></ul></ul></ul><ul><ul><li>Transfers may impact other rights holders, downstream users & the environment </li></ul></ul>
  20. 20. Who’s it FITFIR? <ul><li>Senior licence holders  </li></ul><ul><ul><li>equity of transfers? </li></ul></ul>
  21. 21. Who’s it FITFIR? <ul><li>Environment </li></ul><ul><ul><li>Many northern basins  (w/ right PW/WCO) </li></ul></ul><ul><ul><li>SSRB  </li></ul></ul><ul><ul><ul><li>Environment has the risk </li></ul></ul></ul><ul><ul><ul><li>Relies on environment licence buy backs </li></ul></ul></ul>
  22. 22. Who’s it FITFIR? <ul><li>New users   </li></ul><ul><ul><li>Can access water for a price </li></ul></ul><ul><ul><li>Equitable access & fairness are not a part of the picture </li></ul></ul>
  23. 23. Who’s it FITFIR? <ul><li>Rural residence/communities (Edwards, Cheers,& Bjornlund) </li></ul><ul><ul><li> licence holders have additional assets of value </li></ul></ul><ul><ul><li> rural economies and culture may be significantly altered – “loss of water…loss of farms…loss of local wealth” </li></ul></ul><ul><ul><li>Private benefit, potential for community loss </li></ul></ul>
  24. 24. Who’s it FITFIR? <ul><li>Remaining questions </li></ul><ul><ul><li>Will there be enough willing sellers? </li></ul></ul><ul><ul><ul><li>e.g. irrigation and municipalities </li></ul></ul></ul><ul><ul><li>Will there by mechanisms for temporary sales? </li></ul></ul><ul><ul><li>Where’s the wiggle room? </li></ul></ul>
  25. 25. Where’s the wiggle room? <ul><li>Question for the SSRB’s aquatic environment </li></ul><ul><li>Water use intensity </li></ul><ul><ul><li>Unused water </li></ul></ul><ul><ul><li>Water reuse –where non-consumptive becomes consumptive –reduced return flows </li></ul></ul><ul><li>Reaching WCO – no plan, strategy or budget </li></ul><ul><ul><li>Holdbacks of minimal impact (AWRI) </li></ul></ul><ul><li>Flexibility to deal with droughts </li></ul><ul><ul><li>Licences based on volumetric supply </li></ul></ul><ul><ul><li>People might pay and be cut off anyway </li></ul></ul>
  26. 26. Better fits? <ul><li>Share based system </li></ul><ul><ul><li>Annual water budgets (ideally with environmental and social allocations set aside) </li></ul></ul><ul><ul><li>Licencees receive their share of the budget and shares are tradable </li></ul></ul><ul><ul><ul><li>See Share the Water – Water Matters & Ecojustice ( pdf ) </li></ul></ul></ul><ul><li>Environmental set aside </li></ul><ul><ul><li>Avoid issues of proof of “no significant harm” </li></ul></ul>
  27. 27. Better fits? <ul><li>Drought or permanently reduced supply should be focus </li></ul><ul><ul><li>offstream storage is likely to play role </li></ul></ul><ul><li>Transfer limitations </li></ul><ul><ul><li>Limit of transfers to within specific purposes – to maintain social/economic continuity </li></ul></ul><ul><li>Market restart – to deal with equity issues & to reduce monopolies </li></ul>
  28. 28. <ul><li>Government review </li></ul><ul><li> </li></ul><ul><li>Water Act amendments on the way ? </li></ul><ul><li>Consultation to take place – summer 2010 </li></ul><ul><li>Questions & Comments? </li></ul>
  29. 29. #800, 10025-106 Street Edmonton, AB T5J 1G4 Phone: 780-424-5099 or 1-800-661-4238 Fax: 780-424-5133 E-mail: Web: For further information contact Environmental Law Centre