Water royalties coming soon: Quebec eyes B.C. and Ontario models

Posted November 27, 2007 in [Water]

Lynn Moore, November 26, 2007, Montreal Gazette - No water-guzzling industry in Quebec - not thirsty mines or bottled-water exporters - pays for the water it uses.

But that is about to change, according to Jean Charest's government, which promised water royalties for industrial and commercial users in its last budget.

Quebec royalties would apply to groundwater as well as surface water, the head of the Quebec Environment Department's integrated water management unit said last week.

"If there are (water) charges, they will be for groundwater and surface water," said Yvon Maranda, whose office has been considering various royalty scenarios for the politicians who will decide the matter.

Serving as models for Quebec are British Columbia, where water royalties and water licences date back to the Gold Rush of 1858, and Ontario, whose first water royalties come into force in 2009.

But neither B.C. nor Ontario would currently tag a water charge on an operation like the niobium mine proposed by Niocan Inc. for the Oka region. B.C. does not charge royalties for groundwater use and Ontario has not yet determined when mining companies would be subject to water royalties for both groundwater and surface water.

It would make sense if Quebec's and Ontario's practices and policies are aligned, Maranda suggested. Industrial sectors are similar and the sister provinces are signatories to the 2005 Great Lakes-St. Lawrence River Basin Water Resources Compact.

On Jan. 1, in Ontario, a fee of $3.71 per million litres of water will be charged to some industrial water users who withdraw more than 50,000 litres per day of ground or surface water, or draw from a municipal system.

The first to be charged include beverage makers - including water bottlers - concrete manufacturers and quarries.

In Ontario, mining operations will be phased in some time later, an Ontario Environment Department spokesperson said.

While Maranda would not discuss specifics about water royalties in Quebec or projected rates, beverage makers and the agricultural sector here are bracing for the impact.

In B.C., all industries and business pay for using water from rivers, streams and springs. Groundwater is not subject to royalties. But the use of groundwater at the rate of more than 75 litres a second would automatically trigger an environmental assessment, said Jim Mattison, comptroller of B.C.'s water stewardship division.

All water-using companies must submit a water development plan and provide details about the downstream impact of their operations, as well as the impact of their water withdrawals and discharges on fish.

B.C. mining companies pay between 65 cents and $1.10 per 1,000 cubic metres of water, depending on the use of the water. In 2009, most industrial and commercial water users - including water bottlers - will pay a rate of 85 cents per 1,000 cubic metres of water while the agricultural sector will pay 60 cents.

Last year, B.C. collected about $300 million from its water-power royalties and about $6 million from water royalties, Mattison said.

As of January, Hydro-Québec has been paying a water-power royalty that goes into the "generations fund" to pay down the provincial debt.