Blog Post # 2 – Pricing BC’s Water



Many of the comments we’ve been receiving so far on the blog and in email submissions have focussed on the pricing of water. Given how essential our water is, it’s an important consideration for sure.  For the most part, water fees and rentals don’t currently cover the cost of administering and managing BC’s water resources.

Under the proposed Water Sustainability Act, all non-domestic users of groundwater, would be required to pay an application fee and an annual rental, in the same way that surface water users do today.

In the new Act we’re proposing that surface water and groundwater would share the same pricing structure and rates.  We’re basing this on the principle that surface and groundwater are interconnected and part of same hydrologic cycle.  Surface and groundwater really are “one water”. 

Government is also contemplating changes to both the pricing structure and rates for water.  Currently, fees and rental rates for users depend on the purpose of the water use and the amount of water used.  In making changes, considerations include fairness and equity, impacts on users, cost recovery and ease of administration.  We describe this more fully on pages 76 and 77 in the detailed Legislative Proposal

So in summary, the proposed new Act would allow government to regulate groundwater and assess fees and rentals like we do now for surface water.  Specific changes to the fee and rental structure and rates require more discussion.

What do you think government should charge for water?  Should the rates be different for different uses or the same regardless of the purpose? Share your thoughts below by leaving a comment on the blog.

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25 responses to “Blog Post # 2 – Pricing BC’s Water

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    [-] Chris

    It would be nice to see our govt actually stand up for the future generations by charging a more reasonable price instead of basically free. I do understand that water will be needing for energy extraction however large companies can easily afford to pay a fee for using a resource that belongs to all the people of BC/Canada. I am a young male with a young family who plans to reside in BC for the rest of my life, I would like to see our govt start doing what is best for the province and not just the few who have most to gain. Water is going to be the most valuable resource the world has and we have large amounts of fresh water that we need to start protecting.

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    [-] R.SLOAN

    WELL SAID CHRIS, THE ONLY THING I WOULD LIKE TO ADD IS THAT THE PEOPLE OF B.C./CANADA RECEIVE A FARE RATE AND CHARGE ANYONE WHO MAKES A PROFIT FROM B.C.’S WATER TO PAY WELL FOR IT. TOO ME WATER IS MORE VALUABLE THAN OIL. “NO WATER, NO LIFE, NO OIL”.

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    [-] Martin Brunelle

    With all the concern that fracking has on aquifers, is the Water Sustainability Act going to address this issue? We all here the news on horror stories of well tap water being good for many years and then after fracking the wells all of a sudden have high levels of natural gas. It appears fracking can have a huge and detrimental affect on groundwater and so it should be considered in an Act designed to protect aquifers.

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    [-] S Kibble

    “Given the pressures of a growing population, a changing climate and expanding development, we must take steps to ensure our supply of fresh, clean water is sustainable – not just to meet our needs today, but for generations to come.” If the government truly believed this then fracking wouldn’t be allowed to happen ever again. As well, the current governemnt wouldn’t be so adamant on trying to extract more and more oil out of the ground. Ground water cannot be replaced!

    The Province has an article (http://www.theprovince.com/technology/Water+prices+fracking+deal/9088170/story.html) (October 27) on how ridiculously low, “free ride”, oil and gas companies are paying to get a resource far far far far more precious than any oil, fresh water. It is disgusting to see how much water these companies in one year are using (the amount water companies takes in comparison is minisucle!). It is however more revolting that the government allows this. To think the amount of fresh water lost forever is only going to multiply thanks to the current government’s future plans to expand on producing/extracting natural gas makes the statement about protecting fresh water an outright lie.

    The price for water should be priceless. Fresh water should not be treated like something cheap. Oil and gas comapnies want it, they should pay a heavy toll for it, so much so that some other method besides fracking will be more desirable. But as usual, the arrogance of humanity will no doubt triumph. We’ve got oil and gas, and the economy will be fine. Let’s just forget we and future generations (and the animals and plant life and the planet itself) cannot live without water. So it’s hard to have faith that the governemt will indeed follow through and ensure fresh water will remain a plentiful resource for continual future use and be given the protection it should have.

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    [-] A Easton

    I take issue with your statement:”surface water and groundwater would share the same pricing structure and rates. We’re basing this on the principle that surface and groundwater are interconnected and part of same hydrologic cycle. Surface and groundwater really are “one water”. ”
    Surface water and groundwater are interrelated but they are not the same. Groundwater depletion has a much longer term effect on the hydro health of a region. If water is removed from groundwater stores at a greater rate than it is replenished, a groundwater deficit occurs that can take decades or longer to fix. What we do know is that groundwater is replenished at a very slow rate but the commercial use of groundwater depletes at a very fast rate, especially if it is “sold” for very little in return. Once a precedent is set for selling our water cheaply, we give commercial interests an ability to sue us for interfering in their profits should we decide to up the price of water. The issue of maintaining our groundwater for future generations needs to take precedence over the short term gains to the “economy” of selling out our water. Tread carefully.

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    [-] Magnus Macnab

    A Easton makes a brilliant point. Ensuring an adequate supply of clean drinking water/ground water and ecosystem integrity for BCs generations to come absolutely must take priority over use by industry and economy, particularly if the latter causes any contamination or results in significant losses of fresh water volume. In addition, access and use of BC water by BC residents for non-commercial use must be given priority of use by other populations. Clean freshwater is undervalued and quickly becoming a scarce and valuable commodity. We must ensure that BC water is appropriately valued, kept clean and sustainably used.

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    [-] Lucille Ross

    I agree that our water has been plundered over the years and it is far past time that we rectify this situation. Ground water is being depleted faster than it can be replenished. We can’t keep giving water away mindlessly. It is a more important resource than oil or gas because we depend on it for many of our other resources.

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    [-] L. Matthaus

    Great comment, I’d like to add a ‘like’ to this if I could! Getting the pricing structure right, especially for groundwater as it’s just coming into the regulated system, is hugely important. It’s also an opportunity to fund high quality water management in BC, especially if the fees collected went into water management instead of into general revenues (which they do now).

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    [-] Brenda McNair

    i agree with A Easton that surface water and groundwater should NOT be considered “one water”! Underground aquifers can be drawn down to dangerously low levels regardless of what is happening on the surface in the same area. I believe the proposed fees for groundwater use are too low, they should be high enough to adequately fund the new licensing regime as well as effective monitoring.

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    [-] Ian Stephen

    Water rates should cover program costs plus an additional amount to go to a fund specifically for water programs such as development and implementation of Water Sustainability Plans. Area-based tools in the WSA provide the most flexibility to deal with unique and/or changing conditions in specific parts of the province. They need to be adequately funded.

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    [-] Mike Watson

    Like others on this blog I would agree that pricing is important. In principle water is “priceless” but in reality we all consume water, we waste water and we take it for granted. One way to change our appreciation for water is to put a price on it. The more we all pay, the more we will pay attention to consumption and use. This applies to companies and individuals. If water is used for industrial purposes it should pay a fee ABOVE the cost of administering the issuance of licenses. Ultimately this price will be passed onto consumers, as are all costs in production, but it will raise awareness of water use my producers (as a variable cost) and consumers as a consumption cost. One final comment, we must be very careful about the impacts of water consumption for oil. As the U.S. pursues development it’s shale oil perhaps we should think long term and anticipate the market for fresh water when they no longer have enough to sustain their own population. I see a future business in the sale of water.

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    [-] Neal

    Groundwater is a unique resource that we often take for granted in BC. Like all resources, there is a value and is therefore an asset to the people. I say people and not province or government because it’s a part of Nature and should be treated with paramount respect.

    The cost structure and who pays for how much is more than economics and pricing – it’s protection of our land from unbridled foreign investment.

    You’d think that lessons were learned with the forest industry in the 80’s with selling raw logs and timber overseas or across the border only to have value-added finished products show up back in our economy. Trade relations are key of course but there’s a difference between making a few dollars or leveraging a protected resource so it remains protected and has a substantial future value embedded in the equation.

    It’s a great step forward to protect the water and frankly it’s about time. It’s time to live up to our Land and BE the ‘Strong and Free’ people of Canada and treat our Natural surrounding like one of us.

    Keep our Children’s Children in mind and that can create a momentum in the right direction.

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    [-] Jennifer Woodroff

    This province needs revenue. Your continual and almost obsessive cutting of revenue has become the source of a lot of woe for the people of this province. Here, you have an opportunity to redeem yourselves by honouring the legacy of this province’s water by charging industry adequately. I suggest you grasp the opportunity.

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    [-] Tisha Kirk

    I feel that 40 year licences are too long. We need to renew all other types of licences – and pay the increasing fees (Driver’s Licence). Without regular renewal, management and accountability of the water licence recipients, that sector will be hard to enforce – let alone measure. How many times are extraction points reviewed, water usage stats quantified, Cross Connection Control monitored under the current legistlation?

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    [-] Salal

    A $265.00 per year charge to Nestle for millions of litres of water is inexcusable.

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    [-] James Wilson

    Madame’s revelation that we now have enough natural gas to last ” forever ” is great news ! Except when you realize that there is probably not sufficient water to give the frackers the opportunity to mine it. Large industrial users must pay, through the nose if necessary, to stop the abuse of our most valuable source of life. The 265 dollar “tax” to Nestle is an insult to the taxpayers of BC. Fix the problem now…not in the future.

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    [-] Tim Sackmann

    I strongly urge the British Columbia government to include and implement a public trust doctrine in the final Water Sustainability Act. The government’s position at this point is that there is insufficient experience with the public trust doctrine, and that there is too much uncertainty in its potential effects. It has already been pointed out by the POLIS Water Sustainability Project that the public trust doctrine has been practiced for centuries, both internationally (e.g. the United States, India, and South Africa, with elements of public trust doctrine adopted in Europe, South America and Australia) and locally (elements of public trust doctrine are found in a variety of systems including Canada’s national park management system, territorial legislation, and the Gulf Islands Trust framework). The notion of public trust is a fundamental component of our common law system, with principles and applications supported by case law and public policy.

    Public Trust doctrine forms a sound basis for protection of water resources in our Province: water is, first and foremost, a common resource which is vital to us all. International experiences shows us that public trust doctrine is one of the strongest, most consistent avenues for protection of water resources. It forms the basis for public involvement in water resource decision-making, and for agency protection in the face of private interest challenges. Further, it stands the test of time: while government policies may change, public trust remains as the underlying basis for water protection and allocations. This feature will become all too important in coming decades as climate change alters hydrological regimes and water availability throughout our Province, especially in areas such as the Okanagan and central Interior which are even now the most water-stressed.

    Therefore, I believe that there is enough precedent and experience in public trust doctrine, and that the British Columbia government would be right to apply the doctrine in our Province’s water management system. Public trust doctrine provides a sound basis for water management in our Province, and will ensure protection of our water resources for future generations.

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    [-] Dana McDonald

    I believe the costs of application and rental are far too low for industry. While, I don’t know the numbers, I expect that the (environmental) costs borne by the province and its citizens far exceed the costs borne by industrial water users. Fees for industrial water users should reflect the impacts their industries have on water resources. As well, their withdrawals and discharges should be closely monitored to maintain ecological flows, which I’m happy to see is in the proposed legislation. I believe that licences for the purpose of water transfer – like for companies extracting for bottled water – should be banned in perpetuity. The transfer of water out of BC watersheds for profit is not acceptable.

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    [-] Andrew D

    I agree with Dana’s statement above, (virtually) free extraction of our ground water by muiltinational corporations for export and profit should not be allowed. Any extraction of ground or surface water should only be allowed to the extent that the water can be replenished. Fracking operations in the province should have to pay a substantial fee for the water they are using a polluting. Economic development should not be traded for a sustainable water supply in any region of the province.

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    [-] jenifer dawson

    Water SUSTAINABILITY Act: It is NOT sustainable to let companies take millions of liters of water out of the system for free or for very little cost. Price water very very high to those who are making a profit from selling the water or the goods and services that our water enables them to produce and sell. If you price it so cheaply that you are in fact giving it away, then there will be no incentive for profit making companies to use water efficiently or to come up with new technology to reduce their use of water AND once you sell it to one company so cheaply others will demand the same. The price for exporting goods made with our water (water bottle, fracked gas, etc.) should be prohibitively high. Sustainability means we want this water to be here for future generations and that will not be the case if we allow the wholesale depletion of this resource. Sustainability does NOT mean price water so cheaply that companies flock to our province to exploit our water resources until they are gone or so polluted that they are undrinkable.

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    [-] Rod Dobell

    The consultation process leading up to the draft Water Sustainability Act has been exemplary, and the resulting draft legislation offers several important amendments to the existing out-dated Water Act. But in some fundamental respects the present proposal falls far short of the potential transformation essential at this time. It fails to take advantage of the present opportunity for British Columbia to lead the world in stewardship of water resources as it has done with the example of the carbon tax.
    To do so demands that the legislation start from recognition of the changing and uncertain world in which stewardship responsibilities must be undertaken. It is now widely recognized that this world is characterized by profound uncertainty and deep complexity. The presence of water resources and the dynamics of water cycles form crucial core features of the complex social-ecological systems within which we all live, at global and local scale. The goal of legislation and policy in these circumstances must be to build and ensure continuing adaptive capacity and resilient, equitable response to unexpected change in both resource needs and potential supplies. It is not possible to promise certainty of claims or outcomes in such changing ecosystems. What must be assured is clarity and certainty of voice for all—including voice for the rights of Nature and future generations—within legitimate processes for achieving equitable adjustment of claims and allocations in the face of changing resource supplies and dynamics.
    In these circumstances, the ancient FITFIR system must be replaced by something more responsive to changing balances of needs and resource availabilities. The new WSA ought to provide overall principles and guidelines within which decisions on plans and allocations can be made through inclusive mechanisms for governance at watershed and more local scales. In earlier days, FITFIR may have served well; in current settings of scarcity and uncertainty, it no longer can. It must go.
    Appropriate watershed governance mechanisms must in turn be informed by effective pricing mechanisms. Price systems and economic mechanisms can only work to achieve appropriate allocation of resources if the values of those resources are properly reflected in appropriate prices to guide decentralized individual decisions.
    In particular, entrepreneurs and corporations can only be permitted licensed access to water resources, and encouraged to make a profit on their associated activities, if they are paying full value for the ecological resources withdrawn or consumed from the pools and systems that are a common heritage for all the community. Firms should make profits on the value they add through their operations; the speculative increases in the scarcity value of ecological resources belong to the community. Corporations and other users should not continue to be permitted to achieve assured access to scarce ecological resources—water in particular—through the administrative stroke of a pen by which the public is led to surrender its legitimate interest in the increasing value of ecosystem goods and services. Full value pricing is essential, though a reasonable period of transition may be necessary.
    Above all, responsibility to ensure these features in the continuing adaptation of access to water must be entrenched and ensured through embedding within the new WSA of a strong expression of a public trust doctrine. The public trust doctrine is sufficiently known and tested that British Columbia can confidently seize this opportunity to take the lead in giving it clear and effective expression to ensure the accountability of governments and other institutions for responsible stewardship of community resources.
    BC has broken new ground in opening up exemplary consultation in preparation of fundamentally new, path-breaking legislation to adapt public policy to the realities of a profoundly changing world. BC should follow through with the vision of transformative legislation that has emerged from that public deliberation and interaction.

    It is in this way that British Columbia can make good on its promise of a green economy and leadership in the world in responsible stewardship of irreplaceable ecological resources, with water principal among these.
    ARD
    November 15, 2013

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    [-] Diane Babcock

    Water can’t be re-created in a lab. What we have is ALL we have.

    It is preposterous to have it pilfered by water companies and sold back to us when our tap water, as well as our wallets, would be healthier if we took better care of our watersheds.

    It is lame limbic thinking to use our limited supply of drinking water for fracking and hot water extraction when we could put our money into technologies that don’t need these industries at all.

    Oh wait! We do have the technology. Why is the government not investing in those smart ideas? It’s time to remind them what the future needs us to do today.

    I bet if they pulled all the invested money out of outdated fossil fuel industries and put it where it belongs, in clean energy, we would all get a Zenn car credit on our income tax by 2015.

    I want my money invested in brain power and think tanks that are focused on finding new and better technologies, not squandered on fossilized methods that end up costing us more than just our money.

    These are decisions that require intellect and integrity and if our government representatives don’t have those, they are in the wrong business.

    As human beings we have responsibilities and government is no exception. Just as the government is not above the rule of law, even more it is not above the laws of nature.

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    [-] Mark Pezarro

    Hello, thank you for this opportunity to comment on the proposed pricing of BC’s water, one of the most important natural resources our province is blessed with.

    First of all, kudos to the Ministry for proposing this new legislation to better govern and conserve the use of freshwater in BC. I commend the Minister and all her staff for this important policy initiative.

    However, I was dismayed to read about the proposing pricing for large-scale commercial and industrial use by companies such as Nestle Canada for example. The proposed rate of $0.85 per million litres is exceedingly low, meaning that Nestle Canada would pay about $400 per year for the privilege of extracting approximately 320 million litres a year of fresh clean groundwater which they then sell across Western Canada under the Montclair brand for a retail value of about $212 million (a 12 pack of 500 ml Montclair bottles retails at Staple for $3.99 or $0.67 per litre). Looking at it another way, Nestle are paying about a millionth of the retail value of a litre of water for every litre they are extracting from BC’s aquifer.

    I urge the Ministry to reconsider the proposed pricing to reflect the true value of this precious resource. Natural Resources Canada has published an excellent study on the subject of groundwater pricing entitled, “Buried Treasure: Groundwater permitting and pricing in Canada”; available on-line at
    http://www.nrcan.gc.ca/sites/www.nrcan.gc.ca.earth-sciences/files/pdf/gm-ces/reports/pdf/gw_permitting_pricing_canada_e.pdf. It suggests that groundwater pricing should be based on the principle of full-cost accounting and full- cost recovery, a recommendation I strongly concur with. These kind of pricing principles will ensure that the Province of BC and its citizens are properly and fairly compensated for the extraction for profit of this vital resource; and that water conservation is properly encouraged in BC. Underpricing of water will inevitably lead to being squandered; this is only human nature and this behaviour applies to any kind of resource. Hence the vital role of government in establishing appropriate price signals to influence citizen and corporate behaviour.

    It is interesting to note that Nova Scotia currently charges $142/million litres for the extraction of groundwater by large-scale commercial and industrial users; this is over 160 times more than the rate that BC is currently proposing and is arguably still too low.

    Thank you again for the opportunity to comment and for all the work you do to safeguard and protect BC’s natural capital. I would be pleased to provide further input if the opportunity arises.

    Sincerely,
    Mark Pezarro
    Earthvoice Strategies
    http://www.earthvoice.ca

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    [-] Jane Barroll

    The WSA Legislative Proposal says that “‘beneficial use’ means using the licensed volume of water for the intended purpose(s) and in compliance with the terms of the water license.”
    It is crucial that the definition of “Beneficial Use” does not relate only to private licensed water use but is also consistent with the public interest and provides protection for public access to drinking water, agricultural water and environmental stream health.
    NAFTA and similar but farther-reaching international agreements-such as FIPA and CETA, which the current federal government wants to implement- allow foreign corporations, if in place, to take our governments to the World Court if they tried to enforce laws designed to protect our civic right of access to our clean water supply and protection of that heritage, if these laws did not exist and were not agreed upon initially.
    Clean water is the most important natural resource in the world. At the very least, our elected officials should protect the source and our access to it…otherwise why are we paying our taxes?

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    [-] Doug Roszmann

    1. I would like to see addressed the 3 areas in a strong governance.
    1/ Domestic and corporate metering of water. This metering is essential to monitor the amount of water consumed/used and therefore gives data to decision makers and users for the awareness and ability to conserve. This is controversial and people will gripe. Hold the course!!! In spite of the individual whining it is necessary for the sake of good data for good governance.
    2/ Corporate use of aquifers. Priority must be given to public domestic requirements over corporate usage. Our aquifers MUST BE owned and operated as a legacy to the citizenry and not a corporate resource to produce wealth. One cannot drink money. Companies have attempted in other jurisdictions to “own” the resource with disastrous results. Protection of our aquifers sustainable regeneration from corporate drainage is essential and good scientific data collection by non-biased governmental monitoring is just plain due diligence. The government of the day is the steward of this essential inheritance. It is not good enough to turn the hen-house over to the fox for monitoring.The legislation you provide must show that water is a valuable resource for all life and a public owned resource, NOT A CORPORATE COMMODITY.
    3/ Absolute control over any contaminants that come from domestic and corporate activity. We need the protection from purity degradation that has strong economic and political teeth. Otherwise we will devolve into third world conditions that is not sustainable nor healthy. Don’t be weak on this matter.
    Be a government and civil service that honourably protects it’s populace as a service and not a vehicle that can be manipulated by corporations to produce wealth for the few. Jobs are important but what good are they when the families of the workers cannot have potable, life giving water.

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