Thank you for the opportunity to comment on the four-page document entitled “Pricing B.C.’s Water” released on March 11, 2014. The following comments are provided by Inder Singh, Manager, Policy, Planning and Analysis Division, Water Services Department, Metro Vancouver and are provided from the perspective of the Greater Vancouver Water District:

All “Sectors” should pay the same rate ($/1000m3) for water rental.

Provincial water rental rates ($/1000m3) should be based on the actual costs of providing service and must be reasonably related to the benefits received by those using the Provincial water resources. The Province should examine the reasons for the current differences in the rental rates paid by each sector. For example, why should there be disparity amongst the “Industrial & Commercial”, “Individual Domestic” and “Waterworks” sectors, which pay $0.85 per 1000 m3, $0.60 per 1000 m3 , and $1.10 per 1000 m3, respectively? The default premise (or starting position) should be the same water rental rate for all sectors. In the water supply industry, the American Water Works Association (AWWA) and the BC Water and Waste Association (BCWWA) both recommend that rates be based on cost of service and that differential rates for the same service should be avoided.
http://www.awwa.org/about-us/policy-statements/policy-statement/articleid/201/financing-accounting-and-rates.aspx http://www.bcwwa.org/resourcelibrary/RateSetting%20Position%20Statement%20rev%20%2024-06-2013_final.pdf
Only with a well documented rationale, should a particular water rental sector pay more, or less, than other sectors. We are in support of the principles described in the “Pricing B.C.’s Water” document, including simplicity, fairness and equity of water pricing for all users.
In 2013, the Greater Vancouver Water District (GVWD) diverted about 390 million m3 of water from its three sources (Capilano River, Seymour River, and Coquitlam Lake). The 2013 rate for water rental charged by the Province for waterworks purposes is $1.10 per 1,000 m3, so for 2013 the GVWD will pay the Province about $430,000 for “Waterworks” water rentals.
The GVWD and/or its member municipalities provide treated drinking water to end users, for all purposes, including the following water rental sectors as set out on page 2 of the “Pricing B.C.’s Water” document and defined in detail under the Water Regulation/Water Act:
• Industrial & Commercial;
• Municipal Waterworks (note that the GVWD sells water to municipalities and some municipalities in turn sell water to other municipalities);
• Agriculture (the Water Act definition includes irrigation, greenhouses, kennels, nurseries, “watering of golf courses, ornamental gardens, parks or similar properties”);
• Aquaculture (the Water Act definition includes fish hatcheries);
• Domestic (the Water Act definition includes camps, churches and community halls, institutions, public facilities).
In pricing GVWD water to municipalities, or with municipalities pricing water to retail customers, the GVWD and its member municipalities, with limited exceptions, take a cost of service based approach to water pricing and charge the same unit rate to all customer sectors (classes) that receive the same service. Embedded in the pricing to end-users of water from “Waterworks” providers, such as the GVWD, or its member municipalities, is the $1.10 per 1,000m3 water rental payment to the Province. By comparison, if a large institution had an Individual “domestic” water licence to extract water directly from a surface water source, it would currently pay a much lower water rental rate compared to a similar institution served via a municipality. These differential rental rates for extraction of water appear to be unfair and we suggest that all sectors should pay the same water rental rate.
Having all sectors pay the same rate for water rental is consistent with the “Pricing B.C.’s Water” principles of “fairness and equity”, simplicity”, “efficiency”, “cost recovery”, and “implications for water users”.

We appreciate the opportunity to provide comments on this document, which is of significance to the 2.3 million people served by the Greater Vancouver Water District and are keen to be an active participant in the process for water pricing review with key user groups.

WATER SUSTAINABILITY ACT

We are writing to express the priorities of the WaterWealth Project on pricing of water use in British Columbia. We commend the Government of BC for taking steps to bring BC’s water laws into the 21st century, but also must express our disappointment with the lack of consultation with First Nations, whose title in BC has never been extinguished. We add our voices to the many calling for the government of BC to honour the spirit of the New Relationship and to correct the lack of recognition of First Nations Rights & Title going forward.

Also we understand that the government has no plans to consult the public on the pricing regime beyond this first phase of the water pricing review. For an issue so vital as fresh water there needs to be continued opportunity for public involvement, specifically an opportunity for the public to provide feedback on the proposed fee structure once it is developed. Further, consultation must continue through the development of the regulations for the Water Sustainability Act.

Of course establishing principles and priorities for water pricing is only as strong as the structures in place to ensure that they are upheld and implemented. An arms-length commission acting in a public and transparent process should be established to ensure that water rates are set fairly and are free of political interference. Water rentals must be set high enough to create incentive not only for conservation in the short term, but also for innovation in the longer term.

Priority 1. Minimizing the negative impacts on water:
As a basic of life, water must be protected for the long term and pricing should be used to discourage excessive and consumptive uses of clean fresh water.

Where possible, pricing should incent use of non-potable water sources, with precautions against and monitoring for any resultant interactions between non-potable and potable sources.

Impacts cannot be considered only in terms of province-wide categories. Impacts of particular uses may be small as a percentage of total impacts province-wide, but might be very large on local scales.

Historically most licences required users to pay for a total licensed volume regardless of how much was actually used. To encourage conservation and innovation, pricing should be based on the volume actually used.

It is troubling that the WSA prioritizes water use purposes with conservation second to last. Pricing should reflect impact to help balance the ranking of priorities.

Water allocated through short-term use approvals under section 10 of the WSA should be priced to discourage abuse. It is particularly important to balance the use approval provision now since the WSA explicitly states that repeated use approvals to the same user from the same source for the same purpose are allowed. Already the current water law is being challenged in the courts over the use of these approvals. This is one area where the WSA seems to make matters worse.

Priority 2. Food security and public health:
Food security will become ever more important as climate change impacts the growing regions we have historically relied upon, e.g. the droughts in California and the U.S. Midwest in 2012 – 2014. The Peace River area and the Fraser Valley region, with their class 1 soil, will grow increasingly valuable as growing regions move northward.

A high quality of drinking water sources is another necessary prerequisite that must be accounted for to ensure lasting public health.

We rank this principle below impact on the water resource in hope of avoiding unsustainable industrial farming practices.

Priority 3. Efficiency:
Encouraging efficient use is part of stewarding water for the long term. Pricing should be based on actual amount used and should be set high enough to achieve the goals of this principle.

The earlier WSA Legislative Proposal suggested leaving deep saline aquifers (non-potable water) unregulated. This would be problematic in several ways. The government seems to have responded to concerns raised and the WSA appears as though it will regulate deep saline aquifers along with other groundwater. Pricing should incent use of non-potable water where possible, but that use should be carefully managed and monitored to ensure no harmful interactions with freshwater aquifers.

Priority 4. Cost recovery:
This is another area where the government has responded to input received in the public comment period last Fall. We applaud the move to ensure pricing fees high enough to enable future water management including science, monitoring, planning and facilitating community involvement, regulation and enforcement.

Although we appreciate the sentiment of acknowledging water as a public resource, we are uncomfortable with the government’s statement, “Costs to users should also reflect a fair return to the Crown for use of a public resource.” This is in direct conflict with unresolved First Nations Title. Insofar as the government has authority to regulate water use (something that is questionable in BC so long as treaties with First Nations remain unresolved), we look to government to steward water as a public trust for now and for the future, and also to ensure honourable engagement with First Nations whose rights and title are affected.

Priority 5. Fairness and equity:
Surface and groundwater are by and large one system and should be treated as one resource. However it is essential to recognize the unique characteristics of each, due to factors such as seasonal variability and aquifer refresh rates. Prioritization of user water rights based on the differences in the value of water given the type of right granted, intended use, location and/or scarcity of the resource would be even better; however a clear pricing hierarchy can help to ensure that fairness and equity are achieved.

Pricing should reflect the reality that polluting water or depleting aquifers imposes a cost on other users, including future users. No price should be allowed to enable the permanent detriment or loss of a water source.

Priority 6. Simplicity:
Simplicity is nice, but let’s not get too hung up on it. At the current rates the Nestle bottling plant in Hope, BC for example would pay $225 dollars per year for the 265-million litres of water they draw from the aquifer. Were water rates to triple, Nestle would pay $675. Fees are not a hardship. Failure to manage water sustainably is. We should beware exemptions offered to water license holders in the name of ‘simplicity’ as they can often lead to the marginalization of important factors, while providing little benefit to the public and environment.

Priority 7. Implications for water users:
Not all water users are created equal. Water must be ensured as a free human and ecological right. However all commercial water users should pay a fair share based on the volumes and conditions of their use. At the same time we must balance the need to cover costs with the reality that water is a necessity of life and must not be commodified in any way that would deny basic needs. “Business competitiveness” must not trump sustainability, or in other words Priority 7 must not trump Priority 1. Further, given the implications for all water users, there should be further opportunity for feedback once the government has draft fees and rates established. We all need water for the long term.

Thank you for the work that has been carried out to bring BC water law into the 21st century. We look forward to a process that continues to engage residents of BC as the pricing and regulations are completed.

Sincerely,
Sheila Muxlow, Director,
WaterWealth Project