Market-based water allocation system has drawbacks: report

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Published: January 13, 2012

A report released earlier this month by the Parkland Institute warns that a proposed Alberta water market should be considered in a wider context.

It said the environment, First Nations rights and water quality standards should be part of the conversation when the government holds public consultations on the future of water allocation in the province.

The report, Alternative Water Futures in Alberta, was written by Jeremy Schmidt, a Trudeau scholar in geology at the University of Western Ontario.

“Choosing a one-model fix is not necessarily going to work as sort of a rubber stamp across the province,” Schmidt said in a Dec. 8 interview.

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“This is a conversation that we need to have about what will work for all Albertans. What we need is a solution that works for all, not just one that sort of fixes certain problems the market can handle.”

A provincial water authority was first recommended in a report re-leased by the Premier’s Council for Economic Strategy.

It suggests oversight of a water allocation exchange that would “give holders of water licenses more opportunity to sell, lease or trade some or all of their right to draw water.

“Such changes will allow licensees holding water allocations they are not currently using or no longer need to lease or sell this surplus to others within the watershed at a price set by market forces of supply and demand.”

Schmidt said his paper, as well as three government reports, agree on the need to ensure environmental protection of water, which is not guaranteed in a system based on supply and demand.

As well, such a system wouldn’t take into account the social values that underpin existing policy and the desires of communities, industries and individuals regarding water use and allocation, he said.

The province has said hearings will take place in 2012 to help prepare for changes to the water act. Schmidt said the release of his report is calculated to provide additional food for thought before those hearings occur.

“That’s an invitation, in my view, not to just try to solve one set of problems. That’s an invitation to achieve the best solution.”

Southern Alberta’s water system is fully allocated and no new licences are allowed. Much of it is governed under the first in time, first in right (FITFIR) policy, under which early and long-term holders of water licences retain rights.

Schmidt acknowledged FITFIR is controversial, but it does indicate historical decisions and values that prevented the richest from owning all land and water rights.

“There are problems with FITFIR … but one of the things we might want to do before just scrapping it is to say if we want to maintain an idea that water is part of healthy communities and of achieving a certain vision of distributive justice, then maybe what we should do is look at expanding the community of who counts.”

The report was publicized by the Our Water Is Not For Sale network. In a letter to Alberta environment and water minister Diana McQueen, the network said it appears only market options are being considered with regard to water. It asks the province to consider the bigger picture.

“Once a market-based water allocation system is established, it will be irreversible because of obligations under international trade agreements,” said the letter.

“The government’s exclusive focus on a market-based system does not provide policy makers or people in Alberta with the full range of options before them, including ones that prioritize treaty rights and environmental and public interest objectives.”

About the author

Barb Glen

Barb Glen

Barb Glen is the livestock editor for The Western Producer and also manages the newsroom. She grew up in southern Alberta on a mixed-operation farm where her family raised cattle and produced grain.

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