Section 1: Introduction

1.1 Overview of Fresh Water

Fresh Water is a Strategic Asset with Economic, Environmental and Social Value

A secure, clean freshwater supply is foundational to Canada’s economic prosperity, food and energy security, health and well-being, and national identity. Canadians care deeply about fresh water^{Footnote 1} and water is sacred to many Indigenous peoples and honoured as a giver of life.^{Footnote 2}

There is a common misconception that Canada has an abundant supply of clean, fresh water. Although Canada holds 20% of the world's surface fresh water, this statistic is misleading. Canada’s water supply is not limitless and requires careful management: only a third of this surface fresh water in Canada is renewable (i.e., salt-free and replaced annually through precipitation), and of this amount, more than half drains northward away from Canada’s most populated regions.^{Footnote 3}

Water is not necessarily available where Canadians need it, and when it arrives, it can be in the form of sudden floods. For example, Western Canada and the Prairies Region are facing water shortages at the same time as national annual precipitation is projected to increase.^{Footnote 4}

Water is integral to the Canadian economy

Fresh water underpins economic growth and prosperity in Canada. An attempt to quantify the global annual economic value of water and freshwater ecosystems estimates it at US $58T – equivalent to 60% of global Gross Domestic Product (GDP).^{Footnote 5}In 2021, electric power generation, transmission and distribution accounted for over two-thirds (69.5%) of all water used by industries in Canada, followed by crop production (6.2%) and animal production (4.8%).^{Footnote 6}

Droughts, floods and storms are predicted to result in a total loss of $108B to GDP between 2022 and 2050, an average of 0.2% of GDP per year, with impacts across manufacturing and distribution, retail, banking and insurance, energy, and agriculture.^{Footnote 7}

Water is essential for a healthy environment

The quality of Canada’s environment is dependent on healthy ecosystems. Freshwater ecosystems, such as wetlands, rivers and aquifers, are a critical part of the global water cycle – supplying, purifying and protecting freshwater resources.

Ecosystems provide valuable “ecosystem services” which support the health of human societies and natural environments. Wetlands are some of the planet’s most vital ecosystems. They are an important habitat for wildlife, filter pollution, provide flood protection, and store large amounts of carbon. In Canada, it is estimated that wetlands provide natural services worth nearly $225B annually, equivalent to around 10% of the national GDP.^{Footnote 9}Despite their high value, wetlands have been, and continue to be, destroyed at a rapid pace.

Ecosystem decline also has a significant impact on biodiversity: between 1970 and 2020, freshwater populations suffered the heaviest decline, falling by 85%, followed by terrestrial (69%) and marine populations (56%).^{Footnote 10} In Canada, approximately 11.7% of assessed freshwater species in Canada are classified as at risk.^{Footnote 11}

Water is significant to the everyday lives of Canadians

Nearly half of Canadians rate fresh water as Canada’s most important natural resource because of its value to the health and quality of life of Canadians.^{Footnote 12} Freshwater ecosystems are also highly frequented by Canadians for recreation and tourism purposes.^{Footnote 13}

Yet, on an individual level, Canadians are among the highest water consumers in the world, with per-capita water use in the average Canadian household exceeding 220 litres a day, which is double the United Nations’ recommended consumption limit.^{Footnote 14}

Surface water supplies drinking water for on average 2/3 of Canadians, while 1/3 of the population’s drinking water supply is groundwater. This is not equally distributed across the country, in fact Canadians that rely on groundwater for their drinking water, represent about 80% of the rural populations across the country.^{Footnote 15}

Challenges to Canada’s Water Supply

The supply of fresh water in Canada depends on healthy and productive aquatic and terrestrial ecosystems and a well-functioning global hydrological cycle. A secure water supply requires having the right amount of water of the right quality at the right time and the right place to meet economic, environmental, and social needs. The water supply in Canada is influenced by many factors and socioeconomic and environmental impacts vary by region, requiring targeted responses based on local needs and conditions.

The cumulative impacts of changes in precipitation patterns, rising temperatures, and extreme weather events are affecting the water supply in Canada, and in turn, having far reaching consequences across all sectors of Canadian society and the economy.

Freshwater Quality Challenges

As of 2023, freshwater quality in Canadian rivers was generally assessed as fair to excellent, with significant local and regional variability.^{Footnote 16} Land development is a key stressor of freshwater quality through agriculture, mining, forestry, high population density or a combination of these. Point source and emerging contaminants (PFAS, microplastics) can also have significant impacts on aquatic ecosystems and human health. Water quality and aquatic ecosystem degradation can result in high costs to the Canadian economy through increased healthcare, water treatment, and remediation costs, among others.^{Footnote 17}

For example, algal blooms in Lake Erie currently cost the Canadian economy $412.5M annually (2019 estimate) due to both direct losses, such as lost commercial fishing value, increased drinking water treatment plant costs and lost property value, as well as indirect losses such as lost utility for recreationists, tourists and also for non-users.^{Footnote 18} Algal blooms also pose adverse risks to human and ecosystem health; and in 2014, an algal bloom on Lake Erie resulted in a drinking water intake plant shutdown for the city of Toledo, Ohio, affecting 500,000 users.^{Footnote 19}

In 2013, the Global Nature Fund named Lake Winnipeg as the world’s most threatened lake of the year due to eutrophication and deteriorating ecosystem health. With agricultural land use occupying over 50% of the watershed, phosphorus loading continues to exceed the lake’s natural capacity to process nutrients, leading to large-scale algal blooms. Further, the health of Lake Winnipeg continues to be challenged by cumulative impacts of multiple stressors (e.g., excess nutrients, climate change, aquatic invasive species) and complexities (e.g., hydrology, cold climate) of the basin.^{Footnote 20}

Freshwater Quantity Challenges

Freshwater quantity in Canada also significantly varies by region with some regions prone to drought and others subject to seasonal flooding. Floods are the most common and costly disaster in Canada and are increasing in frequency and severity. In the past decade, floods cost nearly $800M per year on average in insured losses.^{Footnote 21} Over 1.5 million homes are built in high flood risk areas, and 80% of Canadian cities are built, in whole or in part, on floodplains.^{Footnote 21}

Droughts, exacerbated by climate change, are projected to be more frequent and intense across the southern Prairies and interior of British Columbia, as well as increasing risks for parts of Canada that already struggle with water shortages. For example, in 2021, crop production in Saskatchewan fell by a record-high 47%.^{Footnote 22} In 2022, farmers used 23% more water to irrigate their crops compared with 2020, mostly due to drier conditions.^{Footnote 23}

Canada’s power grid is highly reliant on hydroelectricity (60% of energy mix from 2016-2022). In 2023, three of Canada’s largest hydroelectricity generators were afflicted by drought or abnormally dry conditions, reducing total electricity generated in Canada by 3.9%.^{Footnote 24}

1.2 Freshwater Governance in Canada

Freshwater governance in Canada is complex given roles and responsibilities are shared between federal, provincial, territorial, municipal, and Indigenous governments, and with the United States (US), for boundary and transboundary waters. Collaboration amongst jurisdictions is essential.

Federal Government 

Canada has an extensive and complex legislative and regulatory framework to enable and support the restoration and protection of ecosystem health with authorities derived from the Department of the Environment Act, the Canada Water Act, the Fisheries Act, and the Canadian Environmental Protection Act, 1999, among others. These authorities are implemented by more than 20 federal departments and agencies with freshwater-related responsibilities, which include: freshwater protection; pollution prevention authorities; groundwater mapping and monitoring; fisheries; navigation and shipping; waters on federal lands and First Nations reserves; domestic and international transboundary waters; and international processes/treaties. The Minister of Environment is the federal lead on fresh water, and the Canada Water Agency (CWA) and Environment and Climate Change Canada (ECCC) discharge the Minister’s responsibilities.

The CWA is responsible for leadership and coordination on fresh water for the federal government and improving collaboration with provinces, territories, and Indigenous peoples to keep Canada’s waters safe, clean and well-managed for future generations. The CWA achieves this through federal freshwater policy, management and stewardship leadership. It also delivers on the strengthened Freshwater Action Plan through the implementation of eight Freshwater Ecosystem Initiatives in waterbodies of national significance and delivers the EcoAction program. The CWA serves as Chair of the Prairie Provinces Water Board and the Mackenzie River Basin Board, and provides support to international water boards. The CWA is not responsible for delivery of marine activities within the federal government, which falls under the responsibilities of Fisheries and Oceans Canada.

ECCC is responsible for the collection, interpretation, and dissemination of standardized weather, climate, and water resource information; water quality and quantity science, monitoring and surveillance, modelling and predictions; support to domestic and international water boards; lead on the pollution prevention provisions in the Fisheries Act; advice on international transboundary waters (with Global Affairs Canada), including ECCC’s relationship with the International Joint Commission.

Other federal departments with freshwater responsibilities, include (non-exhaustive list):

• Natural Resources Canada (e.g., aquifer mapping),
•  Agriculture and Agri-Food Canada (e.g., drought monitoring, reducing the impact of agriculture on freshwater quality),
• Department of Fisheries and Oceans (e.g., freshwater fish and fish habitat),
• Indigenous Services Canada (e.g., First Nations drinking water) and
• Public Safety Canada (e.g., emergency management and response, including for spills and flooding).

Provinces and Territories 

Provinces and territories have primary jurisdiction over surface and groundwater management and protection within their borders. Legislative powers include land and groundwater management, water allocation and use, drinking water and wastewater services, effluent permitting, source water protection, thermal and hydroelectric power development, and public education. 

Municipalities 

Provincial and territorial governments often delegate some authority to municipalities, particularly in relation to drinking water treatment and distribution, wastewater treatment, and land use planning. Local watershed management organizations may undertake source water protection, water monitoring and public education, with regulatory oversight from provinces and territories. 

Indigenous peoples 

Indigenous peoples have a strong interest in participating in decision-making about water, based on their traditional role as water stewards, and Indigenous Knowledge Systems, practices and spiritual connections to water – however, participation varies across provinces and territories. Indigenous peoples commonly seek greater recognition of their role and rights in relation to water and water governance.

Many modern treaties and self-government agreements with Indigenous peoples include rights to use, and rights to make laws or certain decisions related to water. Indigenous peoples are also involved in transboundary water management, including through water management boards. This jurisdiction comes from constitutionally protected Aboriginal and treaty rights, which includes the inherent right to self-government, as well as rights protected by the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), implemented in Canada by the Implementing the UNDRIP Act (UNDA). Drinking water and wastewater in First Nations reserves is a shared responsibility between First Nations and the Government of Canada. 

Canada-US relations on Fresh Water

Canada shares significant boundary and transboundary waters with the US. Shared waters comprise more than 40% of the Canada-US border, including more than 300 lakes and rivers that are part of, or traverse, the international boundary. Canada and the US have a long history of collaboration on transboundary waters. Since 1909, the Boundary Waters Treaty established the principles and mechanisms for addressing boundary and transboundary water issues and created the International Joint Commission (IJC). 

The IJC pursues the common good of both countries as an independent and objective advisor to Canada and the US. In particular, the IJC rules upon applications for approval of projects affecting boundary or transboundary waters and may regulate the operation of these projects; it assists the two countries in the protection of the transboundary environment, including the implementation of agreements and the improvement of transboundary air quality; and it alerts the governments to emerging issues along the boundary that may give rise to bilateral disputes.^{Footnote 25}

Global Affairs Canada holds responsibility for foreign policy, including Canada-US transboundary waters, and manages the federal government’s relationship with the IJC. The CWA and ECCC provide technical expertise and support to 15 binational transboundary water boards, committees and task forces of the IJC.

Canada works with the US on shared priority issues such as transboundary water pollution and nutrient management, low water levels and aquifer depletion, and aquatic invasive species and shares management of the Great Lakes ecosystem, one of the largest freshwater systems on earth, through the Great Lakes Water Quality Agreement (1972-present). Other Canada-US collaborative agreements include the Niagara River Treaty, the Columbia River Treaty, and the Lake of the Woods Convention and Protocol of 1925.