Environment

Canadians must start paying more for water and embrace water conservation measures or risk the depletion of one of Canada’s most valuable resources. More than 12 years ago, Environment Canada first warned that without substantially increasing the price of water consumption, delivery infrastructure was at risk of deteriorating beyond usability.

Several studies show that water revenues are not sufficient to cover operational, repair, upgrading, or expansion costs. They cover only a small part of the costs of supplying water. For example, irrigation water charges recover only about 10 per cent of the development cost of the resource. The cost of maintaining (repairing and upgrading) municipal water supply and sewage systems is estimated at $23 billion over the next 10 years. The fact that this money is not currently available is further evidence that water revenues do not cover costs.¹

Increasing the cost of water is one of the best incentives for conservation. Canadians subject to water metering use less water than their rural counterparts who have no means of accounting for their water usage. Furthermore, in Europe, where the price of water has increased, water withdrawals have simultaneously decreased. Canada, which sits at the bottom of the ranking among its peer countries, must seriously contemplate its status as a water-waster if it is to sustain its most valuable resource and the infrastructure critical to its delivery.

Canada’s water consumption was 1,494 cubic metres per capita in 2000. In their homes alone, Canadians used over 300 litres of water per person per day. Canada’s water consumption per capita was over nine times greater than that of the U.K., the best performer, and more than double that of the 16-country average. Canada ranks second to last on this indicator and earns a “D” grade. Only the U.S. consumes more water per person, at 1,682 cubic metres per capita.

Ten of Canada’s peer countries had water consumption below the average of 641 cubic metres per capita; nine received an “A.”

Industry is Canada’s largest water user, using 68 per cent of the total water used in Canada in 2000.² Industry use includes cooling machinery and equipment, producing energy, cleaning goods for manufactured items, and acting as a solvent. Of the industrial water users, thermal-electric power producers withdraw almost 80 per cent. Manufacturing industries take just over 19 per cent—where water is mainly used in the pulp and paper products industry, primary metals industry, and chemicals and chemical products industry. Mining industries are responsible for 1 per cent of total industrial withdrawals.³

Domestic water use—which includes water used in commercial establishments and public services such as schools and hospitals—accounted for 20 per cent of total water use in Canada in 2000,⁴ although average residential water use per person dropped slightly from 335 litres per day in 2001 to 329 litres per day in 2004.⁵ Domestic water use includes drinking water, as well as all water withdrawn for homes, municipalities, commercial establishments, and public services like hospitals.

Residential water use per capita is generally lower in cities and larger communities than in smaller communities. This may be linked to water metering and volume-based pricing. Homes, institutions, and businesses in cities and larger communities are more likely to have water meters than those in smaller communities. Municipalities that charge according to the volume of water used have a lower average daily consumption rate.⁶

Agricultural water use accounted for 12 per cent of total water consumption in Canada in 2000.⁷ Main agriculture water uses include irrigation (85 per cent) and livestock watering (15 per cent). Irrigation needs differ among the various regions of Canada. Some areas, such as southern Alberta, have a relatively large portion of land under irrigation. Other regions, such as Quebec, have a very small portion of the arable land under irrigation. Irrigation is needed mainly in the drier parts of Canada, such as the southern regions of Alberta, British Columbia, and Saskatchewan. These regions account for 85 per cent of all irrigation in Canada.

Some water users are more efficient than others. When the amount of water returned to the environment is taken into account, the proportions change considerably. Water use in agriculture is particularly inefficient, returning less than 30 per cent of water consumption.⁸ Thus agriculture represents the largest consumer of water in Canada.

While many countries in the Organisation for Economic Co-operation and Development (OECD) have decreased water consumption, Canada’s water usage has increased considerably. Between 1980 and 1997, overall water use in Canada increased by 26 per cent, five times more than the overall OECD increase of 5 per cent.⁹

Excessive water consumption in Canada can be attributed to the lack of widespread water conservation practices, as well as water pricing that does not promote efficiency. In many cases, Canadians pay less for water than the actual cost of processing and delivery.

Only 57 per cent of Canada’s urban population was metered in 1999.¹⁰ Furthermore, municipal water rates in Canada are a fraction of those in other countries and among the lowest in the OECD.¹¹ Consequently, a significant proportion of Canadians have little economic incentive to use water efficiently.

In Canada, 43 per cent of domestic water users pay a flat rate, regardless of water use. A further 12 per cent pay a declining block rate, receiving discounts at higher consumption levels. With a declining block rate, a user might pay $0.40 per cubic metre for the first 910 cubic metres, and just $0.15 per for each additional cubic metre consumed. The declining block rate is antithetical to water conservation.

In contrast, 36 per cent of Canadians served by municipal water systems pay a constant rate, where the total bill is proportional to amount used. Only 9 per cent pay an increasing block rate, where the amount charged increases with greater water use.¹²

In the agricultural sector, water charges for irrigation cover operation and maintenance but not capital costs. For industrial water users, the regulatory framework for water withdrawals is based on “use permits” or licences tied to a specific site and use for an indefinite period of time. Some provinces require that a fee be paid for these permits, but most of them, including Alberta and Ontario, grant licences without charge.¹³

Annual water consumption, measured in million cubic metres, is the gross amount of water extracted from any source, either permanently or temporarily, for a given use. It can be either diverted towards distribution networks or used directly. It includes consumption use, conveyance losses, and return flow. Total water consumption is the sum of estimated water use by the agricultural, domestic, and industrial sectors. Per capita consumption is then calculated using national population data from the United Nations Population Division for the year 2000.

¹ Environment Canada, Informational Resources and Services / Water—How we use it, [online, cited August 19, 2008].

² World Resource Institute, EarthTrends Data Tables: Freshwater Resources, 2005, [online, cited August 19, 2008].

³ Statistics Canada, Industrial Water Use 2005 (Ottawa: Statistics Canada, March 2008).

⁴ World Resource Institute, EarthTrends Data Tables: Freshwater Resources, 2005, [online, cited August 19, 2008].

⁵ Environment Canada, 2007 Municipal Water Use Report: Municipal Water Use 2004 Statistics (Ottawa: Author, 2007), p. 3.

⁶ Environment Canada, 2007 Municipal Water Use Report: Municipal Water Use 2004 Statistics (Ottawa: Author, 2007), pp. 4-5.

⁷ World Resource Institute, EarthTrends Data Tables: Freshwater Resources, 2005, [online, cited August 19, 2008].

⁸ Agriculture and Agri-food Canada, The Health of Our Water: Toward sustainable agriculture in Canada, May 2000, [online, cited August 19, 2008].

⁹ David R. Boyd, Canada vs. The OECD: An Environmental Comparison, 2001, [online, cited August 19, 2008].

¹⁰Susan McFarlane and Erik Nilsen, On Tap: Urban Water Issues in Canada (Calgary: Canada West Foundation, August 2003), p. 10.

¹¹ Organisation for Economic Co-operation and Development, Environmental Performance Review: Canada (Paris: OECD, 2004), p. 71.

¹² Environment Canada, The Management of Water / Water efficiency/conservation, [online, cited July 14, 2008].

¹³ Ann Vourc’h, Encouraging environmentally sustainable growth in Canada, Economics Department Working Paper No. 290 (Paris: OECD, March 2001), p. 11.