Strong, steady growth in the South Saskatchewan River Basin (SSRB) has collided with a limited and volatile water supply. The Alberta government acknowledged this dilemma in 1999 with a revised Water Act (the Act) and the Water for Life strategy (WFL) in 2003. In both, Alberta favours a combination of regulatory and market-based instruments to promote conservation, efficiency, and flexibility in balancing environmental, social, and economic objectives. However, many tools in the Act, particularly the water rights transfer system and conservation objectives, remain underutilized. Current policy and the transfer system especially underserve environmental interests even when aligned with government policy. The 1999 Water Act allows development of approved watershed management plans (AWMPs).
These plans, developed with stakeholders, may authorize any of the Act’s tools, but the tools remain inactive unless explicitly authorized by an AWMP or Cabinet order. Some of the key tools are Crown reservations of un-allocated water, which withhold water and designate what, if any, purposes it could be assigned. Also, the government may set water conservation objectives (WCOs), which are certain rates of flow or minimum flow targets assigned to a water body; they require a water licence or allocation for the purposes of meeting the WCO percentage. The most controversial tools are licence transfers and a “holdback” of up to 10% of transferred water retained by the government to meet WCO targets. In 2006, Cabinet approved an AWMP for the SSRB, which authorized the use of transfers, the 10% holdback, a WCO target of 45% of rivers’ natural flow or 10% above existing objectives (whichever is greater), and a Crown reservation. In 2007, Cabinet issued an order to restrict future uses of un-allocated water to storing peak flows, First Nations uses, and meeting WCOs. This closed the SSRB (except for the Red Deer River sub-basin) to new water licence applications. At the same time, the government was issued licences for the approved WCO target, in which it would receive water held back through transfers.