Dec. 18, 2003. 03:31?PM

Ontario may charge bottlers for water

Bottled water is big business. Billions of litres are pumped out of the ground each year at relatively little cost. The Ontario government today slapped a moratorium on permits and said a royalty would be charged on the amount of water taken.

In what would be a Canadian first, the Ontario government said today it is considering making companies such as bottlers and brewers pay royalties on the water they use.

The government also imposed a year-long moratorium on new permits to extract water as it studies the impact on watersheds.

"The days of taking water away for free are over," said Environment Minister Leona Dombrowsky.

She noted that companies which log forests or drill for oil have to pay fees and follow provincial regulations, a situation that doesn't apply to those who extract water directly from the ground, rivers or lakes.

Other provinces such as British Columbia charge administrative fees for water extraction permits, but not a tax based on usage.

A special committee will advise the government early in the new year on how the charges should be applied.

Dombrowsky said the moratorium is designed to prevent the "transport of millions of litres of water out of local watersheds" without considering the environmental impact.

"We simply cannot continue to permit more and more water to be taken without fully understanding the consequences," she said.

Environmentalists said a review of the permit system was long overdue.

"This is one of the most divisive areas in rural communities," said Paul Muldoon of the Canadian Environmental Law Association.

"It's always a problem where big users take the water and the local farmers, residents and community groups really feel alienated and isolated in their comments about whether this is ecologically appropriate."

Protection of water sources in Ontario has been a major issue since the Walkerton tragedy in May 2000, when seven people died and 2,500 fell ill after their drinking water was contaminated with E. coli bacteria from farm run-off.

The Environment Ministry has come under fire for losing track of the thousands of water permits issued since the early 1960s.

In his report on the Walkerton tragedy, Associate Chief Justice Dennis O'Connor recommended tighter controls on the permits as an integral part of protecting sources of drinking water in the province.

Critics noted the ministry has little idea about the impact on the environment and water supplies when issuing permits.

Controversy erupted last year when then-Tory environment minister Chris Stockwell intervened to allow Swiss-based mining multinational OMYA to take 4.5 million litres a day from the Tay River near Perth, Ont., even though it had run dry a couple of years earlier.

The moratorium applies to bottlers, brewers, soft-drink producers, concrete makers and manufacturers who use 50,000 litres of water or more in a day in southern Ontario and those in northern Ontario drawing from watersheds covered by conservation authorities.

It does not apply to municipalities or to farmers.

Existing permit holders can continue to draw water, but the maximum amount will be frozen.

Bottlers have said they wouldn't object to an extraction tax provided other users, such as brewers or soft-drink makers, were also required to pay.

The Council of Canadians said the province has to come up with a broader policy that goes well beyond charging a new fee.

Decisions on the extraction, use and sale of water should not be made on the basis of who has the most money, said the council's Sara Earhardt.

"Putting a price on water just further commodifies it."