The episode—from the Water in Southern Alberta podcast miniseries co-hosted with Bob Morrison which originally aired in June 2025—brings together legal and planning experts to unpack how Alberta’s water law and water market function, especially in southern Alberta. Arlene Kwasniak, a long‑time scholar of water law from the University of Calgary, outlines the complex legal framework governing water, starting from the Canadian Constitution’s division of powers between federal and provincial governments over issues like fisheries, navigation, federal lands, Indigenous lands, and provincial property in water. She emphasizes that alongside federal and provincial statutes, Indigenous law, common law, international law, and policy all influence water management, but her focus is on Alberta’s Water Act and water‑use rights. Before modern legislation, common law riparian rights gave only landowners adjacent to water bodies limited household and “extraordinary” uses, with built‑in equity and sustainability because all riparians shared the same rights and could enforce them in court. These rights were largely extinguished by the Northwest Irrigation Act, which vested ownership of provincial waters in the Crown and introduced the prior allocation principle—“first in time, first in right” (FITFIR)—where licence priority is determined by date of application and senior users are fully satisfied before juniors in times of shortage.
Arlene traces the evolution from the Northwest Irrigation Act to Alberta’s Water Resources Act and then the Water Act, noting that groundwater was brought under Crown ownership and FITFIR in 1962, replacing the old rule of capture. The Water Act introduced major river basin divisions and approved water management plans—currently for the South Saskatchewan, Battle, and Milk River basins—which must be considered in key regulatory decisions like transfers. It also created statutory authorizations: household and agricultural exemptions with quantified annual volumes, and licences that grant diversion rights for specified purposes (municipal, irrigation, commercial, habitat enhancement, recreation, water conservation objectives, and others) typically on renewable 10‑year terms, while older licences have no expiry and are easily renewed. New licences can include water conservation objective (WCO) conditions that allow the director to restrict diversions when flows fall below set thresholds, whereas older licences may have in‑stream objectives (IOs) that are generally less protective. Arlene contrasts both WCOs and IOs with scientifically determined in‑stream flow needs (IFNs), arguing that WCOs and IOs are more politically set and often below IFN levels, limiting ecosystem protection.
Assessing the Water Act against an idealized water law, Arlene finds major shortcomings. She notes that while there are some tools to curb impacts for new licences, existing licences are strongly protected, there is no expropriation power for water rights, and cancellation is only possible when rights have gone unused for three years with no reasonable prospect of use. The Act offers only limited mechanisms to secure sufficient in‑stream flows, does not recognize or secure Indigenous water rights, and does not integrate quantity and quality regulation, conjunctive management of surface and groundwater, formal watershed governance, clear rules for alternative sources (wastewater, rainwater, stormwater, saline water), or climate change mitigation and adaptation—though the government is proposing amendments on some of these fronts. Household use has the highest priority, partially securing basic human needs. Overall, Arlene would grade the Act a “D” and says she would not pass it, arguing Alberta could have moved away from FITFIR toward more equitable systems like those in Saskatchewan, Australia, and New Zealand, but powerful sectors—oil and gas, municipalities, and agriculture—resisted change. In practice, Davin McIntosh—a water rights consultant and broker who specializes in facilitating water transfers in Alberta, with prior experience as a planning and municipal development lawyer and involvement in a significant proportion of water transfers in the Bow River Basin and Southern Alberta—points out that priority calls under FITFIR are rarely made, with Alberta preferring voluntary reductions to avoid cutting off junior users, especially municipalities whose licences are technically subject to FITFIR but whose drinking water cannot realistically be curtailed.
Davin then explains why and how water transfers were introduced. As recognition grew in the 1980s–1990s that full exercise of long‑standing rights could push rivers below environmentally sustainable levels, the Water Act added transfer provisions, and a 2007 moratorium on new licences in many areas made transfers the main mechanism for reallocating water. He describes an eight‑step process:
finding a suitable right (difficult because rights are rarely advertised and cancellation risk discourages signalling non‑use),
negotiating price and contracts despite uncertainty of approval,
confirming the licence is in good standing (including compliance checks and sometimes costly reconstruction of works to match old plans),
submitting a paper application,
responding to extensive and discretionary requests for information from the director,
publishing mandatory public notice and handling statements of concern, possible public meetings, and finally a decision. He highlights the director’s broad discretion and evolving, often unwritten policies—such as disallowing transfers “around a corner” in a Y‑shaped tributary, apportionment rules limiting how much can move from a mainstem to a tributary,
partial good‑standing determinations, and
the 10% conservation holdback that created government WCO licences but is now proposed to be scrapped due to limited overall transfer volumes.
With only about 400 transfers approved since 2007, roughly half being arm’s‑length, the conservation holdback has not significantly boosted in‑stream protection.
Throughout the discussion, we stress that enforcement of ecological needs and federal powers has been weak. Arlene notes that IFNs are not directly recognized in the Water Act, that WCOs and IOs fall short of IFNs, and that private in‑stream flow licences are not currently allowed, though government can and has issued WCO licences to itself.
