- Quebec's Draft Regulation respecting the Charges Payable for the Use of Water
- August 2, 2010
- Law Firm: Ogilvy Renault LLP - Montreal Office
On April 27, 2010, Quebec's Minister of Sustainable Development, Environment and Parks, Line Beauchamp, announced the holding of public consultations concerning a Draft Regulation respecting the Charges Payable for the Use of Water. The Draft Regulation, which results from the Government's commitment to introduce a royalty on water made in the Budget tabled on March 30, 2010, appeared in the Gazette officielle du Québec of May 5, 2010. The charges are aimed at promoting the protection and development of the water resource and ensuring that there is an adequate quality and quantity of water in a sustainable development perspective.
The Draft Regulation provides that the activities to be covered by the Regulation are (1) production of water in bottles or other containers, whether or not the water is intended for human consumption, (2) mining, quarrying and oil and gas extraction, and (3) the manufacturing activities mentioned in the Regulation's Schedule. Accordingly, every person carrying on one of these activities where the activity results in the use of an average volume of water of 75 cubic metres or more per day will be subject to charges for the use of water, whether the water is taken directly from surface water or groundwater or comes from a distribution system.
Moreover, seeing that persons drawing water from a distribution system were not required to report those withdrawals under the Regulation respecting the declaration of water withdrawals (the "Reporting Regulation"), the Draft Regulation contains a provision requiring those persons to also report the volumes drawn.
Unless steps are taken in this regard, the introduction of the new charges will mean that businesses that obtain their water from a distribution system (a municipal water supply system, for example) will be subject to levies at two levels, namely: (1) the rate paid to the municipality for water consumption and (2) the new charges imposed by the Government.
The obligation to pay charges for the use of water will apply as of January 2011 and the annual declaration and the payment of the charges for that year will have to be sent not later than March 31, 2012.
Two different rates will apply, depending on how the resource is used. One rate has been set at $0.07 per cubic metre of water used, for the following activities:
a. the production of water in bottles or other containers, whether the water is intended for
human consumption or not;
b. beverage manufacturing;
c. fruit and vegetable canning, pickling and drying;
d. non-metallic mineral product manufacturing;
e. pesticide, fertilizer and other agricultural chemical manufacturing;
f. other basic inorganic chemical manufacturing;
g. oil and gas extraction.
A second rate has been set at $0.0025 per cubic metre of water used, for all other activities. The press release issued by the Ministère du Développement durable, de l'Environnement et des Parcs on April 27, 2010 indicated that this lower rate was being set for industries that use water in their production processes and thus put most of the resource used back into the ecosystem.
The Draft Regulation provides that persons subject to charges for the use of water will, within 24 months from the date the Regulation comes into force, be required to install measuring equipment the installation, operation, monitoring and measurement of which meet the requirements of Chapter IV of the Reporting Regulation. Until measuring equipment is installed, the volume of water used will be measured based on an estimate made in accordance with Chapter V of the Reporting Regulation.
The charges payable under the Regulation for water use, and interest thereon, are expected to generate some $8.8 million a year, which money will be paid into the Green Fund for the purpose of ensuring water governance.
Any entity that fails to pay the amounts due will be liable to a fine of between $5,000 and $100,000.