Regulation Decision Notice:

On January 18, 2017, the Ministry of the Environment and Climate Change posted a proposal for a regulation to establish a new regulatory charge that would apply to facilities that take groundwater to produce bottled water pursuant to a permit to take water issued under the Ontario Water Resources Act. The charge would help recover the Ontario government’s costs of regulating and managing groundwater takings by water bottlers.

A decision has been made to proceed with the regulation. The final regulation is consistent with the proposal to apply a charge of $500 per million litres to the total amount of groundwater taken by a facility for the purpose of producing bottled water, including water that is incorporated into the product, as well as all water used for processing, washing, and the overall operation of the facility.

The charge would help the province recover costs related to regulating and managing groundwater takings by water bottlers, including:

• regulating water bottling facilities under the Act, including promoting outreach with, and compliance by, facilities with permits to take water for water bottling;
• undertaking scientific research and analysis to advance knowledge of the impacts of water takings for water bottling on groundwater resources in watersheds from which a water bottling facility takes water;
• reviewing the regulatory framework that governs ground water takings by water bottling facilities, including:
  
  i. placing a moratorium on all new and expanded permits to take water from groundwater sources for water bottling (effective December 16, 2016 to January 1, 2019);
  ii. developing and implementing new technical and procedural requirements for existing facilities with permits to take water for water bottling;
  iii. reviewing the policies governing groundwater takings by water bottling facilities to determine if further changes are needed; and
  iv. supporting outreach with Indigenous communities, municipalities, and other organizations and individuals in Ontario who share an interest in managing the impacts of water bottling on groundwater in the province.

The proposal had indicated that if there were facilities with permits to take groundwater for the purpose of producing not only bottled water but also other products, the charge would apply to the portion of water used to produce bottled water. However, currently there are no known facilities in this situation. On this basis, the final regulation is clear that the charge applies to the total volume of groundwater taken by facilities that they are required to report to the Ministry under Ontario Regulation 387/04.

The costs recovered through the new regulatory charge are separate and distinct from the types of costs that are already recovered, in part, under Ontario Regulation 450/07 – Charges for Industrial and Commercial Water Use. The purpose of the charge imposed under Ontario Regulation 450/07 is to recover a portion of the costs of the province’s broader water quantity management programs.

The regulation requires the Minister to review and report on the new regulatory charge at least every five years to ensure that there is a regular assessment of provincial costs incurred to effectively manage groundwater takings for water bottling and that the amount of the charge is appropriate to recover these costs. At the conclusion of the review, the Ministry will publish a report on the Environmental Registry that identifies the amount of the costs the province incurs for the purposes set out in the regulation, and the amount costs may have varied in the period that is the subject of the review.

In addition to the new regulatory charge, other recent actions taken by Ontario to protect groundwater, include:

• Placing a moratorium on all new and expanded permits to take water from groundwater sources for water bottling (effective December 16, 2016 to January 1, 2019);
• Applying new, stricter rules for renewals of existing bottled water permits; and
• Conducting a broader review of the permit to take water program during the moratorium to ensure long-term water protection, including considering the impacts of climate change and future demand on water sources. This includes reviewing groundwater science, programs and policies as they apply to water bottlers and all water takers across the province. Any proposed changes as part of this broader review will also be posted for public comment.
  

Public Consultation on the proposal for this decision was provided for 61 Days, from January 18, 2017 to March 20, 2017.

As a result of public consultation on the proposal, the Ministry received a total of 7962 comments: 7753 comments were received in writing and 209 were received online.

Additionally, a copy of all comments are available for public viewing by contacting the Contact person listed in this notice.

A selection of these comments are available:

The January 18, 2017 Environmental Registry posting included three questions to help guide comments on the proposal. The questions and a summary of the responses received are provided below.

1. Do you agree that the Ontario government should establish the proposed new regulatory charge to recover costs that the province incurs to better understand and more effectively manage groundwater takings by water bottling facilities? Yes or No?
   
   Responses: Among the submissions, there was some support for the proposed charge. A large number of the submissions came in the form of identical emails stating that the Province should not put a price on water and should instead impose a permanent ban on water bottling in Ontario. Several organizations and individuals recommended that the charge be applied to a broader range of industrial and commercial water users. A few comments received from the bottled water sector expressed strong opposition to the charge and stated that water bottling is unfairly targeted.
   
   These comments are being considered through the other actions that the province is taking during the moratorium on new and expanded takings for water bottling, including a review of groundwater science, programs and policies as they apply to water bottlers and other water takers across the province.
   
   
2. Do you agree with the proposal to review the charge at least every five years?
   
   Responses: There was general support for reviewing the charge at least every five years to ensure that provincial costs are regularly reviewed and that the charge is set at an appropriate amount relative to updated provincial costs. A number of organizations requested greater transparency by the Province to demonstrate how the charge rate was determined and how the charge would be used.
   
   These comments are addressed by finalizing the requirement for the Ministry to review the charge every five years, including reporting on the provincial costs incurred to effectively manage groundwater takings for water bottling.
   
   
3. Do you have any other comments on the proposed regulatory charge?
   
   Responses: There were a number of common themes in response to this question, as follows:
   
   • Other water takers should also pay the charge ranging from bottled water companies which use municipal water, to all companies taking groundwater, to all commercial and industrial water takings, to all permitted water users.
   • The charge rate of $500 per million litres is not high enough.
   • Information should be made public on how the $500 per million litres charge rate was determined and how the charge will be used by the Province to recover costs.
   • The money received from water bottlers to recover provincial costs should be shared, for example, with municipalities, Indigenous communities and conservation authorities.
   • Indigenous communities do not consider the Environmental Registry posting to be a mechanism for consultation.

These comments are being considered as part of the complementary actions that the province is taking during the moratorium on new or expanding groundwater takings for water bottling, including a review of groundwater science and water taking policies and the commitment to review and report on the new regulatory charge every five years.

All comments received during the Environmental Registry posting were considered in the development of the final regulation.

In addition to comments on the proposed charge, many individuals and organizations took the opportunity to suggest changes to Ontario’s water quantity management system that should be considered while the moratorium is in place on new and increased groundwater taken for water bottling until January 1, 2019.

Since 2009, industrial and commercial water users who incorporate water into their products, including water bottlers, have been charged $3.71 per million litres of water they use annually. The charge, applied under Ontario Regulation 450/07, was set at the level needed to recover a portion of the costs of the government’s broader water quantity management programs. The regulation requires the Ministry to review the charge every five years to determine if the charge is set at an appropriate amount to recover applicable costs. The existing water charge of $3.71 per million litres will be reviewed this year.

As part of the broader review of the permit to take water program during the moratorium, the government is also collecting data and undertaking research on water resources in the province, and reviewing Ontario’s water quantity management programs and policies as they apply to water bottlers taking groundwater, as well as all water takers across the province. Ontario will engage Indigenous partners, communities and industry on any potential changes to water quantity management practices. Any proposed changes that result from this broader review will also be posted for public comment.

Leo Luong
Manager
Ministry of the Environment and Climate Change
Climate Change and Environmental Policy Division
Land and Water Policy Branch
40 St. Clair Avenue West
Floor 10
Toronto Ontario
M4V 1M2
Phone: (416) 314-4708
Fax: (416) 326-0461

Climate Change and Environmental Policy Division
77 Wellesley Street West
Floor 11
Ferguson Block
Toronto Ontario
M7A 2T5
Phone: (416) 314-6338

Land and Water Policy Branch
40 St. Clair Avenue West
Floor 10
Toronto Ontario
M4V 1M2
Phone: (416) 314-6383