Agenda Item # Page #

SUBJECT:

CHAIR AND MEMBERS ENVIRONMENT AND TRANSPORTATION COMMITTEE

GENERAL MANAGER OF ENVIRONMENTAL a, ENGINEERING SERVICES & CITY ENGINEER

IMPENDING REGULATIONS UNDER THE SAFEGUARDING AND SUSTAINING ONTARIO’S WATER ACT

(FOLLOWING THE GREAT LAKES CHARTER ANNEX AGREEMENT)

MEETING OF APRIL 27,2009 I FROM: PAT McNALLY. P. ENG.

I RECOMMENDATION I1 That on the recommendation of the General Manager of Environment and Engineering Services and City Engineer, the following actions be taken:

a) Municipal Council APPROVE a resolution stating the following:

WHEREAS the water treatment plants serving the City of London were originally constructed, owned and operated by the Province, prior to being transferred to the member municipalities of the Joint Boards of Management;

WHEREAS the water intakes for the plants are designed for capacity well in excess of what is currently being withdrawn for the Great Lakes, representing a significant financial investment in their future use;

WHEREAS the entire City water supply system has been designed to receive 80 percent of its supply from Lake Huron now and into the future and any limits on future supply from Lake Huron would require additional abstractions from Lake Erie, thereby forcing additional plant expansions and transmission and distribution pipes from the Elgin Area Primary Water Supply System causing a financial hardship on the rate payers of the City of London;

WHEREAS the City of London returns more water to the Great Lakes basins than is abstracted from Lake Huron and Lake Erie benefiting the downstream conditions in the Thames River while only slightly decreasing flows in the northern portion of the interconnecting waterway between Lake Huron and Lake Erie without any apparent consumptive use;

WHEREAS it appears that drawing an arbitrary line on a significant watershed such as the Great Lakes Basin will have long term significant economic development impacts on the City of London while there is no demonstrable harm to the environment of the Great Lakes Basin based on growth plans for the City of London;

WHEREAS the City of London has significantly reduced their water taking from the Great Lakes over the last 8 years by more than 15 percent and should not be penalized by the province potentially limiting our water withdrawal from Lake Huron in the future, given our success in managing our valued water resource;

THEREFORE BE IT RESOLVED THAT the Corporation of the City of London recommends that the connecting waterway between Lake Huron and Lake Erie be considered part of both lake basins, since an arbitrary line in the watershed does not accurately portray the ecosystem that is the Great Lakes Basin.

Civic Administration BE DIRECTED to liaise with the Joint of Boards of Management for the Lake Huron and Elgin Area Primary Systems to ensure the concerns of the City of London are duly noted by the Advisory Panel of MNR and MOE.

b)

Agenda Item # Page #

c) Civic Administration BE DIRECTED to provide information to our elected officials to further communicate and gain support from local Members of Provincial Parliament on this important matter to ensure the future water supply for the City of London remains affordable.

BACKGROUND

PurDose

The purpose of this report is to raise the awareness of the issue of inter-basin and intra-basin diversions with elected officials prior to provincial legislation being completed which could have a significant economic impact by increasing water rates well into the future. It is desirable to pass a resolution clearly articulating the reasons why London might be disadvantaged if the interconnecting waterway between Lake Huron and Lake Erie is defined as being only part of the Lake Erie basin.

Executive Summary

It is the position of the City of London and Joint Board staff that the St. Clair River/Lake St. ClairIDetroit River “Connecting channel” would be better defined as a connecting waterway between the Lake Huron and Lake Erie watershed and part of both lake basins, consistent with the international Agreement and the Safeguarding and Sustaining Ontario’s Water Act. Despite language in the Agreement that allows connecting channels to be considered part of either the upstream or downstream watershed, Lake St. Clair is a “grey area” which is still under review by the MNR and MOE. We promote a flexible interpretation, but there is concern the Ministries may take a more restrictive approach which will have considerable implications to the City of London. Our concerns have been expressed to MNR both verbally and in the attached letter. This report and resolution provides additional details specific to London’s concerns.

Backnround

Through the 2001 Great Lakes Charter Annex, the provinces of Ontario and Quebec, as well as the eight US. states bordering the Great Lakes committed to protect and manage the water of the Great Lakes-St. Lawrence River Basin. Commitments would be achieved through implementing agreements that set a common standard for decisions about proposed water uses.

On December 13, 2005, the Great Lakes-St. Lawrence River Basin Sustainable Water Resources Agreement was signed by Ontario, Quebec and the eight Great Lakes States (Illinois, Indiana, Michigan, Minnesota, New York, Ohio, Pennsylvania and Wisconsin). This good faith agreement provides a framework for each province and state to pass regulations that put in place the new protections for Great Lakes-St. Lawrence River Basin waters. Some portions of the agreement were effective immediately, with others being phased in over time.

On June 4, 2007 the Ontario government passed the Safeguarding and sustaining Ontario’s Wafer Act (SSOWA), which amended the Ontario Water Resources Act (OWRA). Further regulations are required to fully implement the requirements of the legislation and the final regulations are anticipated to be released in fall of 2009.

On March 16, 2009, the Ontario Ministry of Natural Resources (MNR) and Ministry of the Environment (MOE) have issued, a Technical Bulletin (appended) identifying the requirements for proponents considering new or additional intra-basin transfers during the period that the regulations are being completed. Further background information can be found on the Environmental Registry (010-0162 and 010-0163) dealing with proposed provisions of the act and the impending regulations.

Discussion

The purpose of the Annex is well-founded in that it serves to protect the Great Lakes from the potential for water diversions outside the basin (e.g. an inter-basin transfer to the US southern states). The agreement was directed at 8 states and 2 provinces surrounding the Great Lakes and purposely was NOT directed at the two federal governments for fear that the interests of the federal US government would trump regional Great Lakes interests. Other than the Great Lakes

Agenda Item # Page #

nn

basin, Ontario is also comprised of the Nelson River and James / Hudsons Bay watersheds however the pressures for diversion from these watersheds are relatively low.

The Ontario Ministry of Natural Resources (MNR) and Ministry of the Environment (MOE) have formed an Advisory Panel to involve various stakeholders in the development of supporting regulations. The City of London's interests are represented by Joint Board (Regional Water Supply) staff who currently participate on this Advisory Panel, as well as on a municipal sector sub-group and an intra-basin subgroup that have been formed. In addition to these two subgroups, the MNR and MOE have also formed working groups related to agriculture, water conservation and efficiency, water charges, and science and information.

The Act and future regulations under it may impact the City of London as described below. It is unclear what the financial impact to London will be at this time, since the details are not complete, but we might expect it could be in the magnitude of hundreds of million dollars over the next 40 to 50 years.

Watershed Boundaries and Connecting Channels Watershed boundaries for each Great Lake have not been finalized, however preliminary draft maps of the watershed boundaries indicate that that the Lake Huron primary transmission pipeline will cross a boundary between the Lake Huron watershed and the Lake Erie watershed. A portion of the flow may therefore be considered an intra-basin transfer. Depending on how the watershed boundaries are defined, this may have significant long-term implications for the regional water system, as well as individual municipalities, including London, Middlesex Centre, Strathroy-Caradoc, and Lucan-Biddulph which return a portion, or in some cases all of their wastewater effluent to a sub-watershed which ultimately enters Lake St. Clair.

River systems which connect each of the Great Lakes to the next are generically referred to as a "connecting channel". The Great Lakes Annex Agreement allows that the connecting channel to be considered as either part of one lake basin or the other, or both. Without discussion or consultation, it appears that MNR has adopted a position that the connecting channel between Lake Huron and Lake Erie (St. Clair River/Lake St. ClaidDetroit River) is entirely within the Lake Erie basin. Accordingly, areas such as Sarnia and the Lambton Area Water System as well as the Lake Huron Primary Water Supply System would be considered intra-basin transfers as the water supplied to some of the area municipalities would cross the boundary and be discharged into the Lake Erie basin.

It is unclear why MNR has taken the position that the St. Clair River/Lake St. ClaidDetroit River connecting channel should onJ be part of the Lake Erie basin. We consider their position to be arbitrary, although we are not privy to all the details. A brief review of background information indicates that each Great Lake has a completed Lakewide Management Plan (LaMP), except Lake Huron. Lake St. Clair has its own management plan, which includes tributary watersheds such as the Thames River, but it does not include the Detroit River. Another possible delineation of the basin boundary could be between Lake St. Clair and the Detroit River. It is also unclear how the provisions of the Clean Water Act as it relates to Source Water Protection will be interwoven with the Safeguarding and Sustaining Ontario's Water Act, the first intends to protect drinking water sources for municipalities, while the second intends to protect the eco-system of the same water bodies. Groundwater tributary to specific watersheds does not appear to have been considered as this point. While it is appropriate to proceed with an "abundance of care", provincial legislation should not disadvantage southwestern Ontario over other areas with respect to long-term economic viability without thorough consideration and assessment of all the issues.

Of primary issue is the terms within the Agreement which state that if water is returned to the interconnecting channel, then the water taking may either be considered as an exempt-transfer subject to specific conditions, or not a transfer at all. The conditions which have been described in the March 16, 2009, Technical Bulletin (which may appear in the future regulations) may provide an exemption for the City of London to expand the Lake Huron water taking, but the burden of proof in terms of meeting the conditions would be on the City of London. The scientific (eco-system impacts, cumulative impacts and climate change long-term impacts) and economic studies needed to support our request would be quite onerous and subject to interpretation/debate and legal challenges not only from local interests, but also parties to the agreement.

It should also be noted that if the basin boundary was established where the Detroit River joins Lake Erie, i.e. the St Clair/Detroit interconnecting channel being considered only part of the Lake Huron Basin, then the water taking for the City of London may be less of a concern

Agenda Item # Page #

Example of Transfer outside of Great Lakes Basin -=-basin transfer - Chicago Diversion to the Mississippi River

Example of Transfer within Great Lakes sub-basins - INTRA - basin transfer - MNR suggested boundary between Lake Huron and St. Clair River results in intra-basin transfer of Lake Huron supply to London

Agenda Item # Page #

nn

because Lake Huron water would be returned to the same basin. On the other hand, Lake Erie water would cross the basin boundary and sewage discharges to the Thames River would be considered an intra-basin transfer, albeit upstream of the withdrawal basin. The water would follow the path of the water cycle effectively being re-circulated and augmenting Thames River flows and flows in the downstream portion of the interconnecting channel. It is only the upstream portion of the connecting channel that would be by-passed.

It should be further noted that the current Lake Huron transfer to the City of London and return to the Great Lakes basin via the Thames River provides a significant ecological benefit to the eco-system of the Thames River system, particularly during periods of minimum flow - 50 % of the Thames River flow is treated wastewater effluent in summer months (a 40% contribution from Lake Huron) - we believe these benefits greatly outweigh any potential minor impact on the St. Clair River ecosystem since the flow diverted through London only represents 0.05% of the St. Clair River’s flow.

The only reasonable solution to this quandary would be for the interconnecting channel to be considered and defined as being part of both Lake Huron and Lake Erie watersheds for Annex management purposes.

Establishment of Baseline Withdrawal Amounts Existing intra-basin transfers will be grandfathered, and the MNR and MOE are currently in consultation with the municipal sector working group regarding how the baseline withdrawal amount will be established. Options include using the current rated pump capacity, capacity of existing infrastructure, amount approved on a Permit To Take Water ( P W ) , metering at the transfer point, etc. The MNFUMOE are taking comments into consideration for the development of their policy and guidance material. A proposed policy on the establishment of baseline amounts has not yet been released.

The City of London has been very successful in reducing its consumption of water from the Great Lakes. If baseline amounts are grandfathered based on current usage, the City would in effect be penalized for its proactive conservation efforts. Any baseline amount should be established on the maximum capacity of any installed waterworks for which the City’s rate payers have already made significant cost contributions. Baseline amounts set below the maximum intake capacity at Lake Huron would result in loss of that investment.

Related Transferors The LHPWSS currently holds a Permit To Take Water (PTTW) which provides approval for the current water taking from Lake Huron and sets maximum limits on the water taking. The LHPWSS is the permit holder, and none of the Joint Board member municipalities associated with the water taking are named on the permit. The MOE intends to change the P1Tw process so that more than one party may be named: the permit holder, parties taking water, and related transferors. Water takers and related transferors may be named in individual schedules attached to the PTTW. Additional terms and conditions in relation to water taking and transfers may be imposed on the permit holder, the related transferor or both. Terms and conditions listed on the PTTW regarding transfers may include the following:

Limiting the amount of water that may be transferred Governing return flow including the quality, the amount and the location Monitoring and reporting related to the transferred water (eg. amount, rate, conservation, effects on water quantity and quality) Governing the use and conservation of transferred water

These requirements could result in the need for enhanced sewage treatment in London, new effluent pipelines back to the source water lakes or as a minimum additional quantity and quality monitoring and reporting.

Water Supply Agreements Although existing water takings will be grandfathered, increased or new water takings must meet required exception criteria. If applying for a new or increased water taking, the application must include an agreement between the P l l W holder and the entity discharging the return water flow (related transferor). The Joint Board does not currently have water supply agreements with all member municipalities, nor are quantity allocations noted in existing agreements. This may be required and mandated in the near future. Any existing water supply agreements may require amendment to demonstrate that return flow of transferred water is guaranteed, or to meet specific conditions, noted above.

Agenda Item # Page #

Efficient Use and Conservation of Existing Water Supplies MNR and MOE policies will include guidance for P l l W holders to prepare water conservation plans. Since the Joint Boards are water wholesalers, the responsibility for development of conservation plans will likely fall to the member municipalities.

The City of London is currently undertaking this process by developing our Efficient Use of Water Program following the 2009 budget approval. Through current best practices of full- metering, outside water use restrictions and a conservation focused residential water rate structure, we have achieved significant reduction in consumption over the last several years.

Water Conservation Charges The Ministry of the Environment (MOE) has also implemented a new charge designed to recover some of the costs of provincial water management programs. Since 2008, the City has reported names, addresses and water consumption of industrial and commercial water customers in the City of London according to an earlier regulation (0. Reg. 450107: charge regulation). The EBR posting in 2007 (010-0162), concluded with regulations to implement the charge starting in January 2009. It is possible that, in the future, London will be required to collect the charge from our customers and remit it to the MOE. While neither the charge ($3.71 per million litres or $0.00371 per cubic metre, 0.5% of our 3" industrial rate) or the collection of the fee is onerous, it will create additional work-load for both the City and London Hydro, particularly in the initial implementation period.

Facilities to which the charge will apply in the regulation, include:

Beverage manufacturing facilities, where water is incorporated into a product, including the manufacturing or production of bottled water or water in other containers.

Facilities that process water as a product in a container for uses other than as a beverage.

Fruit and vegetable canning or pickling facilities, where water is incorporated into a product.

Ready mix concrete manufacturing facilities.

Non-metallic mineral product manufacturing facilities, where water is incorporated into a product.

Pesticide, fertilizer and other agricultural chemical manufacturing facilities, where the water is incorporated into a product.

Inorganic chemical manufacturing facilities, where water is incorporated into a product.

HELP Clean Water The local MOE office requested a meeting with Joint Board staff to discuss projects that are eligible for provincial funding for the HELP Clean Water initiative. Two of the projects, the Lake Huron primary pipeline twinning and the Elgin Area primary pipeline twinning, have been flagged as potential intra-basin transfers or potentially affected by the associated provincial policies that are pending. The MOE is looking more closely at these two projects, particularly with respect to environmental assessments and master planning that has already been completed to date to ensure that potential intra-basin transfers have been identified. Joint Board staff held a meeting with staff from the London MOE office (Program Services Section) on February 17, 2009 to further discuss these projects. The MOE was looking for clarification on the pipeline projects and potential servicing expansion scenarios that may occur. Joint Board staff took the opportunity to provide the MOE with further background information on the regional water supply system and outline challenges that may be faced depending on how the policies are developed.

Policy Postings General provisions of the Act had been posted in 2007. This report and its resolution will be forwarded to MNR and MOE. thereby expressing our concern over some of the provisions which appear to be different than what we had originally assumed to be the outcome. These comments will be considered as the ministries finalize the regulations. Once the regulations have been drafted, they will also be posted on the EBR for public review and comment before being finalized.

Agenda Item # Page #

PREPARED BY:

&@ ROLAND WELKER, P. ENG.

The Joint Board CAO has also taken the opportunity to discuss the intra-basin transfer issue with other municipalities through the Regional Public Works Commissioners of Ontario (RPWCO) members group. RPWCO has agreed to write to both the MNR and MOE, raising concerns about basin transfer limitations, pending rules on consumptive use, and potential impacts on the Permit To Take Water.

Summary

The regulations currently in development by the Ontario government to implement the Great Lakes-St. Lawrence River Basin Sustainable Water Resources Agreement may have future significant implications for the City of London, particularly with respect to future expansions, increased water consumption to support growth and potential intra-basin transfers related to water consumption andwastewater discharge and consumptive uses. If the Lake Huron system is prevented from expanding in the future to serve London's growth and expansions will only be allowed to the Elgin Area Water Supply System, this will result in increased costs to the City of London and other EAWSS municipalities. Given these types of impacts, it is difficult to estimate potential financial implications without detailed analysis. Joint Board staff will continue to actively provide input to the Ontario Ministry of Natural Resources and Ministry of the Environment to represent the best interests of London and the Joint Board member municipalities.

It is appropriate for the City of London to submit a Council resolution directly to MNR and MOE prior to posting of the draft regulations. City elected officials may also discuss the potential impacts on London with local area MPPs in an effort to achieve a reasonable definition of the "connecting channel being common to both lakes" that does not compromise the future economic development opportunities of the City of London thereby maintaining London's Advantage by Conserving the Future and Securing Tomorrow.

RECOMMENDED BY:

6 2 2 PAT McNALLY, P. ENG. u

Acknowledaements

This report has been prepared using information previously prepared by Andrew Henry, Regional Water Supply for the Joint Boards of Management for the Lake Huron and Elgin Area Primary Water Supply Systems along with input from Pat Donnelly, the City's Urban Watershed Manager, Environmental Programs.

DlVlSlON MANAGER, WATER ENGINEERING GENERAL MANAGER ENGINEERING SERVICES 8 CITY ENGINEER

Attach: Appendix " A - March 31,2009 Letter to Ministry of Natural Resources Appendix "B- March 16, 2009 Memorandum and Technical Bulletin from MNR and MOE

Andrew Henry, Division Manager Regional Water Supply John Braam, Division Manager, Water/Sewer Operations Pat Donnelly, Urban Watershed Manager, Environmental Programs Jay Stanford, Director, Environmental Programs & Solid Waste Wes Abbott, Division Manager, Solid Waste Management Brian Hall, Kettle Creek Conservation Authority Ian Wilcox, Upper Tharnes River Conservation Authority Chris Tasker, Thames-Sydenham and Region Source Water Protection

Cc:

Agenda Item # Page#

APPENDIX "A" March 31, 2009 Letter to Ministry of Natural Resources

Elgin Area U

Primary Water Supply System Lake Huron

Primary Water Supply System

March 31,2009

Ministry of Natural Resources Witer Resources Section, Lands 8, Waters Branch 300 Water Street P.O. Box 7000 Peterborough, ON K9J 8M5 Attn: Rob Messervey. Manager

Re: Development of Regulations and lmpllcations for the Lake Huron 8 Elgin Area Primary Water Supply Systems

Dear Mr. Messervey;

The Lake Huron Primary Water Supply System has a water treatment facility on Lake Huron and supplies approximately 375,000 people in eight municipalities across Middlesex County, Huron County and Lambton County, including most of the City of London, The Elgin Area Primary Water Supply System has a water treatment facility on Lake Erie and supplies approximately 100,000 people in seven municipalities across Elgin County including the City of London. Together, the Lake Huron Primary Water Supply System and the Elgin Area Primaly Water supply Systems encompass a service area of approximately 5,000 square kilometres of south-western Ontario between Lake Huron and Lake Erie.

Both the Lake Huron Primary Water Supply System (LHPWSS) and Elgin Area Primaly Water Supply System (EAPWSS) have several key areas of concern regarding the regulations that are currently In development to implement the Safeguardhg and Sustaining Ontario's Water Act (SSOWA) and the subsequent amendments to the Ontario Wafer Resources Act (OWRA). There are potential significant implications to not only the CHPWSS and EAPWSS, but many of their member municipalities and other area water systems in the region with regard to the definition of watershed boundaries and related 'connecting channels". In addition, the method of grandfathering baseline amounts and the exception criteria, in particular the means of returning water to the source Great Lake watershed, will also have significant implications on these regional water supply systems.

For the purpose of this correspondence. I refer to the Lake Huron Primaly Water Supply System and the Elgin Area Primary Water Supply System collectively as the 'Regional Water Systems".

Watershed boundaries and connecting channels To date, much of the discussions at the Advisory Panel meetings and with the working groups have, among other things, dealt with general discussions on the concept of the Great Lake basins, connecting channels and the imp l i ca t i i of intra-basln transfers. but in our opinion has

Lake Huron & Elgin Primary Water Supply Systems Ofke519.861.2500 ext 2714 Fax 519.474.0451 ahenry@london.ca httpJEwat6rsupply.lndm.d

do The City of London Regional Water Supply Dhrlsion

29 Kitworth Pa* Drlve RR#5 Komoka, O n M O

NOL 1RO

avoided any substantive discussions on finalizing the actual definitions of the Great Lake basins. We note, however, that much of the materials produced and provided by the Ministty of Natural Resources (MNR) have presupposed a definition whereby any connecting channel to a Great Lake basin is included in the “downstream” Great Lake basin. It greatly concerns the Regional Water Systems as this presumed definition is inconsistent with the safeguarding and Sustaining Ontario’s Water Act and the Great Lakes-St. Lawrence River Basin Sustainable Water Resources Agreement which was signed by Ontario, Quebec and the eight Great Lakes States, and all subsequent discussions relating to intra-basin transfers are based on this supposition.

From the standpoint of the Regional Water Systems, while one can argue that water from the connecting channel naturally flows to the downstream Great Lake basin, it is equally arguable that water from the upstream Great Lake basin naturally flows to the connecting channel. Notwithstanding these relativity-based points of view, the Safeguarding and Sustaining Ontario’s Water Act and the Great Lakes-St. Lawrence River Basin Sustainable Water Resources Agreement define the watershed of each Great Lake to include its upstream and downstream connecting channels. This is particularly important in dealing with intra-basin transfers and subsequent proposed regulatory implications. While the Regional Water Systems generally support the concepts and principles of the Safeguarding and Sustaining Ontario’s Water Act and the Great Lakes-St. Lawrence River Basin Sustainable Water Resources Agreement it is our position that the implementation of these commitments must be done with logical reasoning supported by scientiic investigation and consideration of local and regional conditions. The arbitrary imposition of the draft definition that connecting channels will exclusively be part of the downstream Great Lake basin is not supported by logic or scientific investigation and represents a significant detrimental impact to many municipalities and water suppliers of southwestern Ontario.

Because of the length of the connecting channel between Lake Huron and Lake Erie, this situation is further exacerbated because of the fact that a significant portion of southwestern Ontario drains to this connecting channel, and not directly to either Great Lake. This makes the application of the connecting channel specifically important for this same region as the implications of returning the water to the source basin or its connecting channel become particularly challenging.

By way of example, the Lake Huron Primary Water Supply System draws water from Lake Huron at its treatment plant located approximately 2 kilometers north of the village of Grand Bend. This facility supplies municipal drinking water to the municipalities of Bluewater, South Huron, Lambton Shores, Lucan Biddulph. North Middlesex, Strathroy Caradoc. Middlesex Centre and the City of London. Should the connecting channel be restrictively defined as only belonging to the Lake Erie basin, then not only would the supply to the City of London be considered an intra-basin transfer. but also the supply to the municipalities of Strathroy Caradoc and Middlesex Centre, as well as portions of the municipalities of Lucan Biddulph and South Huron. These portions of the municipalities lay within the Thames and Sydenham River watersheds which drain to the connecting channel. Given the capacity and design of the existing infrastructure, it is not possible to extend supply of the Elgin Area water system to all of these municipalities without the related cost of significant infrastructure works and all the ensuing social and environmental disruptions.

-2-

Conversely, if the connecting channel is restrictively defined as only belonging to the Lake Huron basin, then the portion of water supplied to the City of London from the Elgin Area water system may be considered an intra-basin transfer as the wastewater from the city is discharged to the Thames River watershed which drains to the connecting channel (solely part of the Lake Huron basin).

It should be clearly evident that the exclusionary definition of the connecting channel more restrictive than the Safeguarding and Sustaining Ontario's Water Act and the Great LakesSt. Lawrence River Basin Sustainable Water Resources Agreement will have a significant and far- reaching impact on a considerable area of south-western Ontario. This not only could include the areas served by the Lake Huron Primaty Water Supply System and the Elgin Area Primary Water Supply System, but also the City of Sarnia and the Lambton Area Water Supply System. The Lambton Area Water Supply System is another regional water supply system that draws water from the St. Clair River and supplies water to six municipalities. The intake is located approximately 100 m into the St. Clair River. Depending on how the connecting channel is defined, this could significantly and adversely impact the system. The Ministry of Natural Resources (MNR) and Ministry of Environment (MOE) should also look at this water system in more detail to clearly understand the potential impacts. Other water systems and municipalities in south-westem Ontario that may be impacted include the West Elgin Area Water System, as well as Chatham-Kent, Essex and the City of Windsor.

Physical and Financial Implications - Elgin Water Treatment Plant Expansion The Lake Huron Water Treatment Plant has a rated capacity of 340,000 m3/day. During peak flow periods in recent years, this plant has reached as much as 78% of its capacity during summer months. If the presumed definition of the Lake Erie basin includes the St. ClaidDetroit River connecting channel, then about 90% of the water volume produced at this facility would be supplied to municipalities which lie within the "Lake Erie basin".

In comparison, the Elgin Area Water Treatment Plant has a rated capacity of 91,000 m3/day. During peak flow periods in recent years, this plant has reached as much as 89% capacity. Even with additional infrastructure improvements planned to be undertaken in the next few years to maximize existing plant capacity, this water treatment plant has less than 11,000 m3/day of unused capacity remaining. At current consumption rates in Elgin County, we currently project that this water treatment plant will need added treatment capacity in approximately ten years, but likely only in the order of an additional 40,000 rn3/day. This plant expansion would not require a new intake structure and pipeline within Lake Erie as the original plant construction by the Province of Ontario included the construction of the intake system to its ultimate planned capacity of 182.000 m3/day.

If the LHPWSS supply to the City of London and the municipalities of Strathroy-Caradoc, Middlesex Centre and portions of Lucan Biddulph and South Huron are considered to be an intra-basin transfer, any future increases in water takings, especially for the City of London, would have to come from the EAPWSS. As the Elgin Area Water Treatment Plant is near capacity, this will trigger a plant expansion much sooner than anticipated and significantly more than currently planned or originally designed by the Province of Ontario. The capital costs for the currently planned plant expansion is in the order of $60 million, limited to additional pumping, treatment and filtration capacity for the existing plant.

The financial implications of this scenario are extreme as the capacity requirements to meet projected demands are far in excess of the planned capacity of the system (by the Province of Ontario) and the current capacity of the existing intake infrastructure. It is estimated that in

-3-

Agenda Item P

El

order to meet the moderate 40-year needs of the City of London for this scenario, an investment of more than $350 million would be required, including a new intake structure in Lake Erie. In addition, an expansion of the EAPWSS would only benefit the City of London as the supply could not be extended to the municipalities of Middlesex Centre, Strathroy-Caradoc, South Huron or Lucan-Biddulph because of physical restrictions of the existing infrastructure. Further to this, the increased taking would trigger a regional review under the Great Lakes - St. Lawrence River Basin Sustainable Water Resources Agreement.

Establishing baseline amounts The Regional Water Systems strongly encourage the MNR and MOE consider existing built capacity when establishing baseline amounts for intra-basin transfers. Many municipalities have already forecasted long-term water needs and have accounted for this in existing infrastructure. The LHPWSS and member municipalities should be able to maximize existing plant capacity before having to redirect resources into new infrastructure at a significant cost. At a minimum, the grandfathered baseline amount should be the existing water treatment plant capacity and associated infrastructure.

If the MNR and the MOE restrict the baseline amounts to current or even recent supply and consumption data, the province would be unduly penalizing proactive municipalities which have implemented water conservation and water efficiency programs to increase the longevity and capacity of the existing systems. In addition, this 'policy" would inadvertently reward municipalities which have done little to implement water conservation and efficiency programs.

Permit To Take Water and Related Transferors The Regional Water Systems currently hold two Permits To Take Water (PTTW) which provide approval for the current water taking from Lake Huron and Lake Erie and sets maximum limits on the water taking. The Joint Water Boards who own the Regional Water Systems are the permit holders, and none of the Joint Board member municipalities associated with the water taking are named on the permit. If the Pl lW process is changed so that more than one party may be named (the permit holder, parties taking water, and related transferors), it is important that each party be listed in an individual schedule to the permit, and that each party only be entitled to make applications for amendments to the schedule that is applicable to them. The MNR and MOE are also strongly encouraged to make linkages to a drinking water system's Municipal Drinking Water License wherever possible.

Exception criteria (returning water to the source great lake watershed) The exception criteria states that water must be returned, either naturally or after use, to the same Great Lakes watershed from which it was taken (source watershed). This issue relates back to the definition of a connecting channel, and whether a Great Lake watershed will include both its upstream and downstream connecting channel. At a minimum, the MNR should allow tributaries which flow into a connecting channel to be considered as naturally returning the flow to the source watershed. Ideally, the Ministty of Natural Resources will exempt intra-basin transfers from legislation if the water is returned to either an upstream or downstream connecting channel.

Conclusion Staff from the Regional Water Systems met with representatives of the MNR and the MOE on November 28, 2008 in a preliminary meeting to discuss this specific issue. Since this time, we have asked for a subsequent meeting with both ministries to address our identified issues now that further details of the draft policies and implementing regulations are available, but have yet to receive a response.

- 4 -

Agenda Item (I m Although a meeting was held with staff from the London District MOE office on February 17, 2009, the purpose of this meeting was to discuss two of the Regional Water Systems’ projects which were identified in our HELP Clean Water initiative which could potentially be impacted by the definition of the Great Lake basins, interconnection channels and subsequent intra-basin transfer conditions.

The Regional Water Systems continue to pursue a meeting with the MNR and MOE to specifically discuss in greater detail these concerns generally outlined in this correspondence. Staff from the Regional Water Systems are willing to meet with you at your convenience, be it at ministry offices in Peterborough or Toronto, or hosted here in London.

In addition, we recommend that the MNR hold a separate regional discussion session with all of the potentially impacted municipalities and drinking water systems in south-western Ontario in order to keep them informed of the issues and to provide information on the direction the MNR may be taking. Until the MNR has a clear policy direction, it is very difficult for these systems to fully assess the system impacts.

Staff from the LHPWSS and EAWVSS will continue to participate on the MNRs Advisory Panel and working groups, providing input that we believe are in the best interest of the Province of Ontario and protect the interests of the Regional Water Systems. Should you have any questions or comments, please contact our office at your earliest convenience.

Besmards,

@r Pat McNally, P.Eng. Chief Administrative Lake Huron & Elgin Area Primary Water Supply Systems

C.C. Paul Van Meerbergen - Chair, LHPWSS Joint Board of Management Bob Habkirk - Chair, EAPWSS Joint Board of Management Carol Mitchell - MPP (Huron-Bruce) Maria Van Bommel - MPP (Lambton-Kent-Middlesex) Hon John Wilkinson - MPP (Perth-Wellington) Hon Deborah Mathews - MPP (London North Centre) Hon Christopher Bentley - MPP (London West) Khalil Ramal - MPP (London-Fanshawe) Hon Steve Peters - MPP (Elgin-Middlesex-London) Ministry of the Environment Member Municipalities - LHPWSS & EAPWSS Municipality of Southwest Middlesex Lambton Area Water Supply System Andrew Henry - Division Manager, LHPWSS & EAPWSS

- 5 -

Agenda Item # Page #

APPENDIX “B” March 16,2009 Memorandum and Technical Bulletin from MNR and MOE

Mlnlstry of the Envlmnment

office of the Minister

135 SI. Clair Avenue West 12Ih Flmr Toronto ON M4V 1P5 Tel: 416.314.6790 Fax: 418-314-8748

Minlatry of Natural

Offcs of the Minister

Room 8830. whltney Bkek 99 WeIIesley Stiwet West Toronto ON M7A 1W3 Tel: 416-314-2301 Fax: 418-314-2210

Re50UrCsS

Mlnlstere de I’EnvlrOnnement

Bureau du rninlstre

135, avenue SI. Clair Ouest 12‘ Btage Toronto (Ontario) M4V 1P5 TW. : 418 3144780 TBIBc. : 418 314-8748

MlnlsMre des Rlchesses naturellw

Bureau de la minlstre

EdlRca WhNney, bureau 8830 89. NO Wellerley Ouest Toronto (Oniatio) M7A 1W3 TBI. : 418 314-2301 TBIBC. : 418 314-2218

Ontario

March 16,2009

MEMORANDUM

TO: All Heads of Council

RE: Implementation of the Great Lakes - St. Lawrence River Basin Sustainable Water Resources Agreement

We are pleased to provide you with an update on recent developments to protect the waters of the Great Lakes through the Great Lakes - St. Lawrence River Basin Sustainable Water Resources Agreement (Agreement). We trust that we have your commitment to do your part to ensure the principles of this Agreement are met.

As you know, on December 13,2005, the Great Lakes premiers and governors signed the Agreement to achieve stronger protection and conservation of the Great Lakes Basin waters. Through the Agreement, the parties have agreed to: . . . . 0

.

.

Ban diversions of water out of the Great Lakes-St. Lawrence River Basin and prohibit new or increased transfers of water from one Great Lake Watershed to another unless strictly regulated criteria are met; Strengthen water conservation through programs in each.province and state; Establish a stronger new basin-wide environmental standard for regulating water uses across provinces and all states; Build the information and science needed to support sound decision-making; Formally recognize the authority of the federal governments and the International Joint Commission under the Boundary WatersTreaty, which remains unchanged; Provide a stronger voice for Ontario, ,its citizens and First Nations in the regional review of water use proposals by other jurisdictions for exceptions to the prohibition against diversions: and Build regional collaboration, for example, in the review of water management and conservation programs.

In the United States, the Agreement is supported by a binding inter-state Compact Agreement among the eight Great Lakes States, which was signed by U.S. President George W. Bush on October 3,2008. This signed Compact Agreement came into effect on December 8,2008.

Here at home, Ontario has already made significant progress in implementing the Agreement. On June 4, 2007, the Safeguarding and Sustaining Ontario's Water Act received Royal Assent, enabling implementation of the Agreement in Ontario through amendments to the Ontario Water Resources Act (OWRA). The Province is currently developing supporting regulations to proclaim new sections of the OWRA to fully implement the Agreement.

The Great Lakes Charter, 1985 (Charter) remains in force until supporting regulations are in place. The Charter commits Ontario to "Prior Notice and Consultation" (PNC) with Quebec and the eight Great Lakes States before approving any new or increased water diversion (transfer out of the Great Lakes Basin or from the watershed of one Great Lake to another) over 19 million litres per day. The Charter also requires PNC for any new or increased consumptive use of water over 19 million litres of water per day. The Ministry of Natural Resources (MNR) administers the Charter in Ontario.

In addition to the requirements of the Charter. the Ministry of the Environment (MOE) and the MNR will work closely with municipalities proposing water or wastewater servicing projects which trigger the Agreement to ensure they meet the spirit of the Agreement while supporting regulations are developed. Municipal water and wastewater projects which involve a new or increased transfer of water or sewage of 379,000 litres per day or more from one Great Lake Watershed to another will trigger the Agreement.

The MOE has developed a Technical Bulletin for Intra-Basin Transfers for water and wastewater proposals which trigger the Agreement (enclosed). The Technical Bulletin applies to undertakings under the Municipal Engineers Association Municipal Class Environmental Assessment (MEA Class EA) and has been developed for MOE Regional Offices as they are a mandatory review agency of Schedule B and C projects. Regional offices will encourage proponents to treat undertakings which will involve a new or increased intra-basin transfer of 379,000 litres per day or more as a Schedule C project under the MEA Class EA.

This measure will help municipalities undertake projects with a view that supporting regulations under the OWRA may be in effect when applying for a Permit to Take Water following the completion of an environmental assessment. As such, provisions under the Agreement should be considered early in the planning process.

Over the coming months, the Province will be undertaking consultation on the regulatory framework to implement the intra-basin transfer provisions of the Agreement in Ontario. If your municipality would like to actively participate in the development of the regulatory framework as a member of the Municipal Sector Working Group, please contact Rheanna Leckie at 705-755-5404. The Province looks forward to working with municipalities on the development of these regulations to fully implement the Agreement.

We thank you for your cooperation and your continued commitment to protecting the environment and the waters of the Great Lakes Basin.

Sincerely. -

Minister of Natural Resources

n osure v

Agenda Itam t# Pa e # -- A

Technical Bulletin Environmental Assessment Direction for Municipal Water

and Wastewater Projects Proposing an Intra-Basin Transfer

PURPOSE The purpose of this Technical Bulletin is to provide interim direction to municipalities planning water and wastewater projects to ensure that intra-basin transfers are not undertaken in a manner that is inconsistent with the provisions of the Great Lakes - St. Lawrence River Basin Sustainable Water Resources Agreement until supporting regulations are in place. The Technical Bulletin also provides direction to municipalities on requirements under the Great Lakes Chatter which currently remains in force.

BACKGROUND In June 2007, the Safeguarding and sustaining Ontario’s Water Act (SSOWA) received Royal Assent, amending the Ontario Water Resources Act (OWRA). These changes to the OWRA help implement the commitments Ontario made in signing the Great Lakes - St. Lawrence River Basin Sustainable Water Resources Agreement, 2005 (Agreement) with Quebec and the eight Great Lakes States (patties of the Agreement). The Agreement committed the parties to a ban on water diversions (or transfers), with strictly regulated exceptions, strengthened water conservation and common environmental standards for regulating the use of surface or groundwater resources of the Great Lakes - St. Lawrence River Basin.

Among the amendments made to the OWRA through SSOWA is the prohibition of a new or increased transfer of 379,000 litres of water per day or greater from one Great Lakes Watershed to another subject to strict exceptions. While the OWRA was amended to incorporate the provisions of the Agreement in 2007, supporting regulations are required to fully implement the Agreement before these provisions can be proclaimed. The Ministries of Environment (MOE) and Natural Resources (MNR) are working collaboratively to develop regulations to manage intra-basin transfers.

Until regulations are completed and the other Great Lakes jurisdictions bring provisions of the Agreement into law, the Great Lakes Charter, 1985 (Charter) remains in force. The Charter commits Ontario to Prior Notice and Consultation with the eight Great Lakes States and Quebec before approving any new or increased water diversion (transfer out of the Great Lakes Basin or from the watershed of one Great Lake to another) over 19 million litres per day’. The Charter also requires Prior Notice and Consultation for any new or increased consumptive use of water over 19 million litres per day.

ENVIRONMENTAL ASSESSMENT Municipal water and wastewater servicing proposals (such as expansions of water and sewage infrastructure i.e. pipes, treatment plants etc.) are generally planned and designed under the Municipal Engineers Association Municipal Class Environmental Assessment (MEA Class EA). MOE Regional Offices, specifically Environmental Resources PlannedEnvironmental Assessment Coordinators are mandatory points of contact where a proposed undertaking (Le. projects, activities etc.) is classified as Schedule B or C in the MEA Class EA.

’ The Ontario Water Resources Act (OWRA) prohibits the transfer of water out Ontario’s three major water basins including the Great Lakes Basin - see section 34.3 of the OWRA. A prohibition against transfers out of the Great Lakes Basin has been in place under the OWRA since 1999.

MARCH 16,2009

-1 -

The MEA Class EA, Section A.2.10 identifies the Agreement, the OWRA and SSOWA as key provincial legislation to consider while undertaking the Class EA process. Additionally, Section A.2.10.2 recommends that technical consultation with the MOE is undertaken for all complex projects involving the construction of water supply and treatment as well as sewage treatment and disposal systems. Projects resulting in an intra-basin transfer subject to the Agreement or consumptive uses that trigger the Prior Notice and Consultation provisions of the Charter are considered complex projects.

While this Technical Bulletin is geared to projects under the MEA Class EA, proponents undertaking an individual EA should also consider the principles of the Charter, the Agreement and the direction outlined below.

DIRECTION TO ENSURE COMMITMENTS UNDER THE GREAT LAKES CHARTER ARE SATISFIED IN RELATION TO CONSUMPTIVE USE AND WATER DIVERSION. There are two triggers under the Charter for Prior Notice and Consultation that are relevant to an Ontario water taking, one in relation to intra-basin transfers and one in relation to the consumptive use portion of a water withdrawal (or taking).

Consumptive use is defined as that portion of water withdrawn or withheld from the Basin that is lost or otherwise not returned to the basin due to evaporation, incorporation into products or other processes? For municipal water use, the consumptive portion of the withdrawal has been estimated to be 10-15% of the new or increased withdrawal ~ o l u m e . ~ Under the Charter, Prior Notice and Consultation is required for proposed withdrawals that involve a new or increased consumptive use of water of 19 million litres per day or more averaged over any 30-day period.

All undertakings for municipal water projects which will result in a new or increased water diversion (transfer of water between Great Lake watersheds) of 19 million litres per day or more averaged over any 30-day period will also trigger the Charter.

The proponent should contact the Lands and Waters Branch, MNR (administrator of the Charter) (contact information below) to confirm the consumptive use and/or water diversion, i den t i what suppotting information is required and coordinate Prior Notice and Consultation if required.

DIRECTION TO ENSURE COMMITMENTS UNDER THE GREAT LAKES- ST.

SATISFIED IN RELATION TO INTRA-BASIN TRANSFERS LAWRENCE RIVER SUSTAINABLE WATER RESOURCES AGREEMENT ARE

Proponents of undertakings for municipal water or wastewater projects where one of the alternatives will result in a new or increased intra-basin transfer of 379,000 litres per day or more should consider treating the undertaking as a Schedule C undertaking under the MEA Class EA.

Schedule C undertakings proceed under the full planning and document procedures (Phase 1-5) as specified in the MEA Class EA. The five phases of the MEA Class EA require greater analysis of the preferred solution and additional public consultation. The Schedule C process includes identification of the problem or opportunity (Phase 1);

* This definition comes from the Agreement. A slightly differently worded definition appears in the Charter. Subsection 1 (6) of the OWRA also provides a definition of consumptive use that draws on these definitions. ’ The Ministries are consulting on what approach to take in relation to calculating the amount of consumptive use as part of its consultation on the SSOWA regulations.

MARCH 16,2009

-2-

identification of alternative solutions (Phase 2); identification of alternative design concepts for preferred solution (Phase 3); documentation of the rationale, planning, design and consultation process of the project in an Environmental Study Report (Phase 4); and implementation (Phase 5). In comparison, Schedule B undertakings only require fulfillment of Phase 1 and 2 of the MEA Class EA process only.

The contents of the Environmental Study Report are outlined in Section A.4.2 of the MEA Class EA. In the Environmental Study Report, the proponent (with the assistance of the MOE and MNR) should demonstrate how intra-basin transfer provisions outlined in Section 34.6(1)-(3) of the OWRA (Schedule 1) have been met. The ESR should also show that the principles of the Agreement have been considered. Below is a summaly of the intra-basin transfer provisions as outlined in Section 34.6(1)-(3) of the OWRA.

Agreement Intra- Basin Transfer Provisions

T I New or increased intra-basin transler of2 379,000 Inns per

New or increased inlra-basin transfer Involving a consumptlve UM of 2 19 million inre$ per day day I

i

return now IO soum G I ~ Lake Watenhsd.

1. Municipal Orlnklng --+ Water System

outlined in Seclion 34.6(3) of lhe o m ) . -mum now may be to another Greal Inkas Watershed if demonstrated mat n IS not feasible. envimnmenteliy Dound or cost effectbe to mtum wabr la the MUWJ Great Laker Watershed and: Thaw are no feasible,. environmentally sound. cost effectbe abmittws la ftn tramfat. Including ansarvaWon and: Onlsrio must provlde prbr notic. to

*

.

2. All Uses -

3. All Uses .

No@ 1 319 ow ud am 19 rnillim !Id are borh amount referenced 8 ” SSCWA and vm Agreement 2 m s u r n p v e use has m me pn t e n ~awlated using a c o - e r ~ m - for rnunripal tsmngr. 10.1516 m t b m-ermenl mat has been used mnsurnptwe use - water mal 4s imt mmugh wsporatim i-rstion m o a pmdwt or my other m e s s where MIW IS mt returned la me basin

Consultation requirements for Schedule C projects as outlined in Section A.3.4 of the MEA Class EA, require three mandatory points of contact. At the third point, the Environmental Study Report is placed on the public record for at least 30 calendar days and the Notice of Completion of the Environmental Study Report shall advise the public and review agencies of their rights with regard to requesting a Part II Order (“Bump-up”) request (section 16 of the Environmental Assessment Act). The appeal process of the MEA Class EA is outlined in Section A.2.8 of the MEA Class EA.

MARCH 16,2009

-3-

If the proponent is unwilling to voluntarily treat its proposed undertaking as a Schedule C undertaking, the Ministry may consider making a recommendation to the Minister of the Environment under ss. 16(3) of the Environmental Assessment Act, requesting that helshe order that the project be assessed as a Schedule C undertaking under the MEA Class EA. Additionally, the Ministry may consider making a recommendation for a ss.16 (3) order for additional requirements such as specific monitoring and reporting.

Furthermore, the MOE (in consultation with a proponent) may determine that an undertaking should be assessed as an individual EA if the size of the proposed undertaking or complexity warrants such analysis (e.9. if Regional Review is required) and recommend that the Minister of the Environment make an order under ss. 16(1) of the Environmental Assessment Act.

Proponents who adhere to the Technical Bulletin and demonstrate that a proposed intra- basin transfer meets the criteria outlined in subsections 34.6 (1) to (3) of the OWRA to the satisfaction of the MOE and the MNR compliance with the intra-basin regulations currently under development.

MASTER PLANS Section A.2.7 of the MEA Class EA identifies that municipalities may consider a group of related projects under a Master Planning process. There are a variety of basic approaches to Master Planning as described in the MEA Class EA, all of which at a minimum, address Phases 1 and 2 of the MEA Class EA process. When preparing a Master Plan, proponents are encouraged to consider the Agreement and how it applies to specific projects identiied by the Master Plan at this stage in the planning process. If a project identified in a Master Plan considers an alternative that will result in a new or increased intra-basin transfer of 379,000 litres per day or more, proponents should consider treating the specific project as a Schedule C undertaking under the MEA Class EA.

be able to use this work to demonstrate

For more information, please contact: Paula Thompson Senior Policy Advisor Water Resources Section Lands and Waters Branch Ministry of Natural Resources 300 Water Street, P.O. Box 7000 Peterborough, ON K9J 8M5 paula.I.thompson@ontario.ca 705-755-1 21 8

Caroline Cosco Senior Policy Analyst Land and Water Policy Branch Ministry of the Environment 135 St. Clair Avenue West, 6'h Floor Toronto, ON M4V 1 P5 caroline.cosco@ontario.ca 416-314-0635

MARCH 16,2009

Schedule 1: Exceptions and Criteria for Intra-Basin Transfers

Water transfers: Great Lakes watersheds 34.6 (1) A permit shall not be issued or amended under section 34.1 so as to authorize the taking of water from a Great Lakes watershed if,

a. any of the water would be transferred: and b. the new or increased transfer amount would be the threshold amount. 2007,

c. 12, s. 1 (12).

Exceptions (2) Subsection (1) does not apply to the following transfers: 1. A transfer that satisfies the following criteria:

I. The portion of the new or increased transfer amount that is lost through consumptive use, a. is always less than 19 million litres, or the lower amount prescribed by the

regulations, per day, or b. if a regulation is made prescribing the manner of calculating average

amounts of water, is less than an average of 19 million litres, or the lower amount prescribed by the regulations, per day.

The water is taken by the operating authority of a municipal drinking water system within the meaning of the Safe Drinking Water Act, 2002 and the system serves a major residential development within the meaning of that Act. The criteria described in paragraphs 1 to 7 of subsection (3) are satisfied.

ii.

iii.

2. A transfer that satisfies the following criteria: I.

ii.

iii.

iv.

V.

vi. vii.

The portion of the new or increased transfer amount that is lost through consumptive use,

a. is always less than 19 million litres, or the lower amount prescribed by the regulations, per day, or

b. if a regulation is made prescribing the manner of calculating average amounts of water, is less than an average of 19 million litres, or the lower amount prescribed by the regulations, per day.

The water is taken by the operating authority of a municipal drinking water system within the meaning of the Safe Drinking Water Act, 2002 or by any other person. It has been demonstrated that conservation of existing water supplies is not a

feasible, environmentally sound and cost effective alternative to, a. the transfer, in the case of a new transfer, or b. the transfer of the additional amount, in the case of an increased transfer. There are no other feasible, environmentally sound and cost effective alternatives to,

a. the transfer, in the case of a new transfer, or b. the transfer of the additional amount, in the case of an increased transfer. The criterion described in paragraph 1 of subsection (3) is satisfied, or it is not feasible, environmentally sound or cost effective to satisfy that criterion.

The criteria described in paragraphs 2 to 7 of subsection (3) are satisfied. Notice of the application for the permit or amendment has been given to the Province of Quebec, the states of Illinois, Indiana, Michigan, Minnesota, New York, Ohio and Wisconsin and the Commonwealth of Pennsylvania in accordance with the Great Lakes-St. Lawrence River Basin Sustainable Water Resources Agreement of 2005.

3. A transfer that satisfies the following criteria:

-5-

MARCH 16,2009

i. The portion of the new or increased transfer amount that is lost through consumptive use,

a. is at least 19 million litres, or the lower amount prescribed by the regulations, on any day, or

b. if a regulation is made prescribing the manner of calculating average amounts of water, is at least an average of 19 million litres, or the lower amount prescribed by the regulations, per day.

it has been demonstrated that conservation of existing water supplies is not a feasible, environmentally sound and cost effective alternative to,

a. the transfer, in the case of a new transfer, or b. the transfer of the additional amount, in the case of an increased transfer. There are no other feasible, environmentally sound and cost effective alternatives to,

a. the transfer, in the case of a new transfer, or b. the transfer of the additional amount, in the case of an increased transfer. The criteria described in paragraphs 1 to 7 of subsection (3) are satisfied. The requirements of subsection 34.1 (14) have been complied with. 2007, c. 12,

ii.

iii.

iv. v.

s. l(12).

Criteria (3) The criteria referred to in subparagraphs 1 iii, 2 v and vi and 3 iv of subsection (2) are:

1. The new or increased transfer amount is returned, either naturally or after use, to the same Great Lakes watershed from which it was taken, except for an amount prescribed by the regulations that may be lost through consumptive use.

2. The efficient use and conservation of existing water supplies cannot reasonably avoid, i. the transfer, in the case of a new transfer, or ii. the transfer of the additional amount, in the case of an increased transfer.

3. The new or increased transfer amount is reasonable, given the purposes for which, i. the transfer is done, in the case of a new transfer, or ii. the transfer of the additional amount is done, in the case of an increased

transfer. 4. The transfer, in the case of a new transfer, or the transfer of the additional amount, in

the case of an increased transfer, is implemented so as to ensure that it does not result in any significant individual or cumulative adverse impacts on the quantity or quality of the waters, or the water-dependent natural resources, of the Great Lakes- St. Lawrence River Basin, considering the potential cumulative impacts of any precedent-setting consequences associated with the transfer or the transfer of the additional amount, as the case may be.

5. The transfer, in the case of a new transfer, or the transfer of the additional amount, in the case of an increased transfer, is implemented so as to incorporate feasible, environmentally sound and cost effective water conservation measures to minimize the taking of water and losses of water through consumptive use.

6. The transfer is implemented so as to ensure that it complies with, i. the Boundary Waters Treaty of 1909, ii. the International Boundary Waters Treaty Act (Canada), and iii. any other treaty, agreement or law that is prescribed by the regulations.

7. The transfer, in the case of a new transfer, or the transfer of the additional amount, in the case of an increased transfer, is implemented so as to ensure that it complies with any other criteria that are prescribed by the regulations for the purpose of implementing Article 209 (Amendments to the Standard and Exception Standard and Periodic Assessment of Cumulative Impacts) of the Great Lakes-St. Lawrence River Basin Sustainable Water Resources Agreement - - of _. 2005, including criteria relating to

climate change or other significant threats to the Great Lakes-St. Lawrence River Basin. 2007, c. 12, s. 1

-~ - -