Exporting water: a source of wealth for Quebec

    MONTREAL, Aug. 27 /CNW Telbec/ - Large-scale exports of fresh water would
be a wealth-creating idea for Quebec and for Canada as a whole. At a time when
water is becoming scarce in many parts of the world, its economic development
stirs up substantial opposition, however. Though some people fear harmful
exploitation or even the drying up of our water resources, Marcel Boyer, the
author of a research paper published by the Montreal Economic Institute, says
it is urgent to look seriously at developing our blue gold.
    "The development and marketing of this expertise require a strategic plan
to enable Quebec to become a leader in water management," says Mr. Boyer, vice
president and chief economist of the Institute. "The success of these markets
relies on the government's ability to establish well defined water use rights
that are transferable and can encourage resource conservation."
    The government could set out a regulatory framework for the trade in
water to make owners or concession-holders more fully aware of the benefits
and costs associated with the various uses of the water under their control.
    These restrictions should be accompanied by a realistic fee structure
that would give consumers and other users incentives to use the resource
responsibly and encourage the businesses involved to ensure a stable supply.
The absence of prices and markets leads to waste, entails a less efficient
economy, and keeps people unaware of the value of water. A first step in
informing the populace would be to determine the precise quantity and quality
of water resources in Quebec. This could be done by the Bureau québécois des
connaissances sur l'eau (Quebec Water Knowledge Bureau), the creation of which
was announced several months ago by Environment Minister Line Beauchamp.

    The special place held by Quebec and Canada

    Canada holds the world's most extensive freshwater reserves, with 8% of
world inventory. Quebec has 3% of the planet's fresh water on its territory,
giving it 13 times more renewable fresh water per inhabitant than the United
States. Quebec is using only 0.5% of its available renewable fresh water,
compared to 18.9% in the U.S. Suitable use of this renewable resource would
not have an impact on Quebec's water reserves.
    The quantity of water we could export without endangering the environment
would be enough to fill nearly 300,000 Olympic Stadiums a year. According to
the Department of Environment, if Quebec alone were to provide the world's
entire production of bottled water - 154 billion litres in 2004, this would
represent 1% of the precipitation that recharges groundwater in Quebec's
inhabited areas. Meanwhile, 97% of the natural recharge in inhabited areas
goes unused, flowing into rivers and then into the ocean.
    The commercial value of water and the profitability of the infrastructure
investment needed for this commercial development will be determined
ultimately by the cost of seawater desalination, currently evaluated at
65 cents per cubic metre. Desalination is a polluting and energy-intensive
technology, but in the long term it represents the most likely alternative to
importing water over long distances.
    Various water export scenarios reveal income opportunities that far
exceed revenues from energy exports. If Quebec were to export 10% of its
one trillion cubic metres of renewable fresh water per year at a price equal
to the current cost of seawater desalination (65 cents per cubic metre), and
if the government took 10% of this amount in royalties, it would generate
income of $6.5 billion a year for the government, five times the dividend paid
by Hydro-Québec.

    The research paper, titled Freshwater exports for the development of
Quebec's blue gold, was prepared by Marcel Boyer, vice president and chief
economist of the Montreal Economic Institute, Bell Canada professor of
industrial economics at the University of Montreal, and a CIRANO fellow.

    The full text is available free of charge at www.iedm.org

    The Montreal Economic Institute is an independent, non-partisan,
non-profit organization that takes part in public policy debate in Quebec and
across Canada, offering wealth creation solutions on matters of taxation,
regulation, and reform of health and education systems. Its publications since
2000 have included the Report Card on Quebec's Secondary Schools. In 2004 it
won a Templeton Freedom Award for Institute Excellence for the quality of its
management and public relations.

For further information:

For further information: and interview requests: André Valiquette,
Director of Communications, Montreal Economic Institute, (514) 273-0969 ext.
2225, Cell: (514) 574-0969, avaliquette@iedm.org

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