Alberta faces water scarcity challenges that make it a bellwether region for better water management policies, according to a study released today by the C.D. Howe Institute and created by University of Lethbridge economics researcher Dr. Henning Bjornlund.

In The Competition for Water: Striking a Balance among Social, Environmental, and Economic Needs, University of Lethbridge economics professor Henning Bjornlund writes that without a modern system for reallocating access to water, particularly from prior licence holders to new users, Alberta's economic development and its ecosystems could be threatened.

His findings and policy recommendations have potential application to other regions of Canada where water scarcity is a growing issue, including some watersheds in Ontario, the southern parts of the Prairie provinces, and in British Columbia's Okanagan Valley.

The challenge of dealing with water scarcity is nowhere better illustrated than in Alberta, he writes. The province is home to 60 per cent of all irrigation in Canada and has a fast-growing population and economy.

Professor Bjornlund discusses how water markets could be used in the Alberta context and what supporting institutions would be necessary to enable them to operate effectively and fairly.

The most pressing task for the Alberta government, he writes, is to define waters within each watershed that need to be protected to secure environmental and other public benefits. Reforms should also aim to improve licensing systems structures and to introduce mechanisms to encourage water markets to work better.