First in Time, First in Right – Is it Being Attacked?

For the last 116 years, Alberta’s water allocation system has been based on the principle of first in time, first in right. This means that the first person to obtain a licence for the use of an allocation of water has priority to water in dry times over someone who obtained a licence at a later date. This priority principle goes as far back as Roman and feudal law.

The first in time, first in right system of water allocation was established in Alberta by the North-West Irrigation Act (1894) and continues today in the Alberta Water Act.

Recently, the Town of Okotoks applied to transfer water allocations under existing water licences to provide for future municipal growth. The transfer of a water allocation from an existing licence holder to another person is permitted by the Water Act. But the fly in the ointment – the Town of Okotoks seeks not only a transfer of the existing water allocation, but asks that the water licence be amended so it can divert and use up to 3 times more than the existing licence allows. It seeks what has been coined as a “net diversion licence”. This fictional type of water licence would allow for a diversion of water in excess of the total volume allowed under an existing water licence so long as the excess volume of water is returned at some point. I use the word “fictional” as this type of water licence is not contemplated by the Water Act.

In addition, the excessive volume diverted would have the same priority as the volume under the existing licence. In essence, the Town of Okotoks would be able to skip the queue and obtain senior priority over those who actually were “first in time”.

Under the Water Act, the Director may only approve a transfer if the volume to be transferred does not exceed the volume under the licence from which the transfer is to be made: s. 83(3)(a). The Director does not have the statutory authority to issue a new licence or amend an existing licence to increase the volume of water diverted. This was confirmed by the Alberta Environmental Appeals Board in Mountain View Regional Water Services Commission et al. v. Director, Central Region, Regional Services, Alberta Environment re: Capstone Energy (26 April 2004), Appeal Nos. 03-116 and 03-118-121-R (AEAB):

“[161] It is important to note that there are no provisions that allow the Director to amend a preliminary certificate or licence to increase the volume of water diverted. The only way to obtain more water is to obtain an additional licence.”

If the Town of Okotoks wants to divert an allocation greater than that being transferred, it must apply for a new licence, which would have the appropriate priority number, being a priority number subordinate to existing licences. To do otherwise would defeat the first in time, first in right priority system on which Alberta’s provincial water management rests.

Richard Jones, with Vipond Jones LLP, Barristers and Solicitors, gives legal advice on water and irrigation issues. He is currently chair of the Municipal Law Section (Alberta South) of the Canada Bar Association. Richard has presented papers on water related issues and was a guest lecturer at University of Calgary, Faculty of Law. He resides in Calgary with his wife and four children.