A brand new agency tasked with protecting Canada’s freshwater is likely on the chopping block as part of an array of budget cuts promised by Prime Minister Mark Carney that span most departments and agencies.
Texts from Environment and Climate Change Minister Julie Dabrusin’s staff suggested “there is nowhere else to cut” while deliberating how to meet Carney’s order to cut spending 15 per cent over three years, the National Post reported on Aug. 26.
The Canada Water Agency, tasked with protecting and managing Canada’s freshwater and brokering international agreements, launched in October 2024. Less than a year into its mandate, it could be facing spending cuts that experts and some opposition MPs warn could not come at a worse time.
“It’s a really bad decision, at a really bad moment,” NDP MP and environment critic Alexandre Boulerice said in a phone interview with Canada’s National Observer. Canada is locked in a trade war with the US and the protection, monitoring and management of water is critical for health, safety, economic development and sovereignty, Boulerice said.
“Mr. Carney was elected to protect Canadian sovereignty … to cut the water agency to be able to buy submarines and increase the defense budget, it’s completely ridiculous,” Boulerice said.
Water is a split federal and provincial responsibility, but many of these watersheds, rivers and lakes are also shared with the US.
“Fresh water has become a strategic priority in Canada because President Trump has directly threatened to take our water resources,” Ralph Pentland, a former water director at Environment Canada, said in a phone interview with Canada’s National Observer. Pentland was Canada’s director of water planning and management for 13 years from 1978 to 1991, helped draft the 1987 Federal Water Policy and has negotiated bilateral water agreements.
This March, US President Donald Trump’s administration paused negotiations on the Columbia River Treaty, which deals with the flows of the Columbia River between BC and the northwestern US. Trump also commented last September that a “very large faucet” could be turned on to use Canada’s water to alleviate drought in the US. Trump’s budget proposal would slash federal funding for the Great Lakes Restoration Initiative and the New York Times reported that in February Trump indicated he wants to tear up the Great Lakes agreements with Canada that lay out the shared management of Lakes Superior, Michigan, Huron, Erie and Ontario.
“At this time, I would think that fresh water is something the federal government should be doubling down on in its investments and even increasing them,” Pentland said.
Pentland said the Canada Water agency is as important as the Public Health Agency of Canada, established in 2004. The public health agency, tasked with protecting against threats to public health and preventing diseases, played a critical role when the COVID-19 pandemic hit, he said.
“If climate change is a shark, its teeth are fresh water. That’s where we’re going to feel the bite and we certainly have been across the country,” Pentland said, paraphrasing renowned Canadian scientist Jim Bruce.
Water underpins everything from energy — hydroelectric power and cooling systems for nuclear power — to shipping to agriculture.
Right now, Canada is facing water crises on all fronts: droughts in the prairies, BC and Eastern Canada; toxic algae blooms in the Great Lakes and other bodies of water, overuse in Western Canada and water contamination and shoreline erosion across the country.
On the flip side, climate change is driving increasingly severe and frequent floods. Canada does not have a national flood and drought forecasting strategy. Legislation to develop such a strategy made it through the House of Commons but died in the Senate when the 2025 federal election was called. This is exactly the kind of work the Canada Water Agency is primed to do, Pentland said.
“The Canada Water Agency was a brilliant move by the federal government to finally set up a coordinating agency that could pull together the expertise from the many federal departments that deal with fresh water and our provinces and territories, and work with [First Nations] and others and then also coordinate our international positions,” Pentland said. “This is necessary for Canada to negotiate the very difficult times ahead as climate change gets worse.”
Importantly, the Canada Water Agency was also set up to ensure First Nations, approximately 35 of which are still under long-term boil water advisories, are at the table.
When Soula Chronopoulos, president of Aqua Action, heard about the possible cuts to the agency, her immediate reaction was, “Are you kidding me?”
“Water security is national security … it fuels the economy, it fuels our infrastructure, it fuels our health, food security and cutting the Canada Water Agency budget risks undermining Canada’s ability to manage freshwater resources, respond to climate threats and basically lead in global water innovation,” Chronopoulos said in a phone interview with Canada’s National Observer.
She pointed to the ongoing Mexico–US water wars, where Mexico is struggling to deliver water to the US under a shared water agreement due to worsening droughts driven by climate change.
“That’s a harbinger for what could definitely happen to us across all our shared waters,” Chronopoulos said. “Cutting [the agency] right now is like removing the rudder from a ship in stormy seas. We need that ship.”
Chronopoulos warned that without an institution to protect our water, “we can see things like the nationalization of water, the ownership of water, where players are going to look at it … as a money-making asset, long term, and we can’t let that happen.”
Cuts still uncertain
The federal government would not confirm whether the Canada Water Agency will be subject to cuts.
As part of a mandate to “spend less on government operations” to invest in building a strong economy, the federal government is reviewing government spending to ensure programming is being delivered efficiently and effectively, Keean Nembhard, press secretary for the minister of environment and climate change, said in an emailed statement to Canada’s National Observer.
“While this process requires candid discussions on various options, no final funding decisions have been taken at this time,” Nembhard said, adding the government “will continue to support programming to fight climate change, protect nature, and support communities.”
Bloc Quebecois environment and climate change critic Patrick Bonin was unavailable for an interview. Conservative Scot Davidson did not reply.
“It’s such a small agency, I don’t see the point of cutting their budget to … not be able to do their job correctly in service of Canadians,” Boulerice said. The Canada Water Agency’s budget for 2024-2025 is $52 million. In 2025-2026 the Agency’s budget is $84.8 million.
Boulerice said it is fine to review federal programs to see if they are efficient, but this is “bad management” and “short-sighted.”
“For an ordinary citizen to see that the cost of F-35s is up 50 per cent and there’s no problem with that, and after that, they go after a little agency that helps Canadians and protects our fresh water all around the country … its bad priorities,” Boulerice said.
The federal government is a “huge, huge machine” and if the water agency is subject to cuts there will be “great consequences to save little money,” he said.
Green Party leader Elizabeth May also panned the possibility of cuts to the Canada Water Agency.
“This is not acceptable, we are at a crisis moment, and this is not when you cut the basis of understanding what’s critical to healthy Canadian populations or, for that matter, to our economy,” May said in a phone interview with Canada’s National Observer. “We need to understand water systems and protect them. This is not a place to cut.”
Carney’s focus on national security has largely revolved around ramping up military spending to five per cent of GDP by 2035, but “the climate crisis and the water crisis are a much larger threat to our security,” she said.
“As the climate crisis worsens, the water crisis worsens, Canada has, over the last number of decades, lost almost all our scientific capacity in monitoring and developing the science that we need to support water policy,” May said. She said the Canada Water Agency is a major step to repairing that deficit but these potential cuts could throw a wrench in that work.
“It’s really disheartening to think that Mark Carney needs educating on things as basic as our water policy … It’s not a solution that suggests intelligence or thoughtfulness,” May said.
The federal government’s fall budget is expected to be released in October.
This summer, Finance Minister François-Philippe Champagne tasked cabinet ministers with proposing operational spending cuts totalling 15 per cent over three years. The deadline for ministers to submit their proposals was Aug. 28.
