AN INTERVIEW WITH WATER EXPERT, DAVIN MACINTOSH
Included within is an interview with water
expert, Davin MacIntosh, discussing how
and why someone would invest in the water
market. Mr. MacIntosh is a consultant to
Bow Water & Land Trust and e;ectively
oversees all operational elements of the
In addition to completing his ;rst law
degree and an MBA, Mr. MacIntosh
obtained a Masters in Law focusing on
markets for water rights. He started a
business called Water Transfer Alberta
in 2007 and has since advised on the
majority of water transfers in Alberta’s
Bow River Basin. He is also a founding
Board member of the Water Conservation Trust of Canada.
Some key items of the conversation have been
provided for you to consider the market and
how Bow Water & Land might ;t within
your investment portfolio.
Could you explain the history that created
a true market for water rights?
Increased pressures from population and
industry in semi-arid areas of Alberta have
compromised the availability of surface water
resources. ;e government of Alberta had
been issuing licences to use water from
Alberta’s rivers and lakes for well over a
hundred years, and most of those licences
never expire. Faced with looming concerns
about water scarcity and environmental
damage, Alberta needed to make changes to
its aging institutional framework for allocating water rights.
To address competing objectives of conservation, management, and encouraging
economic growth, the resultant legislation1
included provisions that would set the stage
for a moratorium on issuing new water
licences. ;e market e;ectively started in
2007 when the government passed the South
Saskatchewan River Basin Water Allocation
Order (A.R 171/2007) which provided that
all unallocated water was reserved and could
not be issued under new licences.
;e e;ect of the moratorium was ultimately
What sort of trends have you seen in
to make transfers the only way that new or
existing users could access water licence
allocations. To put it simply, the only way to
get water is to buy or trade with someone
else who has it.
When the conditions for a market came
into e;ect, no one knew what water
licences were worth. ;e market has seen a
limited number of transactions, and details
of purchase are not part of the public
record, however in my experience, prices
have been rising steadily over the last
decade— especially in areas of the province
where there are fewer water licences and
signi;cant development pressure. In
particular, it has become di;cult to ;nd
water rights for sale on the Elbow and
Why would someone want to invest in
;ere is a limited supply of fresh water,
particularly in relatively arid locations, like
Alberta, Climate change and receding
glaciers may result in that supply diminishing further. Meanwhile, development in
Alberta (including municipal and industrial) results in increased demand for water.
;ese are the sort of conditions that
generally lead to increasing prices.
;at said, the Water Act (Alberta) includes
provisions designed to prevent speculation.
Unless a licencee has a real and current use
for a water licence, the licence can fall out
of good standing and may even be revoked.
Accordingly, one cannot simply invest in
water rights. Water rights must be associated with an active project or undertaking.
What sorts of industry opportunities
exist to invest in water rights?
To my knowledge, there are very few, if any,
opportunities where someone can “invest”
solely in water rights. Farmers can hold a
licence to irrigate their lands,towns can hold
licences to supply municipal services, and
land developers may hold rights for deployment to service speci;c developments.
However, without a legitimate project that
will result in actual use, one cannot hold a
water licence. So opportunities to invest in
water rights are generally contingent on
another project of investment.
Can you explain more about Bow
Water & Land and how an investment
in water rights fits within the project /
Bow Water & Land is a land development
project just west of the City of Calgary that
includes the purchase of a large water
licence. ;e water licence will be transferred
and used to irrigate Bow’s lands in the short
term and may be re-deployed to service the
eventual development of the lands. Because
the water licence allows for the diversion
and use of signi;cantly more water than
will be required for development on Bow’s
lands, there may be opportunities to deploy
the excess water for other economic uses in
the Springbank area.
What makes this water licence unique?
;e water licence that Bow Water & Land
has contracted to purchase is the third
largest licence on the Elbow River – the
City of Calgary owns the two largest ones.
It provides for the diversion and use of
1200 acre-feet, which for example, is
enough water to service approximately
;e water licence is also one of the oldest,
with a priority date of 1939. ;is provides
signi;cant security in the event of a water
shortage in the Elbow River, licences issued
after 1939 would be a;ected before this
Where or how would an investor see
value from the water licence?
Bow Water & Land is exploring an array of
alternatives to extract value from excess
water rights. Bow has entered into a couple
of letters of intent that contemplate the
exchange of a portion of the water rights for
an interest in nearby development projects.
;is sort of arrangement may diversify and
increase the value of an investment in Bow
Water & Land. Bow is exploring an array of
other alternatives that may also unlock
value from the water in future.
If you would like to learn more about Bow
Water & Land Trust and the opportunity to
invest in water rights, please contact your
Authorized Dealing Representative.
1. Water Act (R.S.A. 2000, Chapter W- 3)
MANAGER CAPITAL MARKETS,
DURUM CAPITAL INC.