Water Power Lease Agreement Ontario

Water Power Lease Agreement Ontario: Understanding the Basics

Ontario is one of the Canadian provinces blessed with abundant water resources. These resources have been harnessed to generate hydroelectric power, which is a major contributor to the province`s energy mix. The Ontario government regulates water power generation through the Water Resources Act and the Environmental Protection Act, which require water power proponents to obtain leases, licenses, or permits to use water for power generation. In this article, we will focus on water power lease agreements in Ontario and the key terms to look out for.

What is a Water Power Lease Agreement?

A water power lease agreement is a legal contract between the owner of a water power project and the Ontario government that outlines the terms and conditions for using water resources to generate power. The agreement grants the proponent the right to use the water for a specific period, subject to compliance with regulatory requirements. The lease agreement covers various aspects of the project, such as project location, project design, construction, operation, maintenance, and decommissioning.

Key Terms to Know

1. Term: The lease agreement specifies the duration of the lease, which typically ranges from 20 to 40 years. The proponent is required to comply with all regulatory requirements for the duration of the lease.

2. Rent: The proponent is required to pay rent (a form of compensation) to the Ontario government for the use of the water resources. The rent is calculated based on the installed capacity of the project and is subject to adjustment over time.

3. Environmental Considerations: The lease agreement requires the proponent to comply with all environmental laws and regulations applicable to the project. The proponent must carry out environmental assessments, monitor and report on the project`s environmental impacts, and implement mitigation measures to minimize adverse effects on the environment.

4. Design and Construction: The lease agreement specifies the project design and construction requirements, including engineering standards, safety measures, and construction timelines. The proponent must obtain all necessary permits and approvals from regulatory agencies before commencing construction.

5. Operation and Maintenance: The proponent must operate and maintain the project in accordance with best industry practices and regulatory requirements. This includes monitoring and reporting on performance, conducting regular inspections, and implementing preventive and corrective maintenance measures.

6. Decommissioning: The lease agreement requires the proponent to remove the project from the site at the end of the lease term or when the project is no longer viable. The proponent must restore the site to its pre-project condition and provide financial assurance for decommissioning costs.


Water power lease agreements in Ontario are complex legal documents that require careful attention to detail. As a water power proponent, it is essential to engage legal and technical experts to help navigate the complex regulatory landscape and ensure compliance with all legal and environmental requirements. By understanding the key terms of a water power lease agreement in Ontario, you can ensure that your project is developed and operated in a sustainable and responsible manner, benefiting both the environment and the community.

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