The City of Winnipeg is once again prepared to expand its borders in order to extend water pipes into the CentrePort development.
Since 2008, the city and province have wrestled with a jurisdictional headache surrounding the extension of services to CentrePort, an industrial development that straddles the border of Winnipeg and the RM of Rosser. A tentative deal was struck in 2011 for the two levels of government to share the $17-million cost of extending water and sewer pipes into Rosser.
But a legal challenge from a pair of northwestern Ontario Ojibwa communities effectively turned off the tap last year. Two bands situated on Shoal Lake, the source of Winnipeg's drinking water, argued the city had no right to sell water to neighbouring municipalities.
Ottawa and Ontario granted Winnipeg permission to draw water from Indian Bay on Shoal Lake in 1913. The International Joint Commission, a Canada-U.S. body that governs cross-border water disputes, followed suit in 1914.
In December, the commission told the city the sale of water to neighbouring municipalities was inconsistent with the 1914 agreement. The commission added teeth to that opinion with a ruling on April 18, effectively warning Winnipeg not to proceed with the plan.
"Our preliminary assessment is that the city would be in non-compliance with the IJC order should it transfer water beyond the City of Winnipeg's municipal limits," the IJC's Canada and U.S. secretaries wrote in a joint letter, adding they have brought the issue to the attention of Ottawa and Washington.
Winnipeg Mayor Sam Katz called the preliminary assessment "extremely disappointing" but stated it may take four years to obtain a permanent assessment from the commission.
"The other option is to go where we were prepared to go four years ago," said the mayor, referring to a 2009 plan to annex the portion of the CentrePort development that lies within the RM of Rosser.
"I've always said, three conditions are necessary for CentrePort to succeed. It has to have a single authority, under a single jurisdiction (and be) private-sector-driven," Katz said. "If everyone would be following the advice that was put forward, we wouldn't be having this discussion today."
In 2009, Rosser rejected the idea of annexation, despite an offer of compensation from the City of Winnipeg. Reeve Frances Smee could not be reached for comment Tuesday.
CentrePort declined to comment on the prospect of annexation and is reviewing the IJC decision, spokeswoman Riva Harrison said in a statement.
Local Government Minister Ron Lemieux said in a statement it is not clear annexation will resolve the issue.
"We are exploring all options for servicing CentrePort," he said, raising the idea of using groundwater to service 405 hectares of industrial land.
The lingering dispute has complicated efforts to develop the industrial park. While some businesses at CentrePort have dug wells to ensure they can fight fires, other companies have held off venturing into the area without a servicing deal.
In early 2012, Winnipeg chief administrative officer Phil Sheegl said he wasn't concerned the servicing of the development would be threatened by the legal challenge, initially launched by Iskatewizaagegan First Nation and later joined by Shoal Lake No. 40 First Nation.
The city effectively argued water has already been sold to neighbouring municipalities, as some portions of what is now Winnipeg were separate suburbs before the Unicity amalgamation of 1972.
The IJC, however, noted that arrangement was made under the Greater Winnipeg Water District, whose responsibilities have been subsumed by the City of Winnipeg.