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Good practice Imported

Québec's Statutory Compensation Regime for Wetlands and Bodies of Water

Canada · Québec City · See the Canada profile

Evidence: Observational / pre–post Top 96% 20/100 · Ask Evidence Copilot about this practice

Since 2017, Québec has required developers who destroy wetlands to pay into a provincial compensation fund. Independent legal analysis found the fund held about CA$173 million by 2022, yet under 1% had been spent on restoration while 98% of destruction permits were approved.

~98%
Wetland destruction/disturbance permits approved (since 2017)
~173 CA$ million
Compensation fund balance (by 2022)
<1%
Share of fund disbursed for restoration
25+ CA$ million
2025 disbursement to Quebec City for wetland restoration (2025)
Québec's Statutory Compensation Regime for Wetlands and Bodies of Water

Details

Maturity
Established
Promoter
Gouvernement du Québec – Ministère de l'Environnement, de la Lutte contre les changements climatiques, de la Faune et des Parcs
Period
2017–present
Keywords
wetlands, water, environmental permitting, provincial government, in-lieu fee

Context

Since 2017, Quebec's Act respecting the conservation of wetlands and bodies of water has applied a legal 'avoid, minimize, compensate' hierarchy: developers who cannot avoid destroying a wetland or watercourse must pay financial compensation into the Fund for the Protection of the Environment and the Hydrological Domain of the State, administered by Quebec's environment ministry.

Objectives

Achieve no-net-loss of wetland function by requiring financial compensation for destroyed wetlands, funding restoration or creation projects.

Activities

Compensation rates are indexed annually (most recently January 2025) under the Regulation respecting compensation for adverse effects on wetlands and bodies of water (Q-2, r.9.1). Quebec's government revised the compensation regulation in 2024 to rebalance how funds are allocated across regions, and in 2025 announced a disbursement of over CA$25 million to Quebec City for wetland restoration and creation.

Results

A 2022 critical legal analysis published on CanLII found that financial compensation has become the default response to most permit applications rather than a last resort, with roughly 98% of destruction/disturbance requests approved since the law's adoption. Investigative reporting (La Presse, The Rover) found the fund had accumulated close to CA$173 million, of which well under 1% had been disbursed for wetland restoration or creation projects, leaving most destroyed wetlands with no equivalent replacement.

Conclusions

Independent researchers continue to question whether an in-lieu-fee regime with such low and slow fund utilisation can deliver genuine no-net-loss of wetland function; the 2024/2025 changes are a partial response to the disbursement gap.

Implementation
Indicative cost
High (€500k–€5M) — Fund had accumulated close to CA$173 million by 2022
Time to results
Long (> 3 years) — Statutory regime since 2017; regulation revised 2024; ongoing
Staffing & skills
Gouvernement du Quebec - Ministere de l'Environnement, de la Lutte contre les changements climatiques, de la Faune et des Parcs - fund administrator

Conditions for success

  • Statutory 'avoid, minimize, compensate' legal hierarchy
  • Indexed compensation rates
  • A dedicated provincial fund for environmental compensation

Common failure modes

  • Roughly 98% of destruction/disturbance permit requests approved since 2017 - compensation used as default rather than last resort
  • Under 1% of ~CA$173M collected had been disbursed for restoration by 2022, leaving most destroyed wetlands without equivalent replacement
  • Independent researchers question whether the regime can deliver genuine no-net-loss given low and slow fund utilisation

Commonly funded by

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Data sources

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Attachments

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