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The Ontario Ministry of the Environment has renewed a controversial permit granting a unit of Nestlé Canada Inc. the right to continue extracting up to 3.6 million litres of groundwater a day near Guelph to sell as spring water.

The application for the permit by the food and beverage giant prompted thousands of letters of complaint to the government and has been a focal point of local opposition to the water bottling industry.

Environmentalists had been seeking to have the permit withdrawn, or scaled back, and objected to the government's practice of giving water away for free to those who have permits, including bottling companies that then sell the water they take.

While the ministry doesn't charge for actual water removals, it does levy modest cost-recovery fees to defray expenses for issuing and overseeing its permit system.

"I'm disappointed that they did not reduce their volume, nor did they address the whole issue of giving a public resource away to a private enterprise for free," said Mark Goldberg, co-founder of Wellington Water Watchers, a local activist group.

The province levies a one-time $3,000 processing fee on complicated water permits that need a scientific evaluation. Beginning next year, it will charge an additional fee of $3.71 for every million litres permit holders withdraw, or $13.36 a day if Nestlé takes its full allotment.

"The quantity is outrageous and the fees are ridiculously low," said Jode Roberts, a spokesman for Ecojustice, formerly the Sierra Legal Defence Fund, a legal adviser to Wellington Water Watchers, which has estimated that if Nestlé bought municipal water in Guelph it would pay about $2,700 a day.

The province released a statement yesterday saying it had issued the permit for a two-year period "with strict conditions to protect existing water users and the natural environment."

Nestlé said in a news release it was disappointed the province didn't agree to give it a five-year permit, as it had requested. Nestlé has owned the site, located in Aberfoyle, since 2000.

Although the ministry said studies show Nestlé's water extraction isn't affecting others in the area or local surface waters, it decided to grant only a two-year permit and is requiring the company to perform further monitoring to verify the finding of no harm to the local environment.

The company's pumping has exerted enough pressure to cause surface water in a creek near its site to be drawn underground, but Nestlé has maintained that the effect is of no consequence because it hasn't affected flow rates of the stream.

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