TORONTO - Legislation aimed at protecting the Great Lakes from being drained to dangerously low levels through large-scale water diversions must also cover the disposal of sewage, an Ontario legislative committee heard Wednesday.

Otherwise, diversions in the form of wastewater could still occur and undermine the legislation, several groups told the committee.

"They have the potential to upset the balance of the entire Great Lakes system,'' said Judith Grant, president of the Federation of Tiny Township Shoreline Associations.

The bill contains glaring exceptions that could allow York region's plans to pipe its sewage from the Lake Simcoe-Georgian Bay watershed to a treatment plant on Lake Ontario, said Grant.

Several cities also want to draw drinking water from Lake Huron or Georgian Bay but divert their effluent to Lake Ontario or Lake Erie.

The legislation is designed to create the legal framework that would allow Ontario to live up to its international obligations under a deal it signed in 2005 with Quebec and eight American states that border the Great Lakes.

The heart of that agreement is the prohibition of large-scale water diversions out of the region. With increasingly thirsty southern states clamouring for water for irrigation, drinking and industry, the issue is far from academic.

Lakes Michigan and Huron, and Georgian Bay are already at close to unprecedented low levels, resulting in dried-out wetlands and loss of natural wildlife habitat. Low levels are also curtailing how much freight ships can carry and impacting recreational boating and other uses.

"We know that there are water disputes on the horizon for use of water around the Great Lakes,'' said Mary Muter, vice-president of the Georgian Bay Association.

It's imperative water be returned to its source area after use, Muter said in calling for even tighter legislation.

Heavyweight environment groups, such as the Sierra Club of Canada, the Canadian Environmental Law Association and Pollution Probe, all praised Bill 198 as a critical step toward creating a culture that "lives within our natural water budgets'' and urged speedy passage.

The bottled water industry, however, sounded a loud note of disagreement, accusing the Liberal government of rushing through "unfair'' legislation without consultation.

The association is furious bottlers will be charged for taking water, about $3.71 per million litres, while much heavier users won't be charged.

"Bill 198 requires those of us who make water available for human consumption to pay the most and pay first,'' said Elizabeth Griswold, executive director of the Canadian Bottled Water Association.

"All users should pay equally.''

Speaking for Great Lakes cities, St. Catharines, Ont., Mayor Brian McMullan praised the legislation but called on the government to adopt a more rigorous and legislated conservation strategy.

One idea, said McMullan, would be to ban the sale of water-guzzling toilets.

The all-party committee also heard calls for an "interpretative manual'' to explain the complex legislation to the general public, while several submissions said the proposed law would give the government too much freedom to enact regulations behind closed doors.