Twenty years after the phrase sustainable development (SD) was first coined, and fifteen years after Canada and the international community made strong commitments to SD at the Rio Earth Summit, little progress has been made. At the domestic level, research suggests most large Canadian cities are maladapted to newer realities, production and consumption patterns are unsustainable, freshwater issues pose serious challenges, and market signals need to be improved to reflect the environmental and social impacts of economic activity.

The Policy Research Initiative's (PRI) Sustainable Development Project started in 2001. As part of its first phase, the PRI teamed with the International Institute for Sustainable Development (IISD) to identify seven key SD issues (other than climate change) in greatest need of policy research.

In the fall of 2003, the PRI's SD project entered a second phase, focusing on freshwater issues. A federal freshwater policy was last adopted in 1987; this project aims to provide background research for an eventual renovation of that policy. The PRI has published over 50 papers in this project since 2003, on topics ranging from integrated water resources management to economic instruments for water management, and from a composite index for evaluating water sustainability at the community level to the economics of bulk water export.