The short answer is never. The best practice is to design a development around environmental features, and not the other way around.
While streams can pose serious restrictions to the development potential of a site, these are protected under the provincial Water Sustainability Act, and will likely also soon be subject to protection from the federal Fisheries Act. The streamside area is further protected by the Riparian Areas Regulation.
It's also very important that the presence or absence of fish does very little to change the level of protection afforded by the law. The Ministry of Forests, Lands, Natural Resource Operations and Rural Development has even recently indicated that minor roadside ditches can be subject to legislated protection.
While there is a permitting process available for moving or piping* streams, it is rarely justifiable from an environmental or development perspective.
Natural streams are typically well-established within their channels, stable, and have their own unique ecosystems. Changing a stream course requires extensive study and design to ensure that the new channel will function at least as well as the old.
The best practice for channel relocation also requires, at minimum, no net loss of habitat. As a result, moving a channel around the property is not likely to increase the development potential of a property. If the stream in question flows in higher value habitat, compensation for the works could be required at ratios as high as 2:1 or 3:1, in which cases there would be a loss of developable land.
Despite the above it is sometimes appropriate to relocate watercourses. Examples would include streams that were previously ditched or piped, or that have very low habitat value or potential. Note that even in these cases the design and permitting process can take over a year to complete, without a guarantee of success.
Where stream relocation is not advisable, habitat rehabilitation in exchange for reduced streamside setbacks is sometimes possible. This approach is only appropriate in municipalities that have chosen streamside protection measures that exceed those required by the Riparian Areas Regulation, and where existing habitat conditions are poor. The process typically includes negotiations between the local government, the Qualified Environmental Professional, and the developer to identify strategies to improve local ecosystems while allowing enhanced development opportunities.
Please contact Redcedar Environmental if you have any questions regarding changes in and about a stream, the Riparian Areas Regulation, or habitat rehabilitation options.
Rémi Masson, R.P.Bio.
*Not to be confused with simple road crossing culverts, which are generally supportable.