The powers and responsibilities of the Nunavut Water Board have been defined further by the Nunavut Waters and Nunavut Surface Rights Tribunal Act, (2002, c-10), which was adopted by the Parliament of Canada on April 30, 2002. The purpose of the Act is to give effect to the provisions of the Nunavut Land Claims Agreement related to the management of waters in Nunavut, establish the Nunavut Water Board (and the Surface Rights Tribunal), to identify transitional provisions, and make consequential and transitional amendments. Section 173(1) of the Act provides that the regulations made pursuant to the Northwest Territories Waters Act will continue to apply until they are replaced or repealed under the Act. Consequently, at this time the Northwest Territories Waters Regulations (SOR/93-303) continue to apply in Nunavut.

However, section 5 of the current Northwest Territories Waters Regulations, which permits some water use and waste deposit activities without a license, is inconsistent with section 13.7.1 of the NLCA, which states that "with the exception of domestic or emergency use of water as set out in section 5 of the Northern Inland Waters Act (RSC 1985, c. N-25), no person may use water or dispose of waste into water without the approval of the NWB". In the case of inconsistency or conflict between the Act and the NLCA, the Act provides that the NLCA prevails to the extent of the inconsistency or conflict.Therefore, in order to uphold the letter, spirit and intent of section 13.7.1 of the NLCA, the NWB has passed Order 2002-253 on July 31, 2002 to the effect that the provisions of the regulations made under paragraph 33(1)(m) or (n) of the Northwest Territories Waters Act cease to apply in relation to Nunavut. This order is made pursuant to the Board's power under clause 173(3) of the Act, and specifically nullifies the application of section 5 of the regulations.

Under the Act, the NWB can issue, renew, amend and cancel a water licence, with or without a public hearing, depending on the type of activity. Licences issued following a public hearing must be approved by the Minister of Indian and Northern Affairs ("Minister").

The NWB does not have enforcement powers. Once a licence is issued by the NWB, the jurisdiction of the NWB ceases. Compliance and enforcement of water licences and provisions of the Act fall under the jurisdiction of the Department of Indian and Northern Affairs, whose Minister appoints Inspectors for that purpose.