The federal government is girding for yet more court battles, this time involving waterways used by boaters, cottagers and First Nations, according to a document obtained by CBC News.

At issue is the Navigation Protection Act, a piece of legislation passed as part of the government's omnibus budget bill last year.

The new law, which replaced the Navigable Waters Protection Act, drastically reduced the number of waterways where development would be considered to represent "a substantial interference with navigation."

The rest of the waterways, about 98 per cent of all rivers and lakes in Canada, now have no federal protection, which means an individual or group that depends on a waterway for recreation or livelihood would have to go to court to challenge a development it believes impedes navigation.

"The new (Navigation Protection Act) does not define navigability," reads an Oct. 18, 2013, ministerial briefing note CBC News obtained using Access to Information.

"A determination of navigability by (Transport Canada) for a given project remains an opinion that may ultimately be challenged in the courts as a matter of statutory interpretation. The fact of navigability can only be established through a court of law."

Transport Canada's concession comes at a time when the federal government has had a streak of losing court cases. Just last week, a Federal Court judge struck down the refugee health law citing it as "cruel and unusual." And the government was forced to revamp its prostitution law after the Supreme Court of Canada struck it down as unconstitutional because it led to dangerous conditions for sex workers.

Transport Canada refused CBC News’ request for an interview about the briefing note, instead issuing a statement by email.

"The (Navigation Protection Act) does not provide criteria to determine navigability," wrote spokesperson Karine Martel. "Transport Canada determines navigability in accordance with relevant court decisions. Transport Canada's decision regarding a specific waterway can be challenged in court if an individual chooses to do so."

'David-vs-Goliath fights'

The NDP's environment critic, Megan Leslie, calls Transport Canada's admission an "unintended consequence" of a law that replaced the Navigation Waters Protection Act.

"I recall no consultation on this issue. I recall zero contact from community groups and stakeholders to say, 'Megan, this is what we want,’" says Leslie.

The new Navigation Protection Act applies to 62 rivers, 97 lakes and the three oceans, a fraction of the country’s waterways, protecting them from development that is deemed to impede navigability.

Under the old rules, a waterway was considered "navigable" if a vessel such as a canoe was able to float across it. Anyone who wanted to build anything on or near one of these waterways needed permission from Transport Canada, which would determine if the project threatened the ability of anyone to navigate the waterway.

The government claimed that these rules amounted to too much red tape, so it reduced the number of waterways to those such as the Great Lakes and the St. Lawrence and Fraser Rivers where there is heavy traffic.

"Before these changes, the federal government acted like a watchdog, guarding the public's right to use all Canada’s navigable waterways and balancing the public’s interests against those of industry," says Anna Johnston, a lawyer with West Coast Environmental Law.

"The changes effectively cut the public loose, leaving Canadians to stand up for their rights on their own in David-vs-Goliath fights against industry and, depending on the case, against the government itself. Not only do the changes bring more uncertainty, but they also skew the fight."

Will Amos, director of the University of Ottawa's Ecojustice Environmental Law, predicts this is exactly what will happen.

"Individuals, municipalities and others who are concerned about the impact to navigation will inevitably have to take it into their own hands. (Transport Canada is) downloading the costs of protection of navigation on to Canadian citizens."