Image caption Western Canada is the largest single source of US oil imports, and produces over 1 million barrels a day

A scientific panel has found Canada has "no system" for monitoring how Alberta's oil sands projects may be polluting local waterways.

Academic reports found that extraction plants were sending toxins such as mercury and lead into the water.

The western Canada oil sands are the largest source of crude outside Saudi Arabia.

The region is the largest single source of US oil imports, and produces over 1 million barrels a day.

Opponents say the process of extracting oil from the sands produces huge amounts of greenhouse gases and chemical waste.

The Oil Sands Advisory Panel was commissioned by former environment minister Jim Prentice in response to critisicm about water monitoring.

"Until this situation is fixed there will continue to be uncertainty and public distrust in the environmental performace of the oilsands industry and government oversight," the report concluded.

At a recent news conference, current environment minister John Baird promised to act on the panel's recommendations.

"For far too long we have heard concerns about the quality of water downstream from the oil sands," he said.

"We have hear the panel loud and clear and are ready to act."