No. Under the Alberta Water Act, there is no right of the government to expropriate a licence. What they could do is declare an emergency, if there truly was an emergency. But that's a rather radical power, and the courts will not allow that kind of power, or at least not allow it to be declared for too long.
There are provisions in the Water Act, when human health is at risk, that allow the government to step in. But if the issues are just aquatic ecosystem issues--i.e., there are fish dying--then, under our Water Act, the government can step in for licences issued after 1999 if the effect on the aquatic ecosystem wasn't foreseeable when that licence was issued.
The Water Act is a unique act because it just continues on legislation that started in 1894, when there were no water issues. Although the Water Act has improved a lot of the situations, still, it's the water rights holders who are truly ruling here.