Deforestation of Sooke Lake Reservoir hasn't been a problem - there seemed to be sustainable clearcutting going on for a long time, managed by the Greater Victoria Water District and then the CRD Water Dept. However, the commercial logging stopped when CRD got taken to court (or threatened, I forget which) and so the only logging left was to clear the reservoir rim when the dam was raised. I think there are still jobs for the CRD water foresters tending to the Leech Watershed lands.
For the CRD, trying to get the dam raised 20 years ago was a huge effort given so many environmentalists were fighting it. I recall one environmentalist theme was that having more water would just encourage more development.
If there is a push for more local farming, the water demand will probably be a lot more acute - maybe more than just having new suburbs.
However, even in the late 1990s as the dam raising was going through the CRD Board decision-making grinder, the likelihood of climate change making for more droughts (and possibly more winter rain) was seen as quite likely and another argument to expand the reservoir. This seemed to continue with the discussion and decision to spend the $60 million on the Leech (plus land rehab costs and possibly $150 million for filtration).
While CRD water is a public enterprise, interesting to see how much private sector water provision goes on in the CRD's hinterlands, with companies such as well drillers and the private water trucks expanding.