Why doesn't the government feel that it is necessary to in the very least cover expenses in this and all endeavors?

Huh? Most government endeavours don't cover their own expenses. That's why we pay taxes.

And speaking of taxes.. the tax brought in by the sale of bottled water more than covers the remainder. (The figure implies water management costs about $300/ML. Even if the water was sold at 1 cent/ litre, it would bring in $800/ML in 8% provincial portion of sales tax.) But that's just my observation. In this case, the ministry has stated they would like the water-taking charge to cover costs - they are just slow about it.

The 1.2% figure is simply taken out of context. If you're interested, read the commissioner's actual report

The water-taking charge was introduced in 2009 to only a subset of heavy water users, including bottled-water manufacturers ("phase one" users). The report claims that the charge recovers 27% of costs attributable to phase one users, but that less than five percent of the costs are attributable to phase one users. The report also explains why the ministry was off by 3x in their revenue estimate. So yes, the ministry should hurry up and implement phase two, as well as increase the fee to cover its costs - but only by about 3x, not the ~50x that figure implies.