The fifth generation of the Canadian RCM (CRCM), based on Environment Canada's (EC) Global Environmental Multi-scale (GEM) model, was further developed within the Canadian Regional Climate Modelling and Diagnostics (CRCMD) Network in collaboration with EC during the last four years. One of the important aims of the CRCMD Network had been to increase the range and physical realism of surface processes represented in the model to enable more accurate simulations of surface/sub-surface climate over North America, particularly the Canadian Arctic. This talk will provide an overview of some of these developments such as interactive modelling of near-surface permafrost, lakes etc. This talk will also present results related to the assessment of climate change impacts on Canadian water resources using an ensemble of CRCM projections; in particular changes to the frequency and magnitude/severity of dryspells, droughts, streamflows, precipitation extremes and soil moisture characteristics that determine water availability will be presented.