The city of Chestermere, which is located about 20 kilometres east of Calgary, said water levels on Chestermere Lake were returning to normal on Monday after the water flow was temporarily shut off due to an oil spill.

The lake, which is close to three square kilometres in size, was originally built by the Canadian Pacific Railroad in the 1880s for agricultural use.

It is currently operated by the Western Irrigation District, which controls the water entering and leaving Chestermere Lake.

On Friday, the Irrigation District stopped the flow of water into the lake following reports of an oil spill that had occurred upstream in southeast Calgary.

The Calgary Fire Department was called in and investigators traced the spill to a large container used to store motor oil and hydraulic oil at a commercial business in the 3500 block of 78 Avenue Southeast.

From there, it appears to have entered the Western Headworks Canal, which runs from the Bow River at Harvie Passage into the Chestermere Lake reservoir.

However, when investigators arrived, oil was floating on the surface of the canal. Calgary Fire Department Information Officer Alex Kwan said a vacuum truck was called in to clean up the area.

In a statement, the provincial government said about 1,200 litres were spilled as a result of a storage tank failure and the operator of the facility is covering all costs of the cleanup.

The City of Chestermere said in a social media post that based on cleanup and containment efforts, it appears the oil spill did not reach the lake.

However, while the inflow of water to Chestermere Lake was temporarily shut down, water was allowed to continue to flow out of the lake, which temporarily lowered the water level.

The canal system returned to operation on Saturday afternoon and the Irrigation District, which is leading the investigation, said lake levels were expected to return to normal on Monday.