Environmental changes are altering the water cycle of Canada's boreal plain. Beaver dams are well known for increasing water storage and slowing flow through stream networks. For these reasons beavers are increasingly being included in climate change adaptation strategies. But, little work focuses on how environmental changes will affect dam building capacity along stream networks. Here we estimate the capacity of the stream network in Riding Mountain National Park, Manitoba, Canada to support beaver dams under changing environmental conditions using a modelling approach. We show that at capacity, the park's stream network can support 24,690 beaver dams and hold between 8.2 and 12.8 million m3 of water in beaver ponds. Between 1991 and 2016 the park's vegetation composition shifted to less preferred beaver forage, which led to a 13% decrease in maximum dam capacity. We also found that dam capacity is sensitive to the size of regularly-occurring floods-doubling the 2-year flood reduces the park's dam capacity by 21%. The results show that the potential for beaver to offset some expected climatic-induced changes to the boreal water cycle is more complex than previously thought, as there is a feedback wherein dam capacity can be reduced by changing environmental conditions.