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Streamflow response in Boreal Plains catchments depends on hydrological connectivity between forested uplands, lakes, and peatlands, and their hydrogeomorphic setting. Expected future drying of the Boreal Plains ecozone is expected to reduce hydrological connectivity of landscape units. To better understand run‐off generation during dry periods, we determined whether peatland and groundwater connectivity can dampen expected future water deficits in forests and lakes. We studied Pine Fen Creek catchment in the Boreal Plains ecozone of central Saskatchewan, Canada, which has a large, valley‐bottom, terminally positioned peatland, two lakes, and forested uplands. A shorter intensive study permitted a more detailed partitioning of water inputs and outputs within the catchment during the low flow period, and an assessment of a 10‐year data set provided insight into the function of the peatland over a range of climate conditions. Using a water balance approach, we learned that two key processes regulate flow of Pine Fen Creek. The cumulative impact of landscape unit hydrological connectivity and the peatland's hydrological functional state were needed to understand catchment response. There was evidence of a run‐off threshold which, when crossed, changed the peatland's hydrological function from transmission to run‐off generation. Results also suggest the peatland should behave more often as a transmitter of groundwater than as a generator of run‐off under a drier climate future, owing to a reduced water supply.