There should be a sticker on your water heater stating the clearances from combustibles. If not, refer to your area's gas code. The Canadian Gas Code is 2" for any under-fired storage-type water heater(traditional type of water heater), and 6" for any other type of water heater. Also, you'll need a minimum of 24" of clearance "to any side, top, or bottom where service could be necessary" except if the rating plate states otherwise, or more space is needed to perform any needed removal, replacement or repair.