I cannot give you an answer for PPR but generally passports are expected by most countries for anyone who even enters through immigration checkpoints let alone applying for immigration to not be damaged to the extent they might not be valid.
Only you can really decide whether the water damage would give concern on that basis and whether you might be best to get a replacement to submit along with an explanation letter. No different really from getting a new passport due to an upcoming expiry and notifying CIC of the same, after of course taking copies of the pages in the damaged one.
Requirements for immigration tend to be pretty strict even down to specific photo measurements that can be cause for an initial rejection so keep that in mind
The above is just my personal view so am sure others will have a view as well
Thanks Bs65 for your advice,
I still keep a scanned copy of the passport before the damage occurred
I do not have any issue with immigration checkpoint because the bio and visa pages are still clear. I am just worried about the impending rejection of PR because of unclear travel stamp pages
When I get PPR, can I send my current passport with the scanned copy before the damage and letter of explaination?