Pet owners are generally advised to avoid cedar shavings for their pets these days, due to respiratory problems.
If you are splitting your own cedar roof shingles, at least you know what is in them. The tannin in the wood may color your collected water and affect the taste. It probably wouldn't be strong enough to affect soil or vegetable garden plants, and might even be broken down by soil microbes.
If you buy commercial shingles, they are often treated with CCA (Chromated copper arsenate).
I think fibrous cedar-type barks can be used to wrap live coals for carrying fire bundles, to get back to the original intent of the thread.
Sue