THE HOLM TEAM Economics. Agriculture. Resources. International Cooperation
R.R. #1, HP-8, Bowen
Island, B.C., Canada V0N 1G0
Phone: (604)
947-2893
Fax: (604) 947-2321
email
holm@farmertofarmer.ca
December 3, 2003
Prime
Minister Jean Chrétien
Office
of the Prime Minister
OTTAWA,
Canada K1A 0A2
Dear Prime Minister Chrétien;
RE: Farmers’ Resolution to Exempt Water from the NAFTA
Thank you for your correspondence of October 14th in response to my trip to Ottawa last February 14th to present to you and other political leaders the Resolutions of farmers’ organizations from across Canada seeking an explicit exemption for water under the FTA, the NAFTA and all future agreements of trade.
You
will recall this is a non-partisan initiative. It is neither
anti-NAFTA nor anti-water exports.
It is simply about fixing a
problem that Canadians were assured was NOT a problem prior to the
signing of both the FTA and the NAFTA. The Farmers’ Resolution to
Exempt Water from the NAFTA calls for the inclusion of water (HCCS
Tariff Item 22.01) as one of the exempted items in NAFTA Annex 301.3
Section A - Canadian Measures (goods) and NAFTA Annex II Schedule of
Canada (services and investments). And that water be similarly added
to FTA Article 1203 (Exceptions).
There are three factors that up to now have thwarted resolution of this issue:
During the last half of the 90’s, the water/trade issue became mired in politics, leaving many Canadians with no legitimate place to register their concerns. (Water became the poster child for a “kill the NAFTA” and “ban water exports” campaign.)
Canada’s business community remains reluctant to raise any trade dispute with the Americans, fearing cross-sectoral trade retaliation.
Few Canadians have read and understand the NAFTA, making “spin” difficult to detect and challenge. Unfortunately, this includes many of Canada’s political leaders.
Your letter of October 14th seeks to reassure farmers that the NAFTA and the FTA do not compromise sovereignty over Canada’s water resources. I realize of course that staff wrote this on your behalf. Unfortunately, it is a good example of the sort of “spin” that has characterized this issue for too long. Below are the three assertions raised in your letter and the reasons they quite literally don’t hold water:
“…The Government of Canada has adopted a comprehensive policy to prohibit bulk water removals from all major Canadian water basins. On December 9, 2002, An Act to amend the International Boundary Waters Treaty Act and related regulations came into force. The main elements of the amendments are a prohibition on the bulk removal of boundary waters out of their water basins and a licensing regime for in-basin use. Under these amendments, the Great Lakes and other boundary waters will have protection from bulk removals under federal law.”
RESPONSE:
I was called back to Ottawa in the Spring of 2002 by the House of Commons Committee on Foreign Affairs and International Trade to provide expert testimony on Bill C-6 (An Act to Amend the International Boundary Waters Treaty Act) and so am very familiar with the legislation to which you refer. My comments below are expanded upon in my testimony before the Committee, which are recorded Hansard. Of interest, Senator Pat Carney’s comments on the legislation are essentially the same.
Firstly, the “boundary waters” to which the Act applies only includes waters that lie along the border, not those that cross the border. Consequently, the International Boundary Waters Treaty Act only applies to water in the Great Lakes and the St Lawrence Seaway. The rest of Canada’s waters are unaffected.
Secondly, the Act does not ban exports; it specifically envisions bulk exports. The Act prohibits withdrawals from major drainage basins unless explicitly allowed under a permitting process. The person responsible for permits is the Minister of Foreign Affairs.
“…The Honourable David Anderson, Minister of the Environment, has sought endorsement by the provinces and territories of a Canada wide accord prohibiting bulk water removals out of all of Canada’s major watersheds. As a result of this initiative, all provinces have developed legislation, regulations or policies which accomplish this goal.”
RESPONSE:
While it is true that Environment Minister David Anderson sought agreement from the provinces (Kananaskis Accord), the provinces did not support it and the Accord failed.
While all provinces may indeed have water regulations and policy, there is no unanimity or consistency across provinces. Only BC, which has the strongest legislation of any of the provinces, prohibits both major diversions between watersheds and bulk water removals from the province. There is no country-wide prohibition against bulk water removals from Canada.
And even if all provinces HAD adopted the proposed water accord, this would not have prevented removals of bulk water from Canada to the US within the same major watersheds. Under the proposed Kananaskis Accord, it was noted that “Canada has five major drainage basins: The Atlantic, the Pacific, the Artic, Hudson Bay and the Gulf of Mexico.” The Pacific watershed stretched from Alaska, through BC, Washington, Oregon, California, south to the tip of Chile. The accord would have allowed bulk water shipments by tanker - and any other means - from BC to anywhere in this major watershed.
Moreover, even if all provinces had instituted bans on bulk water transfers out of Canada, this would do nothing to change the terms of the trade agreements. Under both the FTA and the NAFTA, the federal government is responsible for assuring full compliance by sub-governments (provinces, municipalities, etc.). If NAFTA provisions are denied, US investors have rights to compensation under Chapter 11.
And
again, the issue is not exports per se but rather the need for
Canada to retain sovereign decision-making over our water resource,
including domestic water use (and attendant rights) by American firms
doing business in Canada. For example, water flooding in the oil
patch.
“…The Government of Canada has full sovereignty over the management of water in its natural state… The NAFTA countries reinforced this in December 1993 when they issued a joint statement…that…”unless water, in any form, has entered into commerce and becomes a good or product, it is not covered by the provisions of any trade agreement, including the NAFTA. Water in its natural state in lakes, rivers, reservoirs, aquifers, water basins and the like is not a good or product…
RESPONSE:
Of course water in its natural state is not covered. The trade agreements have to do with commerce. Water has a negative value when in surplus and a positive value when scarce. Disparities between supply and demand are addressed through licenses, metering, dams, diversions and other mechanisms that deliver water in a timely manner to farmers, consumers, industry and investors. Water forced down wellheads to retrieve the last 20% of oil and gas is not in its natural state. Water held back or diverted for irrigation is no longer part of a free flowing river. Nor is water pumped out of the ground and bottled. Nor is water flowing from your kitchen tap. All have been taken out of a “free flowing system” to meet demand.
When the user of that water is American, or has American investors, the NAFTA applies, conferring rights superior to those of Canadian farmers and Canadian communities.
The final report of the International Joint Commission confirms this.
I trust the above will be helpful to you in addressing this issue of pressing concern to Canada’s farmers and Canada’s communities. I have kept my rebuttal brief; there is a wealth of detail I would be pleased to provide in support of each point should you require further background.
Water’s inclusion in the NAFTA and the FTA threatens the sustainability of Canadian agriculture. This, in turn, threatens the sustainability of Canada’s communities. Farmers understand perhaps better than most Canada’s need to keep sovereign management over our water resources.
As promised last February 14th, we have continued this year to gather resolutions from farm organizations across Canada and I will be traveling to Ottawa again this Valentines Day to present them to your successor, Mr. Paul Martin, and to Canada’s other political leaders.
I also attach for your information my professional background. I am a Canadian Agrologist, economist and farm journalist with over 30 years standing in my profession. Over the past decade, my work to resolve the water/trade issue has garnered respect and support from Canada’s communities:
BC
Agrologist of the Year (2000)
Queen's
Medalist (1993: 125th Anniversary of Canadian Confederation)
Queen's
Medalist (2002: Queen’s Golden Jubilee Medal)
Gold
Award, Press Column, 2002 (Canadian Farm Writers Federation)
Bronze
Award, Press Editorial, 2002 (Canadian Farm Writers Federation)
The Farmers’ Resolution to Exempt Water from the NAFTA will build – in a professional way, without a whiff of politics or partisanship – “A Table with 1000 Legs” upon which the Canadian public, through its communities, will be invited to stand (“we support Canada’s farmers in this…”), providing the political will for change.
It’s not a renegotiation, it’s a fix. And Canada’s farmers are coming together to speak in one voice to “get ‘er done!
I would be pleased to provide you with a personal briefing on this issue and the Farmers’ Resolution to Exempt Water from the NAFTA when I return to Ottawa this February. I realize of course you will no longer be PM, but trust you will remain engaged with concerns of vital interest to Canadians!
Respectfully yours,
Wendy
Holm, P.Ag.
cc The
Honourable Paul Martin
The
Honourable Gilles Duceppe, Leader, Bloc Quebecois
The
Honourable Stephen Harper, Leader, Canadian Alliance
The
Honourable Peter MacKay, Leader, Progressive Conservatives
The
Honourable Jack Layton, Leader, New Democrats
The
Honourable Lyle VanClief, Minister of Agriculture
The
Honourable Herb Dhaliwal, Minister of Natural Resources
The
Honourable David Anderson, Minister of Environment
The
Honourable Pierre Pettigrew, Minister of International Trade
The
Honourable Wayne Easter, Minister of Justice
The
Honourable John Reynolds, Deputy House Leader, Canadian Alliance
The
Honourable Joe Clark, Past Leader, Progressive Conservative Party of
Canada