Ralph Pentland's Speaking Notes
Canadian Water Sovereignty
Green Party Summit, Ottawa, August 20, 2007
Thank you very much for the invitation to meet with you today. Over the past 25 years or so, Elizabeth and I have crossed paths on water and other environmental matters fairly often, and it's always been a very pleasant and constructive experience. So, here we are again.
Before I start, I should just clarify that I don't currently have any working affiliation with any agency that is on either side of the water export debate. I am basically just an interested individual who has followed the North American water export issue for 40 years or so, from both inside and outside government, and worked on similar issues in several other parts of the world.
Before getting to the Security and Prosperity Partnership, I should probably give you just a bit of history. My first exposure to the water export issue was soon after joining the federal government in the 1960s. We were nearing the end of the big dam era, and just about to enter the environmental era. It was not unusual in those days to see water projects subsidized to the tune of 90% or more. That kind of pork-barrelling is much less common these days in both Canada and the United States. That's not because politicians have stopped trying. It's mainly because decision-making has become a lot more transparent through environmental assessment processes.
So, it wasn't really surprising in the mid 60s to see engineers trying to outdo each other, with bigger and bigger megaproject proposals. A lot of whacky schemes were put forward to move water from the far north of Canada to the southwestern United States. They were little more than lines on a map, and were not taken seriously by either governments or water experts.
But, what was most interesting about that era was the hostile reaction of ordinary Canadians to the very idea of their water environment being despoiled in that way. It wasn't about money. It was about sovereignty and preserving the very essence of our nation. Interestingly, polling data at that time suggested that at least 70% of Canadians opposed water export. And that number has remained relatively stable ever since..
The heyday of environmentalism pretty much dampened the enthusiasm of would-be continental replumbers until the early 1980s. The next major push came from the GRAND Canal consortium. Their scheme, which would have dammed James Bay and pumped water all over the continent had the backing of former Quebec Premier Bourassa, who even wrote a book about it, and the behind-the-scenes support of a few federal politicians. One federal agency even tried to fund a major study of the project.
Our water specialists in Environment Canada did a few quick calculations. They concluded that the project would cost many times more than the proponent claimed and the environmental consequences would have been horrendous. About the same time, an economic study by a Canadian professor indicated that the project's benefits would be considerably less than 20% of its cost. An interdepartmental committee turned the funding proposal down on the grounds that it would have been a waste of taxpayer dollars.
There was another flurry of activity later in the 1980s, when it became know that our chief free trade negotiator had been an active promoter of water export. The government of the day had to go to extraordinary lengths to convince Canadians that our water was not for sale. That included tabling a federal water policy in parliament, which included a prohibition on water export by interbasin diversions. A draft Bill was also tabled in Parliament that would have backed up that policy, but it was never passed.
I left government in 1991 and did a lot of work in other countries for the next several years. In 1999, I was asked to co-chair an International Joint Commission Task Force on Great Lakes diversion policy. On that project, for the first time, I faced some explicit pressure from south of the border. I will come back to that one in a few minutes.
Now let's get to the Security and Prosperity Partnership, and the question that remains shrouded in mystery. Is water "on the table" in SPP negotiations? Government officials say it isn't. Whether it's officially "on the table" or not at Montebello, there is very strong evidence that it is being discussed "under the table" elsewhere.
The Task Force on the Future of North America, which recommended the SPP in 2005 definitely considered the issue. Documentation of their deliberations suggest that they concluded water export would be met with "stiff resistance" in Canada, and that policy recommendations in that area should be considered as longer-term goals. Subsequently, media reports suggested that water was indeed discussed when actual SPP negotiations began in earnest. For example, one SPP advisor was quoted in the Ottawa Citizen as saying water was "the most sensitive topic in conversations" between the federal Privy Council Office and U.S. and Mexican officials.
In April of this year, the Council of Canadians leaked a report prepared mainly by a Washington-based think tank, the Centre for International and Strategic Studies. I am going to refer to them as CSIS, at the risk of confusion with a Canadian agency that hopefully isn't involved with the issue.
The CSIS report touched on a lot of continental integration issues, including water diversions. It suggested government officials from the three countries would be involved in their deliberations, and would review a subsequent report on at least two occasions. Their final report was to be given to government officials, in three languages, to verify the accuracy of translations, on August 22 - the day following the Montebello summit. Maybe a coincidence, or maybe not.
That initial report indicated that CSIS was organizing closed-door meetings on energy and environment, including water, for Calgary later in April. In an attempt to "lubricate democracy", the Council of Canadians organized a public meeting, also in Calgary. Near the end of the public meeting, Maude Barlow, the Chairperson of the Council announced that she had just been informed that federal officials heading to the closed door meetings had been called back from the airport, and instructed not to attend.
Informal notes given to me by a non-governmental Canadian participant at the closed-door meetings indicated that, early in the discussion on water, one of the CSIS affiliated participants suggested that the conference proceedings recommend a further discussion of water exports under the auspices of the Security and Prosperity Partnership. To be fair, I don't think any of the Canadian participants supported that idea.
But, shortly afterwards, the word went around the water community that our federal government was trying to arrange high level meetings on water in Calgary and Washington for early October. Expected participants were to be very senior Canadian government officials, U.S. think tanks and Canadian "opinion leaders". The purpose of the meetings was not defined. But they were to have been held within days of the public release of the CSIS report. About the same time, a top-level CSIS manager made a speech in Ottawa conceding that continental integration efforts were running into problems, and that it may become necessary to engage "opinion leaders". Another coincidence? Maybe yes, maybe no.
I was asked to comment on the water section of the leaked CSIS report at the public meeting in Calgary. I expressed five main concerns, which I later reiterated in a written brief to a parliamentary committee. I will just run over those five concerns briefly with you:
First, I was concerned with the parallel with what happened during largely secretive free trade negotiations in the 1980s. At that time Canadians were continually reassured that water was off the table, and that an exclusion for freshwater would be included in the agreement. To everyone's surprise, that exemption had disappeared by the time the agreement was signed.
Second, I was concerned about the parallel with Great Lakes diversion negotiations between 2000 and 2004. For four years those negotiations proceeded, mainly in secret, based on a questionable legal analysis.
Third, I was concerned that the report began with the inappropriate assumption that Canada has 20% of the world's freshwater. In fact Canada has between 6 and 7% of the world's renewably water supply, almost the same amount as the United States.
Fourth, I was concerned with the naive assumption that large-scale continental replumbing is somehow both practical and desirable.
And finally, I was concerned that any Canadian would participate in a process where the dice was so heavily loaded against the Canadian national interest, when we have the International Boundary Waters Treaty and the International Joint Commission that enable us to deal with our neighbours as equals on water matters.
In Canada, and I am sure in the United States too, public positions of governments generally try to respect the mood of the electorate. Over the past 40 years or so, a significant majority of Canadians have consistently opposed bulk water exports. So, it's not surprising that no Canadian government has ever publically supported the idea. But, behind the scenes, there has always been a tendency to keep that option open.
For example, during the Free Trade negotiations in the 1980s we failed to include an exemption for freshwater. When NAFTA was negotiated in the early 1990s, we again passed up the opportunity to include an exemption for freshwater, even though there were exemptions for raw logs and unprocessed fish. Not only did we not get an exemption for freshwater, but according to leading legal experts like David Boyd, several of the NAFTA provisions actual limit our ability to control future exports and to protect our aquatic ecosystems.
Recently, the Policy Research Initiative, which was until last year an arm of the federal Privy Council office, has been studying the economics of water export. I think they have concluded that large-scale, long-distance diversions are economically impractical. In fact, one of their reports suggested that "the only business case that can be made for large-scale export is the profits to be made by consultants to do government-funded feasibility studies and environmental impact assessments."
I think they also concluded that some localized pipeline projects, and some niche marketing of marine tanker export within the NAFTA region may be getting close to being economically viable. I believe those are all valid findings.
But, just because larger-scale export projects would make neither economic nor environmental sense doesn't mean they won't happen. Hundreds of water projects have been built based on faulty economic assumptions, or with the help of huge governmental subsidies. And certain trends are now underway that are gradually shifting the economic balance in favour of exports. Those trends include climate change, rapid growth in arid and semi-arid regions, and technological advances.
The other thing that's a bit worrying is the fact that much of the interest in continental replumbing seems to be coming from the oil patch these days. And we all know governments are more than anxious to shower that industry with huge taxpayer subsidies, and to turn a blind eye to the environmental consequences.
So, what is the public position of Canadian governments on water export? Because of certain provisions in NAFTA, there are problems with an outright ban on the sale of anything based on jurisdictional boundaries, because that would be viewed as discriminatory. But, restrictions are allowable for valid environmental reasons.
So, since 1999, federal and provincial governments in Canada have said they will prohibit the bulk removal of water from Canada's major drainage basins, mainly on environmental grounds. Four specific reasons are given for this form of prohibition: to sustain the natural supply within river basins; to prevent the introduction of foreign species and diseases into receiving waters; to protect biological diversity; and to ensure the sustainable use of water to meet future needs of communities within watershed basins.
In my view, if it were enforceable, that would represent sound socio-economic and environmental policy, and would be generally consistent with international trade law. The problem is, it is not enforceable today. Nine of the ten provinces have laws which go part way. But, all have huge loopholes, or would face legal problems if they ever tried to enforce them. So, there is still a need for national level safety net legislation, if the will of Canadians is to be respected.
Are there differences between Canada and the United States that would dictate significantly different water policies? I don't think so. Canadian often claim that Americans are water wasters. They are, but so are we. And total water use in the United States has actually declined over the past 25 years while ours has continued to climb.
And Americans have generally fought interbasin diversions even harder than Canadians. For example, in the 1960s, the seven states sharing the Colorado basin tried to get the U.S. federal government to study a diversion from the lower Columbia River between Oregon and Washington. Their efforts were soundly defeated by Columbia basin states and environmental groups.
More recently, in 1987 the eight Great Lakes states got the U.S. Congress to pass legislation banning diversions from the Great Lakes Basin without the agreement of all eight Great Lakes governors.
I would argue that both Canadian and American citizens would be better off if both countries were to adopt the same 15 word water policy "Keep water in its natural basins, treat it with respect, and use it more efficiently." I have no doubt that would yield the optimal outcome for both countries. Maybe that's something the U.S. and Canadian Green Parties might like to consider together.
I would like to come back to the Great Lakes again for a couple of minutes, both because that example is instructive in a couple of ways, and because the Great Lakes could become the first victim of would-be continental replumbers.
The first lesson is just how powerful cross-border alliances can be. As I mentioned earlier, in 1999 and 2000, I co-chaired an IJC Study Team looking at Great Lakes diversion policies. After some very difficult deliberations, the IJC recommended that you should always start from the proposition that removals of water from the basin should be prohibited, and then define circumstances where minor exceptions might be warranted.
The eight Great Lakes governors more or less ignored that advice, and proceeded to negotiate based on legal advice from a southwestern U.S. law firm. Without getting into the detail, that advice was that, at least in principle, everyone in the U.S. has essentially the same right to Great Lakes water. As I mentioned earlier, those negotiations went on largely behind closed doors for four years. When a draft agreement finally came out for public review, citizens in both countries reacted angrily and in large numbers.
Environmental and other civil society groups in the two countries banded together. One of those coalitions was between the Canadian and U.S. Chapters of the Sierra Club. At the time, Elizabeth was the head of the Canadian Chapter. She commissioned an independent legal review by a top-notch Chicago lawyer. The earlier legal study was largely debunked.
Public pressure prevailed. The Ontario government took a strong and quite courageous stand against the draft agreements. Important improvements were made, and final versions were signed in late 2005, based on a prohibition on diversions, with minor and well-defined exceptions.
A second lesson is just how fragile these forms of protection can be. The 2005 agreements are now working their way through the various state and provincial legislatures. After that, the U.S. portion still has to be passed into law by the U.S. Congress. If the two national governments are now flirting with the idea of continental replumbing, or even if there is a public perception that they might be, what will that do to the chances of the U.S. Congress ever passing the virtual ban on diversions?
Over the next decade or two, we will likely witness an epic struggle on the water export question. On one side will be market forces that will attempt to extract tens or even hundreds of billions of dollars from Canadian and American taxpayers, and will, without necessarily realizing it, use those subsidies in ways which will be highly detrimental to the public good in both countries. On the other side will be a financially overmatched civil society sector, and ordinary voters. I am quite sure that, in the end, common sense, the public good and the ballot box will prevail. But, there is now a very real risk that we will make some very expensive and very damaging mistakes along the way.
In the United States, they have something called public trust law. That body of law places upon governments a fiduciary duty to preserve the essence of water resources for the use and enjoyment of the entire populace, not just the privileged. We have no similar laws in Canada. It's really quite ironic that pressures on our water resources are coming from a country that has much higher levels of water protection than we have. If we are going to harmonize things with our neighbours, maybe we should be harmonizing upward for a change, rather than always harmonizing downward.
Before I finish I am going to anticipate the most obvious question arising from my presentation, and try to address it ahead of time. I suggested that water exports from Canada would be detrimental to the public good in both Canada and the United States. Why would importing Canadian water be detrimental to U.S. interests?
I have to distinguish here between local cross-boundary arrangements and large-scale, long-distance imports. We have had a lot of local arrangements between communities on opposite sides of the boundary sharing water systems, and that hasn't posed a problem for anyone.
There are at least five problems with large-scale imports:
- They would never offer the least cost solution - I can guarantee that;
- Building a dependency on a long-distant source where there is no alternative is never a good idea. Unlike oil and gas, where there are many energy options, there is no substitute for life-sustaining water;
- The recipient basin would only be putting off the inevitable for decade or so, rather than getting on with a sustainable solution;
- There would be substantial environmental costs in both countries; and
- With megaprojects like this, there is always a very high probability that there would be unforseen consequences. I don't know what they might - but I will just throw out one possibility. Some oceanographers and climatologists suggest that very large southward diversions could impact negatively on climate. I don't know if that is the case, but it might be. The science simply isn't good enough at this point in history to know what all the unforseen consequences would be.
- So, it would make sense to me for the Canadian and U.S. Green Parties to build an alliance in this area. It might be based on river basin security, and be called something like "a common front founded on common sense."
- I will just finish up with a great quote. It's by Frank Quinn, a former colleague and one of Canada's foremost experts on the water export issue. As he puts it, "water is an economic good, but it is so much more than that: it is the basis of all life, not just human. It is integral to the health and beauty of Canada's landscape. It is the key to our past and our future. If this, the last and greatest natural resource in Canadian hands is traded away, we are a lesser people, sovereign in name only."