Bulk Water Trade Between Canada and the US

Undergraduate Paper

University of Calgary

April 2008
 Contents

Page
A. INTRODUCTION 1
1. US Demand for Bulk Water 1
2. Historical Background of Canadian Water Resources 3
a. Previous attempts to provide bulk water to the USA 3
b. Opposition to attempts to export water – environmental issues 5
B. PURPOSE OF STUDY AND APPROACH 7
C. ANALYSIS 7
1. Economic 7
2. Ecological balance 8
3. Political 10
4. Legal 11
D. SUMMARY OF ARGUMENTS 11
Economic 11
Ecology 11
Political 11
Legal 12
E. CONCLUSION 12
F. RECOMMENDED COURSE OF ACTION 12
G. REFERENCES 13
 Bulk Water Trade Between Canada and the US

A. INTRODUCTION

1. US Demand for Bulk Water

Most Canadians recognize the United States as Canada’s best trading partner and friend,
and understand that trade between the two countries is vital to both economies. Yet
Canadians and Americans also prize the principle of independence. They understand that
whenever a nation no longer controls the necessities of life, its citizens are no longer free
or safe.

Water not only defines Canada’s geography but regularly monopolizes its political
conversations. For more than four decades Canadians have debated a variety of billion-
dollar schemes to export water to the United States and have rejected them as being either
a threat to national security or a crazy economic venture. Whenever disputes have arisen
with its American neighbors over shared waters, Canada has successfully engaged the
International Boundary Waters Treaty Act of 1909 and the International Joint
Commission, created under the Act to address boundary waters issues.

In recent years, shortages in water supply in the US have increased together with pressure
to trade water (in bulk) to that country amid increasing claims of water abundance in
Canada. The issue of water became alive with the signing of the Canada-US Free Trade
Agreement (CUFTA) in 1989 and NAFTA in 1993. Ever since, citizens and economists
alike have asked a basic question: Is water in its natural state now a tradable good subject
to liberalized trade rules? Today there is pressure to include water as a tradable
commodity in the rules of the North American Trade Agreement (NAFTA)

There has been pressure to allow trade in Canadian water. This has increased with the
establishment in 2005 of the Security and Prosperity Partnership or SPP. In a very real
sense, Canada’s water is already “on the table” as current legislation in the Canadian
government does not protect it from being traded away.

In the meetings of NAFTA and other trade organizations, the controversial concept of
continental water integration or “interdependence” increasingly dominates talks between
the US and Canada. This concept is based on one of two assumptions: first, Canada has a
“surplus” of water and therefore, large amounts of water can be moved from one basin in
Canada to another in the US without unduly affecting the environment.

The second assumption is that water, like oil or gas, is a tradable commodity and it is
permissible to trade it and run the risk of degrading one place for the benefit of another.

Academicians in Canada contend that both of these assumptions are false. They subscribe
to the principle that wise management, prudent conservation and responsible stewardship
of water are absolutely necessary for the long-term environmental health and economic

1
prosperity of both countries. This principle can be paraphrased as "Keep water within its
natural basin, treat it with respect, and use it efficiently."

Every year the North American Forum on Integration, a Montreal organization dedicated
to greater continental cooperation, holds a mock North American parliament called
“Triumvirate.” This organization provides insight into prevailing thinking on economic
and political issues that affect Canada, Mexico and the United in the near future. At the
most recent session held in May 2007, 73 university students from the three countries
gathered at American University in Washington DC; in mock debate. They discussed a
broad range of issues including customs unions, telecommunications and human
trafficking. But water dominated these issues.

Members of the United States delegation openly pushed for bulk water shipments from
Canada. The Canadians opposed the move, arguing that water exports posed “a national
security threat.” In the end the delegates agreed that Canada’s position was “un problema
para el futuro” (“a problem for the future”).

But the American delegation considered it a problem for now. During the week-long
session, they demanded that Canadians support a proposal to provide percent of their
annual duties for the purposes of continental defense. If the Canadians refused, the
Americans promised to push for greater “access to Canadian natural resources” including
water. The dominant trading partner prevailed: the Canadians ultimately acquiesced and
agreed to pay for a North American defense perimeter.

Although organizers characterize the Triumvirate as an exercise “beyond any cultural

reality”, Louis Alberta Moreno, the president of the Inter-American Development Bank,
put the affair into clearer perspective. “The Triumvirate is an excellent example of the
importance and depth of North American integration,” said Moreno

Today, Canada’s water – through diversion, transfer, sale, trade or all of the above – is on
the negotiating table in Canada/US relations. In the long-term agenda within the context
of freer trade and increased North American integration, Canada’s water is up for grabs.
As long as its status as a negotiable resource remains unclear, pressure to access
Canada’s water will continue to grow ever stronger.

There is now a formal framework for discussing Canada’s water as a trade item – the
Security and Prosperity Partnership (SPP) – which met most recently in August 2007 at
Montebello, Quebec under the auspices of Prime Minister Stephen Harper, US President
George W. Bush and Mexican President Felipe Calderon.

Over the next twenty years, the United States is expected to intensify ongoing efforts to
conserve freshwater in all sectors. If and when these measures are not enough, even
where they can be supplemented by desalination and other technologies, then importation
of freshwater from elsewhere may well become again the favoured option. The west
might look for water first from Alaska to be transported by tanker or undersea pipeline.
The Colorado basin states might look first to the lower Columbia River with the water to

2
 be transported by pipeline overland. States in the American Midwest and south (via the
Mississippi River) would look to the Great Lakes as the target of choice.

2. Historical Background of Canadian Water Resources

a. Previous attempts to provide bulk water to the USA

Several private sector schemes to export bulk water to the United States received a
rough ride from the Canadian public, which rejected any suggestion that their water
resources were “continental” rather than Canadian.

Arguments in favour of water export normally are prompted by monetary gains,

boosting development in source regions, and sometimes the provision of
humanitarian aid. The opposing view acknowledges that water is an economic good,
but insists it is so much more than that: It is the basis for all life, not just human. It is
integral to the health and beauty of Canada’s landscape, the key to the past and the
future. If water, the last and greatest natural resource still in Canadian hands, is traded
away, Canadians will be reduced to a lower status, sovereign in name only.

Public fears over plans to export bulk water exist despite the tendency of Canadian
governments to dismiss international water diversion proposals as wild pipe dreams.

By avoiding systematic reviews and by failing to choose a policy course, government

appears to be keeping its future options open. At the federal level, opposition to
export proposals have been less than convincing. It consisted of defensive responses
by a series of federal ministers responsible for water resources, rather than an official
policy endorsed by the federal government.

Snowcap and Sunbelt ventures in British Columbia.

While the Canadian government claimed that its participation in free trade
negotiations was no threat to Canadian sovereignty over water resources, it was slow
to respond to related developments at the provincial level. None of the provinces had
opposed the Federal Water Policy of 1987 or the provisions of federal Bill C-156
which allows small-scale water export. Hence, four provinces began to flirt with
entrepreneurs intent on shipping Canadian water to foreign markets.

The Province of British Columbia (BC) quietly decided in 1986 to permit

entrepreneurs to export small volumes of freshwater from its coastal streams by
marine tanker. One of its six licensees, Snowcap, eventually partnered with an
American firm, Sun Belt, and in 1991 they found a market in Goleta, California that
was suffering from drought. Before they could sign a contract to ship water to Goleta,
however, the BC government found itself embroiled in controversy, as the news about
Snowcap triggered a flood of new export applications. These in turn alarmed

3
environmentalists who were worried about the cumulative effects of further bulk
water removals on the marine environment.

In response to the public uproar, the Province placed a moratorium on new or

expanded licenses. As a result, Snowcap could not obtain enough additional water to
satisfy its contract and was reimbursed by the Province for its out-of-pocket expenses.
However, the Province refused to recognize Sun Belt, which was not named on the
license. Sun Belt’s American owner threatened to sue Canada under Article 11 of
NAFTA but has since apparently given up his action. Unable to receive any assurance
of federal legislation opposing bulk water exports, BC eventually passed its own
Water Protection Act in 1995.

In May 2006, the Policy Research Institute or PRI also published an article by
University of Calgary professor Dixon Thompson listing six mandatory conditions for
water export proposals. These were: an environmental impact assessment showing no
damage to the basin, proof of exportable surplus, evidence of financial benefits to the
basin; confirmation of a realistic market, a business plan, and a provision to audit the
project. (Similar standards were recommended and rejected for governing water
diversions out of the Great Lakes in 2004 on the
grounds that they would diminish local water security.) Thompson concluded that it
was entirely possible that “the United States will demand access to what it thinks of
as a continental resource.”

Early in 2007, the Center for Strategic and International Studies (CSIS) a private US
think tank, which includes trustees such as Henry Kissinger, together with the
Conference Board of Canada launched the North American Future 2025 Project to
assist the Security and Prosperity Partnership. (The Center, which played a critical
role in NAFTA’s adoption in the United States, has published several commentaries
on integration including a newsletter called The North American Integration
Monitor). The Future 2025 Project proposed “to analyze, comprehend and anticipate
North American Integration” by holding a series of closed-door roundtables on
immigration, energy, security, competitiveness and water with the goal of reporting
its findings to the executive and legislative branches of Canada, Mexico and the
United States by the end of September, 2007.

However the project’s 25-page agenda was leaked to the media in April 2007, just
prior to a Calgary roundtable on the Future of the North American Environment. The
document laid out plans for continental water trade in the boldest terms. In plain
words, the document pointed out the relative scarcity of water in the United States
and Mexico,” and declared the abundance of water in Canada and that it shared many
watersheds along the US border including the Great Lakes.

The document advocated a more proactive approach in exploring solutions beyond

the current trans boundary agreements anticipating that water availability, quality and
allocation are likely to undergo profound changes between 2006 and 2025.

4
 One option included new “regional agreements between Canada, the United States
and Mexico on issues such as water consumption, water transfers, artificial diversions
of fresh water, water conservation technologies for agricultural irrigation and urban
consumption.” It also noted the need for the three governments to overcome
bureaucratic and legal obstacles if North America desires to achieve joint optimum
utilization of the available water.

Significantly, The Future 2025 Project document does not mention the Boundary
Waters Treaty of 1909 between Canada and the United States or the International
Joint Commission.

Armand Peschard-Sverdrup, a former senior consultant with Econolynx International

in Ottawa, and now director of the Mexico Project for the Center as well as the North
American Future 2025 Project, later confirmed that water was obviously on the table.
He predicted that the US will need water and Canada “has an overabundance and
arrangements between the two countries will eventually be made.

b. Opposition to attempts to export water – environmental issues

A threat to Canada’s water more sinister than the GRAND Canal Company was
emerging. Although it is not widely known, it was Canada, not the US, that initiated
the request for bilateral talks on free trade in the 1980s. Later it was discovered that
Simon Reisman, appointed as chief trade negotiator by the Prime Minister, was not
only a director of the GRAND Canal Company but had made a speech in which he
suggested that Americans would go crazy for access to Canadian freshwater, and
urged that the resource be used as bait to get the Americans to the negotiating table.

In an attempt to settle the water export issue before it became entangled with the
Conservative government’s larger ambition of securing an agreement with the United
States on trade liberalization, the federal Cabinet approved the inclusion of a
statement limiting export within its new Federal Water Policy, which was tabled in
the House of Commons in November 1987. In his introduction, the Environment
Minister indicated that the “Government of Canada emphatically opposes large-scale
export of our water” because of inadequacies of supply in some regions and seasons
and because the required diversion projects would be harmful to the environment and
to northern communities (Environment Canada, 1987). An exception would be
allowed, however, for small-scale exports that would be regulated closely in
cooperation with provinces. Thus the government made a commitment to “strengthen
federal legislation to the extent necessary to fully implement this policy.”

The immediate public reaction to the federal policy statement was positive. It
appeared that the only remaining task was to reinforce the policy on export with
legislation. At a leisurely pace, staff began drafting a bill to ban the export of water.
In the spring of 1988, staff went into overdrive.

The reason for this acceleration of activity was mounting criticism that the language
of the draft Free Trade Agreement would give the United States unprecedented access

5
to Canadian water resources, notwithstanding assurances to the contrary in the
Federal Water Policy. Although the Government of Canada repeatedly denied this
charge, the heat was turned up during the summer of 1988 as widespread drought
gripped the continent and 13 southern US senators led an abortive effort to have the
US Army Corps of Engineers triple the diversion of water from the Great Lakes at
Chicago to keep barges afloat on the Mississippi River (Sasser et al., 1988).

In response to these events, on August 25, 1988 the federal Minister of the
Environment, quickly tabled for first reading in the House Bill C-156, to be known as
the Canada Water Preservation Act. The bill would have prohibited, without
exception, any export, or diversion into boundary waters for the purpose of export, of
water above the average daily rate of one cubic metre per second or annual volume of
20,000 cubic decameters, a very conservative allowance for most parts of Canada.
The bill permitted the Minister to consider licensing exports below this level, after
undertaking environmental impact assessments and setting terms and conditions. His
duties could be delegated to a province to carry out. The bill would not apply to
bottled water (Canada, 1988).

Within a few weeks of introducing this bill, and before its terms could be considered
by a Parliamentary committee, the federal government called a general election. Bill
C-156 died on the order paper. Although some critics had raised concerns about the
ability of Bill C-156 to prevent the export of water, enough voters were reassured by
the government’s actions to help the Conservatives win re-election with a mandate to
proceed with free trade. The government achieved what it most wanted, and the
Canada-United States Free Trade Agreement took effect on January 1, 1989. The
Canada Water Preservation Act bill, however, was never reintroduced to Parliament.
Water export 9 opponents were back to square one, and in terms of protecting
Canada’s water, worse was yet to come.

In 1993, the Liberals under Jean Chretien were elected in Ottawa. Having opposed
free trade with the United States when in Opposition, the new government then
abruptly reversed itself and embraced negotiations to include Mexico and to extend
the scope of trading rules in a North American Free Trade Agreement (NAFTA). Like
the Conservatives before them, the Liberal government declined to negotiate an
exemption for freshwater in the text of the trade agreement, even though exemptions
had already been negotiated for raw logs and unprocessed fish. Instead, the Prime
Minister’s Office issued a media release stating that the three governments were in
agreement that nothing in NAFTA would oblige the water belonging to any of the
parties in its natural state to be exported (Canada, 1993).

Unfortunately, the joint agreement appended to the media release was not signed.
How such a statement would be treated in a trade panel hearing is open to question.

6
B. PURPOSE OF STUDY AND APPROACH
In general, the purpose of this study is to determine whether or not Canada should supply
bulk water to the USA.
Specifically, the purpose is to determine whether it is feasible to pursue this move in terms of
benefits such as:

 Economic gains;

 Ecological balance;

 Mutually beneficial political relations– NAFTA, relations with the US and other
countries; and

 A binding legal framework– legislation, constitutional provisions.

C. ANALYSIS
Advantages and disadvantages as the moves impact on Canadian national interest
1. Economic
Previous attempts – small scale deliveries.
A few unsuccessful attempts were made to trade in bulk water. In 1986, the province of
British Columbia (BC) quietly decided in 1986 to permit entrepreneurs to export small
volumes of freshwater from its coastal streams by marine tanker. One of its six licensees,
Snowcap, eventually partnered with an American firm, Sun Belt, and in 1991 they found
a market in Goleta, California that was suffering from drought. Before they could sign a
contract to ship water to Goleta, however, the BC government found itself embroiled in
controversy, as the news about Snowcap triggered a flood of new export applications.
These in turn alarmed environmentalists who were worried about the cumulative effects
of further bulk water removals on the marine environment.

In response to the public uproar, the Province placed a moratorium on new or expanded
licenses. As a result, Snowcap could not obtain enough additional water to satisfy its
contract and was reimbursed by the Province for its out-of-pocket expenses. However,
the Province refused to recognize Sun Belt, which was not named on the license. Sun
Belt’s American owner threatened to sue Canada under Article 11 of NAFTA but has
since apparently given up his action. Unable to receive any assurance of federal
legislation opposing bulk water exports, BC eventually passed its own Water Protection
Act in 1995.

On April 25, 1998, the Sault Ste. Marie Star reported that a regional office of the Ontario
Ministry of the Environment had granted a permit to the Nova Group, a local company,
to remove ten million liters of water a day for up to sixty days a year from Lake Superior
for export to Asian markets. No government on either side of the international boundary

7
 as well as the Canadian Ministry of Natural Resources had been consulted about the
proposal. The volume of water involved was an insignificant fraction of the late, but the
economics of the venture were dubious. To prevent a dangerous precedent from
occurring, the province of Ontario rescinded the permit.

Unsure economic gain.

The profitability of bulk water trading, whether by containers or through pipeline, has not
been accurately pegged. Shipping costs can be prohibitive as the price of crude oil
continues to be volatile. Likewise, laying the structure of a pipeline from Canada to the
US is formidable inasmuch as major Canadian rivers flow either northward or eastward,
not towards the USA. Possible sources of water are lakes near the border like Lake
Ontario.

However, areas in the USA that need water are located south or southwest which are far
from possible sources of piped-in water. Possibly in the future when aquifers become so
contaminated with salt and chemical toxin that safe water for drinking and irrigation
becomes a precious commodity, will bulk water trading be profitable at prices higher than
oil. This, however, will be contingent on strict ecological standards rather than political
or economic feasibility.

2. Ecological balance

Long-term prospects of clean water supply and ecological balance

Marlowe Hood of the Associated Press cited a United Nations study which projected that
by 2025, fully a third of the planet's growing population could find itself scavenging for
safe drinking water.

More than two million people in developing countries, the vast majority of them children,
die every year from diseases caused by unsanitary water.

There are a number of interlocking causes of this scourge. Global economic growth,
population pressures and the rise of mega-cities have all increased water use to record
levels. Mexico City, Jakarta and Bangkok, to name a few, have underground water
sources -- some of them nonrenewable -- depleting at alarming rates. In Beijing, home to
16 million, aquifers have fallen by more than a dozen meters (40 feet) in 30 years, forcing
the government to earmark tens of billions of dollars for a scheme to ferry water from the
Yangtze River in the south to the country's parched north.

Aggravating the shortages are pathogen and chemical pollution, which have transformed
many primary sources of water in the developing world into toxic repositories of disease.

8
The British journal Nature reported that a team of researchers commented that in
decades to come, water scarcity may be a watchword that prompts action ranging from
wholesale population migration to war, unless new ways to supply clean water are found.

Rising sea levels are already forcing salt water into aquifers beneath mega deltas that are
home to tens of millions, and changing weather patterns are set to intensify droughts in
large areas of Africa, southern Europe and Asia, according to UN's Intergovernmental
Panel for Climate Change (IPCC).

Experts and policy makers point to three broad categories of initiatives to ease the
shortage of clean, drinkable water, especially in the world's poorest regions:

(1) sanitation, (2) purification, and (3) water management.

"Poor sanitation combines with a lack of safe drinking water and inadequate hygiene to
contribute to the terrible global death toll," UN Secretary-General Ban Ki-moon said
earlier this month.

Less than half the households in major Asian cities are connected to sewers, which means
that tons of raw sewage runs into rivers and oceans, according to the UN.

In Latin America and Africa that figure drops to 40 and 20 percent, respectively.

While governments attempt to improve sanitation infrastructure, scientists are developing

new technology to purify the water available, according to Mark Shannon, a professor at
the University of Illinois and Director of the US government funded Center of Advanced
Materials for the Purification of Water with Systems. He reported that desalination with
reverse osmosis is already the largest single growth area in terms of new water supplies.
New techniques of reverse osmosis use membranes with nanometer-size pores to filter
out salt and other contaminants from water, and could for the first time pave the way for
industrial-scale use.

Micro-filters are also used to decontaminate bodies of water increasingly laced with
pesticides, arsenic, heavy metals, nitrates and pharmaceutical derivatives. Current
methods of decontamination, however, remain "challenging, expensive and unreliable,"
said Shannon, “and will take years to perfect.”

A third method of purification -- and the one most relevant to the poor nations -- is
removing or killing bacteria, viruses and other pathogens through disinfection. Shannon
said that pathogens are still the biggest problem in the world today in terms of safe
water.

With worldwide food production set to expand 50 percent by 2030, scientists are also
developing genetically modified grain plants that consume less water and can withstand
harsh conditions. Researchers in the US, for example, have developed genetically

9
 engineered rice with a higher tolerance for drought, salt and low temperatures, the three
main causes of crop failure.

3. Political
Impact on Canada-US relations
The water situation is drawing Canada and the US closer toward solutions. The Nova
Group incident in 1998 prompted the Canadian and US governments to agree on a joint
reference to be given to the International Joint Commission to investigate the
implications of consumption, diversion and export of Great Lakes waters. The Canadian
government also moved to prohibit all bulk water exports and not just large-scale export.
However, trade lawyers and policy experts opined that the federal government could not
adapt Bill C-156 or the Canada Water Preservation Act to legislate a prohibition on
water export from Canada. Neither the NAFTA nor the World Trade Organization would
tolerate a country restricting water explicitly for use within national boundaries as this
constitutes trade discrimination.
Unfazed, the Canadian government adopted an alternative cooperative approach. They
chose a watershed approach—to use major watersheds or drainage basins as the
geographical basis for protecting Canada’s fresh water resources. Protecting water
resources within natural rather than political boundaries—regardless of whether a
proposal aims to divert water within Canada or outside it—enables the government to
skirt the argument of discrimination that can lead to international trade challenges.
The water issue will continue to be an important factor in Canada-US relations. The
uncertainty of its status—whether it is “continental” and subject to sharing with another
country or “national” (to be used only by Canadians)—will grow now that almost every
level of government in Canada has engaged in a process of trilateral integration with the
Security and Prosperity Partnership or SPP.
Impact on local governments
The federal government’s move to adopt a cooperative approach raises the question of its
acceptance by the provincial governments which are the primary managers of water
resources. In order to provide a workable interpretation of constitutional and trade law in
which provinces (and territories) would enact or amend their laws or regulations to
prohibit bulk water removal from watersheds within their jurisdiction. The federal
government would enact amendments to its International Boundary Waters Treaty Act
for the same purpose of prohibiting bulk water exports. This strategy was announced by
the Canadian government in 1999.
However, this strategy did not work as planned. Some provinces chose to use political
rather than watershed boundaries in their laws and regulation. Some used both. Quebec
decided not to prohibit interbasin diversions for hydro projects; Alberta, Manitoba and
Nova Scotia accommodated exceptions to the prohibition against crossing watershed
boundaries. Another weakness of this cooperative approach was the possibility of
provinces breaking ranks at any time to further their own trade interests. Quebec and

10
 Newfoundland have indicated their interest in shipping water in bulk when global prices
are sufficiently high.
Hence, this raises the question of whether or not the federal government can overrule
provincial governments, which choose to act independently, on matters of national
interest and public will.
4. Legal
Is water in its natural state now a tradable good subject to liberalized trade rules?
This is the crux of the problem faced by both the Canadian and US governments. Early
drafts of the Canada-US Free Trade Agreement in 1989 did not include water as a
“tradable good” but the final version of the Agreement omitted this provision.
Even NAFTA classified water as a tradable good. In 1993 it issued a statement that
NAFTA creates “no rights to the water resource” of any trading partner. However, this
statement was unsigned leaving many to conclude this has no legal force.
Another touchy issue is NAFTA’s Chapter 11 which allows a foreign business harmed by
local rules to sue for damages in special tribunals that lack the transparency of normal
court proceedings. In 1998 a California company Sunbelt, Inc. filed a $10.5 billion claim
over the province of British Columbia over British Columbia’s ban on bulk water
exports. The case remains unresolved.
D. SUMMARY OF ARGUMENTS
Economic
Although there have been no extensive trading in bulk water mainly due to technical
difficulties, this does not foreclose the possibility of entrepreneurs engaging in bulk water
removal from basins and coastal rivers and streams. Profits go mainly to the entrepreneurs
with no possible economic gain to the public.
Ecology
Bulk water removal from a basin or a stream will affect the ecological balance of the area.
Demand for water in the US will be most critical during spring and summer especially for
drought-prone areas in the west and southwest. Likewise there are areas in northern Canada
that experience shortages during summer. Lowering of water levels in rivers and streams
can cause siltation and the growth of undesirable fungus and snails and other unwanted
creatures. It will also affect the seasonal salmon run and the breeding of fish in streams and
rivers. In a critical situation, the US government might pressure the Canadian government to
allow access to fresh water sources which will disrupt the ecological balance.
Political
The federal government has a loose hold on provincial governments which manage the water
resources. History has shown that the provinces could easily pursue their own programs with
regards to water resources. Any move by the federal government to allow bulk water trading

11
 will be resisted not only by environmentalists and farmers but also by the provincial
government. Likewise, the federal government cannot control a provincial government on
local trade matters.
Externally, the Canadian government is bound to honour its commitment to the NAFTA and
the World Trade Organization. In honouring these commitments, the federal government
runs the risk of conflict with provincial governments that control and manage the water
resources in their jurisdiction.
Legal
Canadians historically oppose any move by either the federal or provincial government to
trade on natural resources which action is perceived contrary to national interest. They are
opposed to the concept of the Americans that Canadian water is continental rather than
national. They are apprehensive of any move to make water resources continental as this will
allow Americans greater access to Canadian water. It would mean loss of sovereignty on the
side of the Canadians.
However, being a party to the NAFTA and the World Trade Organization makes Canada
subject to the organizations’ rulings particularly on water as a tradable good and that banning
its export would constitute trade discrimination.
E. CONCLUSION
Canada is a regional, if not global, citizen which has to learn to interact beneficially with its
neighbours. The time will come when it will be called upon to share its water resources in
the manner that the US has worked out an arrangement with Mexico a joint use of two of its
rivers. National interest will be the determining factor in any move towards bulk water
trading with the United States.
The researcher concludes that Canada, as a member of NAFTA and the World Trade
Organization, has to share its water resources with its neighbour, the United States albeit on a
limited basis if it is so required. Establishing the limits will be dictated by the following:
1. The overall quantity of renewable and non-renewable water in the basin, river or source of
the bulk water to be removed. Safety levels have to be established prior to concluding an
agreement for trading on bulk water.
2. Projected rate of decline in water levels and depth of aquifers as a result of global
warming.
3. The potential risk of ecological balance disturbance which necessitates the need to stop
sharing the water resource.
F. RECOMMENDED COURSE OF ACTION
On the basis of the above arguments, this study recommends the creation of a Bulk Water
Authority to manage and regulate the use of and export of bulk water. This Authority will be
responsible for monitoring the sharing of water and institute and implement policies that will
ensure that Canadian interest is upheld and environmental issues are resolved.

12
G. REFERENCES
Books
David Boyd, David. Unnatural Law. UBC Press, 2003.
Byers, Michael. Intent for a Nation, Vancouver: Douglas & McIntyre, 2007.
Periodicals
The TrilatHerald, Vol.3 No.2/3, May 22/24, 2007
The TrilatHerald, Vol 3, No.4, May 24, 2007
Newspaper Articles
Joseph, S. (2004, January 6)). The Broken Promise of NAFTA. New York Times.
D’Aliesio, R. (2007, July 2). North American climate change pact urges. CanWest News
Service.
Magazine Articles
Sally Acharya, S. (2007, May 29). Model North American Parliament Draws Students from
Three Nations. American Weekly.
Websites
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<http://www.pi.energy.gov/documents/NAEWGindex020306.pdf>
<http://www.globalpolicy.org/globaliz/econ/2004/0106stiglitznafta.htm>
<http://www.finaafi.org/eng/fina/presentation.asp?langue=eng&menu=finahtt>
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<(http://www.ceocouncil.ca/en/view/?document_id=365)>
Other sources
Canadian Council of Chief Executives. (2003, January). Security and Prosperity: Toward A
New Canada-United States Partnership In North America. January 2003.
Canadian Council of Chief Executives. (2004, April). New Frontiers: Building
A 21st Century Canada-United States Partnership In North America.

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Canadian Council of Chief Executives. (2005, March 23). Trilateral Security and Prosperity
Partnership Will Boost Jobs and Investment.
Standing Committee on Foreign Affairs and International Trade. (@002, December).
Partners in North America: Advancing Canada’s Relations with the United States and
Mexico:
Report of the Standing Committee on Foreign Affairs and International Trade, December
2002: p.158

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