Security or Scarcity? NAFTA, GATT and Canada's Freshwater

NAFTA, GATT, Fresh Water
Campbell, Karen

We Canadians often assume that Canada has an inexhaustible amount of water. However, statistics indicate otherwise. Canadians are second only to Americans in terms of water consumption: we consume an average of 638 L per day. And the volume of water required by Canadians continues to grow. Although Canada has a 20 per cent share of the world's freshwater, only 9 per cent is renewable and available, the rest is captured in glaciers and polar icecaps. In addition, most Canadians live in a narrow strip along the border with the United States, while 60 per cent of our water supply flows north. Also unknown are the potential effects of climate change. There are indications that the northern hemisphere will be more greatly affected by climate change than anywhere else.

In 1999, a report by the International Joint Commission warned that water levels in Lakes Michigan and Huron had dropped 22 inches since 1998. In 2000, the US National Oceanic and Atmospheric Administration predicted that levels would fall an additional 2 feet by 2030. According to Environment Canada, approximately 26 per cent of Canadian municipalities with water distribution systems reported problems with water availability within the past five years. The amount of “clean” water is also being reduced through surface and groundwater contamination. In a recent report analyzing economy based projections of environmental pressures and conditions to 2020, the Organisation for Economic Cooperation and Development (OECD) categorizes groundwater pollution, especially from non-point sources, as an urgent concern.

If Canada's water situation is less than idyllic, the world's situation is much worse. Available freshwater amounts to less than 0.5 per cent of all the earth's water. Freshwater is only renewable by rainfall at a rate of 40,000 to 50,000 m3 per year, yet global consumption of water is doubling every 20 years, more than twice the rate of human population growth. According to the UN, one billion people currently lack access to fresh drinking water, and 31 countries face water stress and scarcity. If current trends are not reversed, by 2025 the demand for freshwater is expected to rise 56 per cent.

Faced with this scenario, the reasons for the interest in exporting Canadian water are plain to see. The US, whose citizens are the highest per capita water users in the world, see importing Canadian water as a solution to their water shortage issues. President George Bush has recently indicated that he is open to discussions about a possible continental water pact.

However, while “thirsty” western states may welcome such an agreement, water rich eastern states may not support this approach. With these obvious stresses on the supply of water, why should Canada not exploit freshwater sources as it does other natural resource? Some of the many reasons are:

  • The amount of water in a watershed has developed over thousands of years and that amount of water is required for ecosystem survival;
  • Water is not really a renewable resource;
  • Selling water on the open market will not address the needs of poorer nations;
  • Public reaction to recent proposals indicates that Canadians have real concerns about water exports;
  • The financial benefit to exporting water would be to a limited few, likely multinational, corporations; and
  • International trade agreements may make it difficult for Canada to control the export of water.

These last three points have been the cause of considerable debate and concern about the security of Canadian water. Recent actions by private companies such as Sun Belt Water Inc. who have filed a claim for compensation under NAFTA, and proposals by governments such as Newfoundland to export bulk water, have ensured that this issue remains live. Media coverage has made clear that this issue is both contentious and emotional for Canadians. Surveys have shown that Canadians are seriously concerned about unlimited American access to our natural resources. This debate will continue until clear action is taken, either by a government or a trade tribunal to clarify exactly how bulk water exports will be treated under NAFTA or the GATT. Until then, uncertainty about the status of our water remains, but the prospects don't look very good.

This paper is divided into five parts. In addition to the introduction, part II provides an overview of trade agreements as they may relate to bulk water export and trade. Part III considers how the federal and provincial governments have responded to concerns about bulk water exports. Part IV will discuss several case studies on the issue, including two relevant BC examples. Finally, part V provides some concluding remarks.

Publication Date
Publication Pages
West Coast Environmental Law
Publication City
Vancouver, BC
Publication Format