ON FOREIGN AFFAIRS AND
DES AFFAIRES ÉTRANGÈRES ET
DU COMMERCE INTERNATIONAL
[Recorded by Electronic Apparatus]
Thursday, May 17, 2001
The Chair (Mr. Bill Graham (Toronto Centre—Rosedale,
Lib.)): Colleagues, I think we can start.
We have a quorum for hearing witnesses.
Ms. Holm is here. We appreciate her coming. We might
as well start.
Ms. Holm, thank you very much for coming. We
appreciate your taking the time, as an individual, to
join us with your expertise. We see you're an
agrologist, which is a rather terrifying-sounding name.
No doubt you will dispel both the mystery and the
terror when you tell us what it's all about.
Thank you for coming.
Ms. Wendy Holm (Individual Presentation): Thank
The Chair: We'll start with you, if you don't
mind. Then Ms. Elwell will come and join us later.
Ms. Francine Lalonde (Mercier, BQ): [Editor's Note:
Inaudible]... because it was submitted to members of the
The Chair: Which one?
Ms. Francine Lalonde: The one on lumber.
The Chair: Mr. Harb will answer that question.
Ms. Francine Lalonde: Did Pierre Paquette agree?
The Chair: Mr. Harb, Ms. Lalonde wants to know whether Mr.
Paquette had supported your resolution.
Mr. Mac Harb (Ottawa Centre, Lib.): Yes, Mr. Chairman.
The Chair: Was it passed?
Mr. Harb: It was passed unanimously at a previous meeting.
The only change that was made related to the dates. We had
previously opted for June 1 and 2, but this time around, we
didn't set a date because we wanted to do that with the members
of the committee.
The Chair: Therefore, everybody agrees on the principle. Now
it's a matter of setting out the technical details. As soon as
we have quorum, if Mr.... [Editor's Note: Inaudible]... also
agrees, we can approve it and let Mr. Harb leave.
For the moment, we don't have a full quorum. I'd like
to go back to Ms. Holm and let her submit her
testimony. We can maybe do it after that.
Ms. Wendy Holm: Thank you.
First of all, I would like to say I only had 48 hours
notice, from the time I got the phone call requesting
my appearance before this committee until I boarded
the plane. It was very short notice. I would have
prepared a written presentation. As it was, I sat in
my hotel room last night and wrote a bunch of notes.
It's a challenging subject to present in a coherent
manner. I will do my best.
There were many colleagues, esteemed experts in this
area from British Columbia and elsewhere in Canada, who
I spoke to when doing some background on this
presentation and who would have liked to appear before
the committee. I think the committee would have
benefited from their appearance and from hearing their
The subject matter of this committee strikes at the
very heart of Canadian public policy. Bill C-6 is
being presented as a solution to Canada's water trade
dilemma. It's being presented as the third plank in
the government's strategy to protect Canada's water.
As such, I feel it fails very dramatically.
If the committee is serious
in its intent to look at this, which I'm certain it is,
you need a fuller public process to consider the
I'd like to speak a moment to my qualifications. I am
a professional agrologist. It's not all that scary.
I'm a professional certified in agriculture. I am a
resource economist. I completed my master of science
degree from the University of British Columbia almost 30 years
ago. I have been practising agrology in Canada for 30
years. I have been involved in discussions on the water
trade debate since 1987. I am the editor and
contributing author to the book Water and free
trade, which first raised the question of
water's inclusion in the trade agreements and the
public policy implications.
For the entire time I have been speaking publicly on
this issue, I have never been accused of being anti-FTA
or anti-NAFTA. I think this is an important public
policy issue that stands apart from the rest of the
issues, the pros and cons of the trade agreements.
I've never argued that this issue is what should kill
the agreement. I think there are solutions. I think
it is critical that all of the issues we raised in this
book have come and are now sitting at our doorstep.
I was a recipient of the Queen's Commemorative Medal
in 1993 for contribution to community. I was president
of the British Columbia Institute of Agrologists.
I'm past director of the Agricultural Institute of
Canada. I am past chair of the board of trustees
of Ethical Funds Inc. I was very pleased to have
been named Agrologist of the Year in British Columbia
two weeks ago, in part because of the work I have done
on the water issue.
I'm speaking to you today on behalf of Canadians, 87%
of whom are strongly opposed to water exports; farmers,
of course, who are entirely dependent on water in
addition to sunshine and soil for the production of
food; and I suppose on behalf of my daughter and the
eight generations who walk in front of me on this
issue. I have no axe to grind. I have no politics
with respect to this issue. I'm here as a
professional. I've been associated with this
discussion for a very long time.
In every aspect of this legislation, Bill C-6 is
presented as “plugging the leak”, fixing the water
trade dilemma that was created first by the FTA and
subsequently by the NAFTA. It is presented as
prohibiting the bulk removal of water from Canada.
Referencing the news release and the background, the
amendments will prohibit the bulk removal of water from
Canadian boundary waters, including the Great Lakes.
This is the last step in a three-part strategy to
prohibit bulk water removals from all Canadian water
basins. It reaffirms Canada's commitment to act within
its jurisdiction to prohibit bulk water removals. The
main element is to prohibit bulk removal of boundary
It is very clearly being presented as a solution that
applies to water and the risk to Canada's water
resources across the country. It does so, as this
committee knows, with licensing and prohibitions in
clauses 11, 12, and 13 of the bill.
When you read the sections and you quote small
portions of it, it sounds very good. Upon closer
reading and closer examination, however, there is very
little in the bill to give any confidence in that
Normally, with any legislation I've looked at—and
perhaps this committee is more familiar with it than I
am; I tended to look at water and resource
legislation—the legislation states its purpose and then it
goes on to contain regulatory sections that set out
explicit allowances or exceptions. For example, the
enabling legislation for NAFTA exempts raw logs and
unprocessed fish from the Maritimes.
Exceptions are, in my opinion, never seen as undoing
the purpose of the bill itself. They're simply there
to make specific allowances where the regulations are
not intended to apply.
In Bill C-6 the exceptions are
capable of undoing the entire purpose of the bill.
The minister has given very
generous powers to exempt basically all of the
provisions of protection that are contained in the
bill, and that authority is unfettered, to my reading.
A further problem with Bill C-6 itself is that it
doesn't, of course, apply to waters.... In the
commentary they use the term “waters used as ballast,
humanitarian, and for the production of food and
The International Boundary Waters Treaty talks
about “navigation, domestic and sanitation, and power
and irrigation”. When you see water for power and
irrigation as part of an exemption and you
look at the great concerns of the United States with
regard to energy production and the production of
irrigated agriculture and the exemption for water for the
production of food and beverages and agriculture, that
is of great
Similarly, it is of concern that the definition of
drainage basins can be left to the Minister of Foreign
Affairs. I leave it to others to question why the
Minister of Foreign Affairs and not also the Minister
of the Environment. My background is not in
environment; it's in economics and trade. But that is
a point that I'm sure will be made to you by others.
The definition of the drainage basin is of great
concern to me. You will recall that the voluntary
provincial accord that the provinces were encouraged to
sign almost two years ago used a similar drainage basin
approach. They said that for the purposes of that
accord, there are five drainage basins: the Atlantic,
the Pacific, Hudson Bay, the Arctic, and the Gulf of
Mexico. With drainage basins defined on that macro a
level, we're basically talking about continental
water-sharing schemes. The ability to define drainage
basins without any qualification being solely in the
hands of the Minister of Foreign Affairs is, I think,
I realize why the government has gone to drainage
basins as opposed to borders, but the drainage basins
erase borders, particularly—and I will speak from the
perspective of British Columbia—where you have the
north-south river systems. It applies primarily to the
Great Lakes and does not really apply west of the
Ontario-Manitoba border. It doesn't apply to rivers
that cross the border, and of course it doesn't apply
to coastal outflows. All of these are very serious
concerns when it is being stated that this bill is
going to prevent bulk water removal. If B.C. had
written our water legislation this way, we would have
tankers plying the coast in short order.
To the extent that this bill will work to discourage
exports from the Great Lakes, it would put more
pressure on the rest of Canada, in particular, from
our standpoint, British Columbia, and of course
Newfoundland. To the extent that the bill does reduce
removals from the Great Lakes, it makes the rest of
Canada's water more vulnerable to export pressures.
There are also concerns with regard to constitutional
challenges to the bill. I'm not sure by what authority
the Minister of Foreign Affairs takes over from the
provinces the responsibility for the licensing of
water. I of course understand that the federal government
does have jurisdiction to sign and implement treaties
in areas of federal responsibility, but it's not clear
that this bill was needed to enforce the treaty already
in place. It seems to raise constitutional issues with
regard to federal-provincial jurisdiction over
Gisborne Lake is a case in point, of course. Water
is a resource under provincial jurisdiction under
paragraph 92A of the Constitution. Absent NAFTA,
provinces could safely consider what they were going to
do with the issue of water exports. I've drawn many
times on Dr. Tony Scott's three criteria. He is an
international expert in water issues.
He is an economist at the University of
British Columbia. Way back in 1986-87 when this was
first discussed, Tony Scott said that there are
three conditions that would allow safe public policy
contemplation of water exports. Those three conditions
are, number one, that it would have to be limited to
small-scale exports; for example, tankers. Number two,
the term of the export contract would have to be a
short term, maximum five years. This is of course to
permit reassessment of the damage or the implications
of those exports, what has been learned after the
contract has been gotten into. If the export turns out
to be problematic in terms of fishing, for example, or
other sectors, the government can then step in. The
third condition is to terminate or renew the contract at
the option of the provincial government. So the three
conditions are small
scale, short term, and terminable or renewable at the
Unfortunately, NAFTA strips away the ability of the
province to contemplate water exports in a safe manner.
Under the FTA and subsequently NAFTA, because
water is not given an explicit exemption, such as raw
logs and groundfish from the Maritimes, all of the
conditions of NAFTA apply, including national
treatment and investor provisions. The ability of the
province to terminate that contract is certainly not
If we were to argue that there were overarching
environmental reasons, we would have to share
proportionately. We could not have any price
discrimination between the two markets and we couldn't
cut off normal channels of supply. The IJC, in its own
report on this, recognized these concerns.
We can't safely undertake water export from coastal
sources. We have no opportunity to give a sober second
thought to these sorts of schemes. The rights are
there in perpetuity. The federal government, in signing
NAFTA and the FTA, has really tied the hands of the
provinces in this area. Then we're saying, now save
yourself. It's an impossibility to look at the
implications of Gisborne Lake without addressing the
problem of NAFTA.
The government has said that there was a three-part
strategy: the IJC reference, the voluntary accord, and
Bill C-6. These three planks are the federal
government's answer to the dilemma created by the
failure to exempt water from the FTA and NAFTA.
The IJC found that water exports do create dependency,
that you can't turn them off. There are four
recommendations, recommendations 10 to 13, and the
conclusions that look at the pressures for removals and
exports. There is, of course, recognition of the
national treatment limitations of the agreements.
The voluntary accord failed appropriately, although
there's no real note of that in the background
documents. The legislation of the provinces
can be changed by subsequent governments, and
there is not unanimous consent amongst the provinces on
the approach to take.
Of the three strategies the federal government has put
forward to deal with this, Bill C-6 is the only piece
of legislation we have. Because of the ability of the
Minister of Foreign Affairs and the cabinet to
basically specify exceptions for proposed subsections
11(1), 12(1), and 13(1), there is really no security in
Bill C-6, even though it only applies to the Great
Lakes. It doesn't offer any solutions for the rest of
I appreciate that the government is bending over
backwards to legislate with regard to basins rather
than borders. I can remember my mother saying what a
tangled web we weave when first we practise to deceive.
We've gotten ourselves into a situation, and now we're
trying all sorts of ways to get out, but we're not
taking the only route that will get us out.
This deal has us so cowed we can't seem
to think straight on a public policy level.
We're coming up
with all of these...I don't want to use the words
“smoke and mirrors”, because I realize there's a lot
of dedicated people who try very hard to deal with
the situation we're presented with and try to
come up with some way. But this way is just not
sufficient. It doesn't do it.
We talk about being afraid to say the word
“exports”, and there's been so much misinformation. It is a
complex issue. There is the statement that as long as we
don't export the first drop, we're okay. That's simply
wrong. The statement was that until water enters trade
and becomes a good of international commerce, the trade
agreement doesn't apply. That's not like saying until
we export one chair, then all of our chairs are at
risk. It means a chair is not subject to NAFTA unless
that chair enters into international trade. If the
chair is sold from Manitoba to B.C., obviously it
doesn't apply. If it's sold into Washington State, it
does. That's the same issue with water; it's on a
case-by-case basis. It's not a question of once the first
one happens, all of the rest are vulnerable.
That having been said, it does create
vulnerability for a province. If Newfoundland were to
export water from Gisborne Lake, then under chapter XI,
the best provincial treatment, best in province,
would be argued for other export opportunities.
The U.S. isn't afraid of using the “e” word. The
eight Great Lakes governors were always able to veto
diversions, and there has been an amendment to the
Water Resources Development Act that explicitly
allows them to veto exports. We have to use clear
language on this issue, and we've gotten ourselves into
a dilemma. Of course the flip side of that
amendment is that if eight governors agree, for
humanitarian reasons, or for irrigation reasons, or for
power reasons, or whatever, they can explicitly agree
The problem is that water is a good under NAFTA under
the investment provisions. Of course, water has
entered into commerce. In the early 1990s
there were several sales of bulk water
out of the Columbia system
that were not treaty water, that were beyond obligations
in the treaty. Water is a good and that bridge has
Another concern with respect to Bill C-6 and the
national licensing it entails is that if there is
an exception made under Bill C-6, that exception becomes
the floor or baseline for all of Canada because
provincial treatment then becomes national treatment.
If you had a bunch of individual provincial standards
and you raise that up to one national standard by
putting in a licensing scheme, then it would certainly
be argued, likely successfully, I would argue and as I
am advised by people who are involved in
constitutional trade law, that you could place other
water at risk.
So while this legislation would perhaps provide some
benefits to reducing removals from the Great Lakes if
all of the problems we've talked about, I've
talked about, were not raised, it offers no protection
to the rest of Canada's water and it makes the problem
worse for some of the provinces. The image that keeps
coming to mind is I remember the child's fable about the
emperor who was going to produce this beautiful suit
of clothes. He went to his tailor and he was told
this was the finest, most beautiful suit. He looked
down and he was stark naked and nobody would say it.
The Chair: In our committee the emperor is the
parliamentary secretary, so you can address your
remarks to him. And believe me, you do not want to
encourage this line of inquiry.
Ms. Wendy Holm: If this bill is being put forward
as the way to save Canada's water resources, it
is a very serious, very noble, and very worthwhile
purpose, but it does not do it. It is like the
emperor's new clothes: it just does not do what it
says it's going to do.
There is a lot of static.
The Chair: Go ahead, Ms. Holm.
Ms. Wendy Holm: I would close my remarks by urging
this committee to take the leadership I think is
required, that I know as a professional, as an
agrologist, as a Canadian, as a mother, is required
with respect to this dilemma we now find ourselves in.
There are four points to the strategy, four corners,
four legs to the stool, of what must be done to resolve
the dilemma we have been placed in because of the
failure to exempt water from the NAFTA and the FTA.
In the material I provided to the committee, there is
a briefing note, “4 Steps”. The first step is
that Canada—and I realize there are problems with
this—must place a federal moratorium on all water
exports in vessels over 20 litres until we have a
solution to this dilemma.
When Sun Belt's NAFTA chapter XI challenge is filed,
and we are hearing all sorts of noises from California
that they are moving forward with this, we have to put
the United States on notice that we do not recognize
the jurisdictional authority over water. We must seek
an explicit exemption for water from all provisions of
the NAFTA: goods, services, and investments.
I'm really glad. When we raised this issue back in
1987 every politician worth his or her salt stood up
and said, no, water's not included; no, it's not
included; no, it's not included; water's not included
in the trade agreement. Pat Carney said it, John
Crosbie said it, and everybody on record said it.
Because we never put it on the table, the exemption
isn't a renegotiation; it's simply a clarification.
If we say to the Americans, we need this exemption or
we have to walk from the deal, I guarantee you the
Americans would give us the exemption. America moves
in her own interest. The trade agreement plus water,
or the trade agreement, is way better, as far as the
Americans are concerned, than no trade agreement at
We have to be prepared to go nose to nose with the
Americans on this. We have to be prepared to play
hardball on this. This is really the only way
to solve it. It is the only way to solve this problem.
We are going around and around with all of these
things trying to create a solution, and it's not
working. The only way is to exempt it from the NAFTA.
Then we need of course a federal water strategy to put
in place the kind of regime with respect to the
management of our water resources that looks at
conservation and protection.
The Chair: Thank you very much, Ms. Holm.
I apologize to you for the short notice you got. The
bill's been around for a long time, so we felt the
community that was interested knew about it. We got
short notice in terms of being able to get people out.
But we appreciate very much your coming all this way. I
want to assure you that you've raised some interesting
things and we'll come back to your specific testimony.
We had the Council of Canadians here the other
day. There are a lot of people drawing to our
attention the level of the relationship between the
free trade agreement and the way it inhibits things,
the way you have. So we are getting that message. We
appreciate you taking the time to come all this way to
join us for that.
Before I go to Ms. Elwell, colleagues, we have one
small housekeeping matter. We have an application from
the trade committee for approval of a travel budget to
go to Washington to discuss softwood lumber, which is
yet something else we are discussing with our American
colleagues. I understand from Mr. Harb that this was
approved unanimously in his subcommittee—all parties
were in favour. We'd like to be able to take it
through our subcommittee this morning so that we can then
take it to the House this afternoon.
An hon. member: So moved, Mr. Chairman.
The Chair: Do we have any trouble with that budget,
colleagues? No. Thank you very much.
(Motion agreed to)
The Chair: I take it it's approved unanimously. I
Mr. Harb, you got your money and now you
can go to Washington.
Mr. Mac Harb: Thank you very much, Mr. Chair.
The Chair: Tell them we want our water, too, while
you're down there.
Mr. Mac Harb: Absolutely.
I would note, Mr. Chair, that in some of
the caucuses there might be some members who are very
interested in participating in the trip.
We'd be more than happy to
try to accommodate anyone interested in being part of
the group, whether part of the committee or not. We
would work with them. They can use their own means to
travel there, but we will help them while they are
The Chair: Can you use your—
Mr. Mac Harb: Travel points.
The Chair: You can't use the House travel points,
but you could use the points you've accumulated by
going say to Washington, as long as you go Air Canada
or something like that.
Mr. Mac Harb: Yes. We would work with them on
The Chair: Thank you very much.
Mr. Mac Harb: Thank you.
The Chair: Okay.
Ms. Wendy Holm: Mr. Chairman, might I inject
something very briefly?
The Chair: Yes, Ms. Holm.
Ms. Wendy Holm: With respect to softwood lumber,
you might want to look at the minutes of this committee
in 1987, when Ian Sinclair chaired it.
I appeared before this committee and argued that a
market imperfection is not a definable government
subsidy under the terms and conditions of the GATT as
defined at the Tokyo Round. All of the bureaucrats
were very excited by this. The testimony fully
elaborates this issue, and it's a card we're not
playing; so you might look at your own committee's
records on this.
The Chair: Thank you. We appreciate that.
Unfortunately, as you know, the problem is we have to
persuade the Federal Trade Commission down in the
States, and they only seem to drink their own bathwater,
having a meeting of the Canada-U.S. parliamentary group
this weekend. Believe me, on softwood lumber, the
water issue—as you pointed out, we need the Americans'
cooperation. We want to bring them in too. We have
solid allies in the United States for dealing with
water in an intelligent way and we have to make use of
them as well.
Thank you very much for your recommendation.
Mr. Pat O'Brien (London—Fanshawe, Lib.): There
are no softwood cards we are not playing, I can assure
you of that.
The Chair: Exactly.
Ms. Elwell, we'll go to you, and then we'll open
it for questions.
Ms. Christine Elwell (Senior Policy Analyst, Sierra
Club of Canada): Thank you very much, Mr. Chair. My
apologies for my unavoidable delay this morning and
for interrupting Wendy Holm's testimony.
I'm with the Sierra Club of Canada, a national
environmental group with five regional offices
across Canada. We're involved in all water issues.
For the record, we'd be very interested in
participating in discussions with respect to softwood
lumber. Our view is the softwood lumber agreement
should be extended and expanded. We're not in favour
of free trade in softwood lumber. An exemption for the
Maritimes is inappropriate. And finally, to say that
export controls is a countervailable subsidy by the
USTR is simply beyond belief. So if we have a
chance to let you know our views with respect to this,
we'd be very grateful.
We have been engaged in water issues at the
provincial, national, binational, and North American
levels. I've filed with your clerk a recent paper
we've done for the North American Commission on
Environmental Cooperation called NAFTA Effects on
Water. It is now posted on their web page in the
three official languages—not as yet but
shortly—in French, Spanish, and English.
In this paper, we review a number of points from an
environmental perspective. We review the current state
of the unreliable scientific information that forms the
basis of current water removals and use projects in all
the jurisdictions within the Great Lakes. These
decisions are based on old 1993 water levels and flows
inventories that don't take into account scientific
change, climate change, and NAFTA economic
developments. The data that current use is based on is
Secondly, we review current climate change impacts to
the Great Lakes showing a 2.5-foot drop in lake levels
by 2030, a mere 30 years away. The urgency of
conserving this exhaustible resource is certainly upon
We also review the trade aspects of NAFTA, GATT, WTO,
and investor-state mechanisms. I won't go into it
because I take it you had quite a bit on this
yesterday, and Wendy's touched on it today as well. But
our general conclusion in the paper was that the
current exceptions in the regimes on prohibitions of
water removals and use, and triggers for notice of
withdrawals, all hang on a legal fiction.
This legal fiction pertains to the exemptions for
water incorporated into products such as agriculture,
used in services such as hazardous waste treatment, and
used in bottling. All of these exemptions are in fact
huge loopholes where water is being used and removed
from the basin. And I'm afraid there's nothing in Bill
C-6 to defog this legal fiction that somehow water
incorporated into products and agriculture and industry
is somehow not a removal, even though it leaves the
The number one gap we found in current regulation of
water in the Great Lakes area has unfortunately not
been closed in Bill C-6.
I also file with you today a paper—
The Chair: Sorry, to interrupt you, but this was a
point I think Ms. Holm made. Perhaps we could help
clear it up right now...well, obviously, others will
We were told by our experts that in fact when water is
used for power generation or agriculture, it doesn't
leave the basin, because it's incorporated in the
the basin's overall ecological system. In power
generation it obviously goes back into the
river—that's not so complicated. In agriculture, some
will be evaporated and so on, but I understood the
whole point to be that it wasn't leaving the basin.
Now Ms. Holm—for the first time out of all the
witnesses—told us this morning that the minister's
permit would allow the export of water for the purpose
of either agriculture or power generation. We've not
heard this from any other witness. We've heard from
our government witnesses that the permits given by the
minister deal with issues like uses in Canada, such as
water for the city of Toronto, running it through,
or the use...in Canada.
In the history of Canada there's never been a permit
for the export of water out of the basin on the basis
of a minister's permit, unless the Chicago drainage
canal would be covered—I don't know.
You and Ms. Holm have introduced a totally new concept
here. Looking around the room, everyone seems to
agree. We'd like you to—
Ms. Christine Elwell: The International Joint
Commission's final report goes through this quite
clearly. Water incorporated into products such as
agriculture—and it's not only evaporation.... Water
goes into your tomato and might go to Europe. It
leaves the basin. Now you might say one tomato, so
what? But the numbers are staggering. Or water used
in slurries—as, for example, the situation in Kingston
with the taking of the Tay River—while it's combined
with maybe 5% of this chalky substance for paper, 95%
of it is water, and it's going out in huge tankerfuls.
So there's this legal fiction that the IJC, Bill C-6,
provincial legislation all have that says—
The Chair: Yes, okay, I hear—
Ms. Christine Elwell: It's a real issue here that
we're not dealing with.
The Chair: Okay, now I understand that point.
I have to tell you I have a little problem with it,
because we drink a lot of water ourselves. I think
we're 98% water. So when we go across the border,
we're exporting the water, if lots of us go. I don't
think we should let the committee go, because they're
going to take too much of our water with them. I have
some problems with that.
As long as I understand it's incorporated in the
product.... Ms. Holm's point was more that this might
allow for the export of actual bulk water. The United
States might say we need a lot of water for a
generation project, something like the Columbia River
basin negotiations, or a similar thing.
Ms. Wendy Holm: May I make a brief comment, since
you asked the two of us on this one?
The Chair: I'm now interrupting our question
period items. I was only trying to get it clear in my
Ms. Christine Elwell: Two quick follow-ups
from that, Mr. Chair.
First with, respect to electricity, while you might be
returning the water, it's not in the same state.
Often the temperature is escalated and it upsets and
disrupts the ecological function.
Second, when you look at Bill C-6, no licence is
required for normal municipal use, or for agriculture,
or for industry. So it's not that the minister can
issue licences that would incorporate water leaving the
basin; no licence is required at all. It's even worse.
I can show you.
The Chair: No, that's helpful. We're just trying
to understand. I'm certainly not being critical.
Ms. Christine Elwell: Our main discovery for the
CEC was this huge gap that allowed all sorts of water
to be taken out of the basin and not accounted for. So
we were very pleased to find out the Great Lakes
Commission, as well as the IJC, was actively engaged in
a scientific project to do a water-levels inventory to
really get a handle on how much water is there, how
much is leaving, good science. Based on good science
you could develop appropriate policy.
All I'm flagging is that today, the way it is now,
we're not using reliable data. We're not accounting
for real removals in products and Bill C-6 doesn't
close this gap.
In addition to this paper, I also leave you with our
five environmental reasons to oppose the FTAA, which we
launched in Quebec City, and which also contains a
section on water.
In the short time I have with you today, I'd like
to emphasize the environmental aspects of the bill in
three main ways. The first way is to agree with the
Being framed as an environmental measure, the
prohibition on removals is being framed as
environmental protection, and we strongly support this
approach. While reasonable people can disagree whether
a ban on water removals in the natural state triggers
trade and investment obligations, the best way to
manage this risk, according to our thinking, is to
clearly and firmly describe the measures as
conservation measures of an exhaustible natural
In our NAFTA Effects on Water paper, we outline
the grounds to doubt the renewability of water, based
on climate change modelling and based on the fact of
water pollution from intensive livestock operations,
hazardous waste, all sorts of things. In effect, water
pollution is like a removal: you no longer have the
same use of it as you did before.
The best counter to trade obligations is in fact that
this is an environmental measure. If we're wrong that
this won't trigger some trade obligations, and if they
do, our best hope is to rely on the exemptions you find
in trade agreements—for example, article XX under GATT
incorporated into NAFTA, or the provisions of NAFTA.
And to be able to get coverage under those provisions,
you need to show that you're not only putting
conservation on the table for others, but you're also
putting it on the table for yourself. So incorporating
some conservation measures within Bill C-6 would
bolster the tone of it being environmental protection
With respect to NAFTA, we know we don't have the
luxury of these general exceptions. The general
exceptions of GATT are not incorporated into NAFTA's
chapters on services or investor rights. The solution
we provided to the CEC was that we need a binational
executive agreement that would list water protection
under 104 of NAFTA as a multilateral environmental
agreement. Under that agreement, you can have
bilaterals, and there are six of them. Three of them
between Canada and the United States list a water
protection executive agreement under 104, which would
give you coverage from the obligations under services
and investment. In that sense, you would have the
luxury to clearly be able to discriminate between in
and out of base in uses and proponents.
There are a number of ways I would suggest you might
modify Bill C-6 to better capture the environmental
content of this initiative. There are a number of
modifications we would need to make.
Number one would be instead of or in addition to the
Minister of Foreign Affairs being in charge of
licensing and approving exemptions for prohibitions on
water removals, the Minister of Environment ought to
play a lead or at least cooperative role in this
regard. When you look at the Quebec legislation, this
is what they've done: it's the Minister of Environment
who approves any exceptions, not the business side of
Another modification we would make, as Wendy
indicated, is we would narrow the scope of water base
to include individual watersheds within the lake or
within the river.
We would insist upon some conservation measures in the
bill itself to trigger that this is indeed an
environmental protection initiative, which would
bolster your chances should there be a trade challenge.
We would also ask that all regulations and licensing
that exempts the prohibition on water removals be
subject to the Canadian Environmental Assessment Act.
We would also suggest the removal of the presumption
that agricultural, industrial, and municipal uses have
de minimis impact and are therefore not covered
by licensing. There's no credible reason to believe
that there are no environmental impacts related to
those uses, whether cumulative or individual.
We would remove the presumption that exceptions are
reasonable with respect to ballast water, bottling, or
water incorporated into products.
On ballast water, may I make a plea that if not in
this bill, there needs to be federal legislation on
ballast water. Indeed, the call is to have a
binational agreement. If you can find some opportunity
to do some work around that, that would be very much
appreciated. The invasive species issue around ballast
water and ships is critical, and the moment is now to
try to engage in a binational discussion. A patchwork
of provincial regulation or non-regulation is just not
Another major recommendation we would make is with
respect to the scope of the bill. It must include
provincial obligations. The federal-provincial accord
leaves too much room to the provinces to increase an
unsustainable use and removal of water. Recent Supreme
Court of Canada decisions have reaffirmed the federal
role in environmental protection. This resource,
water, is clearly an important resource, where there's
a federal need.
Each provincial jurisdiction allows these same huge
loopholes I've indicated, with cumulative impacts based
on administrative regimes that lack the capacity and
often the will to protect the water. In our paper we
give you the example of Ontario taking water from the
Tay River. We expose the lack of capacity with the
Ontario government to actually be able to manage the
environmental impacts around that.
So leaving it up to the provinces will not get the
environmental protection we need. Without environmental
protection of the water enshrined in federal
legislation, we open up our vulnerability to trade
I guess I have one last comment before we get to the
questions. Again, we look for the results of the Great
Lakes Commission and the IJC's scientific reporting on
inventories of water levels and flows. It's that basic
science you need to be able to put together a
comprehensive and workable document and legislative
framework. So I guess my final comment would be to
please keep in mind to review this. We expect results
within maybe two or three years. Keep an open mind
that you may need to re-examine this. It's likely
you'll have to toughen it up.
Those are my comments, and I'm here to answer any
questions you have. Thank you very much.
The Chair: Thank you very much, Ms. Elwell. We
I hope your colleague is well.
Ms. Christine Elwell: I'm looking for her. Is she
The Chair: If you can see her from the window,
give her encouragement from us.
Mr. Casson, sir.
Mr. Rick Casson (Lethbridge, Canadian Alliance):
Thank you both for being here.
Ms. Holm, there's an agrologist in southern Alberta,
Roger Holm. Is he a relative of yours? It's spelled
the same and everything.
Ms. Wendy Holm: No—not that I'm aware of.
Mr. Rick Casson: Interesting.
You made some very interesting comments. I'll
ask you to clarify some, and maybe just go over....
You've indicated that the voluntary accord that was
sought, I guess with the provinces—is that what you
Ms. Wendy Holm: Yes.
Mr. Rick Casson: I'd like you to maybe explain
that a little bit further.
You also said that NAFTA bound the hands of the
provinces to do anything.
Ms. Wendy Holm: Yes.
Mr. Rick Casson: Maybe a little more on that.
What one province does as far as water exports would
not affect another province, or would—
Ms. Wendy Holm: No, it would not.
Mr. Rick Casson: I needed some clarification.
On this whole business of licensing, we've talked quite
a bit at the committee about that. You indicate a real
concern that a licence could be issued. We're talking
about food production, power production. So your
concern is that licensing would allow exports of
Ms. Wendy Holm: Yes.
Mr. Rick Casson: Okay. Then maybe just something
Mr. Chairman, I don't know how much time she'll have
for all of this, but....
On the definition of “natural state”, water in its
natural state, what is that? Of course we heard the
other day that the five drainage basins are indicated,
but that there is a border between the countries, and
it divides the basins. I think you indicated that it
does not. You felt that the entire basin would be part
of the system. Anyway, I'll leave it up to you to....
Ms. Wendy Holm: Okay. Let me try to go through
The voluntary accord I was speaking about was the one
when the provincial environment ministers were closeted
in Alberta two years ago, I believe, the fall of 1999.
The federal environment minister presented to them an
accord, which he was trying to get their consent on.
That accord failed. They did not sign it. It was a
good thing they didn't sign it, in my opinion, because
it was the drainage basin approach. First of all, it
was voluntary, so there was no continuity or certainty.
And secondly, it relied on macro drainage basins, five
drainage basins, so British Columbia and California are
in the same drainage basin under that definition. So
it actually permitted north-south transfers of water;
it enabled north-south transfers of water.
The background material for this refers to this accord
and says the provinces are still moving toward that. I
don't believe there is unanimity on that approach. And
it is voluntary. And no matter what the provinces
say, it doesn't change the federal treaty obligations.
On binding the hands, again, absent NAFTA or the FTA,
Gisborne Lake.... If the people of Newfoundland decided
that they wanted to contemplate water exports through
supertankers, and they did it in a wise and judicious
manner, which I think would be following Tony Scott's
three recommendations—small scale, short term,
terminable or renewable at the province's option—after
you keep looking at this and asking, does this make
sense, okay we'll try it, does it still make sense,
then those three options would make it safe to try.
Our province has taken a different approach and said
no, but that's a provincial matter.
The feds have bound the hands of the province, in that
the province can't go back with a sober second look at
this; they can't terminate or renew at the province's
option because of the rights conferred in the trade
agreement, as long as there is a willing buyer and a
willing seller. And particularly with water, because
of the dependencies that are created, the government
can't come in and disrupt that.
I could go on for a long time on that one, but it
basically binds the hands of the province to undertake
this safely. It says you can go but you can't stop.
It's like putting somebody in a car with an accelerator
and no brakes.
With respect to food production, you have to remember
what the Americans' priorities are. Fair enough, water
for irrigation is a hugely important priority for the
Americans. Similarly, power. If you look at the
Columbia Treaty, the Columbia Treaty is about providing
irrigation water to the million acres in the Columbia
The actual wording of the government's own background
papers on this talk about imposing a prohibition on
removal of boundary waters out of their water basins.
It says that exceptions will be considered for ballast
water, short-term humanitarian purposes, and water used
in the production of food or beverages—e.g.,
irrigation. That's an exception to the prohibition on
removals out of water basins. So the issue is not only
irrigation within a basin; it is with respect to
outside the basins.
If you look at the International Boundary Waters
Treaty, article VIII:
The International Joint Commission
shall have jurisdiction over and shall pass upon all
cases involving the use or obstruction or diversion
of the waters....
This was about managing these waters. It gives the
order of precedence: domestic and sanitary, navigation,
power, and irrigation.
When we use the words “used in the production of the
food”, it sounds so nice, but we're really talking
about irrigation, and some very large-scale irrigation.
If you look at the factory farms in the United States,
you're talking about very large irrigation needs. I'll
give you an example. I'll go to Alberta and we'll
forget about Bill C-6 for a moment.
One of the things we've always argued is the problem
is the Americans can turn on the tap. Let's say we
undertake an irrigation project in one of the western
provinces to provide irrigation water to Canadian
farmers. Because of climate change, because of many
reasons, the province may decide we're going to bring
this land into irrigated agriculture.
The American farmers across the border would be
entirely within their rights to say “We have done
these studies and have decided you have enough water,
really, for both of us if you build this dam higher,
if you do this, if you do that. We will provide the
money to increase the size of the project and bring it
Our farmers would like to share in this
resource too. You can't undertake this simply for the
benefit of Canadian farmers. We would like to share in
the benefit of this. So we want to see this be a
larger project. If you're going to give irrigation
water to Canadians, you can't just give it to Canadians
if Americans want it as well.”
The production of food is very political, and
irrigation and agriculture certainly have a long-time
interest in water from Canada. The wording of the
International Boundary Waters Treaty I just read to you
and the wording of the government's own background
paper recognize that irrigation would be a possible
exception for the prohibition of removals from drainage
You talked about natural state. A river in its
natural state is one that is not.... With the Columbia
River prior to the Columbia Treaty—let's forget about
the other little dams in it—a certain amount of water
was delivered into Washington State from British
Columbia in its natural state. Unfortunately, the
river had huge freshets in the spring and then dropped
down to nothing in August. So there was no
irrigation—it was heat, wheat, and rattlesnakes. The
Columbia Treaty asked Canada to impound that water and
deliver it when and as the Americans needed it. That
took the water from its natural state to a good. When
you deliver that water on time, it becomes a good,
because there is a benefit from the delivery on time,
as opposed to over time, and the difference between
natural state and a good clearly has to do with capture
in that situation.
Drainage basins erase borders. The issue is Canadian
sovereignty over water resources. When you argue a
drainage basin in a country like Canada, the drainage
basins cross the borders. If you say all of this can
be within the same drainage basin, you have, in effect,
erased the border on a policy level in respect of the
management of that resource—not to say that the
integrity of drainage basins is not important. We
share a drainage basin with California. If you're
going to say that movements of that water within
drainage basins is fine, then you facilitate the
continental sharing of water resources. Water has been
on the top of the U.S. Army Corps of Engineers' wish
list since the early 1950s.
We have found ourselves in this dilemma where we are
spinning our wheels, getting into how many angels dance
on the head of a pin with this kind of thing. We need
an exemption from NAFTA. That's really the only thing
that's going to fix this. Then the province can decide
to look at water export proposals like Gisborne Lake
safely. They can also call them back if they don't
work. They can charge a price for it under NAFTA and
FTA. If the Americans have a right to buy it, how much
leverage does the seller of that have?
The Chair: Thank you.
Ms. Wendy Holm: I think that was all the
The Chair: Madam Lalonde.
Ms. Christine Elwell: Could I just make a quick
comment on that?
The Chair: I'm sorry, this has gone way over the
time. We have a rule here, and everybody wants a
chance to ask questions. If we allow one question to
lead to a 20-minute answer, then the others can't get
Ms. Christine Elwell: What about one sentence for
The Chair: One sentence.
Ms. Christine Elwell: The National Post says
the accord has been rejected by Quebec, British
Columbia, Alberta, Saskatchewan, and Manitoba.
The Chair: Thank you. That's the voluntary accord
Ms. Holm was talking about.
Ms. Christine Elwell: The federal-provincial
The Chair: Is that the same thing as the Canada
Ms. Christine Elwell: Yes.
The Chair: Anyway, we'll get an answer to that.
Ms. Francine Lalonde: Thank you very much for having
travelled so far to be here today. You only had a short time to
prepare for this meeting. I would therefore like to thank you for
your two presentations, that I intend to reread several times.
They complement each other.
I would like to come back to the issue of basins. This is a
technical question but one which could become a political one. What
do we have to do to ensure that the definition of basins does not
take into account areas south of the border?
Ms. Wendy Holm: You can't prevent it the way in
which it's being approached currently. The only way
you can prevent it is to accept the fact of the trade
implications of water and deal with it from a sovereign
basis on the trade level. You can't do it with a
drainage basin approach. It is impossible,
Ms. Francine Lalonde: If I understand correctly, basins
necessarily include those areas which may be south of the border.
Ms. Wendy Holm: In fact, the provincial accord
cited five major drainage basins: the Gulf of Mexico,
the Atlantic, the Pacific, Hudson Bay, the Arctic. That
enables continental water sharing along those drainage
Ms. Francine Lalonde: You're talking about the Joint
International Commission. I have read the recommendations and I was
struck by the fact that they were tabled by the provinces and the
American States. Four of the six recommendations, including those
dealing with exports and water conservation, were put forward by
the provinces and individual American States, whereas those dealing
with data collection for water measurement as well as those dealing
with research and development were tabled by individual American
States. The remaining recommendations, including those dealing with
the actual issue of bulk water exports, for example, came from the
provinces. The reason which has been put forward to explain this is
that everything will be dealt with in a coordinated and timely
fashion. There was a third adjective there but I've forgotten what
When you read the recommendations, you will see that measures
for conservation and also measures designed to ensure water quality
have been built in. In terms of the definition of provincial
jurisdiction—Im not talking about individual American States'
jurisdictions here—water, as a resource, belongs to the provinces.
If I am not mistaken, any attempts to link conservation and water
treatment to exports, must be referred to the provinces. Under Bill
C-6, the federal government is amending the implementation of the
treaty and not the treaty itself. Therefore, the government is
required to act within the confines of this treaty. This is why I
believe that Bill C-6 puts us in a vulnerable position. I said
that, before you did. Thats why I was smiling. The Joint
International Committee and the treaty can be used as a foundation
on which to build preservation and conservation measures. It's for
this reason that I am amazed to hear recommendations calling for
obligations to be imposed on the provinces.
I will wrap up here. I would like to hear your comments and
any information that you could provide us on this. I believe that
asking the federal government to take steps to provide better
protection is not a good idea because past experience has shown us
that this doesn't in fact work.
I wanted to give you three examples here. The government
failed to provide better protection on the issues of fisheries, the
unemployed and international negotiations. Consequently, I would
have more confidence in the approach set out by the Joint
International Commission, whereby the federal government would have
only very restricted input. The Joint International Commissions
approach would give the minister, as you have pointed out and as I
did in what I have said, very major discretionary powers.
Ms. Wendy Holm: I think it's clear that water is a
provincial jurisdiction. This is why a federal water
strategy, which died on the order paper almost 12 years
ago now, looked at trying to balance the
federal-provincial jurisdictional issues and consider
the rights of the province to enact water policy within
a safe policy framework.
The problem is that NAFTA makes a safe policy framework
impossible for the provinces to undertake, and so you
have to do the two things.
British Columbia is a case in point. We banned water
exports. We paid out the person who held the licence
in British Columbia, and the chapter XI, we are told,
is going to be coming forward, and as far as I can see,
they are legitimately coming forward. It challenges
the right of the province to act in a way that is
inconsistent with the federal treaty. Of course, we
can say no, as long as we compensate and compensate and
compensate and compensate and compensate. We're
putting the water at risk or the taxpayer at risk, and
that's an impossible dilemma.
We have to bite the bullet and say, look, the problem
is water's inclusion in NAFTA. We're doing all these
things to try to not say the word “water”, not say the
word “export”. It's silliness. We simply have to get
water out of the NAFTA. We have to get an exemption.
Ms. Francine Lalonde: Would you and Ms. Elwell elaborate
further on that? It is the first time that I hear the request
worded in that way. I find it hard to swallow. What rationale can
be used to ask for something like that, other than a relationship
Ms. Wendy Holm: We have a six-month out-clause.
Out-clauses are in agreements to ensure that the
agreement stays fair. Particularly when you have one
party that has more power than the other,
out-clauses are a very important way of ensuring that
the agreement remains fair. We have an out-clause in
the NAFTA and in the FTA. As I said, everybody stood
up and said water is not included. They told the
Canadian public water is not included in the trade
agreement, and that is on record. It was very publicly
stated by our subsequent trade minister.
Surely, Chrétien can go back to the United States and
say we have a dilemma here. Our politicians didn't lie
to the Canadian public. We clearly did not intend to
have water included, and if by some jiggery-pokery it's
in there, we've got to fix this. This is not a
renegotiation, this is a clarification. We are on
record as not wanting to include water. We've got to
fix it, or we have one other option. Then we have to
turn our back on the Americans and let them rage for a
while, but in the end they would do it. What an
empowering thing for Canada to do, to get this one
right. It creates the opportunity then to go forward
in other strong areas. It is leadership we need at the
federal government level.
Ms. Christine Elwell: May I make a comment too?
The basis in NAFTA for exceptions is weak. We have the
1993 statement of the three amigos saying water is not
on the table, yet the same day the USTR issued a press
release saying nothing in that statement changed a word
of NAFTA. So there is a debate on how effective the
statement is by the three governments, when they signed
NAFTA, that water is not on the table.
I think one option is, as I've suggested, a bilateral
executive agreement, using 104 of NAFTA. Call this an
environmental agreement, throw it under 104, and test
to see whether an exemption would work. The intent is
to exempt not only trade obligations and goods, but
also services and investment.
The other provision of NAFTA you could rely upon
perhaps is 1131 in the investment chapter—and I know
Chairman Graham knows this provision. This allows the
free trade commission to clarify NAFTA law for the
purposes of investor-state disputes, and in that
clarification you could say water is not within the
scope of investor-state disputes. It's clearly in the
NAFTA agreement. It has never been tested yet. So
there are a couple of options.
May I just comment on your concern that maybe the IJC
recommendations are the best, and you wonder why
they're directed at the provinces so much? I just
Ms. Francine Lalonde: I understand why, but I would like to
know what you think about it.
The Chair: You're well over the ten minutes, so
please complete this one, because we've got to move to
the next one.
Ms. Christine Elwell: Very quickly, the IJC
recommendation is really not good enough either. It
basically says that as long as there's no more than 5%
taken from the Great Lakes, it's assumed to be a
non-impact.... This is based on data that's old and
reliable. Five percent of an ever-diminishing resource
does not for a sustainable system make, so I wouldn't
rely on the IJC recommendations either. I think you
need to have a new binational accord that seriously
looks at this and tries to carve it out from trade
obligations as best as you can.
The Chair: Thank you.
Mr. Keyes, and then I'll go to Mr. Comartin.
Mr. Stan Keyes (Hamilton West, Lib.): Ms. Holm,
for clarity for myself, is it water in its natural
state that you want excluded from NAFTA?
Ms. Wendy Holm: I want water exempted as a good
from the goods, services, and investment provisions of
NAFTA. I want 2201.9 exempted.
Mr. Stan Keyes: I want to make it clear, because I
think it's important, that back in 1993 it was made
quite clear in a joint statement that water in its
natural state is exempt from NAFTA—
Ms. Wendy Holm: Of course.
Mr. Stan Keyes: —and only when it becomes a
product is it then subject to these....
I want to make that clear for anyone who's listening
in on our committee today.
Ms. Wendy Holm: Just to clarify, the way the
exemption would be done is to put 2201.9 on the
Mr. Stan Keyes: There is an exemption.
That's my point.
Ms. Wendy Holm: No, there is not an exemption.
Mr. Stan Keyes: For natural water.
Ms. Wendy Holm: No, there is not. I'm sorry, I
don't mean to disagree with you, but there is
absolutely no wording in the trade agreement that—
Mr. Stan Keyes: All right, we'll agree to disagree
on that point.
The Chair: It sounds to me like you're
Mr. Stan Keyes: We'll agree to disagree.
Ms. Wendy Holm: Well, it's fact.
Mr. Stan Keyes: For greater clarity, Ms. Holm,
you said 87% of
Canadians are opposed to the export of water.
Ms. Wendy Holm: Yes.
Mr. Stan Keyes: What is your source for that
Ms. Wendy Holm: I sat on a committee called Water
Watch Canada in the 1980s, which actually included
the now Governor General and others. We took a poll of
the Canadian public—I can't remember now whose
poll it was—and on the basis of that poll, 87% of
Canadians opposed water exports and would think very
unfavourably of any government that allowed them or
Mr. Stan Keyes: Okay, so we're talking about a
poll that is ten years old.
Ms. Wendy Holm: Actually, it's probably 13 years
old, but I would suggest that it is more of concern
Mr. Stan Keyes: It depends on how the question is
put, and so on. But that aside, Ms. Holm, which of the
regulations would, in your words, have the potential of
undermining the bill, and how many of these regulations
Ms. Wendy Holm: When you say “regulations”,
you're speaking about...?
Mr. Stan Keyes: You said that the regulations
have the potential of undermining Bill C-6.
Ms. Wendy Holm: Right.
Mr. Stan Keyes: I'm asking, which ones are they,
and how many of them are there?
Ms. Wendy Holm: I'm going to answer that question,
but I would just like to go back, because it's really
not a disagreement.
NAFTA comes into effect jurisdictionally when there is
a buyer and seller. Nobody buys and sells free-flowing
rivers. Free-flowing rivers are not exempted in the
NAFTA; it's just that NAFTA has no jurisdiction over
The word “water” is not mentioned in there. It's
simply that there's no jurisdiction when there's not a
buyer and seller in an act of commerce. It is when
those occur that NAFTA applies.
With the regulations, there are two sections. One is
under proposed paragraph 21(1)(d):
21.(1) The Governor in Council may, on the
recommendation of the Minister, make regulations
(d) specifying exceptions to the application of
subsections 11(1), 12(1) and 13(1);
Above that I also mention proposed paragraph
21(1)(c), describing the water basins or how those
water basins are defined.
Proposed sections 11, 12 and 13 all state
explicitly as well that they do not apply to the
exceptions specified in the regulations. But those
exceptions are not specified; it's just the power to
create an exception that's specified in the
regulations. So it's pretty wide open.
Mr. Stan Keyes: So you feel that we could actually
sit down and define each possible occurrence that the
need to look at in order to provide an
exemption if necessary or not necessary?
Ms. Wendy Holm: I think exceptions allow the
minister to completely undo the purposes of the bill.
That is my opinion.
Ms. Christine Elwell: Correct.
Mr. Stan Keyes: But you're assuming that a
minister would want to undo the purposes of the bill.
Ms. Wendy Holm: Well, I think, with all due
Mr. Stan Keyes: The minister wouldn't be a
minister long and wouldn't be part of a government very
long if they started undoing everything they wanted.
Ms. Wendy Holm: That provides no real policy
Mr. Stan Keyes: There has to be some latitude
here. We can't be listing every possible occurrence
that might take place. It's an impossibility. There
has to be trust in your government and cabinet.
Ms. Wendy Holm: It is very unusual for legislation
to envisage undoing that legislation completely.
The exceptions are usually thought of as specific—
Mr. Stan Keyes: Ms. Holm, I just can't agree with
your idea that this kind of occurrence would happen.
In your Newfoundland example, you stated that
Newfoundland could start to export its water, and then
there should be opportunity to revisit the particular
deal, or whatever, with wherever this water would be
exported to, as long as it wasn't a smaller amount, and
so on, and be able to revisit it again and again in
order to evaluate the impact, and so on. But what
you're talking about there is provincial jurisdiction.
You went on to say that it sounds as though the
federal government then can't step in, in order to do
something about that situation.
Ms. Wendy Holm: No. What I was saying is that the
federal government has tied the hands of the province
in that it cannot undertake the actions in the
interests of the province to stop those water exports
once they start. Once they start—and the IJC
certainly even recognizes this in its own—
Mr. Stan Keyes: But we can't do that now.
Ms. Wendy Holm: I could go into much more detail,
if you want.
Mr. Stan Keyes: The
federal government can't step in now.
Ms. Wendy Holm: It's not the federal government
stepping in. Absent FTA and NAFTA, the
province had all sorts of policy options to deal with
contemplating small-scale export, entering into it,
and, if it didn't work, stopping it.
The federal government, by signing NAFTA and the FTA
and not including a specific exemption for water, has
removed the ability of the province to step in and,
with due sober second thought, turn that tap off if it
no longer makes sense.
Under NAFTA and FTA, the rights to keep that tap on
are between the buyer and the seller. What that does
is put public policy at extreme risk. A province
cannot contemplate an export, because exports are
Mr. Stan Keyes: Well, Ms. Holm, I appreciate you
coming and I appreciate your presentation, but I think
many of your arguments are based on leaps of logic.
Ms. Wendy Holm: I know this deal very, very well.
Mr. Stan Keyes: But unfortunately, in my
humble opinion, many of your arguments are based on
leaps of logic. I think we're going to agree to
disagree on a lot of what you said.
Ms. Wendy Holm: Had I had more time, I could
certainly refer you to many papers that go chapter and
verse, and article and clause and subclause, into all
of the reasons why what I'm saying now in summary is in
Mr. Stan Keyes: Okay.
In conclusion, Mr. Chairman, just as a statement, this
bill has been around even since the last Parliament.
Very little, if anything, has changed in that bill.
Ms. Wendy Holm: Exactly.
Mr. Stan Keyes: So given more time, something Ms.
Holm has stressed....
But I want to make two
things clear. One is that this bill has been around
since the last Parliament, under a whole different
number and letter, and so on, and so I don't want that to
reflect badly on the chairman or this committee, because
in fairness, Ms. Holm, your name was put forward by the
New Democratic Party—
Ms. Wendy Holm: Actually it wasn't. It was by the
Canadian Alliance. Thank you.
Mr. Stan Keyes: Okay, by the Canadian Alliance,
over a week ago—
The Chair: And the NDP.
Mr. Stan Keyes: And the NDP, actually.
Your name was put forward to the committee over a week
ago, and consideration is usually given by those who
put names forward to contact the person and say, look,
you might get a call from the clerk in a week to appear
before the committee, so you might want to get yourself
ready. So I don't want that to reflect badly on the
committee or the chairman.
Ms. Wendy Holm: I certainly feel that I've
prepared for this committee.
Mr. Stan Keyes: Oh, all right.
Ms. Wendy Holm: I'm glad to be here. The point is
it's for a very short time. I could go on for quite a
while, chapter and verse, as to the problems. There
are many people who would like to have the opportunity
to appear before you.
Mr. Stan Keyes: I'm saying I don't want it to
reflect on the committee that you're here in a rush.
It's a lack of consideration by the parties who put
your name forward. They should have given you the
notice over a week ago, that's all.
Thank you, Mr. Chair.
The Chair: Thank you, Mr. Keyes.
Ms. Wendy Holm: Over a week ago is still not a
great deal of notice, really.
Mr. Stan Keyes: It's better than the 48 hours you
Ms. Wendy Holm: I wasn't confirmed. I didn't
speak to the clerk of the committee until Monday. I
was called on Friday.
Mr. Stan Keyes: I'm not going to go into the
nuances, Ms. Holm. You could have been called over a
week ago and told you might be called before the
Ms. Wendy Holm: I'm saying it is my pleasure as a
Canadian to take the time out of my schedule to come
here unpaid. It is a very short notice.
Mr. Joe Comartin (Windsor—St. Clair, NDP): I
assume the last exchange wasn't part of my time. It
was attributed to Mr. Keyes rather than to me?
The Chair: There's an exemption in the bill for
the amount of time.
Mr. Stan Keyes: I was here on time, though, Joe.
Mr. Joe Comartin: I was here when she started as
well, Mr. Keyes. I think I paid more attention to her
than obviously that side of the table did.
Mr. Stan Keyes: On division.
Mr. Joe Comartin: Granted.
Ms. Holm and Ms. Elwell, if I understand both of you,
you feel we're going to lose the Sun Belt case?
Ms. Wendy Holm: If Sun Belt were brought to a
chapter XI, I would certainly feel we would lose it,
Ms. Christine Elwell: Probably what's even worse
is we won't know the position government took behind
those closed doors.
Mr. Joe Comartin: I think you both in different
ways are saying we have to get an agreement with the
Americans on exempting water, a blanket exemption. Am
Ms. Holm, did you agree that section 104 under NAFTA
was the appropriate way to go?
Ms. Christine Elwell: It's one way.
Ms. Wendy Holm: Yes. Any architect of the bill
would be able to tell you in fairly short order that
you have to take it out of goods, services, and
Mr. Joe Comartin: Ms. Elwell, you mentioned a
bilateral agreement. What about Mexico? Don't they
have to be at the table as well?
Ms. Christine Elwell: It's not necessary. Under
section 104, you can have a bilateral executive
agreement. You don't even need to amend NAFTA. It
doesn't have to go through Congress. It's an exchange
of letters and could be bilateral.
Mr. Joe Comartin: Assuming the Canadian and
American governments did so, what's to prevent a
private investor from bringing a claim?
Ms. Christine Elwell: Section 104 exempts all
other inconsistent NAFTA obligations. It would include
chapter XI on investor rights.
Mr. Joe Comartin: Can we do it retroactively?
Ms. Wendy Holm: Sure. Oh, can we do it
Mr. Joe Comartin: Yes.
Ms. Christine Elwell: I don't know, I'm sorry.
Ms. Wendy Holm: I think we would have to distance
ourselves from chapter XI by saying the problem we're
dealing with is getting this out. We never intended to
put water on the table and we won't be part of a
chapter XI. These things come down to politics as well
as hard ball.
The Chair: Surely the witnesses would agree we
could do anything in terms of interpretation in the
writing of the treaty retroactively, if in fact the
parties to the treaty agree. You would need the three
governments to sign on.
Mr. Joe Comartin: I'm not sure, Mr. Chair, given
some of these strange rulings we've had under chapter
XI in the sense of the expansion of the treaty, whether
we wouldn't get a commission or a panel saying you
can't do this retroactively. I was looking at whether
there were any known exceptions.
Ms. Wendy Holm: By retroactively, I was thinking
you would want to get us out from under the dilemma
with Sun Belt. Is that what you mean?
Mr. Joe Comartin: Yes.
Ms. Wendy Holm: I think it would have to be dealt
with and negotiated. I think we should first say, if
it comes to that, we don't accept water is a good. We
have to get this clarified. We're not going to be part
of a chapter XI, nor be bound by any chapter XI
decisions. We clearly did not include water in the
deal, and if it is included, it has to be so.
The Chair: I don't want to use your time, but it
seems to me the problem would be under chapter XI. The
problem is the definition of expropriation is too
broad, or broader than most of us in international law
felt at the time it should be, and which we are now
discovering. That's the issue we're all looking at.
I would think the problem, even if all three
governments rewrote the treaty, with any cases that
have been started up to that time, and Sun Belt would be
one, is the United States would probably run into a
problem where the constitutionality of its revising
retroactively would be taken to its courts.
This is something that would be wildly complicated, I
quite agree with you.
Ms. Wendy Holm: It's better to deal with a small
complication where we can draw the lines around it.
The Chair: Yes, I agree. I'm not trying to get
We're just all trying
to understand this thing.
Ms. Christine Elwell: Presumably it's 113.1 that
allows the three governments to clarify language.
That rule is there until the decision comes out, and we
don't have a decision yet. So technically there's
probably still time.
Mr. Joe Comartin: Good point.
To follow that up, if the Americans say, no, we're not
going to agree, the six-month provision allows us to
back out, requires us to back out of the whole treaty.
Ms. Wendy Holm: Yes, but I don't think we'll ever
have to do that. I really don't. The Americans get an
awful lot of assets under the trade agreement, and I
think they'd figure, if we give it up here, we'll get
it another way. But that's okay. I don't think it
would mean sacrificing the trade agreement at all.
Mr. Joe Comartin: Mr. Chairman, I missed the last
committee meeting. Did the Tay River situation come
The Chair: Yes. The Council for Canadians
witness, Mr. Dunn, mentioned that in his view—without
putting words in his mouth—the Tay River was allowed
by the Province of Ontario under certain environmental
conditions, which in his view were not satisfactory,
and that might establish a standard for the Canada-wide
accord, which would then apply and would be difficult
to deal with if a chapter XI case or something came up.
That's the way I understood his evidence.
Mr. Joe Comartin: Did we get information that
there's another hearing going on and chapter XI is
going to be taken into account?
The Chair: No, we didn't. There was a lawyer here
from the company involved, who said they did go through
extensive environmental reviews, but I didn't feel that
we should get into that at this committee hearing.
We're trying to deal with this bill in its narrow
scope. This is only one part of a tripartite strategy.
One of the problems with all the testimony we're
getting is that we're jumbling up everything at once,
and I'm trying, for the purposes of the bill, at least
to keep it segmented, so we can focus on the other
issues at another time. I'm not saying they're not
relevant, but this is a bill of limited scope.
Mr. Joe Comartin: I have to take exception to
that, because as I understand the situation—and I
haven't seen the ruling—there was a ruling about two
weeks ago from that tribunal in Ontario determining
that in fact they were going to look at NAFTA in the
subsequent hearing. The hearing they're considering
now is for a huge volume increase in the water.
The Chair: Which is that tribunal?
Mr. Joe Comartin: I don't know the name of it.
Ms. Christine Elwell: It's the Environmental
Assessment Appeal Board. It's not a NAFTA chapter XI
case. It's within the Ontario jurisdiction.
By the way, it is relevant to your bill here, because
it's an example of these huge exceptions where water is
contained in products. In this case it's a slurry.
So you have huge amounts of water leaving the basin
because of an exception that's in this bill too.
The Chair: That's interesting. We had not
understood it as being relevant, because it was the use
of water within the province. Now you're saying the
same principles from that could be applied to water—
Ms. Christine Elwell: The water from that slurry
is going south—that's not out of the basin.
The Chair: But wait a minute. I'll have to get an
answer from the experts, but it's not boundary water,
because it's a north-south flowing river. So it isn't
covered by this bill anyway. That's one of the great
problems we're having with this bill. It is very
narrow in its scope, and without a map in front of you
showing exactly what it covers and what it doesn't,
it's quite difficult to get your mind around what it's
trying to do. That's why I think we all have to keep
in our minds that it's only one part of a three-part
strategy, as Ms. Holm said, and we're trying to examine
whether this strategy in itself is satisfactory, and
then we'll focus on the others.
Mr. Joe Comartin: But where it's relevant, Mr.
Chair, is that you could have exactly the same type of
operation set up on the St. Lawrence, on one of the
Great Lakes, the same type of request then being made
to the Minister of Foreign Affairs for a licence. So
the ruling that may come out of that tribunal would
certainly be quite interesting, I think.
The Chair: I agree, and I understand what your
point and Ms. Elwell's point is on that.
Ms. Christine Elwell: If I may, I have one other
point of clarification. The Ontario government relied
on Parks Canada waterflows as part of the channel, from
the St. Lawrence basin water, from the Rideau Canal,
Parks Canada. So it's Parks Canada data that provide
the scientific basis for the Ontario government's
The Chair: Well, thank you. That's interesting.
Did you have any other questions?
Mr. Joe Comartin: No, thank you.
The Chair: Thank you.
Mr. O'Brien, then Madam Marleau.
Mr. Pat O'Brien: Mr.
Chairman, I'd like to thank the witnesses. I'm not
sure I share your views—or certainly to some extent I
know I don't. But I want to probe a couple of things
just briefly, because I want to share my time with my
colleagues, if they have questions.
Ms. Elwell made a point about exporting water. Are
you really suggesting that the Government of Canada
prohibit the export of legal products that contain
water? That seems to be the logical extension of what
I think you said.
Ms. Christine Elwell: No, but I don't think it
should be unregulated.
Mr. Pat O'Brien: So you're not suggesting we ban
the export of legal commercial products.
Ms. Christine Elwell: I suggest it's inappropriate
to not have any regulations about water taking, if it's
for a product, agriculture or hazardous waste
treatment. To say that water that's taken and used in
these circumstances is nobody's business, and not a
matter of a sustainable inquiry, is inappropriate.
Mr. Pat O'Brien: Okay. I got my answer and it's
no. Thanks, Mr. Chairman.
Ms. Holm, you wove a couple of anecdotal things in
there, and I'd like to pick up on one of them.
You talked about a tangled web. What is the point of
that comment? Are you suggesting this bill is designed
to deceive somebody? If so, whom and how?
Ms. Wendy Holm: I think we have a problem that
we've all known about for 14 years.
Mr. Pat O'Brien: Is this bill designed to deceive
somebody? If so, whom and how?
Ms. Wendy Holm: In the verbiage around this bill,
the amendments will prohibit the bulk removal of water
from Canadian boundary waters. The average Canadian,
understanding that, feels that is the answer. They
feel—if I can finish—
Mr. Pat O'Brien: But you're not answering my
question, with all due respect, Mr. Chairman.
Ms. Wendy Holm: The federal government has to
assure Canadians that our water is not at risk. The
legislation that was called for was an export ban, a
moratorium on exports, and then appropriate steps
to resolve the problem. The government is taking
steps, but it's not resolving anything. The IJC
reference does not resolve anything. The provincial
accord does not resolve anything, and this bill does
not resolve anything with respect to protecting
Mr. Pat O'Brien: I appreciate that. I don't like
to interrupt you, but I do control the time I'm allowed
to ask questions, as we do on both sides. You're not
answering my question, with all due respect.
I mean, was it just rhetorical flight—and it's a
serious question—or are you seriously suggesting Bill
C-6 is designed to deceive someone?
Ms. Wendy Holm: Yes.
Mr. Pat O'Brien: Okay, whom?
Ms. Wendy Holm: I think it's designed to deceive
the Canadian public that there is a protection on
Canada's water. I think the Prime Minister and the
Canadian government realize the dilemma they're in, and
they simply won't bite the bullet and do what needs to
be done to save Canada's water.
Mr. Pat O'Brien: Okay. How is it designed to
deceive the Canadian public? I knew I would get you to
answer the question eventually.
Mr. Wendy Holm: Mr. O'Brien, I'm not a hostile
witness here. I answer all questions, and I don't need
to be badgered about it.
Mr. Pat O'Brien: You took a long time to answer
that first one, but could you answer the second one?
My question is simple. I don't want to be a hostile
questioner, but I'm not getting a direct answer.
We finally got the direct answer that you feel it's
designed to deceive the Canadian public. I find that
incredible, but you're entitled to your view. Now my
direct question, in an unhostile way, is how?
Ms. Wendy Holm: First of all, I would like to say
that I think this three-plank strategy is the result of
a government that's not prepared to stand up to the
Americans and say we want an exemption for water. The
three-plank strategy is being dressed up and spun out
to look as though it's going to solve the problem.
I'm sure the drafters of this bill and many people in
Environment Canada and others, who have been grappling
with this dilemma since 1988, are not deceptive
individuals. But the sum effect of this, because the
Prime Minister is not prepared to bite the bullet and
do what needs to be done, is that we are creating this
smoke-and-mirrors situation. Look at the wording.
Everything that's been sent out on this says this will
solve the problem, and it won't solve the problem.
Mr. Pat O'Brien: Okay. So I take your answer to
be that through deceiving-type wording or deliberately
ambiguous wording, the bill is deliberately attempting
to deceive the Canadian public.
Ms. Wendy Holm: The bill is a sieve. The bill
does not do what it purports to do. Because of its
exceptions, its limited scope, and its application to
the Great Lakes, it does not solve Canada's problem,
with respect to water exports, absolutely.
Mr. Pat O'Brien: I guess that's as close to an
answer to my second question as I'm going to get. I
have to say, as a short statement, it's incredible to
me that a witness would come before this committee and
say that the express purpose of a government bill was to
deceive the Canadian public.
Let's disagree on the wording or on the.... But quite
frankly, I have to be candid and tell you I think that
calls into question the usefulness of your testimony,
at least for me. But you're entitled to your opinion.
Thanks, Mr. Chairman.
The Chair: Thank you. We'll take that as a
statement, rather than a question.
Mr. Pat O'Brien: It was intended as a statement.
Ms. Christine Elwell: There must be a full moon
today or something. Is the moon in Aries, or what's
going on here today?
The Chair: Mr. Casson is next, then Madam Marleau,
and then Mr. Paradis will wrap it up for us.
Mr. Rick Casson: Thanks, Mr. Chairman. Hopefully
we're all entitled to have our opinions and express
I'd like to get back to a statement you made, Ms.
Holm, about irrigation. I think this could probably
apply to more things if we in Canada defined different
uses for the water we have—if we want to expand
irrigation acres, use water that's flowing down the
rivers for power generation, food production, or
whatever you want. You kind of intimated that if we
did that, our trading partners would have every right
to ask for the same benefit.
The scope of the bill, again, is a problem here,
because we are dealing with boundary waters. If we had
a boundary water and we had an agreement with the
Americans to take more out for irrigation, then the
agreement would already be in place to do that. So how
would that statement apply to the situation that if we
expanded our irrigated acres in Canada, our trading
partners—being the Americans—would have the right to
demand more acreage as well?
Ms. Wendy Holm: I think it applies as well
in the Great Lakes instance as it does in the Canadian
context, and I agree. That's why I sat for many
hours trying to put together the connections between
these. It is because this bill purports to solve the
problem for Canada that we have to look at the rest of
the areas that are left vulnerable.
That having been said, the IJC International Boundary
Waters Treaty Act envisages the productive uses of
water, such as power, agriculture, domestic uses, sanitary
uses, and navigation. The Canadian explanation of the
bill specifically envisages exceptions for allowing
out-of-basin withdrawals for agriculture.
All I can say is that in the situation of climate
change, I'm sure, with the Great Lakes, the eight
governors are very well organized around that. Part of
what underpins some sense of optimism for the Great
Lakes is the American involvement in the future of the
Great Lakes, and all of the other agreements that are
in place there. But by the same token, the bill
specifically allows for the exceptions for agriculture.
So it is of concern to me, even in the Great Lakes
example, but it is of greater concern in the larger
Mr. Rick Casson: Thank you.
The Chair: Thanks, Mr. Casson.
Ms. Diane Marleau (Sudbury, Lib.): I want to say
that, speaking for myself, and I'm sure for a lot of
Canadians, we share your concerns. There's a lot of
concern about the future of water here in Canada. While
I don't believe that this bill has been put together to
deliberately fool anybody, the reality is it has a very
small scope. Even as a member of the committee, I was
disappointed with the scope of the bill. It does so
little, frankly, to change what's already in place.
So I would ask, is there some wording directly in this
bill that you think should be changed? There are only
a few clauses, and we will be doing clause-by-clause.
You're right, the bill only addresses these transboundary
waters that are already being addressed in other
ways. I'm not even sure if it changes what's in place
very much. Some say it does.
But there's another issue that I think needs to be
looked at, and there's one question I'd ask you
in terms of that. There has been a proposal for a
committee to study water. Now we're waiting for the
agreement of other parties and it has nothing to do
with this committee. I really believe that many of
your concerns have to be addressed, and I'm very hopeful
that perhaps in the fall we can have that kind of a
committee in the House of Commons to really look at all
of the issues you've brought up, because it's a
concern to all of us. I don't think we on the
government side or anyone in the opposition takes it
lightly. So while we may take offence to your saying
this bill deliberately misleads, I don't think there's
anything at all there that's been made specifically to
mislead. But it is a very weak bill, you're
Perhaps if we're guilty of anything it's of wanting to
work too much and too closely with the provinces. But I
think we need to do this, to show this willingness, at
least in the first instance. As we study the issues,
then perhaps we have to look at the federal government
putting in an overarching level of governance for
water that has a lot more power than what this bill
would ever have.
I share many of your concerns, and the minister shares
them, the Prime Minister shares them—this is not
something that those of us on this side are not aware
of and don't care about. The sooner we look at an
overarching way of managing all of our water resources
Ms. Wendy Holm: I don't like having been baited to
come up with the statement, but I will stand by it.
Although it was not in my presentation to this
committee, when you have verbiage around the bill and
the way a bill is presented that says this is what's
going to ensure that Canada's water is protected, it's
misleading. That is misleading, and I think I made it
clear this is a dilemma that Canada has gotten itself
into because it does not want to take the perhaps more
obvious and harder course that I think this government would
be cheered for taking, which is to solve the problem
with water's inclusion in the NAFTA and the FTA.
With respect to what you can do to tinker about the
edges with this bill, it's very difficult. You have
wide open exception doors there.
Ms. Diane Marleau: They're there already.
Ms. Wendy Holm: Yes. The creation of a national
licensing scheme raises the spectre of.... The MAI is
what said whatever happens in one province applies to
all. The MAI of course didn't pass. The NAFTA says it's
provincial. If you have exports in a province, then
there are rights under chapter XI that are restricted to
that province, not across Canada. But what this bill
does in its licensing regime is it opens the door for an
argument that if it happens in one place, it can then be
extended. That is of great concern to me. It
places additional pressure on British Columbia and
other provinces that have water to export. So I don't
know what you can do, I'm sorry.
Ms. Diane Marleau: But the challenges exist
whether we pass this bill or not.
Ms. Wendy Holm: Absolutely.
Ms. Diane Marleau: So this bill doesn't address
it, and it isn't designed to address it either.
Ms. Wendy Holm: But it does say in all of the
wording, and this to me is a very important
Ms. Diane Marleau: I think it's been a good thing,
even if I personally don't believe it does very much.
I think it has at least allowed us to listen to
people like you; it has allowed you a platform to bring
your concerns forward, even though they are not
particularly included in the scope of this bill. I
think the more we have a chance to discuss these issues
in the open the better. And I hope we can continue to
work together because I do believe that water is going
to be one of our best natural resources in this
century, and we'd better, as a country, come together and deal
Ms. Christine Elwell: Thank you for those words.
May I also add that the specific recommendations we
made looked at providing a role for the Minister of
Environment and making the exception subject to the
Canadian environmental impact assessment. You could
have clauses in here on licensing that say
ordinary use is for domestic purposes; or for the exceptions
contained in the regulations, you could say provided
they're for sustainable use.
You could add some language that would bolster the
environmental nature of this bill, which would be very
helpful should you have a trade problem.
Ms. Diane Marleau: Maybe we'll look at that. We're
going to be doing clause-by-clause, and at that point we
might look at some of your suggestions.
Ms. Christine Elwell: Invite us back.
Ms. Diane Marleau: That's two weeks from now.
The Chair: Without encouraging Ms. Elwell, who
is an extraordinarily energetic lawyer, I might
suggest that if you have a specific recommendation for an
amendment, you might want to actually get it prepared
in a way you could give it to one of the members, with
the proposal as an amendment. Otherwise, to
suggest it to us and then have us come into the room with it
in our heads, not in concrete form—it won't
happen. So if there's a specific amendment, you might
want to speak to one of the members to see if they
would be willing to sponsor it and do it.
Ms. Christine Elwell: Maybe Pat.
Mr. Pat O'Brien: I tried to get from our witnesses
how the bill tends to deliberately deceive. I don't
want to be part of that. I didn't get an answer today.
Maybe I'll get one in writing.
The Chair: Right, thank you.
Mr. Pat O'Brien: I'll look forward to it.
The Chair: The parliamentary secretary, with his clothes on,
Mr. Denis Paradis (Brome—Missisquoi, Lib.): Thank you,
First of all, I would like to welcome the witnesses, and
particularly Wendy Holm, who, as is the case with many other
witnesses who appear before this committee—and it is important
that I point this out—travelled right across the country. Whether
or not one agrees with the presentations that are given by
witnesses, we must remember that these people give of their time to
come and explain their point of view. I commend all of the
witnesses who travel from near and far to appear before the House
of Commons committees, Mr. Chairman.
And now, to the business at hand. I, personally, feel that the
bill is important. It does not answer all of the questions, and
that is not what it is supposed to do. There is a lot of talk in
the media about water quality, whether it be in Walkerton or North
Battleford. There is also a lot of discussion on the issue of
protecting our water.
Last summer, a group of members travelled to the Okanagan
Valley, in British Columbia. We hosted the mayors representing all
of the cities in the region, who told us they felt it was important
that the various levels of the government protect our water, which
is a natural and environmental resource. We told them we would try
to make some progress with Bill C-6, but what we must not forget is
that the government of Alberta can bring about concrete results
that would also allow the people of British Columbia to preserve
their water. This is a constant concern, something that is of
interest to all Canadians, from coast to coast.
As to Bill C-6, I would like to raise a few points that
require clarification. Firstly, the principle of Bill C-6, which,
through its scope, is, of course, not intended to take the place of
the provinces, but rather to take the place that the Constitution
and the treaties have granted us within the Canadian framework. It
is assumed that, at a given time, this would represent a
prohibition, a restriction on the massive removal of water from our
Canadian lakes and basins. But, once again, we must not forget that
we will need a federal-provincial agreement, we will require the
support of the provinces so that each one can undertake this within
its own jurisdiction.
I would like, as an aside, to mention that the licensing
system that has been provided for has absolutely nothing to do with
the bulk removal of water. These are not licences to remove a small
amount or a larger amount. That has nothing to do with it. The
permits provided for in clauses 11 and 12 are a way to legalize
what has been taking place since the treaty was signed.
Since the treaty came into force, Canadians and Americans have
agreed that if there is a dam on one side or the other, then each
country must give its consent through the International Joint
We might think that the use of licences means something else,
but that is not the case at all. It is simply in order to provide
for cases where there might be dams or other types of obstructions.
Previously, there was an exchange of correspondence; authorization
or agreement was granted in a letter. From now on, licences will be
used instead of letters. It has nothing to do with the removal of
In support of what I have just said I would quote the
beginning of clause 13, which deals with prohibition, and where it
says Malgré l'article 11, ÀDespite section 11ä. Therefore, clauses
11 and 12 have nothing to do with what is called bulk removal. That
is my first point, Mr. Chairman.
The second point, that I dealt with briefly, earlier, involves
the essential nature of co-operation with the provinces. Everyone
says: if we want it to work, then everyone must be onside. That is
important. We say that it covers the Great Lakes, but remember that
the Great Lakes represent between 20% and 22% of the world's fresh
water. It is really quite something, Mr. Speaker, to say that we
hold 20% to 22% of all of the fresh water in the world. I would
like to ask our witnesses to comment on that later, Mr. Speaker.
The third and final point is the following. Of course, this
bill involves water in its natural state, that is to say, the water
that is in the basins, not the water that is outside of these lakes
or rivers, which is not a commodity. That is why we need the
support of the provinces. It is because this is an environmental
Everyone has to be involved; this bill requires co-operation.
Let us take Newfoundland, for example. The province could, at some
point, authorize the bulk removal of water from a lake or other
body. It would be more advantageous for the province to work along
with us in trying to prevent the bulk removal of water. We will try
to convince the province to do so. But, some day, it could still
decide to allow some water to be removed.
We must understand that when water is removed from its natural
basin it can become a commodity. But, when it is in a river or
lake, it remains an environmental resource that a province might
want to protect by prohibiting its removal, in the same way that it
can put an end to logging once it feels that enough trees have been
cut down. Only the provinces can manage their own natural
No one can force a province to cut down a certain number of
trees unless a contract has been signed. That relates to
contractual obligations, which is another story. If a contract
binds both parties for a five- or ten-year period, that is another
matter. When it comes to natural resource management, the provinces
are in charge.
Mr. Chairman, this bill includes everything, it seeks to
ensure that everyone will operate in the same way, and it is
important for all Canadians.
Maybe this should have been a question rather than a comment,
The Chair: We have about two minutes left, and I
wouldn't mind making a statement myself.
Ms. Wendy Holm: This is an example. Mr. Paradis,
you said that it prevents removal of water from
Canadian drainage basins. It's boundary waters, which
is an extremely small subset of Canadian drainage
basins. The entire western half of this country is not
touched by this bill. It's very easy to say it
prevents water removal from basins, but it doesn't.
Boundary waters are a very small subset of that.
When you talk about proposed section 13, proposed
sections 11, 12, and 13 all say their particular
subsection (1) does not apply in respect of exemptions
specified in the regulations. So you can have
exemptions for the licensing under proposed sections
11, 12, and 13—all envisage exceptions. Proposed
subsection 13(4) says:
Subsection (1) does not apply in
respect of the exceptions specified in the
So all of these are there until they are accepted.
This is not the business of this committee, but if
Gisborne Lake goes ahead, it is almost impossible for
the province to come in and say no, if both the buyer
and the seller have an interest in continuing that. It
is a longer discussion than we have time for here. I
am more than happy to send you chapter and verse as to
why that is.
Poor Newfoundland, poor British Columbia, in their
ability to act in the interest of their residents,
their hands have been tied by the federal government's
entering into NAFTA and FTA without an exemption for
water, and that's the problem. Even the IJC recognized
The Chair: Okay.
Mr. Denis Paradis: Mr. Chairman, if I may, I would simply like
to say that we have the regulations here before us. I simply wanted
to mention that to the committee members. The government doesn't
always take the trouble to introduce the regulations along with the
bill. But we do have the regulations available to committee members
at this time and I simply wanted to point that out.
Mr. Chair: Yes, absolutely. We have the regulations.
I'm going to close the hearing now, because we have to
go. But I just want to leave two points with the
I subscribe to what Madame Marleau said. Everybody is
concerned about the problem. I wouldn't go as far as
she does in saying that the bill doesn't do much. I
think the bill establishes an important principle, but
I'd say it's very limited in its scope. Obviously, we
appreciate the fact that it deals with boundary waters.
It doesn't deal with the west coast, it doesn't deal
with the internal waters of the province, and things
like that. As Ms. Holm said, I think accurately, it's
part of a three-pronged strategy. We want to make sure
that at least this part of the strategy is accurate and
good, and we'll worry about the other parts later. We
have to focus on all of them.
I would say there are two points you've left with me
that trouble me. Both of you and other witnesses have
brought up the relationship of NAFTA, chapter XI
largely, but also other aspects. Our own parliamentary
library researchers drew to our attention in their
report to us the statement of the Governments of
Canada, Mexico, and the United States that we've
referred to. Ms. Elwell, you seemed to give that the
back of your hand by saying, oh, well, even the USTR
said.... An international lawyer might say, well, that
may be good, because it firms up what's already in the
treaty. So you could read that both ways. But I will
be asking our legal experts to tell us, in terms of the
Vienna convention and the law of treaties, what the
weight of this statement is and to what extent we can
rely on it as an interpretative vehicle in assuring us
that NAFTA does not apply to water in its natural
state. There may be other problems, but at least we
can address that one.
The other thing I'll be asking our legal advisers to
do when they bring the bill forward is address, I
think, Ms. Holm's point—it's the first time I've heard
it here. There's no requirement for a licence for
water to be used for power or irrigation purposes, and
my understanding was that was just internal. You seem
to suggest—and I'm just going to some of these more
exotic schemes, like the Grand Canal that would go to
Arizona to deal with their aquifer problems—because
it's an irrigation problem, it wouldn't be covered. If
that's what you're suggesting, I'd really like to get
some advice on that, because that seems to be a big
Is that what you were suggesting to us, that if the
United States came to us and said they wanted to drain
one of the Great Lakes or use some of the water in one
of the Great Lakes for the purpose of irrigation, or
for power, and it's going to require bulk exports of
water to do it, that wouldn't be covered by the bill,
or by the International Joint Commission, or by the
treaty, and things like that? If that's what you're
saying, I think that's a serious concern. But maybe
I'm misinterpreting what you're telling us.
Ms. Wendy Holm: We might disagree and you might
have another opinion on this, but my point was not that
it's a problem that they're not licensed—although I
take your point on it. My concern was that they are
acknowledged uses of the water—power, irrigation,
domestic and sanitary, ships—
Ms. Christine Elwell: Ballast.
Ms. Wendy Holm: —ballast, transportation. These
are the priorities the United States and Canada put on
the uses of water, and these three uses are envisaged
as exceptions for removal of water from the drainage
basin. I don't think the licensing scheme does that
much one way or the other. So it wasn't so much that
they weren't licensed, it was that they are—
The Chair: We'll ask for comment and clarification
on that important issue. You may or may not accept
that, whatever the government says, but at least it
will give us all a platform for better understanding
and for future discussion of these issues. As Ms.
Marleau says, this is not an issue that is going to go
Ms. Wendy Holm: I did not disagree that waters in
their natural state are not covered. That's a
tautology, we know that. So that wasn't a point of
disagreement on my part.
The Chair: I see. The argument is more, what is
water in its natural state?
Ms. Wendy Holm: No. The fact is that water never
becomes a good when it's in its natural state. We do
things to it and then it becomes a good, then all the
terms of the agreement apply, such as making it
available, damming it, holding it back, delivering it
on time. These are what make it a good.
The Chair: I understood that. I think I see the
officials back there, so we'll be asking for
clarification about that.
Thank you very much.
Ms. Christine Elwell: Mr. Chair, when might we
expect to see these regulations that would go with the
The Chair: I think they're a matter of public
record before the committee. So you've got total
access to them—
Ms. Christine Elwell: Maybe the clerk could
The Chair: —and we'll be happy to provide them to
Ms. Christine Elwell: Lovely. Merci.
The Chair: It's very dangerous to give competent
lawyers more and more documents. It just produces more
We're adjourned, colleagues, until Tuesday the 29th.
Don't forget that on Monday the 28th we have the