International Trade Committee on June 1st, 2010

[Matthew Kronby]

The provision does not prohibit the sale of anything. There was concern at the time of the NAFTA, certainly, that somehow the NAFTA was allowing the sale of water in its natural state, and the provision was inserted at the time to make absolutely clear that this was not the case. A similar provision has been inserted in FTA-implementing legislation ever since.

[The Acting Chair, Conservative, Larry Miller]

And this basically strengthens it, when it comes to water?

[Matthew Kronby]

You can question whether it had to be strengthened or not, but it makes it clear that it does not.

[The Acting Chair, Conservative, Larry Miller]

Okay, and Mr. Julian's colleagues are always ready to stand up and try to pretend that water was for sale in the NAFTA, so I think he would be very happy to have this clause in here.

Are there further questions on clause 4?

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thank you, Mr. Chair. I believe that was argumentation that you just made.

Coming back to our witnesses, let me ask how “natural” is defined and at what point the “surface or ground water in liquid, gaseous or solid state” is no longer in a natural state.

Let me give you an example. If there is a licence issued to move that natural surface water and bottle it, would that not mean, depending on how “natural” is being defined, that this bottled or bulk water would then apply to the trade rules that many have been concerned about?

[Matthew Kronby]

Since I'm not able to provide legal advice to the committee, I won't opine on the definition of “natural”, but I can certainly say that Canada has exporters of bottled water. There are those who export water in bottles commercially, so I think you may be able to draw your own conclusions on what water is or is not considered natural or in its natural state.

[The Acting Chair, Conservative, Larry Miller]

Just to clarify that—and then we'll come back to you—it cannot be sold in bulk; it's bottled water in containers of limited size. Would that be correct?

I know it to be correct, but I would like to hear you say it.

[Matthew Kronby]

In fairness, I don't believe that's what this provision is intended to address. This provision is intended to address water in its natural state. I think that's about as far as I can go.

[The Acting Chair, Conservative, Larry Miller]

Okay, Mr. Julian, go ahead.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thank you, Mr. Chair.

That's a little bit disturbing, then, because if what we're saying is that “natural state” ends once that water is bottled or put in a tanker for bulk export, then that would mean that indeed that—

[A voice]

Mr. Chair, there are no bulk exports allowed. There are none.

[The Acting Chair, Conservative, Larry Miller]

That's a moot point, Mr. Julian. He is correct.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

I'm sorry, I missed that, Mr. Chair.

[The Acting Chair, Conservative, Larry Miller]

I said he corrected you: there are no bulk exports. He is right on that. It is a moot point.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Chair, I beg to differ. There's an issue of whether or not there have been bulk water exports up until now, and, as you know, Mr. Chair, in a whole bunch of provinces, including my own, including Newfoundland, including Quebec and Ontario, there have been battles around bulk water export permits.

The issue that exists is that because there isn't an ironclad definition of what water is subject to those trade rules and subject to the investor-state provisions that exist in the Colombia trade deal, as they do in other trade deals, the problem is that once those bulk water exports start—and it doesn't matter which province does it—then, according to the definition we've been getting here, it would mean that yes, trade rules would apply and the investor-state provisions may apply.

Certainly, Mr. Chair, in my province the reason Sun Belt was able to bring an investor-state suit against the provincial government is that this opening is there. Fortunately, the former B.C. NDP government banned bulk water exports, but if the current government changes that, then we could be in a situation in which water that is in a bulk water container is subject to the provisions around investor-state and provisions around trade rules.

So this is a matter of some concern. This isn't a moot point; I beg to differ. It is a point that is quite substantial. Surface or groundwater, when we don't talk about a ”natural state”, would protect those water resources to a much greater extent. If we're saying “natural” and we are defining “natural” as up until the point that it is put in containers—

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

I have a point of order.

[The Acting Chair, Conservative, Larry Miller]

There is a point of order.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Thank you, Mr. Chairman.

Mr. Chairman, I appreciate that when Mr. Julian has a question of clarification to the witnesses, that's the reason we have witnesses. Once that question and clarification have been received, we need to continue with clause-by-clause.

[The Acting Chair, Conservative, Larry Miller]

And on the point that you were just talking about, Mr. Julian, this government has been very clear about exports of water. I will give the previous government credit. When a permit in my province of Ontario was approved—I can't remember the year—it was quashed, which I'm very happy about.

Recently, I believe in 2005 or early 2006, when there was an application to take water in your province of B.C., I and a number of MPs across Canada banded together and basically that proposal was scrapped.

I think that history speaks for itself, so it is a moot point.

Do you have another question on clause 4?

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Chair, I will be intervening, because after our questions are finished, of course, we have debate on the clauses. I will be intervening on the debate. But I believe Mr. Laforest has a question.

[The Acting Chair, Conservative, Larry Miller]

Of course. It's your time. You can waste it how you want.

Mr. Laforest.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Thank you, Mr. Chairman.

I would like someone to explain this clause. You say that it is excludes—and I guess that's what it means—exports of water, which is found in large quantities in Canada and Quebec, whether we're talking about surface or groundwater, in a liquid, or gaseous state, and so on. Is that actually what this defines? Does this restrict exports of water, meaning that the Agreement does not provide for excessive exports?

And I have a sub-question. It refers here to natural surface water. All lakes and rivers and all the large lakes are fed by rainwater. Why is there no protection given to rainwater in Canada? It could be excluded. If rainwater is collected before it reaches the ground, it is no longer surface water; it's water from the sky. If someone collected rainwater, could it be exported if there is a prohibition on exports of surface water?

[Matthew Kronby]

I think perhaps there's a bit of a misunderstanding as to what this provision does.

This provision does not prohibit water that has been turned into a product from being treated as any other product, from being exported--or imported, for that matter. The provision essentially clarifies that there is nothing in the act or the agreement that obliges Canada--we're talking about the Canadian implementing bill--to exploit its water for commercial use or to export water. There's nothing that says you have to do so.

Whether it is natural surface water or groundwater, it does not deal with water that has been turned into a product, like bottled water that may be, and is in fact, exported or imported.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

With respect to my question on rainwater, I was saying that all surface water starts out as rainwater.

Why do these agreements never include provisions to protect that sort of thing? A company that became aware of this clause and wanted to export water could assume that, if the water is collected before it hits the ground, it can be exported. Why is this kind of situation never addressed?

[The Acting Chair, Conservative, Larry Miller]

And you're serious?