Thank you, Mr. Chair, and other members of the committee.
Let me begin by thanking you for the opportunity to address the committee, remotely, on this important topic.
As you have indicated, I am a professor of economics here at Brock University, and also director of a recently formed research network which is specifically aimed at improving water governance.
For the last 20 years or so, the bulk of my research has been concerned with the economics of water resources, so I very much appreciate the opportunity to discuss this bill before your committee.
The first point I'd like to make is that in some respects, a ban on the export of a natural resource is, to a degree, an unusual step for the government to take. Successive federal and provincial governments have actively promoted the export of both our renewable and non-renewable resources, so a ban on water exports, whatever its emotional appeal, stands in contrast to many perceived government policies. Then why impose a ban? One can imagine at least three arguments being made to support a ban.
First, we want to avoid an irreversible mistake; that is, if we were to allow bulk exports today, that would somehow prevent us from curtailing these exports at some point in the future. This is largely a matter of international and trade law, and I would defer to Professor Saunders on this point.
Second, there may be significant uncertainty about future economic and environmental conditions, and as a result we collectively believe we should be very cautious in the face of that future uncertainty. That's a perfectly reasonable argument, but if it were the case, presumably it would apply to all our natural resource exports, and we would want to think about applying the same type of logic to those.
Third and finally, it could be argued that Canadians assign such immense value to their water that they are unwilling to countenance its export in bulk form. The difficulty with this argument is that Canadians are remarkably profligate in their use of water, thereby suggesting, at least to outsiders, that we may assign relatively little value to preserving it. Indeed, as a result of years of underpricing at the municipal level, and also assigning provincial permits to take water with little or no scrutiny of the wisdom of those uses, Canada is now in the unenviable position of having perhaps the highest per capita water use in the world, and if not, perhaps the second highest.
Furthermore, Canadians and Canadian governments know almost nothing about the value of water as it's used by industry, farms, and households. We have fragmentary knowledge of how water is used and how water contributes value to our society and to our economy. This is particularly true of water's role in providing what are frequently referred to as ecological goods and services, whose values are not captured in the marketplace.
Thus, it's not really clear that there is an economic rationale for such a ban. For all the concern regarding bulk water exports, the fundamental economics suggest that these are very unlikely to occur, even in the absence of a ban. Water has a low value relative to its mass and this means that it is difficult and not cheap to transport over great distances.
If some entrepreneur were to somehow secure a supply of Canadian water and seek to sell it in the United States, she would likely find that there would be a surprising amount of competition from U.S. water sources. In order to see this, it's important to remember that it's not so much that America is short of water, but rather that America is experiencing localized shortages, largely brought on by decades of poor water management. In many areas where water is considered in short supply, such as the American southwest, large volumes of water are still irrigating very low-value crops.
If an entrepreneur tried to sell Canadian water for some dollar amount that was sufficient to cover her cost of transportation and a reasonable rate of return, she would find that local farmers who hold licences to water would be more than happy to sell or lease their water rights at a fraction of the price, so it's hard to see that this could be a viable commercial activity.
I should also point out that the argument I've just made regarding the lack of commercial viability of bulk water exports was made as many as 20 years ago in a report that I co-authored for the Macdonald commission.
If Canada wants to ban bulk water exports, that ban should be comprehensive. It's our water and we can choose to do with it as we see fit. But let's not think that doing so is a substitute for a comprehensive and sound national water strategy, nor for the need to maintain the institutional capacity to measure and document the state of our water resources, to manage water resources in an integrated fashion, and to use those resources in a way that fully benefits all Canadians.
The absence of a sound national water strategy is, in my mind, a far greater impediment to maximizing water's potential contribution to Canada's well-being than is the possibility of future bulk water exports. There are many pressing issues relating to water use that need to be addressed, whether the issue be the threats to groundwater from hydrocarbon extraction, the state of our municipal water supply and sewage treatment facilities, or the very serious threats to first nations communities due to inadequate water supplies.
Let me conclude by saying that I applaud members for their concerns regarding Canada's water resources. Furthermore, if Canadians have signalled that they truly do not want bulk water exports, then the House is right to act. However, once the deliberations regarding this bill have concluded, I would hope that the members would direct their attention to the continuing and very real challenges facing water resources in Canada today.
