Foreign Affairs Committee on Oct. 25th, 2012

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

I believe you're an expert as well in environmental assessment.

[J. Owen Saunders]

I wouldn't call myself an expert.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

But you know something about it.

[J. Owen Saunders]

I know something about it.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

I'm just thinking that this bill, which is welcome as I say, is not a step forward in the sense that it's breaking new ground. It's just codifying the International Boundary Waters Treaty with respect to transboundary rivers, saying you can't affect the flow of a transboundary river because you'd be affecting the flow of it in the United States. I would think that even if you didn't have this bill, wouldn't environmental assessment de facto prohibit the diversion of water on that scale for export, quite frankly, or for any other reason? An environmental assessment panel would look at the environmental impacts of such a diversion and say right away, that they can't allow this. Do you think that environmental assessment would de facto put a prohibition on these kinds of exports?

[J. Owen Saunders]

With respect to your first point about it essentially codifying what's in the International Boundary Waters Treaty and therefore not being advanced, that's true with respect to the amendments to the International Boundary Waters Treaty. It's largely housekeeping. I think it's useful housekeeping, but it's still housekeeping. That's not true with respect to the International River Improvement Act. That really is a new addition to the act and it does make a change.

With respect to environmental assessment, the answer is always that you don't know until you hear from the panel.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

They'll keep doing it under what rules?

[J. Owen Saunders]

You put yourself at risk, certainly.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

That's right.

Mr. Renzetti, I read your paper on tanker shipments a couple of years ago. The Fraser Institute said that right now it's not profitable to export water but that, if we lifted the prohibitions on exporting water, that would spur technological advances that would lower costs.

You're familiar with that report, I imagine. What do you think of that as an economist?

[Prof. Steven Renzetti]

Several things have happened recently. First, there's a surplus of single-hull tankers in the world, and that has driven down the cost of potentially shipping raw water. In most jurisdictions you would only need single-hull tankers, so that perhaps has lowered the cost. On the other hand, desalination costs are dropping very rapidly, so potentially, in some jurisdictions, especially the Middle East and farther south, the idea of moving fresh water is bumping up against the costs of desalination. Technology changes could move in both directions, making it more or less feasible.

The available evidence right now, though—and it's in fact provided by the policy research initiative of the federal government—indicates that the costs are prohibitive. They are in the order of, for the types of scenarios they looked at, $8 to $15 per cubic metre. When you translate that into the values that are paid right now in the areas where water would be sent, it's simply that there'd be lots of other suppliers of water, if you were to try to get that price in those areas. It's just not commercially viable, and the orders of magnitude suggest it's not going to be in the foreseeable future.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We're now going to start our second round of five minutes for questions and answers.

We'll start with Ms. Grewal.

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Thank you, Chair.

My question is for Ms. Hurley.

Many American states in the midwest as well as in the southwest have chronic water shortages. What arrangements exist between these states and the northern states that have better access to water to help relieve these shortages? Are there any comparable regulations to the one being proposed here in other highly integrated areas, such as the European Union or among states in India or Australia, for example?

[Adèle Hurley]

I'll answer your second question first. There is tons of transboundary work under way particularly via the United Nations and inter-university organizations, but I really can't speak to the applicability of any of that to the current situation.

With respect to your first question about drought and aridity issues in the U.S. southwest in particular, I've just come back from there. They are fully engaged in all manner of water preservation, protection, underground banking, groundwater mapping, monitoring. I think one of the benefits of a committee of the House of Commons addressing this particular issue at this time in our history is to finally remove it from receiving the amount of attention that it has been receiving in this country and the stress it has caused to a lot of Canadian citizens. In the meantime, as was mentioned earlier today, there are a number of other very important water issues in this country that we need to get to. One of those is groundwater mapping and monitoring, particularly in southern Alberta. There are parts of this country that are over-allocated in terms of water use. We need to deal with this bulk water export issue so that we can get to these other issues. I can't overstress that today.

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Thank you.

I'll pass the rest of my time on to Mr. Dechert.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Thank you very much.

I would ask Mr. Renzetti, as an economist, to give us a better understanding of the international sale of bottled water. I've always found it kind of amusing that we live in Canada with the greatest amount of pure fresh water in the world and yet when we go into a restaurant and we order bottled water, whether still or sparkling, we get Italian water or French water.

What is the market for Canadian water outside Canada. Can you give us more information on the international sale of water and what drives that market?

[Prof. Steven Renzetti]

Economists used to think people are rational, but that may not apply there.

Professor Saunders mentioned a few moments ago that this is a relatively small amount of water. In reality it is. We're talking about very small amounts of water relative to the issues before this committee in terms of bulk exports. In that respect, from an environmental point of view, with the exception of some instances where jurisdictions don't have the same type of safeguards that we enjoy in Canada, and there have been instances of aquifer depletion and fresh water depletion that's of concern, I don't think there's a significant environmental issue here. In terms of the economics of it, it has been largely an effort by some skilful entrepreneurs to market something that appears to be distinct and unusual, and there are people who, whether it's cheese or water, are willing to pay for that.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

In your opinion, is there a market for Canadian bottled water outside Canada?

[Prof. Steven Renzetti]

There is at the moment. It's fairly small. If you travel to the United States, for example, you can occasionally find Canadian bottled water, artisanal water, or even water from icebergs. That has a certain cachet to it. Other than that, it's a very small market.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

I would just note that the value of a litre of water is much higher than the value of a litre of gasoline in my city.

[Prof. Steven Renzetti]

I should also point out that much of the bottled water that's sold in the United States is actually from municipal water supplies. The water has simply been subjected to de-chlorination and other treatments. It doesn't really fall under a concern with respect to environmental impacts.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We're going to move over to Ms. Davies. Welcome to the committee. Then we'll finish up with a quick comment from the Conservative side before we wrap up today.

Ms. Davies, five minutes, please.

[Libby Davies, NDP, Vancouver East, BC]

Thank you very much.

Thank you to the witnesses for being here today. I'm sorry I missed the earlier presentations—I'm covering for another member of our committee—but what I did hear I found very interesting.

Professor Renzetti, I was particularly interested in what you had to say about Canadians' perception or understanding of this whole issue of our water and how we value it. I think the notion of making irreversible mistakes is something that's very important.

I'm from Vancouver. In Vancouver we tend to have a perception that our water is boundless. British Columbia is a province that has lots of water, rain, and all the rest of it, and yet we went through a pretty severe drought this summer on the south coast. Things are definitely changing, with climate change and other things.

I want to pick up on the overarching question as to whether or not the public policy we deal with is treating water as a commodity or whether it is a common or public good.

I think this is something that you raised. We need to have a national water strategy for overall management and so on. I wonder if you could give us any examples of where you've actually seen this in other states, where there a comprehensive policy that deals with not only possibly the ban on exporting water but also the management of water internally. I think it would be helpful for us to know that in terms of what we need to do beyond this bill.

[Prof. Steven Renzetti]

I would make just one point before I directly answer your question. You raised the issue of whether water is a commodity or a public good. I think the simple answer is that it's both. Water provides a myriad of services to ecosystems, to humans, to industry. We need to be cognizant of all those services, if you like, that water provides. That of course is one of the reasons it's such a complicated thing to regulate.

With respect to other jurisdictions, there are other jurisdictions that are fairly well ahead of us in this regard. It's not surprising that they are often in water-short areas. If you look at Australia, it's often seen as the instance of where, after years of not getting things right, they are now. That's in terms of integrated water management and possibly the use of water markets.

I'd also point to South Africa, which faces very severe water shortages and also some very severe social justice and inequality issues. Their recent water legislation has simultaneously addressed both. I find that to be a very interesting model to pursue.

Within Canada, a number of the provinces in the last decade have been quite foresightful and comprehensive in their approaches. Alberta has its water for life plan. Here in Ontario there's an initiative that follows some other directions, but also with respect to their source water protection. I know in British Columbia they are now instituting a significant review that will, for the first time, bring groundwater under regulatory control.

It is good to see that in other jurisdictions there are some examples that we can follow, but we can also give a nod to the provinces, which are moving forward in this regard.

[Libby Davies, NDP, Vancouver East, BC]

Are there any amendments that you would like to see brought forward that would help strengthen this bill? Have you considered any amendments?

[Prof. Steven Renzetti]

I'm not an attorney, so I would defer to Professor Saunders and his group. They have studied this at length, and I believe they have a much better perspective on this.

My point is not to prescribe to the committee. Rather, it's to indicate that if Canadians feel strongly about this, then, all right, let's ban the proposed activities, but at the same time, let's not mistake a ban for a policy. A ban is in some sense an anti-policy. Let's move on to what are the really significant challenges that really do prevent us from maximizing water's contributions, from an environmental point of view and also from a social and economic point of view.