International Trade Committee on May 10th, 2007

[Alain Beaudoin]

The report, as I mentioned earlier, was made public. I understand Mr. David Stewart-Patterson handed out copies when he testified two weeks ago here, but border crossing facilitation involves issues that are the purview of public safety, so I wouldn't be in a position to comment.

[John Maloney, Liberal, Welland, ON]

Border crossing is a bone of contention for me. We had the U.S. Department of Homeland Security several weeks ago nixing the border pre-clearance pilot projects that were in place, which had been strongly advocated by commerce on both sides of the border as being a step in the right direction.

We have lofty ideals with the security and prosperity partnership. Everyone wants to cooperate, but when it comes right down to it, sometimes security of one nation trumps all other agendas.

My concern is that talk is cheap, but action is really what we should be desiring. With all this talk, I'm not sure whether we're spinning our wheels on this. If we want to really strengthen our competitiveness and reduce the cost of our trade, why are the countries involved not sitting down and working out all these problems?

[William Crosbie]

It does not mean we're going to agree on everything. We won't agree on everything with the U.S. or with Mexico, but at least with this process we're engaged in a conversation through which we can be more knowledgeable about why we have sometimes chosen to go in different directions. We can choose, sometimes, to go in the same direction. Sometimes we may choose to do things differently, and that may be for good and valid reasons, but then there may be occasions when, through talk, we identify a way in which we can do things collectively.

I think the border agenda still remains essentially a bilateral discussion between Canada and the U.S. and between the U.S. and Mexico. I would say there are successes and there are areas in which we can't agree. For us, maintaining that conversation, improving our understanding of one another and what we're trying to achieve, and identifying some common goals are essential. We would expect, I think, as neighbours, that we are engaged in a collective discussion about how we improve our neighbourhood. That's what we're seeking to do through the SPP.

[John Maloney, Liberal, Welland, ON]

Thank you, Mr. Chair.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Maloney. That was a little over three minutes.

We'll now go to Monsieur Cardin for three minutes.

[Serge Cardin, Bloc, Sherbrooke, QC]

Good morning, gentlemen.

As we know, and as you mentioned earlier, the important aspects of the partnership have to do with traffic at the borders, cooperation in the area of standards and regulations and energy integration.

Before discussing these topics, I would like to speak briefly about water. You said, Mr. Fawcett, that water in its natural state, as a natural resource, would be excluded from NAFTA. That is what you said. However, is water excluded in all the forms in which it can be presented? When water is not in its natural state, it could come under NAFTA.

[Peter Fawcett]

Thank you for the question. I will try to answer it.

I think the NAFTA statement issued by the three countries makes it very clear that water in its natural state is not a good or a commodity and therefore is not subject to any trade agreement. It is in fact a resource.

The whole approach we've taken in amending the International Boundary Waters Treaty Act, which implements the boundary waters treaty between Canada and the United States, is to look at and deal with water as a natural resource, to protect it in its basin and to prohibit removals out of the water basin. It's an environmental measure of general application and is consistent with our international trade obligations.

So I just want to emphasize that this is the approach we've taken to deal with water—as a natural resource, in its basin.

[Serge Cardin, Bloc, Sherbrooke, QC]

You are referring to the context of the International Boundary Waters Treaty Act. There is some water that is not boundary water in Canada and Quebec. You said this: water as a natural resource in its natural state. So water that is not included in boundary waters, when it is not in its natural state, could be included under NAFTA.

[Peter Fawcett]

Let me give you the other side of that.

Yes, when water is put in bottles, as an example, then it becomes a good and is subject to trade agreements. But let me also try to address the other question you raise. Yes, absolutely, when we amended the International Boundary Waters Treaty Act, this was specifically designed for the federal government to operate within federal jurisdiction. And it deals with boundary waters—for instance, the Great Lakes, the St. Lawrence River, the St. Croix and Saint John rivers in New Brunswick. But the Minister of the Environment worked with his colleagues in provinces, and in fact provinces have taken similar measures within their own jurisdictions to provide the same kind of protection for waters within their jurisdictions.

Again, that's dealing with water as a resource, which is the fundamental element in our approach.

[Serge Cardin, Bloc, Sherbrooke, QC]

So you say that bottled water becomes a commodity. So water in a very large bottle, about 65 feet by 10 feet in diameter, would become a commodity. Let us leave out boundary water; I am talking about water within the boundaries of Canada and Quebec. It would therefore become a commodity.

[Peter Fawcett]

I'm generally familiar with the area of provincial regulations and legislation, but I'm not an expert in it; the environment ministry has worked with their opposite members in the provinces. My understanding is that many provinces in fact have prohibited removal of water in containers over a certain size. They have tried to address the issue you're raising.

[Serge Cardin, Bloc, Sherbrooke, QC]

But the other governments that signed NAFTA still have the option of challenging provincial laws. It is possible that people who challenge provincial or Quebec legislation on extraction may want to make water into a tradeable commodity. All the irritants in NAFTA that prevent the free trade of goods become subject to challenge to some extent. The possibility exists. People would like an express guarantee that water, not just in its natural state but Water with a capital "W", will be excluded from NAFTA. Then we could say that there is no harm in being extra careful.

[Peter Fawcett]

Let me try a brief response. I think the statement made by the three NAFTA parties in 1993 is quite clear. I think that stands on its merit. Further to that, we have then amended our International Boundary Waters Treaty Act to address this very issue by prohibiting bulk water removals.

I want to go back to Mr. Menzies' question just briefly to say that in the time that I've been involved in this issue, since 2001, there have been no proposals for any bulk water removals or any projects that would address that issue. In fact, since that time, greater protections have evolved. The Provinces of Ontario and Quebec entered into an agreement with the eight Great Lakes states to amend the Great Lakes charter annex to, again, protect water in its basin. So not only do we have a federal level of protections, but we also have at the level of provinces and states in the United States a similar approach to protect water in their basins.

Frankly speaking, Mr. Chairman, the biggest threats to our waters these days are not because of removals. The threats that we're facing are in water quality and invasive species. You may have seen even this week the major problem we have in the Great Lakes with hemorrhagic fever affecting all species of fish. This is not the first. In fact, there are 180 or more invasive species in the Great Lakes and in the St. Lawrence River that pose much greater risks to our water resources and the ecosystems and communities that depend on it.

Water quality remains a huge issue. We're reviewing the Great Lakes Water Quality Agreement. The biggest threat, and there again it's no surprise, is municipal sewage treatment and a lack of full treatment that's affecting water quality.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Fawcett. I have to cut you off.

Merci, Monsieur Cardin.

Mr. Allison for three minutes.

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Thank you, Mr. Chair.

I'd certainly like to thank my colleague, Mr. Julian, for bringing up the fact that Ontario is still struggling to get back from the NDP government we had in the early nineties and the fact that those studies started in late 1989 and moved on. We were driven so far behind that we almost became a have-not province. I can say that Mr. Harris came in, in 1995, and tried to correct it and provide a solution, and we had $25 billion cut in transfer payments from the federal government at that point in time, so I think all things considered—

When you look at figures and how you want to spin them, I think it does remain that families are still trying to get back from the 1990s. It was that NDP government in Ontario that almost killed Ontario permanently. I do want to mention that and put it on the record.

We've had some groups come in and talk to us and say we shouldn't be trading with the U.S. I guess my concern is always that no one ever provides a solution or provides another—I don't know whether they think we're going to get all our trade with Chile or where it's going to come from, because it's always just naysayers, etc.

There are two points I want to question again. When we look at harmonization of pesticides, I would assume that one of the reasons we're looking at that is because our farmers—I know certainly in my area, and I know Mr. Maloney would maybe say the same thing--have concerns about the unfair advantage they have in not being able to compete. I would suggest that one of the reasons we are looking at the possibility of harmonization on some of these issues is we're trying to be more competitive. Have you been led to believe that this is one of the reasons, as we look at this issue of pesticides? Does it come from stakeholders such as farmers and other groups that deal with these things?

[Alain Beaudoin]

Unfortunately, I don't know the specifics of the background as to why. As far as I can understand, the decision has not been taken. I read Minister Clement's statement earlier that any changes would be based on scientific evidence, according to the highest standards of health.

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

These goods and services are crossing the borders. What percentage are small businesses and what percentage are large companies that are doing trade with the U.S. on a daily basis?

[Alain Beaudoin]

I'd have to come back with the specifics on this question. I can't recall the numbers specifically. My apologies.

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

I know other groups have said it's over 50%. I just want to know if that's the case with you gentlemen as well. One of the other concerns that people keep raising is that this is just for big business. I happen to know that within our own communities there are constantly issues of small businesses doing trade.

Mr. Maloney and I sit in the Niagara Peninsula, where we have a lot of farmers, greenhouse operators, and individuals who do not own large businesses. They are trying to deal with this issue of getting across the border. So I share Mr. Maloney's concerns about infrastructure at borders. I believe that some of the negotiations in these talks would deal with actual infrastructure at borders. Is that not part of what this is about as well?

[Alain Beaudoin]

Infrastructure at the borders is part of the SPP, as said earlier. If you would like more detail on what's going on under the security component, you may want to invite my colleague at Public Safety, who could provide you with more information.

On your previous point, this would apply to all businesses. There would not be discrepancies or differences between big businesses and SMEs.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Allison. Our time for these witnesses is up.

Thank you very much, gentlemen, for coming this morning. It is very much appreciated. We look forward to seeing you some time in the future.

We'll take a short break as we change witnesses and go to the second part of the meeting.

[The Chair, Conservative, Leon Benoit]

I would appreciate it if the next witnesses could come to the table. We want to have as much time as possible with the witnesses.

We've had a request from Mr. Maloney to get a legal opinion from the Library of Parliament on bulk water imports and what is in place now.

Mr. Maloney, if you'd like to say a few words on that, I could ask the committee if they'd be willing to accept that by consensus.

[John Maloney, Liberal, Welland, ON]

Before I vote on this motion, the issue of whether bulk water is or is not included in NAFTA is complex. We've been discussing it for several days now. It came up in our meeting this morning, even though it wasn't the topic. I would like the Library of Parliament to review the situation and give a legal opinion. Is it or is it not included in NAFTA?

[The Chair, Conservative, Leon Benoit]

Thanks, Mr. Maloney.

Is there consensus around the table that we do that? Okay, then we will go ahead with that.

We'll go right to the witnesses now so that we get the maximum amount of time possible with them. For this hour, from the Parkland Institute, we have Gordon Laxer, director; from Common Frontiers we have Corina Crawley and John Foster. Each group will have a maximum of eight minutes for a presentation. We'll begin with Mr. Laxer.

[Dr. Gordon Laxer, Director, Parkland Institute]

Thank you for inviting me.

Parkland Institute is an Alberta-wide research network at the University of Alberta in Edmonton. We're supported by over 600 individuals and dozens of progressive organizations. Parkland conducts research and education for the public good. My remarks are on energy and climate change implications of the SPP.

I don't understand why Canada is discussing helping to ensure American energy security when Canada has no energy policy and neither plans nor enough pipelines to get oil to eastern Canadians during an international supply crisis. Canada is the most vulnerable member of the International Energy Agency—the IEA—yet recklessly exports a higher and higher share of oil and gas to the U.S. This locks Canada into a higher share under NAFTA's proportionality clause. Instead of guaranteeing the U.S. energy security, how about a Canadian SPP, a secure petroleum plan for Canada?

While rising Canadian oil exports help wean America off Middle Eastern oil, Canada is shirking responsibility to Canadians. Rising Canadian exports are perversely leading to greater Middle Eastern imports to Canada. We import about 40% of our oil—850,000 barrels per day—to meet 90% of Atlantic Canada's and Quebec's needs and 40% of Ontario's. A rising share of those imports to Canada comes from OPEC countries and a declining share comes from the North Sea. So the rising share is from Algeria, Saudi Arabia, and Iraq. How secure is that?

Many eastern Canadians heat their homes with oil. Yet we have no plan to send domestic supplies to them. Why not? In which NAFTA country are the citizens most likely to freeze in the dark?

The National Energy Board's mandate is to promote safety and security in the Canadian public interest. Yet they wrote me on April 12, saying, “Unfortunately, the NEB has not undertaken any studies on security of supply.” This is shocking. I asked the NEB whether Canada is considering setting up a strategic petroleum reserve under its membership in the IEA. The NEB replied that Canada “was specifically exempted from establishing a reserve, on the grounds that Canada is a net exporting country, whereas the other members are net importers”.

The IEA was set up, if you remember, by industrial countries in 1974 to counter OPEC's boycotting power. The 24 members must maintain emergency oil reserves equivalent to 90 days of net imports. Only net exporters are exempt from this. Canada shares this status with three other members. Britain and Denmark have been net exporters, but they have strategic reserves because they're members of the European Union. This leaves Norway and Canada. Norway doesn't need a reserve.