Thank you very much to the chair and the committee for the invitation to present insights here, and to Clerk Sophia Nickel for her assistance in making this possible.
Over the past 20 years, my research has concerned the geopolitics of the oil industry. I have conducted extensive fieldwork in oil-producing regions in Mexico, among other regions, and Nigeria. I have also researched oil and gas regulation in Canada, as well as the role of Canadian extractor firms at the UN agency responsible for managing deep-sea mining in the seabed outside state jurisdiction, the International Seabed Authority.
Recently, a significant portion of my work has concerned Canadian investment in the restructured Mexican energy sector brought about by Mexico's controversial 2013 energy reform. At present, I speak to you from Mexico City, where we just completed the Mexican leg of a binational intensive field course on the CUSMA. The second and final week of this course will continue at York University in the last week of June. I would note that Canada's renewed and sudden visa restrictions on Mexico at the end of February created a significant and unexpected logistical problem for us in planning the course, and I would underline that policy change as an irritant in ongoing relations between the two countries.
Since the implementation of the Mexican energy reform, and over the past decade, the continental energy relationship has transformed, particularly as the United States, which had previously been a net importer of fossil fuels, including from Canada and Mexico, became a net global exporter, in particular of natural gas from its fracking boom to the Mexican energy grid. Although this predated COVID, this exhibit of so-called nearshoring in the pandemic's aftermath is often invoked as a means to prevent supply chain blockages through physical and often terrestrial proximity. However, the result here has involved a reversal in Mexican energy sovereignty in a form similar to the reversal in Mexican food sovereignty that resulted from the NAFTA accord, after which Mexico shifted from being a net exporter to a net importer of corn. The same has occurred now with relationships to Mexico's hydrocarbon supply.
The gas that is delivered to Mexico comes by a pipeline system in which Export Development Canada has been a significant investor, particularly given the role of TC Energy, formerly TransCanada PipeLines, as a major Canadian investor in Mexico. Indeed, in recent years, TC Energy has touted itself as the single largest Canadian investor in Mexico. TC Energy's major role in the distribution of gas across the continent has come at a considerable cost not only to Mexican energy sovereignty, but to broader civil society's role across North America in meaningful climate policy. This is seen, for instance, in TC Energy's controversial ISDS case against the U.S. government for the cancellation of the Keystone XL pipeline expansion.
That climate change and indigenous rights receive limited substantive treatment in CUSMA is a significant area for consideration in the review, as is the need to take advantage of the best aspects of CUSMA to develop a continental climate plan for a collectively managed transition off of fossil fuels. The lack of language or an annex on climate agreements makes all three states in the agreement vulnerable to claims if they seek to alter their domestic policies to reduce overall carbon emissions. For Mexico, this is particularly acute, given annexes and articles that prevent Mexico from reforming particular elements in its electricity sector. These tensions are seen in the tabling of complaints by both Canada and the U.S. in the last couple of years in relation to the role of bodies such as Mexico's Federal Electricity Commission and Pemex.
A proper plan for continental energy transition would require independent ongoing modelling and research that would entail an analysis of the life-cycle emissions and hazards posted by various energy sources, including from the process of extracting and continentally transporting fracked gas. This would require a substantive and enforceable raising rather than lowering of the bar that made accidents such as the one in Lac-Mégantic, Quebec, possible.
This would also require the end of the threat of ISDS on Mexico should it wish to modify contracts or promote its own energy sources, because at present, Mexico is at risk of these being interpreted as negatively impacting private Canadian and U.S. firms. A proposal to this effect, I note, is included in the Canadian Centre for Policy Alternatives' recent publication on the CUSMA review, which calls for a moratorium on trade and investment rules that would challenge climate change policies. It also calls for a rapid response environmental enforcement tool, similar to the successful rapid response labour mechanism, which we discussed in significant detail in the course in Mexico City over the past week.
I would note here that CUSMA can be updated to strengthen continental leadership, not only in labour rights, as the CUSMA agreement does and stands out internationally for, but also in environmental and social policy, thus in indigenous rights, climate commitments and notably on the protection of migrants. Also, the U.S., Canada and Mexico creating a level playing field in labour protections by raising them and in the enforcement of global norms around upholding indigenous rights and substantive emissions reductions, as well as investigating gender-based violence in the context of domestic work, would be essential elements in confronting key contemporary global challenges.
I would end by noting that expanding the existing rapid response mechanism for labour violations to agriculture and migrant labour and adopting a similar kind of mechanism for disputes around environmental conditions—so they would be handled in an effective and efficient form—and disputes over indigenous rights and human rights more broadly would create the basis for all three parties complying potentially with their requirements under the IPCC and the Paris Agreement.
I thank you very much for your time and consideration. I'm happy to discuss these comments further.