The180

The relationship between NAFTA and Canadian water

Last week, we heard concerns about how B.C. will charge companies to access water. More than 250,000 people signed a petition calling for higher rates, but one former politician said charging more could put the province in conflict with NAFTA. This week we get the legal perspective.

What would happen if Canada sold its water? It's a question we explored on last week's show, and one we'll delve into further this week. 

British Columbia's new water fee system begins next year. More than 225,000 people signed a petition asking the government to charge a higher rate to companies that access the province's water. But one former B.C. MLA says charging higher fees for commercial users like Nestlé could turn B.C.'s water into a commodity for sale - and put the province in conflict with NAFTA.

Judi Tyabji says, "The minute that the government makes a dollar, retains a dollar, on what they're charging Nestlé, Nestlé could go to a NAFTA tribunal and say, 'They sold us this water, therefore we want the water commodity provisions from NAFTA to apply to it', and then we can't turn off the taps."

Martin Olszynski teaches law at the University of Calgary and has studied international trade implications for Canadian water. He says an increase in B.C.'s commercial water rates would not subject the resource to the conditions of the North American Free Trade Agreement (NAFTA).
    
This interview has been edited for clarity and length.    

You just heard Judi Tyabji's concern that raising the commercial fees for water in B.C would trigger the application of NAFTA. Why do you disagree?

Just because you're raising the price of something doesn't mean that it somehow turns into a commodity... It's not fair to describe NAFTA, or international trade regimes, as these kind of 'booby traps' that you might walk into inadvertently or carelessly, and then suddenly they trigger this machinery that you have no control over... Fundamentally, that system  [for accessing water in western Canada] is a licensing scheme; you're not getting a right to water, you're getting a right to take water if it's available.

Canadians are, for the most part, ignorant to the realities of water... Canadians think about water like they think about hockey or beer and the reality is, that is not really helpful.- Martin Olszynski

Judi Tyabji also argues that once NAFTA is activated, Nestlé will be able to take water, even in times of water scarcity. What do you think of that?

Even if we were in a world where water was being traded, exported as a commodity, there are provisions within the NAFTA that allow parties, countries to restrict its exports. The first one, Article 11 [of GATT - General Agreement on Tariffs and Trade]: in times of critical shortage, a party can restrict export. Similarly under Article 20, there's an exception for conservation of a natural resource. The literature is pretty consistent that water would fall within these two exemptions. 

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