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On December 4, 1998, Sun Belt Water, Inc. of Santa Barbara became the third U.S. company in a year to launch a lawsuit against Canada under the North American Free Trade Agreement (NAFTA). Sun Belt is suing Canada for $220 million (U.S.) because of an earlier British Columbia decision preventing the company from exporting billions of litres of fresh water from B.C. to California. The case is important, not only because it demonstrates – again – the power of foreign businesses to sue our government under NAFTA, but because it highlights mounting efforts by business to privatize and export Canadian fresh water abroad – efforts the federal government appears unwilling (or unable) to stop.
A global water crisis
Growing numbers of the world’s people are living in areas
where fresh water is a scarce resource, creating a global water
crisis. Canada holds 20% of the world’s supply of fresh water
and investors are proposing to export and sell bulk quantities of
it abroad for profit. None of the schemes proposed would help people
who lack access to sustainable supplies of clean water. Water shipped
abroad would be bought only by the few who could pay for it. Drought-stricken
nations and the poor would be least able to afford it. In addition,
countries that import Canadian water would be less inclined to find
better, local solutions to their water problems.
Priming the privatization pump
Investors see water as the oil of the next century. Although Canada’s
fresh water is publicly-owned and controlled, increasingly private
companies are vying for control of water treatment, delivery and
sewage services. Some municipalities are exploring public-private
partnerships in the provision of water services. The Ontario government
has been pushing water privatization for several years.
But privatization comes at a price. In England and Wales, where water services were privatized in the late 1980s, customers have seen their rates soar, water shortages have been severe, and thousands of low-income people have had their water disconnected, raising serious concerns about the public health consequences. Little has been reinvested in the aging infrastructure, and the actual savings from privatization – the result of massive layoffs, pay cuts and union busting – have been poured into lavish executive salaries, high shareholder dividends and capital to buy other utilities worldwide.
Corporate water giants
France, an even earlier convert to water privatization, has had
similar experiences, spawning in the process their own corporate
water giants. Lyonnaise Des Eaux (LDE), one of the world’s
biggest promoters of water privatization, owns Degremont Infilco
Ltee of Lachine, Quebec, which supplies water treatment facilities
to many municipalities. It also owns most of the second largest
water utility in the U.S., United Water Resources. Many worry that,
if water is allowed to be privatized and exported to the U.S., under
free trade, we won’t be able to turn the tap off – and
companies with large holdings in the U.S., like LDE, will be more
concerned with healthy profits than healthy drinking water for Canadians.
Leaky trade
Canada already permits the sale and export of bottled drinking water.
Unfortunately, we lack a comprehensive national water policy and
legislation prohibiting the bulk export of fresh water. Last year
the Nova Group of Sault Ste. Marie announced it had been given a
five-year permit from the Ontario government to draw up to 10 million
litres of fresh water a day from Lake Superior for export to Asia.
A few months later the McCurdy Group of Gander announced it was
applying to export 52 billion litres of water a year from Gisborne
Lake in southern Newfoundland. Under NAFTA, Canada could lose control
of its fresh water once it becomes a tradable commodity. The Nova
Group has since withdrawn its application, on the understanding
that it will be first in line at Lake Superior if water ever does
become tradable; the Newfoundland application is still being considered.
What our government should do
First, introduce an immediate moratorium on the bulk export of Canadian
fresh water to stave off further export threats. Second, enact legislation
prohibiting large-scale water exports. Third, open negotiations
to exempt water from NAFTA or, preferably, kill the deal. Fourth,
develop a broad national water policy that ensures ownership and
control of Canada’s fresh water remains in public hands. Fifth,
join with other countries and NGOs worldwide to promote more efficient
use and maintenance of local fresh water.
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