There are many reasons to be critical of the lack of federal leadership when it comes to the stewardship of Canadian water resources – not least among them is the lack of a meaningful federal water policy. But recent proposals to export Canadian water, and a NAFTA claim by a US corporation for $hundreds of millions because BC refused it a water export license, have brought a new urgency to safeguarding public control of this vital resource in the new era of privatization, deregulation and free trade .
In response to growing public concern about water exports, the federal government has abandoned early suggestions that it would ban water exports and is now proposing a federal-provincial accord, ostensibly for the same purpose. Unfortunately its strategy appears to have been determined by a reluctance to confront the reality that under NAFTA and World Trade Organization (WTO) rules, water export controls are prohibited. Moreover, under NAFTA, Canada is also precluded from denying US investors and service providers the same access to Canadian water it allows Canadian companies, communities, and residents.
But instead of seeking amendments to these agreements, Canada is attempting to finesse these trade constraints by adopting the highly dubious position that water in its "natural state" is not a tradable "good" and therefore not subject to international trade rules. Furthermore, by focusing attention on water as a tradable commodity, the federal government is ignoring the fact that under NAFTA, water is both an investment and service even if it is not considered to be a "good".
However, rather than confront these problems directly, the federal government seems to be hoping that if it ignores them, they’ll go away. This is particularly troubling because of the consequences of under-estimating the impact of trade rules, including the fact that under NAFTA, once the tap is turned on – it is impossible to turn off. It is also fair to point out that this same government offered similar assurances about the security of Canadian cultural programs in the free trade context. But its protests did nothing to deter the WTO from ruling them out of order, or prevent the US from announcing $300 million in retaliatory trade sanctions when Canada failed to remove them quickly.