Five Things You Should Know About Water

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.