FAIT Committee Meeting

STANDING COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE

COMITÉ PERMANENT DES AFFAIRES ÉTRANGÈRES ET DU COMMERCE INTERNATIONAL

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, May 10, 2001

• 0908

[English]

The Chair (Mr. Bill Graham (Toronto Centre—Rosedale, Lib.)): Colleagues, I'd like to call this meeting of the committee to order.

As you know, we are commencing this morning with Bill C-6, dealing with the export of water from Canada. It's really a bill to amend the International Boundary Waters Treaty Act. It's a first cut, if I may say, at an issue profoundly troubling to Canadians of whether we will have control over one of the most important resources we do control, our water.

[Translation]

I invite Mr. Paradis, Parliamentary Secretary to the Minister, to introduce the bill. But before turning the floor over to Mr. Paradis, colleagues, I need your support to solve a problem. There are witnesses we need to hear with respect to this bill. The problem is that committee members and especially the parties propose witnesses during the process. We need to be aware of that. We have to finish up by June 11.

• 0910

Accordingly, I propose that May 11 be the deadline for proposing witnesses, in other words all witnesses must be proposed by May 11 at the latest. Is that okay with the clerk? So May 11 is the deadline for submitting the names of witnesses.

[English]

That's the cut-off date for witnesses. Anyone who wants a witness on this bill will have to have their name in by May 11.

Ms. Diane Marleau (Sudbury, Lib.): Mr. Chairman, isn't that a bit drastic? That's tomorrow.

The Chair: It's what the clerk is telling us. We've been told everyone's office has been informed for over ten days now. It may sound draconian as of this morning, but it's not as if no one knew about this a couple of weeks ago. Okay? Agreed?

[Translation]

Ms. Francine Lalonde (Mercier, BQ): Could we not have until Monday, Mr. Chairman?

[English]

The Chair: We're having witnesses on Tuesday and Thursday. If you want anybody added to the list, we could go to Monday. Is Monday okay? Okay, you have until next Monday.

Mr. John Harvard (Charleswood St. James—Assiniboia, Lib.): We have until Monday morning.

The Chair: You have until Monday morning.

Mr. Stan Keyes (Hamilton West, Lib.): You have until noon on Monday.

The Chair: You have until noon on Monday. What a negotiating session. It's great to see the committee so cooperative this early in the morning.

Mr. Stan Keyes: We're so cooperative this morning, yes.

The Chair: We're going to ask Mr. Paradis to wash away the problems of the legislation before us. Colleagues, this is a very complex piece of legislation that amends our law dealing with an international treaty. We're very fortunate to have experts here who will guide us through it. I'll ask Mr. Paradis to commence.

[Translation]

Mr. Denis Paradis (Parliamentary Secretary to the Minister of Foreign Affairs, Lib.): Thank you, Mr. Chairman.

First of all, let me introduce the water experts from the Department of Foreign Affairs and International Trade. Mr. Frank Ruddock is the Deputy Director of the US Transboundary Division. Mr. Jason Reiskind, from the Department of Justice, is counsel in the International Law and Activities Section. Mr. John Cooper is the Director of the Water Issues Branch. Welcome, gentlemen.

Members of the committee, Mr. Chairman, I am pleased to address the standing committee on Bill C-6, on An Act to Amend the International Boundary Waters Treaty Act.

[English]

Bill C-6 represents the fulfilment of the government's commitment to take action within its jurisdiction to address the issue of bulk water removal. Bill C-6 is our highest legislative priority and a key part of the government strategy to private bulk water removal from all major Canadian water basins. Furthermore, it responds to concerns expressed by Canadians that all levels of government should take action to ensure the long-term security and integrity of Canada's freshwater resources.

[Translation]

The committee will be considering Bill C-6 soon. For this purpose, we have provided all members with binders containing detailed information about the bill, including all aspects of trade-related questions. We have also provided a draft of the regulations. That is noteworthy, I must say. I think it is important for a parliamentary committee considering a bill to also consider the regulations at the same time.

Today, I would like to describe briefly the main features of C-6, and then address a few broad questions which are frequently raised.

The amendments to the act are three-fold: a prohibition provision; a licensing regime; and, sanctions and penalties.

The prohibition provision imposes a prohibition on the bulk removal of boundary waters out of their water basins. The main focus of this measure is on the largest of the boundary waters, the Great Lakes. This will protect the Great Lakes from bulk water removal under federal law and provide the means to stop any future plans for bulk water removal out of the Great Lakes.

A licensing regime will cover projects in Canada such as dams or other obstructions in boundary and transboundary waters. Under existing provisions of the Treaty, these types of projects must have the approval of the Government of Canada and the International Joint Commission. Over the last 92 years, there have been about 60 such projects approved without any problems. In essence, this process is not changing, except that for the Government of Canada's approval it will be formalized in a license. I would like to stress that the licensing regime is separate from the prohibition. Bulk water removal projects, if they were to be proposed, are covered by the prohibition.

Finally, C-6 provides for clear and strong sanctions and penalties. This will give teeth to the prohibition and ensure Canada is in a position to enforce it.

• 0915

[English]

I would like to address four issues that have been raised regarding Bill C-6 and Canada's strategy on bulk water removal: first, the scope of Bill C-6; second, Bill C-6 and provincial jurisdiction; third, why not an export ban on water; and fourth, what is the U.S. doing to protect the Great Lakes.

[Translation]

What will the scope of Bill C-6 be? All levels of government must act effectively and in concert within their respective jurisdictions. Bill C-6 fulfills Canada's commitment to act within its jurisdiction.

However, we must recognize the primary responsibility or provinces and territories for water management. Our colleague, the Minister of the Environment, therefore proposed a Canada-wide accord to prohibit bulk water removal out of major Canadian water basins. As of today, all provinces have put into place or are developing legislation and policies to prohibit bulk water removal.

What will the impact of Bill C-6 be on provincial jurisdiction? Bill C-6 does not expand federal jurisdiction or activities into provincial areas of competence, either with regard to the prohibition provision or the licensing regime. Federal jurisdiction is being applied only to the degree stipulated in the Treaty.

With regard to the licensing provision, under the amended Act, the fundamental test of whether or not a future project triggers federal government and IJC involvement will remain precisely what it has been since 1909: does it fall within the scope of the Treaty?

Only the federal government has authority to fulfil the Treaty's obligations. Nevertheless, the federal government consulted extensively with the provinces since 1998 on these amendments. We will continue to consult with provinces on the licensing provisions and the regulations.

[English]

Why not an export ban on water? Some people have advocated federal unilateral action through an export ban on water. Such an approach is wrong. It is unrealistic, especially in the federal-provincial context. It would be ineffective. Worse, it would actually undermine the goals we all share. Unlike Canada's approach, which is focused on comprehensive environmental objectives in a manner that is trade-consistent, an export ban does not address the environmental dimension. It also has possible constitutional limitations and may be vulnerable to trade challenge. An export ban would only regulate the cross-border movement of water once it has become a good, and would therefore be subject to international trade agreements. It would likely be contrary to Canada's international trade obligations.

Under Canada's environmental approach, water is protected and regulated in its natural state, before the issue of exporting arises and before it has become a commercial good or a saleable commodity. This approach is consistent with Canada's international trade obligations. Canadian governments have full sovereignty over the management of water in its natural state, and in exercising this sovereignty are not constrained by trade agreements, including the NAFTA.

[Translation]

What is the United States doing to protect the Great Lakes? It is self-evident that we must work closely with U.S. jurisdictions, both federal and state, to ensure that the regimes on both sides of the border are as consistent and restrictive as possible.

Canada and the U.S. agreed on a reference to the IJC to investigate and make recommendations on consumptive uses, diversions and removals in the Great Lakes. The IJC, in its February 2000 final report, made recommendations which provide the basis for developing a consistent approach to protecting the Great Lakes on both sides of the border. Also, each governor of the eight Great Lakes states has a congressionally affirmed power to veto any new diversions.

In the years ahead, the Boundary Waters Treaty will remain a critical instrument in protecting Canada's rights in the Great Lakes and other boundary and transboundary waters.

• 0920

By adopting Bill C-6, Parliament will set down in law an unambiguous prohibition on bulk water removal in waters under federal jurisdiction, and especially in the Great Lakes. This is a forward-looking action which places the highest priority on ensuring the security of Canada's fresh water resources, which must be protected for future generations. It demonstrates leadership at the federal level. It affirms an approach which is comprehensive, environmentally sound, respectful of constitutional responsibilities and consistent with Canada's international trade obligations.

Mr. Chairman, thank you for the opportunity to address the committee on this important matter. I believe that the departmental officials from Foreign Affairs, Justice and Environment are available to answer members' questions.

Thank you, Mr. Chairman.

The Chair: Thank you very much, Mr. Paradis.

If I have understood correctly, the officials will not be making a presentation.

Mr. Denis Paradis: Mr. Chairman, we will go directly to questions.

The Chair: Thank you very much.

[English]

Mr. Stan Keyes: On a point of order, I just want to state for the record, not just for this committee, but for any other committee that's operating on this Hill, Mr. Paradis, I'm really disappointed that you, as the parliamentary secretary, did not have copies of your presentation ready for distribution to members of this committee. This process is respected by any other witness who appears before this or any other committee of the House, in both official languages. Because of the detail that's involved in your presentation and the questions that would likely spring from it, I think it would only be courteous that this be followed.

So I would have you take that back and ensure that you and any other PS on this Hill, if they're making a presentation to a committee, follow the rules we expect witnesses to follow at the very least.

Mr. John Harvard: May I add just to that, Mr. Chairman, because I too am very disappointed?

The chairman starts off the meeting by saying this is a complicated piece of legislation. He's right. The parliamentary secretary says this is a top priority of the government, and I take him at his word. This is something that's been coming down the pipeline for a good long while, yet the government doesn't see fit to provide this presentation in written form. I think it's a lack of courtesy, Mr. Paradis, and I hope you pass that along to your superiors.

[Translation]

Mr. Denis Paradis: Mr. Chairman, in the next few minutes, we will be making copies of the presentation and handing it out to committee members.

[English]

We will make copies right now. Excuse me, I should have delivered these copies to all the members of the committee.

The Chair: Thank you very much.

[Translation]

Would you like to speak to the same point of order, Ms. Lalonde?

Ms. Francine Lalonde: I want to speak on the same point. I want to add that I would really have liked to have the Minister appear before the committee to talk about this issue that is considered so important and such a priority. I have nothing against Mr. Paradis. I do not believe that the fact that the Minister appeared here to talk about the estimates means that coming to discuss Bill C-6 is less important.

The Chair: In fact, Ms. Lalonde, I believe that the Minister is in the Middle East right now. I am sure that he would be there if it were possible, but it is not in the circumstances.

[English]

Mr. O'Brien.

Mr. Pat O'Brien (London—Fanshawe, Lib.): On that point, Mr. Chairman, having chaired a committee of this House for two years—and the member well knows this, as an experienced member—I think a request to appear before the standing committee would be honoured by any minister I've ever seen. So if it's considered a priority of this committee, then that's an option we could look at.

The Chair: We'll see as we get through the bill whether you feel the minister is necessary, but Mr. Paradis is here representing the minister, and at least we want to get the bill started.

So we move to questions. Mr. Obhrai.

Mr. Deepak Obhrai (Calgary East, Canadian Alliance): Thank you.

Thank you for coming, Mr. Paradis. It's nice to see you over there and getting a little heat from your members here.

First, I would like to make it quite clear that from my party's perspective, support of a side agreement to exempt water in NAFTA is what we are aiming for eventually, which your party promised in the 1993 election but has not delivered.

• 0925

In my opinion, this bill is second-best, a patchwork of agreements. But let me ask some questions so that we can have some clear ideas. Perhaps your experts can just tell us what they mean by a “water basin”, so we can have a very clear definition out here on “water basin”.

Mr. Jason Reiskind (Counsel, International Law and Activities Section, Department of Justice): In general terms, the way the bill works is that it prohibits the bulk removal of water from boundary waters, as defined by the treaty, and taking those boundary waters outside of a basin in which the boundary waters are located.

Now, a basin is generally the area of land where rivers and streams would drain into those boundary waters. The definition of basins is left for the regulations, and I believe that the committee has a set of draft regulations. It's proposed in the regulations to describe three sets of water basins. Those would be the Great Lakes and St. Lawrence basin, the Hudson Bay basin, and the Saint John and St. Croix basin.

Those water basins cover the main areas where the boundary waters are located. So, for example, if somebody would send a tanker into the Great Lakes and then try to remove bulk water from the Great Lakes and then sail down the St. Lawrence into the Atlantic, he would be removing from the Great Lakes the boundary waters. He'd be taking that water outside of the Great Lakes and St. Lawrence basin once he hits the Atlantic. Because it's being taken out of that Great Lakes and St. Lawrence basin the water will not run back into the boundary waters, which is why it's so important to prohibit that bulk removal.

Mr. Deepak Obhrai: And you say this is in the regulations, which brings the second question. Your proposed subsection 13(4) provides for possible exceptions that might be for ballast water, water required for short-term purposes, humanitarian purposes, and water used for production of food or beverages, which is fine, but these exemptions are to be set by an order in council. These are important exemptions, so is it possible to clarify these exemptions and put them in the bill?

Mr. Jason Reiskind: The reason these exemptions are in regulation was to ensure that we could deal with situations that may arise in front of us and to deal with them in an efficient manner. One has these key exceptions set out in the regulations but essentially to ensure the ability to quickly deal with possible efforts at any time to get around the legislation. In order to deal efficiently with such efforts, it was considered best to put them in the regulations.

Mr. Deepak Obhrai: The government mentioned the mounting pressure—I don't know who is going to answer this—on freshwater resources as the reason for this bill. One of the reasons why the government brought this bill was this mounting pressure, the government is claiming. Maybe you want to tell us what that pressure is. I mean, what kind of pressure was put on for you to bring this bill? Why could the existing regulations not reach the same conclusion or the same target as the other regulations? What were the pressures to bring this bill?

• 0930

Mr. John B. Cooper (Director, National Water Issues Branch, Ecosystems and Environmental Resources Directorate, Environmental Conservation Service, Environment Canada): If I can, I'd like to start by saying that some fundamental principles of water management today are to protect watersheds. Most jurisdictions across the country are looking at watersheds. It's the fundamental unit—a water basin's the same—of management for protection of both the ecosystems and the communities dependent on these natural water supplies.

Much of our investment in protecting from pollution and overuse is directed on a watershed-based approach, and, as the IJC report on the Great Lakes indicated, with the population of the Great Lakes Basin reaching 40 million people and the industrial growth, these water uses are under increasing pressure from use for industrial, municipal, a variety of agricultural, and other purposes.

Climate change is also expected to have significant impacts on levels and distributions of water across the country, and it's predicted that the Great Lakes levels could actually be reduced by over a metre and a half by 2025 due to climate change impacts. As we've experienced over the last three years, there have been low levels of the Great Lakes, which have affected shipping, recreational boating use, and even municipal water supplies.

What we have to understand is that only a certain percentage of the water that flows through a basin is renewable each year. It's based on the precipitation and snowmelt that come into the watershed and flow through the watershed. In the IJC study, they reported that on average the annual renewable component of the Great Lakes is only at 1%, and that is the water that we use for many purposes. It's the water that keeps the rivers flowing down the St. Lawrence to allow us to continue shipping and provide water to municipalities along the system. The rest is the water that is left over from the ice ages. It's essentially the capital, because we don't flush out the system each year. It's just based on that 1% renewable flow, and there's increasing pressure on that 1% with population growth and the impacts of climate change.

On the cumulative impacts of consumptive uses, the IJC reported that approximately 5% of our uses of Great Lakes water is consumptive. Consumptive means that you lose that water permanently, and bulk water removals is a permanent loss of water. For example, 95% of our water uses in the Great Lakes basin return that water to the Great Lakes basin for other uses and to keep the levels up. So if we allow bulk water removal, regardless of whether the destination is another country or another part of Canada outside the watershed, that particular watershed will lose that water forever.

Mr. Deepak Obhrai: Thank you.

The Chair: Thank you very much.

Madame Lalonde.

[Translation]

Ms. Francine Lalonde: Good morning.

A number of documents indicated that the federal government draws its authority for water and its enforcement powers from the 1909 Boundary Waters Treaty. That said, the way I read Bill C-6 is that the scope of this legislation goes beyond the scope of the treaty.

Moreover, Mr. Chairman, the copy of the treaty in our binder is in English only. There must be a French version of these treaties. Have you taken note of that, Mr. Chairman?

[English]

Mr. Stan Keyes: I'm sure the chairman will look into that bilingual copy of the treaty.

• 0935

[Translation]

Ms. Francine Lalonde: The treaty in our binder is in English.

The Chair: All right, but it is available in French. I am certain of that.

Ms. Francine Lalonde: That is why I am asking why we do not have it.

The Chair: The treaty is part of the act, is it not, Mr. Ruddock?

Mr. Frank Ruddock (Deputy Director, United States Transboundary Division, Department of Foreign Affairs and International Trade): [Editor's note: Inaudible] ...since in my binder, it is in French.

Ms. Francine Lalonde: So there must be a mistake, Sir.

I have written notes on my copy. The interpreters will have to give the French version of what I am going to say.

Regarding boundary waters, the preliminary article states:

[English]

...waters are defined...but not including tributary waters which in their natural channels would flow into such lakes, rivers, and waterways, or waters flowing from such lakes...

[Translation]

But clause 12 in the bill includes what is excluded in the treaty. I do not understand how, in a bill to amend implementing legislation—this is how I understand it—the scope can be defined differently.

The scope is not defined precisely in the bill the way it is in the treaty, but rather the Minister is given the power to define water basins. That is my first question, Mr. Chairman. How do you explain that?

[English]

Mr. Jason Reiskind: We were very careful to remain within the general ambit of the original treaty in order to keep the constitutional basis of 132.

The particular point you mention—I can appreciate why it needs an explanation, but we have limited the prohibition to removals from boundary waters. If there would be a removal from waters flowing into boundary waters, we have not included it in the prohibition. So in that way we are not providing a prohibition of bulk removals dealing with waters flowing into boundary waters, because those are not covered by the treaty.

When you talk about the basins, what we are saying is if you have a bulk removal from a boundary water, such as the Great Lakes, it cannot be taken out of the broad geographic basin, because it doesn't flow back into those boundary waters. So it's ancillary to the main point of protection of preventing a change in the level and flow of the boundary waters, which is explicitly in the treaty.

My understanding generally is that implementing legislation doesn't have to follow exactly the wording of the treaty, but it has to be reasonably necessary. I mention, if I may, Mr. Chairman, for example Water Law in Canada, written by Gérard La Forest, who was later, of course, a Supreme Court judge. He writes in that book, on page 65—and I'd be glad to leave it:

Implementing legislation under section 132 need not come within the exact terms of the treaty; it is sufficient that it is reasonably necessary to perform the obligations under it.

• 0940

He cites also a case worth mentioning to the committee, Regina v. Stuart from 1925, where they implemented the Migratory Birds Convention. In that instance it was held by the Manitoba Court of Appeal that the legislation held valid as being reasonably ancillary to the purpose of the treaty.

So while the water basins aren't mentioned in the treaty, it's directly related to protecting the levels and flows of the boundary waters on the U.S. side, which is the focus of the treaty.

[Translation]

Ms. Francine Lalonde: I have noted that Supreme Court decision and I will examine it. In Quebec, people say that the Supreme Court always leans the same way, like the Tower of Pisa. I would also like to mention that the answer to my question dealt with the clause 13, whereas my question dealt with clause 12. But I will move on anyway.

In its recommendations, the International Joint Commission takes a completely different approach from the federal government. It makes recommendations on bulk water removals and diversions, but its recommendations are addressed to the eight states and two provinces that have signed the 1985 Great Lakes Charter, whether we are talking about removals, major new or increased consumptive activities, conservation or standards.

In recommendation 5, the Commission states:

To help ensure the effective, co-operative and timely implementation of programs for the sustainable use of the water resources of the Great Lakes Basin, governments should use and build on existing institutions to implement the recommendations of this report. In this regard, the governments of the states and the provinces should take action with respect to the implementation of the Great Lakes Charter.

It also says that, in order to ensure the effective, co- operative and timely implementation, the federal government should work with the provincial governments to collect data and do research and development.

Since the expertise and experience that is referred to occurs at the provincial and state levels, why is the federal government, instead of trusting the provinces, determined to broaden its jurisdiction, create an infrastructure, and give its officials expanded authority, when the issue has already been dealt with or could have been, using the approach that it proposes? I find that hard to understand. I would add that the International Joint Commission was acting on a reference from the two federal governments, those of Canada and the United States.

Mr. Frank Ruddock: The International Joint Commission's report shows very clearly that the IJC's approach was parallel to that taken by the federal government. As Mr. Cooper was saying earlier, they saw the problem as a multi-facetted one, which means that it goes beyond water exports to include the environment, economic growth, demographic changes, climate change and other aspects, as well as the cumulative effect.

They took the same approach as we did, that is, that this is an intergovernmental issue. You have quoted some of the recommendations addressed to the eight American states and to Canadian provinces, Ontario and Quebec, since they are members of the Great Lakes Charter.

• 0945

But their recommendations are aimed at all levels of government, including the federal government. The International Joint Commission's conclusion in its report was to ask all levels of government to take a cautious approach to water management and, in particular, to protect the basin's ecological integrity. Before Bill C-6, the federal government was already taking a cautious approach by prohibiting certain activities but, as my colleague, Mr. Reiskind, said a few minutes ago, that prohibition applies only to boundary waters as defined in the treaty. There is no increase in federal powers.

Ms. Francine Lalonde: I am sorry, but clause 12 of the bill says the opposite.

Mr. Frank Ruddock: Clause 12 applies to the licensing regime, I believe, and it is very important to make a distinction between the prohibition under clause 12 and the licensing regime. The licensing regime formalizes a system that goes back 92 years and has nothing to do with bulk water removals. It deals instead with projects like dams in boundary waters. That aspect of the treaty dates back 92 years.

Over the past 92 years, there have been 60 projects that required the approval of the International Joint Commission and the government of Canada under the treaty, and these 60 projects were given that dual approval without any problem. There was no overlap with provincial jurisdiction. But that applies only to these projects; it does not apply to the prohibition.

The Chair: I am sorry, but you have already had 13 minutes. We will have a chance to come back to this issue.

Ms. Francine Lalonde: Yes. You see that it is not a simple matter.

The Chair: I agree that it is quite a complicated issue and we would have liked to understand, but other people would like to ask questions. We will now go to Mr. Keyes and then to Mr. Comartin.

[English]

Mr. Stan Keyes: Thank you, Mr. Chairman.

Good morning, gentlemen, and thank you to the parliamentary secretary for his remarks to us this morning.

For the benefit of our viewing audience and for greater clarity—if not for them, certainly for me—here are a couple of basic questions that may take us back a little.

Is giving the federal government sole power over bulk water exports a change from the current legislation?

Mr. Frank Ruddock: When you say “sole power over bulk water exports”, could you be more precise, because that's not what the bill's about; it's about a prohibition on bulk water removal.

Mr. Stan Keyes: All right then. That leads me to my next question. Does any bulk water currently exit Canada?

Mr. Frank Ruddock: There are no projects of bulk water removal from Canada in the sense we're looking at in this bill, bulk water removal such as a tanker project like the one in the Great Lakes in 1998.

Mr. Stan Keyes: I'll be more specific then. Can water be exported by tanker truck or shipload, or by pipeline from Canada to the United States currently?

Mr. Frank Ruddock: Under the present legislative situation, all jurisdictions in Canada either have adopted or are in the process of adopting legislation to prohibit bulk water removal. Self-evidently, until this bill would be passed, we wouldn't have the federal power. There are three other provinces that....

Mr. Stan Keyes: Okay, I'm going to interrupt. Can water currently be exported by truckload or pipeline or tanker truck to the States? Can it, yes or no? It's not a difficult question.

The Chair: It is a complicated jurisdiction.

Mr. Stan Keyes: No, Mr. Chairman, what I'm asking is very simple.

• 0950

Currently, can a tanker visit a freshwater basin, whether it's in the Great Lakes or Winnipeg, load up with water—by pipeline or tanker truck or vessel—and export that water from the country? Can this happen right now, as we speak?

Mr. John Cooper: In terms of removal of water from Canadian jurisdictions at the moment, number one, it's not happening. Whether it can happen in some of the jurisdictions that have not yet got their legislation—

Mr. Stan Keyes: But I'm talking federal jurisdiction. Can it happen?

Mr. John Cooper: Federal—you mean the Great Lakes, for example?

Mr. Stan Keyes: Sure, let's take the Great Lakes.

Mr. John Cooper: Yes, it can happen.

Mr. Stan Keyes: It can. Okay.

This legislation comes forward, and now we are saying we're going to try to prohibit this. We don't want any bulk water removed; we don't want the big ships coming in, loading up in the Great Lakes—and as in your earlier example—leaving Canada via the St. Lawrence Seaway, going down the Atlantic seaboard, and the water is gone.

But does this legislation prevent the same tanker from visiting the Great Lakes, loading up with water, going to Toronto, docking there, transferring the water from a tanker to a bottling company, putting it in 20-litre bottles, and having it shipped down to the United States? Does the legislation prevent this from happening?

It's another difficult question, Mr. Chairman.

Mr. Frank Ruddock: No, it does not. The legislation does not interfere with legitimate commercial products. But the important point here is when the tanker's sitting empty, whoever's loading the tanker has to say why they're doing it, what their purpose is.

Mr. Stan Keyes: Fine. But I don't want to wander off point. The point is a tanker still can go into the Great Lakes.

What I'm demonstrating here is that what we're not going to permit through the back door—loading up a tanker, taking it down the St. Lawrence to the east Atlantic seaboard—we are going to permit if the tanker loads up, docks in Toronto, unloads its shipment at a bottling plant, puts it in 20-litre bottles, and exports it to the United States.

Unless I stand to be corrected, it may be even further than just the appearance of...still being the export—the same damn water out of the same damn ship—but we're going to make it a little more difficult, because it's got to go into a bottle before being exported by truck down to the United States.

Is this an accurate summary?

Mr. Frank Ruddock: Well, partly, but first of all the—

Mr. Stan Keyes: What part isn't true?

The Chair: It's the question.

I've had the opportunity, Mr. Keyes, of having some explanation on this. There is water presently being extracted from Canadian aquifers and being exported in bottles. This legislation trys to deal with all those issues, but it is complicated. It does permit under certain circumstances this type of controlled removal, but it's a limited controlled removal. We have to get to those....

Mr. Stan Keyes: All right, if it's a limited controlled removal, as you state, Mr. Chairman, then perhaps my next question—and it's basic too, I suppose—is are there any limits to the amount of water making its way out of Canadian freshwater basins to the bottle companies exporting it?

Mr. Frank Ruddock: May I answer one of the last questions first, Mr. Chairman?

The Chair: Yes.

Mr. Frank Ruddock: First of all, the purpose of the bill is not to interfere in legitimate products, legitimately traded—whether it's bottled water, or beer, or reconstituted juices, or whatever. This is certainly not the purpose of this bill.

I would note as well on the issue of bottled water, the International Joint Commission, in its report in February 2000, essentially said that this trade was not of sufficiently large size to cause concern. They looked at it and said it was not of concern in the Great Lakes basin.

To go to your last question now, most bottled water—Mr. Cooper can correct me if I'm wrong—almost all bottled water comes from aquifers. In fact people don't draw it out of lakes; for the most part it's from aquifers. All aquifers are under provincial jurisdiction. The law does not cover aquifers; this is provincial jurisdiction, and as we've noted, we've stayed within the federal jurisdiction.

Once the water's in the bottle, it's a product, and it's legitimately traded.

• 0955

Mr. Stan Keyes: Okay.

In the document “Bulk Removals, Status of Legislation & Regulations across Canada”, there's a column called “Exceptions” for each province. Who sets these exceptions on this sheet we received? Are these federal exceptions or provincial exceptions?

Mr. John Cooper: These are provincial exceptions.

Mr. Stan Keyes: Oh, these are all provincial exceptions. All right. They're under provincial legislation.

I just found it odd, Mr. Chairman, that in Quebec, for example, the last exception says that “the prohibition may be lifted on the ground of urgency, for humanitarian or other reason in the public interest”. No other province in the country has the same exception. A nice, all-encompassing exception is included for Quebec.

I have just a quick, final question, gentlemen. When it comes to the aquifers, which I suppose supply the water to the Great Lakes...this is where I have to sort this thing out in my own mind. You're not allowed to have a ship, take water out of the Great Lakes, and transport it down the eastern seaboard. However, we have the aquifers, which are under provincial jurisdiction, and it's the aquifers that supply the water eventually to the Great Lakes. It has to come from somewhere. So it's not okay to take the water out of the Great Lakes, but it'll be okay to take it out of the aquifers because they're provincial. Even though we're affecting water levels in the Great Lakes, you'll still be able to fill those tankers or draw a pipeline from an aquifer, direct it to a bottling company, and put the water in a bottle. Then it's a product, so that's okay. We can still export that.

Gosh, I'm quite seriously thinking that I ought to go into the business of bottling water. We are now saying that it's okay because it's under provincial jurisdiction; there's nothing we can do about the aquifers; we're having discussions and we're going to have some good arrangements with these people; but at the same time we're going to take the step as a federal government not to allow water to be bulk exported out of our Great Lakes or basins.

Okay. That's terrific, but the water's still getting there from somewhere. It's coming from an aquifer, and we have no control over how much water comes out of that aquifer into the basin. We're accomplishing the same thing, just through the back door instead of the front door.

The Chair: Do you have any comment on that, Mr. Cooper?

Mr. John Cooper: Yes.

The aquifers do not contribute all the water to a basin. There's clearly precipitation, snow melt, exchange, and what have you as well.

Mr. Stan Keyes: Do you have percentages on that?

Mr. John Cooper: It varies according to the basin. Now, in terms of aquifers, it's true that this legislation does not cover the issue because the treaty doesn't cover groundwater. However, provincial legislation that is being put in place in Ontario, for example, covers groundwater removals as well as surface-water removals.

In that context, in terms of bottled-water exports from this country, it's important to know that there is, I believe, around five hundred million litres of water exported from this country per year on average. Now, this is less than the proposal made by NOVA Corporation in 1998 to remove water from Lake Superior, which was 600 million litres per year. It's not a significant amount of water in the grand scheme of things.

Mr. Stan Keyes: Thank you, gentlemen.

I was being argumentative, but I was trying to make a point. If we're concerned about water export, it's certainly not just a.... We can take our steps with this legislation federally as we are doing, but there has to be cooperation between the federal and the provincial governments. The provincial governments must understand the importance of not only measuring and monitoring exports but of ensuring that we're not doing through the back door what we're not allowing through the front door.

Thank you, Mr. Chair.

Mr. Denis Paradis: Maybe on that, Mr. Chairman, I would just like to add that Environment Canada has been working with the provinces over the last two years to try to have a kind of pan-Canadian scheme for that.

The Chair: Yes. It's very clear that water is a provincial resource and that it is owned by the province. We're in one of these usual things where the federal government has a certain limited level of regulatory power over this matter. In this case it comes under the treaty, but sometimes it comes under other forms of federal regulation. Ultimately we will, as you say, Mr. Keyes, require cooperation between the provinces and the federal government to completely cover this field.

• 1000

Is that fair, Mr. Cooper? I think we all understand that.

Mr. John Cooper: Yes, Mr. Chair. Can I make one brief point?

The Chair: Yes, sir.

Mr. John Cooper: When this issue arose with the NOVA proposal in 1998, there were only two provinces with legislation prohibiting bulk water removal. At this point we have all provinces except New Brunswick with legislation in place or introduced or with regulations in place or introduced prohibiting bulk removal. New Brunswick is in the process of developing that. We do have that federal-provincial cooperation, so we are providing coverage for all of Canada.

The Chair: Good. Thank you very much.

We'll have Mr. Comartin and then Mr. Harvard.

Mr. Joe Comartin (Windsor—St. Clair, NDP): Thank you, Mr. Chair.

Just as a preliminary comment, there have been meetings going on between the federal government and the two provinces in the Great Lakes and St. Lawrence watershed according to a memo I think I got from some government source. My understanding is—and I've had this confirmed from some meetings I've had in the United States—that the state governments on the American side have what they're calling a de minimis threshold of water they each want to take out. Do any of you know what the status is of those meetings?

Mr. Frank Ruddock: This was a proposal by the Council of Great Lakes Governors under the Great Lakes Charter. Ontario and Quebec are participants in that, so there are eight Great Lakes states plus Ontario and Quebec.

In December they came up with a new standard, and this was the recommendation that Madame Lalonde referred to in her question. The de minimis threshold was put out in this draft document in December. It attracted a lot of criticism for being too lax, this threshold making it too easy to take water out. The Canadian government made formal comments in writing, indicating our opposition to it, to the Council of Great Lakes Governors in February. Last month the Government of Ontario and the Government of New York both formally announced their opposition to it as well.

What in effect has happened, therefore, is that the council and the Great Lakes Charter group have gone back to the drawing board to reconsider it. There was a lot of criticism on both sides of the basin from environment groups and other governments, so basically it's nowhere at the moment.

Mr. Joe Comartin: I have two supplementary questions. Is there anything in the existing treaty that would prevent either a number of these states or an individual state from unilaterally going ahead and removing—using that de minimis if some of them persist with it—a million gallons a day. Is there anything that prevents them from just doing it unilaterally?

Mr. Frank Ruddock: There are, yes—

Mr. Joe Comartin: I'm sorry. As part of that, do you have any sense of what the intent is from these states as to the use of this water?

Mr. Frank Ruddock: There are sort of three questions there. The intent of the states for the use of the water is a complicated question but concerns their economic interests. Most of the Great Lakes states have indicated they are not in favour of what one would call large-scale, long-distance removals. What they are interested in, though, are transfers of water within their state but outside the basin. If you look at the Great Lakes basin, it cuts through most of the Great Lakes states. It slices them in half, so there's a northern half within the basin and a southern half outside. At present, they can't get that water over the divide because they're not allowed to. That's what their state interest is there.

On the issue of whether they can do it unilaterally, the answer under U.S. law is that no, they can't. There is a U.S. federal law that gives each of the eight Great Lakes governors an individual veto over transfers outside the basin. For Ohio to say it wants to transfer x million gallons out of the basin, it needs the individual approval of all the other Great Lakes states, and that's proven hard to do.

Also, the third protection that is there...that's what the Boundary Waters Treaty is about. We have obligations to the United States, and they have obligations to us. If we feel a concern about that, that's what the treaty is there for, to defend Canada's rights. It's a complicated mix of jurisdictions, but these aren't things that can happen overnight—unilaterally.

• 1005

Mr. Joe Comartin: If all eight of the state governors agree, is there anything that Canada can do to prevent them from moving that water?

Mr. Frank Ruddock: The last point I made, which is if all eight governors were to agree.... I would point out that under the Great Lakes Charter they wouldn't require the agreement of Ontario and Quebec, but they would sure have to pay attention to Ontario and Quebec, because they're part of the Great Lakes Charter. So they would have to deal with the two provinces as well. But as far as the federal government goes, if there were such a large diversion or removal of water that we objected to, we have the treaty there. In that the treaty deals with water volume—that is, affecting levels and flows of the waters of the Great Lakes—we would have an instrument to intervene.

Mr. Joe Comartin: Is that because of historical understandings, or are there specific provisions in the treaty that prohibit either country from accelerating the removal of water?

Mr. Frank Ruddock: Basically, the treaty says that neither government will affect the level and flow of water on the other side of the boundary without the approval of the International Joint Commission and the government where the project is taking place. The principle behind that is very clear. That is not to say that diversions haven't taken place in the past. They have. People talk about the Chicago diversion that exists right now. But in the future, that is an important protection.

Jason, do you want to add anything?

Mr. Joe Comartin: The commission itself could approve.

Mr. Frank Ruddock: Not by itself. It depends on where the project is. If the project is in Canada, then it must have the commission's approval and the Canadian government's approval. If it's in the United States, it must have U.S. approval and the commission's approval. If the project straddles the whole boundary, then it needs three approvals—United States, Canada, and the commission. I would remind you as well that the commission is independent of government. It is an independent approval, once it goes there.

Mr. Joe Comartin: Except that the appointees to that commission are all government appointees.

Mr. Frank Ruddock: No, they're appointed, but they're independent. They do not take orders from governments once they're there. They're independent commissioners, and the treaty specifically enjoins them to work in the interests of both countries. There is a balance—three American, three Canadian commissioners. But it is an independent commission and it has quasi-judicial functions. That's one of the reasons why it is independent. There is not a Canadian delegation to the IJC.

Mr. Joe Comartin: You'll have to allow me to be skeptical on that.

Let me move on to clause 11.

The Chair: That is always permitted in this committee.

Mr. Joe Comartin: Thank you, Mr. Chair.

Why did we opt for a licensing provision? I know the historical projects that we've allowed. As far as I know, they've been pretty well exclusively, as the minister said in his statement, dams and other types of diversions of that nature. As I read section 11, it also allows for the use of the water, not just obstruction or diversion of boundary waters. It seems to me that opens up the possibility of licensing for bulk export.

I'm referring to proposed section 11 in Bill C-6.

Mr. Frank Ruddock: That part of the wording of proposed section 11 was taken directly from the treaty, so that is not really anything new. It's almost exactly from article 3 of the 1909 Boundary Waters Treaty. It's important in our context in that the bulk removals can be considered in some ways a use or a diversion. But this way we're covered and, as I say, it's not a wording that we invented for the bill.

• 1010

Mr. Joe Comartin: But what is new is a formal licensing infrastructure, as I think one of the other members mentioned, that's being implemented now with these amendments, or would be if these amendments go through. We've never had a formal licensing infrastructure before—is that correct?

Mr. Frank Ruddock: I think it's important to distinguish here that it is not new. Presently, if a proponent comes forward with a project that falls under that part of the treaty, right now they are required to get federal government approval. They are required to get IJC approval. As a matter of fact, the IJC won't even look at a project unless the federal government sends it to them. And even then, the IJC does not even consider that federal government approval. That approval is required.

Essentially that approval has always been more informal under the authority of the treaty. So the IJC does its work—that's what it's there for—and the federal government has always informally said yes, we agree. So the licence will just be a formalizing of that yes, we agree.

But I think it is important to recognize, because you mentioned another point there, that the prohibition there is a prohibition. The exceptions to the prohibition do not include issuing licences and things like that. The prohibition is there to prohibit. The licences are there to formalize these projects that occur under articles 3 and 4 of the treaty. The licences are not there to license bulk water removal.

The Chair: You'll have to reserve your skepticism now for a moment of reflection, Mr. Comartin. We'll go to somebody else, and we'll perhaps have a chance to come back to you.

Mr. Joe Comartin: Put me on the list for the next round.

The Chair: Yes, sir.

Mr. Harvard, sir.

Mr. John Harvard: Thank you very much, Mr. Chairman. And thanks to the witnesses for coming today.

Gentlemen, to me the intent of the bill is quite clear: to prohibit the bulk removal of water from Canada. That seems to be quite clear. But everything after that is a bit less clear—a bit more complicated. Perhaps, in a way, the bill might be found guilty of half measures. And I think I understand why.

To me, the simple way would be if we don't want water leaving Canada in bulk fashion, we just simply impose an export ban. But of course we have provincial jurisdictions and federal jurisdiction, and we somehow have to recognize that in our very complicated federal system. So what you've done, it seems to me, is you've come up with this bill, which really applies only to boundary waters. It doesn't apply to any other waters but the boundary waters.

So with regard to my two questions, after that preface, really one is political and one is perhaps technical. Maybe Mr. Paradis can answer the political question.

I assume that the reason why we didn't go to something much simpler, which is an export ban, was that it would cause a political donnybrook or a political brouhaha with the provinces, especially your home province. And, God, we couldn't do that, even though it seems that everybody and his dog is not in favour of exporting water in bulk form from this country. But we couldn't do it in a simple fashion, because that would offend some provincial sensibilities.

Mr. Stan Keyes: Approach on jurisdiction.

Mr. John Harvard: Yes. Approach on jurisdiction, which we always have to, of course, abide by.

But the other thing is the technical side of it, and that is the export ban itself, which we haven't chosen to pursue. I think that for the sake of the public, witnesses, we need to know more from you about why we couldn't have just—forget about the politics—chosen the export ban. I suspect it has something to do with trade obligations and the WTO and all that kind of thing. But I think I want to hear that from you.

There is no doubt that at the end of the day, sure, we're going to have a bill applying to boundary waters, but we're also going to be dependent upon provincial governments. Is that not right, Mr. Chairman? We're going to need the cooperation of provincial governments.

• 1015

Right now we have ten provincial governments that appear to be onside, or at least they're going that way, despite the fact we've heard comments from the Premier of Newfoundland in recent times, in recent weeks and months, saying maybe he'll allow something in the way of bulk removal of water.

Would Mr. Paradis answer the political question? Would the witnesses, the experts, give us more detail on why we couldn't choose a straightforward export ban?

The Chair: Mr. Paradis, sir, and then we'll go to Mr. Ruddock.

[Translation]

Mr. Denis Paradis: Mr. Chairman, the first reason is that it is an environmental issue and not a trade issue.

[English]

It's not a trade issue, it's an environmental issue. I think it's very important.

The second answer would be that provinces have to be part of it. Here, with the federal jurisdiction, we only touch what is federal. Water within provinces is a provincial jurisdiction. We take environment first, province cooperation second, and third is the trade issue you mentioned in your last question.

Our belief is water in its natural state is not a good. It's very important that we consider water in its natural state in a basin. Some people would pretend that if you take water from its natural basin and put it in a truck, it becomes a good. It could be; I don't know. We're sure of one thing: when the water is in a natural basin, it's not a good.

The three points are really environmental ones. The preoccupation of the people is the environment. It's very safe to keep this water in the basin, not only for us, but for future generations. It's also very important that we have a cooperative action with all the provinces in Canada, not only Quebec. Third is the trade consideration.

Mr. John Harvard: Can I, Mr. Chairman, pursue one more question with respect to what Mr. Paradis is saying?

I understand the provincial sensitivities, Denis. I understand that. I'm not a lawyer, but can you tell me this? There are lawyers in this country and constitutional experts who would argue that in the higher political interest or the public good of this country, we do have legal recourse and the legal right in the national interest to impose an export ban. It would be in the national interest to prevent provinces, if they were willing, from selling this natural resource of water in bulk fashion outside the country.

Mr. Denis Paradis: I imagine you can find lawyers to argue that. Every point could be argued by a lawyer.

Mr. John Harvard: What does the Canadian government say?

Mr. Denis Paradis: At the same time....

The Chair: Are you suggesting, Mr. Paradis, that lawyers would say anything?

Mr. Denis Paradis: No. I mean to deliver good points. There are different points.

[Translation]

In a court case, there are lawyers on both sides that claim to be right.

The Chair: It depends on the fees.

Mr. Denis Paradis: All the government experts and the people consulted told us that the safest way, the most environmentally sound way, in other words, the best approach was to be careful not to get into the trade aspect and transfers of water from one country to the other. It is better to resolve the problem from the environmental angle, and that is what we are doing by legislating on water in its natural state, since the water is still in its original basin. We are talking about an environmental problem that we want to correct, and it is important to resolve the problem within the basin. Otherwise, there could be all sorts of legal challenges. Is water considered a good or not once it leaves the basin? That is a big question mark.

This is an important issue and the government has decided to protect water using an environmental approach and to preserve this water for future generations.

I repeat that there are three important aspects. The first is the environment, the second is co-operation with the provinces, and the third is that water is not a trade good when it is in its natural state.

[English]

Mr. John Harvard: I respect that. I suspect we have the legal right to do it. We wouldn't do it politically because it just wouldn't work politically. I want to hear from the experts on the external ramifications of a possible export ban.

The Chair: Mr. Ruddock.

• 1020

Mr. Frank Ruddock: Everything Mr. Paradis has said is correct. I would like to point out a very important distinction, though. An export ban deals with products; it doesn't deal with water in its natural state. And it only deals with products when they cross the border and when they're a good. Those sorts of measures are vulnerable to trade challenge. Even those who during the long debate on this subject have advocated an export ban concede that an export ban would be vulnerable to trade challenge.

The principle we have pursued, which Mr. Paradis has referred to again, that we are managing and regulating water in its natural state, is a far more defensible principle.

This issue that Canadian governments—and you've heard us say this before—have full sovereignty over the management of water in its natural state, and that in exercising that sovereignty they are not constrained by trade agreements, including NAFTA, is a basic principle of international law. This view has been supported by an extremely wide range of expert opinion. The International Joint Commission held public hearings on this. They heard from governmental and independent experts from all points of view. In their final report, they came up with the same conclusion.

Furthermore, the deputy United States trade representative, in a written submission to the IJC, defended the same point of view, saying that the rights to manage water in its natural state—and I'm quoting here—“belong solely to the country or countries where the water course lies”. He further indicated, referring to the World Trade Organization, that the WHO “simply has nothing to say regarding the basic decision by governments whether to permit the extraction of water from lakes and rivers in their territory”.

That's why this is a better approach to it, this basic principle of international law that governments have the fundamental right to decide whether they're going to extract the natural resource, and when. And if you just substitute for the word “water” forests, fish, minerals—you name it—I think it becomes readily apparent that just because one government somewhere has decided to sell 10,000 hectares of forest, or a vein of iron ore, it doesn't obligate anyone anywhere else, or even that government anywhere else, when a person, be he Canadian or foreign, walks in the door, to simply hand it over to them.

Mr. John Harvard: Just explain something to me, hypothetically. I'm not worried about water going out in bottled form. I just don't see it being used up in any great volume through bottles. But if we were to ship water outside the country, either through a tanker or a pipeline, what possibly would our trading partners say to that? Given all the things you've already said, if we start shipping out by tanker great volumes of water, or we send it out by pipeline, what might our trading partners say to us?

Mr. Frank Ruddock: I'm sorry, Mr. Harvard, I'm not getting the drift of the question.

Mr. John Harvard: Well, I would assume that if we were to allow a Canadian firm to buy a tanker and ship water by tanker elsewhere to some other part of the world, our trading partners would say “Well, if you're going to do that, we want our corporations to do the same thing”. Is that a possible response that we would get from them?

Mr. Frank Ruddock: I don't know. I really can't.... I don't know what other governments would say.

Mr. John Harvard: Come on, come on. You're trade experts, you know something about water. If we're enacting a bill that is going to cause some interest outside our borders, I want to know what that interest is. If we didn't have this kind of bill and if we were to engage in the bulk removal of water, I want to know what the possible response would be from the international community. Surely you can tell us that.

Mr. Frank Ruddock: I think it would depend on the situation of the country. I think you'll find countries that have very poor water resources are probably advocates of shipping water over great distances in great quantity—frequently they may be—or they may search for local solutions, like desalinization.

• 1025

I think the European countries tend to have a more flexible approach to water removal. We probably have among the strictest, although as I said, the same principle that underlies this is one that I think every government adheres to, which is, you control your natural resources. So they might have a different view of bulk water removal, but they would not, I think, have a different view of the principle that underlines our policy, which is that we have the right to decide what we extract, when we extract it, and at what rate.

The Chair: I think we're going to have to move on.

Just for your information, colleagues, I think this is an important issue that Mr. Harvard's brought up, and it brings in the whole issue of non-discrimination provisions in international treaties and things like that. We are going to be having some law professors come as well, so we'll be able to explore this at subsequent sessions, and I'll come back to that at the end. But I hope we will have the chance to get full and complete answers to satisfy both the committee and the public, because there's a lot of talk out there about this very issue.

Thank you very much, Mr. Harvard. I have to go to Mr. Casson now.

Mr. Joe Comartin: Just on that point, as committee members, are we going to have some input as to who the witnesses are going to be?

The Chair: Well, I was going to announce that at the end, but since you bring it up now, let me just deal with it.

We presently have three more hearings scheduled on this bill, and really, given the other exigencies of the committee's business, that's about all we can do, unless there's something really urgent we have to follow up.

Of those three hearings, I assume one would have to be taken up by clause by clause, although there are not a lot of clauses in the bill. So assume we have two hearings; we'd then have the time for expert witnesses, and I believe we dealt with this before you came in, sir.

I asked that people let us know of any recommendations of witnesses and consult with the clerk before Monday at noon—we'll have to make that the cut-off date, because it's Tuesday and Thursday of next week that we'll be having them. So if you have any recommendations, the sooner you can get them to the clerk, the better. Obviously, there are already some in the hands of clerks; there may be duplications. By all means, members, recommendations for witnesses should be in the hands of the clerk at latest by noon on Monday.

We certainly intend to e-call.... I've seen Professor McCrae's name here, Professor Bankes, and Professor Owen Saunders. All of these are experts in this area who can help flesh out some of the answers that have been given up to now.

Mr. Casson.

Mr. Rick Casson (Lethbridge, Canadian Alliance): Thanks Mr. Chairman.

It's interesting this deals with international boundary waters. In the riding I represent, one of the rivers that flows through the riding ends up in Hudson Bay—the Oldman River—and the Milk River ends up in the Gulf of Mexico. It would be a very simple thing to transfer water from one basin to another. So to have interbasin transfer and to have international boundary agreements certainly is important.

To use this bill as the basis for prohibiting bulk exports is, I believe, wrong. I want to get into your definition of “natural state”—you keep emphasizing water in its natural state. I think that's what Mr. Keyes was alluding to. How easy is it to change water from its natural state? Is it just to put it in a bottle? Is water in its natural state water that's in a riverbed, a basin, or a lake? I'd like you to answer that.

Water management is a very serious issue to the provinces. They take it seriously and they have done a pretty good job in most cases. I know in Alberta we have an agreement with Saskatchewan that we have to release so much water through the rivers that flow through the watershed through Alberta into Saskatchewan. We can't use more than our allotted amount.

There are agreements within provinces with users. We have irrigation districts that charge for the use of water; water rates are being charged to irrigation users right now. So water is a commodity with a price on it in this country in many areas. We treat it in our municipalities and we charge for it. The way to protect our water is through a signed agreement enacted with a water agreement.

This bill deals with international boundaries. How does it deal with outfalls, let's say in Newfoundland or British Columbia, that go right from the province into the ocean? I've seen a river that runs into the Pacific out of B.C. that is just huge, and they say they could take water out of there forever and they'd never know it was missing. We've got to deal with that.

• 1030

So how do we deal with that aspect of water that outfalls into the oceans? And what is the definition of water in its natural state?

Mr. Frank Ruddock: Mr. Chairman, I'll answer the first part of his question and then ask Mr. Cooper to respond to the water falling into oceans.

Water in its natural state essentially is water in rivers and lakes for the purpose of this bill. There are some situations in which water is very clearly a good. If it's in a bottle and it's sitting on a shelf, it's clearly a good. If it's been incorporated into beer, juices, or some other product, it's clearly a good. There is, I would say, a grey area, where you would have to look at the specific terms of the licence or the way the water is being used to determine if it's a good or not.

You've used the example of municipal water supplies. We would argue that mostly it's a service, not a good, in the sense that the water coming out of your tap is provided to you for your personal use, but it's not really owned by you. If you want to test that hypothesis, try setting up a water bottling plant in your house. You'll discover you don't in fact own the water. You do not have free unfettered use of the water.

The basic point here is that our approach, the approach of Bill C-6, deals with water in its natural state. This is before the issue of exporting arises, before any extraction has taken place, before there is any question of it being transformed into a good.

You mentioned a side agreement to NAFTA, but the government does not consider that would be appropriate or useful. We have the declaration that was made in 1993 in NAFTA, confirming quite clearly that water in its natural state is not a good. It also confirmed quite clearly that once it has been transformed into a good, the water that has been thus transformed is subject to trade agreements. But the water sitting in the river or the lake continues, in its natural state, not to be a good and not to be subject to trade agreements.

I'll ask John to answer your other question.

Mr. John Cooper: In respect of outflows to the oceans, I think it's very important to realize that there's no surplus water as such. The outflow of fresh water to salt water produces some of the richest coastal and estuarine systems in the world. These are areas where we have significant fisheries and biodiversity. Part of the reason is that the fresh water outflow creates a mixing and a circulation that brings the nutrients up to the surface and changes the salinity and the temperature, affecting ice conditions and ice floes.

The effect of this outflow is local and regional. If you think of the outflow of the St. Lawrence into the Gulf of St. Lawrence, it extends even beyond the Gulf of St. Lawrence, bringing more nutrients and changes to that area, increasing the biodiversity, and helping the fishery.

One also has to consider, if you are going to put tanker ships into coastal streams, that it's not just a matter of bringing the ship up through the coastal stream. You're going to have to construct wharves, pipelines, and significant infrastructure to actually take that water. The environmental impacts go beyond just the mixing and the beneficial aspects of freshwater outflow.

• 1035

Mr. Rick Casson: I wonder if you could maybe explain to me your take on irrigation water rates, when an irrigation district charges a landowner so much an acre to have access to water and then they guarantee him so much a year. Is that not a charge for water in its natural state?

Mr. Frank Ruddock: No, we wouldn't say that. We would say that they may be charged water for the irrigation, and when they get the water, one could argue it's a good. But we go back to the fundamental position that the water in its natural state is not a good. It might be once it's out of its natural state, but that's precisely why we've taken the approach of dealing with it in its natural state, because once it gets out of its natural state, you do enter a far more difficult, complex area. This approach is not only simpler from the point of view of the trade aspect, but it also makes more environmental sense.

This is going back to what Mr. Cooper has said on the importance of the ecological integrity of water basins themselves. That's why we want to deal with it in the water basin so that we can take account of all the factors that are affecting...we can influence the situation in the water basin.

Mr. Rick Casson: Thank you.

The Chair: Mr. O'Brien, and then Madam Lalonde.

Mr. Pat O'Brien: Thank you, Mr. Chairman.

I have two points. On the point that was just made, if we tried an export ban as has been suggested, does that implicitly say that we're considering water as a good? I think that's what I'm hearing, but the approach you're taking in the proposed bill is much better—the natural water in its natural state. I wonder what your view on that is.

Secondly, I think this is much more than political sensibilities. This is a matter of, I would think, first and foremost—I'm not the lawyer here— of jurisdiction. So I wonder if somebody could overview for us a little more fully. I know we'll have lawyers we can pursue it with later, but what is the jurisdictional context?

Surely it's not just the Boundary Waters Treaty that was alluded to earlier. What does the Canadian Constitution say on this? From that, what is the jurisdictional context? I don't think this is a matter of just not wanting to annoy provinces. This is much more than that.

Mr. Frank Ruddock: I'll ask Mr. Reiskind to answer your second question.

The first one, if I understood it, was would an export ban imply that water is a good? I think it gets back to the point I made before, that export bans may only be applied to goods.

Mr. Pat O'Brien: Yes.

Mr. Frank Ruddock: Therefore, ipso facto, an export ban applies to goods. I think some of the confusion that does arise occasionally with the use of export bans is that an export ban can't apply to water in its natural state, because it's not a good.

Mr. Pat O'Brien: Right.

Mr. Frank Ruddock: So that, I think, is the answer to your question. But there is, I think, a misunderstanding sometimes in the public and the press where they refer to export bans and are really talking about water in its natural state. The two don't meet.

Mr. Pat O'Brien: Right, and I appreciate that. I will just comment that it seems to me.... It might be attractive, but I think it's rather simplistic to just say, well, we just ban all export of water, and that'll solve the problem. It's not that simple at all. As a matter of fact, it's not the most effective way to go; that's what I'm hearing. I certainly would agree with that on the basis of what I've heard so far, so I appreciate that.

I wonder if somebody can help us with this jurisdictional context a little bit?

Mr. Frank Ruddock: I was going to ask Mr. Reiskind to address that.

Mr. Jason Reiskind: Well, in fact we have used the basis of the treaty as being quite clear and quite straightforward, so that there would be no problems on the jurisdictional side.

• 1040

Mr. Pat O'Brien: But my question really is how does the Constitution speak to the question of water?

Mr. Jason Reiskind: Just in general terms, water and other elements within the country.... Because of our split jurisdiction, it isn't easy to give a simple answer because it's quite complicated. The most one can say is that it's a shared jurisdiction. That's why there have been treatises written on water jurisdiction—a big book like that, as I mentioned before, by Gérard La Forest on water law in Canada, as well as aspects of others.... I guess one can say it's a shared jurisdiction, and that's why we are working together with the provinces in trying to protect that key resource.

Mr. Pat O'Brien: Okay, I can appreciate that.

Therefore, is it the Constitution that gives the federal government jurisdiction over boundary waters? Is that what the Constitution says, or does that flow from the Boundary Waters Treaty? I would think we wouldn't have needed the Boundary Waters Treaty to know what our federal jurisdiction is within Canada.

Mr. Frank Ruddock: The jurisdiction on boundary waters comes to the federal government because it's an international treaty, but it is jurisdiction—don't forget—to the extent stipulated in the treaty.

Mr. Pat O'Brien: Right.

Mr. Frank Ruddock: In other words, over a boundary water, the province still has jurisdiction over things that are provincial.

Mr. Pat O'Brien: Yes.

Mr. Frank Ruddock: We're not taking that away. We're not impinging on that in any way whatsoever. Our jurisdiction on the boundary water is as set out in the treaty, which is that we have an obligation to the United States not to do anything that affects levels and flows on its side of the boundary.

Mr. Pat O'Brien: Okay.

The Chair: Mr. Reiskind, I appreciate that this is an enormously complex question, as all Canadian constitutional problems eventually become enormously complex, but to strip it down to its simplest, at least for the purposes of the purchase and sale of water, which is what we're talking about here—the potential of selling it to foreigners—surely the key issue of provincial jurisdiction that we must recognize is that the provinces own the water as a resource the same way they own the minerals in the ground or the trees that grow in the provinces.

Resources within the province belong to the provinces or belong to the crown in the right of the province rather than the federal government. Isn't that the key issue that we have to face? I realize there are hundreds of others, but that at least is one that gives the province its primary jurisdiction. Is that right?

Mr. Jason Reiskind: Yes. That shorthand of referring to ownership of water in the provinces is certainly generally correct and can point to.... The basis of that is property and civil rights in the province and public lands in the province having provincial jurisdiction. But essentially, it's as you say.

The Chair: Right.

Mr. Cooper, did you want to add to that as an environmentalist?

Mr. John Cooper: Yes, and not as a constitutional lawyer, please.

The Chair: Can you give us a common-sense approach, then, as opposed to a constitutional lawyer's?

Mr. John Cooper: The Constitution doesn't specifically refer to water. It refers to, as my colleague Mr. Reiskind said, land and property rights, which belong to the provinces. The federal government has jurisdiction over such things as treaty power, fisheries, navigation, and federal lands, so it's very specific. In terms of day-to-day management, ownership, and licensing of water uses, this is a provincial jurisdiction, and this is why we cooperate in this area.

The Chair: Thank you. I think that helps all of us.

We go then to Madame Lalonde and then to Madame Marleau.

[Translation]

Ms. Francine Lalonde: Thank you. I will try to summarize what you have said. The treaty protects boundary waters. That is already the case, and you are saying that Ottawa is not giving itself any new powers. One wonders then why Bill C-6 is being brought in.

• 1045

To that I would add the fear of trade agreements. As proof, I would turn to Minister Anderson's comments on Bill C-15, which is more or less the same as Bill C-6, and which are found in the Library document. The government is quoted as saying:

An export ban would only regulate movement of water once it has become a good and would therefore be subject to international trade agreements. This contrasts sharply with the federal government's approach.

Since these agreements limit the governments' ability to control the export of goods, banning exports may not be in keeping with Canada's trade obligations.

That much is clear. However, we are told that this is now being viewed as an environmental issue. That is something that is very different. However, the International Joint Commission, when giving its opinion on trade agreements, does not ascribe to such a definitive view. The Commission states:

Recent decisions of the appeal body of the WTO may raise concerns about the circumstances in which environmental measures will meet the test of not constituting arbitrary or unjustifiable discrimination or a disguised restriction of international trade, even though they may otherwise relate to the conservation of an exhaustible natural resource or may be necessary for the protection of life or health. The WTO decisions have tended to focus on whether measures are arbitrary or discriminatory. In the light of these decisions, it appears that it would be desirable, whenever possible, for environmental measures to be based on an international agreement or arrangement.

Let us now turn to what is written in this little brochure, also produced by the Library, about the interpretation of Chapter 11 and measures taken by a government that could be deemed, in a decision, to be tantamount to expropriation.

I think that the federal government's biggest concern revolves around the interpretation of Chapter 11. Why do you think that the provinces should feel reassured, Quebec in particular, when it's the federal government that is signing the trade agreements and it is Prime Minister Chrétien who is telling us that Chapter 11 does not cause any difficulties, that everything is just fine? We have Bill C-6 which, on the pretext of environmental criteria, is taking the place of provinces to a certain extent, by duplicating measures and claiming that the federal government is going to look after the matter properly. I would conclude by pointing out that when the federal government looked after the fisheries, its intervention created serious problems in many sectors. So why are you introducing Bill C-6?

Mr. Denis Paradis: Earlier I mentioned three aspects: the environment, cooperation with provinces and trade considerations.

I will go back to the issue of the environment because this is more or less what Ms. Lalonde was asking about. The government is not saying that it wants to legislate the size of the bottle. It is saying that it wants to legislate on matters pertaining to the quality and cleanliness of the bottle, etc. We have an environmental resource in Canada, namely, the water found in our lakes and basins in its natural state. This is an environmental resource and not a good or a commodity.

In 1909, the governments of Canada and the United States signed a treaty on this environmental resource. Today the activities performed by the International Joint Commission pertain a great deal to environmental issues: water analysis, water quality in the Great Lakes, etc.

• 1050

This is why I'm saying that the main issue is the environment. I would go back to what the experts and just about everyone else are saying: water in its natural state, in its basin, is an environmental resource and is not to become an object of trade.

Ms. Francine Lalonde: Yes, but the provinces have this responsibility. Quebec, at any rate, looks after this, as do the other provinces. What are the grounds for Bill C-6? Why a new infrastructure? Why have new government officials do to water what they managed to do, with great difficulty to the fisheries?

Mr. Denis Paradis: Ms. Lalonde, I'm going to let Mr. Ruddock add to what I explained earlier.

Mr. Frank Ruddock: We responded to concerns expressed very clearly, in 1998, at the time of the NOVA project, by Canadians who were wondering how we could protect our fresh water resources in the future.

This initiative was not motivated by the fear of trade law challenges. Instead, we wanted to protect our fresh water resources in the future. A debate with trade overtones arose because some people demanded an export ban. This is why we engaged in this debate and why we have a lot of information on this area.

Secondly, we of course want to ensure that our actions comply with our international obligations. You quoted from the International Joint Commission report. You quoted from the section that deals with trade. This report does say, however, that nothing is stopping the governments of the United States and Canada from protecting their fresh water resources and the Commission supports the principle that water, in its natural state, belongs exclusively to the government concerned.

The Chair: We have only seven minutes left. I will, therefore, turn the floor over to Ms. Marleau, who has been waiting for her turn for a long time.

The Hon. Diane Marleau: I am so patient.

[English]

I want to go back to a question that was asked by my colleague across the way. He asked whether Bill C-6 would regulate the bulk water coming from rivers pouring directly into the ocean. We got a great explanation about the impact these waters would have on the environment, but we got no answer as to whether Bill C-6 would have any jurisdiction over this aspect of it. Before I continue, I'd like to receive the answer to that.

Mr. Frank Ruddock: Only if it's a boundary water. I think there's only one boundary water that flows directly into an ocean, and that's the St. Croix River in New Brunswick.

Ms. Diane Marleau: So the rivers they're talking about in Newfoundland—

Mr. Frank Ruddock: Are under provincial jurisdiction, and that's—

Ms. Diane Marleau: So you're saying that these would be exempt from this piece of legislation.

Mr. Frank Ruddock: Not exempt, just not covered. The bill doesn't exempt them. It simply doesn't cover them.

Ms. Diane Marleau: Why does it not cover them? Is it because they're considered to be under provincial jurisdiction?

Mr. Frank Ruddock: Exactly.

Ms. Diane Marleau: I see no reason we wouldn't add a clause to Bill C-6 so that if it is not covered by legislation at the provincial level, it would be covered by this legislation. After all, even though water is a natural resource that belongs to the provinces, there is a national security issue involved. It is more than just the security of the population of, say, Newfoundland or British Columbia, because it would affect people across the country. When that happens, it becomes a national responsibility. I think if we choose to, we can add that kind of clause to a piece of legislation without impinging on provincial jurisdiction.

Mr. John Harvard: Hear, hear!

• 1055

Mr. Frank Ruddock: When we began to formulate the policy, we had a very extensive consultation with the provinces. It involved in 1998 federal officials going in person to every single province and territory to discuss various approaches. We've continued that consultation. The government chose an approach that asked the provinces to do their part. As Mr. Cooper mentioned earlier, we've made very good progress there. We've gone in effect from two of fourteen jurisdictions to all fourteen jurisdictions, including ourselves.

Ms. Diane Marleau: Very good is fine, but it's not perfect.

As you know, Newfoundland has a piece of legislation in place, but they have been talking about doing exactly what their legislation prohibits. If they chose to change their legislation, it would then place all of us in jeopardy. Once they allow the bulk removal of water for export, which is what they are proposing to do, we would be bound by agreements, and it would change the whole face of what we're doing.

So I'm asking the question. It's not because I don't think we should work with the provinces. I really believe in cooperating with the provinces. But when they don't, who is responsible for the overall security of the people of Canada? Somebody has to be, and it has to be the national government because there's nobody else.

Could we add the kind of clause I am thinking about to this piece of legislation?

This is an extremely serious issue, as you know. The people of Canada, wherever they live, are extremely concerned. I think we need to have some clarification of that, and we need to do more than just talk nicely to provinces, even though they're very good and they want to do the right thing.

The Chair: Mr. Ruddock, the time is now drawing to a close, and we must leave at 11 o'clock. So I'm going to leave this question unanswered for the moment because I think other witnesses will come back to it.

Colleagues, what we might have done when we brought the bill before the committee was provide a map to show what waters are covered by this bill. I think it's very important for the committee and the public to realize that this bill is one piece of a large puzzle, which includes provincial regulatory powers over the sale of waters and federal jurisdiction over other waters. But from a geographical perspective, it does not deal with waters that run into, for example, Hudson Bay and waters out west, as I understand it.

Ms. Diane Marleau: And why not?

The Chair: It just deals technically with boundary waters.

It's because the treaty gave us jurisdiction over this, and, as I understand from Mr. Ruddock, we are looking at other ways of dealing with that.

Just from a technical point of view in terms of our committee work, Madame Marleau, we could not add a clause such as you suggest because it would extend the scope of the bill totally beyond what it presently is, and it wouldn't be in order. The bill has now gone through second reading in the House. If you wanted to take a bill that was limited to a certain geographical region and to certain specific things and transform it into a bill that would apply to the whole country, you'd be totally changing the nature of the bill. So I don't think at this point we could do it.

But I don't disagree with the premise of your question, because it is important for the committee and for the public to understand what the government is doing with this bill and how it fits into the overall scheme of dealing with it.

Mr. John Harvard: You're saying that it would be procedurally wrong.

The Chair: I think procedurally we couldn't do it. But I don't think that's an answer to your question—

Ms. Diane Marleau: No, not at all.

The Chair: —because it is a political issue.

Perhaps, Mr. Ruddock, within that context, you could give a short answer and then leave it that we will have to come back to this issue at a future hearing.

Mr. Frank Ruddock: First, you mentioned that there would be some precedent-setting aspect. There would be no precedent-setting aspect under trade law. One project does not create a precedent anywhere else. That's a clear point.

The other point is just a very general one, which I think follows from what the chairman just said. What we are trying to do is construct a regime that will protect Canada's waters. There's always a possibility that governments will go back on legislation, but at the end of the day, having legislation in place in every jurisdiction is stronger than not having legislation in place.

Ms. Diane Marleau: Absolutely.

[Translation]

The Chair: Mr. Paradis, you have the last word.

• 1100

Mr. Denis Paradis: To conclude, Mr. Chairman, I would like to mention that the statement I made at the beginning was distributed to the committee members in both English and French.

The Chair: Thank you.

[English]

Members, you might want to look at the map in your briefing book. It describes the geographic limits as to what this bill is trying to do.

Thank you very much.

We're adjourned until Tuesday.