Proceedings of the Standing Senate Committee on
Foreign Affairs
Issue 18 - Evidence
OTTAWA, Tuesday, November 27, 2001
The Standing Senate Committee on Foreign Affairs, to which was referred Bill C-6, to amend the International Boundary Waters Treaty Act, met this day at 5:15 p.m. to give consideration to the bill.
Senator Peter A. Stollery (Chairman) in the Chair.
[English]
The Chairman: Honourable senators, I call the meeting to order. We are dealing with Bill C-6, to amend the International Boundary Waters Treaty. We have Minister Manley with us and we are conscious of the time.
Minister Manley, we welcome you to our committee, and we would like you to proceed with your brief statement because we have questions for you.
The Honourable John Manley, Minister of Foreign Affairs: Honourable senators, I am sorry that my time is rather constrained this afternoon. However, I will try to make my statement as rapidly as possible.
Bill C-6, before you, represents the fulfilment of the government's commitment to take action, within its jurisdiction, to address the issue of bulk water removal. It has a high legislative priority and is a key part of the government's strategy to prohibit 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 fresh water resources.
I believe that all members of the committee have now been provided with binders that contain detailed information about the bill, including the draft regulations and explanatory note on prohibition, licensing and exceptions.
[Translation]
The purpose of the bill is to prohibit the bulk removal of boundary waters from their drainage basins. The definitions and exceptions are contained in the proposed regulations to allow for effective, continued application of the prohibition, in cases and uses not currently envisaged. If these were contained in the bill, amending legislation would have to be passed in order to stop any new threat to Canada's water supply or permit new uses.
[English]
The definition of the "removal of boundary waters in bulk" as set out in the prohibition and the regulations includes large projects involving a continuous flow of water such as diversions, pipelines, canals, tunnels, aquaducts and channels. It also includes those with a volume threshold for removals by various modes of transport of 50,000 litres per day, which is rather low. It represents slightly less than the capacity of one single tanker truck or about the volume used by 50 average households in a day.
Three types of exceptions are proposed in the regulations. First, ballast water for safety of shipping and water for the operation of a ship, vehicle or aircraft, including for any people or animals on board, would be exempted. The second exemption is water for the manufacture of products within the basin, or manufactured products containing water, as this practice has been permitted under the Boundary Waters Treaty and is regulated by provinces. Third, water for fire fighting and humanitarian purposes that are of a short-term duration and non-commercial in nature are exempted. These exceptions are in the regulations to ensure the ability of the government to react quickly to projects that were not envisaged and that might undermine the prohibition as set out in the proposed legislation.
The licensing regime would formalize the existing approval process of the Government of Canada for projects that fall under Article III and Article IV of the treaty. It is separate from the prohibition provision. We consider that a more explicit, stronger and transparent approval process is required to better implement Canada's obligations under the treaty, which is why we are here.
Proposed new sections 11 and 12 of Bill C-6 relate to Canada's obligations to approve or reject projects that could have an impact on the natural level or flow of waters on the other side of the border. Also, under the treaty, such projects require a separate and independent approval by the International Joint Commission. As a result, the licensing approval process would confer no new powers on the government.
[Translation]
The draft regulations will be put out for public comment and the provinces will be further consulted before the regulations are finalized. As several senators have pointed out, there are safeguards and oversight of the regulatory process provided by the Standing Joint Committee of the Senate and the House of Commons on the Scrutiny of Regulation.
Senators have asked about U.S. measures to protect boundary waters. We must continue to work closely with U.S. jurisdictions, both federal and state, to ensure that the regimes on both sides of the border be as consistent and restrictive as possible.
[English]
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 to the U.S. and Canadian governments that provide the basis for developing a consistent approach to protecting the Great Lakes on both sides of the border. Any project affecting the level or flow of boundary waters must be submitted to the IJC.
In addition, each governor of the Great Lakes states has a congressionally affirmed power to veto any new bulk water diversions. In the years ahead, the Boundary Waters Treaty will remain a critical instrument in protecting Canada's rights.
By adopting Bill C-6, Parliament will set down in law, an unambiguous prohibition on bulk water removal of boundary waters. This is a forward-looking action that places the highest priority on ensuring the security of Canada's freshwater resources. It demonstrates leadership at the federal level. It affirms an approach that is comprehensive, environmentally sound, respectful of constitutional responsibilities and consistent with Canada's international trade obligations.
Thank you for the opportunity to appear before you on this bill.
Senator Corbin: Thank you for your presentation, Mr. Minister. I would like to obtain from you a statement that this bill is absolutely airtight.
Mr. Manley: Perhaps "watertight" would be a better term.
Senator Corbin: Watertight, if you wish. However, I use the term "airtight" because I am speaking about language.
I understand very well the prohibition on the potential commercial export of water. Would it be possible, at some future date, to interpret the proposed legislation, or the regulations arising under it, to mean that there is a possibility of granting licences for the export of water beyond the 50,000 litres that you mentioned?
Mr. Manley: Senator, first, it is important that everyone remember that the bill applies to waters within federal jurisdiction, which is why it applies to waters that are covered by the boundary treaty. Therefore, my answer pertains to those waters.
Such an interpretation of the regulations, namely, that they can be used as a tool for exporting water, ignores, first, that the bill deals with the International Boundary Waters Treaty Act and does not read the treaty with the act. The answer to your question is no, this is not a vehicle for permitting the removal of water. It is a vehicle for protecting the boundary waters.
Senator Corbin: Some concerns have been raised in this area about the traditional rights of Parliament to legislate. There is a fear, or perhaps either a founded or unfounded interpretation, that under the regulations, it would be possible to do things that properly belong in the realm of parliamentary legislation. Is that the case?
Mr. Manley: I do not believe so. Obviously, many, if not most, pieces of legislation contain a regulatory power that can be exercised in various ways. Due to the importance of the regulatory provisions of this bill, we ensured that the draft regulations were tabled with the committees in advance of the adoption of the bill, so that they could see what was anticipated, what the government was intending to do and make a comments, if they so desired. This is normal procedure, and the joint commission, as I mentioned in my remarks, has the ability to exercise a supervisory role with respect to the regulations if they were to be changed.
The advantage of doing it this way, of course, is that it gives us the ability to respond rapidly in the event of technological or other changes. The entire concept of velocity is important in dealing with the modern technological world, which unfortunately, our institutions tend to lack.
Senator Carney: Minister, we appreciate your taking time from your schedule to come before us. Senator Corbin has touched on our primary concern with this bill, which is that the powers that are being sought through Governor in Council and through the regulations are, in our view, excessive. The powers that can be exercized under this bill as drafted, and the intent of the bill as you enunciated it, are two different things.
As legislators, we are concerned that the bill, with legislated powers to make regulations, would allow future governments or future ministers to reverse the intent of the bill and actually use it as a vehicle for approval rather than prohibition of bulk water removal.
As an example, 13 (1) on prohibition does not mention bulk water. It states:
Despite section 11, no person shall use or divert boundary waters by removing water from the boundary waters and taking it outside the water basin in which the boundary waters are located.
It does not mention bulk water at all. "Boundary waters" is a wider interpretation than bulk waters.
Proposed subsection 13 (3) states:
Subsection (1) applies only in respect of the water basins described in the regulations.
Proposed subsection 13 (4) states:
Subsection (1) does not apply in respect of the water basins described in the regulations.
If your purpose was to limit bulk water removals, why is that not stated in 13 (1)? Why would you not state that the prohibition applies to boundary waters in bulk? The regulations simply state that this prohibition in 13 (1) does not apply to the removal of boundary waters, other than the removal of boundary waters in bulk. If it is important enough, why are you putting the definition of the prohibited action in the regulations, which can be changed, rather than in the bill?
Mr. Manley: I am not sure whether the problem is a definitional one. It seems to me that the notion of the concept of "bulk" is picked up in the combination of the prohibition with the exceptions to it. The reference to boundary waters gives us the constitutional jurisdiction to deal with these particular sources of water. That is why the clause is focused on boundary waters, the effect of the removal being, first of all, either one that affects the natural level or the flow of boundary waters. It clearly contemplates the notion of "bulk."
We are dealing with water in its natural state, and the exceptions are quite limited in terms of the quantities that could be removed for other purposes. Therefore, you have the concept of the size of any removal that could be contemplated.
Senator Carney: If I may follow up on that, you have put your finger on the problem. Of course, there are no definitions in this bill, other than the ones for the minister, for the boundary waters that are defined in the treaty, and for the licence under proposed section 16. Bill C-6 is wide open to definitions, and you have not indicated that you are prohibiting the diversion of bulk water in the proposed legislation, which is one of our concerns. I will leave my colleagues to follow that up.
I would like to move to the trade issue. Your officials say quite flatly, and you have told my colleague, Senator Corbin, that there is no relationship between trade agreements - the Boundary Waters Treaty or the international trade act - and the scope of the water in its natural state.
We have agreed that the NAFTA provisions state that water in its natural state is not affected as a trade item. However, the IJC's report, on page 32, cautions about the possibility that, in future, water could be considered a tradable item. In your own speech before the House of Commons on February 5, Minister Manley, you mentioned the exceptions of food and beverages. Food and beverages are products. They are manufactured products, and you specified in your speech that exceptions to the removal of water from the boundary waters would include food and beverages.
The NAFTA provision definitely states that water is a natural resource unless it is changed to a commodity. How can you assure us that, in the proposed legislation, not in the regulations, there will be no scope for water, given your exception of food and beverages, to be considered a tradable item?
Mr. Manley: I am not sure if I understood the question, but let me try to respond.
Senator Carney: The question is simple. The bill does not deal with it, but the regulations may. However, it is not in the bill. You have stated that an exception to the prohibition on the diversion of water applies to food and beverages. Well, food and beverages are commodities. You must have had a reason for identifying food and beverages. Why did you make that exception? What risks are you taking?
Mr. Manley: The exception relates to the removal of water to make a manufactured product within the basin. For example, if you had a Coca Cola bottling plant, the use of the water to manufacture the product is anticipated, provided it is done within the basin. I do not see that as being problematic. It does not convert the water in its natural state into a tradable good, but rather a manufacturing process would create the tradable good.
Furthermore, that process is in keeping with the way the Boundary Waters Treaty has been interpreted throughout its history.
Senator Carney: Interpretation of informal practices is not the same as legislating those practices. Are you saying, categorically, that water cannot, according to the provisions set out in this bill or the regulations, be considered a tradable good at any time?
Mr. Manley: There is nothing in this bill that characterizes water as a tradable good, or could be interpreted to do so.
Senator Carney: There was in your speech in the other place.
Mr. Manley: I do not think so.
Senator Murray: I would like to follow up on some questions that Senator Carney asked earlier. First, the explanatory notes put out by the department state that proposed section 13 prohibits the bulk removal of boundary waters out of their water basins. However, as Senator Carney has pointed out, the bill does not do that. It simply states that no person shall use or divert boundary waters by removing water. Why would you not include bulk water, or bulk removal, in the bill? Is this an oversight in the drafting? Is there some policy consideration that led you to not use the word "bulk" in the actual bill?
Mr. Manley: Perhaps I am missing something. I am not aware that "bulk" is a term of art. The provisions of 13 (1) and (2) make it quite clear what the proposed legislation is to encompass.
Senator Murray: I do not think it does, with respect, minister. You, as the spokesman for the government, and the documents that the government put out keep referring to the prohibition against bulk removal in proposed section 13. However, it does not say, "bulk removal," but rather it says, "removing water."
Then, if I may, it will apply only in respect of the water basins described in the regulations. There is no regulation as we sit here, but there will be; and it does not apply in respect of the exceptions specified, which brings me to the regulation-making authority.
As you correctly pointed out, there is a regulation-making authority in almost every bill that we pass. The regulation-making authority in this bill is extraordinary in the context of what the bill purports to do. You said that bulk water removals are prohibited. It says that the Governor in Council, the cabinet, can make whatever exceptions to that prohibition it pleases.
Prohibition with an unfettered right of cabinet to make exceptions is, in my view, not much of a prohibition at all. The bill states that the prohibition will only apply to those basins that are selected by cabinet, again.
I do not understand why you do not put some of these provisions in the bill. As you have pointed out, the exceptions in the regulations are fairly thin and pretty reasonable. Why would you not just put them into the bill and not leave yourself the unfettered right to make exceptions to the prohibition?
Likewise, you have named three water basins. I do not know why those three and not others. If those are the three to which the regulations will apply, why did you not put them right into the bill? That is a fair number of questions, but I think you see what I am getting at.
Mr. Manley: I do not understand the point about bulk.
Senator Carney: It is not in the bill.
Mr. Manley: We are dealing with the removal of water. If it is not in bulk, what is it? Is it by the cup?
Senator Carney: We are asking you. It is not in the bill.
Mr. Manley: Senator, how else would you remove the water? Is the problem that, because it says, "You may not remove water" and it does not say "in bulk," therefore you could remove it in bulk?
Senator Murray: You use the word "bulk" in the draft regulations. Why have you not used it in the bill?
Mr. Manley: It is unnecessary.
Senator Murray: Why is it necessary in the regulations? If there is no policy consideration here, say so. I wonder why there is this discrepancy.
Mr. Manley: It is a drafting matter. I am not sure whether the lawyers have anything further to add.
Mr. Jason Reiskind, Counsel, International Law Section, Department of Justice: Honourable senators, proposed section 13 is meant to make it clear that the government's general view is that there shall be no water removed from the boundary waters and taken out of the basin, and that necessarily includes any bulk removal. If you cannot remove any water, you certainly cannot remove bulk water. The bar is set very low in the proposed legislation to make it clear that, as a matter of policy, the government does not want projects involving removal of waters from boundary waters to an area outside the basin to proceed.
Senator Bolduc: Proposed subsection 13 (4) says that the prohibition does not apply in respect of the exceptions specified in the regulations; in other words, we have a statutory prohibition and then we have the possibility of making regulations. The Governor in Council has the power to make those regulations, and then in those regulations, he can make exceptions.
I may be wrong, but to me, that amounts to the possibility that the Governor in Council could say, "There is a prohibition, but in that case we will permit something." Is that not the real intent of the bill? Why is it necessary?
Mr. Manley: That requires a belief in conspiracy theories that confounds me, I am afraid. The purpose of the bill is to give a legislative context to the treaty and to make clear the federal government's position on removal of water in its natural state from within the basin. It would be completely contrary to the intent of the bill and contrary to the treaty. It would not fly at the International Joint Commission. I simply do not accept the premise that that would be the logical conclusion of a regulatory motion. I do not think it would get past the joint committee, either.
We have a very clear statement here of what the government's intent is with respect to water being removed. It is an environmental provision that gives us a clear policy direction in the context of what has sometimes been disputed under trade agreements. It sets a model for the application of rules in a provincial context to water as a natural resource where it is entirely within the province. It is consistent with everything we have been saying about trying to establish the government's policy direction. To suggest that somehow or other we will put exceptions in that will gut the bill, I simply do not accept that as being possible.
Senator Carney: We are pointing out that you have the power to gut the bill the way it is now written. That is clearly specified by the fact that there are only three definitions. Everything else is at ministerial discretion and the regulatory powers are unfettered, as my colleague says.
According to our reading of this bill, you have the right to completely negate the alleged intent. Why would you not put those restrictions in the bill? We are asking you to consider amending the proposed legislation so that it says what you imply your objective is.
Mr. Manley: This is an amendment to the International Boundary Waters Treaty Act. The bill is not capable of giving the federal government new powers because it is constrained by the international treaty. To take your interpretation would run totally contrary to the treaty that is implemented in the act that this bill is amending.
Senator Bolduc: We are at the very heart of the matter here.
[Translation]
The minister has discretionary powers and so has the government; the act says that there is a prohibition and the regulations say that the government will determine when there is a prohibition or not.
[English]
For example, is it the same type of power that the Minister of International Trade is given in a trade agreement with Costa Rica? Is it the same type of regulation; that is, there is legislation and then there is a possibility for the government to go over?
Mr. Manley: I would have to look at that. I am not familiar with the legislation.
Senator Graham: Thank you for coming, Mr. Minister. We hear this word "prohibition" used repeatedly. With respect to the bulk water removal, why is prohibition much more effective than a total export ban? Why did you choose prohibition over a total export ban?
Mr. Manley: Essentially, senator, we want to avoid making a commodity out of water, that is, turning it into a tradable good or product. We are dealing with water in its natural state. We are legislating with respect to federal jurisdiction over boundary waters. The purpose of the bill is one of environmental protection. In other words, it is to avoid removal of water in such quantities as, first, to affect the level or the natural flow of the water, which is an indicator of the effect of the removal. This is consistent with the treaty, which has been in effect for a long time.
There have been, as I am sure you know, a number of approvals given under the treaty over the years with respect to water diversions, dams and so on, at Sault Ste. Marie, Niagara Falls, the Welland Canal and elsewhere. However, these are done under the treaty with close cooperation between Canada and the U.S.
We are likewise, in this bill, endeavouring to send a clear signal that the federal jurisdiction is exercising authority with respect to the removal of water in its natural state. That is part of the overall strategy.
A further part of this is the work that the Minister of Environment has been doing with his provincial counterparts to ensure that provinces are taking action within their jurisdictions in dealing with water in its natural state that is wholly within provincial boundaries. In other words, it is not boundary water.
All of that was meant to avoid it being turned into a good that would be subject to actions under our trade agreements. That is why it is focused on removing water from the basin, not on whether it is exported from Canada.
Senator Graham: The minister mentioned Niagara Falls. As we learned during the election campaign, all the water in North America does not flow north-south. Some of it flows south-north. I am wondering if there are reciprocal agreements? Are our friends south of the border, that is, the United States government and the various states, currently introducing reciprocal legislation, or do they already have that legislation in place?
Mr. Manley: There are various things happening. There has been a reference to the IJC dealing with this issue that was reported back last year. There is a great deal of interest in boundary states. As you probably know, it is very controversial. We are in intense discussions with the United States on the entire question of removal of water from a basin, not just because of the effect on flows, but because of the fact that when water is diverted from one basin to another, you can also move biological substances that could affect the composition of life in the other water basin. These are very controversial issues between Canada and the U.S. at the present time.
Senator Andreychuk: Water is the most contentious and the most valuable commodity for the future. When you say, "No person shall use or divert water," I think every Canadian will understand that. They will also understand that there will be exceptions available to the minister in regulations. If your intent is to have but three exceptions, would it not be better to put them in the bill? We have some reason for a conspiracy theory, as you described it. Perhaps it is paranoia. More and more is being moved into regulations, from day to day, month to month and year to year. The Standing Joint Committee for the Scrutiny of Regulations is powerless to deal with this emerging trend, which amounts to an unfettered right to make regulations and not put substantive, contentious issues into bills. The plea is: If your intent is to have but three exceptions and not to develop some creeping expansion of those exceptions, would you consider putting them in the bill? That would send a clear signal to us, to the Canadian public, to the Americans and to everyone that that is your intent. It would amount to saying that 13 (1) is an overall intent that you will maintain, subject to the three exceptions. If that is not done, you leave us with this being subject not just to your intentions, minister, but to some other minister down the line who might have a more creative approach to the exceptions.
Mr. Manley: My concern is the reverse. When you define them in the bill, then your ability to make changes is limited when someone comes up with new technology or a new means of going around it. One's ability is limited by the time that it takes to make amendments to the bill rather than regulations. That is where my concern lies. The truth is that the regulatory authority is limited already, in that it must be consistent with the purpose of the proposed legislation. This is well established in administrative law. The purpose of this bill is to amend the International Boundary Waters Treaty Act, which was enacted to give effect to the Boundary Waters Treaty. To turn it on its head and use regulations to permit the removal of waters would clearly be ultra vires the act.
Senator Carney: There is no definition of what constitutes a water basin in either the bill or the draft regulations. That is our point. Proposed section 13 provides for a prohibition against the removal of boundary waters from the water basin in which the waters are located only in respect of water basins described in the regulations. There are none in the regulations. There is no definition of what constitutes a water basin in either the bill or the draft regulations. We are saying that this bill is so wide open you could drive a Mack truck through it, or a Rocky Mountain trench water diversion.
Senator Bolduc: Moreover, when you say that the regulatory power is limited, what about 21(c) and (d)?
The Chairman: We will be able to pursue this line of questioning with the three officials who will remain when the minister leaves. At 7:30 p.m., we will hear from other witnesses from the Centre for Trade Policy and Law at Carleton University and from the University of Ottawa.
We have explored this matter reasonably well.
I thank you, minister, for answering the same question five different ways. Thank you very much for coming.
The Chairman: Our remaining witnesses are Mr. Fawcett, Mr. Reiskind and Mr. Cooper.
Senator Andreychuk: The minister talked about administrative law. He said, first, that coming back to Parliament was too difficult, that there would be a time delay. Absolutely, democracy is difficult, messy, hard, and it takes time. However, it is also what makes this country what it is.
If he wanted to give the government this power to make quick regulations to meet new technologies, should there not have been at least a generic explanation of what kinds of exceptions there would be?
Surely it should have narrowed the possible exceptions. The exemptions are narrowed only by the intent of the bill, and the intent of the bill is to comply with the International Boundary Waters Treaty Act. The intent of the bill is to prohibit the removal of water. That is a pretty broad definition.
As I say, creative thinking under proposed subsection 13(4) could result in almost anything, including slowly taking the water out by a little here and a little there. Lo and behold, it is then legitimate to take bulk water.
Would it not have been better to put some restriction on the absolutely unfettered reign of the Governor in Council over regulations?
Mr. Reiskind: I do not think it is correct to suggest that the minister would have unfettered jurisdiction because of the parameters of the bill. The bill is implementing the Boundary Waters Treaty.
That implementation involves a bi-national organization that reviews any projects that are put forward. The prohibition as set out here uses part of the treaty that gives the Government of Canada the ability to say "no" to projects. However, if the Government of Canada wishes to say "yes" to projects, the International Joint Commission, according to the parameters of the act, must still review them.
Any project that might go ahead involves different levels and the joint commission must still review water flows. There is no completely unfettered power because of the parameters of the bill. However, the government is saying it will not allow bulk removals; in fact it will prohibit them, so that a request to do so will not even make it as far as the joint commission.
To explain in more detail what the minister said, the term "bulk removal" would necessarily have to be accompanied by a definition.
Senator Murray: You have to do that anyway.
Mr. Reiskind: "Bulk removal" itself does not appear in the Boundary Waters Treaty. It is an implementation of the treaty.
Senator Andreychuk: That is the point.
Mr. Reiskind: We have the definition of "bulk removal" in the regulations. The definition includes any removal through diversions, pipelines, channels or any amounts greater than 50,000 litres per day that may be taken by truck or train or ship.
In order to deal with future contingencies quickly and to ensure that a proponent cannot get around the prohibition, we have put that definition of 50,000 litres and diversions in the regulations to ensure that we can act quickly to stop any possible loophole that we had not envisaged.
I will give some examples that may help to explain the concerns. Let us say that there is a five-year drought and there is a serious problem on the Great Lakes. It might be better to lower the 50,000-litre level in those circumstances. That could be done more easily through the regulations, and in a timely way, to prevent a project that could hurt the Great Lakes in that situation.
The term "ballast" is used in one exception. Let's say we had an unfortunate situation where someone fills up a tanker, says the full tanker is ballast and some how succeeds with that argument in court. Then they are off to the races. We mean that ballast is just a minimal amount to keep a tanker steady. We would be able to react more quickly by clarifying "ballast" in the regulations and preventing such a project from getting underway.
The Chairman: Does that answer your question, Senator Andreychuk?
Senator Andreychuk: We are really saying that is it is too cumbersome and difficult to bring these things to Parliament. Therefore, in the name of efficiency and speed, we will put all of the issues to do with water in the hands of the minister, to be handled by Order in Council through regulations.
Many Canadians are very concerned about this commodity and would wish to have a parliamentary scrutiny where there would be many points of view aired. I remain to be convinced that we could have such an emergency that Canadians could not wait for Parliament to act. When there has been an emergency, Parliament has acted rather quickly.
It has been recalled on emergency issues. The reasoning for the need to exclude Parliament is questionable, in my opinion, in the case of water.
Senator Carney: I have other questions relating to the lack of clarity in the bill. However, following up on what you said about the need to be flexible in the administration of the bill, I point out to you that in this bill, the minister, or the Governor in Council, may specify what constitutes a use, obstruction or diversion for the purpose of this act, defining any word or expression used in proposed sections 11 to 26 not defined in the bill. It is a huge discretionary power to be able to define any word or expression used, including "water basin," to which proposed section 13 applies.
Nothing in the bill or the regulations describes the water basin. Proposed subsection 13 (3) of the bill provides that the prohibition against the removal of boundary waters and taking it outside the water basin in which the boundary waters are located "applies only in respect of the water basins described in the regulations." However, there is no definition in the regulation of "water basin." That is entirely up to ministerial discretion through regulations.
The minister has the power to specify the exceptions described, prescribe the classes of licences, determine who is eligible to hold the licences and define the formula for licences, the fees, the duration of licences and the renewal and amendment of licences. The minister can define every single thing related to this issue except the three exceptions. Do you consider that the normal approach that Justice takes to legislation?
This bill provides huge discretionary powers over every facet, including definitions, and yet fails to mention bulk water or define a water basin. Do you consider that a good piece of proposed legislation?
Mr. Reiskind: I would say, from my understanding, that it is consistent with other pieces of similar legislation. I can give some examples of that. In more detail, you mention the ability to change the definitions of "use" and "obstructions." There is a limitation in the bill on those key words. Proposed subsection 21 (2) states:
For greater certainty, regulations made under paragraph (1)(a) do not restrict the ordinary meaning of the words "use," "obstruction," "diversion" or "work."
The normal meaning of those words is to apply. If there were a detailed meaning that was not clear because of an interpretation by the courts, clarification would be made in the regulation. However, the bill states that the ordinary meanings of those words are to be applied, so that you could not undermine the common understanding of those words by regulation.
Senator Carney: If I may summarize: Please explain to me, in view of what you have just said and what your minister said, where, in the 26 proposed new sections in Bill C-6, there is a clear prohibition on the export or the removal of bulk water; and where there is a clear definition of "bulk water" and "water basin," or any of the other terms. Can you tell me that? Can this bill, as presented to us, allow a future minister, using the powers provided and the regulatory powers that can be changed in the future, to authorize the export or the removal of bulk water? I want to know exactly where it says that.
Mr. Reiskind: You have the direct prohibition on removing water outside of the water basins in 13 (1). The bar is set very low to indicate the intention. One also has the parameters of the bill, which implements explicitly the Boundary Waters Treaty. The minister could not, without violating the treaty, permit tremendous amounts of bulk removals. Ultimately, the parameters of the bill include the treaty limits.
That is why I do not believe the minister would be able to do that.
Senator Bolduc: On a supplementary, if it is true that there is a prohibition, and that it applies to three water basins only, what happens to the other water basins?
Senator Carney: There are about 300 water basins.
Mr. John Cooper, Director, National Water Issues, Environment Canada: Bill C-6 applies only to boundary waters, which include the Great Lakes, Lake of the Woods, the Saint Croix River and part of the Saint John River. All the other waters are transboundary, which means they cross an international boundary, such as the Red River or the Columbia River. We are not able, within Bill C-6, to implement the prohibition on removal of those waters. We are limited in scope, in terms of this bill, to a prohibition that applies strictly to boundary waters, that is, those waters through which the boundary runs.
That is why our strategy, since its announcement in February 1999, has been based on a partnership approach with the provinces. When we initiated that process, there were two provinces with prohibitions on bulk removal - B.C. and Alberta. Nine out of ten provinces now have regulations or legislation in place that prohibit the bulk removal of water. The remaining province, New Brunswick, is in the process of developing legislation to prohibit bulk removal. Effectively, the prohibiting of bulk water removal is covered across the country.
Senator Bolduc: Geographically, it is clear that there are five basins. Why do you not put them in the bill, instead of leaving them for the regulations, to which you can make exceptions after the fact?
Mr. Reiskind: We have covered all the areas where it is deemed that there could be any bulk removals. In the West there may be, theoretically, some small lakes along the boundary that could be considered boundary waters. We could not imagine anyone being able to carry out a bulk removal from those small areas. We have covered the areas where bulk removals might take place. By having it in regulation, if someone should figure out that a small lake is worth a bulk removal and it needs to be stopped, then we could cover it, if necessary.
Senator Murray: You could also delist a basin, could you not?
Senator Spivak: I will follow up on all of the questions about excessive ministerial powers and the ability to change regulations without bringing them to Parliament. I point out to you that, in the context of the bill and the entire issue of bulk water removal, with which I am sure you are familiar, there have been detailed schemes in the past, and probably some current ones, for diverting huge amounts of water.
You do not have to ascribe conspiratorial motives to understand why people are nervous and anxious about Bill C-6. You said that the minister could not change the regulations because a proposed change would have to go before the International Joint Commission and would have to comply with the treaty. You have not given a clear answer as to why those regulations could not come before Parliament. I would like to hear a clear answer as to why those regulations could not come before Parliament, so that there could be an overabundance of protection. Are the bulwarks opposed to such an action taking place in the future? After all, you are considering the next hundred years with this bill. The last treaty was made in 1909. This is legislation for the future.
Why not have an overabundance of caution? Let us hear a clear answer as to why those regulations cannot come before Parliament.
Mr. Reiskind: Overall, of course, a committee of Parliament approves regulations.
Senator Spivak: However, the committee does not have the power to change the regulations. We are talking about parliamentary power to change regulations.
Mr. Reiskind: Regulations also appear in the Canada Gazette a certain number of months before they are promulgated. If a serious problem is perceived, it can always be raised in Parliament.
In any act, certain things are put in regulations. The tax act contains many details and then has boxes of regulations. I do not think this bill is out of line with other, similar acts. In environmental legislation, if a minister does not set out the substances to be controlled by regulation, the act is not effective, in many cases. One could make arguments there.
In the International River Improvements Act, which deals with levels and flows affecting rivers on the other side of the boundary, there is a regulation-making power to exclude various projects. The details on when a licence is necessary under that act are provided for in regulations. I see this bill as quite consistent with other, similar pieces of legislation.
Senator Spivak: Mr. Reiskind, with great respect, you are saying to me that there is no reason why these regulations cannot come before Parliament, but that you find it more suitable or more convenient or more whatever to avoid that. You cannot cite other acts. More and more legislation is coming before us with most of the details in the regulations, which I think is an insidious practice. Are you suggesting to me that there is no reason why they cannot come before Parliament? Am I correct in that understanding?
Mr. Reiskind: When you say "come before Parliament" ...
Senator Spivak: Before they are changed, because regulations cannot be changed without the approval of both Houses of Parliament.
Mr. Reiskind: It is the same as with other acts. Most acts do not have their regulations submitted to Parliament. In practical terms, some of the details, as I mentioned, such as the levels of removals, are in the regulations in order to ensure a speedy reaction to possible loopholes or developments at the International Joint Commission.
Senator Spivak: I do not want to pursue this, but I want to point out to you again that this is not a normal situation; it is a situation under threat. There are all kinds of disputes right now under NAFTA about bulk water removal.
My second question is on 21.1, in regard to the rights of Aboriginal peoples. I want to know whether there is anything under section 35 of the Constitution Act, 1982 that would prohibit a native band from selling bulk water if it so wished. Is there anything in that particular section that would disallow that, or are we still looking at these defences? What is the status of section 35 vis-à-vis the Boundary Waters Treaty or any other barriers under this proposed legislation? Is my question clear?
Mr. Peter Fawcett, Deputy Director, United States Transboundary Division, Department of Foreign Affairs and International Trade: Perhaps you could repeat the question.
Senator Spivak: This is a non-derogation clause, I take it. It says that "nothing in this Act shall be construed so as to abrogate or derogate from the protection" provided by section 35 of the Constitution Act. If a native band somewhere on the boundary waters wished to sell bulk water, what is to prevent that? Obviously not this bill, because it says here "nothing in this Act." I am asking you, would they be able to do that? What would prevent it?
Mr. Fawcett: My understanding of this amendment, which was added in the House of Commons during the clause-by-clause stage, was to provide that nothing in this bill changes with respect to rights of Aboriginals.
Senator Spivak: Do those rights include that particular action?
Mr. Fawcett: My understanding is that if this bill were to become law, all Canadians would be bound by it, just as all Canadians are bound by provincial laws.
Senator Spivak: I understand what you are saying. It does not change what is in the act, but they would be as bound.
Mr. Fawcett: That is right.
If I might, in a more general way, address some of the earlier concerns about the regulations, over the last three years of developing this bill, we have found that there is overwhelming support for it. There is overwhelming support for the purpose of this bill, which is to protect Canadian waters and to prohibit bulk removal. We are worried about big projects that will remove water in bulk.
Proposed subsection 13(1) prohibits removal of all waters. The purpose of the definition of "bulk removals" is to ensure that we capture all methods of removing that water - that is, by irrigation, by pipelines and by various other means. As the minister said, new technologies come along all the time. Who knows, technologies that can "cryo-vac" ice or remove water by evaporation could come along and pose a real threat to our water resources. The purpose of that definition is to be able to react to those situations.
If you look at the earlier concern about the definition of "use" - as Mr. Reiskind has indicated, that does not derogate from the normal meaning of those words - that is in the context of the licensing provisions. One thing that we discovered in developing this law to live up to our obligations under the Boundary Waters Treaty was that there was quite an informal process for approving projects within basin diversions.
The licensing provisions are there to ensure that it is an open and transparent process and that we capture all of the intended purposes. Those uses, and the other elements that you were referring to, would apply only to the licensing provisions. They do not apply to the overall bill.
Senator Bolduc: Is it possible that 13(4) could have the effect of letting the Governor in Council relax the prohibition?
Mr. Fawcett: It is obviously a hypothetical question, but what you are proposing would be completely contrary to the purpose of this bill. There are safeguards in place if such a proposal were to be made.
Senator Spivak: What are they?
Mr. Fawcett: It is hard for anyone to imagine.
Senator Bolduc: Theoretically, is it true or not that the Governor in Council has that power?
Mr. Fawcett: It is a hypothetical question.
Senator Bolduc: Supposing another government, rather than the one we have at present, had other views about the future. Would they not be able to do something that would be against the bill?
Mr. Fawcett: If you look at the regulations in this area and the exceptions that are provided, I do not think anyone has a problem with what is being proposed as exceptions.
Senator Murray: Then put them in the bill.
Mr. Fawcett: Ballast for safety, for normal use, for people and animals, for humanitarian purposes. There may be other purposes that come along that we would see as necessary. It is from that perspective that these exceptions are being provided. It is in that context. Again, you have to look at the overall purpose of the bill, which is to restrict bulk water removals.
Senator Carney: It is not in the bill. Why do you not say it?
Mr. Fawcett: It says it.
The Chairman: Senator Carney, would you like to ask a question?
Senator Carney: I have two points that have not really been covered but only referred to. My first question deals with the statement by Mr. Reiskind concerning regulations being raised in Parliament. I am disputing that in the sense of how we understand Parliament to operate. It is my understanding that the regulatory power that is set out in this bill follows this kind of process: The regulations are drafted by the various departments involved, such as Foreign Affairs or Environment. They go to PCO and are reviewed by PCO-Justice. They then go to a special committee of cabinet for review, after which they are gazetted in the Canada Gazette. Those of you who sit up nights and read the Canada Gazette have my sympathies. After a short period, they are gazetted for public comment. After a few weeks, public comments on the gazetted regulations are gathered up and go through the same process. They go back to PCO-Justice and the other departments for comment. The regulations then go to the special committee of cabinet and then to the full cabinet. Nowhere in that cycle is there normally a parliamentary process.
In some bills, there is the provision that regulations in a very controversial area have to return to Parliament. Is the regulatory process I have described to you the normal one? I am asking you because you are the one who said they are raised in Parliament, and I have described a process in which Parliament is not involved.
The Chairman: Are you asking Mr. Reiskind?
Senator Carney: I already asked him that.
Mr. Reiskind: Yes, that is generally correct. They are also put before a committee of Parliament so that Parliament is aware of them.
Senator Carney: But unable to change them.
Mr. Reiskind: For the rest of the process, you are correct.
Senator Carney: Since the committee which you say reviews them has no powers to change them, it would be misleading to suggest to this committee that Parliament would have a chance to change the regulations that flow from this bill; is that correct? Yes or no? It is very simple.
Mr. Reiskind: New regulations are not passed in secret. There are various processes that enable Parliament to see them.
Senator Carney: In fairness, you have agreed that the process I have outlined is correct. You have already agreed to that. Why can you not admit that that is the case? You have already agreed to it. There is no power of Parliament in that process to change the regulations. Yes or no? You cannot agree that the process I have described is accurate and then argue that Parliament plays a role in changing the regulations. There is no power for Parliament to change the regulations in the process that you have agreed I have correctly described.
Mr. Reiskind: Except to the extent that the political process may cause an issue to be raised for debate in Parliament, that is correct.
Senator Carney: Thank you. I wanted to get that on the record. Clearly, Parliament is not involved once these regulations are gazetted.
It has been suggested in the testimony that the International Joint Commission somehow or other did not raise, or is indifferent to, trade elements. That is how I took the testimony, and we can read it.
The IJC's report on the protection of the waters of the Great Lakes specifically points out two possible threats on the trade side of this issue. Part of this section states:
When water is "captured" and enters into commerce, it may, however, attract obligations under the GATT, the FTA, and the NAFTA.For the record, Mr. Fawcett is nodding his head.
Then it goes on to state that the exceptions most relevant to trade in water would appear to be those related to measures necessary to protect human, animal, plant life or health, which is called the "health exception." Then there is the "conservation exception." It points out there, however, that these exceptions cannot:
"be applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade."Furthermore, the report goes on to state:
Although dispute-settlement panels considering these GATT exceptions have affirmed, in principle, that trade interests may have to give way to legitimate environmental concerns, it is also true that the same panels have questioned very closely whether measures nominally taken for environmental reasons have underlying protectionist elements. Clearly, then, the achievement of a coherent and consistent approach to water conservation and management in the Great Lakes Basin - an approach clearly grounded in environmental policy - would be an important step in addressing any trade-related concerns with respect to the use of Basin waters.The IJC is quite sensitive to the issue of trade-related elements. Since there is a lack of definition of "good" in the NAFTA, the GATT and in this bill, I am putting forward the suggestion that we are not made immune to future trade challenges to the export of water, the use of water or the use of manufactured products by this bill. I am saying that for the record, Mr. Chairman, because there has been a suggestion otherwise.
If Mr. Fawcett would care to correct me, I am, of course, open to correction, as always.
The Chairman: Mr. Fawcett, would you like to correct that or not?
Mr. Fawcett: I will attempt to respond, Mr. Chairman. I was nodding my head, senator, because you read the key phrase. The entire purpose of this bill is exactly what has been described by the IJC, to deal with water as a resource, not as a good. We are prohibiting bulk removal of water in its natural state.
Senator Carney: You are not.
Mr. Fawcett: As you said, senator, once water enters into commerce, it becomes a good. However, we are dealing with it as a resource.
Senator Carney: What about manufactured products?
Mr. Fawcett: Products manufactured within the basin are allowed for under this bill. Of course, this is subject to provincial licences and other provisions. Again, that simply allows for removal for this specific purpose, but we are still dealing with water as a resource. I think you will hear from other trade experts that this approach is sound.
Senator Carney: The bill does not define "water basin." You can say all you want about how it is limited to this basin, but if you do not define "water basin," it is irrelevant.
The Chairman: I think you have made that point, Senator Carney.
Mr. Fawcett: If I might finish, I did want to refer the senator to the same report in the trade law section. It talks about this at some length. It is quite a good treatment of the overall trade provisions. At the end of section 23, on trade law, it says: "Canada and the United States cannot be compelled by trade laws to endanger the waters of the Great Lakes ecosystem."
That is a fairly strong conclusion in terms of the rather comprehensive coverage of all of the elements in the report.
Senator Carney: It is only one conclusion.
Senator Murray: Mr. Chairman, I am amazed that the House of Commons let this bill go through with the extraordinary regulatory powers granted to the Governor in Council. There is the power, for example, to define almost any word in the bill in any way that the Governor in Council chooses, cabinet chooses. There is the ability to delist some of the waters to which the so-called "prohibition" will apply. There is also the unfettered right to make exceptions to the so-called "prohibition." These are surely extraordinary.
I understand the position that the minister has taken, and that the officials have made a good attempt to support tonight, to the effect that the regulatory authority is not unfettered because the minister is constrained by principles of administrative law or by the parameters of the bill.
These are pretty thin reeds to lean on. It is like saying that you are constrained by the Ten Commandments. It is true, but not necessarily relevant, when the government is taking upon itself such broad regulatory authority.
Not much time has been spent on the licensing provisions in proposed sections 11 and 12. Here again, you provide that the licensing provisions will not apply in respect of exceptions specified in the regulations.
To what would those exceptions apply? Is it just the licensing provision, which is one step at the end of a long process, or would regulations permit exceptions to the entire process?
Currently, if you have a project in mind, you go to the government. The government has right of first veto, as I understand it. They decide whether to refer your application to the International Joint Commission. The IJC makes a decision. Perhaps it says yes, with conditions. It goes back to the government, which then, I assume, has another chance to say "no." It usually says "yes," and does so informally. This bill provides that the government will issue a licence. Why are you providing in 11(2) for exceptions to the licensing provisions?
Mr. Reiskind: That is to provide an opportunity to ensure that the International Joint Commission is able to operate as it has for the last 90 years. If a project is for domestic or sanitarypurposes -
Senator Murray: You have already covered that.
Mr. Reiskind: That is explicitly in the bill. I give that as an example. The joint commission, under the treaty, has generally not reviewed those types of projects because most of the water goes right back into the basin from drinking water.
Senator Murray: That is very interesting. Who decides whether a particular project will be exempted from the process contemplated in the treaty?
Mr. Reiskind: Right now, projects are submitted to the Department of Foreign Affairs. If the project appears to be for domestic or sanitary purposes, a letter generally goes back saying that the project is not subject to the regulatory application of the International Joint Commission.
Senator Murray: We will not bother the IJC with that, because the exemption is already there. However, what other exemptions do you contemplate? The exceptions to 11(1) are not contained in the draft regulations that you tabled with the House of Commons.
Mr. Reiskind: Small manufacturing projects within a basin have generally not received International Joint Commission review. It is our view that those small projects do not affect the natural level and flow on the other side of the boundary. Therefore, they would not fall under 11(1).
However, if there were some odd court case where it was insisted that this small manufacturing process be subject to licensing review, despite our understanding that it does not affect levels and flows -
Senator Murray: You would make a regulation.
Mr. Reiskind: - this provision would allow us to ensure that the same system -
Senator Murray: It would nullify the court decision.
You have not put any of the exceptions into the draft regulations.
Mr. Reiskind: That is correct.
Senator Murray: The exceptions will apply, not just to the final step, which is the issuance of a licence, but also to the entire process. You will be able to make exceptions such that projects need not bother with the IJC or the process contemplated under the treaty.
Mr. Reiskind: It would be so to ensure the continued application of the system that has been in place now for 90 years.
Senator Murray: What about the exceptions contemplated in 12(2)? Is that the same answer?
Mr. Reiskind: The same idea. We cannot envisage any right now.
Senator Murray: Why did you not put some of these into the draft regulations?
Mr. Reiskind: We do not expect it will be necessary to set out exceptions.
Senator Murray: However, you give the government the power, just in case.
Mr. Reiskind: That is to ensure the continued effective operation of the joint commission.
Senator Murray: I will close on this, Mr. Chairman. Mr. Reiskind has hypothesized about acts of God, such as a drought, that the cabinet would want to be able to deal with expeditiously and not have to come to Parliament. There were other exceptions, including that if new technology came along, the cabinet could deal with it expeditiously and not go to Parliament.
Nice try, I say to the officials. We are talking about the ability to make exceptions to the prohibition and to the licensing regime. I do not see how those hypothetical acts of God or new technology coming along really answer our criticisms.
Senator Corbin: I would add one comment to what Senator Carney said about the examination of the joint committee on regulations. Senator Carney is absolutely right that the committee has no power to change the regulations, per se. However, the committee members do report to their respective Houses with recommendations and suggestions for correction of the regulations. They have done that repeatedly. In most instances, the government has followed up on the committee's recommendations. Inasmuch as it is within the power of the committee to act, it does so by way of that process. That is a long-established, traditional parliamentary process.
Senator Carney: I appreciate the explanation in this cordial debate, but it is pretty cold comfort in respect of the excessive powers given to the minister and the cabinet to regulate issues that the minister has defined as "of crucial importance to Canadians."
Senator Spivak: If I may make a comment on this issue.
Senator Corbin: I did not want to provoke a debate.
Senator Spivak: This is not business as usual. In a nice, gentlemanly, civilized world, you could have all these lovely little niceties, but we are talking about schemes that actually exist and about many kinds of corporations that would love to undertake bulk water removals. This is not "business as usual."
Senator Corbin: I had a chuckle when Senator Murray mentioned the Ten Commandments. I have been re-reading Dante's Divine Comedy and I am going down the circles of hell. I do not want to qualify the interventions of my colleagues, but there seems to be a demonizing of this bill that I find out of proportion. Perhaps I am too naive.
Senator Spivak: You have to ask yourself if it would spoil some grand plan if the regulations were submitted to Parliament - not at all.
Senator Corbin: I cannot think that the authors of this bill would take the opportunity to formalize and clarify a practice that has been in existence for the most part of the last 90 years, and, under the regulations, make a power grab of the kind that would endanger our Canadian water resources. I hope that is not what you are reading into the bill.
I would like to ask the officials a question. It is my understanding that the bill is to formalize, clarify and establish a licensing system that will simply confirm what has been happening for the last 90 years, nothing more.
Senator Carney: We would like the bill to say that, but it does not. You must give us that.
Senator Corbin: Should we read more into it than that? I accept that, in light of evolving technology, we must cover the waterfront, and that is best done through regulation. Do not forget that there are critical situations. I remember one that involved the Presque Isle River, which flows between Maine and New Brunswick, being used as an open sewer at a time when we were right in the middle of an election. Where was the concern of Parliament then? Parliament did not sit for nine months. Does the bureaucracy sit and watch the stuff flow in or out in any state?
I will make an argument that we need regulations that are flexible and take nothing away from the legislative powers of the Houses of Parliament. That is the comment I wanted to make. I feel quite secure about the bill as it is written, but if we need to add clarifying statements, I will agree with that. I am not yet convinced that that is the case.
Mr. Fawcett: I will be brief. I will make a point of clarification. The purpose of the bill is to prohibit bulk water removals. In doing that, we are looking at the big projects - the ones that threaten our water supply and the ecosystems. It is very much an environmental approach that we have adopted or proposed in Bill C-6.
Honourable senators must try to find the fine line between the prohibition of large projects, and the micromanaged water resources that, other than boundary waters, are in provincial jurisdiction.
The bill deals with boundary waters, and I want to make a point about the regulations. There is a definition of "boundary waters" in the regulations as the basins to which we are referring - the three major basins. They are defined broadly so that we do not micromanage water resources that are in the purview of the provinces.
Senator Graham: It would be a shame if we did not include Mr. Cooper in the discussions. I understand that there were consultations with the Department of Environment and the provincial counterparts, and that various provincial jurisdictions will be implementing legislation.
Could you give us a bird's eye view of where that stands and what progress they are making?
Mr. Cooper: Certainly. As I mentioned earlier, all provinces have legislation or regulations in place, or are in the process of developing legislation. Nine provinces have a prohibition in place on bulk water removal; it is either in legislation or regulation. New Brunswick is in the process of developing its approach within a broader framework to protect water within the province. They agreed that prohibition on bulk removal is the approach that they want to adopt. Essentially, we have a cross-Canada prohibition on bulk water removal.
The quantities of water that they would allow to be removed vary, but in general, the exceptions are consistent with the sort of exceptions that are applied in Bill C-6.
Senator Graham: What is the situation with the territories?
Mr. Cooper: DIAND is in the process of negotiating with the territorial governments with a view to developing a policy directive to prohibit bulk water removal from the territories. My understanding is that, with Yukon devolution potentially occurring in 2003, the Government of the Yukon Territory will introduce its own legislation to prohibit bulk water removal in line with the policy directive issued by the Minister of Indian Affairs and Northern Development.
The Chairman: I thank our first group of witnesses this evening.
Our next panel of witnesses include Mr. Hart and Ms Sullivan. Please proceed with your presentations and then we will have questions.
Ms Ruth Sullivan, Professor, Faculty of Law, University of Ottawa: Honourable senators, I was asked to give my impressions of Bill C-6. My impression is that it is a paper tiger. It has an appearance of a certain ferocity. When you read it, you think, "Oh my goodness, look at all those teeth." However, when you look at it carefully, you see there is not much going on here.
There is the potential in this bill for a great deal of protection for Canadian boundary waters, but I would say that whether that potential is realized or not depends entirely on the goodwill of the government. There is nothing in this bill that requires the government to move forward in any significant way.
In my introductory presentation, I will start by going over the "ferocious" part of the bill, because it does move us forward. Then we can perhaps turn to the way in which the bill takes back part of what it appears to give. We might end by looking quickly at the regulation-making powers.
Some of the most impressive things about this bill are the enforcement provisions. Proposed sections 16 to 19 give the minister all sorts of extraordinary powers to make orders and to order forfeitures, and under proposed section 26, he can seek an injunction. These are all useful remedies, and the minister is able to act with fairly minimal pre-conditions.
Under proposed sections 22 to 25, we have some very impressive penalties, including significant fines and the potential for imprisonment. There is a continuous offence provision, so that each day you maintain your diversion, you are liable to those rather severe penalties. There is a provision for personal liability of officers and directors as well as for vicarious liability. This is a complete set of enforcement provisions. In 26, the court is given injunction-granting powers.
Therefore, the bill looks good and is definitely an improvement over the existing act. If I understand it correctly, the existing act is virtually unenforceable. Its only enforcement mechanism appears to be a private action by an individual who has been aggrieved by some action contrary to the treaty. I see no provision in that act for creating penalties of the sort we have here. This bill strikes me as an important step forward in that sense.
The main provisions are proposed sections 11, 12 and 13. Each of these introduces a prohibition, and 11 and 12, as I read them, largely codify articles III and IV of the treaty. However, they offer slightly more protection.
Let us focus on Article III, as that relates to diversion, which is our main concern. Article III of the treaty prohibits use, obstruction or diversion that would affect the natural level or flow of the water. You would have to establish that the diversion would affect the level or flow.
Under the bill, we have a slightly broader prohibition, in that a use, obstruction or diversion is prohibited if it affects, or is likely to affect, the flow or level of boundary waters. The prohibition is slightly enlarged. It allows the government to go after the threat of environmental damage or the threat of significant diversion, not just the fact itself.
Another important feature of this bill is that it is binding on Her Majesty in right of Canada and the provinces. That is quite an important feature, since many of these actions that might divert water could be undertaken by a Crown corporation, for instance, or by some agent of government.
As I read it, the bill maintains the protection of joint commission approval as a pre-condition for entering into diversions and so forth. That safeguard remains in place. Then, most importantly, there is proposed section 13 that introduces a new provision and a deeming clause. The new provision says that no person can use or divert boundary waters by removing water from those boundary waters and taking it outside the water basin in which the waters are located.
This represents an improvement, insofar as you do not have to show that there is any threat to the flow or to the level of water. Simply by virtue of taking the water and removing it from the basin, you have breached the act. Potentially, that is a significant enlargement of the protection.
Then we have the deeming provision. I must admit that I find this puzzling. It says that any removal from the water outside the basin will be deemed to affect the level or flow of water. Since, under (1), we do not care whether it does that or not, I do not see the value of this.
This provision might have value if it related back to proposed section 11, which would make sense, but it does not say that. It states that, for the purposes of subsection (1), or the treaty, we have this deeming provision. I do not see it doing any work, since the prohibition under proposed subsection (1) simply says, if you take the water out of the basin, you commit an offence. Who cares whether the water level is deemed to be affected?
I do not understand this deeming provision. It may be that the intention was to say that for purposes of proposed section 11, we have a deemed impact on the water. That would make sense to me, but it does not say that. I have some trouble with that.
Senator Murray: What about the words "and the application of the treaty"?
Ms Sullivan: It is not clear to me what that means.
The Chairman: Let us let Ms Sullivan finish her presentation and then you can ask your questions.
Ms Sullivan: All those provisions do something. They give something beyond what we already have in the existing act.
The problem is that we have a very large transfer of power from Parliament to the Governor in Council, in the form, first, of a power to make exceptions. Second, there is a power to define. For me, the key problem is that proposed section 13 is useless. It will not operate unless there are regulations in place that describe water basins.
Sometimes, regulations are a condition precedent to the operation of a provision; sometimes they are not. In the case of section 13, the existence of regulations is a condition precedent to the provision having any effect whatsoever. Without the regulations, it will just sit there on the books. It cannot be enforced in any way. That strikes me as making the impact of section 13 totally dependent on the goodwill of the cabinet to do something. Even if it decided to act, it can define "basins" broadly or narrowly. It has a great deal of control over the scope of the provision. It could include basins as broadly as possible, or it could be narrowed down to a single, token basin. There is nothing in the bill that controls that. That is the key problem with proposed section 13.
There is another strange dimension here. Apart from having conferred quite a significant regulation-making power on the Governor in Council, this measure gives a huge power to the minister. The discretion conferred on the minister is quite extraordinary, in my view. There is little in the bill itself to control that discretion. There is the treaty and various provisions in the treaty that might be appealed to, to narrow the discretion of the minister. For the most part, it is an untrammelled discretion.
I notice that sometimes, a minister's discretion cannot operate until regulations are in place, but that is not the case here. Here, the minister can act, grant licences, fix the terms and conditions of licences and withdraw the licences. In fact, the minister can do any of these things without benefit of guidance by regulations. How he exercises his power or why he is exercising it does not even have to be public. If the Governor in Council chooses to enact regulations, then they will structure the discretion and set out limits to it. However, there is nothing in the bill that requires the Governor in Council to do that.
Even by current standards, I find this is an unusually broad discretion that is given to the minister. I also notice there is reference to the Minister of Foreign Affairs, who, arguably, is not the best-placed minister to be balancing environmental concerns against these other trade concerns.
Finally, we might quickly look at the regulation-making power. I will make one observation that struck me from a drafting point of view. That is to say, the regulation-making powers set out in 21 begin by stating that the minister may make regulations:
...specifying what constitutes a use, obstruction, diversion or work for the purposes of this Act;This, I gather, is a disturbing provision, in that clearly, it is enabling the cabinet to enlarge or shrink, on the face of it, the scope of the prohibition set out in 11. When you look at proposed subsection 21(2), you see a bizarre provision. It states:
For greater certainty, regulations made under paragraph (1)(a) do not restrict the ordinary meaning of the words "use," "obstruction," "diversion" or "work."
Proposed section 21 sets out all the regulation-making powers of the Governor in Council. The first one is that it can specify what constitutes use, obstruction, diversion or work. These are key terms in proposed sections 11 and 12. One feels somewhat worried that the Governor in Council can decide what counts as a use, a diversion and so forth. When you look at 21(2), it states:
For greater certainty, regulations made under paragraph (1)(a) do not restrict the ordinary meaning of the words "use," "obstruction," "diversion" or "work."
Senator Murray: I follow it, but what does it mean? What is your point?
Ms Sullivan: I had trouble with it, too. Ordinarily, you do not define terms unless you vary the ordinary meaning of the words. That is a basic drafting principle. I think this is saying that you can enlarge it, but you cannot shrink it. This is good, if you are interested in protecting boundary waters against diversion. It is saying that you cannot make these terms smaller; you can only make them larger. You can only broaden the scope of it. I find it to be an odd provision.
I suspect it has to do with treaty implementation concerns. I really do not know what it has to do with. I have never come across anything quite so bizarre - although that is not true. The bizarre things one finds in legislation are really not to be counted. This certainly is up there among the more bizarre things I have come across.
Mr. Michael Hart, Professor, Norman Paterson School of International Affairs, Centre for Trade Policy and Law, Carleton University: Honourable senators, it is a pleasure to be here and to share with you some of my concerns about this proposed legislation.
We have just heard what I think is a masterful presentation of some of the weaknesses of this bill, based on the premise that the basic purpose may be sound, but the execution requires some rethinking.
I would go further and say that the basic thinking behind the bill requires some further thought. It is based on a premise that is manifestly false, or, to put it succinctly, as Ms Sullivan did, this is a solution in search of a problem.
When I was asked last week to testify on Bill C-6, I had to admit that I was not aware of what Bill C-6 was. I have since become aware of it. I have looked at some of the documentation that the committee kindly sent to me. I looked at material that my colleagues had provided. In fact, one of my colleagues testified before the committee in the other place, indicating what she thought were some of the problems. I sent a copy of her testimony to the committee staff for background, as well as a very fine analysis of the water problem by a pair of lawyers in Toronto, which I think you might usefully make part of the record of this committee.
I will indicate to you why I think there is a problem with this proposed legislation. What are the problems that this bill is trying to address?
The first one might be that there is a great demand for Canadian water outside of Canada. I have looked high and wide, and that is not the case.
It is true that there have been occasions when highly imaginative schemes have been dreamt up by Canadian engineers and entrepreneurs looking into the possibility of exporting Canadian water. To my knowledge, there has never been a demand expressed, despite the fact that every once in a while, Canadians say that there should be a demand for Canadian water. I am unaware of any widely held view outside of Canada that there are people looking to buy our water.
They are not looking to buy our water because it would be very expensive to do so. Those countries that do experience a current shortage of potable water for human use probably would not mind buying Canadian water, except that it is expensive to move it. There are far less expensive solutions available to other countries than buying Canadian water.
Israel desalinates water. The Israeli experience is that you can desalinate water for about 30 cents a gallon. It would cost more to move water from the Great Lakes to a market far away.
I read some of the testimony outlining the James Bay scheme and the great mountain trench scheme and so on. The amount of money that would be required to bring one of these schemes into reality is far beyond the capacity of anyone to pay.
One of the ways to find that out is to go to California and see how water is being wasted there right now. California would be a potential customer for this kind of water. I spent four winters living in California. It is a wonderful place to live because they have put a lot of water diversion projects in place. They take water from the rivers in the mountains in the north and make it available to farmers further south.
Water is being wasted in California and Nevada at a tremendous rate. In California and Las Vegas, in the desert, people continue to have nice, thick, luscious lawns because not enough money is being charged for the use of that water. A simple regulatory change in a country like the United States to make the users of water in those jurisdictions pay what it costs to bring water to them would immediately lead to the kind of conservation measures that are required and would dry up any demand for Canadian water.
I am not convinced that there is a demand for water. Is there a shortage of water in Canada? That is a difficult one to take seriously.
I have looked at various estimates of the amount of fresh water in Canada. They range anywhere from 20 per cent to 50 per cent of the world's reserves of fresh water for the exclusive use of one-half of 1 per cent of the world's population. It is difficult to envisage that at some time in the future, Canada will face any serious threat to the use of water.
Is there an environmental threat to the water? Given the economics, I am not convinced that federal and provincial governments lack sufficient regulatory power to deal with any entrepreneurial threat of diversions on the kind of scale that is contemplated by this bill. The amount of licensing and the number of permissions that would be required would make it virtually impossible for anyone to do this without government's participating in the decision-making and providing the permissions.
If a government wants to do that, this piece of proposed legislation will not undo it, because, as Ms Sullivan says, the government can define things any way it wants and then proceed. It does not serve any useful purpose from that perspective.
The hidden agenda behind this bill is the perception in certain quarters of the public that there is a trade agreement problem, in that Canadian governments have entered into trade agreements that might, at some point in the future, require Canada to sell water to customers outside of the country in a way that we are unprepared to do.
Is that true? That is based on a misreading of the existing trade agreements and a misunderstanding of a number of decisions that have been made by both WTO panels and NAFTA panels.
The trade agreements into which Canada has entered, specifically, the North American Free Trade Agreement and the World Trade Organization Agreement, are based on some simple, basic premises. First, the government cannot discriminate except in the ways that the agreement allows.
As a citizen of this country, I think that is a very good rule. The less governments are allowed to discriminate, the happier I am. I have visited many countries where governments are allowed to use a lot of discretion. That is a quick recipe for corruption.
Second, trade agreements provide an orderly and progressive way for government to remove overt barriers to international trade - particularly tariffs, but also quotas and similar kinds of restrictions. Over the years, we have been quite successful in doing that.
Third, trade agreements allow governments to come to a common understanding as to how they should regulate the marketplace. There are rules about dumping, subsidies, government procurement and so on, based on the fundamental premise of non-discrimination, important premises such as due process and transparency, and other basic hallmarks of good governance.
In addition to that, however, each of these agreements provides for exceptions. That is, there are provisions in those agreements that allow governments to do the kinds of things that governments feel that they must do, and which may, in one way or another, be inconsistent with those agreements. Most of those exceptions are spelled out in the agreement. In addition to that, there is a general exception in most agreements - Article 20 in the GATT. There is a similar article in the General Agreement on Trade in Services. There is a similar article in the NAFTA.
The general exception article indicates that if any aspect of the agreement requires governments to do something that they feel they cannot do, for a variety of reasons, they may take action. There is a very important saving clause in that. There is a head note that says that governments may take such actions as they deem necessary - and the word "necessary" is important - to protect public morals, animal and plant health or life, national treasures, exports of gold and silver and similar types of things.
There is an important head note that says they must do that in a way that is not overtly discriminatory and that does not constitute a disguised barrier to trade. Both of those phrases have been critically important in the interpretations that panels have made of cases that have been put before them, both in the World Trade Organization and in the NAFTA.
The decisions reached in these cases are worth recalling. Two that have created a significant amount of interest in the environmental movement are the famous shrimp-turtle case in India and a tuna-dolphin case in Mexico. The first was under the GATT and the second under the WTO. A panel took exception to measures that the United States implemented in order to protect, in the one case, turtles that were caught in shrimpers' nets, and in the other case, dolphins that were caught in tuna nets.
In both cases, WTO panels questioned whether the United States had taken action that was consistent with its obligations. In both cases, they had not taken the opportunity to look for alternative ways to solve the environmental problem that they were trying to address. The panel said that the U.S. was entitled to take action to protect the environment, but not more than was necessary. In other words, the U.S. had not looked at all alternative ways to address this problem. Second, the U.S. had not looked at ways to deal with this problem in non-discriminatory ways that did not create an overt, new barrier to trade.
In both cases, the panels were at pains to point out to the litigants that the WTO, or the GATT or the NAFTA in similar cases, is not interested in restricting governments' ability to regulate and deal with environmental problems. Rather, it is interested in ensuring that when governments do that, they do so in a way that does not create an unnecessary obstacle to international trade. In other words, the panels were interested in the U.S. doing what was necessary, rather than what may, at one point, have been politically attractive.
The Sun Belt situation raised quite a lot of concern. Senator Carney may be aware of it. A British Columbia company and a California company entered into a partnership to sell water from British Columbia in California.
The British Columbia government changed its mind, withdrew the licence, went ahead and settled with the British Columbia company, but failed to settle with the California one. California's complaint is not that they were denied the right to sell water, but that they were discriminated against. They want the British Columbia government to deal fairly with them. That is a simple, necessary rule that should animate these kinds of cases.
If you go through all the other cases, and I will not take the time to do that because there are about a dozen of them, you will find that, in each case, the issue is not the government's right to regulate, it is not the government's ability to address environmental concerns, but it is whether a government has acted arbitrarily and discriminatorily, rather than fairly. I have no difficulty supporting that kind of trade agreement.
Third, and this goes to a more philosophical realm and builds on what Ms Sullivan said, I have a rather libertarian view of legislation. I like the government that governs least. I am anxious when governments begin to put laws and regulations in place that address non-problems, particularly proposed legislation such as this, which has such a wide sweep of potential regulatory powers that are not under the aegis of Parliament.
When honourable senators look at this type of legislation, ask: Why is it being passed? What possible role can it play in the future? What hole is being filled that is currently not already properly attended to by existing legislation? Given these considerations, I for one do not think that it really serves a useful purpose and it would be better to allow it to die on the Order Paper.
Senator Murray: Unaccustomed as I am to entering a defence of the government -
Senator Carney: Be careful.
Senator Murray: I will be careful, and members opposite will take up the argument, I am sure. The government would say that the prohibition provision in Bill C-6 is one part of a three-pronged strategy that involves, among other things, a good deal of federal-provincial cooperation and provincial action in their own jurisdictions. We were told earlier today by one of the government witnesses that nine of the ten provinces now have legislation or regulations in place to prohibit removal of water in bulk. At a minimum, the government would reply to you that, having encouraged or urged the provinces to do this, the least the federal government can do is to take similar action in its own jurisdiction. What would you say to the fact that nine of the ten provinces have legislation or regulations in place to begin with? What would you say to the argument that the federal government really ought to teach, not just by precept, but also by example, in a matter of this kind?
Mr. Hart: One of the reasons that the provinces ventured into that legislation is because the federal government has been bullying them to do just that for the last five years. It is not that these provinces identified a problem and decided that they needed to address it. It is that the federal government has been meeting with them and constantly reminding them that this is a potential, real problem. Some of the provinces have now decided that, for greater certainty, they will go ahead and legislate this way, but not with the kind of conviction that would lie behind it if they really thought there was a problem.
Senator Murray: You do not think, then, that a prohibition provision, whether at the federal level or at the provincial level, is necessary?
Mr. Hart: I do not think it serves any useful purpose.
Senator Murray: Ms Sullivan, I have a couple of questions. The minister and the officials have defended the extraordinarily broad, and indeed in some cases unfettered, regulatory power to be conferred by this bill on the cabinet by saying that there are principles of administrative law, and there are parameters of the act and the treaty that will constrain the cabinet in exercising this regulatory authority. How much comfort can we take in that, given the extraordinarily broad nature of the regulatory power?
Ms Sullivan: I do not think there is much comfort to be had from that. It seems to me the problem is not that the government has the power to suddenly prohibit actions across Canada. The problem is that the prohibition is in the bill. The power given to the government is to take the teeth out of it and ensure that it does not work. The problem is inaction, not action, on the part of the government.
If the government does nothing, proposed section 13 is a dead letter. If the government does nothing, the minister can grant licences or not grant licences, within the parameters of the bill. I do not see that as a huge danger. It violates principles of non-discrimination because it permits the minister to decide, without having to answer publicly, whether he or she will grant a licence. I see this as a problem of inaction.
Senator Murray: I have your biographical notes here, Ms Sullivan, and I notice that your area of expertise is legal drafting and legislation. You have considerable educational background and you have also served time as legislative counsel in the Department of Justice in the regulation section. Experience has taught me that whenever officials or others are pressing upon you the need for what appears to be a broad executive authority in answer to any raising of eyebrows or objections, they can always reach into their briefcases and say: There is a precedent.
Being able to cite a precedent, especially one invoked by a previous government of a different political stripe, always encourages ministers to go along.
In this case, we have what would be a legislated prohibition made subject to an unfettered discretion to make exceptions to that prohibition. I find that nonsensical and inherently contradictory, dangerous and excessive.
Is it unprecedented?
Ms Sullivan: I could not say that it is unprecedented. It is actually quite commonplace, although this is a surprising exercise of it. There is no legal limit on what can be done in this case. Parliament chooses to delegate and it can delegate the shop; there is no limit. From a legal perspective, there is no objection to what is happening in this bill. It is purely a political judgment as to whether this is an appropriate exercise of the delegation-making authority on the part of Parliament.
Senator Murray: There are acts of Parliament that have a regulation-making authority sufficiently broad to, in effect, negate the plain purpose of the act?
Ms Sullivan: If you formulate it that way, then we do have a legal limit. If you make a regulation that negates the purpose of the bill, the courts will strike it down as being unauthorized. That is the kind of limit that Justice was referring to. It is hard to imagine what that would be in practice; perhaps if they enact a regulation that says: No basin shall ever count for purposes of this bill.
Senator Murray: I will give you a hypothetical example. This might not work, but in the draft regulations, for example, 13(1) does not apply to the removal of boundary waters other than the removal of boundary water that is bulk. That is clear enough.
Suppose some future government changed that regulation to read: "Clause 13(1) does not apply to the removal of boundary waters in bulk."
Ms Sullivan: I see no problem there. It is absolutely clear that proposed section 13 contemplates that government will be in control of the application of this section. That will not count, in the eyes of any court, as an exercise of power that totally violates the purpose of the bill.
Senator Murray: If they said that 13(1) does not apply to the removal of boundary waters in bulk, do you think that would be struck down?
Ms Sullivan: They will not say that because they do not have to. If they do not want it to apply, they say nothing and they are home free. I think you are focusing on the wrong provision. I think you want to look at 13(3), which says that subsection (1), which is the prohibition, applies only in respect of water basins described in the regulations. Until they describe a water basin, it cannot apply. If they do not want it to apply, they need only repeal any regulation describing water basins and you have a zero diversion of water.
Senator Murray: They would be able to delist any basins that were already listed.
Ms Sullivan: They would, and that would effectively cut the guts out of proposed section 13. They need not enact exceptions that draw attention to what they are doing. The exception-making power permits them to carve out exceptions in a different manner. There are two ways you can narrow the scope of proposed section 13. You can describe only one, or two or none of the basins or, if you have described a significant number of basins, then you could carve out exceptions from that. I cannot foresee any court ever objecting to that, because it is clearly contemplated by the bill.
Senator Murray: Is the notion that the Governor in Council can define almost any word in the act that is not already defined a normal type of regulation?
Ms Sullivan: No. Definition-making powers are given by way of regulation, but I have never seen such a striking one before.
Senator Corbin: I wish to elicit one comment from Ms Sullivan.Are you happy with the way Canada and the United States of America have managed their 1910 treaty obligations? If not, give me the exceptions, because that is what this bill is all about.
Ms Sullivan: I find the implementation provision in the existing act very peculiar. It is certainly dated and it is difficult to understand what it means. I know nothing about the water relations between Canada and the United States. My expertise is purely in interpretation of the bill before us. I cannot comment on the policy matter. I can only say that, as currently implemented in the existing legislation, it is a very poor job and I am surprised that there have not been a lot of problems.
Senator Corbin: With all respect, we are not academics or theoreticians. We are pragmatic politicians. This bill endeavours to clarify, normalize and formalize practices that have been going on for the last 90 years or so. In my opinion, and in the opinion of many other people, it is not a power grab by the government. It does not purport to be a tool for the future commercial export of water, or whatever you want to call it.
You have alluded to the powers of the minister. Ministers do not operate in isolation. They know from whence they come. They have an electorate. They answer to their caucus. They answer to the House of Commons, and sometimes to the Senate. They are members of the cabinet. They must justify their decisions. They must seek the approval of cabinet. They are subjected to a free press. They are scrutinized closely by public opinion. Yes, on paper, their powers seem to be awesome. However, the International Boundary Waters Treaty Act and the treaty itself have been operating very publicly. In my opinion, the International Joint Commission has done a very good job of fulfilling its mandate in the interests of both nations. In fact, some of the provisions of this bill will help the IJC clarify its own mission. It is not just for the conduct of the bureaucracy or the minister.
As I said earlier, I think we are reading too much into the bill. In my opinion, it is a housekeeping bill. To go beyond that is to be carried away by your imagination.
The Chairman: It seems to me that the first people who would object, if regulations were promulgated improperly, would be members of the IJC. They would be very public and they have been successful for a very long time.
Senator Carney: Why do they not appear before this committee?
The Chairman: It is a quasi-judicial body and half of them are Americans. They said, in response to our request, that they were not prepared to appear before our committee.
Senator Carney: Therefore they will not be public. You have just made our point.
The Chairman: They will not come to our committee, but they operate in a public manner. They manage the boundary waters and, as I have understood them, they certainly have been public. They have access to the press. If something inappropriate were done, I think they would be the first to object to, at the very least, the minister.
Senator Bolduc: Mr. Hart, you are a specialist in commercial treaties. We recently had before us the treaty with Costa Rica. In that agreement, there was an article giving the Governor in Council the power to modify the meaning of the current law. I was somewhat surprised by that. I asked the parliamentary secretary what he thought of that arbitrary power. He said it is a kind of Crown prerogative and that we have to implement the treaty. He said that they must have some of those powers. As a technical example, he said that a panel deciding something somewhere may change the meaning of it. He said that we would have to amend the law by an Order in Council, which power was in the bill.
I was somewhat scandalized by that, but in the field of international treaties, I accepted, albeit reluctantly, Crown prerogative. Do we have the same thing here? Is that why we have those fantastic regulatory powers for the executive?
Mr. Hart: As an exercise of Crown prerogative?
Senator Bolduc: Yes, is it in the same spirit as the implementation of a treaty?
Mr. Hart: I am not an international or domestic lawyer. I am a trade practitioner who has participated in the negotiation of these agreements. The lawyers on the team have always counselled me that in Canada, we have a simple principle, based on British common law, that the international agreements that we negotiate are not self-executing. The negotiation of those treaties is an exercise of the Crown prerogative. In other words, it is part of the government's power to negotiate international treaties. However, those international treaties are not made part of Canadian law unless Parliament so decides. That means that when a treaty is negotiated, it is negotiated within the confines of the law to the extent possible, and where there are changes required, then it is necessary for the government to bring a bill before Parliament in order to bring that agreement into law. I am not familiar with that particular clause in the agreement with Costa Rica, but I find it a surprising one.
Senator Bolduc: I thought of this because there are international matters involved here. We have the same framework.
Ms Sullivan: It is true that sometimes, changes must be made to bring existing implementation law in line with an international decision. However, there is a way of doing that. You give a power to implement international decisions. You do not give a power to define terms as the government sees fit.
Senator Bolduc: That was my argument this afternoon to the minister, but apparently he did not understand what I meant.
Senator Graham: Ms Sullivan, in your opening remarks, you said, if I heard you correctly, that the Minister of Foreign Affairs may not be the best minister to balance environmental concerns against trade concerns. Who then, in your opinion, would be a more appropriate minister to be responsible for this proposed legislation?
Ms Sullivan: Recent legislative schemes have often used a combination of ministers. For example, recent environmental legislation requires the Minister of Environment and the Minister of Fisheries to get together. I am sure that the expertise of the Minister of Foreign Affairs would be appropriate and necessary, but it might be balanced by the expertise of other ministers as well.
Senator Graham: I am sure that there have been appropriate consultations among the three ministers, and since they would have to find someone, a senior minister, it seems that the person in the middle would be the Minister of Foreign Affairs.
I would like to address a question to Mr. Hart, because he used the term "bullying" with respect to the provinces. You suggested that the federal government was bullying the provinces. Have the provinces objected to what you call "bullying"? What provinces have objected and on what basis?
My understanding, Mr. Chairman, is that it has been more of a consultative process and that the provinces have been willing participants. I know that in 1998, federal officials travelled to each province, and each territory, as a matter of fact, to discuss the various options for a federal approach to bulk water removals, and that following the federal government's announcement of a strategy in 1999, there were extensive discussions with the provinces and the territories on all aspects of it, including the amendments to the act.
I understand as well that some adjustments were made in response to representations by the provinces and the territories. I also understand that as regulations to the bill are being developed, the federal government will continue to consult closely with the provinces and territories.
Against that, where is the bullying in all of this?
Mr. Hart: This file was not created in 1998. It goes back many years. It first emerged with some real attention during the course of the free trade negotiations in 1985.
Senator Graham: With respect, I did not say it was created in 1998. I merely observed that in 1998, federal officials travelled to the provinces and the territories to consult.
Mr. Hart: They have been travelling back and forth for a number of years. The provinces have waxed and waned on the desirability of this kind of legislation. Some have put legislation forward and then withdrawn it. Some have gone so far as to legislate and then change their mind and withdraw it. The provinces are not of one mind as to what kind of legislation makes sense in this particular instance.
Senator Graham: Senator Murray reiterated a response to a question I had earlier asked of one of the officials. As a matter of fact, it was Mr. Cooper from the Department of Environment. His response was that nine out of the ten provinces have already enacted legislation in this respect.
Mr. Hart: They have enacted some legislation, but it is not all uniform.
Senator Graham: I would not expect that all provinces would have uniform legislation, but they do have legislation.
Mr. Hart: Most of them now have some kind of legislation. The provinces jealously guard their ability to manage the resources within their jurisdiction. They are rather suspicious of the federal government trying to invade that area of their responsibility.
Senator Graham: I understand that in this particular respect, there has been a lot of consultation and a great deal of cooperation among the provinces, the federal government and the provincial and territorial jurisdictions.
Senator Carney: First, I wish to address myself to Senator Corbin's remarks and remind the committee that Ms Sullivan was not called here as a political witness or to comment on political intent.
Senator Corbin: She did.
Senator Carney: No, she was called here as an expert on regulatory matters and as an expert in the drafting of proposed legislation such as the present bill before us. I think that the honourable senator might want to reassure her that he did not mean to attack her integrity.
Senator Corbin: Absolutely not.
The Chairman: I want to say, Senator Carney, that I do not think Senator Corbin attacked her integrity.
Senator Corbin: I thought my questions or comments were rather straightforward. I am never personal about my questions.
Senator Carney: I want to clarify, for the record, that Ms Sullivan is here in an expert witness capacity, not as a political witness, and I took exception to those remarks.
The Chairman: I believe we understand that, Senator Carney. I am certain I did not hear anything that was an attack on Ms Sullivan.
Senator Carney: As long as it is on the record that that was not the intent.
Senator De Bané: What is wrong with being partisan? Senator Carney is always partisan.
Senator Carney: The witness is not asked to be a political witness, she is asked to be an expert.
The Chairman: I do not think she has been a political witness, Senator Carney; she is just answering questions about regulations, which is her area of expertise.
Senator Carney: I have raised the question and it has been clarified.
Senator Graham: Would you allow me one moment, Senator Carney? Senator Corbin was explaining the process, from a political point of view through the committees, of how legislation is developed. You have explained how it is dealt with by the special committee of cabinet, the cabinet, the PCO, Justice and so on.
Senator Carney: Thank you for your clarification.
Senator Corbin: On a point of order, I would simply like to make it plain that I was focusing on the purpose of this bill. I accept the professor's admission that she does not know anything about the application of the treaty and how it has performed over the years. It is a perfectly legitimate question to put, even to a drafter. What is drafting all about? It is not painting clouds, is it?
Senator Carney: Let me answer that question.
As we pointed out earlier to the minister, this bill, while it purports to deal with the removal of bulk water, does not actually mention bulk water. As you have pointed out, 13(3) refers to subsection (3), which applies to prohibition of diversion, but it applies only in respect of water basins described in the regulations, where no such water basins are described. We have already established that.
In view of your comments about the extraordinary powers granted to the minister under both the exceptions and the regulatory process, is it possible, in your opinion as a drafter, that Bill C-6 could be made to achieve the opposite of what it purports to achieve? That, according to the minister, is to prohibit the export of water. Bulk water is not mentioned in the bill. I am asking you as a drafter, in view of the exceptions, the regulatory powers and the lack of definitions, could you so define the terms, use, licences, duration of licences, renewal of licences and the water basins - or, as you say, not define water basins - such that this bill could achieve the opposite of what it purports to do?
Ms Sullivan: One of the points I made in my introductory remarks is that this bill does not remove the jurisdiction of the joint commission over these issues. The joint commission retains its power to review any attempt to deal with water in a way that would affect the level or flow of boundary waters and its right to refuse permission for such an action.
In that sense, I do not think the bill could quite accomplish what you describe, because it would still be subject to that it is currently subject to, namely, the approval of the joint commission. I do not think this bill takes us backward in any way. When I speak of the broad powers that are conferred on the minister or the Governor in Council, I emphasize, once again, that there are powers not to act. The point of the imagery of the paper tiger is to suggest that the bill appears to create some fairly strong protections that perhaps did not exist in the past, but then the powers conferred on government create the potential that these will not be realized.
It is not quite the case that we are giving government powers that it did not have before to undermine an existing regime. It is more smoke and mirrors. We appear to be putting more teeth into this regime, whereas in fact, the government can, through a non-exercise of its powers, maintain the status quo and not move forward at all. That is what I would prefer to say.
Strictly speaking, I would agree with you that there is nothing in this bill that would prevent the minister from licensing a diversion of water that would amount to the export of bulk water. The joint commission might prohibit that, if it so wished. I do not know what its criteria are. If there are no regulations under proposed section 13 and the minister decides to licence that activity, I see no reason why it could not be done.
Senator Carney: That is one of the problems we have with this bill, that contrary to what the minister thinks the bill says, we feel that as it is presently drafted, it would permit the diversion or the removal of water.
Ms Sullivan: It would not change the status quo in that respect. I do not think it permits something that was prohibited formerly. It simply fails to prohibit something that was not prohibited formerly.
Senator Carney: You have said that a minister could authorize the removal and the diversion.
Ms Sullivan: That is right.
Senator Carney: And the export?
Ms Sullivan: I believe so, under proposed section 11. I do not see why that could not be done.
Senator Carney: That is one of our concerns, and others may wish to clarify that with you. I would like to ask Mr. Hart a question.
When you talk about concerns about the trade impacts of this bill, I would like to clarify something. Of course, I have raised these concerns. I do not think you can say I am totally ignorant of the intent or the wording of the trade law. I wish to point out to you that the statement by the three NAFTA countries in 1993 does say that NAFTA creates no rights to natural water resources of any party to the agreement. Unless water, in any form, is used in commerce and becomes a good or product, it is not covered by the provisions of any trade agreement, including NAFTA. Nothing in NAFTA would oblige any party to the agreement to exploit its water for commercial use or to begin exporting water in any form. You would agree that is what is stated. That is not a misunderstanding.
The International Joint Commission itself has raised scenarios in which it feels that when water is captured and entered into commerce, it may, however, attract obligations under GATT, FTA and NAFTA. This concern has been raised. You have said that this criticism is the result of a misunderstanding.
I want to follow up on Ms Sullivan's point. Suppose the government wanted to export water. Suppose it was not a case of saying, "Well, we are forced to do so." Suppose they wanted to export water. Is there anything in this bill that would prevent them from doing that?
Mr. Hart: I am not an expert on legislative drafting. Ms Sullivan is more competent to address that question. My expertise lies in trade agreements. My view is that, regardless of whether this proposed legislation becomes part of the law or not, if the Government of Canada decides for its own good reasons that it wants to export water, its obligations require that any water that it licenses for export must be licensed on a non-discriminatory basis.
Senator Carney: That is the point I made in my speech in the House.
Mr. Hart: We do currently export water in a variety of formats. The Government of Ontario, for instance, regularly licenses the withdrawal of water from various watersheds, which is then put into bottles and entered into commerce. If the Government of Ontario were to pass a regulation saying that it would only make that available to the good citizens of Ontario, and that no one else was allowed to withdraw that water, they would be in difficulty under the trade obligations into which Canada has entered.
However, they could say that they will only allow 1 million gallons of water to be withdrawn within a certain period of time, provided that that water is made available to any number of companies willing to do that. They could still limit it to 1 million gallons or 100,000 gallons or 1 gallon. The issue is, they are not allowed, under the trade agreements, to discriminate in favour of one party or another to carry out that withdrawal.
Senator Carney: Thank you very much for making my point.
Senator Andreychuk: Ms Sullivan, having been in a room full of drafters across Canada, both provincial and federal, who have great respect for your abilities and your opinions, I just wanted to prod somewhat further on drafting issues.
If I understand what you are saying, from a drafting point of view, the delegation of powers that the Parliament would give under this bill to a minister, to the Governor in Council, are very broad. You are saying they are within the bounds of administrative law. Nothing is wrong with the way it is drafted. It is a political problem, if there is a problem, in the sense that, as you have pointed out, if you wished to be restrictive, you could, by the exercise of these delegated powers, do the opposite of what the bill intends.
In other words, we do not know what they will do with the powers. They are rather broad.
Ms Sullivan: Yes. I hesitate to say "broad." I probably use the word "broad" over and over again, but it creates a misleading impression. Once again, the problem here is that the bill provides the power to withdraw the teeth more than it provides the power to do things the government could not otherwise do.
As I said, the basic structure remains in place. The prohibitions are there. The joint commission retains its authority to approve projects or not. This appears to establish limits, but then it gives powers that permit the government to take those limits away.
It returns you to the status quo if the powers are not exercised in a strategic way. I do not mean in the least to suggest that government has an agenda here. I would not begin to know about that.
Senator Andreychuk: I was asking from an interpretive or drafting point of view.
Ms Sullivan: We have an absolute prohibition - one cannot do this - and then we have three different ways one can do it. Is that a broad power? It is more like no power. They have given a restraint and then they have taken it back, leaving everyone free to do what they always could before the restraint was imposed.
Senator Andreychuk: We are saying that it is not a drafting problem. If these were the instructions you were given, this is what you would draft. Therefore, I come down to the point with which we have to struggle: Should we give these powers to the minister, to the Governor in Council? At the moment, the government is asking us to do this. They are proposing we should give them these powers to exercise in certain ways. You are telling us that in giving them the powers, we might end up with a prohibition on the use of water. On the other hand, as you also said, they may put in so many limitations that we end up with the status quo.
Senator Carney: Either that or we export.
Ms Sullivan: As I understand it, the government could export now.
Senator Andreychuk: The question is then a very political one. We do not have a clear idea of what the consequences of this bill will be, as so much of it will be embedded in the exercise of the power, particularly in the regulations that are not before us.
Ms Sullivan: Yes, or ministerial discretion.
Senator Andreychuk: Ministerial discretion, you are right.
Ms Sullivan: I would say that initially, the power lies in the minister's discretion. Only if the regulations are exercised does the Governor in Council then structure or limit that discretion.
Senator Andreychuk: Given that that is the interpretation and the result of this bill, it really is a question for us of whether we want to do this.
Ms Sullivan: I believe so. I do not believe there is any legal problem with this bill whatsoever. There is a slight confusion in the drafting of the provision to which I drew your attention, the deeming provision. There might be an error there - I am not sure - but that is the only drafting difficulty that I perceived.
Senator Andreychuk: Then we must make a decision as to whether we believe, by passing the bill, we will in fact accomplish what the minister said he intends to accomplish with it.
Senator Spivak: Senator Corbin has said several times that this bill only puts into legislation what the practice has been for a number of years, very successfully, under the International Joint Commission.
I am puzzled. You pointed out at the very beginning, Ms Sullivan, that under 13(3) and (4), all you would have to do is delist or make exceptions, and then you could export water from the basins. Would that not also be subject to the International Joint Commission? Then obviously, this proposed legislation does not conform to the practice that we have had for a long time.
Looking at 13(3), it applies only in respect of the water basins described in the regulations. Thus it is not really following the former practice because it is allowing for something that previously was not allowed for, except you are saying we could in fact export now.
I cannot quite understand that. The International Joint Commission would prohibit the bulk removal of water out of three basins. Perhaps I am not making my question clear.
Ms Sullivan: I think I understand what you are getting at. This bill does not address the powers of the joint commission, which remain exactly the same.
Senator Spivak: Right.
Ms Sullivan: Under the current situation, it is open to the relevant minister to give permission to whomever he or she likes to export water. There is no current prohibition in law on the export of bulk water.
Senator Spivak: The International Joint Commission would not agree to that.
Ms Sullivan: That remains the same.
Senator Spivak: That would go back to the minister and he could still permit it. What is the penalty?
Ms Sullivan: The point is that there is no current penalty.
Senator Spivak: I am testing the proposition that this is simply implementing what has been done all along. I do not really think so.
Ms Sullivan: It strikes me that it is, and that the problem is that it is pretending to do more. It seems to me it leaves you exactly where you would be with no bill whatsoever.
Senator Spivak: I understand your point.
I wanted to ask about privatization of municipal water systems. I guess my question is directed to you, Mr. Hart. There is a movement now to privatize the provision of water systems.
Let's take a hypothetical situation. Sometimes, the water remains within the ownership of the municipality, but not always. The municipality engages in some form of exporting water. Does that trigger a definition of the water as a "good"? Do you understand what I am asking? I know there are other dangers to municipalities under NAFTA. That is, not dangers, but provisions that apply to them over which they have no power or about which they have no knowledge. In this particular instance, is there some way in which that would trigger a NAFTA provision concerning making water a commercial good?
Mr. Hart: I think that mixes up a number of issues.
Senator Spivak: That is what I thought.
Mr. Hart: I have had a long discussion over dinner with my daughter on this issue. My daughter is a lawyer and I am not. She sometimes tries to tell her father what the law is.
The point I made to her is that in government, there are three exercises of governmental authority. There is the government as paymaster; there is the government as regulator; and there is the government as deliverer of a particular service. These are three distinct functions. The more you mix them up in one organization or institution, the more likely it is you will have problems.
I think the problems that we have had in the delivery of municipal water supplies in this country have been because we have mixed up the regulation of water supplies with their delivery. I for one would have preferred to see the government exercise strong regulatory authority over how water is delivered and what kinds of regulations must be applied. I am totally indifferent as to whether that is done by a private organization or by a governmental organization.
Whether it is the government or a private company doing the delivery is also a matter of indifference from a trade law or trade agreement perspective. The operative thing is, what are the regulations and are they consistent with existing international trade obligations?
The Chairman: Thank you very much, Mr. Hart and Ms Sullivan.
On behalf of members of the committee, I thank both of you. You have been very helpful in our deliberations.
The committee adjourned.