Proceedings of the Standing Senate Committee on
Foreign Affairs
Issue 20 - Evidence
OTTAWA, Tuesday, December 4, 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 6:20 p.m. to give consideration to the bill.
Senator Peter A. Stollery (Chairman) in the Chair.
[English]
The Chairman: Honourable senators, I call to order this meeting on Bill C-6, to amend the International Boundary Waters Treaty Act. Our first witness this evening is Mr. Nigel Bankes, professor of law at the University of Calgary.
Mr. Nigel David Bankes, Professor of Law, University of Calgary: Honourable senators, thank you very much for the invitation to attend this evening and to address the committee. I will begin by talking about my own stance in relation to this water removal bill. In my view, there is a legitimate concern about out-of-basin removals. For me, that concern is an ecological or environmental one rather than a nationalistic or trade concern.
I also believe that, constitutionally, water resources are provincially owned and subject primarily to provincial regulation. Therefore, the federal government should be appropriately cautious in legislating in this area so as to protect values that are truly national, or, at least, that transcend the interests of more than one province.
It follows from that that I agree with the intent behind the proposed bill and the emphasis in the accompanying literature on environmental concerns. It is, of course, curious that one can read the bill and not see the words "environment" or "ecology" anywhere within it. I will come to that later.
My real concern today, and it was the same concern that I spoke to before the House committee, is whether the drafters have proposed the most effective way of achieving their objective. By "effective" I mean a scheme that will stand up to scrutiny from both the trade law and constitutional law perspectives.
I do not plan to say much about trade law. I am not a trade law expert. However, I can offer some preliminary observations. First, if you draft a bill like this, it is better to focus on basin removals rather than export bans. You are likely to end up with something more sustainable.
Second, I agree with those witnesses before you who said that trade law deals with goods and products, not water in its natural state.
I would add that just because one commodifies some water, by allowing its bottling and sale, for example, it does not follow that one must commodify all water. We know that is the position in relation to provincially owned oil and gas reserves and provincial forest resources.
My final comment from the trade law angle is that I think raising chapter 11 is simply a red herring. I do not see a chapter 11 issue in this bill.
From a constitutional perspective, I have concerns about proposed section 13, the prohibition provision. Maybe before getting there, I will just say something about the previous provisions of the bill. I see this bill as doing two things. The first is addressing the issue of out-of-basin removals in proposed section 13, and then putting in place the licensing scheme to properly implement, in domestic law, articles III and IV of the boundary waters treaty. My view is that the provisions that do that, proposed sections 11 and 12, are entirely appropriate. They are useful additions to the legislative scheme and they add certainty and clarity.
Constitutionally, they are fine. There is no doubt about their validity. That depends upon section 132 of the Constitution Act, which authorizes Parliament to legislate to perform the obligations of Canada under an imperial treaty.
What about the new section 13? Before addressing the constitutional issue, maybe we should take a moment to notice what it does and does not apply to. The question here is whether it is a "paper tiger," to use Professor Sullivan's comment from the other day. First, it does not apply to transboundary waters. It does not apply to waters crossing the international boundary. It does not apply to tributary waters that flow into listed boundary waters. It does not apply to waters that are neither boundary nor transboundary. Therefore, it does not apply to the Gisborne Lake situation, the lake in Newfoundland from which it was proposed to export. It does not apply to exporting water from coastal locations in B.C. It does not apply to boundary waters, unless and until they are listed. Of course, you spent a lot of time looking at the exceptions. It does not apply when any of the exceptions are triggered.
To what does it apply? It applies to removals from boundary waters, strictly so-called, that is, waters along which the international boundary runs. It applies to removals from boundary waters, where those removals affect boundary water levels or are deemed to affect boundary water levels.
That gets me to the constitutional issue that I see with respect to proposed section 13. My concerns are twofold. One is the deeming clause. I think Professor Sullivan has already drawn your attention to that in proposed subsection 13(2) of the bill and the prohibition scheme that is incorporated in section 13.
What is the problem here? The problem is that the drafters of this bill are relying exclusively, I believe, on section 132 of the Constitution Act for the validity of this bill. You can only rely upon that section to the extent that this proposed legislation is designed to allow Canada to fulfil its obligations under the boundary waters treaty. What then does article III of the boundary waters treaty deal with? It deals with projects that change the natural level or flow of boundary waters. In other words, to qualify, to trigger article III, a removal project would have to have a measurable or material effect. Quite clearly, many removal projects would not have that measurable effect.
The deeming clause is, of course, designed to get around this. It is designed to say, if you like, no matter how small the removal, it is deemed to have an effect on levels. I simply say that that deeming provision is constitutionally suspect and we have had the Supreme Court tell us that on at least one occasion.
The second issue that I identify in relation to this provision of the bill is the prohibition that is at the heart of proposedsection 13. We know there are lots of exceptions potentially to 13, and that has had the attention of this committee, particularly proposed subsection 13(3). However, my concern is with the way this is framed. I say that article III, when read with the balance of the boundary waters treaty, does not create a prohibitory scheme. It creates a regulatory scheme. It says, effectively, that for any project that will affect levels of boundary waters to proceed, there must be the approval of both the government concerned and the International Joint Commission, but it does not require the introduction of a prohibitory scheme for its implementation.
Yet that is what we have in 13. I recognize that Department of Justice representatives addressed this before the House committee. I recognize that there is flexibility in the way in which the Parliament of Canada legislates for the fulfilment of its international obligations, but there is a concern here that this bill oversteps that line, insofar as it puts in place a prohibitory scheme rather than a licensing scheme.
The alternative is to draft this bill so that it draws not simply upon section 132 of the Constitution Act for its authority, but also on the peace, order and good government power found in the opening words of section 91. There is indeed a precedent for that in the area of international waters, because most people consider that the International River Improvements Act is based upon the POGG power and not upon the boundary waters treaty andsection 132.
I did prepare for the committee an outline of my comments.I am not sure whether they have been translated and distributed, but I did propose draft text in the form of an amendment to proposed new section 13.
The term "Minister" in the bill refers to the Minister of Foreign Affairs. Given the responsibilities accorded to the minister under this bill, in the form of the exceptions and the possibility of defining terms in relation to recommending regulations to the Governor in Council, it seems appropriate that "Minister" be defined to include the Minister of Environment as well as the Minister of Foreign Affairs.
Honourable senators have also had their attention drawn to the broad power to create exceptions. Again, it might be appropriate to include certain conditions precedent that would have to be satisfied before such exceptions could be promulgated. Those conditions precedent might refer to the minister satisfying him or herself as to the environmental rationale for the exceptions.
I will finish there and await your questions.
Senator Carney: I wish to clarify a point.
Professor Bankes, a few minutes ago you said that this puts in place a prohibitory scheme rather than a licensing scheme. Earlier, I thought you said it puts in place a licensing scheme rather than a prohibitory one.
Mr. Bankes: I wanted to describe the bill as a scheme for prohibition, relying on the title to the section and the marginal note.
Senator Murray: Professor Bankes, I do not know whether you have had the opportunity to read the testimony of the trade lawyers who were here the other night.
Mr. Bankes: Yes, I did.
Senator Murray: Dr. Howard Mann and Mr. Barry Appleton argued quite forcefully that water is a good, and that what counts for our purpose is whether and when it is brought into commerce. That does not have to be international commerce, just commerce.
Contrary to your position, they argued that this bill would be as subject to trade law as any other. They said that this bill would be no less vulnerable to trade action than an export ban would be. They took the position, as I understand it, that if an export ban is what we want - and that is what the bill is about, although indirectly - then we should do it directly. An export ban, done right and properly timed, would be much more effective than this bill.
What is your reason for opposing an export ban? Is it a constitutional reason? Do you agree with them? I know at least one of them said, and I believe both of them agreed, that an export ban would be within the powers of Parliament under the commerce power.
Mr. Bankes: To address the last point first, I believe it was Mr. Mann who said that this bill could be justified under the trade and commerce power.
Senator Murray: They were referring to an export ban.
Mr. Bankes: I would agree with that constitutionally. I do not think there is any doubt about Parliament's ability to do that. However, as to whether you should do that for trade law reasons,I said at the outset that I do not claim to be a trade lawyer. However, why focus on something that we know is the subject of restrictions under both the GATT and the NAFTA, that is, the imposition of export limitations? Why not focus on something that looks, on the face of it, to be non-discriminatory, that is, removals from water basins, whether those removals are going into or out of Canada, and continue to apply it on a non-discriminatory basis? As long as we do that, we should be able to withstand trade law challenges.
Senator Murray: You read their testimony. You know that the licensing scheme may well bring water into commerce and that it would then be as vulnerable as anything else to trade action.
Mr. Bankes: As water does enter into commerce, whether in the form of bottled water or in another form, it will be subject to trade disciplines. However, I do not think anyone is arguing about that. The question is, what is the connection between that proposition and this bill? I have difficulty seeing that connection.
Senator Murray: Returning to the constitutional argument, you believe that they are considerably stretching a point by relying on section 132 of the Constitution Act and article III of the treaty with regard to new section 13 that is proposed by this bill. Proposed subsection 13(2) reads:
For the purposes of subsection (1) and the application of the treaty, removing water from boundary waters and taking it outside the water basin in which the boundary waters are located is deemed ... to affect the natural level or flow of the boundary waters ...
That is the way that they try to square this with the treaty.
Mr. Bankes: That is correct.
Senator Murray: You do not think that would survive a constitutional challenge?
Mr. Bankes: I would go so far as to say that there are serious risks in drafting in this way, and there are other ways to render this type of provision constitutionally stronger.
There is a real problem any time you see "deeming" language and something is being deemed thus and so, when that is being done for constitutional reasons. That is what I see proposed subsection 13(2) as doing.
Professor Sullivan drew your attention to new subsection 13(2) when she appeared before you the other day and expressed puzzlement as to its function.
It is there, as I say, solely for constitutional reasons, because the drafters know they have to bring this within article III.
Senator Murray: Your other argument on the constitutional vulnerability, if I can put it that way, is that the treaty and the act are effectively licensing and regulatory regimes, and because this bill purports to enact a prohibition, it goes beyond the purpose and therefore might not fly in a court challenge.
Mr. Bankes: Yes, that is my argument. If I look at the language of article III and read it in conjunction with article VIII of the treaty, which is the article that instructs the International Joint Commission on how it should deal with applications underarticles III and IV, I say that is a licensing scheme.
Clearly, the Government of Canada, on a case-by-case basis, is entitled to deny approval to a project that is approved by the International Joint Commission. I also think that, under another head of power, perhaps, the Government of Canada, the Parliament of Canada, could prohibit all projects that affect boundary waters. However, I do not believe that it can usesection 132 to do that.
Senator Murray: Do you think that if the constitutional challenge centred on the fact that the bill purported to enact a prohibition, the government might go to court and argue, "This is not much of a prohibition at all because there is an unfettered right to make exceptions"?
Mr. Bankes: I had not thought of that argument until I read the "blues" of this committee, when so much attention was drawn to the scope of the exceptions. I still say that the basic scheme here is prohibition, and then classes of activities, rather than individual activities, that are to be exempted.
Senator Carney: First, on behalf of the committee, I would like to thank you, Professor Bankes, for coming from Calgary to Ottawa. As you know, it is not easy to travel. I know it is a very busy time for you with your university work and that it took some persuasion. I am very grateful that you came to assist us on this matter.
I want to know, Chair, if we could somehow incorporate into our record the testimony Professor Bankes gave before the House of Commons committee, which goes into this argument in a very detailed way and includes the amendment he proposes.
Senator Spivak: Is this the document of May 27?
Senator Carney: If we cannot include his document, then we will have to ask about the amendment.
We have to get his proposed amendment on the record, and that was one way of doing it.
The Chairman: It is in your material.
Senator Carney: I would like to get his proposed amendment on the record.
The Chairman: It is in your material.
Senator Carney: Will it be in our record, then?
The Chairman: No. I suppose it is on the House of Commons record. The two Houses are separate. I suppose anyone interested could read the record of the House of Commons.
Senator Murray: Or the witness might read his amendment.
The Chairman: Yes.
Senator Carney: I will read his amendment, after which I have some questions.
His proposed amendment to the current -
The Chairman: Senator Corbin, did you want to say something?
Senator Corbin: I simply want to point out that we have a document here dated May 27, 2001, revised November 29, 2001.I presume that it was revised for the purposes of this committee, and it contains a proposed amendment.
Senator Carney: I will read it into the record and then ask my question of the witness.
You state that this would also follow more closely the IJC's own recommendations for a precautionary approach with a reverse onus, rather than a prohibition, and you are proposing this redrafting of the current text of proposed subsection 13(1):
Despite section 11 and section 16, no person shall be granted a licence to 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 unless that person has demonstrated to the satisfaction of the Minister that the removal, taking into account any cumulative environmental affects that are likely to result from that proposal in combination with other existing and projected uses and needs within the water basin, will not endanger the integrity of the ecosystem of the water basin of which these boundary waters form a part.
My question relates to the relationship between the minister and the IJC. The other night, the minister told us:
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 -
My interpretation is that this bill could be used to license the export of water rather than to constrain it.
- would run totally contrary to the treaty that is implemented in the act that this bill is amending.
My question is simple: Are the minister's powers under this bill constrained by the treaty and the IJC? We are arguing that those powers swing both ways. We say that it is both a licensing and a prohibitory bill. What is the relationship between the minister and the IJC? Does the IJC fetter the minister's right to license the export of water under this bill?
Mr. Bankes: My position here is that any proposal that would have the effect of changing the levels of boundary waters would require the approval of both the International Joint Commission and the minister, at least if it is dealt with under proposedsection 11 or 12. If it is dealt with under the proposed prohibition section, then 13 is really saying, "Notwithstanding the fact that the IJC might be prepared to approve a removal, it will not be permitted under Canadian domestic law." I think proposedsection 13 is adding to the treaty.
Senator Carney: In this case, considering the powers of the Governor in Council in this bill, who is the supreme major domo? Who has the final say, the minister or the IJC?
Mr. Bankes: Even if an exception to new section 13 is somehow triggered - so we are dealing with a project that has been exempted from the application of that section - and that discretionary power has been exercised, the project will still require both the approval of the IJC and a licence under proposed section 11, as long as it does in fact affect boundary water levels. If it does not affect boundary water levels because it is adi minimis removal, then it will not trigger proposed sections 11 and 13 or the boundary waters treaty.
Senator Carney: What about the deeming clause? You have already said in your presentation, either in the House of Commons or here, that the deeming clause says that even minute withdrawals of water could be deemed to affect the levels. For the record, I am trying to determine who is the sergeant-at-arms here. Who is the person or agency that says "No. The minister cannot do this," or, "The minister can do this," under the IJC? What is the fetter?
Is the IJC a fetter on the minister's powers?
Mr. Bankes: If you have a project that will alter boundary water levels -
Senator Carney: Or is deemed to, under this.
Mr. Bankes: If it is deemed to alter boundary water levels under new section 13, that means we must be dealing with a project that is not caught by the exception, and therefore it will not be allowed to proceed because it will be caught by the prohibition provision. If the exception has been triggered, then you do not have regard to the deeming provision and you simply deal with article III of the treaty and proposed section 11 in the bill.
Senator Carney: Does that fetter the minister's power or not?I want to know whether the treaty supersedes the minister's right to grant licences under the exceptions. You have also pointed out that the IJC never asked for a prohibition, that they took a precautionary approach.
If we have concerns about this bill, is the IJC the watchman at the gate who will prevent a licensing, or do we know? If we do not know, it is a good point, because we can clarify it in the bill.
Mr. Bankes: The IJC has to be involved any time there is a project that will affect levels. Its approval is required by article III of the treaty. There is then an additional requirement for a licence under new section 11. If the project will not affect levels, unless it is caught by the deeming provision and is a removal from the basin, then that is the role of the minister.
Senator Carney: I am not satisfied that you have answered my question, but you may wish to have an opportunity to explain.
Senator Corbin: It may not be the answer you want.
Senator Carney: I am quite open in this process. I am concerned about this bill and I am seeking information. I did not bring Professor Bankes here as an advocate for a position. I brought him here because he knows more about the IJC than anyone in this room.
Do you want to explain why you think your amendment is an improvement? Please deal with that in the context of your statement that the IJC never asked for a prohibition, but rather for a precautionary approach. I gather that your amendment follows the IJC's own recommendation for a precautionary approach. You are obviously going along with the IJC's precautionary approach rather than the minister's prohibitory approach. Why do you think your amendment would assist?
Mr. Bankes: I have proposed this text because I believe it is more constitutionally sustainable. To explain why I believe that, you can see in the proposed text that it reverts to a licensing rather than a prohibitory approach. Therefore, it is more in line with article III of the treaty. If we want extra support for that, we are entitled to look at the IJC's own report on the reference.
I believe that this helps ground the proposal much more firmly in the actual text of the boundary waters treaty. I also think that it can then be supported on peace, order and good government grounds in a way that it cannot be supported as drafted.
Senator Carney: Can this bill, as presently drafted, which gives discretionary power to the Governor in Council, and also through the regulatory process, be used to license the export of bulk water from boundary waters?
Mr. Bankes: Suppose there were a proposal for a pipeline to pipe slurry coal south of the border, or a proposal from a municipality for an extra basin removal. It seems to me that both those categories of use could be accepted under the exceptional powers of new section 13. However, if those proposals would affect levels of boundary waters, then the projects would still need to be reviewed by the International Joint Commission, and it may then say no.
Senator Carney: I want to know whether or not the power exists. You have cited examples about slurry and coal. Would removal of waters for irrigation purposes to the United States be allowed if you could show, by an environmental assessment or other means, that it did not affect boundary levels?
Mr. Bankes: You are asking whether that could be an exception under proposed subsection 13(4), as currently drafted, that relates to use of water for irrigation purposes?
Senator Carney: Given the power of the minister to make exceptions and define the terms, and the regulatory power of the bill, is that possible? Could some future minister do that?
Mr. Bankes: I think the answer is yes.
Senator Grafstein: I have extensive experience with the constitutionality of matters dealing with water. I have a bill that was given unanimous first and second reading by the Senate.I have read about 37 of the 47 pieces of legislation affecting water domestically. Therefore, I am very interested in your constitutional view.
I have reached a different conclusion about this bill. I think it is a very elegant bill and very carefully drafted. I am usually a critic of the department, but in this case, I that it is an elegant bill that matches the objective, which is to implement, by amendment, the International Boundary Waters Treaty. If it goes beyond the four corners of the treaty, it finds itself in difficulty.
I will start by dealing with the constitutionality of this matter. You can come at this in many different ways, but proposed subsections 13(1) and (2) clearly fall within section 91.27 of the Constitution Act, which gives the federal government the power to legislate on criminal matters. Why do 13(1), (2), (3) and (4) not apply to that? It is, without question, within the exclusive power of the federal government.
Senator Spivak: It does not apply to the exceptions.
Mr. Bankes: While it would be possible to draft it so as to make use of the criminal law power, I do not believe this bill does that. I say that because the good that this provision is aiming at is not protection of the environment or of human health, but protection of water levels.
That is the only good that 13(1) and 13(2) aim at. That is the good protected by the treaty. The treaty protects that largely because of navigation concerns, not because of environmental concerns.
Senator Grafstein: Proposed section 22 is clear to me. It reads:
Every person who contravenes subsection ... 13(1) is guilty of an offence...
It does not have to deal with the question of good or not good. It is the application of the exclusive criminal power. What is wrong with that? That is unquestioned.
Senator Carney: Do you have the bill with you?
Mr. Bankes: Yes.
Senator Grafstein: If you want to give evidence, senator, I will be glad to cross-examine you.
The Chairman: We do have departmental officials appearing before us after Professor Bankes.
Senator Grafstein: As I understand this, and I will make a comment and you can comment, the department has a very difficult and surgically precise task. There is a treaty, called the International Boundary Waters Treaty, that sets out the parameters of the act. The act must, when it establishes compliance, as this does, meet those parameters. If it goes beyond that, it might properly be challenged as contravening the treaty. I think the department has very eloquently said, "Here is the treaty, and we want to make sure, when we bring the criminal power to bear, by prohibition or otherwise, that we keep within it." It seems clear-cut to me. I do not care if it is a good or not. What has a good got to do with that? Nothing.
Mr. Bankes: I think, with respect, that it does have something to do with whether or not this proposed section could be justified under the criminal law power. It is not possible simply to justify a provision under the criminal law power by adding an offence provision at the end of the bill. The substantive provision must be justifiable, and for that we must be very concerned about what good it is protecting.
Senator Grafstein: There is no limitation on the criminal power, subject to the Charter.
The Chairman: Professor Bankes, do you have a particular answer to that?
Mr. Bankes: No, other than to say that the Hydro-Québec case of the Supreme Court did expand on notions of the criminal law power; it did say that it was perfectly permissible for Parliament to legislate to protect environmental health; but I do not see this bill as protecting environmental health because I do not see the word "environment." This bill is concerned with boundary water levels, and they are protected under the treaty for reasons other than simply environmental reasons. Quite clearly, in 1909, the principal value was navigation and shipping.
Senator Austin: I join with my colleagues, Professor Bankes, in thanking you for your submission. There are several issues I wish to explore with you. The first is the constitutional question. You agree that the International Boundary Waters Treaty, 1909, is an imperial treaty under section 132.
Mr. Bankes: Yes.
Senator Austin: You have no doubt as to the legislative capacity of the Government of Canada, through the Parliament of Canada, to add provisions to carry out the intentions of the International Boundary Waters Treaty, 1909?
Mr. Bankes: It is quite clearly able to legislate for the performance of obligations under the treaty. There is a margin of appreciation accorded to Parliament as to how it goes about doing that.
Senator Austin: On the question that is before us, you have said, on at least two occasions tonight, that one of the principal purposes of the 1909 treaty was the regulation of the levels of the Great Lakes - triggered by the decline created unilaterally by the Chicago drainage diversion, if I may add a touch of history to the point. That is correct. In referring in proposed section 13 to "levels," I assume you will agree that the bill is on all fours with the treaty, constitutionally speaking? How could it be outside of that when that is the principal purpose of the International Boundary Waters Treaty?
Mr. Bankes: The subject of levels is clearly within the International Boundary Waters Treaty and therefore within the purview of Parliament. The question, though, is whether Parliament can deem something to affect levels and thereby obtain jurisdiction over something. Question: Can Parliament, instead of the licensing scheme contemplated by the treaty, put in place a class of prohibitions? That is the issue I raise.
Senator Austin: Let us take a look at a long line of constitutional cases that indicate Parliament can deem black to be white and brown to be green. If Parliament deems something, it says, "This shall be considered the facts of the circumstance for the purpose of this legislation." Do you have a quarrel with that statutory interpretation?
Mr. Bankes: As a principle of statutory interpretation, and as a principle of administrative law, I have no quarrel with it whatsoever. As a proposition of constitutional law, I do have a quarrel with it. The case that I am thinking of, where the court has struck down a deeming provision, is the Sutherland case, which was a decision relating to the Natural Resources Transfer Agreement. The proposition that flows from that case is that a provincial legislature, and I think the same goes for the Parliament of Canada, cannot deem something to be such-and-so for constitutional reasons.
Senator Austin: Right. However, there is no federal-provincial issue here. There is simply a question of pure federal jurisdiction, in which the Parliament of Canada is asked to deem something. That does not, in my view, fall within the case and the precedent you are citing.
Mr. Bankes: Parliament clearly has some powers undersection 132, but those are not unlimited. It cannot, if you like,use 132 to expand the scope of the treaty and thereby expand its own jurisdiction. I see the deeming provision as running afoul of that.
Senator Austin: I wish I could understand your argument. This is entirely within federal jurisdiction. There is no provincial issue here. If it wishes, for greater certainty or whatever reason, to deem something that is entirely within the scope of section 132, Parliament can do that.
Moving on, what interpretation do you give to the wording of section 13(2) that follows the word "deemed"? It reads: "given the accumulative effect of removals of boundary waters outside their water basins... "
How do you interpret that?
Mr. Bankes: I see it as an attempt to bolster the deeming provision. That is, the drafter is perhaps aware that deeming provisions are vulnerable, so it is offering a rationale and suggesting that if you have a number of projects, those projects taken together will indeed have an effect on levels.
Senator Austin: It strikes me that this is legislative awareness and a warning to those who make an application. The minister will consider a cumulative effect test in making a decision. That is certainly important to the minister in the administration of the question of levels. It is not a question of taking each issue on its own, but whether a series of requests, for example from several municipalities and agricultural groups, would lead to a deterioration of the boundary water levels. Once you give permission to one, then you set a precedent for others to claim a similar entitlement that can affect the levels of the boundary water. How do you react to that argument?
Mr. Bankes: I would agree with you if, and only if, this were not a prohibition provision, but a licensing provision that said to the minister, "In deciding whether or not to issue a licence, you should take into account cumulative effects." I do not read new section 13(2) as operating that way. I see it simply as supporting the prohibition. The minister is not exercising his or her discretion in this case. This is simply saying that any removal from the basin is deemed to affect water levels, whether or not it does.
Senator Austin: Proposed subsection 13(4) reads:
Subsection (1) does not apply in respect of the exceptions specified in the regulations.
Therefore it is not a blanket prohibition; it is a provision that permits a -
Senator Carney: Time.
The Chairman: I keep check of the time, Senator Carney, and your time was quite generous.
Senator Austin: I believe I have a right to continue my cross-examination.
Senator Carney: You certainly have.
Senator Austin: Thank you very much.
Senator Carney: The Chair has made it clear that we have other witnesses, and I am worried that our members will not have a chance to ask questions.
Senator Austin: There must be a fair balance on both sides.
The Chairman: I think I have been generous with everyone, Senator Carney, and particularly with you. Senator Austin is pursuing a line of questioning, and he should be permitted to follow it to its conclusion.
Senator Austin: I sat in total silence while you asked questions, and I resent the fact that you are interrupting my cross-examination. I want that to be clear.
Let me come, Mr. Bankes, to whether you have any information on the Vienna Convention on the Law of Treaties. Is this within the area of your knowledge and information?
Mr. Bankes: I am not familiar with every article in that convention, but try me.
Senator Austin: Article 31(2)(b) of the convention provides that any instrument that was made by one or more parties in connection with the conclusion of a treaty may be used for the purpose of interpretation.
The author of this document says that the joint statement made by the parties is potent authority with respect to the treatment of water in its natural state under NAFTA.
I am referring to the Vienna convention because we have heard Dr. Mann and Mr. Appleton argue in their presentations that somehow, water in its natural state is a trade commodity. I was quoting the Vienna convention as an authority. As you are aware, the three NAFTA participants said water was not a commodity under their agreement. The Vienna convention confirms that if the parties make such a statement, that is definitive of the issue. Would you comment on that?
Mr. Bankes: The only qualification I put on that is that article of the Vienna convention is simply a rule of interpretation. I do not think I would ascribe to it a definitive effect. It simply says that you are entitled to look at these things as an aid to the interpretation of the text of the treaty and to assist in determining the intention of the parties.
Senator Spivak: I wish to express my appreciation to the chairman for having recognized me, despite the fact that I am not a member of the committee.
There are all these lawyers sitting around the table and arguing the fine points. However, the context here is this: This is one part of a three-pronged policy having to do with water. The objective is to ensure that no disaster occurs in the Canadian environment through the bulk removal of water.
In the discussion that we had prior to this meeting, the most important questions were the exceptions. Under the heading "licences," proposed subsection 11(2) states:
Subsection (1) does not apply in respect to the ordinary use of waters for domestic or sanitary purposes, or the exceptions specified in the regulations.
It was stated that those exceptions do not come before Parliament, could be changed and are not subject to surveillance. In other words, it is possible that those exceptions could be enlarged or interpreted differently and Parliament would not know.
The second difficulty was the unfettered discretionary powers of the minister. Proposed new section 16 reads:
Subject to the regulations, the Minister may, on application, issue, renew or amend a licence... subject to any terms or conditions the Minister considers appropriate.
I believe Senator Carney said that you could drive a truck through that.
In your amendment, you have made explicit the real objective of this bill, which is not just to regulate the flow, but also, given the deeming provision, to deal with the cumulative effect. You say this is an environmental issue.
You are specifying that in your amendment.
Here is my question -
The Chairman: What is the question? Could we have the question, Senator Spivak?
Senator Spivak: I listened to everybody, Mr. Chairman.
The Chairman: I understand, but you are not a member of the committee, Senator Spivak.
Senator Spivak: Here is the question: Will this amendment close the big holes through which you could drive a Mack truck? In other words, will this amendment help with the exceptions to the regulations? Will it help with the unfettered discretion of the minister? Mine question is similar to Senator Carney's, but I am asking it more specifically.
Can we be confident that this amendment will restrict the discretion of the minister to the environmental question, and similarly with the regulations?
Mr. Bankes: Let me make two points. First, it is very clear that what I am trying to do is make environmental values front and centre in this bill -
Senator Spivak: Which is the government's purpose.
Mr. Bankes: - and not bury them. I talk in the actual written proposal here, in paragraphs 8 and 9, about some additional consequential changes that would follow. I would say that this particular amendment, with those consequential changes, would do away with the Mack truck created in new subsection 13(4). I also suggest, in paragraph 9 - and I closed my opening remarks with this - that one might want to impose preconditions on the minister before exceptions are promulgated.
Taken together, I think what I am suggesting would address some of the concerns.
Senator Spivak: This would make it a stronger bill in terms of its objective. No one here is quarrelling with the objective; they are quarrelling with the means. In your opinion, this would make it a stronger bill by which the government could meet the objectives it says it wants to meet.
Mr. Bankes: Yes, I believe that.
Senator Spivak: I have just one other question. A previous witness, and I believe it was Professor Appleton, suggested that the bill operates in an extraterritorial fashion because of the term "boundary water." Both in the treaty and the act, the term deals with waters from main shore to main shore. By failing to refer to Canadian waters in this bill, he said we would be creating criminal offences for Americans on the U.S. side of the border. What is your opinion on that?
Mr. Bankes: I simply do not buy that. I do not think any court will approach this act with that as even a possible interpretation.
Senator Graham: The International Boundary Waters Treaty Act gives the federal government clear jurisdiction over boundary waters to the extent stipulated in the treaty. In the government's view, amending the International Boundary Waters Treaty Act was the best way to achieve their objectives, as opposed to prohibition, while all the time, of course, respecting provincial jurisdiction. Would you agree with that?
Mr. Bankes: I think I made the point at the outset, senator. I am sorry I did not reaffirm it when Senator Austin said this was a "surgical" bill. I said that one of my values was that Parliament should be intervening as little as possible in relation to waters, which, after all, are primarily within provincial jurisdiction. However, that is my response.
Senator Graham: You said, I think in your opening statement, that water resources are provincially owned and subject primarily to provincial legislation. We have been told that there was wide consultation with the provinces, beginning in 1998 and continuing through 1999, that 9 of the 10 provinces have enacted appropriate legislation, and that New Brunswick is in the process of reviewing its legislative options.
Have you any heard any complaints from the provinces with respect to this bill?
Mr. Bankes: No, I have not. My concern is that Parliament be able to uphold its end of the bargain. I want a section 13 that will stick.
Senator Graham: I understand. You said that the water resources are provincially owned and subject primarily to provincial legislation. However, in response to my question about whether you have heard complaints from the provinces with respect to Bill C-6, your answer is no.
Mr. Bankes: That is correct, sir.
Senator Carney: Chair, for the record, I want to clarify an earlier statement that in trade law, the NAFTA agreement states that water in its natural state is not a tradable good. I wanted to add that the same statement also says that when water is captured and enters into commerce, it may, however, attract obligations under the GATT, the FTA and NAFTA. You have to drop both shoes before that reference makes sense.
Professor Bankes, there are two points that have yet to be explored. What is the reciprocity feature of this bill? Senator Graham, in some earlier testimony, pointed out that international treaties like this, or IJC-like agencies, have to make reciprocal arrangements. He asked the minister what reciprocity applies. If you read the "blues," the minister never directly answers that question. If Bill C-6 passes, is there any obligation on the Americans to pass similar legislation? If so, have they?
Mr. Bankes: The first part is easy; there would be no obligation. As to the second part, there is, of course, the Great Lakes Charter. I think I am correct, and no doubt the departmental officials can clarify this later, in saying that all the states have passed legislation implementing that. However, that does not prohibit extra-basin removals. It restricts them. It suggests they should be subject to special scrutiny. It suggests that all great basin states and provinces should consent. However, I do not think it has an outright prohibition and the charter itself is not an enforceable document.
Senator Carney: Senator Graham may want to follow that up. You have been very patient with us.
The Chairman: Senator Graham has been very patient.
Senator Carney: Professor Bankes, you say in your summary that you agree with those many witnesses who argued that the power to specify exemptions in Bill C-6 is extremely broad. Given your concerns, you suggest:
- efforts should be made to limit the power by requiring the minister to form a reasonable judgment that proposed exemptions will not threaten ecological integrity or have a cumulative effect on levels or flows. Perhaps such exceptions should also be subject to periodic review.
Since I have been a minister and found that reasonable judgment often eludes ministers, how would you actually put that into legislative form? How would you subject exemptions to periodic review? Given the concerns raised by the bill, that would be an excellent suggestion.
Mr. Bankes: How would one do the drafting? Perhaps that would be tricky, but I added that the minister should form a reasonable judgment, rather than just relying on his or her own opinion. There must be grounds for determining that these are appropriate exceptions. In my view, the grounds for that would be drawn from the previous text that I had suggested for 13(1). You would have to build a provision into the act that any regulations that promulgate lists of exceptions should have a shelf life.
Senator Carney: Would that review be done by Parliament?
Mr. Bankes: It would not be necessary for Parliament to review it, but the act would have to stipulate that exceptions would have a shelf life. Then the minister could re-promulgate, on forming the opinion once again, and notwithstanding all the activity occurring under the exceptions, because it was still appropriate to do that.
Senator Carney: If you are to exclude Parliament from that review, who would actually perform it?
Mr. Bankes: The minister would do the review, as advised by his or her officials.
Senator Austin: Professor Bankes, I am curious about what seems to me to be a real contradiction between paragraph 6 and paragraph 8 in your paper. Number 8, of course, is your recommendation. Number 6 covers the importance of the level, or flow, of boundary waters. You have your doubts about the underlying adequacy of the provisions in the bill. However, it seems to me that in your recommendation, you take us way beyond the International Boundary Waters Treaty itself when you switch the major premise from maintaining levels to the integrity of an ecosystem. Unless I misunderstand "ecosystem," you have put many other values into this game, and the International Boundary Waters Treaty, 1909, is not mandated to deal with ecosystems. Would you comment on that? I understand your aspiration, but can you travel that distance?
Mr. Bankes: My response is that I am jumping onto two horses at this point. I am not simply relying upon 132 because I do not need to if I draft it in this way. I can also rely on the peace, order and good government power, and say that there is a national concern here, which is the ecological values associated with shared waters. In addition, I would say that this drafting follows, to some extent, the IJC's own recommendations. I am taking support from this too.
Senator Austin: I am not disagreeing with your objective, but it seems to me that we would need a protocol to the treaty to achieve it.
The Chairman: Thank you, Professor Bankes. You have been generous with your time, and we thank you for that.
Senators, our next witnesses are the departmental officials. I will ask them to speak for a few minutes in response to some of the points that have been made. We will then question them.
Mr. Peter Fawcett, Deputy Director, United States Transboundary Division, Department of Foreign Affairs: I will address issues related to the treaty and the trade aspects, there being no specific trade provisions. Mr. Reiskind will deal with legal questions and Mr. Cooper will deal with environmental questions.
Your debate on this issue has been very interesting.The first question I will address is the licensing and prohibition issue. Proposed section 11 refers to the licensing regime for water diversions within basins that would formalize the existing approval process for the Government of Canada. That is separate from the prohibition provision. Proposed sections 11 and 12 in Bill C-6 relate to the obligations of Canada 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 separate and independent approval from the International Joint Commission, as I think you are aware. As a result, this licensing process confers no new powers on the government. It is merely housekeeping.
The prohibition is really the main purpose of this bill and it is embodied in proposed section 13. Its purpose is to prohibit the bulk removal of boundary waters from their drainage basins.Bill C-6 has been drafted in a restrictive manner with a prohibition as its starting point. The intent of the prohibition is to meet treaty obligations, not to affect levels and flows.
It will also provide a significant degree of protection to the ecosystems and communities that depend on a sustainable supply of water within the basin. The prohibition focuses on bulk removals because of the element of size and the cumulative effect. There is no intent to prohibit small-volume removals. That would be impractical and inappropriate from an administrative point of view.
As it says in 13, the prohibition removes bulk removals out of water basins from the licensing regime, despite proposedsection 11, and imposes a prohibition on such projects binding on the government. That is a fairly strong statement. It certainly tries to separate licensing from prohibition. The licensing is for within-basin projects and the prohibition is for any removals outside of the basin. We seem to be falling into a short form of licensing exports, which is not what this bill is about.
I do want to address one other trade provision. It is an important one because it belies the approach to this bill. It was addressed in Mr. Appleton's testimony when he said water is a good. I believe he said that all water is a good. Part of his reason for saying that is that "natural water" appears in the tariff schedule.
In our view, that is mistaken. Tariff schedules exist to provide a system of classification for tariff negotiation purposes, to allow importers and exporters to readily identify the tariff, if any, that applies to a particular article, and for a range of other technical applications such as administration, rules of origin and customs valuations. The tariff schedule does not define what is a good, nor does it tell us if or when water is a good. It only tells us that, when water is a good, it falls under a particular tariff heading. That is a very important distinction. In other words, a good is classified in a certain way, but simply because it is classified does not mean that it becomes a good.
Senator Andreychuk: That is one interpretation.
Mr. Fawcett: This approach was clearly supported by the International Joint Commission, and I think we all support the International Joint Commission. They commissioned some of the best trade lawyers in the country to come up with their position. I would take exception to anyone saying that the International Joint Commission is wrong in its recommendations in this report.
The issue about not having an export ban has been brought up several times. We are taking the approach of banning bulk removals of water from its natural basin for two very good reasons. First, it is dealing with water as a resource, and we know that governments have full sovereignty to manage their water resources. Second, it pays an environmental dividend. It has been shown that removal of water from its basin will cause an environmental effect. Our concern about the export ban approach is that it can only be imposed at the border, and likely after water is turned into a commodity, and may be subject to our international treaty obligations.
That is the background on why our approach is an environmental one and a prohibition on bulk water removal.
Mr. Jason Reiskind, Counsel, International Law Section, Department of Justice: Perhaps I will start with Professor Bankes's testimony today.
Overall, it would appear that his suggestions would move us further away from clarity and certainty and thereby would not necessarily achieve the control and prohibition of bulk water exports that we set out to achieve.
In article III of the treaty, the wording is quite straightforward:
... no further or other uses ... of boundary waters ... affecting the natural level or flow ... shall be made except by authority of the ... Dominion of Canada within their respective jurisdictions and with the approval ... of the International Joint Commission.
There will be no further uses affecting levels and flows without the double-barrelled okay: government and the joint commission.
I think it is strange to say that a prohibition does not seem to fall within the treaty. The wording seems quite clear. Furthermore, Professor Bankes himself admits that the government could say no to each individual bulk removal project and not submit it to the International Joint Commission. It does not seem that different to say, in advance, "We will not give any of these projects to the joint commission," than to say it individually.
On the other hand, to move away from the ambit of the treaty, and the constitutional basis in section 132, to peace, order and good government, seems to move us away from certainty and toward a lack of clarity.
Professor Bankes, I believe, mentioned the International River Improvements Act and its constitutional basis. I would mention that Mr. Justice La Forest, in his well-known book, Water Law in Canada - The Atlantic Provinces, regarding the constitutional basis of the International River Improvements Act, puts it in these terms on page 344: "Justification may possibly be found in the peace, order and good government clause."
Why should we move to "justification may possibly be found" from a quite certain constitutional basis, as admitted by Professor Bankes, in the empire treaty section?
Briefly, if I may, I will touch on some points raised by other witnesses last week.
On the suggestion that too much regulatory authority is given to the minister, as even Senator Bolduc pointed out, we are trying to implement an international treaty, which in many cases necessitates a certain amount of flexibility within the legislation to ensure an effective implementation over time.
With regard to the structure of the bill, I do not think there is much that can be considered out of line with other, similar pieces of legislation. I can mention a list, and if senators wish, at some time, I can read some of the provisions, but just to give a few examples so that we can move through the session today, the Yukon Waters Act of 1992 provides tremendous power in the regulation section, including to make regulations establishing water management areas. Therefore, the area of control is left for regulation. There is the Canadian Environmental Assessment Act of 1992, for example, where an environmental assessment is only done if an act is mentioned in the regulations.
As to leaving the definition of terms to regulations, there are many acts that do that, such as the Bank Act, the Canada Transportation Act, the Canadian Environmental Protection Act, and others.
In any event, as was mentioned by witnesses such as Professor Sullivan, and Professor Bankes today, any exception to the prohibition in proposed section 13 would, in any event, be subject to the licensing process according to the terms of the bill, and would require approval by the International Joint Commission according to our treaty obligations with the U.S.A. These exceptions would have to be within the parameters of the1909 treaty. The minister is not being given a free rein.
Dr. Mann suggested implementing article II of the treaty concerning certain transboundary waters. I would say that it is quite clear that section 4 of the original act is meant to implement article II and uses almost identical wording.
Mr. Appleton talked about the possibility that "domestic purposes" might allow for export for household purposes to California. That is certainly stretching any reasonable interpretation. In any event, the prohibition contained in 13 does not include an exception for domestic purposes, so such an interpretation is not available.
Mr. Appleton talked about "boundary waters" possibly providing an extraterritorial application of the act. Dr. Mann, and also, in response to a direct question, Professor Bankes, thought that that was an untenable interpretation of "boundary waters." Section 3 of the original act stipulates particularly that its scope is "within Canada."
Mr. John Cooper, Director, National Water Issues, Environment Canada: I wish to touch on several environmental aspects of this approach. I am very glad to hear that Professor Bankes indicated his support for an environmental approach as opposed to an export ban. I would like to reaffirm an environmental approach as the basis for our work with the provinces in seeking a Canada-wide prohibition on bulk removal.
It is important to understand the environmental approach and the importance of watersheds. If we recognize that we spend hundreds of millions of dollars each year protecting our watersheds, both from a water quality and quantity perspective, all the land use - agriculture, forestry, mining - everything that goes on within a drainage basin, has impacts on the local watershed.
Provinces and the federal government have adopted a watershed approach to protecting water and ecosystems. The watershed drainage basin approach is the basis of Bill C-6.
I will touch quickly on the deeming issue from an environmental perspective. One must look at out-of-basin removals and in-basin water uses completely differently. An out-of-basin removal takes 100 per cent of the water out of the basin for good. Most of the uses of water within the basin return that water to the basin. That is an important consideration. Communities and ecosystems depend on a sustainable supply of water within those ecosystems. That is where the water should be maintained. We must look at out-of-basin removals differently from within-basin uses.
That brings up the question of the Great Lakes Charter, to which reference was made. The Great Lakes states have been working together to implement one of the IJC recommendations to better protect the Great Lakes and are looking at the issue of bulk removal. In February, they came forward with a proposed draft annex indicating that a removal from the Great Lakes basin of 1 million gallons per day would be allowable.
The concern exists from both a precautionary and from a cumulative impact point of view. Many instances of 100 million gallons per day of removal of water could have a significant impact on levels and flows. When they consulted with the public and with provinces, there was significant opposition to it. When they returned in June with the revised annex, they had removed that portion and indicated that that needed further work. Clearly, there is a sense that we need to consider cumulative impacts and the precautionary principle when we are talking about out-of-basin removals.
Mr. Appleton indicated that the Mississippi basin and the Great Lakes basin are now connected to the Chicago diversion and that they form one basin. That is just not the case. There is a connection between those two basins through which a small but significant amount of water flows. This is exactly the type of project that we are trying to prevent in the future. That is also similar to the projects being proposed in North Dakota, with the Garrison diversions that would move water from the Missouri basin into the Hudson basin, to the detriment of our ecosystem waters and fisheries through the introduction of pollution and of invasive species. Clearly, it is important to achieve a common domestic policy stance within Canada.
Finally, just in reference to Professor Hart's comments that we have up to 50 per cent of the world's water, I would like to set the record straight. We have 9 per cent of the renewable supply of water. That is the amount of water that, through precipitation and snowmelt, flows through our rivers to the oceans each year. The rest of the water is what is left over; it is our capital. It is not replaced every year. We do have approximately 20 per cent of the world's water, but only 9 per cent of that is renewable.
The IJC made it clear that, on average, only 1 per cent of the Great Lakes water is renewable each year. That water is used many times over within the basin. We must protect that, using the precautionary approach and considering the cumulative impacts.
Senator Bolduc: Mr. Reiskind, you heard Mr. Bankes in reference to paragraph 6 of his submission. In terms of legislative drafting, as a lawyer, what do you think of his amendment to proposed section 13 in the bill?
Mr. Reiskind: The purpose of drafting is to implement the intention of the bill. In my view, it creates problems with the intent of what we are trying to achieve. For example, mentioning particular standards, or issues that a minister is required to review, opens up to proponents who are trying to get a project through, an argument they could possibly raise in court as to why their project should be allowed and why the minister cannot stop it.
In drafting terms, when you add conditions, you open up a hornet's nest of possibilities for proponents to argue why the minister has blocked their project unjustifiably.
Moreover, in issuing licences with conditions, the minister would be trying to impose the conditions specified by the International Joint Commission. Listing certain conditions here might make it difficult for the minister to put the conditions in the licence that the joint commission requires in approving the project.
Senator Bolduc: On the other hand, when I look at proposed section 13, it prohibit something, but then there is the power by regulation to just contradict that, so finally, there is no prohibition; that is my point. We have been arguing about that from the beginning. Two lawyers quite familiar with these things told us that we were right. I asked whether it is true that proposed subsection 13(1) could become an empty prohibition if you can just destroy it through the regulatory powers. Mr. Mann agreed with me. What do you say about that?
Mr. Reiskind: Other witnesses have made it quite clear that the minister does not have a free hand. In any case, if the minister were to create an exception, that would still have to be reviewed by the International Joint Commission.
Senator Bolduc: I understood that the minister exercised a supervisory role in advance of the commission; is that correct?
Mr. Reiskind: The way the treaty appears to work is that either the minister or the joint commission can block a project. If either of them opposes a project, it does not go through. However, one of them cannot approve a project unilaterally.
The Chairman: I suppose since it is a joint commission, the Americans must be involved somewhere.
Senator Carney: My first question is for Mr. Fawcett. When you talked about the role of the IJC in your remarks just now, you seemed to suggest that we were attacking the IJC or questioning it. Again, I point out that in its own report, the International Joint Commission uses the words, "The Commission believes it is unlikely that water in its natural state...is included within the scope of any of these trade agreements." That paragraph states, "The Commission believes..."
It goes on to state that when water is captured and enters into commerce, it may, however, attract obligations under the GATT, the FTA and the NAFTA. It then states the circumstances where it feels there are vulnerabilities. I am saying that the IJC has indicated, with all the help of the experts you mentioned, that it believes there may be obligations.
You say that licensing exports is not what this bill is about. You just told us that. However, every witness who came here has said that that is the effect of the bill as drafted. No one has said that exports are banned under this bill. How can you square your statement that licensing exports is not what this bill is about with the fact that every witness has said, whether it was the aim or not, that it permits that?
The Chairman: It must be pointed out, Senator Carney, that they were all your witnesses.
Senator Carney: I think that is extremely unfair,Mr. Chairman.
The Chairman: It is not unfair.
Senator Carney: That speaks to the minister's suggestion that there -
The Chairman: It is a fact.
Senator Carney: The witnesses were selected by the steering committee. It speaks to the minister's statement that you would have to believe in a conspiracy theory. We got the best witnesses that we could on this issue, and none of them, including -
The Chairman: All of the witness came from your list. You personally gave the steering committee your list. Thank you. That is okay.
Senator Carney: You are impugning the motives and the integrity of the witnesses whom we have called to provide clarification on this bill. You can say -
The Chairman: I am not impugning anything, Senator Carney. I am stating a fact. Thank you.
Senator Carney: I resent the implication that our witnesses -
The Chairman: You can resent it all you like.
Senator Carney: Would you like to apologize to the witnesses?
The Chairman: No, I would not, Senator Carney, because I did not impugn anything. I stated a fact.
Senator Carney: Mr. Fawcett, let us go back to your suggestion that licensing exports is not what this bill is about, yet the witnesses have said that the way this bill is drafted, given the regulatory powers and given the IJC's powers, it could have that effect. Where is the fetter or the constraint in Bill C-6 as drafted?
Mr. Fawcett: Thank you, Senator Carney, for your comments.I should clarify that my earlier comment about criticism of the IJC report was aimed at a previous witness, Mr. Appleton, who said that the IJC was wrong in its testimony. I think we all agree that that is a very well-founded and very comprehensive response.
My earlier remarks about licensing exports are related to the way this bill is structured. Proposed section 11 refers to licensing for in-basin uses. That is not for exports; that is for in-basin uses.
The prohibition is on bulk water removals outside the basin.
Senator Carney: The words "bulk water" do not appear in this bill. Do you remember that?
Mr. Fawcett: I think you have to read this bill in combination with the regulations, which is why we have made them generally available.
Senator Carney: You have established that the witnesses are wrong and you are right. My second point is, if you are casting this bill in environmental rather than economic terms, why are the words "ecology" and "environment" never mentioned in it?
Mr. Fawcett: As Mr. Cooper pointed out, the environmental effect is quite evident in the approach that we have taken, which is to keep water in its basin for environmental purposes.
Senator Carney: That is not what the bill says; you will agree to that?
Mr. Fawcett: I would like to address -
Senator Carney: No. The bill does not mention that point. Senator Austin raised the point that the environment was not a concern in 1909 or 1910 when the original legislation went forward. I ask you simply: If you are casting it in an environmental manner - and the Minister of the Environment introduced this bill in the House of Commons - why does the bill not mention "ecology" or "environment"?
Mr. Fawcett: It is only in the regulations that the word "environment" appears. A concise environmental analysis of the project is required.
Senator Carney: It is not mentioned in the bill, however.
Mr. Reiskind, you have indicated - and this is for clarification because we could not get an answer to this earlier - that both the IJC and the government are required to approve a project. Do you mean that if the minister uses the power of regulation and the power of exception to approve a project, the IJC can stop it?
Mr. Reiskind: Exactly. A double-barrelled approval is necessary. It is very important to us that the Government of the United States cannot approve a project on its own. They would need the approval of the IJC, on which there are also Canadian commissioners.
Senator Carney: That would only be within the mandate of the IJC, which as far as I am concerned, does not necessarily include the environment. It talks about water levels, but it does not talk about environment.
Mr. Reiskind: Perhaps Mr. Cooper, who has been involved in some of the IJC approvals, might comment on the IJC reviews.
Senator Carney: I will get to Mr. Cooper. If you are not able to answer that question, I will move on. You say that the regulatory and ministerial powers, or the IJC powers, are not out of line with other legislation. One of the acts that you quoted, of course, was the Canadian Environmental Assessment Act of 1992. That has very clear stipulations about regulations, the regulatory process, how regulations are to be made, who is to make them and how they are to be reviewed. Would you be willing to have that kind of mechanism incorporated into Bill C-6?
Mr. Reiskind: I raised the CEAA because, theoretically, by regulation, if no acts were put on the law list, then no environmental assessments would be done. Thus, you could make the same argument regarding that act.
Senator Carney: You have not answered my question. Would you be willing to have that regulatory process incorporated into this bill, which does not seem to have any review mechanism whatsoever?
Mr. Reiskind: They are different pieces of legislation. The CEAA does not directly implement a treaty, which is why the bill was drafted in this way.
Senator Carney: You introduced it here, Mr. Reiskind. I did not. You introduced it when you said that this bill is not out of line with other pieces of legislation. I am asking if you would like to bring this bill in line with CEAA.
I have another -
Senator Corbin: That would be a matter for the minister to decide.
Senator Carney: The minister is not here.
Senator Corbin: These people are officials. They cannot define policy.
Senator Carney: I am responding to comments they have made.
Mr. Cooper, why does the bill not mention the words "environment" and "ecology?" Do you have a comment on the point that I made to Mr. Reiskind?
Mr. Cooper: I am not sure that I am in a good position to provide a response, given that the drafting of the bill was based on the ambit - the scope - of the treaty.
Senator Carney: Which does not include environment.
Mr. Cooper: Article IV refers to:"...waters flowing across the boundary shall not be polluted on either side to the injury of health or property on the other."
In very roundabout terms, it makes a case for other considerations beyond navigation, irrigation and domestic and consumptive uses. I would like to point out that the IJC has also moved in that direction. The IJC mandate, which was established by the International Boundary Waters Treaty, is to look at issues from the environmental aspect, and the levels and flows. It was also proposed, I believe in 1998, to set up ecosystem trans-boundary boards to protect, with the United States, the ecosystems concerned.
As to why there is no explicit language referring to environments, it was the drafters' decision, and I really cannot comment on that.
Senator Carney: Mr. Cooper, you said earlier that after discussion with the provinces, there is a Canada-wide prohibition on the bulk export of water. We have been unable to find such a prohibition. Could you explain where we might find this?
Mr. Cooper: In February 1999, the federal government announced its strategy to pursue a Canada-wide prohibition on bulk water removal. It was a three-pronged process, as was mentioned. Under that process, we sought to work with the provinces so that each would introduce its own legislation or regulations that would prohibit bulk water removal.
Nine of 10 provinces have done that, and New Brunswick is currently working on it. I would say that is, in a sense, a Canada-wide prohibition on bulk removal.
Senator Carney: I wanted to get that on the record, because we have been unable to find it in place.
A number of witnesses have spoken to Bill C-6, and several of them have pointed out that, on the beneficial side, there are penalties and other provisions to improve the informal arrangements that are now in place. However, other witnesses have made very pointed and coherent criticisms of the bill in its present form. Have you heard anything, in all these hours of hearings, with which you could agree? I ask each one of you to respond, please. Is there no change required in this bill? We have no quarrel with the objective of the bill as stated by the minister. Our position is that the bill, as drafted, does not accomplish the stated aims.
The Chairman: If you want to answer very quickly, that is fine. We will then go to Senator Murray, who has been very patient. I do not know how the officials can answer the question.
Senator Carney: Is there nothing they heard with which they agree? This is in the technical drafting of the bill - we said we agreed with the policy.
Senator Corbin: It comes out to the same, Senator Carney, because the politicians dictate policy. These people are not politicians. They execute and they translate into legal terms the will of the politicians. They feel that they have done a good job.
Senator Carney: Could you let them answer, senator?
The Chairman: They can all say they have done a good job.
Senator Carney: This is a serious question, because they heard much criticism of the bill.
The Chairman: We take you seriously, Senator Carney. If you would like them to answer, perhaps they will.
Mr. Fawcett: I will try first. The bill, as drafted, does what it set out to do. The questions that have been posed regarding this bill are outside what we had expected when we prepared the materials for this.
It has been proposed that, using the exception provisions, the minister could license exports. Now, in addition to the safeguard mechanisms - the IJC and the review - if the licensed exports affected the levels or flows of boundary waters, the minister would also be in violation of the treaty. We cannot contemplate that ministerial discretion would go that far. That seems to me to go beyond the purpose of the bill, which is to prohibit bulk removal of water out of its basin.
Mr. Reiskind: I agree with Senator Grafstein's comment concerning the elements of the drafting of the bill.
Mr. Cooper: I am happy with the way the bill has been drafted because it is based on an environmental approach. It is exactly the approach that we recommended the provinces implement. We are fulfilling our side of the commitment.
Senator Murray: Mr. Chairman, I will make some comments and others may reply, if they wish.
As to what we have heard this evening from the government witnesses, Mr. Fawcett points out correctly that the licensing provision in proposed section 11 simply formalizes the existing approval process. It is really a housekeeping provision, and I accept that. However, it also has to be pointed out that there is an unfettered - I repeat, unfettered - authority for the Governor in Council to make exceptions to the licensing provision, and indeed to the entire process.
Mr. Reiskind and I had this conversation the other night, and I said that the Governor in Council would be able to say, "You do not have to bother with the government, the IJC and the licence in this case." Mr. Reiskind said, "Yes, but that conforms to what has been the practice." Still, we are codifying that unfettered right to make exceptions in this bill.
Now, Mr. Fawcett makes the distinction, as a number of witnesses have, between the licensing provision on the one hand, which relates to in-basin uses of water, and the prohibition provision in proposed section 13, which, as we know, relates to the removal of waters from the basin. Mr. Cooper said the same on this matter. I understand that distinction between in-basin uses and out-of-basin removals, and I understand its importance on one level.
However, it is not important in terms of what we are trying to get at here, which are the trade and commerce implications. Water, in its natural state, can be brought into commerce - and we are told that it does not have to be international commerce, just commerce - under the licensing provision. We have it on the authority of the trade lawyers who appeared here the other night, Mr. Appleton and Dr. Mann, that once you go down the road of Bill C-6, you are making it that much more difficult to prevent water from being brought into commerce. That is the argument of those trade lawyers. They are arguing, I think, for an export ban.
Let us be clear about that, Mr. Chairman. You can call them Senator Carney's witnesses or our witnesses. They are the committee's witnesses. I have never laid eyes on either of them before. I am sure they were not here to advocate for a particular political party, nor do I think they are advocates of a particular environmental cause. Both of them made it clear, as have other witnesses, that they are interested in effective law in this field. They do not think this bill will be effective law, that an export ban would be the best way to go, and that it would render us no less vulnerable in terms of trade action and trade law than this bill eventually would.
I need not say too much on the question of the regulations, but Mr. Reiskind defends the broad regulation-making authority on the ground that we need the flexibility to implement this international treaty. However, the act implementing the international treaty has been in force since 1911, I think, with no regulations at all. We could have amended that act, as Bill C-6 proposes to do, without giving the Governor in Council an unfettered right to make exceptions to a licensing provision and a prohibition. We could have insisted that the exceptions, which they insist are few in number, be written into the act, so that if any future government wants to change them, it can jolly well come back to Parliament and get them changed. We should insist that there not be an unfettered power to define, in the regulations, any word that is not defined in the bill. We could insist that definitions be written into the act, as they are in most statutes, and that we not give the Governor in Council the right to list or de-list the basins to which this law will apply, but rather that those basins be defined in the act. Then, if a future government wants to add to them or de-list any that are there, it can come to Parliament, as it should on a matter of this importance.
I am indebted to Senator Austin, who earlier quoted an opinion of two lawyers from Davies, Ward and Beck who made a presentation at a conference on Great Lakes water law in Milwaukee in February 2000. They dealt with this whole issue of the so-called "commodification" of water. Senator Austin did not get to these passages, which I know are relevant for our purposes. I draw your attention to page 4, where they say:
Rather, we believe that the "water is not a good" argument is a politically expedient red herring that risks distracting attention from the effort to discern and develop a constructive and mutually supportive relationship between international trade rules and environmental policy.
In our view, a satisfactory resolution can only come from a dispassionate and informed analysis of existing international trade law relating to the conservation of natural resources.
On page 14, they say, as Senator Austin quoted, that the joint statement made by Canada, the U.S. and Mexico, although it may not be strictly binding upon the parties to NAFTA, is potent authority with respect to the treatment of water in its natural state under NAFTA.
They then say this:
Given the categorical language of the joint statement, it is highly likely that water in its natural state would not be construed as a good for the purposes of NAFTA or any of the obligations of NAFTA with respect to trade in goods, including GATT Articles III (national treatment) and 1X (prohibition of quantitative restrictions) as incorporated by reference into NAFTA. Unfortunately, however, this conclusion still leaves many questions unanswered, as discussed in Part VIII of this paper.
I will not take you through Part VIII, but will flag a couple of things. I draw your attention to page 24, where it says:
Indeed, the argument seems to turn on a metaphysical sleight of hand "deeming" a country's natural resources not to be a "good" until a point in time when human beings interfere with them to some unspecified degree so as to remove them from their "natural state". The "water in its natural state" argument effectively "ducks the issue" in a very limited context, but leaves the more important underlying question unresolved.
Those underlying questions are listed on page 25. I will not go through them, as you have them.
Senator Austin: The argument all comes down to article 20(g) under the GATT and the jurisdiction there.
Senator Murray: Yes. Why? They say, on page 27, speaking of this bill under its previous title, which was Bill C-15:
However, it appears to us that a focus on removal of water from a basin is, at best, a make-shift solution. While this approach has a superficial appearance of conservation/environmental rationale, closer inspection may give rise to some doubts.
The final sentence reads, which is the point thatMessrs Appleton and Mann made so forcefully the other night:
One does not need too much imagination to see how a trade challenge of the "out-of-basin prohibition" policy will begin in describing the "primary aim" of the policy.
Mr. Chairman, Senators Carney, Bolduc, Andreychuk, Spivak and I started out studying this bill with some serious reservations, but they were quite precise. We came in here with concerns about a bill with a licensing provision and a prohibition provision that we thought were threatened by excessive regulatory power. Everything we have heard has added to our concerns. Professor Sullivan, the expert in legal drafting, has told us that the courts will find no fault with most of the regulations that might be promulgated under this bill because it so clearly gives the government control of those. We then heard from two trade lawyers, and you know what they said about the fact that water is a good anyway, that the problem will arise when it is brought into commerce, and that it is much more likely to be brought into commerce if we go ahead with the licensing provision of Bill C-6. We then had a constitutional expert tell us tonight that this bill is highly vulnerable from a constitutional point of view.
There we are. We can forge on or we can take some time and leave this on the back burner for a while and make some amendments.
Mr. Fawcett: We agree with Senator Murray that once water has been brought into commerce and becomes a good, it is subject to trade agreements. It is very important. This is the reason for our approach dealing with water as a resource, not as a good.
The second point is related to the licensing regime and whether it is brought into trade obligations. The advice that I have from my trade law experts is that trade rules are limited to dealing with government measures that regulate the cross-border flow of goods. We are not dealing with a cross-border flow of goods. We are dealing with a licensing regime for in-basin uses. I do not think that a measure that prevents a resource - water, in this particular case - from becoming a good, without purporting to regulate water that has become a good, is affected by the operation of trade rules. That is a fairly specific answer to the senator's question.
Senator Andreychuk: Senator Murray has certainly summed up the issues in a very appropriate way, but I want to respond to Mr. Fawcett.
I understand that you received advice from your trade people that a cross-border situation would have to come into play. We heard from some other experts that equally, some management or use of water on the Canadian side could trigger the trade issue, not the IJC. I wonder whether you have consulted with your colleagues in trade law to get an assessment of that opinion.
I am not an expert on the environment or the IJC. When I was practicing law, I was guided by a certain judge who said, "It is not good law; 12 Baildon farmers cannot understand it." In this case, if all we want to do is to amend the International Boundary Waters Treaty Act, and that is all the bill says it wants to do, fair enough.
However, that is not what the minister said, or what you are saying. You say it is one prong of a three-pronged approach, which leads me to believe there is some inherent need beyond just the amendments you are solidifying in this bill. In other words, this issue of bulk exports, this fear or unease about the definitions in trade rules are what the minister was really grappling with here. Therefore, it makes me very nervous when all of that is not in the bill, when there is nothing in the preamble to identify what you are trying to do. You simply say you are trying to amend an act. You are not trying to protect the international treaty; you are not trying to stop interpretations that could draw long bows from trade people, as we know has happened in the past and will in the future.
Given all of that, why would you put such a broad, unfettered power in regulations if you are trying to assure Canadians who have environmental concerns that we will not get trapped in trade nuances, which has happened often, with our neighbours? Who knows what the treaty commissioners will do? We know what they have done for the last century; we have no idea how they will interpret things in the future.
The unease is about what is left out, coupled with unfettered discretion for the minister, which leaves Parliament out of the picture. We are supposed to give carte blanche. There is nothing by which we can turn to the public to say, "Do not worry, your water is safe. You will not get yourself into trade implications."
In Saskatchewan, where I come from, we always face innovative trade interpretations from the other side. That is the business of trade.
I would like your response as to why the drafters - the experts - crafted it this way, when you stated clearly what you want to do. I wish they were here so I could support you.
Mr. Fawcett: Thank you for the question, Senator Andreychuk. That is part of the purpose of our appearing before you, to try to explain all of this. It is difficult to put all of this into a bill and answer all of the questions. They have all been very good questions.
As you know, water is a very sensitive matter for Canadians and they want to be assured that our waters are protected. That is the reason for this.
You asked about the three-pronged approach. That was really in response to earlier criticism that we were only dealing with boundary waters - what about all the rest of the waters in Canada? We did not want to get into a jurisdictional battle with the provinces. Hence the Canada-wide accord, so that we would cover all the waters in Canada. We wanted to have some guidance from the International Joint Commission. Therefore, we commissioned the study that you have seen, which has made very strong recommendations that both governments have to at least take notice of. It is a strong approach. I think it is a broad approach to try to deal with this complex issue.
To some extent, you have answered your own question. It is a complex matter. The purpose of the regulations is to be able to respond to situations. Those who would like to export water and make money from Canadian resources will look at this bill and see what they can do to circumvent it. The powers in the regulations are to be able to respond to that kind of challenge.
Senator Andreychuk: As a final word, I commend the government on the policy it is attempting to put in place. My difficulty is that the bill, as drafted, makes me feel even more insecure than having no bill does, as it opens the door for all of those things that you have just enumerated. The policy was to try to stop it. The bill does not appear to do that. This unfettered discretion for the minister seems to widen the problem. I am not talking about the current minister, as I have great respect for him. I am talking about future ministers, who may have a totally different idea of what the environment is and what sale of waters should or should not happen. Creative interpretation may thwart the best intentions of the treaty commissioners.
Senator Spivak: I will be brief, as most of the issues have been summarized.
I want to comment very briefly on the context of this. One would have to be Sherlock Holmes to understand why, in the context, you have done what you have done. The first context is that we were told repeatedly that under the Free Trade Agreement, water is not on the table. We were also told repeatedly that culture is not on the table. That has turned out to be false.
Second, we are looking at a three-pronged policy, at the heart of which is an environmental issue, and yet the word "environment" is not used. Is this because "environment" might be a non-tariff barrier? Why is that?
Third, given the number of schemes there have been in this context, that is, the Grand canal scheme and all the others looking to sell water, why then would you say we can trust future ministers?
What is the penalty if the minister does that? Where is the penalty?
I have one other question. The current WTO Doha text - you do not have to comment on this because the chairman does not want to spend more time on it - calls for the elimination of non-tariff barriers to environmental goods and services. We heard that water is a good, and we are told that Canada is pushing for its inclusion in the General Agreement on Trade in Services. Is that correct, and if so, why is Canada taking that position?
Mr. Fawcett: I will try to answer your last question,Senator Spivak. In the Doha Declaration, that is the ministerial intent for a new round of trade negotiations, so it is a beginning.
The specific reference you make to article 31 in the ministerial declaration was put on the table by the European Union at the last moment, that is, to deal with trade and environmental issues. That is the context.
As you mentioned, there is a proposal for trade liberalization in environmental goods and services. That goes back to our earlier discussion about water in its natural state being neither a good nor a service. In that context, it does not apply to water; it applies to environmental goods and services.
Frankly, having worked on trade and environmental issues, and having debated this in the WTO committee on trade and environment for a number of years, we welcome further general discussions in this area. However, there are no specific provisions related to water. Canada is not pushing for water to be included. That would be completely contrary to the bill before you. Furthermore, access to technology, especially in the environmental area, is an issue that developing countries want to deal with. They have been clamouring for technology transfer. This is a good news story.
Senator Carney: My final word is addressed to the officials, who have been very patient tonight in appearing before us. I want to quote from the Davies, Ward and Beck paper that Senator Austin was kind enough to introduce tonight. The postscript on the paper says: "If you find yourself in a hole, stop digging."
The Chairman: I wish to thank everyone very much. No one watching this on television would ever think we were dealing with only a six-page bill, but that is the story.
The committee adjourned.