The price of free trade. (Resources).

Yes, there is an enormous imbalance of power between Canada and the United States. They have ten times our population and 14 times our wealth. But, Canada is not without a few bargaining chips. We have a couple of things in abundance that the Americans are desperately short of--energy and water.

However, it looks as though we've given up control of these without a whimper.

As far as energy goes, Larry Pratt says Canada has given away the store and its sovereignty. Mr. Pratt wrote a study for the Parkland Institute in 2001 in which he states:

"We are paying a high price for free trade. The 49th Parallel is vanishing, creating a new integrated continental oil and gas market in which Canadian energy industries are used to feed an ever-growing American demand.

"Free trade was supposed to lower prices. But consumers of electricity, natural gas, and petroleum products will recall the winter of 2000-2001 as a time when gasoline prices rose even while crude oil was in surplus; when natural gas heating charges soared in Canada, largely because California ran short of both electricity and natural gas; and when the deregulation of power markets caused havoc everywhere. Energy exports to the U.S. and oil company profits have never been higher, but domestic consumers have seldom paid so much to heat their homes, drive their cars, and keep their lights burning.

"There is no shortage of oil or gas in Canada that can justify these price escalations. We have, in effect, imported them through trade agreements ... NAFTA stripped Canadian governments of the power to intervene in the energy sector, deregulated exports, and freed Canadian producers to meet the energy demands of an insatiable U.S. market. NAFTA ties the hands of Canadians who want to cut back exports and conserve our precious non-renewable resources."

But, we don't have to worry about going short, do we? Well, in fact, we do.

There's a clause in the NAFTA called "proportional sharing." This means that Canada must guarantee to the U.S. market the same percentage of Canadian energy production regardless of Canadian needs. And, that guarantee holds good forever. Even if Canadians are freezing in the dark because of a shortage we can be forced to supply the U.S. with natural gas. We could find ourselves in a similar bind over water.

The FTA defines water as a "good." And, anything defined as a good, is "tradable." This opens up the possibility that when the U.S. gets thirsty it might invoke the provisions of the FTA and force us to divert the flow of Canadian rivers.

The United States is thirsty already. Not too far in the future it faces a catastrophic water shortage particularly in the southwest. States such as Arizona, Nevada, and California are in arid regions with little natural rainfall. However, the warm, dry climate attracts people so that, over the past two decades, there has been a huge population shift to the U.S. southwest.

People can't exist without water and, luckily, those south-western states sit on top of a vast underground reservoir. The Ogallala Aquifer has been filling up for thousands of years with water seeping down from the surface. But, those parched desert folk are sucking it dry in a few decades. When the wells start pumping air the call is going to go out for help. That's when the United States will turn its attention to Canada's river systems.

There was a time when we could have protected our water resources, but not anymore.

Free trade agreements treat everything as a commodity--food, energy supplies, culture, and water. At first, Canada's trade officials said water was not part of NAFTA. Then environmentalists showed them the fine print in Article 309 and Article 315.

Article 309 states that "no party may adopt or maintain any prohibition or restriction on the exportation or sale for export of any good destined for the territory of another party." This means that if the export of water were to commence between NAFTA countries, the tap couldn't be turned off.

Article 315 is our old friend the "proportionality clause." This says that a government of a NAFTA country cannot reduce or restrict the export of a resource to another NAFTA country once the export flow has been established.

The Council of Canadians explains what's in store. "There is no doubt that under NAFTA, water is a commodity, a good to be traded ... Once any province decides to export it, water will become a resource as defined by NAFTA and will have the same provisions applied to it as energy does."

When the American thirst gets critical Canada will be under enormous pressure to start exporting clean, fresh water. For the U.S. it will be a matter of national security; it's unlikely Canada will be able to resist the pressure.

Natural gas reserves, in years worth of supply, the National Energy Board insisted must be on hand before approving exports prior to the signing of the Free Trade Agreement: 25

Proven natural gas reserves, in years worth of supply, on hand in 2002: 9

The export portion of Canada's natural gas production increased from 25% in the early 1990s to 60% a decade later.

Kyoto Protocol http://www.climatechange.gc.ca/english/whats_new/overview_e.html

National Energy Board--http://www.neb.gc.ca/

Parkland Institute http://www.ualberta.ca/~parkland/

RELATED ARTICLE: Squaring the circle.

At the end of 2002, Canada ratified the Kyoto Protocol. This commits us to reducing our emissions of so-called "greenhouse gases" that are thought to contribute to global warming. These greenhouse gases are produced mostly by the burning of fossil fuels--gasoline, coal and, to a lesser extent, natural gas. But, through our free trade agreements with the U.S. Canada is committed to increasing its exports of energy, thereby adding to greenhouse gas emissions. Meeting two competing demands will require some fancy footwork.