The Post-Staples State: The Political Economy of Canada’s Primary Industries



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ENDNOTES




1  The figures for foreign control change almost weekly as foreign takeovers of domestic firms and domestic takeovers of foreign firms occur. The estimate on foreign and domestic ownership in the Canadian oilpatch are from data collected by the Canadian Association of Petroleum Producers.

1 Timothy W. Luke, “The Uneasy Transition from Extractive to Attractive Models of Development,” in Warren Magnussen and Karena Shaw, eds. A Political Space. Reading the Global through Clayoquot Sound (Montreal and Kingston: McGill-Queen’s University Press, 2002), 91-92.

2 Innis, H.A. The Fur Trade in Canada. Toronto: University of Toronto Press, 1930; H.A. Innis, Problems of Staple Production in Canada. Toronto: Ryerson Press, 1933.

3 See Hessing, Melody and Michael Howlett. Canadian Natural Resource and Environmental Policy: Political Economy and Public Policy. Vancouver: University of British Columbia Press, 1997.

4 Throughout this period, Canadian governments have attempted to balance support for resource mega-projects and existing resource industries with environmental protection, creating a policy regime focusing on environmental assessments and mitigation in so doing. See Bowden, Marie-Ann and Curtis, Fred. “Federal EIA in Canada: EARP as an Evolving Process.” Environmental Impact Assessment Review. 8, no. 1 (1988): 97-106; Mitchell, B. and R. Turkheim. “Environmental Impact Assessment: Principles, Practices, and Canadian Experiences.” In R. R. Krueger and B. Mitchell, ed(s), Managing Canada's Renewable Resources, Toronto: Methuen, 1977. 47-66; Rees, William E. “EARP at the Crossroads: Environmental Assessment in Canada.” Environmental Impact Assessment Review. 1, no. 4 (1980): 355-377 and Schrecker, Ted. “The Canadian Environmental Assessment Act: Tremulous Step Forward or Retreat Into Smoke and Mirrors?” Canadian Environmental Law Reports. 5(1991): 192-246.

5 Triggering government investments in areas such as transportation and communications infrastructure designed to efficiently extract and ship goods to markets as well as provisions of export subsidies and credits designed to facilitate trade, See Naylor, R. T. “The rise and fall of the third commercial empire of the St. Lawrence.” In G. Teeple, ed(s), Capitalism and the National Question in Canada, Toronto: University of Toronto Press, 1972; Hodgetts, J. E. The Canadian Public Service. Toronto: University of Toronto Press, 1973; Stone, Frank. Canada, the GATT and the International Trade System. Montreal: Institute for Research on Public Policy, 1984; and Whalley, John. Canadian Trade Policies and the World Economy. Toronto: University of Toronto Press, 1985

6 See Naylor, R. T. “The Rise and Fall of the Third Commercial Empire of the St. Lawrence.” In G. Teeple, ed(s), Capitalism and the National Question in Canada, Toronto: University of Toronto Press, 1972; Hodgetts, J. E. The Canadian Public Service. Toronto: University of Toronto Press, 1973; Stone, Frank. Canada, the GATT and the International Trade System. Montreal: Institute for Research on Public Policy, 1984; and Whalley, John. Canadian Trade Policies and the World Economy. Toronto: University of Toronto Press, 1985

7 See Anderson, F.J. Natural Resources in Canada. Toronto: Methuen, 1985; Wilkinson, B. “Canada’s Resource Industries.” In J. Whalley, ed(s), Canada’s Export Industries and Water Export Policy, Toronto: University of Toronto Press, 1985; and M.C. Webb and M.W Zacher, Canada and International Mineral Markets: Dependence, Instability and Foreign Policy Kingston: Queen's University centre for Resource Studies, 1988.

8Cameron, David R. “The Growth of Government Spending: The Canadian Experience in Comparative Perspective.” In State and Society, edited by K. Banting. Toronto: University of Toronto Press, 1986. 21-52.

9 Howlett, Michael. “Canadian Environmental Policy and the Natural Resource Sector: Paradoxical Aspects of the Transition to a Post-Staples Political Economy.” In E. Lee and A. Perl, ed(s), The Integrity Gap: Canada's Environmental Policy and Institutions, Vancouver: University of British Columbia Pres, 2003.

10 See Drache, Daniel. “Re-discovering Canadian Political Economy.” In W. Clement and D. Drache, ed(s), A Practical Guide to Canadian Political Economy, Toronto: Lorimer, 1978 and Williams, Glen. Not for Export: Toward a Political Economy of Canada’s Arrested Industrialization. Toronto: McClelland and Stewart, 1983

11 See Clement, Wallace and G. Williams, ed. The New Canadian Political Economy. Montreal: McGill-Queens University Press, 1989; and Clement, Wallace, ed. Understanding Canada: Building on the New Canadian Political Economy. Montreal: McGill-Queen's University Press, 1997. On the service sector specifically see Warton, David A. “The Service Industries in Canada 1946-1966.” In V. R. Fuchs, ed(s), Production and Productivity in the Service Industries, New York: Columbia University Press, 1969 and Grubel, Herbert G. and Michael A. Walker. Service Industry Growth: Causes and Effects. Vancouver: Fraser Institute, 1989.

12 Many of these discussions centre on the role of technology in driving service sector development. See Anderson, R. et al., ed. Innovation Systems in A Global Context: The North American Experience. Montreal: McGill-Queen's University Press, 1998; Niosi, J. “Canada's National System of Innovation.” In Science and Public Policy 18, no. 2 (1991): 83 and Niosi, J., ed. Technology and National Competitiveness: Oligopoly, Technological Innovation and International Competition. Montreal: McGill-Queen's Press, 1991.

13 Hutton, Thomas A. Visions of a 'Post-Staples' Economy: Structural Change and Adjustment Issues in British Columbia. 1994. Vancouver: Centre for Human Settlements. PI #3, pp. 4-5.

14 Adapted from Hutton, Thomas A. Visions of a 'Post-Staples' Economy: Structural Change and Adjustment Issues in British Columbia. 1994. Vancouver: Centre for Human Settlements. PI #3, pp. 1-2.

15 In Canada, unlike many other developed countries concerned with issues such as urban pollution or toxic wastes, the key environmental issues of the 20th century were those related to resource management concerns involving conflicts over existing or potential resource extraction and transportation activities. These have included the designation and protection of wilderness areas and other land use decisions to exempt them from resource exploitation or related activities such as pipeline and hydro-electric generation or transmission; pollution regulation related to natural resource producing industries such as smelters of pulp and paper manufacturing facilities; pesticide and herbicide management issues related to intensive silviculture and other forestry-industry-related activities; and disputes over harvesting and extraction methods such as clearcut logging, wolf, bear and game hunting, fur trapping, deep-sea dragging, and offshore-drilling, among others. Benidickson, Jamie. “Environmental Law Survey: Part I.” 24, no. 3 (1992): 734-811; Benidickson, Jamie. “Environmental Law Survey: Part II.” 25, no. 1 (1993): 123-154; Estrin, David. “Environmental Law.” Ottawa Law Review. 7, no. 2 (1975): 397-449; Schrecker, Ted. “The Political Context and Content of Environmental Law.” In T. Caputo, ed(s), Law and Society: A Critical Perspective, Toronto: Harcourt, Brace Jovanovich, 1989. 173-204; Swaigen, John. “Environmental Law 1975-1980.” Ottawa Law Review. 12, no. 2 (1980): 439-488.

16 Cameron, David R. “The growth of government spending: The Canadian experience in comparative perspective.” In State and Society, edited by K. Banting. Toronto: University of Toronto Press, 1986. 21-52. As Cameron has noted, boom and bust cycles are common in a staples economy, linked to the manner in which long-term incremental changes in international demand are met by medium-term spurts in productive capacity and supply Most staples-based countries have a monopoly or near-monopoly on the production of only a very few resources or agricultural goods, and producers must sell at prices set by international conditions of supply and demand.. While international demand for most resources—outside of wartime—has increased at a relatively steady but low rate, world supplies of particular primary products are highly variable. A good harvest, or the discovery of significant new reserves of minerals or oil, or the addition of new production capacity in the fishery or forest products sectors can quickly add to world supplies and drive down world prices until demand slowly catches up and surpasses supplies, resulting in sudden price increases triggering a new investment cycle and subsequent downturn. It is these fluctuations in international supplies that account for the “boom and bust” cycles prevalent in most resource industries and, by implication, most resource-based economies like Canada's. See Anderson, F.J. Natural Resources in Canada. Toronto: Methuen, 1985; Wilkinson, B. “Canada’s resource industries.” In J. Whalley, ed(s), Canada’s export industries and water export policy, Toronto: University of Toronto Press, 1985; and M.C. Webb and M.W Zacher, Canada and International Mineral Markets: Dependence, Instability and Foreign Policy Kingston: Queen's University centre for Resource Studies, 1988.

17 Hutton, Thomas A. Visions of a 'Post-Staples' Economy: Structural Change and Adjustment Issues in British Columbia. 1994. Vancouver: Centre for Human Settlements. PI #3, pp. 4-5.

18 Howlett, Michael and Keith Brownsey. “From Timber to Tourism: The Political Economy of British Columbia.” In R. K. Carty, ed(s), Politics, Policy and Government in British Columbia, Vancouver: UBC Press, 1996. 18-31; Tomblin, Stephen G. Ottawa and the outer provinces : the challenge of regional integration in Canada. Toronto: James Lorimer, 1995.; Apostle, Richard et al. Community, State and Market on the North Atlantic Rim: Challenges to Modernity in the Fisheries. Toronto: University of Toronto Press, 1998.

19 Adapted from Hutton, Thomas A. Visions of a 'Post-Staples' Economy: Structural Change and Adjustment Issues in British Columbia. 1994. Vancouver: Centre for Human Settlements. PI #3, pp. 1-2.

20 Source: http://ats-sea.agr.ca/supply/e3314.pdf; Agriculture and Agri-Food Canada (2001).

21 Trade flows have also been affected by the low Canadian dollar relative to the American, as well as by domestic public policies of the two countries. For example, the elimination of Canadian grain freight rate subsidies made the US market attractive for Canadian unprocessed grain and oilseed exports. Simultaneously, US grain export subsidies created a demand in the American market for Canadian grain by making it profitable for American producers to ship their grain overseas.

22 High value processed products are distinguished from processed intermediates (live animals, animal feeds) and bulk commodities (grains, oilseeds).

23 The government transfers to the railways were put in place in 1984 following the abolition of the statutory Crow’s Nest freight rates.

24 For example, the CFA President publicly chastised the Agriculture Minister in 2002 for proceeding with a plan to redesign farm income risk management programs despite farmers’ opposition. Doing so, he said, posed “a real danger that the relationship between governments and the industry will be jeopardized and will be undermined irreparably” (Friesen, 2002:14).

25 These data are available at: http://www.statcan.ca/english/Pgdb/econ124a.htm; and http://www.statcan.ca/english/Pgdb/econ117a.htm. Average farm size varies depending upon the province, (grain) farms are larger on average in Saskatchewan. See also Bowlby and Trant 2002: 8.

26 Commercial farms have revenues over $100,000. Small and medium-sized farms, 35% of all farms, have revenues between $10,000 and $100,000. The remaining 34% of farms are hobby firms which account for 1% of production and are totally dependent on off-farm income.

27 The Alberta and Manitoba Wheat Pools merged and were subsequently purchased by United Grain Growers to become Agricore United, in which the multinational grain company, Archer Daniels Midland, has a major share.

28 These transfers brought the average farm family income up to that of non-farm families and resulted in an average net worth for farm households above that of non-farm households (Culver et al. 2001).

29 I gratefully acknowledge funding from the Social Sciences and Humanities Research Council during the period when most of the research for this chapter was gathered. The views expressed here do not necessarily represent those of my employer.

30 Colin Woodard, “A run on the Banks: How factory fishing decimated Newfoundland cod” E, Norwalk, Mar/Apr 2001, 34-39.

31 World Trade Organization, available at: http://www.wto.org/english/thewto_e/whatis_e/whatis_e.htm, internet.

32 Jeremy A. Sabloff and C. C. Lamberg-Karlovsky, eds., Ancient Civilization and Trade, 1st ed. (Albuquerque: University of New Mexico Press, 1975) 114.

33 Ibid.

34 Bernard M. Hoekman, and Michel M. Kostecki, The Political Economy of the World Trading System: From GATT to WTO (Oxford: Oxford University Press, 1995), 22.

35 Brian Hocking and Steven McGuire (eds). Trade Politics: International, Domestic and Regional Perspectives (London: Routledge, 1999), 149.

36 Ibid.

37 Ibid., 7.

38 Apostle, et. al, 32; Mary Quayle Innis, An Economic History of Canada (Toronto: The Ryerson Press, 1935), 182.

39 Ibid., 2.

40 Donald C. Masters, The Reciprocity Treaty of 1854: Its History, Its Relation to British Colonial and Foreign Policy and to the Development of Canadian Fiscal Autonomy, Vol. 9 (Toronto: McClelland and Stewart Limited, 1963), xvii.

41 Ibid., viii.

42 Donald C. Masters, The Reciprocity Treaty of 1854: Its History, Its Relation to British Colonial and Foreign Policy and to the Development of Canadian Fiscal Autonomy, Vol. Vol. 9 (Toronto: McClelland and Stewart Limited, 1963), 19, 26, 28. Establishing a ‘most favoured nation’ principle to be extended to other trading partners was one such hope.

43 Ibid., 10.

44 Clement, and others, 169.

45 Mary Quayle Innis, An Economic History of Canada (Toronto: The Ryerson Press, 1935), 282.

46 Richard Apostle, et.al., Community, State, and Market on the North Atlantic Rim: Challenges to Modernity in the Fisheries. Toronto: University of Toronto Press, 1998, 64.

47 Mary Quayle Innis, An Economic History of Canada (Toronto: The Ryerson Press, 1935), 286.

48 Clement and others., 169-170.

49 Apostle, et.al., 75.

50 Ibid. Note that Newfoundland joined the Canadian Confederation in 1949, and was therefore subject to Canadian political interests as opposed to just Newfoundland interests.

51 Ibid., 76.

52 Ibid., 79.

53 Ibid., 33.

54 Apostle, et.al., 45.

55 Canadian Embassy, Washington, D.C., Treaties and Agreements in Force between Canada and the United States, Government of Canada, internet. Available at: http://www.canadianembassy.org/government/treaties-en.asp#21. NAFTA does not include specifics about the fisheries, and therefore is only applicable in indirect ways such that the fisheries are an integral part of Canada’s exports. According to the FAO, the NAFTA does not pay any specific attention to fish and fish products, and additionally does not cooperate with the FAO on fisheries matters. As well, at this time, there are no provisions in the GATT or NAFTA to equalize foreign access to coastal fishing.’ (Wathen, 1996: 83). However, NAFTA cannot be ignored due to its pre-eminence in the Canada-US trade relationship. As noted by Christopher L. Delgado et.al, institutional developments that apply to sectors outside of the fisheries have great implications for the fisheries nevertheless.


56 Daniel Pauly and Jay Maclean, In a Perfect Ocean: The state of fisheries and ecosystems in the North Atlantic Ocean (Washington: Island Press, 2003), 127n.

57 Delgado, et.al., 66.

58 William E. Schrank and Walter R. Keithly, Jr. “Thalassorama: The Concept of Subsidies,” Marine Resource Economics, vol.14, 1999, 153.

59 Ibid., 154.

60 Ibid., 159-160

61 Ibid.

62 Ibid., 114.

63 Ibid.

64 Giovanni Anania, ed., Agricultural Trade Conflicts and GATT: New Dimensions in U.S.-European Agricultural Trade Relations, ed. Giovanni Anania (Boulder, CO: Westview Press, 1994) 518.

65 Ibid., 114.

66 North American Free Trade Agreement, Art.103.

67 Trade Policy Review: Canada, November 1996, internet. Available at: http://www.wto.org/english/tratop_e/tpr_e/tp48_e.htm

68 Trade Policy Review: Canada, November 1998, internet. Available at: http://www.wto.org/english/tratop_e/tpr_e/tp98rev1_e.htm

69 Ibid.

70 ibid.

71 Director General Mike Moore, ‘Globalizing Regionalism: A new role for Mercosur in the Multilateral Trading System,’ WTO NEWS, Buenos Aires, 28 November 2000.

72World Trade Organization, Legal Texts: General Agreement on Tariffs and Trade, internet. Available at: http://www.wto.org/english/docs_e/legal_e/gatt47_02_e.htm

73 Multilateral Trade Negotiations on Agriculture: A Resource Manual. Agreement on Agriculture Rome: FAO, 2000), internet. Available at: http://www.fao.org/docrep/003/x7353e/X7353e11.htm.

74 Michael Swenarchuk, General Agreement on Trade in Services: Negotiations Concerning Domestic RegulationsUnder GATS Article VI (4) Toronto: Canadian Environmental Law Association, 2000, 2.

75 Alan P. Rugman, and John S. Kirton, Environmental Regulations and Corporate Strategy: A NAFTA Perspective, ed. Julie S. Soloway (Oxford, England: Oxford University Press, 1999).

76 Ibid, 55.

77 Ibid, 56.

78 Ibid., 57.

79 Ibid.

80 Ibid.,

81 Ibid., 58.

82 ibid..

83 Ibid. 59.

84 Alan P. Rugman, and John S. Kirton, 229.


85 Kyle Bagwell and Robert Staiger, “National sovereignty in the world trading system,” Harvard International Review, 22, 4, Winter 2001: 54-59.

86 Ibid.

87 ibid.

88 Michael Weinstein and Steve Charnovitz, “The Greening of the WTO” Foreign Affairs, vol.80, issue 6, Nov/Dec 2001: 147-156.

89 Ibid.

90 Carl Pope, “Race to the top: The biases of the WTO regime” Harvard International Review,23, 4, Winter 2002, 62-66.

91 The scope of the BC fishfeed industry (and the contents of fish food) was recently highlighted when Washington State fish farmer found their supplies delayed at the border by the BSE incident, “Canadian BSE case causes fish feed holdups” May 22, 2003, www.intrafish.com (accessed May 23, 2003)

92 It is often claimed that there are at least 17 federal departments and agencies with a finger in the aquaculture pie. In fact, from a regulatory point of view in shellfish aquaculture, there are just three key departments, DFO, Environment Canada, and the Canadian Food Inspection Agency,

93 Both sections contain provisions for habitat to be harmed or deleterious substances to be discharged by Regulation or by Ministerial Order (Fisheries Act RSC ss. 35 (2), 36(4),(5),(6)), creating the possibility for a classic “permitting” regime as has been proposed by the Commissioner for Aquaculture Development: “By providing clear and transparent standards, regulations under section 36 could give confidence to stakeholders that environmental interactions are managed. (OCAD,2002: 23).The continuing lack of transparency in enforcement is at issue in a private prosecution being brought by a prominent member of the anti-aquaculture coalition, Dr. Alexandra Morton, alleging DFO’s failure to enforce the relevant provisions of the Fisheries Act (http://www.friendsofwildsalmon.ca/)

94 Exceptions include the Canadian northern territories, where authority over mining has been devolving from the federal government to the territorial and First Nations governments and other areas of Canada where some comprehensive agreements have been settled with First Nations. (See chapter 12).

95 The NWT and NU became separate territories, as per the Nunavut Final Agreement, on April 1st, 1999.

96 Concerns associated with boards include that representatives are to serve as individuals, and as not representatives of appointment organizations, and boards serve an advisory, rather than decision making function.

98 Although a coalition of Northern Environmental NGOs (Canadian Arctic Resources Council, Ecology North and Canadian Parks and Wilderness Society) were offered funding to participate in the assessment they declined the resources as being inadequate. Funding was later provided to CPAWS, and the Status of Women Council of the Northwest Territories.

99 This situation is not only the case in forestry towns, but across Canada as well, especially in this phase of neoliberalism (see Gabriel 1999).

100 The idea of improving upon nature assumes a hierarchy between nature and culture, where culture is gendered male and considered superior to nature, which is associated with femaleness. For more in depth analyses of this kind of thinking, which has supported and naturalized many complex forms of inequality and domination, including among others the hierarchy of man to woman, and Western culture to cultures considered ‘uncivilized’ or ‘primitive’, see Plumwood 1992; Merchant 1989; Bordo 1993.

101 This paper draws on a more detailed analysis in Cashore, Auld, and Newsom (2004). Much of the research for this project came from a wide range of in person interviews in Europe and North America. For brevity, we limit direct citations to these research interviews. We are grateful to Steven Bernstein, whose collaborative work on a related project has greatly improved our analysis.

102 Originally the FSC created two-chambers – one with social and environmental interests that was given 70 percent of the voting weight, and an economic chamber with 30 percent of the votes. There are current three equal chambers among these groups with one third of the votes each. Each chamber is further divided equally between North and South.

103 BC members of the coalition included BC Pulp and Paper Association, Council of Forest Industries, Interior Lumber Manufacturers’ Association (Canadian Sustainable Forestry Certification Coalition 2000).

104 This group included, the Confederation of Canadian Unions, the Pulp, Paper and Woodworkers of Canada Union, the Union of B.C. Indian Chiefs, the Canadian Environmental Law Association, Greenpeace Canada, and a number of others.

105 Personal interviews, senior officials, Haindl, Augsburg, Germany, May 4, 2001

106 Personal interview, official, Canadian High Commission, London, England, April 25, 2001.

107 Personal interview, senior official, British Broadcasting Corporation Magazine, London, England, July 3, 2001

108 Personal interviews, senior official, Forest Alliance of British Columbia, Vancouver, Canada, September 19, 2000 and senor official, British Columbia Council of Forest Industries, Vancouver, Canada, September 1, 2000

109 Personal interview, official from BC forest industry (see Appendix 2).

110 Of the top nine companies in BC, Weyerhaeuser/MacMillan Bloedel, Canfor, Doman (Western Forest Products) and International Forest Products all announced intentions to pursue FSC certification, while Weldwood and West Fraser supported through cash contributions and/or participation in FSC processes (Cashore, Auld and Newsom 2004: Chapter Three)

111 The principle now states that “Management activities in high conservation value forests shall maintain or enhance the attributes which define such forests. Decisions regarding high conservation value forests shall always be considered in the context of the precautionary approach,” [Forest Stewardship Council, 1999 #2052].

112 The opposing view was raised in a number of personal interviews with environmental group officials (see Appendix 2)

113 The other economic member of the steering committee was a small woodlot owner.

114 These groups included the New Brunswick Endangered Species Coalition, the Margaree Environmental Society, First Nations, the Falls Brook Centre, and the Sierra Club of Canada.

115 In addition to Irving, G.P.I. Atlantic and B.A. Fraser Lumber Ltd had expressed early interest in the FSC standards network.

116 FSC-Canada’s central office was still in its organizational stages during most of the initial Maritimes drafting process.

117 Membership included officials from the Nova Scotia Woodlot Owners and Operators Association, the Falls Brook Centre, First Nations Forestry, G.P.I. Atlantic, B.A. Fraser Lumber Ltd., FSC CanadaJ.D. Irving, Margaree Environmental Society and the New Brunswick Endangered Species Coalition.

118 At this stage, the Canada Working Group required all future regional initiatives to create a four-house (economic, social, environment, and First Nations), and they also allowed the election of non-members to regional standards committees.

119 I wish to acknowledge financial support from the Social Sciences and Humanities Research Council of Canada, under the project "Policy Innovation and Management on the Eastern Continental Shelf: the Politics of Offshore Petroleum Development in Nova Scotia and Louisiana."

120 As a minor exception to this, small delivery systems carry small volumes of Canadian municipal water a few miles to adjacent American towns across the border. An example is the sale of water by the town of Coutts, Alberta, to the nearby community of Sweetgrass, Montana. See Scott, Olynyk and Renzetti (1986), p. 184. It is worth noting, in the context of the discussion below of delivered water prices, that the price charged for these exports (in 1982) was Cdn$0.42 per cubic meter.

121  Costs vary depending principally on the capacity of the tanker, the number of days consumed by the round trips, and the state of the oil tanker market. Moreover, these estimates cited do not include the cost of on- and off-loading facilities. For all of the foregoing estimates, see Feehan, pp. 13-15.

122  These figures compare reasonably well with other sources on water prices in the western United States. See Canadian Environmental Law Association (1993 p.99), which reported that, "prices paid for water in the Los Angeles area by various categories of water users in 1990 ranged from $362 to $857 per acre foot." For a more recent comparison, see NUS Consulting Group (2001), which records "national" (presumably average) prices (in $US/cubic meter) in selected countries, including 0.52 for the United States, 1.11 for the United Kingdom and 0.37 for Canada.


123 It is worth noting that, allowing for the broad-brush character of these estimates, the unit cost of delivery for this project over a fifty-year life-span has been calculated by the present author at US$0.68 per cubic meter (based on data provided by Judd).


124 The plausibility of this cost estimate may be measured against the cost projections in 1982 for a much more modest plan to transfer water from the Mississippi/Missouri drainage to the High Plains region from Texas to Nebraska, which the U.S Army Corps of Engineers estimated could run as high as US$0.64 per cubic meter (Scott, Olynyk and Renzetti 1986 p.177). Meanwhile, Judd also provided figures for the cost of agricultural water in the California market at the time at 5-to-10 times below the prevailing cost of urban water of only US$0.25-0.50 per cubic meter – in other words, pennies or fractions of pennies per cubic meter.

125  Scott, Olynyk and Renzetti (1986 p.179) similarly point to the manner in which regulatory and economic factors combined to undermine the viability of the Alaskan natural gas pipeline project aborted in the late 1970s: “This $40 billion project was half built when the U.S. importers belatedly discovered in the late 1970s that gas from contiguous states would be less expensive than Alaskan or Canadian supplies. This discovery has led to financing difficulties and project delays so that it is now uncertain when, or even if, the pipeline will be completed.”


126  Scott, Olynyk and Renzetti (1986 pp.205-24) contains a good overview of the cost-benefit calculations bearing on major water transmission systems, some of which touch on this conundrum. Elsewhere (pp.178-9) the authors makes the point that "the delivery of Canadian water...would be a very unattractive alternative to developing the political will to make better use of the water supplies already available in the south and southwestern United States." In other words, if water were priced at its market value, especially for agricultural uses, the United States would not have to worry about importing it.

127


 See McDougall 1991. The NAFTA provisions concerning energy regulation are further discussed below.


128 The obligation of the Government of Canada to extend an international minimum standard of treatment and expropriation to foreign investors is contained in Articles 1105 and 1110 of the NAFTA. In addition, NAFTA includes a “proportionality clause” (Article 315) which specifies that the government of a member country cannot reduce or restrict the export of a resource to another member country once the export flow has been established.

129


 Shrybman cites the possibility that foreign investors holding riparian rights or licences under federal or provincial permits and attempting to exercise them for purposes of bulk water exports "might assert a claim that any denial of the opportunity to do so represents "expropriation under the expansive terms of Article 1110. Alternatively, water use permits, which are silent with respect to the particular purpose for which the license was granted, might also give rise to claims under Chapter 11."

130


 See Table on “Alberta’s Exports”. Absolute numbers were rounded by the author.


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