NAFTA vs. CUSMA: Is Canada's water a good or a right?

• Author: Peerani, Aaida

Reading Time: 5 minutes

The impact of the new CUSMA on Canada's water, as compared to NAFTA's provisions, remains to be seen.

While Canada has 20% of the world's freshwater, less than half of this freshwater (7%) is renewable. The world, including our American neighbours, is struggling with water crises in many places. As Canadians, we should understand how our agreements with the U.S. impact our rights to and trade of water.

In Canada, the federal and provincial governments share responsibility over water. The Constitution Act (1867) (the "Constitution") does not list water under a specific level of government. Arguments exist for both levels of government having responsibility. First, under, section 109 of the Constitution, provinces have control over publicly-owned lands, mines, minerals and royalties. Control over natural resources falls to the provinces and presumably includes water. Provinces have responsibility over providing licenses to access and export water in bulk, and creating water management services.

However, the federal government has authority via section 91(2) of the Constitution to regulate trade and commerce, which includes entering into trade agreements. Moreover, the federal government has control over navigation and shipping (s. 91(10)), seacoasts and inland fisheries (s. 91(12)). The federal government also has significant powers over boundary and transboundary waters under treaties the British Empire signed on Canada's behalf, such as the Boundary Waters Treaty (1909). Lastly, the federal government controls national parks, First Nations land and the territories. Considering that 60% of our freshwater drains to the north, and that many rivers pass through First Nations lands, the federal government has significant say in allocating Canada's water resources.

The challenge of this dual responsibility is that different provincial policies for allocating water have created a fragmented approach at both levels of government. If an international trade dispute settlement process decides a provincial policy violates a trade agreement, this can have lasting effects on our ability to protect and preserve our water. We have seen this in cases started by investors against Canada under Chapter 11 of NAFTA (North American Free Trade Agreement). For an example, see the AbitibiBowater case.

NAFTA

In 2018, the federal government re-negotiated NAFTA into what is now known as the CUSMA (Canada-United States-Mexico Agreement). The...