Exporting bulk water is the wrong way to go

Canada should use its abundant water to generate economic wealth

EAU - Commerce de l'eau

KAREL MAYRAND and JAY RITCHLIN - Water exports are a recurring, ever-controversial theme in Canada. From Soviet-style schemes such as the 1960s Grand Canal proposal to divert James Bay water to the United States, to more recent commercial plans to ship water from Newfoundland's Gisborne Lake and Ontario's Lake Superior, dozens of failed attempts to export water have generated thousands of pages of debate.
At a critical time when conserving our freshwater supply and safeguarding our aquatic ecosystems should be of paramount importance, the Montreal Economic Institute - a Montreal-based free-market advocacy group - is reviving this debate once again.
According to the UN, two thirds of humans will face water scarcity within a generation. The combined effect of population growth, the depletion of water resources and climate change is driving this trend. Canada receives seven per cent of the world's renewable freshwater supplies, but contains less than half of one per cent of the world's population. At first sight, exporting water from a water-rich country to quench a thirsty planet makes sense. But does it really?
A recent article in Scientific American lists five solutions to the global water crisis: water pricing; improved, more efficient irrigation; low-water sanitation; virtual water exports; and desalination of sea water. Interestingly, water imports/exports fails to make the list. This is not surprising.
The economic case for exporting water still has to be made. Moving large quantities of water over long distances, whether by pipeline, ship or road, is expensive and the cost increases exponentially based on quantity, distance and the price of fuel. The price of water at the end of the pipe is likely to be much higher than alternatives such as water-saving technologies, demand management, or desalinisation. It is clear that any large-scale water-diversion project would need to be massively subsidized.
Moreover, exporting water is a low-added-value activity that would not create many jobs or economic opportunities. Exporting virtual water (water embedded in the goods and services we export) makes much more sense. For example, producing a kilogram of wheat requires 1,000 litres of water. Our abundant water is a key comparative advantage for Canada - provided that we manage it sustainably. Why would we want to give it away?
Trading water also carries the risk of losing control over our own resources. There is a great deal of uncertainty as to the status of water in the North American Free Trade Agreement. Some fear that if we start exporting it, water might be considered a traded natural resource falling under the purview of the agreement. This would mean that once we open the tap, NAFTA provisions would make it virtually impossible to close.
In practice, this means that Canadians would have to compete with other water users across the continent in the allocation of resources within our own watersheds. NAFTA could confer rights to water users and investors located thousands of kilometres from a Canadian watershed. It would also place limits to the capacity of the federal and provincial governments to manage and protect our water resources.
Perhaps the most worrying aspect of water exports is their potential impact on watersheds and ecosystems. Proponents of water exports base their rationale on the notion of surplus water that is lost to the sea and the fact that water shipments would be equivalent to a drop in a bucket.
But the science is clear: There is no such thing as surplus water. Ecosystems and humans need all available water. The impact of large water diversions or the cumulative impact of numerous water withdrawals will certainly affect our water resources and ecosystems. This impact could be devastating in some areas. The risk is even greater when one considers the likely impact of climate change on our water resources, especially in the Great Lakes basin, which is so vulnerable to evaporation.
Exporting water therefore carries important social and environmental risks, as well as limited potential economic benefits. Canada has historically used its abundant water resources to generate economic wealth. In the process we have become key exporters of virtual water, but we have seen our natural resources depleted and polluted, and our aquatic ecosystems altered by decades of neglect.
Instead of trying to export bulk water, we should take on the national challenge of restoring this key Canadian resource for the benefit of future generations.
Karel Mayrand is the David Suzuki Foundation's director-general for Quebec. Jay Ritchlin is the foundation's director for marine and freshwater conservation.

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