Five Things You Should Know About Water
On December 4, 1998, Sun Belt Water, Inc. of Santa Barbara, became the third U.S. company in a year to launch a lawsuit against Canada under the North American Free Trade Agreement (NAFTA). Sun Belt is suing Canada because of an earlier British Columbia decision preventing the company from exporting billions of litres of freshwater from B.C. to California. The case is important, not only because it demonstrates - again - the power of foreign businesses to sue our government under NAFTA, but also because it highlights mounting efforts by business to privatize and export Canadian freshwater abroad - efforts the federal government appears unwilling (or unable) to stop.
1 A global water crisis
Growing numbers of the world's people are living in areas where freshwater is a scarce resource, creating a global water crisis. Canada holds 20% of the world's supply of freshwater and investors are proposing to export and sell bulk quantities of it abroad for profit. None of the schemes proposed would help people who lack access to sustainable supplies of clean water. Water shipped abroad would be brought only by the few who could pay for it. Drought-stricken nations and the poor would be least able to afford it. Furthermore, countries that import Canadian water would be less inclined to find better, local solutions to their water problems.
2 Priming the privatization pump
Investors see water as the oil of the next century. Although Canada's freshwater is publicly owned and controlled, increasingly private companies are vying for control of water treatment, delivery and sewage services. Some municipalities are exploring public-private partnerships in the provision of water services. The Ontario Government has been pushing water privatization for several years.
But privatization comes at a price. In England and Wales, where water services were privatized in the late 1980s, customers have seen their rates soar, water shortages have been severe, and thousands of low-income people have had their water disconnected, raising serious concerns about the public health consequences. Little has been reinvested in the aging infrastructure, and the actual savings from privatization - the result of massive layoffs, pay cuts and union busting - have been poured into lavish executive salaries, high shareholders dividends and capital to buy other utilities worldwide.
3 Corporate water giants
France, an even earlier convert to water privatization, has had similar experiences, spawning in the process their own corporate water giants. Lyonnaise Des Eaux (LDE), one of the world's biggest promoters of water privatization, owns Degremont Infilco Ltee of Lachine, Quebec, which supplies water treatment facilities to many municipalities. It also owns most of the second largest water utility in the U.S., United Water Resources. Many Worry that, under free trade, if water is allowed to be privatized and exported to the U.S., we won't be able to turn the tap off and companies with large holdings in the U.S., like LDE, will be more concerned with healthy profits than healthy drinking water for Canadians.
Canadian Perspectives, Winter 1999