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Kitchener-Waterloo Record, Thursday, September 15, 2005

Trade pact cost us a bundle

by David Orchard

Across Canada the price of gasoline rose steadily over the summer. Recently it shot up another 30%. We were told that this unprecedented leap was because Hurricane Katrina in the Gulf of Mexico affected U.S. production.

Why does a storm in the U.S. drive up Canadian prices? There was no storm in Alberta. No drilling rigs were toppled in Saskatchewan. Yet Canadians are now paying up to $1.44 a litre or over $6 per gallon for gasoline, more than in most places in the U.S. How can this be? Isn't Canada an oil and gas producer, the largest foreign source in fact for the U.S.?

The answer is spelled FTA and NAFTA. Not long ago we had a made-in-Canada price for energy, Canadian oil and gas companies, and a 25 year reserve of gas set aside for Canada's future needs. A cold country, with vast distances, quite reasonably gave its own citizens a better price for oil and gas than it charged for export -- just as Saudi Arabia, Venezuela and other oil exporting countries do for their citizens.

Abundant energy was Canada's advantage in an era of world competition. China has cheap labour, the U.S. a warmer climate. Canada had energy.

All of that changed in 1988 when Canada, for reasons unknown to most of its citizens, signed the Canada-U.S. free trade agreement (FTA) and with the stroke of a pen gave away control of its energy.

The energy terms of the FTA bear repeating.

Canada abolished its reserve requirements for its own future needs -- so all of our reserves can now be exported -- and agreed to never charge the U.S. more for exports of energy than it charged Canadians. In addition, if Canada faced a shortage of any form of energy it would continue to send the same proportion of its energy to the U.S., even if Canadians went short themselves.

It is safe to say that no other country in the world has, in time of peace, signed away so completely its energy resources, present and future.

In 1994, the FTA was expanded to NAFTA to include Mexico. Mexico refused to sign the energy clauses Canada had signed.

Those of us who spoke out against the FTA pointed out this was not free trade, but forced trade, and warned the agreement would have profound effects on our future, our energy security and our sovereignty.

We were accused of being "fearmongers," of being "anti-trade," of being "protectionist" and so on. Now even those who hurled those accusations are realizing they have been standing on quicksand.

The results stare Canadians in the face and hit their wallets every time they fill their cars, trucks, industrial or agricultural machines with fuel.

As Canada exports more and more oil and gas -- it has by-passed Saudi Arabia as the largest supplier to the U.S. -- some still attempt to justify these agreements. However, under the FTA, the U.S., now taking 60 % plus of our production, will, when the shortage comes, have the right to 60% (or more!) in perpetuity -- Canadians will have the right to whatever is left.

Oh, but the Alberta tar sands are there, we are assured. Rarely mentioned is that the petroleum coming out of the tar sands is going south to the U.S. virtually royalty free and that large reserves of increasingly valuable natural gas are being burned to process this tar sands production. In other words, Canada is actually subsidizing -- at great financial and environmental cost -- the giveaway of a precious finite resource.

The NAFTA promise of secure access to the U.S. market was never anything but an illusion and nothing but shreds remain of the guarantee of an end to arbitrary U.S. tariffs. Yet the take over of our industries continues apace -- from energy to beef, from manufacturing to retail. It's time to wake up.

We need to set up a coast to coast comprehensive review of the FTA and NAFTA. This review should examine in detail the effects of these agreements on our economy and sovereignty and then make an informed recommendation about the future.

Integrating our energy and our economy into that of the U.S. means being subject to U.S. ownership, decisions, priorities and prices. It means losing the capacity to direct our future and our own resources in our national interest.

We don't have to remain tied into agreements that will see our energy prices driven through the roof, or watch our economy and control of our destiny move into foreign hands.

Some insist that Canada continue to suffer and crawl, but it is not necessary. Both the FTA and NAFTA have withdrawal clauses that enable Canada, with six months notice, to withdraw without penalty or conditions and then revert back to trading with the U.S. under existing multilateral trade rules.

Let's not wait till our industries and agriculture become completely uncompetitive or until Canadians are left begging for their own energy at 40░ below zero. As we watch the catastrophic events unfold in the Gulf of Mexico it is clear that Canada too has important decisions to make to safeguard its future.


David Orchard is the author of The Fight for Canada - Four Centuries of Resistance to American Expansionism, and ran for the leadership of the federal Progressive Conservative Party in 1998 and 2003. He farms at Borden, SK and can be reached at tel (306) 652-7095, e-mail: davidorchard@sasktel.net, http://www.davidorchard.com

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