Ottawa Citizen, Friday, August 19, 2005 (also
published in the Kitchener-Waterloo Record,
August 18, 2005; Vancouver Sun and Saskatoon
StarPhoenix, August 19, 2005)
The end of NAFTA: Canada signed away its energy and
got nothing in return; the U.S. response to a recent
lumber ruling shows it's time to get out
by David Orchard
For two decades those of us critical of the Canada-U.S.
free-trade agreement (FTA), and its successor NAFTA,
have pointed out that these agreements didn't give us
free trade, but would cost us a large part of our
sovereignty and national well-being.
Today, even promoters of the FTA as a "rules based"
nirvana of "secure access" to the U.S. market -- and
part of a move toward global "free trade" -- have been
forced to face hard realities.
A couple of recent examples deserve examination.
Recently, the China National Offshore Oil Corp. (CNOOC)
was forced by what it called "unprecedented political
opposition" in Washington to withdraw its open-market
bid to buy California-based Unocal Corp. Congress saw
the deal as a threat to American "energy security."
U.S.-based Chevron is now almost certain to pick up
Unocal -- for a substantially lower bid than that
offered by CNOOC.
Canadians, on the other hand, living in a larger,
colder country with a critical dependence on energy,
have signed away under the free-trade agreements our
energy security and -- even though our industry is far
more foreign-controlled than that of the U.S. -- are
told repeatedly by the government that we no longer have
any need to own or control our oil and gas reserves.
While both other NAFTA countries have national energy
policies focused on support for domestic ownership, last
fall our finance minister, Ralph Goodale, told us it was
time for Canada to get out of the energy business. The
government announced the sale of its remaining Petro
Canada shares at the bargain-basement price of $64.50 --
a fire sale begun in 1991, when shares now pushing $100
were sold for $13; more followed in 1996 at $20.
This month in British Columbia -- in the biggest
foreign takeover since the 2002 purchase by U.S.-based
Duke Energy of Westcoast Energy -- Texas-based Kinder
Morgan picked up Terasen Inc., the province's largest
natural gas distribution company and the biggest
private-sector provider of water services in Western
Canada. All of Terasen's pipelines, refineries, oil, gas
and water operations are included in the deal,
essentially stripping B.C. of domestic control of its
At a time of unprecedented energy hunger, as
countries around the world scramble to secure energy
supplies, and our prices escalate, Canadians are treated
to an ongoing mantra about how we should be pleased that
foreigners are buying up our energy industry and
reserves. Federal Trade Minister Jim Peterson recently
expressed satisfaction: "I would not be surprised if
people from around the world wanted access to our energy
or saw our energy companies as very good investments."
While spending billions and passing sweeping laws
supposedly to protect against terrorist threats, real or
imagined, our government is doing nothing to maintain
domestic control over our rapidly dwindling
non-renewable reserves of oil and natural gas, leading
to the predictable and very real threat of skyrocketing
energy prices to Canadian industry, agriculture and
While the so-called free-trade agreements handed
Canada's ever-more-valuable energy over to U.S. industry
through the forced proportional sharing and pricing
clauses of the FTA (which Mexico refused to sign), did
we get the secure access and rules-based regime that
made it all worthwhile?
Maybe ask the lumber industry. After repeated, and
ignored, FTA and NAFTA rulings in Canada's favour, where
are we? A U.S. tariff has netted $5 billion. The U.S.
response to the latest NAFTA panel ordering it to get
rid of the tariff and return the $5 billion has been a
yawn and a succinct rejection.
In a further mockery of free trade, under U.S. law,
money from the tariffs collected by the U.S. is
distributed to the companies initiating the challenges
against Canada's industries -- an ongoing incentive for
U.S. companies to continue targeting Canadian exports
and attempting to impose tariffs on them.
When the U.S. speaks of its national security, the
Canadian government salutes almost automatically, but
who is protecting Canada's national interest?
Chasing the utopian dream of secure access to the
U.S. economy has devastated our livestock industry, led
to almost total U.S. ownership of our meat packing
capacity and to repeated U.S. trade challenges and
unprecedented tariffs on our grain and lumber, seen
close to 20,000 Canadian companies (including the
ownership of entire industries) move into U.S. hands in
the last two decades, and left us holding a bag of ashes
instead of reaping the rewards of our abundant energy
It is clear that the U.S. has pulled out of NAFTA.
This means our energy resources are once again ours, as
is our ability to determine our course in the world. We
have everything we need to do so, except political
leadership not afraid to give Canadians a direction of
which we can all be proud and which will provide real
security in times ahead.
David Orchard, author of The Fight for
Canada -- Four Centuries of Resistance to American
Expansionism, ran for the leadership of the federal
Progressive Conservative Party in 1998 and 2003. He can
be reached at