U.S. President Donald Trump speaks at the White House, in Washington, on Feb. 5.Kent Nishimura/Reuters
Donald Trump wants to buy Greenland, own Gaza, take back ownership of the Panama Canal and turn Canada into the 51st state. The President is a liar and a con artist, but his desire to occupy vast parts of the planet does not seem a bluff or a negotiating tactic.
But why Canada? The United States dominates north-south trade and plays a leading role in many Canadian industries, including oil, mining, autos and retailing. It buys any product or commodity it wants from Canada with ease. Economically, if not politically, Canada is in effect the 51st state, has been forever. But there is one crucial commodity that the United States does not have access to: water.
Water may be the real reason, or one of the top reasons, propelling his desire to turn Canada into Minnesota North. Canadians represent 0.5 per cent of the globe’s population yet sit on 20 per cent or more of its fresh water. Vast tracts of the United States routinely suffer from water shortages, which are drying up rivers – the once mighty Colorado River no longer reaches the Pacific Ocean – shrinking aquifers beneath farmland and preventing water-intensive industries from building factories. Warming average temperatures will intensify the shortages.
There was a reason that Honda built one its largest manufacturing plants in Alliston, Ont., and not, say, California, and that reason was ample water piped in from nearby Georgian Bay.
Mr. Trump’s transaction-oriented brain knows that water availability translates into job availability. If Canada were forced to export water in bulk to the United States, Canada in effect would be exporting jobs and America absorbing them. In the fall, when he was campaigning, he called British Columbia “essentially a very large faucet” that could be used to overcome California’s perennial water deficit.
The President’s potential lunge for Canadian water is nothing new. The United States for decades has made on-and-off attempts to tap into Canadian water.
During the NAFTA negotiations in the early 1990s, various federal politicians claimed that Canada had a sovereign right to manage its own water. It wasn’t long before some clever lawyers, environmentalists and business people argued quite the opposite might be true. They said that water was not exempt from NAFTA’s trade list, and once you started shipping water across the border, the government would be powerless to stop you. Or, if it did, it would have to compensate you for the lost income.
Along came Nova Group, an unknown American company with an ambitious plan to siphon water from Lake Superior and send it by tanker to Asia. It obtained a permit from the Ontario government to do so. When the news broke, Canadian nationalists went berserk and Nova’s permit was withdrawn.
In 1999, Sun Belt Water, a California water-transportation company, threatened to hit the federal government with a suit claiming up to US$10.5-billion in compensation under NAFTA’s investment provisions. Sun Belt said its deal to export water from British Columbia to California by tanker was thwarted in the early 1990s when the province slapped a moratorium on bulk water exports. It argued that provinces are not allowed to halt the free trade of goods (Sun Belt filed a notice of intent to submit a claim but never followed through).
Various American companies have also tried to nab the water rights of Canadian paper mills, which have voracious water needs, with the goal of converting those rights into water-export licences. None of the attempts worked.
In Canada’s favour, Canadians have been united in their opposition to bulk water exports. That sentiment is codified in the Transboundary Waters Protection Act, which bans large-scale removal of water from waterways shared with the United States. And the successor of NAFTA, the United States-Mexico-Canada Agreement (USMCA), does not apply to water in its natural state. In other words, it is not listed as a tradable good.
But never mind. With Mr. Trump as President, international laws and treaties matter for little or nothing. Note that the Trump administration is launching sanctions against the International Criminal Court for having issued an arrest warrant for Israel Prime Minister Benjamin Netanyahu for alleged war crimes in Gaza.
Mr. Trump could cancel the Transboundary Waters Protection Act, which might allow him to divert or block U.S. rivers that flow into Canada, as does, for instance, the Red River, which reaches Manitoba from its headwaters in North Dakota and Minnesota. He could insist that USMCA be renegotiated to include water as a tradable good (USMCA as it stands terminates in June, 2026, so negotiations to recast it will start soon).
Or, if he determines that Canada has all the legal tools necessary to prevent bulk water exports, he could resort to brute force. Mr. Trump has agreed to hold off imposing 25-per-cent tariffs on Canada (and Mexico) until March 4. What if he insisted the tariffs are to take effect, or rise to 35 per cent or more, unless Canada listed water as a tradable good? At that point, Canada would have the choice between a prolonged and devastating recession, or giving Mr. Trump the water he wants. Nice little economy you have there, Canada; shame that your refusal to turn on the faucet could wreck it.