Interbasin Water Transfers after NAFTA: IS WATER A COMMODITY OR ECOLOGICAL RESOURCE?

I. Introduction

As demand for fresh water escalates in the southwestern United States and Mexico, Canada's water resources may be drained, if proponents of interbasin water transfers have their way. Continent-wide water transfer proposals, initiated by engineers in the 1960's, are being revisited as possible solutions to water scarcity in the desert southwest. Continuing development in the region, coupled with the drought of the 1980's, tax the existing supply beyond sustainable levels. As a result, Canada's abundant fresh water resources may regrettably provide a quick fix, while the harder tasks of improved water-management and better land-use planning are ignored.

Fueling the renewed interest in international water transfer projects is the pending North American Free Trade Agreement [NAFTA]. NAFTA and the US-Canada Free Trade Agreement of 1988 [FTA] essentially prevent Canada or any of her provinces from placing restrictions on the export of water. The trade agreements thus provide new hope for developers, agribusiness and policy makers anxious to build a continental water system.

This brief memorandum underlines the need for the wise management and conservation of North America's fresh water resources. Moreover, it seeks to unite concerned groups in a continent-wide network aimed at monitoring and preventing efforts to divert Canada's water resources to the southwestern United States and Mexico. Recent trends indicate that commercial interests, which view water not as a dwindling ecological resource but merely as a commodity, are successfully lobbying policy makers to resurrect the interbasin water schemes at the expense of the continent's hydrological integrity. Should Canada, the U.S. and Mexico enact NAFTA, environmentalists fear that water's essential ecological role will be sacrificed for the sake of unsustainable growth in arid regions of the continent.

The next section of this memorandum briefly describes the primary continent-wide water transfer projects still under consideration, such as the North American Water and Power Alliance [NAWAPA]. The third section discusses relevant trade law provisions, including FPA, NAFTA and the General Agreement on Tariffs and Trade [GATT]. The fourth section discusses other trends making the construction of large-scale transfer projects more likely. The final section offers recommendations for future activities to move us from the current myopic policy patchwork to an ecologically-sounder, conservation-oriented water policy.

II. Major Interbasin Water Transfer Proposals

During the 1960's, engineers drafted several proposals for massive water projects to transfer large quantities of fresh water from Canada to the southwestern U.S. Canada has twice as much surface and underground fresh water as the U.S., whilee comprised of one-tenth of the U.S.,'s population and industry. Because water is needed in the southwestern U.S. in quantities greater than traditional modes of transportation, such as trucks or tankers, could feasibly handle, hydrological engineers have dreamed of shipping water via massive dams, canals and pipelines.

Despite gaining widespread initial support, the proposals succumbed to economic and political realities and were dropped. *They have never been completely shelved, however.* Many observers believe that some recent water development projects - for example, the Oldman River dam in Alberta - are part of an attempt to construct these larger schemes piece-by- piece.
The three most ambitious as well as environmentally damaging projects that have been proposed - the North American Water and Power Alliance [NAWAPA], the Great Replenishment and Northern Development Canal [GRAND Canal], and the Alaska-California Subsea pipeline project - are discussed briefly below. [footnote in original: There are several other schemes, including the North Thompson or "Clancey Diversion" project to divert water from British Columbia to California, the "Eco-Vision" project in Nevada, the diversion of the Columbia River to California, and a major interbasin transfer project in Kansas. These are not adddressed in detail because they can be considered as simply down-sized versions, or components, of the larger schemes discussed in this paper]

1. The North American Water and Power Alliance [NAWAPA]

NAWAPA was first proposed in 1964 by the Ralph Parsons Engineering Company from Pasadena, California. The project contemplates damming virtually every major river in Alaska and British Columbia, including the Yukon, Susitna, Tanana, Skeena, Peace, Churchill, MacKenzie and Fraser rivers. The "excess" water would be diverted into the five-hundred mile, natural depression known as the Rocky Mountain Trench that runs the length of British Columbia. The depression would store up to 400 million acre feet of water. [footnote in original: An acre-foot of water is the quantity of water necessary to cover one acre with one foot of water. One acre-foot equals 325,851 gallons, enough to sustain two average U.S. households for one year]
Water would move down several different paths from the reservoir. From the northern end, a canal would run southeast, linking with the Great Lakes and the Mississippi River. Water level in the Great Lakes would rise; hydroelectric output at Niagara Falls could increase and ocean-going vessels would move up the Mississippi to St. Louis. Some water would be shunted off toward the Columbia Basin to produce additional electricity near the southern end of the reservoir.

Most of the water, however, would make the long journey southward and travel along both sides of the Rockies towards the Great Plains and to the southwestern deserts. Idaho would receive 2.3 million acre-feet; Texas, 11.7 million; California, 13.9 million; and Mexico 20 million.

The plan, monumental and breathtaking in its scope, would be the largest engineering project in the world. Although initially NAWAPA picked up some influential supporters, it eventually stalled because of social, environmental, economic and political opposition. The estimated cost of the project was between $100 billion and $200 dollars, and could not be considered cost- effective under any reasonable estimate. [footnote in original: Closer scrutiny of the economic arguments is now warranted, especially in light of more realistic water-pricing policies, increased water scarcity and the elimination of political obstacles to the water transfers. As the marginal costs of supplying the Southwest with water from other sources increase, the relative economic merit of the transfer schemes improves] The plan also emerged just before the first major upwelling of environmental concern in the 1970's. Its environmental consequences would be virtually unimaginable, flooding thousands of miles of wilderness, and displacing hundreds of indigenous peoples.

One of the important reasons for NAWAP's inability to gain support initially was that the requisite level of international cooperation seemed impossible. NAFTA, however, has changed all that. As discussed in greater detail below in Part III below, if NAFTA is implemented, it will remove virtually all of the international political obstacles to large-scale water-transfers - and make it very difficult to prevent commencement of projects like NAWAPA through national or provincial regulations.

2. The Great Replenishment and Northern Development Canal [GRAND Canal]

The GRAND Canal is eastern Canada's version of NAPAWA. Indeed, the two projects could be interconnected in time. The GRAND Canal scheme was first conceived in the 1950's by Thomas Kierans, founder and president of the GRAND Canal Co. Ltd. *The project is still very much alive*, and has been backed at times by many of Canada's leading engineering firms, including Bechtel of Canada and Lavalin; the massive utility, Hydro- Quebec; Quebec Premier Robert Bourassa; and Prime Minister Mulroney.

The GRAND Canal scheme contemplates construction of a huge dike across the northern end of James Bay, an arm of Hudson Bay. The many rivers feeding into the bay would fill a reservoir the size of Lake Ontario. The water would then be channeled into the Great Lakes, where it could be pumped into Saskatchewan's Lake Diefenbaker and other points in western North America. The total estimated cost in 1985 was $100 billion.

The GRAND Canal can be seen as an extension of Quebec's efforts to become a major supplier and exporter of hydro-electricity. The controversial LaGrande River hydroelectric projects, and the other James Bay projects under construction by Hydro-Quebec, are significant steps toward realization of a GRAND Canal project. Although built primarily for hydro-electric power generation, the $20 billion LaGrande complex is integral to any scheme for sending James Bay water south. The next stages of Hydro-Quebec's plans, which it is currently implementing, involve damming or diverting all the remaining major rivers flowing into James Bay by the year 2001, at a cost of $44 billion. After completion of that phase, all that will be necessary to complete the plan will be the canals to the Great Lakes, a relatively inexpensive addition [footnote in original: For more on the James Bay projects, see Sean McCutcheon, ELECTRIC RIVERS: THE STORY OF THE JAMES BAY PROJECT {1991}] Moreover, the high energy needs for pumping water west and south will provide a welcome demand and justification for the hydroelectric facilities.

3. The Alaska-California Subsea Pipeline Project

Alaska's governor Walter Hickel has recently been promoting an undersea pipeline 1400-2100 miles long to transport over four million acre-feet of Alaskan water to Lake Shasta in northern California.[footnote in original: The Alaska-California subsea pipeline is not directly affected by NAFTA. As discussed below, NAFTA has essentially streamlined the diplomatic channels for transferring water, making a Canada-to- California pipeline more likely. This could dramatically reduce the estimated cost of a pipeline project, making it far more economically feasible] The federal Office of Technology Assessment [OTA] was sufficiently interested to organize a workshop and conduct an investigation into the economic feasibility of the project [U.S. Office of Technology Assessment, ALASKAN WATER FOR CALIFORNIA? THE SUBSEA PIPELINE OPTION - Background Paper, 1992] The OTA study concluded that at $110 billion, the pipeline could not compete economically with other options available to California. The delivered water would cost between $3000 to $4000 per acre foot [$2.40-$3.25 per cubic metre]

The pipeline option attracts some supporters in part because it may present less environmental damage than other water transfer schemes. As contemplated, the pipeline would take water from the mouth of the Copper or Stikine rivers. Thus, it would probably require smaller storage reservoirs to regulate the flow of the rivers. Moreover, the riperian zones and the river flows would be affected less than if water were diverted from the headwaters. Nonetheless, the pipeline could change coastal salinity and temperature, thus endangering critical salmon and marine mammal habitats.

Although the report concluded that the pipeline was not economically competitive with other options currently available to California and that "California does not currently need the large volumes of imported water that could justify a major inter-basin transfer," the report leaves the reader with the uneasy feeling that it is only a matter of time before large-scale transfers become necessary. After emphasizing the role global warming could play, the report analyses the fifty-year outlook in the following way:

"Although the current trend is away from interregional water transfers, at some point, then, such schemes could again receive serious attention. A subsea pipeline to transport water from Alaska, diverting some water from the Columbia River or various proposals for diverting water from western Canada's rivers, as well as other expensive options such as tankering water, might then be considered. Moreover, although the Eel and Klamath Rivers in northern California are now part of the National Wild ans Scenic River System, they too could be tapped if current law is changed in response to concerns over global climate change." [p.11]

This conclusion for the longer term [fifty years] should alarm environmentalists. None of the long- term options the report emphasizes offers an environmentally benign future. That a federal report could so easily contemplate withdrawing two rivers from the protection of the wild and scenic designations is remarkable, and illustrates once again the single-minded view of water developers.

III. NAFTA and Large Scale Water Exports From Canada

*Some of the political and economic obstacles that have effectively blocked NAWAPA and the other massive inter-basin transfer schemes no longer exist in the current climate that has spawned NAFTA*. The goal of NAFTA and the 1988 FTA is to create a North American free trade bloc, so that goods and services can flow freely through the continent. *Among the goods and services covered by the agreements are natural resources such as water. As a result, local, provincial or even national attempts to prevent or restrict Canadian water exports to the U.S. or Mexico would be subject to the review of an international panal. As currently contemplated, that panel would not be bound by any environmental standards and its proceedings and final rulings may both be kept secret*. Efforts to protect instream values will likely be subordinated to international economic views *of water as a commodity*. Moreover, international agencies have historically been more difficult for environmentalists to influence than national or local authorities. In any event, understanding how the free trade agreements affect water exports will now be a necessary first step in mounting any effective campaign.

1. The U.S.-Canada Free Trade Agreement [FTA]
*The water export issue arose initially in the late 1980's during the debate over the FTA, which appears to preempt Canada from taking any unilateral actions to restrict large-scale water exports*. FTA, like NAFTA discussed below, prohibits any party from placing export restrictions [including, for example, export taxes or quotas] on any goods subject to its provisions. Water implicitly qualifies as a "good" under the FTA, because it was not specifically excluded as were other natural resources. The conclusion that water is includedunder FTA's general provisions is also supported by the inclusion of natural waters in the tariff provisions [tariff item 22.01.9].

*Although the Canadian government disputes that it has lost control of its water exports due to the FTA, Canada passed an amendment to its FTA implementing legislation that specifically states nothing in the legislation or the FTA applies to water. The implementing legislation, however, would not be considered by an FTA dispute panel if the U.S. were to complain that Canada was violating the FTA by withholding water exports. The FTA dispute panel would have good cause to rule in the favour of the U.S. if Canada places an export restriction on water. Canada need not automatically submit to such a ruling, but it might be subjected to trade retaliation by the U.S. if it chose not to comply. Such retaliation, or the threat of such retaliation, may be enough to force the Canadian government to allow large scale water exports*.

2. The North American Free Trade Agreement [NAFTA]

NAFTA is in many ways just an extension of the FTA. It, too, opens the possibility that Canada would be legally bound to make water available to the U.S. under the same conditions as water is available inside Canada. Despite the controversy that arose over the FTA, Canadian negotiators did not seek a specific exemption in NAFTA for water. According to a government spokesman, they reasoned that Canada's Federal Water Policy of 1987, likely NAFTA implementing legislation, and other solely Canadian statements rejecting these exports insulate Canada's water resources from the NAFTA regime. Moreover, all of the parties to NAFTA supposedly understood that large-scale water exports were not included in the negotiations, according to the spokesman. Additionally, asking for a specific water exemption might have provoked counter-offers from the U.S. and Mexican negotiators for their own additional exemptions. *As a result, the actual text of NAFTA supports the claim that large-scale transfers of Canadian water to the U.S. and Mexico cannot be prevented on the national or local level*. First, consistent with the FTA's tariff treatment of water, *NAFTA considers water as it wood any other good by including it in its tariff schedules*. The other relevant NAFTA provisions and explanations are discussed below.

A] The Principle of National Treatment

One of the basic principles of free trade is that similar goods and services should be treated similarly whether they are being traded domestically or internationally. This principle of national treatment is embodied in Articles 102 and 301 of NAFTA. Each states that each party, province or state must accord no less favourable treatment to goods and services of other parties than the most favourable treatment accorded to any similar, directly competitive or substitutable goods and services. Article 102 makes national treatment one of the underlying objectives of NAFTA. Article 301 specifically accords this national treatment "to the goods of another Party in accordance with national treatment provisions of Article III of the [GATT]." As GATT tariff schedules typically include all types of water, *including large-scale exports*, and because both NAFTA and the FTA *specifically include water in their tariff provisions*, NAFTA's national treatment principle appears to apply to large-scale water exports. [footnote in original: That NAFTA's national treatment principle applies to water exports is buttressed by Canada's chosen exceptions to national treatment in NAFTA, Annex 301.3, which apply to exports]

B] The Prohibitions of Import and Export Restrictions

Another major goal of the trade agreements is to eliminate import and export restrictions between the parties. Under Article 309, except as provided in NAFTA, *"no Party shall adopt or maintain any prohibition or restriction...on the exportation or sale for export of any good destined for the territory of another party"*. *This provision prevents Canada from restricting exports of its water, whether large-scale or otherwise, regardless of the intent of the parties that negotiated the agreement or the unilateral proclamations of an individual government.*

The Grand Canal Corporation, the Cree, and James Bay

The VANCOUVER PROVINCE ran an article on Shelley Ann Clark's warnings with regard to the Free Trade Agreement, the Quebec Referendum, Canadian water exports and the Grand Canal Corporation which appeared in or around the second week of March, 1994 - the *only* article I'm aware of as having ever appeared in the Canadian press on this astonishing story!
Charlie Greenwell, of CJOH-TV in Ottawa interviewed Shelly Ann over a year ago, in the presence of John Bowlby [of Citizens Against Bad Law], and was shown proof of certain of her assertions concerning the "doctored" Free Trade Agreement briefing books which were shown to the Provincial Premiers to ensure that they supported the final Agreement. Water, Energy, Subsidies, Agriculture, Minerals, Harmonization of Social Policies...the "doctored" books said one thing, the actual Agreement said another. The secession of Quebec, water exports via Grand Canal, and Continental Union by 2005 were all chronologically detailed in an accompanying but unreleased Letter of Implementation.

As an aside, check out CONSTITUTIONAL CRACK-UP: CANADA AND THE COMING SHOWDOWN WITH QUEBEC, by William Gairdner [your library may have a copy of the review of it featured in the TORONTO SUN, 2 May 1994, headlined CIVIL WAR IN QUEBEC?]. He's righter than he thinks! And you'll also find it profitable to quickly scan BREAKUP, by Lansing Lamont, Canadian correspondent for TIME magazine. Note his personal and affiliative data. Note also his apparently accurate assertions that Quebec will leave, that the Cree will attempt to destroy the James Bay hydro-generating facilities, and that the 10th Mountain Division from New York's massive Fort Drum would intervene as "peacekeepers" [the 10th Mountain is a 10,000-man shock assault Division: Fort Drum lies just across Lake Ontario from Kingston]. He writes as one who's seen the script, although he's less detailed than he could have been: the 10th Mountain Division is currently being tutored in French!
The following quotes and exerpts ought to provide you with a good springboard for further research into the topic of GRAND CANAL. Good hunting!

(the following Southam News piece is taken from the March 1991 issue of "World Press Review" and is by Mr. Ken MacQueen)
Is Canada quietly preparing the plumbing for a $100 billion plan to sell northern fresh water to the Canadian Prairie Provinces, the US, and Mexico? Proponents of the proposed second phase of the James Bay hydroelectric project in Quebec, and of the Rafferty-Alameda dams under construction in the province of Saskatchewan, say that they are separate provincial mega-projects. Others note that they could also be vital components of the biggest pipe dream of them all: the Great Recycling and North Development (GRAND) Canal water-transfer project.The proposed GRAND Canal project, backed by some of Canada's top engineering firms, would fill James Bay with fresh water, pump this water into the Great Lakes, and transfer some of it across the Prairies to the Lake Diefenbaker reservoir in Saskatchewan. From there, the water would head south through the Rafferty-Alameda dams into a network of US rivers."

"To believe that it's coincidence just stretches credibility," says Wendy Holm, a Vancouver resource economist and editor of the book "Water and Free Trade." [required reading] "There has to be a connection between the GRAND Canal, the James Bay hydroelectric project, and the Rafferty-Alameda dams."

The GRAND Canal proposal has been evolving since the late 1950s, when it was conceived by mining engineer Tom Kierans, founder and president of Canada's Grand Canal Co. Ltd. Both provincial projects, Kierans says, "could be integral components of the jigsaw puzzle... They are being put in the right place, except those that are putting them there don't really know that they're part of a much bigger picture." Unfortunately, he says, there is no political agenda to complete his project. "I don't think that there is anybody who is that Machiavellian... I don't think that there is anybody that smart."

Kierans says that his project would "recycle" the fresh water now lost when rivers flow into the salt water of James and Hudson bays. "James Bay's recycled run-off can relieve the water-supply crisis and enrich environments for 160 million people in both nations. It can add 10 % to Canada's fresh water," Kierans claimed in a 1989 presentation to American water regulators in Boston. Global warming, droughts and depleted water reserves in the prairies, California and the US Midwest make the GRAND project inevitable, he says. Now, Kierans says, individual pieces of the project are coming together. Lake Diefenbaker became operational in 1968, and the controversial Rafferty-Alameda dams in southern Saskatchewan - which are being constructed with substantial American financing - would help to regulate the release of water into the Souris and Missouri river systems, Kierans says.

The completed first phase of the James Bay project in northern Quebec and the proposed second phase "are essential to our project," he says, because they would generate the massive amounts of power needed to pump the river down south. As important, the dams and river diversions, which would flood an area the size of Lake Erie, are necessary to regulate fresh-water flows into James Bay. The second stage of the James Bay project has yet to receive final approval.
Kierans' plan has financing or endorsements from such giant engineering firms as Bechtel of Canada Ltd. [subsidiary of a massive US firm], the SNC Group, and Lavalin Inc. In 1985, it also won backing from Quebec Premier Robert Bourassa and Prime Minister Brian Mulroney. Simon Reisman, a consultant and lobbyist who served as Canada's negotiator for the Canada-US Free Trade Agreement, has also backed it but has said repeatedly that water was never on the table during the later free-trade negotiations.

Donald Gamble, executive director of the independent Rawson Academy of Aquatic Science in Ottawa, has met frequently with Kierans to discuss and debate his proposal. Gamble says that the project has a surface, almost visceral, appeal to engineers, but on "pure, hard economic analysis... the project is nuts. It just doesn't make sense."
Gamble says that although the Saskatchewan and Quebec projects do link together, the project "is not on" politically because of its massive scope and huge environmental impact. But he warns that the political posture against water export could change. "If global warming turns out to be what we think it is by the beginning of the next century," he says, "no price will be too high for water."

Some Quick Quotes on American Interest in Canada's Water

Jim Wright, Democratic congressman from Texas, in his 1966 book "The Coming Water Famine": "There is to the north of us a stupendous supply of water...enough to satisfy our predictable wants for years to come. We need the water. We need to develop a means of getting that water."

Rep. Fred Grandy (R., IA) during a CNN interview on June 28, 1988: "I think one of the reasons the United States wants to negotiate a free trade agreement with Canada is became Canada has the water resources that this country is eventually going to need."

US Ambassador Clayton Yeutter (yait-ter) during a May 1, 1988 interview on CTV's "Question Period": "In either case it will have to be negotiated between the two countries and so I don't think anybody in Canada should be concerned that 'our water is now going to be committed to the Americans.' Obviously that will not happen except by deliberate decisions of the government of Canada." [but has it already happened? read on!]

"Environment Canada was lobbying hard, within caucus, to get an exemption for bulk water under the free trade agreement. Other sections in this book ["Water and Free Trade"] note the remarks by Frank Quinn, senior civil servant with Environment Canada that "in the eleventh hour, we didn't get all the changes we wanted." This is commonly interpreted to mean that water was initially exempt, but in the final stages this exemption was withdrawn.

This is consistent with information obtained through my involvement in the BCSSBG [British Columbia "Small" Small Business Group, which tried to protect Canada's water rights during the negotiation of the Free Trade Agreement] lobby. In December, one day after the final text was released, I phoned Chris Thomas, who had been Carney's [Patricia Carney, Tory MP involved in FTA negotiation] international trade advisor during the negotiations. When I queried him concerning the legal status of bulk water under the free trade agreement, Mr. Thomas responded, in a somewhat exasperated tone, "It's exempt. It's right there in black and white. Water is exempt from the FTA."

When asked to find the exemption, Mr. Thomas could not, of course,do so. After searching the text, Mr. Thomas replied "I don't know what happened. We discussed it; it should be there. I thought it was there."

The fact that there would seem to have been an explicit exemption for water in the deal until the eleventh hour is further confirmed by remarks initially made by Pat Carney when first queried by myself on this matter during the course of a Neighborhood Night held at the False Creek Community Center in Vancouver on 17 February 1988. "Water is exempt from the deal- it's right in the agreement," said Carney. When asked to produce a reference to the exemption in the text Carney consulted with an aid [sic] and then replied "It was there."

--excerpt from Wendy R. Holm's "Incompetence or Agenda?" piece in "Water and Free Trade" published in 1988 by James Lorimer & Company and edited by Wendy Holm

Journalists and radio talk-show hosts who wish to interview Shelley Ann Clark or Glen Kealey on the astonishing agenda concealed behind the Quebec Separation Referendum on October 30th - a story of greed, deceit, corruption, astronomical profits, purchased politicians and the destruction of a country, all wrapped up in the GRAND CANAL PROJECT and Rockefeller's plans for Continental Union by 2005, should call them at
THE INSTITUTE FOR POLITICAL INTEGRITY, Ottawa,
[819] 778 1705, or fax them at [613] 747 1644.

Politician's links to the GRAND Canal Project
From: Financial Opportunities <financial.opportunities@canrem.com>
It may re-pay the reader to spend a few minutes tracing the connections of Paul Desmarais and Power Corp. to the leading politicians, etc. of Canada:

JOHN RAE: leading strategist for Prime Minister Chretien's election campaign. Was Executive Vice- President of Power Corp. and Paul Desmarais' right- hand man. His brother is....

BOB RAE: Rhodes Scholar and ex-NDP [Socialist] Premier of Ontario, who appointed....

MAURICE STRONG to the chairmanship of Ontario Hydro, which he proceded to dramatically cut in both skilled human resources and generating capacity {to provide a future *need* for power from James Bay/Grand Canal?}

PAUL MARTIN: current federal Finance Minister. Rose through the ranks at Power Corp., mentored by Paul Desmarais. Bought Canada Steamship Lines from him. Ran against Chretien for Liberal Party leadership.

JEAN CHRETIEN: Prime Minister. Daughter, France, is married to Andre Desmarais, son of Paul Desmarais, chairman of Power Corporation. Chretien's "advisor, counsellor and strategist" for the past 30 years has been MITCHELL SHARP, who brought Chretien into politics when *he* was Finance Minister. Sharp has been, since 1981, Vice-Chairman for North America of David Rockefeller's TRILATERAL COMMISSION.

DANIEL JOHNSON: present Liberal [and Opposition] leader in Quebec. Rose through the ranks of Power Corp.

BRIAN MULRONEY: ex-Conservative Prime Minister. Now a lawyer and lobbyist for Power Corporation which, together with Ontario Hydro and Hydro Quebec, has just formed the Hong Kong-based ASIA POWER CORP., to help China to develop its energy potential. Power Corp.'s legal interests in Asia will be handled by a Hong Kong branch of Mulroney's Montreal law firm, Olgilvy, Renault.

So...we have the CONSERVATIVE party [via Mulroney], the LIBERAL party [via Chretien], and the NDP [via Rae] all tightly connected to....Paul Desmarais and Power Corp.

And we have the Prime Minister, the Finance Minister, and the Prime Minister's key aide all tightly connected to....Paul Desmarais and Power Corp.

Mel Hurtig wrote, in THE BETRAYAL OF CANADA: "since Brian Mulroney became Prime Minister, Big Business has had effective control of the political and economic agenda, and hence the social and cultural agenda as well. Paul Desmarais provided much of the money for Pierre Trudeau's campaign, Brian Mulroney's campaign, and Jean Chretien's campaign." {p.188}
Maurice Strong has now joined Brian Mulroney and Paul Desmarais in investing the Asia Power Group's $100 million venture capital in "small coal-fired power plants being built in the south of China". They are also looking at "larger projects in northern China, as well as in Malaysia, the Philippines and India." The Asian economies are expected to spend $1 trillion [US] on essential infrastructure, of which an estimated $400 billion [US] will be on power generation. Chinese and Asian labour costs are low - as low, in China, as $45 per month - and potential profits are high.

The Nov/Dec. 1993 issue of David Rockefeller's Council on Foreign Relations' publication FOREIGN RELATIONS contains an article, THE RISE OF CHINA, in which we are warned that China will begin to use *more energy than the United States* within a few decades, massively straining the world's energy supplies.*Most of China's energy comes from the burning of soft, high-sulphur, highly- polluting coal*. In 1991 alone, *11 trillion cubic meters of waste gases and sixteen million tons of soot were emitted into the atmosphere over China* - and it has only just *begun* its long process of increased energy generation!
The suphur in this coal causes acid rain. The burning of the coal releases carbon dioxide into the atmosphere, the most efficient "greenhouse gas" in the global warming process.

The *warmer* the climate becomes, the *greater* the need for fresh water in Mexico and the southern United States - and the more *urgent* the need for a GRAND Canal project to get it there. An astute businessman could, if he were so inclined, potentially make *astronomical* profits off *both* ends of this process!
Oh, and Paul Desmarais?

In September, 1993, he joined David Rockefeller's Trilateral Commission.
He won't feel out-of-place there, though. Other prominent Canadian members include Gerald Bouey [former Governor of the Bank of Canada]; Conrad Black, newspaper magnate and chairman of Argus; John Allen, CEO of Stelco; Raymond Cyr, President of Bell Canada Enterprises; Peter Dobell, of Foreign Affairs and Foreign Trade, in Ottawa; Marie-Jose Druin, Hudson Institute of Canada; Claude Edwards, Public Staff Relations Board in Ottawa; Allan Gottlieb, former Canadian Ambassador to the U.S.; David Henniger, Regional Director of Burns, Fry; Senator Duff Roblin; Ron Sutherland, CEO of ATCO Ltd., William Turner, of Montreal's PCC Industrial Corporation; and J.H. Warren, former Canadian Ambassador to the U.S.
[And, of course, Quebec Premier Jacques Parizeau was also in the habit of frequently briefing meetings of David Rockefeller's Council on Foreign Relations in Washington; and Lucien Bouchard, separatist PQ leader, was brought into politics by Brian Mulroney, whose last act in Ottawa was to host a black-tie dinner for 200 members of Rockefeller's Council of the Americas, who flew up on Rockefeller's private jet to celebrate the successful negotiation of NAFTA - another Rockefeller innovation]

SERIOUS QUESTIONS

Water is not just another resource. It is the basis for all life. There is no substitute. It has a special place in the human psyche. Society, particularly Canadian society, quite rightly places water in a category quite different from anything else. Water is an all- encompassing symbol of value and life that transcends comprehension as market worth and even intrinsic worth. When threatened, that value naturally prompts great emotion.

To deride this trait in Canadians only cheapens the values that are a vital part of our identity. If this stretches conventional reason for some, then perhaps the strong public reaction to ideas like the GRAND Canal is more understandable in the contexxt of opinion polls that consistently place environmental issues, and water issues in particular, at the top of the list. This public concern is shared internationally, as the recent report of the World Commission on Environment and Development points out so well.

The dedication of waters from Canada to the United States on the scale envisaged by the GRAND Canal does raise serious continental questions. For example, such a scheme, if it were feasible, would create a permanent and direct American interest in one of our most basic resources. The waters of the Great Lakes are already shared, but that arrangement would be extended north and south. If the scheme actually does what its proponents claim, it would create a lifeline from the U.S. Midwest and Sothwest up through the Great Lakes into Canada's North. Americans wuld be dependent on that supply of water, water they will increasingly see as their own, their right, and vital to their continued well-being. But there are real possibilities for tension and serious misunderstandings that cannot be overlooked. The implications of establishing the GRAND Canal scheme with its origins in Canada and criss-crossing the nation's heart -land are at the core of the decision-making process. These decisions cannot be made lightly. They are not in the purview of engineers. Problems, where they do exist, can always be addressed in more than one way. The choices must not be artificially defined nor should they be restricted by short-term, vested interests. And fear whipped up to suit a cause should be understood to be the emotional blackmail that it is.
Water shortages exist now, and they may get worse in some regions, but it is important to remember that these shortages are defined by human use and abuse of water resources. Resource specialists and users worldwide see augmented supply as only one aspect of the solution to shortages. Using very expensive and massive water transfers is increasingly suspect. More often the real issue is seen to be in the laws, regulations, economies, and management techniques that drive our manipulation of water. Within that, demand management through efficiency of use, conservation, and realistic pricing offer immediate means to address shortages. If history can teach us anything, it will show that few water shortages are solved in the long run by throwing more water at the problem. More elegant solutions are worth pursuing as the avenue of first recourse.
Perhaps, in the end, the GRAND Canal scheme, or some variation of it, may be necessary, even desirable. If so, we must accept that it is fraught with issues that can be ignored only at our peril. Today, the scheme is more symbolic of the potentially fatal water mismanagement we are quietly perpetuating than it is of any solution that will provide a sustainable future. In all the talk and promotion, hopefully, we will be wise enough to see that sustainable future as the real issue to be addressed. If nothing else, Kierans could be just one more "agent provocateur" that compels us to do so.

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