Fuel For Thought On N.A.F.T.A.

Like the rest of North America, Canada has been hit hard by the rise in fuel prices. If there were ever an especially inopportune time for this to happen in Canada it would be this time of year, as we head into winter. Sure there are parts of the United States that are geographically further north than parts of Canada, and have winters just as bad, but that’s nothing to compare to the amount of territory in Canada that enters the endless night of the Artic winter.

Fuel oil, natural gas, and electricity are essential to surviving the long Canadian winters. Unlike people in warmer climes who’s need for oil is to drive their S.U.V.s to work and clog the freeways, a great deal of Canada depends on it for heating homes to survive.

You’d think the government would take steps to ensure that the people of its country would have the ability to heat their homes in as an affordable manner as possible. Obviously there is nothing they can do about sudden increases in world prices that are caused by natural disasters like Rita and Katrina, but considering the amounts of oil and natural gas that the country produces you’d think there would be some sort of cushion against just such an event.

Guess again. Fifteen years ago, or whenever it was that the cursed deal was signed, the government agreed as part of the North American Free Trade Agreement (N.A.F.T.A.) to send a proportion of our oil stocks to the United States. The more oil produced the more sent south of the border, not the more for use at home.

“The killer is this: No matter how much this cold country decreases its oil usage, it won’t affect the proportion of oil we are obliged to sell to the United States under North American free trade agreement. We have no control over the fate of our own oil stocks.” Heather Mallick, Toronto Globe and Mail Sat. Oct. 1/05

This wouldn’t stick in the throat so much if N.A.F.T.A. wasn’t turning out to be such a one-way trade agreement. Supposedly trading away parts of our oil stocks would open U.S. markets to Canadian businesses. That’s interesting, since any time they seem to start making inroads into those same markets, the respective industry in America gets the government to slap duties on those goods.

Currently Canada’s lumber industry is owed $5 billion in lumber fees over the softwood lumber dispute. Maybe to a country that runs deficits in the trillions that doesn’t seem like much, but numbers like that put our lumber industry in a big hole. When they start hurting financially they start laying people off, and when that happens whole communities start to hurt and go under.

When the people putting together the N.A.F.T.A. were writing up the agreement didn’t they realize that the majority of what Canada does is supply natural resources or their byproducts to the rest of the world? We’ve been hewers of wood and haulers of water for as long as this country has existed. Obviously Canadians were going to want to be able to sell their natural resources without any hindrance on the American market. What other reason would there be for a free trade agreement?

I don’t see any oil companies complaining about lack of duty on Canadian oil, or electricity for that matter. Oh yes Canada’s also sells America a huge amount of electricity. Whether from the James Bay project in Quebec keeping New York State alight, British Columbia sending excess power down the West Coast to try to keep California from browning out of existence, or Ontario being hooked into a power-sharing grid that stretches down to Ohio, Canada’s hydroelectric power runs through wires across the union.

The major cities in Canada suffer through repeated brown-outs, and the cost of hydro to consumers keeps getting higher on a regular basis because there isn’t enough generated to meet demand. But since a great chunk of that demand is generated outside of Canada, there is little that local consumers can do about any of the problems. Two summers ago saw a prime example of this, when a foul up in the grid in Ohio caused all of Ontario to lose power for close to a day.

Somehow or other water has been kept off the table. There have been numerous mutterings about diverting rivers etc to supply water to border states, but each attempt has been met by so much public resistance that they have mostly been cancelled. Thankfully for Canadians water was not included in the N.A.F.T.A., so there is no obligation to sell off any of it to anybody.

Successive American governments have seen no problem taking with one hand and not giving back with the other. Free trade should mean just that, not just access to the things you want, and being able to shut everything else out. Canada’s retail industry was devastated by the introduction of Wal-Mart and its ability to bring in inexpensive American manufactured goods, but governments didn’t slap countervailing duties on retail goods to keep them afloat when they couldn’t compete.

Why should the American lumber industry expect to be treated any differently? Even the N.A.F.T.A. tribunals have found against them, but they don’t want to play by the rules of the treaty so it doesn’t matter. The question becomes why should Canada continue to live up their ends of the agreement?

What would the United States of America do in this situation? If they were being dicked around by a trading partner who was dependant on their oil and electricity how would they react? What sort of retaliatory measures would be considered?

Canadians have seen their oil, natural gas, and hydro-electric bills go through the roof in the last couple of years, yet the government continues to ship a large percentage south of the border in order to comply with an agreement that the party on the receiving end seems to abide by only when it suits them. Sooner or latter that question of why is going to need to be answered.
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