EDMONTON - Alberta has nothing to fear from oilsands companies demanding compensation under the North American Free Trade Agreement should the province be forced to ration water during a drought, says a NAFTA expert.
Todd Grierson-Weiler, a lawyer who has been handling NAFTA cases for the past decade, said he rejects claims made by water activist Maude Barlow that oilsands companies would be entitled to sue the Canadian government for hundreds of millions of dollars if their water licences were suspended or cancelled.
"If only it were half as easy as Maude claims," said Grierson-Weiler, who was co-counsel for the Canadian Cattlemen for Fair Trade in their recent NAFTA case against the United States.
He said actions taken by government for environmental reasons are considered by NAFTA tribunals, even though they are not explicitly listed.
"The regulation would have to attack the investment and even in those cases the tribunal weighs very carefully the other factors before they decide compensation is owing," he said.
Barlow, an author of two books on water conservation and the sale of water, warned last week that Canada could be in serious trouble if it doesn't amend the NAFTA agreement to exclude water from being considered the property of foreign investors. "These corporations would not only have the right to sue for existing water use, but for all the investment they put in for the future," she said.
But Grierson-Weiler said a tribunal rarely rules against a country and the compensation is never that large.
Few companies want to take on a government because they know the government has the power to deal with them in other ways, he added.
"It's very rare that companies will take that kind of step ... especially in a regulated industry like the oilsands."
Grierson-Weiler noted that Syncrude and Suncor could have brought a NAFTA case against Alberta over its decision to raise their oilsands royalty rates.
"They didn't do it because they knew if they did they could have been gotten a hundred other ways," he said.
Alberta Environment officials say they aren't worried about being challenged over NAFTA in the event they have to restrict water to oilsands companies.
"We checked with our legal team and they are quite confident it's not included," said spokeswoman Kim Capstick.
She said that if the province restricted water to only American companies in the oilsands, it might be considered a violation of NAFTA because it would be seen as discriminatory.
"But if we say for environmental purposes we're going to change your licence -- as long as we do it to everybody it doesn't apply to NAFTA," Capstick said.
Barlow based her views on a legal opinion written by Calgary lawyers Joseph Cumming and Robert Froehlich, a paper the pair wrote while attending the University of Calgary a number of years ago.Edmonton Journal
