Council of Canadians chairperson Maude Barlow is calling on Prime Minister Justin Trudeau to end the energy proportionality clause, which can also be understood as a de facto mandatory oil and gas export provision, in the upcoming renegotiation of the North American Free Trade Agreement (NAFTA).
Trudeau is expected to meet with US President Donald Trump in Washington in late-February to talk NAFTA.
Barlow says, “One of the most egregious aspects of the Canada-US Free Trade Agreement was that it wiped out the long-standing Canadian policy that sufficient supplies to serve Canadian needs had to be guaranteed before exports were granted. Most important, the FTA, and NAFTA after it, placed strict limits on the ability of our government to curtail energy exports in times of Canadian need or for environmental purposes.”
She explains, “The deals say that Canada must maintain at least the same level of oil and gas exports to the United States as it had supplied for the past thirty-six months. Only if Canadian consumption is cut proportionately, and then only in times of crisis, could the Canadian government claim jurisdiction over its own energy resources.”
According to the US Energy Information Administration, the US imported 3.76 million barrels a day of oil from Canada. That same year Canada consumed 2.32 million barrels a day. So even if Canada could restrict oil exports to the US to 1.44 million barrels per day, our domestic consumption would have to be cut to zero.
While we support the Leap Manifesto demand of a 100 per cent clean energy economy by 2050, energy proportionality means we have to keep exporting oil and gas to the United States until that time.
As such, Canada could not, as author-activist Gordon Laxer has recommended, end oil exports to the United States, phase out the tar sands by 2040, and rely on conventional oil as a transition strategy until 2050 when we would then be able to fully rely on renewable energy.
Today’s approval of the 830,000 barrel per day Keystone XL pipeline by Trump – which was welcomed by the Trudeau government – only exacerbates this situation by increasing the level of oil exports to the United States.
Laxer has written the federal government should seek a “Mexican exemption” to NAFTA’s energy proportionality rule. He explains that during the negotiations for NAFTA in the early 1990s, Mexico said no to the provision. And he has quoted California energy expert Richard Heinberg who says, “Canada has every reason to repudiate the proportionality clause, and to do so unilaterally and immediately.”
There has also been speculation that if Trump were to rip-up NAFTA, or if Canada were to walk away from NAFTA, the two countries would then be subject to World Trade Organization (WTO) rules. The General Agreement on Tariffs and Trade (GATT) is a multilateral agreement in effect under the WTO framework. Laxer notes, “While proportionality [in NAFTA] prohibits Canada from reducing energy exports for conservation reasons, the GATT allows it.”
To meaningfully tackle the climate crisis, Trudeau must demand proportionality be removed from NAFTA or be prepared to take further steps.
