The Council of Canadians opposes Article 605, the energy proportionality provision in the North American Free Trade Agreement (NAFTA).
The provision basically says 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 cut export levels to the US.
To put numbers to this situation, the US imports about 3.76 million barrels a day of oil from Canada (that’s about 1.37 billion barrels a year), while Canada consumes about 2.32 million barrels a day.
If a future Canadian government were to commit to a 100 per cent clean energy future by 2050 (as the climate justice movement demands due to the climate crisis) it could not begin by ending those oil exports to the United States and then slowly weaning domestic consumption as more renewable energy is brought online.
The Canadian Press reports, “[Maude Barlow says] the proportionality clause could allow the US to prevent Canada from choking back oilsands production to meet its international environmental commitments, for instance, or to interfere if Canada tries to keep more oil and gas for domestic use during an energy shortage.”
For his part, Prime Minister Justin Trudeau has given no indication he is concerned about the provision.
In February, Natural Resources minister Jim Carr said the renegotiation of NAFTA would benefit the energy sector. Reuters reported, “Asked whether the energy industry could get a more favorable role than other parts of the economy in NAFTA renegotiations, Carr said, ‘I think that’s a real possibility’. …Carr told reporters that Canada will continue to make the case that the integration of the energy sector is in the best interest of all three governments. ‘I think the energy sector is one of those where the integration argument and the mutual benefit can be well advanced by Canada’, said Carr.”
In July, The Globe and Mail reported, “Both the Trudeau government and the Trump administration want to bring Mexico fully into the energy chapter of NAFTA to lock in its recent free-market reforms.”
And last week, the Canadian Press reported, “Canada’s position on proportionality is unclear. It wasn’t one of the priorities mentioned by Foreign Affairs Minister Chrystia Freeland in a statement Monday [August 14]. Her office did not immediately respond to a request Tuesday to clarify Canada’s stance.”
Furthermore, Alberta Premier Rachel Notley does not appear to be concerned about energy proportionality either.
The Canadian Press reports, “Alberta’s minister of trade says Canada’s oil and gas industry has little to worry about as wide-ranging North American trade negotiations get underway. Speaking Thursday [August 17] after a conference of state governments in Tacoma, Wash., Minister Deron Bilous said US lawmakers recognize the importance of an integrated energy market. He said Alberta government representatives have been meeting with US counterparts regularly to emphasize the importance of market access and open borders, and he’s been encouraging industry members to do the same.”
But Edmonton-based author-activist Gordon Laxer has commented, “The [energy proportionality] clause was crafted to allow petro-corporations, most of them foreign, to export as much Canadian oil and natural gas to the US as possible. It was written before the end of the age of cheap oil and before we recognized the looming catastrophe of climate change.”
Laxer adds, “Alberta’s oilsands can’t be greened – they must be phased out. So must oil and natural gas exports. …The first step is to cap and then phase out the Sands over fifteen years. Canada can meet its target of reducing carbon emissions by 80 per cent if it phases out Sands oil and relies instead on our slowly falling output of conventional oil and natural gas as transition carbon fuels to get Canadians to a low-carbon future run on renewables.”
Toronto-based author-activist Linda McQuaig recently echoed this argument in an op-ed published in the Toronto Star. She wrote, “If we’re serious about fighting climate change, we’re going to have to phase out dirty oilsands production and rely on our remaining reserves of conventional oil (we have about 11 years left, at current rates) while we transition to clean energy… But if we reduce our consumption like this, the Big Oil companies operating in Canada will just export more of our oil to the US And, under Article 605, that will increase our future oil export obligations to the US…”
The Council of Canadians believes that climate leaders do not approve export pipelines (as Trudeau and Notley have done with Line 3 and Kinder Morgan while also supporting Keystone XL), nor do they back the energy proportionality provision in NAFTA.
We call on the climate justice and trade justice movements to work together to challenge Trudeau and Notley on this provision.