by David Orchard

Across Canada, the price of gasoline rose steadily over the summer. Recently, it shot up another 30 percent. We were told that this unprecedented leap was because hurricane Katrina in the Gulf of Mexico affected US production.
Why does a storm in the US drive up Canadian prices? There was no storm in Alberta. No drilling rigs were toppled in Saskatchewan. Yet Canadians are now paying up to $1.44 a litre, or over $6 per gallon for gasoline, more than most places in the US. How can this be? Isn’t Canada a producer of oil and gas, the largest foreign source for the US, in fact?
The answer is spelled FTA and NAFTA. Not long ago, we had a made-in-Canada price for energy, Canadian oil and gas companies, and a 25-year reserve of gas set aside for Canada’s future needs. A cold country, with vast distances, quite reasonably gave its own citizens a better price for oil and gas than it charged for export – just as Saudi Arabia, Venezuela, and other oil exporting countries do for their citizens.
In an era of world competition, abundant energy was Canada’s advantage. China has cheap labour, the US a warmer climate, and Canada had energy. That all changed in 1988 when Canada, for reasons unknown to most of its citizens, signed the Canada-US free trade agreement (FTA), and with the stroke of a pen gave away control of its energy.
The energy terms of the FTA bear repeating. Canada abolished its reserve requirements for its own future needs – so all of our reserves can now be exported – and agreed to never charge the US more for energy than it charged Canadians. In addition, if Canada faced a shortage of any form of energy, it would continue to send the same proportion of its energy to the US, even if Canadians went short. It is safe to say that no other country in the world has, in peacetime, so completely signed away its energy resources, present and future.
In 1994, the FTA was expanded to NAFTA to include Mexico. Mexico refused to sign the energy clauses Canada had signed. Those of us who spoke out against the FTA pointed out this was not free trade, but forced trade, and warned that the agreement would have profound effects on our future, our energy security, and our sovereignty.
We were accused of being “fear mongers,” “anti-trade,” and “protectionist.” Now, even those who hurled those accusations realize they have been standing on quicksand. The results stare Canadians in the face, and impact their wallets every time they fill their cars, trucks, and industrial or agricultural machines with fuel.
As Canada exports more and more oil and gas – it has bypassed Saudi Arabia as the largest supplier to the US – some still attempt to justify these agreements. However, under the FTA, the US, now taking 60 percent plus of our production, will, when the shortage comes, have the right to 60 percent (or more!) in perpetuity. Canadians will have the right to whatever remains.
Oh, but the Alberta tar sands are there, we are assured. Rarely mentioned is that the petroleum coming out of the tar sands goes south to the US, virtually royalty free, and that large reserves of increasingly valuable natural gas are burned to process this tar sands production. In other words, Canada is actually subsidizing – at great financial and environmental cost – the giveaway of a precious, finite resource.
The NAFTA promise of secure access to the US market was never anything but an illusion, and nothing but shreds remain of the guarantee of an end to arbitrary US tariffs. Yet the takeover of our industries continues apace, from energy to beef, from manufacturing to retail. It’s time to wake up.
We need to establish a coast-to-coast, comprehensive, review of the FTA and NAFTA. This review should examine, in detail, the effects of these agreements on our economy and sovereignty, and make an informed future recommendation.
Integrating our energy and our economy into the US means being subject to US ownership. It means losing the capacity to direct our future and our own resources in our national interest. We don’t have to remain tied to agreements that will see our energy prices driven through the roof, or watch our economy and control of our destiny move into foreign hands.
Some insist that Canada continue to suffer and crawl, but it is not necessary. Both the FTA and NAFTA have withdrawal clauses that enable Canada, with six months notice, to withdraw without penalty or conditions and then revert back to trading with the US under existing multilateral trade rules.
Let’s not wait until our industries and agriculture become completely non-competitive, or until Canadians are begging for their own energy at 40 degrees below zero. As we watch the catastrophic events unfold in the Gulf of Mexico, it is clear that Canada also has important decisions to make to safeguard its future.

David Orchard is the author of The Fight for Canada – Four Centuries of Resistance to American Expansionism, and ran for the leadership of the federal Progressive Conservative Party in 1998 and 2003. He farms at Borden, SK. davidorchard@sasktel.net