Leaky Exports: A Portrait of the Virtual Water Trade in Canada

EXECUTIVE SUMMARY
This report highlights a little understood practice in Canada: the daily loss of massive amounts of the country’s fresh water used to produce commodities, minerals and energy for export. Virtual, or embedded, water is the sum of water used in the production of a good or service. Virtual water trade refers to the embedded water transferred across borders when these goods and services are internationally traded.
The practice is now coming under close scrutiny as some impoverished and water-poor countries are depleting their water supplies in order to maintain export markets, while other, more wealthy countries import most of their “water footprint” (the total volume of water needed to produce the goods and services for their citizens) in order to protect their own limited water resources.
Because Canada has more abundant water supplies than some other countries, successive provincial and federal governments have built their economies on the “myth of abundance” and the assumption that these supplies are unlimited. Most depend to this day on exports that may endanger Canada’s fresh water legacy. While Canada is often touted as having 20 per cent of the world’s water supplies, in fact it has 6.5 per cent of the world’s renewable water. Many parts of Canada are facing some form of water crisis and nowhere is our groundwater properly mapped. Yet the practice of allowing almost unlimited access to our rivers, lakes and aquifers for commodity, energy and mineral production and export continues without public debate or oversight.
Major Findings
1) Agriculture consumes 70 per cent of Canada’s fresh water.
2) Due to its high volume of agricultural exports, Canada is a major virtual water exporter, second in the world only to the United States.
3) Canada is a major net virtual water exporter, second only to Australia. Canada’s net annual virtual exports (exports minus imports) amount to just under 60 Bm3 (billion cubic metres), enough to fill the Rogers Centre in Toronto 37.5 thousand times.
(Note: This figure, the latest available, is a decade old. With the increase in food and energy exports over the last decade, the real figure is likely considerably higher.)
4) Every year, Canada exports an amount of virtual water in wheat, barley, rye and oats equivalent to twice the annual discharge of the Athabasca River.
5) Alberta is particularly at risk from this practice. The province, with just two per cent of the country’s water supply, accounts for two-thirds of the country’s water used for irrigation, much of it for export.
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6) The United States is the destiny of most of Canada’s virtual water exports.
* Over 60 per cent of Canada’s total agricultural exports and their embedded water go to the U.S.
* The U.S. is the destination of almost 99 per cent of Canada’s cattle and swine exports.
* Every year, Canada uses (and destroys) 1 billion, 95 million cubic metres of fresh water in the production – mostly for export to the U.S. – of energy from the tar sands of Alberta.
* The U.S. is the destination of 58 per cent or 1.1 Bm3 of virtual water exports annually from Canada’s minerals, metals and non-metal commodities, including coal.
7) The increase in virtual water exports to the U.S. is closely related to the Canada-U.S. Free Trade Agreement and NAFTA, due to the post–trade agreements’ increase in water-intensive exports to the U.S. and the integration of key parts of the North American agriculture and energy sectors.
* For instance, two American companies control 95 per cent of Canada’s cattle industry.
* Similarly, American energy companies now control over 50 per cent of the tar sands operations.
Canada is a large net exporter of virtual water. Our fresh water heritage is at risk from the lack of government concern; poor information, mapping and research on our groundwater and surface water supplies; and the almost total absence of policy intervention by any level of government to set conditions on access to fresh water sources for export-driven production.
Most of these virtual water exports go to the United States and represent a huge environmental cost that is not reflected either in the pricing of these commodities or in the calculations of the costs and benefits of free trade. The so-called NAFTA “benefits” claimed by some industries and sectors come at the expense of Canada’s fresh water heritage.
There is an immediate need to assess the loss of so much of Canada’s fresh water supplies in trade-related economic development if our water heritage is to be preserved for future generations. It is our hope that the findings of this report will spark the debate and research so long overdue in Canada.
Maude Barlow
May 2011

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