Stage set for water usage dispute

In hearings that start tomorrow, OMYA Inc. will defend its permit to take 1.5 million litres of water per day from the Tay River. It's a case that could have precedent-setting repercussions, writes Carrie Buchanan.
Carrie Buchanan
The Ottawa Citizen

Monday, October 08, 2001
The Ottawa Citizen

The Tay River runs through the picturesque town of Perth, about 100 kilometres west of Ottawa. Residents, cottagers, politicians and environmentalists are concerned about the impact that OMYA (Canada) Inc. could have if its permit, which would allow the company to extract even more water from the river, is not changed. Public hearings are scheduled to start tomorrow in Perth at the Civitan Club.

OMYA is permitted to withdraw up to 1.5 million litres of water every day, used to make a slurry that is shipped out by tanker trucks and rail cars for paper-making across North America. Its permit, under appeal, would allow OMYA to triple the water they take by 2004.
Frank Chalmers holds a chunk of calcium carbonate, a raw material mixed with water and used in paper-making. Biologists have testified that when so much water is taken from an ecosystem, it must have an impact. Other studies have shown 'no significant impact,' in part because water is a renewable resource.

PERTH - Into the Perth Civitan building they will stream at noon tomorrow, about two dozen people lugging boxes and binders full of documents. Lawyers, scientific and technical experts, government officials and a captain of industry will come to answer their challengers: a retired Mountie, two former teachers, the head of a Perth environmental group, an Algonquin Indian chief, a former MP and MPP, three Bob's Lake cottagers and the Council of Canadians.

All are involved in an appeal by Ontario's Environmental Review Tribunal of a permit (now in abeyance) granted in August 2000 to OMYA (Canada) Inc., a Swiss-owned multinational. OMYA makes products out of calcium carbonate, which in its natural form is limestone, marble or chalk. The products are widely used in products ranging from paint to drywall.

These people represent all of us. The questions at this hearing are being asked across Canada: How do we balance the needs of industry and the economy with those of nature and healthy communities? And how do we maintain control of our resources, as once-public goods such as water become commodities involved in global trade?

The permit now under appeal allows OMYA to remove up to 1.5 million litres of water a day from the Tay River, a small, struggling river that runs through this picturesque town of 6,000 about 100 kilometres west of Ottawa. The Tay connects to a network of 46 lakes whose shores are dotted with thousands of cottages.

In 2004, the permit lets OMYA triple its water-taking to 4.5 million litres a day provided monitoring and further studies show no adverse impacts. The amount is slightly more than the town of Perth used for drinking water in 2000, according to testimony by Jim Ronson, president of the Perth Community Association. The smaller amount, to be used in the first few years, would just about fill two Olympic-sized swimming pools.

OMYA wants to mix most of this water with ground-up calcium carbonate to make a slurry, used in paper-making, which is shipped all over North America in tanker trucks and rail cars. The slurry is about 25 per cent water, similar to ketchup but less dilute than, say, beer or liquid soap, says Olivier Chatillon, vice-president and general manager of OMYA (Canada) Inc., a company that has no president.

OMYA now uses about 650,000 litres a day of groundwater for this purpose, a majority of which ends up in the product, Mr. Chatillon says. Thus, most of the water OMYA wants to take will leave the area in shipments to other parts of Canada and the U.S.

Biologists who testified last summer noted that when water leaves an ecosystem like this, it can't help having an impact. However, several studies produced to date have predicted "no significant impact" on water levels or fish habitat in the river and the major lakes that feed it.

The argument that OMYA is disrupting the ecosystem bothers Mr. Chatillon. "Water is a renewable resource and is constantly replaced by rainfall. It's part of a complete cycle," he says. "Water flowing in the Tay River goes into the St. Lawrence River and (also) leaves the area."

To the Council of Canadians, OMYA's shipments should be classified as a bulk water export, prohibited under several treaties and accords. But senior water policy and trade experts have told the hearing that OMYA's product is not a prohibited export. That's because it's a "product" rather than "water in its natural state," said Frank Quinn, a senior federal water policy analyst. He got substantial agreement from Stephen de Boer, a senior provincial government trade analyst, when both men testified in July.

Products, they said, are exempt from the ban on water exports in Canada's international treaties and interprovincial accords. They're also exempt from Ontario law prohibiting water shipments from one watershed to another. Even bottled water is considered a product and, provided the containers are small, they too are exempt.

Presiding over the Perth hearing is a former federal cabinet minister, Pauline Browes, who was a junior minister of the environment and later minister of Indian Affairs in the Brian Mulroney governments of the early 1990s. It's her job to decide whether the permit should go ahead, perhaps with conditions attached, or be revoked.

Already, Ms. Browes has made legal history by agreeing to consider, among other issues, the impact of trade agreements such as the North American Free Trade Agreement and World Trade Organization agreements, as well as water exports and the relevance of Canada's federal-provincial bulk water accords.

"This case is a landmark. It's the first time a regulatory tribunal at a provincial level has ever considered Canada's obligations under NAFTA and the WTO. And the fact that it concerns a water-taking permit makes it that much more important," says Steven Shrybman, the lawyer representing the Council of Canadians at the hearing.

"The 20th century was about oil and gas. The 21st century is about water. It's what many say the wars of the next 100 years will be fought over. So I think that's the context," Shrybman adds.

If the Council of Canadians is right, the hearing taking place in this small Ontario town could have serious repercussions for Canadians' control over water resources. That's because this permit, if granted, would set a precedent, says Jamie Dunn, water campaigner with the Council of Canadians.

What's precedent-setting about it? Basically, that so little information was required before it was granted. No environmental assessment was done, and the environment ministry relied largely on studies paid for by the company, to assess the potential environmental impacts. One of those studies was thoroughly criticized by hydrology experts at the hearing for relying on scanty, out-of-date data on water flows.

Under NAFTA's controversial Chapter 11, Mr. Dunn argues, a foreign company could claim the same right in the future, to obtain a water permit without any environmental assessment. If denied such a permit, the company could sue, and in a private hearing, win a cash settlement not just for the amount the company invested, but also for lost profits it might have earned.

Ontario routinely makes decisions about water permits without basic information about what is being taken out of the system already, and what will be needed in the future, Ontario's Environment Commissioner Jim Miller told the hearing in July. He called for a "water budget" to account for such things.

There are some mitigating factors: OMYA's permit did set conditions requiring more studies during the first three years, before the higher amount can be taken in 2004. The ministry also consulted with other federal and provincial departments and agencies. And in the year since the permit was issued, the company has produced several more studies. But there have been many scathing comments about Ontario's procedures during the hearing, including some from federal officials.

"It seems strange that you would issue a permit before you had all the information. We normally issue the permit after the information is gathered," said David Ballinger, the senior Parks Canada official responsible for the Rideau Canal.

Indeed, Brent Valere of Fisheries and Oceans Canada said the federal government, upon hearing about OMYA's plans, launched a full environmental assessment because it was felt the device could harm fish habitats. The federal process requires that the studies be done by scientists who are not paid by the company applying for the permit, Mr. Valere noted.

The federal environmental assessment was nowhere near finished when the permit was issued, and is still underway. The process has produced "volumes" of material since it began in March 2000, Mr. Valere said, and a report is expected next week, which will then be subject to public consultations for 30 days before it's finalized. The process might continue, Mr. Valere testified, depending on the outcome of the public consultations. But if the public comments don't turn up a significant objection, it could soon be over.

For Mr. Chatillon, the end to all these hearings and consultations is anxiously awaited. "We have been very supportive of the process, but after 20 long months it's time now to put some closure on this issue." That's how long it has been since the company first applied for the permit, on Feb. 29, 2000.

The appellants, too, are suffering. Some, having used up vacation time to attend the first three weeks in June and July, are taking unpaid leave for the unexpected extra month the hearing is scheduled to take. Some, such as Carol Dillon, have cottagers staying in their homes because the cottages aren't winterized.

For Ms. Dillon, the story of this hearing is multifaceted, involving community tensions over OMYA's role as a major employer, as well as the environmental issues at hand. It's a story that's not isolated to Perth, she notes.

"It's happening in local areas across the country. Not always about water, but we hear from British Columbia about trees and logging, it's the same sort of thing. It's big multinational companies, it's small communities, and it's the pressure that the presence of a very large company can have on a small community in a number of ways."

The hearing is scheduled daily at the Civitan Club, 6787 County Road 43 in Perth, from noon to 5 p.m. Tuesday, 9 a.m. to 5 p.m. Wednesday and Thursday, adjourning at noon on Friday. It is expected to continue until Nov. 2.