The ability of governments to fend off lawsuits from companies over environmental rules, and Canadian industrial competitiveness with NAFTA partners, were two hot topics at a roundtable hosted by Environment Minister Catherine McKenna, according to attendees.
The minister huddled with key stakeholders at a Toronto hotel on Thursday as environmental battle lines take shape during the first week of three-country talks, punctuated with a warning from U.S. President Donald Trump’s trade czar to expect major changes.
The discussions are particularly relevant as Trump revoked a 2015 Obama-era rule Tuesday that forced infrastructure projects using U.S. federal grant money — like schools, roads, bridges or hospitals — to meet flooding standards based on climate science.
A list of those attending the Toronto meeting provided by McKenna's office showed the sit-down consisted of top representatives from Canadian automotive, power, oil, shipping and building industries, as well as pro-business, academic, green energy, labour, Indigenous and environmental groups.
Hassan Yussuff, who attended the roundtable as president of the Canadian Labour Congress, said the minister wanted to hear their take on the North American Agreement on Environmental Cooperation, the side agreement to the current NAFTA, and how it might be inserted into a re-negotiated deal.
He said most in the room felt it was critical that the deal become part of a re-done NAFTA, with the caveat that a dispute mechanism known as Chapter 11 that allows corporations to sue governments be dealt with differently.
“The majority of those lawsuits have been in the context of environmental protection,” said Yussuff. “Some people echoed that, and in addition, recognized that whatever is able to be achieved is useful in the sense of how we get to common views on environmental protection.”
He also noted the issue of climate change has come onto the radar of governments since NAFTA was first negotiated 23 years ago.
Foreign Affairs Minister Chrystia Freeland wants to see environmental provisions strengthened and climate change addressed in a re-done NAFTA, but it’s not clear whether Ottawa would walk away from talks if the term “climate change” doesn’t wind up in the deal’s final text.
“The challenge, of course, is in addition to that, going forward, how can you bolster a commitment to the environment in general within the context of this agreement, recognizing there are a very different approaches the U.S. is taking versus Canada,” said Yussuff.
Automakers embrace Europe deal as template, with conditions
Canada has moved to adopt more of a right-to-regulate stance in its trade pact with the European Union, said Yussuff.
The Comprehensive Economic and Trade Agreement, which Ottawa has raised as an example of a template of sorts for NAFTA talks, allows the EU, its member states and Canada to “adopt and apply their own laws and regulations” on the environment “that regulate economic activity in the public interest,” according to a text attached to the deal.
Mark Nantais, who attended the roundtable as president of the Canadian Vehicle Manufacturers' Association, said CETA was the first deal to recognize that the three NAFTA countries should be negotiating future agreements as a trade bloc, because of his industry’s high cross-border integration.
“The CETA agreement is something which we support; [it] provided placeholders in the context of North America, or at least trade with the United States,” he said. But he added it would be more complicated than simply importing a CETA-style environmental chapter wholesale into NAFTA.
“One needs to be careful, one needs to be cognizant of what some of the limitations are, and then you need to look at that in the context of what works and what doesn’t work,” he said.
McKenna’s office said she was not available for a phone interview with National Observer. The minister did do interviews on site with local media.
“I heard strong support for Canada’s progressive trade agenda,” McKenna told Business News Network. “I think this is an opportunity for all three countries — for Mexico, the U.S. and Canada — to step up on the environment.”
Alberta minister says U.S. interests understand energy sector
Both Yussuff and Nantais said competitiveness was also an issue that cropped up at the meeting.
“We need to talk about our environmental regulations in the context of North America, we need to talk about competitiveness of the industry sectors, and the highly integrated nature of some of our businesses,” said Nantais.
“There’s opportunities in terms of modernizing the agreement, and there’s things that we truly need to preserve given the deep integration of our economies, the integration of supply chains and so forth.”
Alberta Economic Development Minister Deron Bilous, in the United States this week for the Council of State Governments West conference in Tacoma, Wash., said Thursday that there was talk at the summit of advocating for the three NAFTA countries as a "Team North America" trade bloc.
"There is definitely an understanding of Alberta’s energy and how much we supply the U.S., and at this point in time I have absolutely minimal to no concerns that there will be any changes that will negatively hurt our sector," he said.
Bilous said the province is on the same page as the federal government when it comes to both climate change and dispute resolution.
“The individual states are very committed to moving forward on their environment policies, and frankly there’s immense interest, talking with Alberta, in terms of how we are bringing forward a strong climate leadership policy while at the same time protecting and supporting our energy industry,” Bilous said.
“Canada and Alberta are unequivocal about maintaining the dispute resolution mechanism,” he added. “When you engage in trade deals, there has to be rules, and the rules have to be followed.”
Trump revokes Obama-era flood rule
This week Trump, who has announced he will pull the U.S. out of the Paris climate change accord, fired his latest missile at America’s environmental protection regime. The president removed a 2015 Obama-era rule mandating that U.S. federal funds for infrastructure projects take climate change-induced flooding into account.
Trump's order was little-noticed as it was announced at the brawling Trump Tower press conference that went off the rails when the commander-in-chief defended attendees at a deadly rally in Virginia filled with Nazis, white supremacists and Klansmen.
Obama’s rule, which was called the Federal Flood Risk Management Standard, had similar goals as one outlined by Transport Minister Marc Garneau this summer. Garneau said federal dollars for transportation projects would be aimed at projects built to withstand climate disasters.
Questions to McKenna’s office about whether that item was discussed at the roundtable, and whether the minister was expecting the NAFTA talks to deal with that executive order in some way, were not returned before publication.
Another element in Trump's new rule mandates a new "goal" of completing all U.S. federal environmental reviews for "major" infrastructure projects within two years. Major projects are defined as those with environmental impact statements and that also involve multiple federal authorizations.
That two-year timeline is the same as that mandated in Canada’s 2012 omnibus environment bill, C-38, passed under former prime minister Stephen Harper. Under that legislation, environmental assessments from review panels have to be completed within two years.
Former prime minister Harper met with U.S. Environmental Protection Agency boss Scott Pruitt on March 27, according to The Huffington Post. The meeting was described as a “meet and greet” by a lobbyist; the EPA has denied Pruitt was seeking policy advice.
The Trudeau government is planning a large overhaul of the Harper-era environmental assessment regime, and is seeking feedback until the end of August. Its discussion paper proposes maintaining the two-year timeline and allowing ministers to approve exceptions “in special circumstances.”
— With files from Trish Audette-Longo
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