Vaughn Palmer: B.C. is waiting to see if Trump has a specific proposal or is just listing the treaty as a negotiating tool
VICTORIA — Energy Minister Adrian Dix delivered the sobering news this week that the Americans had “paused” negotiations on updating and modernizing the Columbia River Treaty.
“To some extent that’s normal practice with a new administration,” said Dix.
The talks started in 2018 and Joe Biden’s administration paused them temporarily when it took office in 2021.
The sobering aspect is that the latest pause was initiated during Canada’s tariff showdown with President Donald Trump.
“What isn’t normal is some of the musings of the president of the U.S., with respect to British Columbia, to Canada and our water,” Dix explained. “The vicious anti-Canadian attacks that he made on this, on all these issues.”
Though Trump initiated the treaty talks during his first term, the president has now indicated he’s not happy with the agreement in principle reached last summer.
The president included the treaty on a four-page list of grievances that he recited on a recent call with Prime Minister Justin Trudeau, the Globe and Mail newspaper reported Saturday.
“The president said the treaty was unfair to the U.S. and that it needed changes that Canada had yet to agree to,” wrote reporters Patrick White and Robert Fife.
If the Americans are seeking better terms, that could be bad news for B.C. The New Democrats endorsed last year’s agreement, even though it included significant concessions by the Canadian side.
The terms required B.C. to immediately give up 37 per cent of its entitlement to the market value of electricity generated on the U.S. side of the border. The reduction would increase to 50 per cent starting in 2033.
The New Democrats played down the significant loss of revenue to B.C. when the terms were announced last summer.
Finance Minister Katrine Conroy did not even mention the reduced entitlement in a statement celebrating the deal. Later she insisted it would only amount to “a little bit” of a reduction. Premier David Eby said the loss of revenue would be mostly offset by increased U.S. payments for flood control.
One had to read the U.S. news coverage to discover the American view, that the reduced entitlement would mean a reduction of more than $100 million a year in U.S. payments to B.C.
Then came this week’s release of the B.C. budget and a revised forecast of the province’s revenues from sale of the downstream benefits under the Columbia River Treaty.
Last year’s budget estimated the returns to B.C. at $1.4 billion over three years. This year, the forecast for the same three years is $940 million, a reduction of about one third.
The New Democrats haven’t specified to what degree the revenue drop is attributable to last year’s entitlement revision.
But Canada and the U.S. reached an interim deal last November to proceed as if the 37 per cent reduction were in effect, retroactive to last Aug. 1.
The two countries tried to get the revised treaty approved by the U.S. Senate and the Canadian government before the Trump inauguration. “An enormous effort,” Dix called it, but one that failed.
The Americans face some challenges as well.
Under the original treaty, concluded 61 years ago, Canada agreed to build storage dams in B.C. to hold back water to reduce the threat of floods downstream. The Americans granted B.C. a share of the electricity that would be generated from the more balanced flow of water downstream.
The treaty update reduced B.C.’s entitlement, while the U.S. assumed greater responsibility for flood control. The Americans will now have to maintain lower reservoir levels as a safety margin on their side.
“The U.S. now has less than half of the support it used to have in managing the trillions of gallons of water that cascade toward the border each spring,” said a recent report in the Spokane Spokesman-Review newspaper.
Rather than go back to square one on the treaty talks, the two sides could try to increase the trade-offs on flood control in exchange for further reductions in B.C.’s entitlement.
Dix discouraged the idea that B.C. could take a lead from Ontario Premier Doug Ford, and threaten to cut off electricity supplies to the U.S.
“We represent only a small percentage of overall electricity in the western grid,” Dix replied. “A surcharge would hurt us more than hurt them. I don’t think the effective strategy, when people are threatening your country, is to punch yourself in the face.”
He also rejected the idea of Canada invoking the treaty’s termination clause, which requires 10 years notice.
“A 10-year notice would put the end of the treaty in 2035,” he told reporters Tuesday. “It’s not an effective negotiating tool for us in this current dispute with the United States.”
Plus there’s no way of knowing whether Trump is bent on remaking the treaty or simply using the threat as bargaining leverage with Canada.
Until there’s a specific proposal from the Americans, Dix favours sticking with the stopgap agreement signed in November.
“That’s still in place,” he notes, cautious in the face of Trump’s latest provocations.