How much money can Nestle make selling Canadian drinking water to USA?

An exploration of figures related to Ontario’s proposed bottled water moratorium

As I’m about to file my Canadian citizenship application, I feel it only prudent to become better informed about the state of the environment and natural resources of my adopted country.

I was very interested to hear about the Ontario government’s proposal yesterday to put a 2-year moratorium on the creation or expansion of bottled water operations in that province.

From that investigation, I’ve put together some figures to help put into context the economics driving, for example, Nestle muscling in on an Ontario town’s water supply recently.

Water Costs

According to the linked Guardian article above (and corroborated elsewhere), permitting for bottled water operations can cost up to $3,000 depending on expected environmental impact.

But after that, the government of Ontario only charges $3.71 CAD for the right to extract up to 1,000,000 liters. In Americanese, that’s around $2.83 USD for 264,172.052 US gallons.

Nestle, for example, has the right in the province of Ontario (according to above source) to extract up to 4.7 million liters of water a day. That’s 1,241,608.646 gallons per day, at a cost of around $17.44 CAD or $13.31 USD.

$13.31 USD for 1.24 million gallons of water. Per day.

Let that soak in for a moment…

Commercial Markup

According to NAFTA rules, Nestle has the right to freely trade Canadian bottled water in North America — though Canada has a ban in place on bulk export of water (non-bottled, from what I understand).

I found a 2001 news source quoting the commercial value of bottled water to be at around $8.00 USD. And a 2013 article saying $7.50 USD for a gallon. Evidently, 64% or approximately 2/3 of all bottled water sold is sold in single-serving bottles, for which the highest rates are paid.

Applying the figures above at the lower commercial value of $7.50:

1,241,608.646 gallons (per day)

* $7.50 value per gallon

_______________

$9,312,064.85 USD

Subtracting from our sum $9,312,064.85 the pittance of $13.31 cost per day paid to the Ontario government and applying the max. cost of $2,289 USD ($3,000 CAD) for permitting:

$9,312,064.85 (commercial value of water)

-$13.31 (costs in USD per 4.7m L)

-$2,289 (permitting fee paid once, not daily)

______________

$9,309,762.54

Nestle’s potential profits — per day — from selling bottled Canadian water as single serving units in the United States is something in the ballpark of:

$9,309,762.54

Nestle can potentially make $9.3 million dollars per day off Canadian water — in Ontario only. (Less their costs, of course) Meanwhile, the government of Ontario — and hence the people of Ontario — rake in approximately $25 CAD per day ($17.44 + supposing $3,000 max. annual permitting/365 days per year).

→ * THAT. IS. FUCKING. CRAZY. * ←

And that’s just in Ontario. I’ll try to find the numbers for how much water Nestle is allowed to extract across all the Canadian provinces, just for laughs.

Needless to say, I wholeheartedly support the Ontario government’s proposed moratorium, as well as our national ban on bulk exportation of Canadian water supplies. According to Environment Canada, we currently are stewards of 7% of the total quantity of drinking water on the entire planet… If we don’t get control of this situation, it’s clear that it’s going to get control of us.