National flags representing Canada, Mexico, and the U.S. are lit by stage lights at the North American Free Trade Agreement, NAFTA, renegotiations, in Mexico City, Tuesday, Sept. 5, 2017.THE CANADIAN PRESS/AP/Marco Ugarte

Canada loses NAFTA court challenge, reviving environmental concerns

The government has lost a court bid to overturn a NAFTA ruling involving a Nova Scotia quarry and marine terminal project

The federal government has lost a court bid to overturn a NAFTA ruling involving a Nova Scotia quarry and marine terminal project, sparking renewed concerns about the trade deal’s effects on Canada’s environmental regime.

The U.S. firm that backed the proposed project welcomed the Federal Court of Canada decision, while environmental groups said it highlights how the North American Free Trade Agreement hamstrings Canada’s ability to protect its ecology.

In her decision, Federal Court Justice Anne Mactavish rejected federal arguments that a NAFTA tribunal inappropriately decided questions of Canadian law when it found problems with an environmental review panel process.

RELATED: NAFTA talks hold Foreign Affairs Minister in Washington, substitute heads to NATO summit

Sixteen years ago, American firm Bilcon planned to develop a basalt quarry, processing facility and marine terminal on the Bay of Fundy at Whites Point in southwestern Nova Scotia. The company hoped to ship 40,000 tons of stone to the United States each week for a period of 50 years.

The Nova Scotia and federal governments nixed the project in 2007 after a joint environmental assessment panel said it should not go ahead. The panel concluded the initiative would have a “significant adverse effect” on the surrounding communities, damaging the quality of life.

Bilcon, which had invested considerable time and money in the project, filed a NAFTA challenge under Chapter 11, alleging Canada’s environmental regulatory regime had been applied in an arbitrary, unfair and discriminatory manner.

The NAFTA tribunal found Nova Scotia authorities created expectations the project might proceed as long as federal and provincial environmental laws were respected. The tribunal ruled that the assessment panel indeed acted arbitrarily by effectively creating a new standard of assessment concerning “community core values,” without notice to Bilcon.

RELATED: Canada will not bend to U.S. steel tariff pressure in NAFTA talks: Freeland

After winning at the tribunal, Bilcon said it would seek at least US$300 million in damages from Canada.

Ottawa took the matter to Federal Court, but Mactavish determined the NAFTA tribunal made no errors warranting a reversal of its ruling.

However, she said the tribunal’s decision “raises significant policy concerns,” including its effect on the ability of NAFTA parties to regulate environmental matters, the power of tribunals to properly assess whether foreign investors have been treated fairly, and the potential “chill” in the environmental assessment process that could result from the decision.

The Clayton family of New Jersey, principals of Bilcon, applauded the court decision, calling their experience a “cautionary tale” to both U.S. and Canadian investors who expect reciprocal and fair treatment in both countries.

“Bilcon, a family-owned company that has been in business for more than 50 years, believes the treatment it received was unbecoming of Canada’s reputation as a reliable jurisdiction in which to do business.”

Environmental groups that intervened in the case expressed disappointment and even alarm.

Lisa Mitchell, executive director of East Coast Environmental Law, said the court judgment means that even when the Canadian government makes good decisions to protect the environment, “there’s a chance a NAFTA tribunal could swoop in, decide our environmental laws are ‘unfair,’ and force Canada to pay hundreds of millions of dollars — leaving Canadian taxpayers on the hook and the environment at risk.”

Given that Canada is renegotiating NAFTA and Parliament is evaluating legislation to revamp environmental assessments, the court decision comes at a critical moment, said Gretchen Fitzgerald, Sierra Club Canada’s national programs director.

“Canada must now look to fix NAFTA to protect the environment and the right of Canadians to reject damaging projects by getting rid of Chapter 11.”

The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

New police force in Surrey must avoid VPD, RCMP errors made in Pickton case: Oppal

Boots are scheduled to be on the ground by spring 2021

PHOTOS: Surrey designer uses toilet paper to make a dress for annual Toronto show

‘The dress is very experimental and avante garde,’ says Guildford-based Alex S. Yu

Police issue warning after four overdoses in North Delta

Police and emergency health services use naloxone to revive four overdose victims Thursday morning

Surrey reacts to policing plan getting the green light

Former mayor, councillors and residents weigh in on the Public Safety Minister approving the transition

Trudeau vows to stand firm against ‘increasingly assertive’ China

China has accused Canada of meddling in its affairs

Conan turns to the Property Brothers for tips on buying Greenland

Jonathan Scott suggests removing glaciers and mountains to bring in ‘more natural light’

Forests minister visits B.C. town hit by multiple mill shutdowns

A third of Mackenzie turns out for rally, not much to cheer about

B.C. sockeye returns drop as official calls 2019 ‘extremely challenging’

Federal government says officials are seeing the same thing off Alaska and Washington state

North Van music teacher accused of sexual misconduct involving girls

Police believe other victims could be out there after the arrest of Lamar Victor Alviar

B.C. family stranded in Croatia desperate to come home

Funds being raised to bring back mom and two children

B.C. man on trial for daughters’ murders says an intruder broke in

Andrew Berry takes stand in his defense for December 2017 deaths of young daughters

‘Plenty of time for a deal’: Teachers’ union expects kids back in school on Sept. 3

BCTF says class size, composition at the heart of the issue

Most Read