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

B.C. declares state of emergency as more than 560 wildfires rage

This is only the fourth state of emergency ever issued during a fire season

UPDATE: Search for missing Cranbrook woman enters third day

The search for a Cranbrook woman missing in the Jumbo Pass area is entering its third day.

Evacuation Alert rescinded for Corbin area

Leach Creek wildfire 95 per cent guarded, remains estimated at 30 hectares

Search for missing Cranbrook woman ongoing

Louise Baxter missing in Jumbo Pass area since Sunday

Average Canadian family spends 43% of income on taxes: study

Fraser Institute’s consumer report shows taxes accounting for larger chunk of income each year

B.C. company patents Sasquatch, the country’s first homegrown hops plant

Created by Hops Connect, Sasquatch hops are being grown commercially for the first time in B.C.

Farmers ponder impact of alternatives to pesticides being banned

The nicotine-based pesticides scientists have linked to a rising number of honey bee deaths will be phased out of use in Canada over a three year period starting in 2021.

Time to kick maverick Tory MP Maxime Bernier out of caucus, Scheer urged

Conservative MP Maxime Bernier is taking issue with Prime Minister Justin Trudeau’s oft-repeated message of diversity in Canada, calling it a form of “radical multiculturalism.”

Thousands of police officers expected at regimental funeral in Fredericton

Two civilians were killed in a shooting in Fredericton that also claimed the lives of two police officers.

2 girls, hand-drawn map in hand, sneak out of B.C. home for adventure

The pair’s escape has transit police reminding commuters to report unusual behaviour

Ex-B.C. teachers’ union leader among latest pipeline protesters to get jail time

Twelve people have been sentenced for violating court order to stay away from Kinder Morgan terminal

B.C. not prepared for a Humboldt Broncos bus crash, group says

An air ambulance advocacy group wants an overhaul of B.C.’s emergency medical system in rural regions

Help needed to restore Sparwood wetland

The next weed pull at Sparwood’s Beaverfoot wetland is on August 21 from 6:30-8:30 p.m.

Most Read