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

Langley City in need of some Terry Fox Run helpers

People can help out on run day or be involved in preparations before then.

Langley rider looks for hometown advantage if she makes World Cup

It won’t be known until Friday if Langley’s L.J. Tidball qualifies for the Longines FEI competition.

Mayoral candidates still scarce in Langley

Only three people are officially in the running – two in the City, one in the Township.

Mother charged in murder of little Aaliyah Rosa in Langley

The mother is in B.C. Provincial Court this afternoon. IHIT won’t release details of how child died.

VIDEO: Mustang Roundup in Langley attracts car lovers from all over

A car show dedicated entirely to one model of Ford drew admirers and collectors to George Preston Recreation Centre.

Case of truck driver charged in Humboldt Broncos crash adjourned until October

Jaskirat Singh Sidhu is charged with 16 counts of dangerous driving causing death, other charges

REVIEW: MTV VMAs was a shocking event, for the wrong reasons

MTV Video Music Awards lacked star power and felt flat and some of the winners turned heads

4.6 quake detected off coast of Vancouver Island

The small earthquake happened early Tuesday morning

Puppies picked up by BC Wildfire crew to be returned to family

They were just leaving the Monashee Complex of fires when they found the cutest creatures.

At least 14 illegal fires set in Fraser Valley this month

Conservation officers are fed up with people not listening to the province-wide fire ban

5 to start your day

Langley woman charged in daughter’s murder, Canada beats Mexico and more

B.C. woman promoting ‘orange glow’ campaign to support firefighters

A Penticton woman is hoping an orange ribbon campaign will catch on throughout B.C.

Air Canada-led consortium signs deal to buy Aeroplan program

The deal would acquire the Aeroplan loyalty program from Aimia Inc

Most Read