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

Discontent City can remain where it is until the end of next month

B.C. Supreme Court judge grants application for an extension to comply with injunction

SD68 candidates make last pitch prior to election

Nanaimo Duncan and District Labour Council hosted a meet-and-greet for prospective school trustees

LETTER TO THE EDITOR: So much for ‘say no to drugs’ in Canada

I’m from the ‘users are losers’ generation, says letter writer

Former Nanaimo Daily News editor writes first business book

Book launch for It Worked For Them, It Will Work For Me is Tuesday, Oct. 23

Interfaith Amigos find commonalities

Imam, pastor and rabbi will be at Nanaimo’s Bethlehem Centre from Oct. 26-28

UPDATE: Shots fired at house during fight in Nanaimo

Shots were fired at about 2:30 p.m. Thursday in 500 block of Kennedy Street, say RCMP

Candidate lists finalized for Nanaimo, Lantzville, RDN, school district

Nomination deadline passes in advance of Oct. 20 local government elections

Election 2018: candidate questionnaires

News Bulletin’s questionnaire responses for Nanaimo, Lantzville, school board, regional district

When to vote, where to vote, how to vote

Voting day is Oct. 20, with polls open 8 a.m.-8 p.m.

Beefs & Bouquets, Oct. 18

To submit a beef or bouquet to the Nanaimo News Bulletin, e-mail bulletinboard@nanaimobulletin.com

Chicken and Broadway on the menu at Bite of Nanaimo

Food, music and roving broadway characters a recipe for TheatreOne fundraiser Friday, Oct. 19

Anti-SOGI school trustee files defamation lawsuit against BCTF president

Barry Neufeld says Glen Hansman’s words caused him “indignity,” “personal harassment,” and “anxiety”

Ocean “Blob” returns to North Coast of B.C.

A 2,000 kilometre patch of warm ocean water could signal a warm winter in Prince Rupert

Pot sales down by nearly 70% on Day 2 of legalization in B.C.

Several products on BC Cannabis Store are still sold out

Most Read