NAFTA ruling could cost Canadians $580 million

The company for which Victoria MP Murray Rankin testified as an expert witness won tribunal ruling in May.

TAXPAYERS COULD BE ON THE HOOK for more than $580 million after a court rejected Canada’s appeal of a North American Free Trade Agreement (NAFTA) tribunal ruling. In a written ruling released May 2, Federal Court of Canada Justice Anne Mactavish turned down Canada’s appeal of a NAFTA tribunal’s finding, in favour of Delaware company Bilcon.

The company was planning a quarry and marine terminal on the Bay of Fundy. As Judith Lavoie reported in the October, 2015 Focus, after a joint review panel recommended against allowing the project—a decision supported by the Nova Scotia and federal governments—Bilcon filed a claim under NAFTA’s Chapter 11, which governs so-called investor-state dispute settlement issues. Victoria MP Murray Rankin testified for Bilcon as an administrative law expert.

On March 17, 2015, the tribunal decided in favour of Bilcon. Two years of appeals and legal wrangles later, Bilcon asked for reparations of US$443 million, or approximately C$580 million. In addition, the company asked that Canada pay all fees, costs and disbursements. Though the submission is marked “confidential,” it is publicly available on the website of the Permanent Court of Arbitration. The NAFTA panel has yet to rule on the size of that claim.

In her recent ruling on Canada’s appeal, Mactavish found that the court had no power to intervene in the tribunal’s decision. Her ruling followed hearings on January 29 and 30, 2018 in Ottawa.

Though Canada could have appealed Mactavish’s decision to the Federal Court of Appeal, it failed to do so within the 30-day time limit. Why would Ottawa let sit a ruling that paints such gloomy prospects for the value of environmental panels reviewing foreign-owned resource projects, not to mention hefty compensation bills?

One environmental expert believes the government was reticent for fear of upsetting its current negotiations with the US over the free trade agreement itself. Gretchen Fitzgerald is national program director of Sierra Club Canada Foundation. “It’s touchy, obviously, with the US right now,” said Fitzgerald, who attended the January court hearings. Sierra Club Canada Foundation was an intervener in the government’s appeal, supporting Canada’s position, along with East Coast Environmental Law.

Fitzgerald said that by failing to appeal to the higher court, the government is telling foreign investors that they need no longer fear Canadian environmental review boards and the like: “The corporations can have expectations of approval when they start investing.”

Despite deciding against Canada, Mactavish noted that the tribunal’s ruling raised significant policy concerns. These include “potential chill” in the environmental assessment process, Mactavish wrote.

Bilcon’s March 10, 2017 submission can be viewed online at: https://pcacases.com/web/sendAttach/2123. Other Bilcon documents available here: https://www.italaw.com/cases/1588

Formerly a political columnist and reporter, Russ recently returned to the fold after a stint as a BC government analyst. During his 10 years with the government, he worked in strategic policy, legislation, and performance management for a number of ministries.