A Calgary-based company incorporated in Delaware intends to sue Canada under the North American Free Trade Agreement for Quebec’s moratorium on fracking.
The Toronto Star reports, “The Canadian government faces a $250-million suit from a U.S. energy producer over Quebec’s environmental stance, raising new questions about the wisdom of investor rights treaties Ottawa is planning with China and the European Union.”
“Under NAFTA’s Chapter 11 dispute resolution provisions, the governments of Canada, the U.S. and Mexico can be sued by private companies that believe their interests as foreign investors have been harmed by discriminatory actions in one of the three countries. …Lone Pine Resources Inc. has declared its intention to use its power under NAFTA to challenge Quebec’s … moratorium on fracking while (the province) studies the environmental impact of the technology, which some say consumes unacceptable volumes of water and may be contaminating groundwater. …Quebec’s moratorium on the use of fracking to produce natural gas will stay in place until 2014, when the province is expected to complete its review of the drilling technique.”
The article highlights, “Scott Sinclair, a senior research fellow with the Canadian Centre for Policy Alternatives, … said Ottawa will almost certainly be subject to more of these challenges if Prime Minister Stephen Harper’s government puts in place planned investor protection deals with China and the European Union.”