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US company seeking $570 million in lost profits following court ruling on NAFTA Chapter 11 decision

The North American Free Trade Agreement (NAFTA) has dealt another blow to environmental protection – and likely to the pocket books of Canadians. In response, Council of Canadians honorary chairperson Maude Barlow has tweeted, “Disgraceful!”.

The Federal Court of Canada ruled today on a challenge relating to a controversial proposed quarry on the Bay of Fundy in Nova Scotia.

The basics of the case:

– in 2002, New Jersey-based Bilcon proposed a basalt quarry on the Bay of Fundy

– in 2007, Nova Scotia and the federal government rejected it after a joint review panel said it would have a “significant adverse affect” on the community

– Bilcon then launched a NAFTA Chapter 11 challenge saying the decision was arbitrary, unfair and discriminatory

– a NAFTA arbitration panel found that the quarry being rejected on “community core values” was not a “rational government policy”

– the federal government applied to the Federal Court of Canada to set aside the ruling on the grounds the NAFTA panel exceeded its jurisdiction

– the Federal Court ruled the NAFTA tribunal acted appropriately

– the company is now seeking US$443 million (about CAD$570 million)

The Canadian Press reports, “The federal government has lost a court bid to overturn a NAFTA ruling involving a Nova Scotia quarry and marine terminal project… 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.”

Mactavish ruled, “I find that the tribunal made a factual finding of arbitrary conduct and applied customary international law in determining whether Canada violated the minimum standard of treatment for the purposes of Article 1105 of NAFTA.”

A CBC news report adds, “The company is seeking $443 million US in lost profits on two million tonnes of gravel per year for 50 years — the estimate of the life of the quarry at Whites Point on Digby Neck. The government of Canada rejects the claim and had little response Wednesday to its Federal Court defeat. ‘We are aware of the Federal Court decision and are reviewing it’, spokesperson John Babcock of Global Affairs said in an email. ‘Canada is also awaiting the tribunal’s award on quantum of damages, which will likely not be issued before the end of 2018.'”

Our allies East Coast Environmental Law, Sierra Club and Ecojustice were dismayed by the court’s decision, highlighted that the decision leaves the environment at risk and taxpayers on the hook, and stated that Chapter 11 must be removed in the NAFTA talks happening now. Their full statement following the ruling can be read here.

The Trudeau government has not publicly adopted the position that NAFTA should be removed from NAFTA, despite the United States insisting on it.

To sign our petition against this investor-state provision, please click on Tell Trudeau to drop Chapter 11 in NAFTA!

The timing is urgent. Talks on a new NAFTA deal will resume on May 7 and US Trade Representatives are pressuring for a deal to be reached within 7-14 days.