Keystone XL: TransCanada's embarrassing NAFTA lawsuit just the beginning

January 7, 2016
Media Release
Obama pipelines

OTTAWA — With the announcement that TransCanada is using NAFTA to sue the U.S. government for $15 billion over its decision to disallow the Keystone XL pipeline, the Council of Canadians says the proliferation of free trade agreements such as the TPP (Trans-Pacific Partnership) and CETA (Canada-European Union Comprehensive Economic and Trade Agreement) guarantees an avalanche of such challenges to environmental laws and democratic decisions. 

“TransCanada’s move is an embarrassment for Canadians on the world stage. It is a complete disregard for U.S. democracy and of President Obama’s attempts to manage the environment and the American economy,” says Maude Barlow, national chairperson of the Council of Canadians. “These trade agreements not only sanction such actions, they embolden them."

TransCanada is using the investor-state dispute settlement provisions (ISDS) of NAFTA to sue the United States. Found in 3200 trade agreements, including the TPP and CETA, these provisions allow companies to sue states for lost profits due to democratic decisions or regulations. Trade lawsuits totalling hundreds of billions of dollars have already challenged environmental protection measures such as solar power programs, neurotoxin and additive bans, and the rejection of proposed mines. Canada, the most sued developed nation, is facing $2.6 billion in corporate challenges against legislation that restricts or bans carcinogenic additives in gasoline, lawn pesticides and fracking. 

TransCanada has spent $2.4 billion on the pipeline to date, but is claiming $15 billion in damages. NAFTA negotiator Derek Burney is now reportedly a TransCanada director. The completed Keystone XL pipeline was projected to produce 22 million tonnes of greenhouse gas emissions a year.

“We just came out of the Paris climate talks with fine ambitions to do something about climate. Obama, cognizant of his commitment, rejected Keystone XL,” adds Barlow. “As they stand, these trade agreements are the single biggest threat to meeting our climate change goals, which the Canadian government proudly announced only a month ago. Why are we letting corporations have the final word on our democratic decisions and environmental progress?”