Controversial NAFTA challenges continue to grow—study

January 28, 2008

OTTAWA—The number of challenges launched by foreign investors against Canada under NAFTA’s controversial investment rules continues to grow, says a study released today by the Canadian Centre for Policy Alternatives (CCPA).

The study looks at the six new NAFTA cases filed against Canada over the last two years and finds the targeting of environmental protection and natural resource management regulations particularly disturbing. Two recent actions include a challenge by multinational oil giant Exxon-Mobil to Newfoundland’s local economic development policies and another over the province of Ontario’s decision to halt a controversial project to dispose of Toronto’s landfill in a man-made lake.

“Unfortunately, NAFTA’s investment rules are so broadly worded that these aggressive claims might well succeed,” remarked Scott Sinclair, the report’s author. “At a time when Canadians are more concerned than ever about protecting the environment, this is simply unacceptable.”

As of January 1 2008, there have been 49 investor-state claims -18 against Canada, 14 against the U.S. and 17 against Mexico. Nearly half of these claims have involved investor challenges to how governments protect the environment or manage natural resources.

Tribunals have awarded financial damages to the complaining investors in two of three decided claims against Canada. Canada also settled another claim out of court by agreeing to pay the investor damages and repealing the challenged measure. Mexico recently lost its third NAFTA investment case. By contrast, in the four decided cases against the U.S. to date, the investors’ claims have been dismissed.

“Instead of eliminating the NAFTA investor-state mechanism, our government seems intent on expanding it through bilateral trade agreements,” Sinclair said. “New agreements with Peru, Colombia and South Korea contain versions of NAFTA’s chapter 11 rules, which permit foreign investors to challenge government measures that allegedly diminish the value of their investments.”


NAFTA chapter 11 investment disputes: An update is available on the CCPA web site at

For more information contact Kerri-Anne Finn, CCPA Communications Officer, at 613-563-1341 x306.