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NAFTA settlement may effectively privatize Canada’s water

March 08, 2011

Steven Shrybman recently told the Standing Committee on International Trade that the Harper Government appears to have entered into a NAFTA settlement that may allow foreign investors to assert propriety claims to Canadian water.

In December 2008, AbitibiBowater announced the permanent closure of its Grand Falls-Windsor pulp and paper mill in Newfoundland. The Province claimed that AbitibiBowater had reneged on agreements to continue operating the mill, and that it had been granted water and timber rights on that condition. The Province then passed legislation expropriating AbitibiBowater’s assets and terminating the water and timber licenses.

Rather than seeking recourse in the Canadian courts, AbitibiBowater filed an arbitration claim under NAFTA investment rules seeking $500 million in compensation. The claim not only sought compensation for the physical assets taken by the Province, but also for the loss of its water and forest licenses, which it referred to as “Water and Waterpower Rights” and “Timber Rights”.

Instead of standing up for the public ownership of water and timber resources and refuting AbitibiBowater’s claims to proprietary “rights” in Canadian public goods, the Harper Government entered into a $130 million consent judgment to settle the NAFTA claim.

The potential consequences for the protection and regulation of Canada’s public resources are dire: the settlement goes farther than any NAFTA judgement to date, recognizing AbitibiBowater’s “rights” to Newfoundland’s water and timber. This sets a precedent in which the obligation of governments to treat water as a public trust essential to both human well-being and biodiversity rank second to commercial and private interests.


Steven Shrybman

Practice Areas

Public Interest Litigation