LNG Quebec promoters have filed an arbitration against Ottawa for blocking their plans for a natural gas liquefaction terminal in Saguenay and a 780-kilometer gas pipeline that would have connected northeastern Ontario to the Port of Saguenay.
The federal government refused to approve the terminal project in February 2022.
The lawsuit was filed with the World Bank Group’s International Center for Settlement of Investment Disputes (ICSID) in Washington.
Proponents cite arguments related to the American Free Trade Agreement (NAFTA) and the Canada-United States-Mexico Agreement (CUSMA).
Few details were disclosed about the Request for Arbitration and its rationale. GNL Quebec declined to comment on the filing on Saturday.
The natural gas liquefaction terminal LNG Quebec was planned for the Port of Saguenay. (file photo)
Photo: Marc-André Couture, courtesy of the Port of Saguenay
request deemed disproportionate
The demand for $20 billion seems disproportionate in the eyes of Charles-Emmanuel Côté, a law professor at Laval University, while the project never saw the light of day.
“At first glance, that seems a bit exaggerated. Claims of $20 billion have almost never been seen in this type of arbitration. We’re really far, far away from that. The largest amounts claimed against Canada in the past – and it has never had to pay such amounts – were claims of $500 million. »
— A quote from Charles-Emmanuel Côté, Professor of Law at Laval University
In this context, Professor Côté wonders about the chances of success of the promoters of GNL Québec before the ICSID.
Colin Pratte, associate researcher at the Institute for Socio-Economic Research and Information (IRIS), also wonders how GNL Quebec will make its case.
This attempt to obtain funding from governments for the rejection suffered by the project promoters is questionable, to say the least, as it raises the question of what caused the project to be rejected. Is it social protest, ecological reasons? he asks.
institution criticized
The researcher also points out that ICSID is a criticized institution.
“Moreover, this tribunal, held by the World Bank, is the subject of severe criticism, since it essentially consists in attacking the political and regulatory levers available to a state to decide on the economic activities carried out on its territory take place. . »
— A quote from Colin Pratte, Associate Researcher at IRIS
Professor Charles-Emmanuel Côté specifies that ICSID acts as a secretariat that supports arbitration panels created on a case-by-case basis according to the requests submitted.
It is a center open to complaints from companies investing in a state other than their home state, allowing foreign companies to file a complaint against another state that has agreed to allow their investment on their territory. The parties legally agree that the arbitral award will be binding on them, he explains.
He also wonders about the reasons for invoking NAFTA in the GNL Québec request when that agreement is no longer in force and has been replaced by CUSMA.
In the new CUSMA, Canada no longer consents to arbitration. So why this claim, almost three years later? he asks.
The professor argues that proponents intend to bet on a three-year transition period in NAFTA, but that this interpretation could be debated.
Quebec’s LNG natural gas liquefaction plant would have been built near the Grande-Anse marine terminal in the La Baie district of Saguenay.
Photo: Radio Canada / Pascal Girard
A rejection that must be respected, said Mario Simard
Bloc Québécois MP for Jonquière Mario Simard believes GNL Québec must respect Ottawa and Québec refusals.
Now I’m wondering: what does it take for GNL to understand that this project won’t take place in Quebec? I have the impression that the company may be seeking an out-of-court settlement to recoup the costs associated with its project. If so, it really sends the wrong signal to the population. It sends the wrong signal to taxpayers, who will have to pay for this project, he feared.
Deputy for Jonquière, Mario Simard
Photo: Sophie Lavoie/ The Daily
German Environment and Climate Change Minister Steven Guilbeault could not be reached on Saturday to respond to the news.
For his part, Conservative MP for Chicoutimi-Le Fjord Richard Martel, who had backed the GNL Québec project at the Bureau d’audiences publiques sur l’environnement hearings, declined to comment on the request to GNL Quebec arbitration on Saturday.
The port of Saguenay, where the liquefaction terminal project was to see the light of day, also declined to comment on this appeal.
With information from Julien Boudreault-Gauthier and Jean-François Coulombe