View of some of the dozens of turbines on Wolfe Island, Kingston Ontario.

View of some of the dozens of turbines on Wolfe Island, Kingston Ontario. Ontario halted a proposed 100 turbine added development in 2011, and under NAFTA Chapter 11, Canadian taxpayers will have to pay $28 million dollar penalty, and the project may not proceed regardless
Photo Credit: via South Shore Conservancey

Huge free trade penalty against Canada

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It is another example of what those opposed to international trade deals have been saying about the ability of sovereign governments to enact domestic policy decisions in regard to environmental and social protection, and other decisions.

Ontario taxpayers will now be on the hook for over $28-million penalty to Windstream Energy LLC, a company owned by New York investors. This comes as a result of a challenge under the North American Free Trade Deal (NAFTA).

“This is another outrageous example of taxpayers having to fund foreign corporations who do not respect the democratic rights of governments to regulate in the interests of their citizens. This is another reason to reject ISDS in NAFTA and other trade deals such as CETA” Maude Barlow, Council of Canadians

The dispute stems from a decision by the Ontario government in 2011 to place a moratorium on offshore wind turbines. This frustrated a $5.2 billion contract in 2010 with Windstream to erect 100 turbines offshore near Kingston Ontario in a 300MW project signed with the Ontario Power Authority.

An arbitration tribunal launched under the auspices of NAFTA’s Chapter 11 dispute mechanism decided in favour of Windstream Energy LLC, and against Canada. Although the moratorium was a provincial decision, under NAFTA, it is the federal government which is held responsible. The award, $25,182,900 was for damages, and a further $2,912,432 was for legal costs. It is the largest penalty to date against Canada under the free trade agreement.

The tribunal ruled that the provincial government  “on the whole did relatively little to address the scientific uncertainty surrounding offshore wind that it relied upon as the main publicly-cited reason for the moratorium.” Further, it “did little to address the legal and contractual limbo in which Windstream found itself after the imposition of the moratorium.”

The free trade tribunal also ruled that the contract is formally “in force”.

Reaction to decision- for and against

In a press release Windstream director David Mars said, “This award is an appropriate first step at remedying the challenges we have faced. We look forward to working with the Government of Ontario to build this project in accordance with the contract.”

In reaction to the decision, the citizen’s advocacy group, Council of Canadians said today, “Here’s just another example of the outrageous nature of investor state dispute settlement provisions, the chapter 11 in NAFTA.  Here it is: targeting Ontario green energy policies which encourage local economic development.  This is the same thing that we will be getting with the new deals Canada’s promoting CETA and the TPP. We in Canada are the most sued country in the developed world, over NAFTA.  It begs the question: why are we signing up for more punishment?”

Windstream Energy LLC is the sole owner of the Windstream Wolfe Island Shoals Wind Energy Project, a 300 MW offshore wind power project in eastern Lake Ontario. Its investors are a New York City-based investment group

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16 comments on “Huge free trade penalty against Canada
  1. Danny Dolen says:

    Hopefully the NDP will adopt abrogation of all these trade deals that designate Canada as an Open Pit Mine

  2. ursula wagner says:

    https://www.youtube.com/watch?v=L9inPBS98cs

    there is a short video from Maude Barlow what freetrade agreements did to Canada,
    and her advice for CETA.

    a MUST!!!!!!!!!!

  3. Bob says:

    Canadians, now is the time to take control of your destiny. National sovereignty is being threatened everywhere. The pundits thought Brexit would never happen, so it is possible to escape the clutches of globalism. All these trade agreements (like NAFTA and TPP) are nothing more than insurance policies for the multi-nationals while at the same time ensuring these corporations have access to the cheapest labour.

  4. Jacob Rempel says:

    The root of this (and earlier and the next such) problem lies in the entire NAFTA/FTA cozy arrangement among political and corporation leaders. And the problem is now especially great and dangerous because clean energy projects such as the wind power enterprise are stopped. It seems to me that governments now should obligate every enrgy cororation to transition rapidly to projects like wind generators, tidal power generators, solar panels and geothermal projects.

  5. Lynn Hickey says:

    This is a prime example of what is wrong with these so-called “Free Trade” agreements. In this decision made by an outsider ISDS tribunal, Canada is being penalized unjustly for trying to use its own policies to protect the environment. It is time for the federal government to pull out of this treaty which is obviously not in Canadian interests at all.

    • Ian Wilson says:

      At what cost? Politicians signed this agreement, and others, with cancellation clauses worse that the offshore tribunal penalties. Canada is run by naive, self serving politicians. A prospective leader of the Conservative party told me “I am a corporate lawyer and this sort of thing, this sort of penalty, will never happen”. Eat your words Mr. oh! no names mentioned.

  6. Marjaleena Repo says:

    That is why abrogations of both the Canada-US FTA and NAFTA are in order, and we can do that with a six months’ notice. After the cancellation we return to trading with the US (and Mexico) under the WTO rules, under which (when it was GATT) we did very well and never suffered the kinds of penalties we have had under NAFTA. It is insanity for Canada to continue masochistically to destroy our own industries and our government health and envirnomental policies!

  7. James Vandenblink says:

    Harper, Trudeau, what’s the difference?
    They’re both owned and operated by the same corporate crowd. NAFTA CETA, TPP, it’s getting worse all the time! The Big Business mob is laughing all the way to the offshore bank.
    Canada’s sovereignty is up for sale!

  8. Joe Visconti says:

    The whole ISDS mechanism is a sham and just caters to the corporations. When are the people of Canada (and other jurisdictions in the world) going to wake up? When are the governments going to get rid of these horrible mechanisms and take into account the good of their people instead of the good of these corporations? It is sickening.

  9. Meg O'Mahony says:

    This is unbelievable! A foreign country suing us for protecting the part of the environment that we have responsibility for protecting? They are entitled to profit from harvesting wind in a IBA? Without penalty? ENOUGH!!!
    Free trade? Since when is “wind” a traded commodity? …and it’s not that wind is limited to just Canada! It’s time to advocate and fight for justice and protecting the environment vs caving into and supporting big business. Do it!

  10. Kim says:

    This is what happens when you break a contract. Strictly the government fault for putting dogma ahead of legalities

  11. John Bell says:

    If You think it`s bad now, just wait until China nails us on her Alberta tar pit operations!

  12. Stephanie Robinson says:

    How did the company enter into a contract that might be disputed later? How does a foreign company get to this position without early opposition or intervention from the sovereign territory in which it proposes to operate? I understand that NAFTA is nearly impossible to get out of, so perhaps our governments should be looking at how to mitigate such situations.

  13. Greg Teed says:

    Remember the trade tariffs the U.S. placed on Canadian lumber – in direct contradiction to NAFTA? Remember what happened when Canada sought arbitration? The Americans laughed and refused.

    Maybe we should laugh and refuse now, and sell our uranium elsewhere.

  14. Carol J Tencza says:

    Bruce, thanks for this. With all the money being doled out to foreign countries, why is some of that money being used to develop our own green energy? We give away and then allow contracts from out-of-country thus retarding devlopment of our own resources by Canadian companies who have the equipments, knowledge, etc., to take the contract. Should we be looking at Ontario for shame for not giving the same opportunities to our own businesses. This is totally asinine. We are not running our own shows. Seems like every time there is a large contract handed out, it goes to outside investors. Perhaps some research into these things needs to be opened up for public scrutiny. Given that it is going to be paid for by our dollars, we should at least be getting the work and keeping the money circulating within our own boarders.

    .

  15. ursula wagner says:

    No wonder, that informed people are against these wonderful, “SAFE” trade agreements.

    If we are not careful, we will get more of it