Canada has paid out over $300 million under NAFTA’s ISDS, think tank reveals

22 January 2018: A report published by the Canadian Centre for Policy Alternatives (CCPA) last week has revealed that Canada has paid out nearly $220 million in losses under the NAFTA investor-state dispute settlement mechanism (ISDS), and $95 million in legal fees defending against ISDS claims.

CPPA is calling on Canada’s trade negotiators to agree to the Trump administration’s proposal for an ISDS ‘opt-in’ option in a renegotiated NAFTA. They argue that ISDS not only imposes huge costs but also can lead to ‘regulatory chill’, where governments shy away from public policy decisions due to fears that they will be sued by foreign investors.

There have been 41 ISDS claims made against Canada, 23 ISDS claims made against Mexico and 21 made against the US. Canada has been sued 15 times since 2010. In the report, CCPA suggests that the Canadian government’s commitment to ISDS and compliance with the scheme ‘encourages’ investor-state claims against itself.

Canada’s chief negotiator, Steve Verheul, has said that if an ISDS ‘opt-in’ clause was added to NAFTA then all three parties to the deal would opt out. Negotiators are meeting in Montreal this week for the sixth round of talks.