US$20 billion claimed by GNL Quebec: a questionable claim, according to experts

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20 G $ US claimed by GNL Québec : a questionable demand, according to experts

This map shows the location that was planned for the Énergie Saguenay natural gas liquefaction plant.

The request by the promoters of GNL Québec and Gazoduq, who are seeking compensation of 20 billion US dollars from the Government of Canada, raises questions in the eyes of some experts.

The promoters of GNL Quebec have filed for arbitration against Ottawa for blocking their plans for a natural gas liquefaction terminal in Saguenay and a 780 kilometer gas pipeline that would have linked northeastern Ontario to the Port of Saguenay.< /p>

The federal government had refused to authorize the terminal project in February 2022.

The application was filed with the International Center for Settlement of Investment Disputes (ICSID) of the Group of the World Bank located in Washington.

Promoters cite arguments related to the American Free Trade Agreement (NAFTA) and the Canada-United States-Mexico Agreement (ACEUM).

Few details have been released on the request for arbitration and its justifications. GNL Quebec did not want to comment on the file on Saturday.

The LNG Quebec natural gas liquefaction terminal was projected at Port of Saguenay. (File photo)

The request for 20 billion dollars seems disproportionate in the eyes of the law professor at Laval University Charles-Emmanuel Côté, while the project never saw the light of day.

“It seems to me at first glance a bit exaggerated. Requests for 20 billion dollars, there have hardly ever been any in this type of arbitration. We are really far, far from that. The largest amounts that have been claimed against Canada in the past – then it has never had to pay such amounts – were claims of $500 million. »

— Charles-Emmanuel Côté, professor of law at Laval University

The professor wonders in this context about the chances of success of the promoters of GNL Québec before the ICSID.

Colin Pratte, who is an associate researcher at the Institute for Socio-Economic Research and Information (IRIS), also wonders how GNL Quebec will assert its arguments.

This attempt to obtain funds from governments for the rejection suffered by the promoters is questionable to say the least, because the question at stake is to determine what is the cause of the rejection of the project. Is it social protest, ecological reasons?, he asks.

The researcher also points out that the ICSID is a criticized institution.

“This tribunal, which is held by the World Bank, is also the object of strong criticism, since it consists roughly in attacking the political and regulatory levers available to a State to decide on the economic activities that take place on its territory. territory. »

— Colin Pratte, associate researcher at IRIS

ICSID acts as a secretariat that supports tribunals created on a case-by-case basis, according to the claims submitted, specifies the Professor Charles-Emmanuel Côté.

It is a center that is open to complaints from companies that invest in a State other than their State of origin, so foreign companies can make a complaint against another State that has agreed to admit their investment on their territory. The parties legally undertake that the award will be binding on them, he explains.

He also wonders about the reasons for invoking NAFTA in GNL Québec's request, when this agreement is no longer in force and has been replaced by CUSMA.

There is no longer Canada's consent to arbitration in the new CUSMA. So why this claim, almost three years later?, he asks.

The professor argues that the promoters intend to bet on a transitional period of three years included in NAFTA , but that this interpretation may be debated.

The LNG Quebec natural gas liquefaction plant would have been built near the Grande-Anse maritime terminal, in the borough of La Baie in Saguenay.

Bloquiste federal MP for Jonquière, Mario Simard, believes that GNL Québec must respect the refusals of Ottawa and Québec.

Now, I wonder: what does it take for GNL to understand that this project will not take place in Quebec? I have the impression that the company may be seeking an out-of-court agreement where it could erase the expenses that have been associated with its project. If this is the case, it really sends the wrong signal to the population. It sends the wrong signal to tax payers who will have to pay for this project, he worried.

Federal MP for Jonquière, Mario Simard

Federal Minister of the Environment and Climate Change, Steven Guilbeault, was not available on Saturday to react to the news.

The Conservative MP for Chicoutimi-Le Fjord, Richard Martel, who had gave its support to the GNL Québec project during the hearings of the Bureau d'audiences publiques sur l'environnement, declined to comment on GNL Québec's arbitration request on Saturday.

The Port of Saguenay, where the liquefaction terminal project was to see the light of day, also declined to comment on the appeal.

With information from Julien Boudreault-Gauthier and Jean-François Coulombe

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