Should municipalities worry about becoming the target of a NAFTA Chapter 11 foreign investor claim?
NAFTA Chapter 11 rules ask that companies be treated fairly and equally. Canadian municipalities already operate in this manner. The people working for firms in your jurisdiction – your constituents – expect that their employers will be treated fairly by their municipal regulators. They expect their firm to have an equal chance to compete for business, and to be treated like all other businesses. In Canada, companies have long had the right to sue governments in domestic law. What the NAFTA does is set out an agreed procedure that is common to all three NAFTA Partners to ensure that investors from NAFTA countries are treated in accordance with international law. The obligations under the NAFTA are assumed by the federal governments of Canada, the U.S. and Mexico. Therefore, these governments would be respondent in any dispute arising from alleged breaches of the Agreement. In such circumstances, the federal government would work closely with the relevant provincial, territorial or muni
