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Celgar launches $250-million NAFTA claim against Canada over alleged discrimination by B.C. Hydro

January 31st, 2012

By Castlegar Source

Mercer International, the parent company of Castlegar’s pulp mill, Zellstoff Celgar, is filing a $250-million claim indicating discrimination on the part of B.C. Hydro is costing the company  about $19 million of incremental energy sales every year.

The claim, according to a Mercer press release issued Jan. 26, is against the government of Canada for what Mercer calls, “breaches by it of its obligations under the North American Free Trade Agreement (NAFTA)”.

“We have been forced to commence the NAFTA Claim following years of attempts to resolve our issues through dialogue with the province and proceedings before the commission because of NAFTA time period limitations relating to the expiry of our claim”, said Mercer president Jimmy Lee in the press release.  

“We are bringing the claim as, under provincial policy, the mill’s ability to effectively utilize its own generation assets and to sell and purchase energy is severely and unfairly restricted.  All other competing pulp mills in British Columbia receive more favorable treatment with respect to their ability to purchase and sell energy.

“This puts the mill at an unfair competitive disadvantage,” Lee added.

“In our various attempts to resolve the issue, we have sought fair treatment in order to put us on equal footing with other pulp mills within the province that have electrical generation capacity.  Unfortunately, we were not able to obtain a satisfactory resolution through these efforts.”


Despite having head offices in Vancouver, Mercer International is a U.S. company with mills in Germany and Canada.


Lee said Celgar is not being given the same treatment as domestic Canadian companies, as required under NAFTA, which is why the claim is being filed against Canada, not BC Hydro or the government of BC.


Lee went on to call BC Hydro’s treatment of the mill “unfair and discriminatory”.


 “Under the NAFTA Claim, we will be seeking damages in the amount of approximately $250 million Cnd, consisting of past losses of approximately $19 million Cnd. per year accruing since 2008 and the net present value of projected losses arising from the ongoing application of discriminatory provincial policies,” he said.


To read the press release in its entirety, visit

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