Nova Scotia denies quarry deal, says province not liable for NAFTA damages

Nova Scotia says there is no agreement with Ottawa that obliges it to pay some of the damage award coming to a U.S. company that was improperly stopped from opening a quarry in Digby County.

New Jersey-based Bilcon successfully appealed the decision to reject its quarry proposal for Digby Neck to an international NAFTA tribunal.

• Nova Scotia taxpayers may be on hook for NAFTA defeat

After the tribunal ruling last week, Bilcon's lawyer, Barry Appleton, suggested Nova Scotia will be on the hook for yet-to-determined compensatory damages since the province was held partly responsible and a cost-sharing side deal exists.

Nova Scotia disagrees.

"No cost-sharing agreement exists between Nova Scotia and the government of Canada in this particular case," Nova Scotia Environment Department spokesperson Heather Fairbairn said in an email to CBC News Tuesday.

"We are seeking clarity from the government of Canada — as the lead on this file — about what its next steps will be. We have no additional information at this time."

On Tuesday, Premier Stephen McNeil told reporters he expects Ottawa to pick up the cost.

"At this point we believe it's Ottawa," McNeil said.

"The announcement came down on Friday. We're looking at it. Ottawa is looking at it. It's our belief the challenge is with NAFTA, this is the federal government," he added.

Bilcon successfully argued it had been unfairly blindsided by a joint review panel created by the province and Ottawa to examine the project.

The panel rejected the quarry on the grounds it compromised "community core values," a vague criteria never actually raised at the hearing.

"Bilcon had been denied a fair opportunity to know the case it had to meet and to address it," the tribunal wrote in its decision.

The tribunal said the joint review panel did not properly assess the environmental effects of the proposed quarry and, wrongly, completely ignored mitigation measures.

"The rigorous and comprehensive evaluation was not in fact carried out... There was in fact a fundamental departure from the methodology required by Canadian and Nova Scotian law."