Canada has blocked an investigation into Alberta's tailings ponds by NAFTA's environmental watchdog.

Representatives of the Canadian government, along with Mexico and the United States, on Tuesday passed a resolution behind closed doors to stop the Commission for Environmental Cooperation from looking into whether the federal government is failing to enforce the Fisheries Act.

Two environmental groups and three private citizens had asked the commission to investigate whether tailings ponds were leaking into nearby rivers and creeks in northern Alberta.

Allowing toxic material to get into water is against the federal Fisheries Act. The commission secretariat agreed last year there was a case, and told all three countries it wanted to go ahead with an investigation, called a factual record.

It shows that the Canadian government is willing to circumvent institutions that make sure Canada upholds environmental laws - Dale Marshall, Environmental Defence

But the unanimous decision released Wednesday by the three-member council that governs the commission has stopped that in its tracks.

"It's disappointing," said Dale Marshall of Environmental Defence, one of the groups that asked for the investigation.

"It shows that the Canadian government is willing to circumvent institutions that make sure Canada upholds environmental laws."

It's the third time in a year Canada has successfully stopped NAFTA's scrutiny of its environmental behaviour. In 2014, with Mexico's support, it stopped investigations into polar bear protection and B.C. salmon farms.

The Commission for Environmental Cooperation was set up under the North American Free Trade Agreement to make countries follow their own environmental laws.

But this time, its reasons for not looking into tailings ponds are legal not environmental.

Canada originally tried to stop the investigation by saying there was an ongoing legal case on the tailings ponds launched by a private citizen in Fort McMurray, Alta. The rules say if that's happening, the NAFTA watchdog can't conduct its own case.

But Tony Boschmann, the man behind that legal action, told CBC News Wednesday he went to Alberta provincial court last February seeking charges over suspected tailings ponds leaks into the Athabasca River. The court decided there wasn't enough evidence to proceed, and the appeal period ended in August.

He said he finds the government's use of his case to block an investigation "misleading."

"There is a desire not to uncover the truth," Boschmann said. "It's convenient for the Canadian government to use this argument."

Despite assurances from their own secretariat staff that the Alberta case had been dropped, Mexico and the United States sided with Canada and agreed a lawsuit could potentially still go ahead.

"Accordingly, the secretariat should have proceeded no further in its analysis and terminated the submission," said the written decision by the council instructing its staff "not to prepare a factual record with respect to this submission."

Tailings ponds may still face scrutiny

Alberta's tailings are a touchy political issue for the Alberta and Canadian governments. They've become a symbol of the environmental impacts of oilsands production.

There were hints this would happen just before Christmas when Environment Canada said the three countries had already decided to stop the investigation into the tailings ponds and then later retracted the statement. Staff familiar with the file told CBC News that Canada had been aggressively trying to block the case.

But it appears the U.S. thinks tailings ponds could be investigated in the future.

The written decision notes the U.S. believes groups could still submit another request once other domestic legal cases are completed.

Marshall is not sure what Environmental Defence will do now, pointing out the NAFTA watchdog seems hamstrung.

"It's possible we could go to the commission again," he said. "But it's clear the Canadian government is not going to be transparent. It doesn't care if the tailings ponds are leaking toxic chemicals into fresh water."