Investigators from an environmental watchdog set up as part of the North American Free Trade Agreement want to investigate whether Canada is enforcing its laws on toxic leakage from giant oilsands tailings ponds.

Canada has already told the Commission on Environmental Cooperation that it doesn't have that right. The disagreement sets up a second fight between the Harper government and the three-nation body intended to ensure free trade doesn't degrade environmental enforcement.

"The (investigators) have acted contrary to their authority," says a letter from Environment Canada to the commission. "The current submission should be terminated."

The conflict stems from a complaint filed in 2010 by two environmental groups and three individuals.

It cites reports and research from governments, industry and environmentalists that all conclude an unknown amount of tailings from the oilsands are seeping into area groundwater. The groups allege the seepage adds up to as much as four billion litres a year of waste water containing hydrocarbons and heavy metals known to be toxic to fish.

They say such releases break the Fisheries Act and they've recommended the commission investigate whether Canada is turning a blind eye to environmental crimes by a powerful and lucrative industry.

"We've all seen the accumulating evidence over the past year in terms of linking tailings to local watersheds," said Hannah McKinnon of Environmental Defence Canada, one of the groups that filed the complaint. "Most of us believe they really don't have this under control."

On Thursday, commission investigators recommended the body begin looking into those complaints. Any such move must first be approved by a majority vote of the three NAFTA nations.

Instead of responding to the allegations, Canada tried to block the commission by pointing to a legal action filed by a private citizen in Fort McMurray, Alta., that levelled similar criticisms. The commission is not allowed to investigate any matter that's before the courts.

That legal action was heard in February. The person who filed it confirmed to The Canadian Press that he considers the matter dead.

Nevertheless, Environment Canada argues that because the appeal period isn't over, the commission's staff is offside.

That sets up an impasse which could play out similarly to another conflict with the commission over Canada's handling of wild salmon stocks.

Commission staff have recommended an investigation into whether Canada protects wild salmon stocks adequately from disease carried by farmed salmon.

Canada, the U.S. and Mexico must vote on whether to approve a salmon investigation by Tuesday. Canada has said it will ignore the results.

"We do not intend to engage in or recognize as valid ... any further consideration of this submission," Environment Canada has written.

Department spokesman Mark Johnson said in an email Thursday that Canada will let the process unfold.

"Canada takes enforcement of our environmental laws very seriously," he said.

A vote on whether to proceed with a tailings pond investigation must be held by Oct. 27. The investigation must be complete within 180 working days and the countries have another 150 working days to review it and decide if it will be made public.

The commission's enforcement powers are limited, McKinnon acknowledged.

"This is just another opportunity to shed legitimate light on these serious problems."

McKinnon said the recommendation for a review comes as the world grows increasingly skeptical of Canada's environmental policies.

"The world really is watching the tar sands and watching Alberta and watching the federal government to see if they really are the great environmental stewards that all of the PR claims they are."

Since the commission was formed in 1995, Canada has been the subject of 37 per cent of complaints filed. Mexico was named in 49 per cent and the United States in 11 per cent.

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