A Pennsylvania investor has served notice that he plans to use NAFTA to sue Canada for $355 million, alleging Ontario unfairly shut down a plan to have a mine serve as a landfill site for Toronto garbage.

Vito G. Gallo alleges the Ontario government's 2004 move to ban dumping at the Adams Mine site in Kirkland Lake was tantamount to expropriation, The Globe and Mail reports.

"The intent of Bill 49 was clear and beyond dispute: to shut down the Adams Mine property as a solid waste landfill site and to put the Enterprise out of business," the NAFTA filing says in documents served on the office of Canada's deputy attorney general several months ago.

Gallo argues Canada breached a NAFTA clause that allows investors in Canada, Mexico and the U.S to sue other NAFTA members if their investments have been unfairly damaged by law or regulation.

The investor's Ontario company owns and controls the Adams Mine property, a former open-pit iron ore mine.

Gallo's NAFTA filing alleges government "interference'' took place after Dalton McGuinty's Liberals took office in October 2003 and reversed earlier approvals for the project, the Globe reports.

Gallo's filing also states the site's south pit is capable of receiving one million tonnes of non-hazardous waste per year and has a capacity of at least 20 million tonnes.

The McGuinty government's decision reversed earlier environmental approvals by the province and the green light given by the previous Progressive Conservatives in August 1998.

International Trade Minister David Emerson's office had no immediate comment on the case Sunday. A Toronto lawyer for Gallo declined to discuss the case with the newspaper.

Toronto decided to ship garbage to Michigan after looking for a replacement site in the late 1990s to take the place of its Keele Valley landfill.

The federal government, as signatory to NAFTA, must answer the complaint even though it was the Ontario government's actions that are central to the case.

Canada and Gallo are supposed to consult on the matter before he moves to submit a claim for compensation under NAFTA. If nothing is resolved, and 90 days have elapsed since the notice of intent to submit a claim was filed, he is entitled to ask for an arbitration panel to hear his case, the Globe reports.

U.S. and Canadian NAFTA negotiators originally put the investment provisions in the trade agreement to make sure the Mexican government did not arbitrarily nationalize an industry without properly compensating foreign owners.

Companies, however, have been using the NAFTA rules to challenge decisions in all three countries that cost them profit, the Globe reports.