The suit also claims some residents of homes insulated with Zonolite became sick, and that the houses were all but unsaleable even if the material was removed.

The two lawyers who filed the class action suit say the impact could be as far-reaching as the UFFI debate, which eventually led to the federal government paying out $181 million in compensation to homeowners forced to gut their houses of the toxic material.

“Just as REALTORS® now have to check the box about UFFI every time they sell a property, I think within a few years there will be a box to check whether or not a house has ever had Zolonite in it,'' says lawyer Evatt Merchant of Calgary. Similar lawsuits have also filed class actions in Federal Court, as well as in Alberta and Saskatchewan. A separate suit is also underway in Quebec.

The suits names U.S.-based construction giant W.R. Grace and affiliated companies who made and sold Zonolite, as well as the federal government, chiefly the Department of National Defence, which used Zonolite widely in military housing. The lawsuit filed in B.C. also says the insulation product was also used in homes on First Nation reserves.

The Defence Department launched a $2 million program last January to test military homes and buildings for Zonolite but there are no plans to relocate residents. The Canadian military then decided to spend almost $2 million to seal the attics of military housing that has the asbestos-tainted insulation Zonolite, including housing at the military base at Shilo, Manitoba. In letters to military families sent out earlier this month, the military said it will be installing a barrier to ensure Zonolite can't be disturbed if it is exposed, and also sealing joints and cracks around ventilation and light fixtures in the uppermost ceilings of housing units where asbestos has been found.

While Health Canada issued a warning about Zonolite in the spring of 2004, the federal government has thus far said it's not clear what health risk Zonolite actually poses and has denied requests to help homeowners test for the presence of asbestos, or remove Zonolite completely. Zonolite generally is thought to release asbestos particles into the air only if disturbed.

Ottawa promoted the use of both Zonolite and UFFI during the oil-price spikes of the 1970s and early 1980s as a way to conserve energy, offering grants and rebates to homeowners who installed the material. It's estimated up to 300,000 homes were insulated with Zonolite between 1977 and 1984.

Zonolite was the trade name for a type of vermiculite, a granular, asbestos-containing mineral mined by Grace in Libby, Montana. Inhaling its tiny, needle-like asbestos particles can cause various kinds of lung damage and cancer, the latest lawsuit claims. It was available for decades and didn't go off the market in Canada until the mid-1980s. Facing a raft of asbestos-related suits in the United States, Grace filed for bankruptcy protection in 2001.