Ikea Canada says a section of land where it wants to build its largest store in the country has been contaminated with dry-cleaning chemicals.

The furniture and housewares chain says in court documents that an environmental study found tetrachloroethylene (also referred to as PCE or "perc") in the soil under the parking lot at the east end of the Ottawa mall the retail outlet currently occupies.

The company claims the contamination is affecting plans to move its location from the west side of the mall into a new, two-storey building on the east side that will become the largest Ikea in the country.

Ikea has launched a suit against the owner of a small strip mall near the site, the past owner of the strip mall, and the owners of two dry-cleaning outlets that operated there until 2004. Ikea wants them to help pay for the cleanup. The lawsuit, which Ikea filed in July, claims $1 million in damages from each of the eight defendants, plus other costs.

Ikea's lawsuit has also set off third-party litigation between the defendants.

Ikea alleges that PCE and other hazardous chemicals seeped into the soil and water table from the dry-cleaner located in a nearby plaza.

Soil samples taken from the southeast corner of the property during a 2007 environmental assessment found concentrations of the chemical at 37 parts per billion, about seven times the limit for non-potable groundwater.

The owners of the plaza deny there is any problem with contamination from their property.

PCE is considered a probable or possible human carcinogen and in high concentrations can cause neurological problems and other health problems.

"The degradation products of PCE over time is also dangerous and harmful to humans and the natural environment," Ikea says in the lawsuit. "The migration of the PCE onto the Ikea property, which contains both retail operations and restaurants, poses a hazard which Ikea cannot properly address while the migration from the Baxter property continues." However, an Ikea spokeswoman says the company believes the level of chemicals the environmental testing company found is not dangerous.

"We have been told that it is contained underground and that there is no risk to the health and safety of anybody shopping," said Madeleine Lowenborg-Frick.

Lowenborg-Frick said Ikea will pay to have the ground cleaned up, regardless of the outcome of the lawsuit.

One of the defendants, Baxter Plaza owner John Yang, denied there was a problem with contamination. He said that testing of his property, ordered by the court last month, showed "most of the spots are OK."

In a statement of defence, Yang and his company denied the dry-cleaning company contaminated the ground or groundwater and challenged Ikea to prove otherwise. None of the allegations have been proven in court.