Canada: Tougher Environmental Enforcement Measures Now In Place

Reprinted with the permission of Miller Thomson LLP
(*originally published in December 2010)

On December 10, 2010 many sections of Canada's Environmental Enforcement Act ("EEA") came into force. The EEA amends the offence, sentencing, penalty, and enforcement provisions of nine federal environmental statutes in the following respects:

• Prescribing minimum fines;
• Increasing fines up to $12 million;
• Doubling penalties for second offences;
• Creating different penalty regimes for individuals (including officers and directors of corporations), small corporations and large corporations;
• Creating an administrative monetary penalty system;
• Directing that fines be paid to an Environmental Damages Fund;
• Requiring courts to order companies to notify shareholders;
• Establishing a positive duty of care on directors and officers to comply with the legislation;
• Creating a public registry for corporate offenders; and
• Identifying factors that courts are to consider in sentencing offenders.

The federal statutes affected are the:

• Canadian Environmental Protection Act, 1999
• Antarctic Environmental Protection Act
• Canada National Marine Conservation Areas Act
• Canada National Parks Act
• Canada Wildlife Act
• International River Improvements Act
• Migratory Birds Convention Act
• Saguenay-St. Lawrence Marine Park Act
• Wild Animal and Plant Protection and Regulation of International and Interprovincial Trade Act

(the "Environmental Acts")

Increasing Penalties

One of the major changes under the EEA is the substantial increase in monetary penalties that a court may award upon conviction. The new fine scheme, summarized in the following table, differentiates between individuals, small corporations, and large corporations; between serious offences and other offences; and between summary convictions and indictment.

Sentencing

The EEA amends each Environmental Act to include a provision relating to the fundamental purposes of sentencing, which include: deterrence, denunciation, and reinforcement of the polluter-pays principle. In addition to sentencing considerations under the Criminal Code, the EAA directs courts to consider additional aggravating factors. These include whether the offence caused damage or risk of damage to the environment or ecosystem, the degree of damage, and whether the damage is extensive, persistent or irreparable. The Act's broad definition of damage as including both loss of use value and non-use value, increases the likelihood that a court will find this to be an aggravating factor.

Other aggravating factors include: whether the offence was committed intentionally or recklessly; whether the offender had the financial means to take reasonable steps to prevent the commission of the offence; whether the offender intended to increase revenue or decrease costs; whether there was a history of non-compliance; whether attempts were made to conceal the commission of the offence; and whether the offender failed to prevent, mitigate or remediate the effects.

Upon conviction, corporate offenders are required to notify shareholders, and their identity will be posted for a minimum of five years on a publicly accessible registry.

Repeat Offenders

The EEA prescribes that fines may be doubled for repeat offenders, making large corporations potentially liable to fines of $12 million. Furthermore, if a court is satisfied that profits were made in the commission of the offence, the Act makes it mandatory for a judge to impose an additional fine equal to such profits. While this new penalty scheme enables courts to impose much higher fines, a judge does have discretion to impose a fine below the minimum where there is proof that it would cause undue hardship. The Act prescribes that, unless otherwise ordered by the court, all fines be paid to an Environmental Damages Fund and used for purposes related to protecting, conserving or restoring the environment or to administering that Fund.

As of December 10, 2010, the penalty provisions of the following statutes have been amended: the Antarctic Environmental Protection Act; the Canada National Marine Conservation Areas Act; the Canada National Parks Act; the International River Improvements Act; and the Saguenay-St. Lawrence Marine Park Act. The amended offence, penalty, liability and sentencing provisions have not yet come into force for the following statutes: the Canada Wildlife Act; the Canadian Environmental Protection Act; the Migratory Birds Convention Act; and the Wild Animal and Plant Protection and Regulation of International and Interprovincial Trade Act.¹

In addition to monetary fines, the EAA also provides for creative sentencing options upon conviction. Under the amended Environmental Acts, courts are authorized to suspend or cancel any licence or permit that was contravened. It also enables a court to prohibit the offender from applying for new licences or permits for a set period of time. Other innovative sentencing options include: preparation and implementation of a pollution prevention plan; payment of scholarships for environmental studies; and community service work.

Environmental Violations Administrative Monetary Penalties Act

The EEA also created the Environmental Violations Administrative Monetary Penalties Act (the "EVAMPA"), which came into force on December 10, 2010. The purpose of EVAMPA is "to establish, as an alternative to the existing penal system and as a supplement to existing enforcement measures, a fair and efficient administrative monetary penalty system for the enforcement of the Environmental Acts".

To achieve this purpose, the Act greatly expands the scope of potential liability. It establishes liability for a) directors and officers of corporations; b) directors, officers and owners of ships and vessels; and c) owners, operators, masters, and chief engineers of ships and vessels. Moreover, EVAMPA removes the defences of due diligence and mistake of fact to persons, ships or vessels named in a notice of violation. Absolute liability will arise as soon as it is established that the regulatory offence was committed.

EVAMPA also increases liability by providing that any violation that continues for more than one day constitutes a separate violation for each day on which it is committed. It may be that this Act, which can not be used to pursue a violation already subject to a proceeding under another Environmental Act, will be used to capture violations that would not otherwise be prosecuted. Although the Act expands the scope of liability, defendants may nevertheless favour prosecution under this Act, since its maximum penalty of $5,000 for individuals and $25,000 for other persons, ships, or vessels is significantly less than the maximum penalties in the Environmental Acts described above. Furthermore, violations of the Environmental Violations Administrative Monetary Penalties Act do not constitute an offence under the Criminal Code.

Enforcement Provisions Amendments

The amendments introduced by the EEA broaden the authority of enforcement officers and give them statutory immunity (provided that they act in good faith). Although their specific responsibilities vary under each Environmental Act, if an enforcement officer has reasonable grounds to believe that an offence has been committed, he or she is empowered to detain vessels; stop and detain conveyances; issue tickets; and arrest without a warrant. To assist enforcement officers to meet this expanded mandate, the Federal Government has committed to increasing the number of enforcement officer positions and improving its laboratory equipment and technical expertise.

Conclusions

To date, there are no reported decisions regarding prosecutions under the new EEA provisions or under EVAMPA. However, it is anticipated that these legislative amendments will promote deterrence, denunciation, and reinforcement of the polluterpays principle among those who commit environmental regulatory offences.

Footnote

^{1 The sections that have not yet come into force are: 47(2) and 48 (dealing with offences, penalties, liability and sentencing under the Canada Wildlife Act); 72 to 80, 87 and 88 (dealing with offences, penalties, liability and sentencing under the Canadian Environmental Protection Act, 1999); 101 and 102 (dealing with offences, penalties, liability and sentencing under the Migratory Birds Convention Act, 1994); 121 to 123 (dealing with offences, penalties, liability and sentencing under the Wild Animal and Plant Protection and Regulation of International and Interprovincial Trade Act); and 127 (dealing with coordinating amendment to Contravention Act).}

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