Major amendments to the Environment Quality Act (the
EQA) which came into force on November 4, 2011
significantly increase the amounts of the fines that may be imposed
pursuant thereto. The maximum fine that may be imposed on a legal
person is increased to $6 million ($1 million for a natural
person). The minimum and maximum fines double for a second offence
and triple for a subsequent offence. The maximum term of
imprisonment is increased to 3 years (5 years less a day for a
Directors and officers are treated severely in the amended EQA:
fines that may be imposed on them are double those that would apply
in the case of a natural person for the same offence. In addition,
if the legal person (including, for such purposes, a partnership
and an association without legal personality (term used in the
EQA), in addition to a corporation) commits an offence under the
EQA or its regulations, the directors and officers are
presumed to have committed the offence themselves, unless
it is established that they exercised due diligence and took all
necessary precautions to prevent the offense. The EQA makes no
distinction based on the type of legal person involved (public or
private corporation, partnership, etc.) or its size.
Furthermore, directors and officers of a legal person become
solidarily liable with the legal person for the payment of any
amounts due to the Minister, unless they establish that they
exercised due care and diligence to prevent the failure which led
to the claim.
The implementation of procedures to allow directors and officers
to establish due diligence now becomes paramount. However, it
should be borne in mind that such measures cannot guarantee that a
due diligence defence will always be available.
New and important powers are granted to the Ministry of
Sustainable Development, Environment and Parks
(MSDEP), including the power to revoke, modify,
suspend or refuse authorizations (including, generally, any permit
which may be issued pursuant to the EQA or its regulations) if the
applicant (or authorization holder), or certain persons that are
legally or factually related to it, including its directors,
officers and major shareholders and a person with whom it has
entered into a contract for a loan of money (excluding banks and
certain other financial institutions), have been convicted of, for
instance, an offence under a fiscal law, an indictable offence
connected with activities covered by the authorization, an
indictable offence under certain sections of the Criminal
Code (offences related to participation in criminal
organizations) or an offence under the EQA or one of its
The MSDEP is further granted the power to impose, starting in
February 2012, newly created administrative monetary penalties
(AMPs), pursuant to a regime intended to be rapid
be fast and simple. We expect that the AMP regime, not subject to
the burdens of criminal standards, will be used much more
frequently than the penal system (historically seldom used). The
amount of the AMP will vary according to the nature of the
provision with which the person failed to comply, from $1,000 to
$10,000 for a legal person and from $250 to $2000 for a natural
person, for each day the failure continues.
The frequency at which AMPs will be imposed remains to be seen
but AMPs are regulatory and not subject to the burden of criminal
proof or to criminal procedures and so could be used quite
frequently. A general framework regarding AMPs is expected to be
published soon by the MSDEP.
Finally, the limitation period for penal proceedings following
an offense under the EQA is considerably increased.
Directors and officers should be aware that due diligence
regarding environmental matters becomes an inevitable requirement
and in many circumstances will require measures beyond those
currently taken by businesses.
The Imperial Oil refinery pled guilty to one offence for discharging a contaminant, coker stabilizer, thermocracked gas, into the natural environment causing an adverse effect and was fined $650,000...
Ontario's Ministry of the Environment and Climate Change continues to roll out its Climate Change Action Plan with its proposed GHG guide for projects that are subject to the province's Environmental Assessment Act.
In June, 2016, Justice Faieta of the Ontario Superior Court of Justice awarded damages of $57,712.31 plus interest against legal counsel who failed to file a claim within the required limitation period.
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