Canada: Court Of Appeal Weighs Conflicting MOE And CCAA Orders

Last Updated: October 11 2013
Article by Barry Glaspell and Aimée Collier

Most Read Contributor in Canada, September 2016

On October 3, 2013, the Court of Appeal for Ontario issued two significant decisions1 on the interplay between provincial environmental remediation and federal insolvency orders. The cases are of interest to environmental and insolvency lawyers across Canada. They are equally of interest to taxpayers who foot remediation costs shifted through insolvency.


In Nortel2, the Ontario Superior Court had stayed Ministry of Environment (MOE) orders pursuant to a Companies' Creditors Arrangement Act (CCAA) insolvency priorities process. The judge rejected MOE's submission that environmental cleanup orders only become a CCAA "claim" upon transformation into a payment obligation. A similar result was then applied in Northstar3 by the same judge. Each lower court decision was released prior to the Supreme Court of Canada (SCC) landmark AbitibiBowater4 decision addressing similar issues.5


The Ontario Court of Appeal allowed the MOE's appeal in Nortel.

Nortel had owned contaminated properties in Belleville, Brampton, Brockville, Kingston and London. Prior to Nortel filing for CCAA protection, it disposed of each site apart from a minor interest in the London property. Critically, at the point of CCAA filing, the MOE had not issued any remediation order. The MOE issued orders following Nortel's CCAA filing. Nortel estimated it would cost $18 million to comply.

In finding the MOE orders were not CCAA-stayed, the Court of Appeal noted the following stay requirements:

1. There must be a debt, liability or obligation to a creditor;

2. The claim must be founded on an obligation falling within the time limit for CCAA claims; and

3. It must be possible to attach a monetary value to the obligation, based on substance as opposed to form.

The Court of Appeal held that ongoing environmental remediation obligations may be reduced to compromisable CCAA monetary claims only where: (i) the province has performed remediation work and advanced a claim for reimbursement; or (ii) the obligation may properly be considered a contingent or future claim because it is sufficiently certain the province will do the work and seek reimbursement.

In brief, MOE orders will only be stayed under a CCAA order if there is sufficient reliability that the provincial regulator "will ultimately perform remediation work", thus entitling it to seek reimbursement by means of a monetary claim.

In AbitibiBowater, the SCC had indicated not all regulatory environmental orders will fit into the CCAA definition of a "claim". Nortel has provided the first such example in Ontario.

The Court of Appeal's decision seeks to give effect to the balancing of multiple stakeholder interests in the CCAA process including the general public. Not all environmental regulatory orders will be provable claims.

Unlike in AbitibiBowater, in Nortel other unrelated parties named in the MOE orders including the current owners6 were jointly and severally liable with Nortel for compliance costs. The MOE also had power, legally and practically, to make future orders against subsequent owners. Accordingly, it was not sufficiently certain the MOE would be forced to undertake remediation of four of the Nortel properties because other responsible persons besides Nortel existed.

With respect to the London, Ontario property, the Court of Appeal made an exception. On the facts it was sufficiently certain the MOE would undertake Nortel's cleanup obligations and seek reimbursement. Nortel still retained some ownership and no other entity existed following Nortel's insolvency. The property had no value and was abandoned. Therefore, the MOE order for the London site was compromisable as a claim under the CCAA process, shifting costs to taxpayers.


The same Court of Appeal panel heard the MOE's appeal in Northstar. Unlike in Nortel, the MOE made orders against Northstar before it filed for CCAA protection. Northstar sold all of its assets except for a property in Cambridge, Ontario, which had extensive trichloroethylene contamination. Unsurprisingly, no willing purchaser stepped forward for the contaminated property. Northstar indicated its intention to stop remediation and abandon it.

On these facts, the Court of Appeal agreed with the lower court that the MOE order sought to enforce, in practical terms, a payment obligation. The MOE had no realistic alternative but to remediate the Cambridge property. No subsequent purchaser was available to become subject to MOE orders.

As with Nortel's London property, the MOE order became a CCAA provable claim, it being sufficiently certain the MOE would end up remediating the Cambridge site and seeking reimbursement from Northstar.


MOE remediation orders are now being judicially characterized as either regulatory (not folded into a CCAA stay order) or CCAA provable claims (stayed under the CCAA statute).

Accordingly, relative timing of CCAA protection and MOE remediation orders becomes crucial. The regulator's stated intention and liquidity of other parties named in a cleanup order also are key considerations.

Read together, these two decisions demonstrate the current confluence of Canadian insolvency and environmental law, providing greater clarity on whether a regulator's cleanup order will be subject to a CCAA stay of proceedings.

CCAA stays of MOE orders impact Ontario taxpayers left with the remediation tab. Those with contaminated sites need expert legal assistance in order to avoid unexpected results.


1 Re Nortel Networks Corporation, 2013 ONCA 599; Re Northstar Aerospace Inc, 2013 ONCA 600.

2 Re Nortel Networks Corp., 2012 ONSC 1213.

3 Re Northstar Aerospace Inc., 2012 ONSC 3323.

4 Newfoundland and Labrador v. AbitibiBowater Inc., 2012 SCC 67.

5 BLG's summary of the AbitibiBowater decision is available at:

6 In AbitibiBowater, Newfoundland and Labrador owned the properties and it was reasonable to expect they would remediate.

About BLG

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.