On May 30, 2016, the Federal Court of Appeal upheld a lower
court decision that had confirmed the constitutional and
administrative law validity of a statutory requirement that diesel
fuel contain at least 2% renewable fuel. As set out in the
FCA's Reasons for Decision in Syncrude Canada
Ltd. v. Canada (Attorney General), this requirement is a valid
exercise of the Federal Government's criminal law powers and is
not improperly aimed at creating a market for renewable fuels
(which could be within provincial jurisdiction).
The legislation at issue is the Canadian Environmental Protection Act,
1999(CEPA). Section 139 of the CEPA prohibits
the production, importation and sale in Canada of fuel that does
not meet prescribed requirements. Subsection 140(1) of the CEPA
provides that regulations may be made for carrying out the purposes
of section 139. Subsection 140(2) requires that the Governor in
Council be of the opinion that the regulation could make a
significant contribution to the prevention of, or reduction in, air
pollution resulting from, directly or indirectly, the combustion of
The Renewable Fuels Regulations (RFRs) were made
under the authority of section 140 of the CEPA. The stated
objective of the RFRs was to reduce greenhouse gas (GHG) emissions,
"thereby contributing towards the protection of Canadians and
the environment from the impact of climate change and air
pollution." Subsection 5(2) of the RFRs requires 2% of diesel
fuel to be renewable fuel.
Subsection 272(1) of the CEPA makes it an offence to breach
section 139. If prosecuted by indictment, an offender is liable for
a fine of between $500,000 and $6,000,000.
In Syncrude Canada Ltd. v. Canada (Attorney General),
the applicant challenged the constitutional validity of subsection
5(2) of the RFRs. Among other things, Syncrude alleged that the
subsection was not a valid exercise of Parliament's criminal
law power because it lacked a criminal law purpose and intruded
into provincial legislative responsibility for non-renewable
natural resources. Syncrude did not succeed in its position in the
first instance, before the Federal Court of Canada (see here).
Syncrude appealed the Federal Court decision to the FCA on a
number of grounds. None of these was successful.
As set out in its Reasons for Decision, the FCA concluded that
"subsection 5(2) [of the RFRs] is directed to maintaining the
health and safety of Canadians, as well as the natural environment
upon which life depends." The Court found that this is a
"valid criminal law purpose," as it addresses "a
public concern relating to peace, order, security, morality, health
or some other purpose." The Court relied on a prior Supreme
Court of Canada decision (R v. Hydro-Québec ) for the
proposition that "the protection of a clean environment is a
public purpose [...] sufficient to support a criminal prohibition
[...] to put it another way, pollution is an 'evil' that
Parliament can legitimately seek to suppress."
The Court also dismissed Syncrude's arguments that
subsection 5(2) of the RFRs is ineffective at achieving its purpose
(reducing GHG emissions) and that the dominant purpose of the
requirement is to create a market in renewable fuels. On the first
point, the FCA did not find any evidentiary support of the
ineffectiveness of the requirements, and noted that ineffectiveness
is not proven simply by showing that there is a better way to
accomplish the same ends. On the second point, the Court stated
that "[t]he criminal law power is not negated simply because
Parliament hoped that the underlying sanction would encourage the
consumption of renewable fuel and spur a demand for fuels that did
not produce GHGs. All criminal law seeks to deter or modify
behaviour, and it remains a valid use of the power if Parliament
foresees behavioural responses, either in persons or in the
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Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
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