Canada: Directors And The Environment: Toward Accrued Liability?

Last Updated: March 3 2008

Edited by Julie-Martine Loranger

The environment has a more and more prominent position in the news and political sphere. Therefore it should not be surprising to see, over the next few years, an increase in sanctions relating to environmental legislation. And if in the past directors were relatively safe in that regard, it seems that sooner or later they will be the target of a tightening in terms of enforcement of standards.

Moreover, the table is already set for the authorities since both federal and provincial laws contain provisions pertaining to personal liability of directors in case of an offense.

Statutory liability of directors

a) at the Federal level

Federal environmental legislation, among which, the Canadian Environmental Protection Act (1999) ("CEPA") and the Fisheries Act, contain provisions for important monetary penalties in the case of directors and officers who participate in an offense, authorize it or permit it directly or by omission.

The CEPA contains a provision, among others, for an offense of "aiding and abetting" for directors and officers who have given the order, authorized, assented or participated in an offense of the CEPA. They are considered as being co-creators of the offense and are liable for punishment of the offense whether or not the corporation has been prosecuted or found guilty of the offense. Moreover, the CEPA forces directors and officers to exercise due diligence to ensure the corporation complies to the CEPA and its regulations as well as to the orders and guidelines of the Minister and its agents

Type of offenses

Offenses to the CEPA go from the communication of false information or the omission to communicate certain information, to the non-compliance to ministerial orders, the non-declaration of discharge in the environment and the omission of taking the required emergency measures. The fines contained in the CEPA can go up to a $1,000,000 a day as well as result in prison sentences.

Watch out for the fish

The Fisheries Act also contains an aiding and abetting offense for directors when there is a discharge of a dangerous substance in waters inhabited by fish or in any other location where there is a risk of the dangerous substance penetrating waters inhabited by fish or for the substance affecting a fish habitat. The fines contained in the Fisheries Act, just like in the CEPA, can go as far as a $1,000,000 a day, as well as result in prison sentences.

b) in Québec

The Environment Quality Act ("EQA") states that a director or officer of a corporation who leads the latter by means of an order, an authorization, an advice or encouragement, to refuse or neglect to comply with an order or to emit, deposit, release or discharge a contaminant into the environment in contravention of the provisions of the EQA, commits an offense and is liable to a penalty of at least $2,000 and at the most of $20,000.

Grounds of defense

The most common grounds of defense in the case of an environmental offense is that of due diligence. And thus, one of the most popular means for a corporation to meet the regulatory requirements of the courts, is to conduct an environmental due diligence verification as well as put an environmental management system in place, especially in the case of a corporation that presents risks to the environment. This process should include, among others:

  1. environmental policies and guidelines,
  2. adequate training for employees and directors,
  3. a crisis response plan,
  4. a verification of conformity to laws and regulations,
  5. a verification and maintenance of the equipment, and
  6. a regular inspection program.

Civil proceedings against directors and officers

In addition to statutory offenses, directors and officers are not protected from civil proceedings from the authorities or individuals. Indeed, the EQA also provides for civil proceedings against directors and officers, notably to recover costs relating to the refusal or neglect of the corporation to conform to an order pursuant to this Act.

This type of proceedings could be quite onerous for a director or officer in a case where, for example, the corporation does not conform to a remediation order of a site and the Ministry of Sustainable Development, Environment and Parks incurs the expenses of the remediation. This is exactly what happened in Saint-Basile-le-Grand in the warehouse fire that released PCBs: the attorney-general of Québec sought to recover the costs of the clean-up and decontamination of the site and of protecting the environment that amounted to more than 17 million dollars. In this case, the director and principal shareholder was sued personally for the costs since it had been decided that he was the directing mind of the corporation.

Also, directors can be the target of proceedings brought by individuals although, generally, up to now, these proceedings involving the personal liability of directors seem to have been rejected for lack of evidence. Thus, recently the Court of appeal refused to authorize a class action against directors in the matter of Regroupement des citoyens contre la pollution v. Alex Couture, J.E. 2007-934 by refusing to lift the corporate veil because of the lack of evidence of the directors' liability. However, in the case of the class action of Girard v. 2944-7828 Québec inc., J.E. 2003-1583 (S.C.) and J.E. 2005-182, the Superior Court and the Court of appeal agreed to lift the corporate veil and the directors operating a landfill site were sentenced solidarily to pay damages.

So every corporate director should be very cautious with respect to the environment, even if his or her corporation is not directly involved in the environmental sector.

Gowlings has many environmental specialists who know what type of situations to avoid and can give advice on the best protection measures.

Do not hesitate to contact us if you wish to discuss any of the questions relating to your duties and obligations or to have your policies, guidelines or environmental conformity program duly assessed.

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.

Events from this Firm
8 Nov 2016, Seminar, Ottawa, Canada

The prospect of an internal investigation raises many thorny issues. This presentation will canvass some of the potential triggering events, and discuss how to structure an investigation, retain forensic assistance and manage the inevitable ethical issues that will arise.

22 Nov 2016, Seminar, Ottawa, Canada

From the boardroom to the shop floor, effective organizations recognize the value of having a diverse workplace. This presentation will explore effective strategies to promote diversity, defeat bias and encourage a broader community outlook.

7 Dec 2016, Seminar, Ottawa, Canada

Staying local but going global presents its challenges. Gowling WLG lawyers offer an international roundtable on doing business in the U.K., France, Germany, China and Russia. This three-hour session will videoconference in lawyers from around the world to discuss business and intellectual property hurdles.

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.