Canada: Ontario Clarifies Administrative Penalty Regime Under Climate Change Legislation

Last Updated: February 19 2018
Article by John Georgakopoulos and Joanna Vince

Ontario recently released its Draft Guideline for the Implementation of Administrative Penalties under the Climate Change Mitigation and Low-Carbon Economy Act, 2016 ("Draft Guideline").1

The Draft Guideline clarifies how Administrative Monetary Penalties ("AMPs") are issued and calculated under the Climate Change Mitigation and Low-carbon Economy Act, 2016 ("the Act")2 and O. Reg. 540/17. The Draft Guideline also describes the factors that the Ministry of the Environment and Climate Change ("MOECC") will consider when calculating an AMP. The MOECC is receiving comments on the Draft Guideline until February 16, 2018.3

AMPs are calculated based on particular formulas set out in O. Reg. 540/17. The Act provides that an AMP cannot exceed $1M.4


The Act implements Ontario's Cap and Trade Program, sets provincial targets for greenhouse gas ("GHG") reduction, and establishes obligations for GHG emitters.5 See our article on the Act here.

The MOECC may impose AMPs to enforce the Act and prevent financial benefits resulting from non-compliance.6 Funds collected through AMPs go to the MOECC's GHG Reduction Account to fund GHG reduction initiatives.7

The MOECC can issue AMPs to entities and persons involved in the cap and trade program, including owners and operators of facilities, designated account representatives, sponsors, and accredited verification bodies.8

The MOECC can issue AMPs for certain contraventions of the Act9, including failing to register with the cap and trade program, failing to submit reports or information to the MOECC, providing false or misleading information to the MOECC, and engaging in prohibited transactions with emissions allowances or credits.10 The MOECC can also issue AMPs for contraventions of regulations under the Act, including the:

  • Reporting Regulation (O. Reg. 143/16)
  • Cap and Trade Regulation (O. Reg. 144/16), and
  • Offsets Regulation (O. Reg. 539/17).11 See our article on Ontario's Offsets Regulation here.

The Draft Guideline outlines the process and timeline for issuance of an AMP. The process is similar to the process used by the MOECC to issue AMPs under the Ontario Environmental Protection Act.12

  1. If the MOECC identifies a potential contravention of the Act or its regulations, the MOECC must issue a Notice of Intent to issue an AMP.13
  2. A party that receives a Notice of Intent can request that the MOECC consider additional information relevant to the contravention (including the duration of the contravention14) and steps the party has or is now taking to remedy the contravention or prevent it from reoccurring. The party can request a meeting with the MOECC to discuss any additional information provided.15 If a party does not request that the MOECC consider additional information, the MOECC may issue an order for an AMP based on available information.16
  3. After considering additional information provided by a party, the MOECC may either issue an order for an AMP or notice of its decision to not issue an AMP.17
  4. A party that has been ordered to pay an AMP can appeal the order to the Environmental Review Tribunal ("ERT").18 The ERT may confirm, revoke, or vary the amount of the order.19

The defence of due diligence is not available where AMPs are imposed.20 Issuance of an order for an AMP does not prevent prosecution for a contravention of the Act.21


The MOECC has developed formulas for calculating AMPs under the Act. The Draft Guideline provides examples of how the MOECC will calculate AMPs in different contexts.22

To calculate an AMP, the MOECC:

  1. Determines a Daily Base Penalty from a set of penalty ranges. Daily Base Penalties are set higher for:

    • corporations (as opposed to individuals), and
    • serious contraventions. Contraventions are considered serious where (i) they impact the environment, the integrity and reputation of the climate change program or other parties, (ii) they are deliberate, or (iii) the contravening party has prior convictions.23
  2. Multiplies the Daily Base Penalty by the number of days or partial days of non-compliance to determine a Multi-day Base Penalty.24 Multi-day Base Penalties are capped to ensure that multi-day offences do not result in unlimited penalties.25
  3. Adjusts the Daily or Multi-day Base Penalty based on additional information provided by the party in non-compliance to determine the Final Base Penalty. The MOECC may reduce the Base Penalty if the party demonstrates that it took or is taking significant, well-documented, actions to correct the contravention and prevent the contravention from occurring again.26
  4. Adds the value of any Economic Benefit the party gained from non-compliance to the Final Base Penalty to determine the total AMP. Economic Benefit includes the value of any costs avoided or delayed, or revenue gained by non-compliance. Unlike the Final Base Penalty, a party's Economic Benefit value will not be altered based on preventative or mitigative actions the party has taken.27


1 Ministry of the Environment and Climate Change, January, 2018. DRAFT Guideline for the Implementation of Administrative Penalties under the Climate Change Mitigation and Low-carbon Economy Act, 2016 (Ontario Regulation 540/17), online at: [Draft Guideline].

2 SO 2016, c 7 [the Act].

3 MOECC. January 2, 2018. Guideline for the Implementation of Administrative Penalties under the Climate Change Mitigation and Low-carbon Economy Act, 2016. EBR No. 013-1818, online at:

4 The Act, s. 57(8); Draft Guideline, pg. 3.

5 Draft Guideline, pg. 2.

6 The Act, s. 57(1).

7 Draft Guideline, pg. 3; The Act, s. 71 and Schedule 1.

8 O. Reg. 540/17, Schedule 1.

9 O. Reg. 540/17 "Administrative Penalties" under the Act, Schedule 1.

10 O. Reg. 540/17, Schedule 1.

11 Draft Guideline, pg. 3.

12 Environmental Protection Act, RSO 1990, c E.19, ss. 182.3, 182.4, and 182.5.

13 Draft Guideline, pg. 4; The MOECC must issue the Notice of Intent within 60 days of becoming aware of the potential non-compliance.

14 Draft Guideline, pg. 12.

15 Draft Guideline, pg. 5; The individual or corporation must request that the MOECC consider additional information within 15 days of the Notice of Intent being issued. The individual or corporation may request that the MOECC consider the additional information in relation to its calculation of the Initial Base Penalty, the Initial Economic Benefit, or Reductions for Preventative and Mitigative Actions.

16 Draft Guideline, pg. 5.

17 Draft Guideline, pg. 6. The MOECC must issue an AMP or issue a notice of decision not to issue an AMP from 15 days to 1 year after it becomes aware of the non-compliance.

18 Draft Guideline, pg. 6; The individual or corporation must appeal the order for an AMP to the ERT within 15 days of the order being served.

19 Draft Guideline, pg. 6.

20 Draft Guideline, pg. 3.

21 Draft Guideline, pg. 3.

22 Draft Guideline, pgs. 8-15.

23 Draft Guideline, pg. 8. Prior convictions include convictions under the Act, its regulations, or O. Reg. 452/09 (Greenhouse Gas Emissions Reporting) under the Environmental Protection Act.

24 Draft Guideline, pg. 7.

25 Draft Guideline, pg. 7 and 11.

26 Draft Guideline, pg. 7, and 13-14.

27 Draft Guideline, pgs. 7, 15-16.

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.

John Georgakopoulos
Joanna Vince
In association with
Related Topics
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions