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Legal Guide


Overview

Environmental enforcement in Canada generally proceeds through three stages – voluntary abatement, mandatory rectification and, as a last resort, prosecution and penalties. Both federal regulators and provincial environmental regulators have designated enforcement and abatement personnel, and some of the regulators have publicly available written policies setting out how abatement and enforcement are handled.

Canadian regulators encourage a proactive and cooperative approach to environmental protection. It is possible in the right circumstances to obtain a grace period and present a compliance plan, setting out designated plans of actions and timeframes to achieve compliance. Where there is no such cooperation, environmental regulators are empowered to issue mandatory administrative orders, directing that certain activities cease and that steps be taken to implement remedial or abatement measures, or to conduct further tests and studies. While these orders can be appealed, they are generally not stayed for the duration of the appeal, making immediate compliance mandatory. The time to file an appeal may be as short as 15 days, so any order requires immediate attention and action.

Inspection and investigation powers of regulators

Both federal and provincial statutes invest regulators with broad inspection, and related search and seizure powers, to determine and investigate environmental compliance. Such rights allow regulators to: enter property without a warrant or notice; seize items; take samples; conduct sub-surface investigations; require, inspect and seize documents; and make related inquiries. As these rights do not extend to buildings, an inspector needs either a court-issued warrant, or the consent of the owner or occupier, to enter and conduct an inspection of, or within, a building. Failure to cooperate with an inspector is a separate offense punishable by a fine and/or imprisonment. This offense does not include a refusal to provide consent for an inspector to enter a building.

Canadian law draws a marked distinction between inspections and investigations. The purpose of inspections is to assess regulatory compliance. Accordingly, inspectors also have the power to issue administrative orders requiring a party to take steps to attain or maintain compliance. Investigations, on the other hand, are for gathering evidence of an offense and a possible prosecution. A defendant in an investigation has rights against self-incrimination and to legal counsel. It is unlawful for investigators to use the inspection powers to effectively conduct an investigation.

Spill/release reporting

Spills and releases (generally defined as discharges out of the ordinary course of events, including exceedances of levels prescribed in permits) must be immediately reported to the regulator under most environmental statutes and municipal by-laws. Off-site migration of a contaminant may trigger a reporting obligation under certain circumstances. Some provinces do not impose a general obligation to report historic contamination, even if migrating offsite. A number of provinces have reporting requirements for specific types of discharges, such as leaks from old storage tanks. Contamination, regardless of characteristics, may also have to be reported if it poses a serious risk to human heath.

A “spill” of a contaminant triggers an immediate obligation to investigate and remediate, as well as to report. Regulators have the power to issue administrative orders requiring remedial or mitigative action. Such orders can compel a party to conduct tests or perform a site assessment to determine residual soil contamination or risk of migration, and to fashion an appropriate cleanup program.

Whistleblower protection

Federal and most provincial environmental statutes contain whistleblower protection clauses. Whistleblower protection is also extended under Canadian criminal law, which makes it an offense, punishable by up to five years imprisonment, to threaten, harass or dismiss a whistleblower.

Penalties and defences

Different provinces vary in the severity of environmental penalties. Ontario currently has the strictest regime, as it requires a minimum mandatory fine of CA$25,000 for corporations per count. Maximum penalties can be as high as CA$1 million and can be imposed for each day on which an offense continues. Imprisonment for up to six months for individuals convicted of environmental offenses is also possible.

Generally speaking, there is a “due diligence defence” available to polluters who can establish that they took all reasonable steps in the circumstances to prevent the occurrence of the offense. Evidence of due diligence involves a proactive approach to prevention and risk management at all levels of the corporation, and includes, for example, regular training, auditing and reporting within the corporation, emergency response programs, compliance with internal protocols and appropriate disciplinary action. An exception to the availability of a due diligence defence are the administrative penalties that now exist for certain offenses in Ontario and Alberta. There is also a common-law strict civil liability if a dangerous substance escapes from someone’s property and harms another property.

Ongoing liability

The dissolution of a corporation does not provide a shield against environmental liabilities. Administrative orders can be issued against a corporation, as well as anybody who had “charge, management or control”, including directors and officers, regardless of the status of the corporation. Regulatory fines and criminal sanctions, including imprisonment, against such parties similarly survive corporate dissolution. If, at the time a corporation was dissolved, there was an outstanding environmental liability, shareholders would be liable to the extent they received funds out of the dissolution.

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