CEPA Environmental Enforcement Provisions Now in Force
By: Jessica Webster, Summer Law Student and Harry Dahme
On June 22, 2012, the offence, penalty, and sentencing provisions of the Canadian Environmental Protection Act (CEPA), implemented under the Environmental Enforcement Act, came into force. These amendments, as with all amendments implemented under the Environmental Enforcement Act, are designed to “achieve greater compliance and respect for Federal Environmental laws.”1 If convicted under CEPA, individuals, persons and corporations will now face increased maximum fines, longer limitation periods and a requirement for increased transparency.
Bill C-16, An Act to amend certain Acts that relate to the environment and to enact provisions respecting the enforcement of certain Acts that relate to the environment (Environmental Enforcement Act) was passed by the House of Commons on May 13, 2009 and received Royal Assent on June 18, 2009. This Bill created a new Act called the Environmental Violations Administrative Monetary Penalties Act and amended enforcement, offence, penalty and sentencing provisions of the following Acts:
- The Antarctic Environmental Protection Act;
- The Canadian National Marine Conservation Areas Act;
- The Canada National Parks Act;
- The Canada Wildlife Act;
- The Canadian Environmental Protection Act, 1999;
- The International River Improvements Act;
- The Migratory Birds Convention Act, 1994;
- The Saguenay-St. Lawrence Marine Park Act; and
- The Wild Animal and Plant Protection and Regulation of International and Interprovincial Trade Act. 2
The Fisheries Act and Species at Risk Act were not amended by this legislation.
Not all provisions of Bill C-16 came into force on December 10 2010. Some provisions including the offence, penalty and sentencing provisions of CEPA were delayed coming into force in order for accompanying regulations to be established. The applicable Regulations for were published in the Canada Gazette, Part II on July 4, 2012. These regulations complete the fine scheme for CEPA under the Environmental Enforcement Act and enabled the offence, sentencing and penalty provisions to come into force.
The fine regime provisions of CEPA were significantly amended. CEPA now recognizes different ‘types’ of offences with more serious offences corresponding to higher fine amounts. According to the Regulatory Impact Analysis Statement “[u]nder the new scheme, designated offences involving direct harm, or risk of harm to the environment, or obstruction of authority, are subject to a new, increased fine range.”3 The new fine regime introduces mandatory minimum fines and new, higher maximum fines. The penalty ranges have gone from a maximum of $1,000,000 for conviction on indictment for the most serious offence type by a person to a maximum of $6,000,000. The penalties double if the person is convicted of a subsequent, substantially similar, offence under CEPA or one other environmental Acts. The idea behind the increased fine is to decrease the financial incentive of contravening environmental laws.
CEPA’s fine regime also creates different classes of offenders. A distinction is made between large and small corporations. Smaller corporations are liable for lower minimum and maximum fines if convicted under the Act. CEPA, as amended, defines a ‘small revenue corporation’ as a corporation whose gross revenues are not more than $5,000,000 for the 12 months before the day before the subject matter of the proceedings arose.4 This distinction has been criticized as being arbitrary. The amendments also set out specific penalties for ships under section 272.4 of CEPA (as amended). Ships too, have also been distinguished based on the ship size with larger ships (7,500 tonnes of deadweight or over) responsible for higher fine regimes.
The Environmental Enforcement Act has expanded the existing sentencing provisions under CEPA. Some of the sentencing amendments introduced by the Environmental Enforcement Act were previously brought into force on December 10, 2010. These include provisions related to the purpose and principles of sentencing, and aggravating factors to be considered during sentencing. CEPA, as amended, requires a disgorgement of benefits gained while contravening the Act. The court is able to increase the maximum fine by the value of the property, benefit or advantage gained through the commission of the offence. This has the potential to significantly increase fines imposed upon conviction depending on the nature of the contravention. Upon conviction courts are now required to order corporations to notify the Shareholders of the conviction including facts of the offence and details pertaining to the punishment imposed.
Other amendments of significance include:
- an increase in the limitation period for proceedings by way of summary conviction from 2 to 5 years;
- extension of liability to a Mandatary (a person to whom a mandate is given5), in addition to the directors and officers of the corporation;
- clarification that directors and officers, and a Mandatary, if convicted, would be subject to the penalty outlined for individuals;
- extension of liability, by section 76 of the Environmental Enforcement Act which adds a provision in CEPA to expand liability to a ship’s owner, if convicted under the Act, where the owner is not a corporation.
There are still a number of provisions in the Environmental Enforcement Act that are not yet in force. The provisions that are still not in force are for the Wildlife Act, the Migratory Birds Convention Act, and the Wild Animal and Plant Protection and Regulation of International and Interprovincial Trade Act. Similar to the recently in force CEPA provisions, the not yet in force provisions under the specified Acts will implement increased fines, longer limitation periods and increased transparency for individuals, persons and corporations convicted under the Acts. The fines, once in force, will similarly introduce mandatory minimums and increased maximum fines. In addition, provisions outlining the fundamental purpose of sentencing, sentencing principles and a list of aggravating factors used to determine whether the fine amount should be increased will also be included once these provisions come into force.
1. Environment Canada, “Canada’s Environmental Enforcement Act”, online: Environment Canada < http://www.ec.gc.ca/alef-ewe/default.asp?lang=En&n=2AAFD90B-1>
2. Bill C-16, An Act to amend certain Acts that relate to the environment and to enact provisions respecting the enforcement of certain Acts that relate to the environment, 1st Sess, 40th Parl, 2009.
3. Regulations Designating Regulatory Provisions for Purposes of Enforcement (Canadian Environmental Protection Act, 1999), (2012) C Gaz II.
4. Supra note 2 at s 72.
5. The New Shorter Oxford English Dictionary, Thumb Index ed 1993, volume 1, sub verbo “mandatory”.
We’re pleased to announce that 33 Gowlings professionals have been recognized as leading business lawyers in the latest edition of Who’s Who Legal’s The International Who’s Who of Business Lawyers 2012. This annual compendium features exceptional legal practitioners in 139 countries for their expertise in corporate and commercial law.
In total, our professionals received 38 rankings in 15 practice areas. Based on the number of professionals per category, Gowlings was a top-listed firm in the areas of Environment, Franchise and Trade-marks. In the area of Environment, the following professionals were recognized:
Alan Blair, Harry Dahme, Jennifer Danahy, David Estrin, Paul Granda and Mark Madras.