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COURT AND TRIBUNAL DECISIONS WHAT'S HAPPENING? ONTARIOTOUGH & INNOVATIVE AMENDMENTS TO ONTARIO ENVIRONMENTAL PROTECTION LAWS PROPOSED BY BILL 133Bill 133, given first reading October 27, 2004 in the Ontario legislature, proposes a number of tough and innovative environmental protection measures:
Bill 133, would amend both the Environmental Protection Act (“EPA”) and the Ontario Water Resources Act (“OWRA”). Environmental Penalties Bill 133 equips environmental officials with a new and powerful tool to punish people for spills and other contraventions without going to court. The government calls this the “you spill, you pay” approach. Although the current versions of the EPA and the OWRA include provisions allowing bureaucrats to impose monetary penalties, those sections have never been proclaimed in force. Bill 133 reintroduces this concept under the new name of “environmental penalties.” The environmental penalties initially will target about 176 facilities in the municipal industrial strategic abatement sector, including petroleum refining, iron mining, steel manufacturing, pulp and paper, chemical producers and electrical power generators. The penalties provisions will also apply to persons who are subject to certificates of approval and other permits under the EPA or OWRA. Administrative environmental penalties of up to $20,000 a day for individuals and $100,000 a day for corporations responsible for spills and emissions can be imposed by provincial MOE staff under the proposed law, regardless of impact or fault. The actual amount of the penalty will be determined in accordance with regulations. Unlike fines, which are handed down by a court following a prosecution and conviction that usually occurs months after the event, environmental penalties can be billed within a few days of a spill and are immediately payable. There is no defence of “due diligence” or fault, so the penalty must be paid regardless of environmental impact, and regardless of what reasonable steps may have been taken in an effort to prevent the contravention. An environmental penalty can be issued to a person (ie. a corporation or individual) engaged in a business activity prescribed by regulations or to any person holding, or who is required to hold, or who is exempted under the Act from the requirement to hold a certificate of approval, certificate of property use, licence or permit. Environmental penalties can also be issued against a person who is a director, officer, employee or agent of any such person. An environmental penalty order must be served not later than one year from the date that the contravention occurred or on which evidence of the contravention first came to the attention of the MOE. Despite issuance or grounds for issuance of the penalty, the bill provides that the MOE can make an agreement with a person against whom an order may be or has been made requiring the person to take specified steps, in which case the obligation to pay the penalty may be cancelled or reduced in accordance with the regulations. An environmental penalty order can be appealed to the Environmental Review Tribunal (“ERT”) but on appeal, the onus is on the polluter to disprove that a pollutant or contaminant was discharged. Any appeal of an environmental penalty will stay the requirement to pay the penalty until the appeal is heard. Payment of an environmental penalty does not prejudice the right of the Ministry to prosecute for breach of offences found in the EPA or the OWRA although payment of an environmental penalty can be taken into account in mitigation of sentence. Where an environmental penalty is not paid, the order requiring the payment may be filed with the Superior Court of Justice and enforced as if it were a court order; and the MOE may by order suspend any certificate of approval, licence or permit issued and also refuse to issue any future certificate or licence or approval until the penalty is paid. Penalties are to be deposited into a special fund and used to compensate those who incurred expense as a result of a spill, to provide financial assistance to those who undertake environmental remediation projects, or for such other purposes as may be prescribed by regulation. Higher Fines and Penalties for Conviction of an Offence Bill 133 increases minimum and maximum fines under the EPA and OWRA as well as potential jail terms. Individuals convicted of general offences are will be subject to fines of up to $50,000 per day (increased from $20,000) for a first conviction and up to $100,000 per day (increased from $50,000) for subsequent offences. Imprisonment for up to one year may also be imposed. For more serious offences, in the case of individuals, there will be a minimum fine of $5,000 per day and a maximum fine of $4,000,000 per day on a first conviction, a minimum of $10,000 a day and a maximum of $6,000,000 per day on a second conviction and a minimum fine of $20,000 per day and a maximum fine of $6,000,000 per day on any subsequent conviction. Imprisonment for up to five years less one day may also be imposed. For corporations, the maximum fines for general contraventions will increase from $100,000 per day on a first conviction and $200,000 per day on a subsequent conviction to $250,000 and $500,000 per day respectively. More serious offences carry a minimum fine of $25,000 per day and a maximum fine of $6,000,000 per day on a first conviction, a minimum fine of $50,000 per day and a maximum fine of $10,000,000 per day on a second conviction, and a minimum of $100,000 per day and a maximum of $10,000,000 per day on any subsequent conviction. New Sentencing Considerations re Aggravating Factors Upon conviction for EPA or OWRA offences, the Bill would require the judge to impose a penalty which reflects a number of “aggravating factors” and the “seriousness of the particular circumstances of each of those aggravating factors. If the court decides an aggravating factor does not warrant a more severe penalty, the court is required to give reasons for that decision. “Aggravating factors” are defined as:
The Bill specifically directs a court that in determining the penalty to be imposed, “the court shall not consider compliance with an order issued under this Act in response to the offence to be a mitigating factor.” However, a court may consider the payment of an environmental penalty to be a mitigating factor in imposing sentence, in which case a fine of less than the minimum fine provided for may be imposed. Broader and Reverse Onus Due Diligence Requirements for Officers and Directors The Bill broadens environmental due diligence responsibilities of officers and directors. Currently, both the EPA and the OWRA provide that a duty of care on officers and directors exists to prevent the discharge of contaminants, but only where the corporation “engages in an activity that may result in the discharge of a contaminant.” Bill 133 imposes a duty on directors and officers of all corporations “to take all reasonable care to prevent the corporation from contravening” the EPA and OWRA and orders, approvals, licences or permits issued under such statutes. Failure to carry out this duty constitutes an offence. Bill 133 also imposes a reverse onus on officers and directors. In any prosecution under this section they would have the onus to prove that they took such reasonable care. Provincial and Municipal Staff Can Levy Spill Clean-Up & Remedial Action Costs; New Provisions for Contribution and Indemnity Between Orderees Where a pollutant is spilled, the Bill authorizes both an MOE Director and municipal officials to issue an order requiring the owner or controller of the pollutant to pay reasonable costs or expenses incurred by the respective government regarding remediation of adverse effects, restoration of the natural environment and prevention or reduction of the risk of future discharges by the person against whom the order is made. In the case of a municipal order against a person who owns real property in the municipality where the pollutant was spilled on that property, the municipality will have a lien on the property for the amount specified in the order and that amount will have priority lien status as described in s.1 of the Municipal Act 2001. An appeal may be taken from these orders to the ERT, in which case an automatic stay takes effect. However, the review scope of the ERT is quite limited; it can only consider whether or not the orderee was, immediately before the discharge, the owner or controller of the thing that was discharged, or an employee or agent of such person, whether any of the costs or expenses specified do not relate to things for which the provincial government or the municipality incurred costs or expenses for the purposes specified or whether such costs or expenses are “unreasonable having regard to what was done.” The Bill provides that where two or more persons are liable to pay costs or expenses pursuant to such an order, they are jointly and severally liable to the province or the municipality but, as between themselves, in the absence of an express or implied contract, each is liable to make contribution to and indemnify the other in accordance with certain principles set out in the Bill. However, if it is not practicable to determine the respective degrees to which the fault or negligence of two or more persons liable to pay costs or expenses pursuant to an order caused or contributed to the costs or expenses, such persons shall be deemed to be equally at fault or negligent. Certain Thresholds Lowered Many existing provisions of the EPA and the OWRA require that, in order to establish a contravention or in order to authorize MOE action, something be “likely” to occur or be “expected” to occur. The Bill amends many of these provisions to reduce the threshold so that it is sufficient if something “may” occur. Bill 133 would make it much easier for prosecutors and environmental officials to do their jobs. The Bill also amends certain sections to remove references to an actual or likely “adverse effect.” For example s. 15 of the EPA currently requires notification of the Ministry by a person who discharges a contaminant into the natural environment out of the normal course of events “that causes or is likely to cause an adverse effect.” The Bill would amend this section to remove the reference to causing an adverse effect. Since “contaminant” is defined in the legislation as “any solid, liquid, etc. resulting directly or indirectly from human activities that may cause an adverse effect,” this amendment may be intended simply to remove a redundancy. Alternatively, the change may have the effect of lowering the threshold for reporting discharges. Broader Preventive Measures Orders Bill 133 broadens the preventive requirements that may be ordered under s. 18 of the EPA. These orders can in future be issued, “to prevent, decrease or eliminate an adverse effect that may result from … the presence or discharge of a contaminant in, on or under the property” and to require the development and implementation of plans to prevent or reduce the risk of a spill, or to prevent, decrease or eliminate any adverse effect that results or may result from a spill or other discharge. Deemed Water Impairment Drastically Broadened Deemed impairment of water quality has been drastically broadened under the Bill's changes to the OWRA. Unlawful impairment is deemed to occur by the discharge of material if the material or a derivative of the material enters or may enter the water, directly or indirectly and:
The Minister apparently believes that the amendments are important environmental initiatives, however many of the concepts appear to be at odds with what many would say are the basic principles of our legal system, such as the presumption of innocence, the rule against double jeopardy, the abhorrence of absolute liability coupled with serious penalties, and the rule against overbroad offences. If even half of the changes proposed by Bill 133 become law, we will see dramatic changes in the regulation and enforcement of environmental laws within the province. http://www.ontla.on.ca/documents/Bills/38_Parliament/Session1/b133.pdf Brownfields Statute Law Amendment Act 2001 in ForceThe Record of Site Condition (“RSC”) provisions of the “Brownfields” amendments to the Environmental Protection Act and the Ontario Water Resources Act came into effect on October 1, 2004, together with the RSC regulation (Regulation 153/04). A number of guidance documents have also been released by the Ministry of the Environment (the “MOE”), and the Environmental Site Registry is up and running. The RSC exemption is the “centrepiece” of the new Brownfields law. When an owner engages a “qualified person,” carries out the necessary work, completes an RSC and files it on the Environmental Site Registry and provides a copy to the MOE, the owner will enjoy qualified protection from liability for a range of MOE Orders. Other parties who are involved with the property after the filing of the RSC (and in some cases former owners) will also obtain the protection of the exemption. The intention is that this protection from liability will remove one of the traditional impediments to the development of contaminated lands in Ontario. The RSC exemption is intended to act in the same manner as a “no-action letter” in certain U.S. jurisdictions. Currently the filing of an RSC is voluntary, that is, there is no legal requirement under the statute for the filing of an RSC. Eventually this will change, and such filings will be required whenever there are prescribed changes in property use, generally to a more sensitive use. For a detailed review of the new legislation, see the “Toxic Real Estate” chapter update of David Estrin's book “Business Guide to Environmental Law” (Carswell). Other Ontario Legislative ProposalsOntario Asbestos in Construction Projects and Building Repair Operations Regulation Amendments ProposedThe Ministry of Labour proposed on October 7, 2004 amendments to update safe work procedures and enhance respiratory protection for labourers who come in contact with asbestos during the course of their work. Based on current scientific and technical knowledge, revisions proposed to Regulation 838 prescribe, among other things, measures to control worker exposure to asbestos and guidelines for safe removal of contaminated waste. The proposed amendments will apply to construction projects and to workers involved in maintenance and repair operations in industrial, commercial and institutional buildings that contain asbestos. For details and a comparative table of the new and old regulations see: www.gov.on.ca/LAB/english/hs/reg838/reg838_draft_2.html Ontario Hazardous Waste Pre-Treatment to be RequiredIn a move aimed at putting Ontario on par with the rest of Canada and the US, the MOE is proposing regulations banning untreated hazardous waste from being land disposed when treatment or destruction alternatives exist. The pre-treatment of hazardous waste would have the objective of neutralizing, immobilizing or eliminating all toxic pollutants in the material before disposal. The EBR notice states that pre-treatment requirements “would apply to all hazardous wastes destined for land disposal, including those hazardous wastes destined for landfills owned and operated by companies exclusively for their own wastes.” Due to the economic impact such legislation will have on Ontario's waste management industry, the pre-treatment standards will be phased in over a period of 5 years with a longer time frame allowed for specific waste streams generated by specific industry sectors. As well a “small quantity exemption” is proposed. While this means that only 0.5% of Ontario's hazardous waste will go untreated, such an exemption would affect 40% of generators. Written submissions to the MOE may be made until November 27, 2004. Refer to EBR RA04E0016. For more details see: http://www.ene.gov.on.ca/envregistry/023634er.htm FEDERAL2004 REPORT OF THE COMMISSIONER OF THE ENVIRONMENT AND SUSTAINABLE DEVELOPMENTThe Commissioner of the Environment and Sustainable Development, Johanne Gélinas, tabled her fourth annual report in the House of Commons on October 26th. The Commissioner's mandate is to audit and report to Parliament and Canadians on significant environmental issues and the federal government's various commitments in the area. Ms Gélinas' principal criticism this year was that although the federal government has issued mandates and made commitments to protect the environment and promote sustainable development, these commitments are not followed through due to a “lack of leadership, lack of priority, and lack of will.” The report is comprised of six chapters:
For a more details see:
REPORTING OF PESTICIDE ADVERSE EFFECTS TO BE REQUIREDHealth Canada's Pest Management Regulatory Agency (“PMRA”) has proposed regulations to accompany the new Pest Control Products Act (“PCPA”). Under the proposed regulations, which would take effect January 1, 2006, the presitice registrant or registrant applicant will be required to report information concerning adverse effects related to their chemical products in Canada or the US or generated through studies on an international level. Such reports are currently voluntary. The reports will be used by the Minister to determine whether reasonable grounds exist for ordering a special review of the pesticide in question, after which the pesticide's registration would be confirmed, amended or cancelled. A pesticide cannot be sold in Canada without first being registered. Further, with the exception of confidential business information, the new PCPA also allows public access to all information in the register including adverse effects reports. The new regulations will provide further harmonization of rules governing pesticides in Canada and the United States. One major difference that will exist between the two regimes is that the reporting times in Canada for the more serious adverse effects, i.e. major adverse effects on a human or the environment or the death of a domestic animal, are shorter. For a more detailed analysis of the new regulations, see the Canada Gazette Part I, October 23, 2004, p. 2952. COURT AND TRIBUNAL DECISIONSALBERTA ENVIRONMENTAL APPEAL BOARD (“AEB”) HAS NO JURISDICTION WHERE APPELLANT HAD OPPORTUNITY TO PARTICIPATE IN ALBERTA ENERGY AND UTILITIES BOARD PROCESS (“AEUB”)This was an appeal made to the Alberta EAB concerning the interpretation of s. 95(5)(b)(i) of the Environmental Protection and Enhancement Act (“EPEA”) which provides that the EAB does not have jurisdiction to hear a matter if it has been heard and adequately dealt with by the AEUB and the person had the opportunity to participate in the hearing or review. Approval had been issued under the EPEA for an oil processing plant and oil production site. The appellant claimed it had not been consulted properly and that no public hearing regarding the project had been held. The EAB dismissed the appeal noting that while no public hearing had been held, the appellant had started in the review process with the AEUB but had later withdrawn on the pretense that they had no objection to the proposed project. The EAB held that section 95(5)(b)(i) of the EPEA only requires that a party has the opportunity to participate in the AEUB process and that if a party chooses not to participate, they cannot use another process to achieve what should have been done under the original process. On a review of the actual AEUB process, the Board held that the issues had been adequately dealt with. Wood Buffalo First Nation v. Alberta (Director, Northern Region, Regional Services, Alberta Environment) For the full decision please see: (2004), 9 C.E.L.R. (3d) 42. POSSIBILITY OF IRREPARABLE HARM NOT SUFFICIENT FOR STAY PENDING APPEAL OF WATER LICENCE, B.C. ENVIRONMENTAL APPEAL BOARD (“EAB”) FINDSIn this decision, the B.C. EAB refused a stay pending appeal of the Regional water manager's decision authorizing transfers of appurtenancy of two conditional water licences for the withdrawal of 11,315,000 gallons of water per year from Hotel Lake for waterworks purposes. The appellants, lakeshore property owners and existing water licensees, appealed the decision and then applied for a stay of the decision pending the outcome of the appeal. The EAB adopted the usual three-prong test for granting a stay, requiring the appellants to demonstrate (1) there was a serious issue to be tried, (2) they would suffer irreparable harm, (3) the balance of convenience was in their favour. The EAB found a serious issue to be tried, noting that the Regional Manager had failed to give existing licensees notice of the proposed transfer and to offer them an opportunity to be heard before the decisions were made. However, the EAB found that the appellants could only raise the possibility of irreparable harm to their interests and the environment and that this was not sufficient. As for the balance of convenience, the EAB found granting a stay would result in the Regional District being unable to withdraw enough water to meet the demands of current users without being out of compliance with its licence, and would delay the completion of the developer's project. The EAB noted that there was no evidence that the new homes in the development would actually be occupied and drawing water from the lake before the merits of the appeal were decided. Furthermore, a stay would not address the appellant's concerns that excessive amounts of water were already being drawn from the lake system. The application for a stay was therefore dismissed. McClusky v. British Columbia (Assistant Regional Water Manager), B.C. Environmental Appeal Board. For the full decision see: (2004) 9 C.E.L.R. (3d) 30. NO DUTY TO RESPOND TO TELEPHONE REQUEST FOR FURTHER SPILL INFORMATION, ONTARIO COURT RULESFollowing the accused company's telephone report that 400 litres of cooling tower water had been discharged into a river, an MOE provincial officer telephoned to request further information. Subsection 92(1) of the Environmental Protection Act (“EPA”) requires that where there is a spill that causes or is likely to cause an adverse effect, the MOE must be notified forthwith, including “the circumstances thereof and of the actions that the person has taken or intends to take.” The accused provided information about past analyses of cooling tower water but declined to provide an analysis pertaining to the day of the spill, taking the position that they were not required to provide this or further information in the absence of a written request from the Director as contemplated by ss. 92(3) of the EPA. Subsection 92(3) authorizes the Director to require the person reporting the spill to provide “such additional information in respect of the pollutant, the source of the pollutant and the spill of the pollutant as may be required by the Direction.” The MOE took the position that in refusing to provide the requested information to the provincial officer, the company had wilfully hindered a provincial officer in the performance of his or her duties pursuant to ss. 184(1) of the EPA. The MOE argued that once a spill report is required to be made pursuant to ss. 92(1), there is an obligation to answer all reasonable inquiries until the Ministry is satisfied that it has all the relevant information. A Justice of the Peace ruled in favour of the MOE, convicted the company of obstruction and imposed a $5,000 fine. On appeal, the Ontario Court of Justice reversed the decision, holding that, following the initial reporting of the spill in accordance with ss. 92(1), only the Director has authority to demand further information and this must be done by way of a written request, unless the provincial officer is on-site carrying out a physical inspection pursuant to s. 156 of the EPA. This case should be borne in mind by companies in considering the level of information to provide to the MOE in response to inquiries by provincial officers. Her Majesty the Queen v. Crompton Co./Cie. October 15, 2004 (Ontario Court of Justice, Kitchener File 3355/03) WHAT'S HAPPENING?Conference - Year in Review 2004 - November 25, 2004 (Toronto) Last call for Year in Review 2004, a conference presented by Gowlings' National Environmental Law Group in conjunction with the EcoLog Group on November 25, 2004. We are delighted to advise that John Meaney, legal counsel with Environment Canada, Gord Miller, Environmental Commissioner of Ontario and Elizabeth May, Executive Director, Sierra Club of Canada will be speaking at the conference. To register visit
Seminar hosted by the Greater Toronto Apartment Association - November 17, 2004 (Toronto) Jennifer Mesquita and David Tang of Gowlings will speaking on legal considerations related to the management of mould contamination in residential apartments, at a seminar hosted by the Greater Toronto Apartment Association, on Nov. 17, 2004. They will be joined by Franco di Giovanni of Airzone One Inc. who will address technical considerations in mould investigation and remediation, along with and Kate Dodge and Steve Osselton of Marsh Canada Ltd., who will address insurance solutions and risk management for residential property managers. Environmental Liability of Estate Trustees and Beneficiaries - December 2, 2004 (Toronto) David Estrin is presenting a paper on “Environmental Liability of Estate Trustees and Beneficiaries” at the Law Society of Upper Canada “Estates and Trusts Law Summit” December 2nd and has just written a detailed review of the recently in-force “Brownfields” provisions of the Environmental Protection Act and RSC Regulation. Conference - Second Annual Environmental Law and Compliance in Ontario - February 16-17, 2005 (Toronto) Katherine van Rensburg will be speaking at the Insight conference “Second Annual Environmental Law and Compliance in Ontario” in Toronto on February 16-17, 2005. She will be speaking on the topic “What's New in Federal and Provincial Enforcement?.” |
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| Gowlings is an internationally acknowledged leader in environmental law. Professionals in our Environmental Group are recognized in the Lexpert/American Lawyer Media 2004 Guide to the 500 Leading Lawyers in Canada and the Lexpert Legal Directory. They're also included in Euromoney's Guide to the World's Leading Experts (Canada). Gowlings is further recognized in the areas of intellectual property, technology, business law and advocacy. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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