Federal Environment Commissioner Critical of Government’s Climate Change Track Record

The Commissioner of the Environment and Sustainable Development, Johanne Gélinas, tabled her Annual Report in the House of Commons on September 28, 2006.

The Report contains a harsh assessment of Canada's climate change policy:

"On the whole, the government's response to climate change is not a good story. At a government-wide level, our audits revealed inadequate leadership, planning, and performance. To date, the approach has lacked foresight and direction and has created confusion and uncertainty for those trying to deal with it. Many of the weaknesses identified in our audits are of the government's own making. It has not been effective in leading and deciding on many of the key areas under its control. Change is needed."

The Report urges the government to "take immediate and long-lasting action on many fronts". Among the Report's many specific recommendations is for the government to better integrate energy policy and climate change policy in order to ensure that greenhouse gas emissions from the booming oil and gas industry do not cancel out any emissions reductions in other industries.

The Report also asserts that "the government urgently needs a believable, clear, and realistic plan to significantly reduce greenhouse gas emissions". If the government cannot meet its emissions reduction targets under the Kyoto Protocol, "then new targets should take its place".

The Report is available at:
http://www.oag-bvg.gc.ca/domino/reports.nsf/html/c2006menu_e.html.

Amendments Proposed to Transportation of Dangerous Goods Regulations

Transport Canada has proposed Regulations Amending the Transportation of Dangerous Goods Regulations. The changes are technical but extensive. Public comments are invited by December 13, 2006.

The proposed regulations and an explanatory note are available at:
http://canadagazette.gc.ca/partI/2006/20060930/html/regle10-e.html.

New Hazardous Waste Regulations Proposed

The proposed Interprovincial Movement of Hazardous Waste and Hazardous Recyclable Material Regulations were published in the Canada Gazette, Part I, on September 2, 2006. The proposed regulations would repeal and replace the existing Interprovincial Movement of Hazardous Waste Regulations. To ensure consistency with the Export and Import of Hazardous Wastes and Hazardous Recyclable Material Regulations, which came into force on November 1, 2005, the proposed regulations would introduce new definitions of hazardous waste and hazardous recyclable material and would replace references to "manifests" with references to "movement documents".

The proposed regulations are available at:
http://canadagazette.gc.ca/partI/2006/20060902/html/regle3-e.html.

Canadian National Railway Co. v. A.B.C. Recycling Ltd., [2005] BCJ No. 982 (B.C.S.C.)

The British Columbia contaminated sites legislation came into force on April 1, 1997. One aspect of this legislation (now the Environmental Management Act (British Columbia) and the Contaminated Sites Regulation) is a statutory cause of action by which any person who remediates a contaminated site may sue one or more "responsible persons" in accordance with the principles of liability set out in the legislation.

The above decision is one of the first which grapples with the nuts and bolts of an action for the recovery of remediation cost and provides guidance on what a plaintiff must prove and what a plaintiff can recover.

The case is currently under appeal.

In this case, many of the issues one expects to find in a recovery of remediation cost case were not in dispute. There was an agreed statement of facts. It was agreed that the defendant, A.B.C. Recycling Ltd., had caused contamination on land owned by the plaintiff, Canadian National Railway Co. It was agreed that the defendant was a "responsible person" and thus liable for remediation costs. It was also agreed that the plaintiff had cleaned up the contaminated site, had acted reasonably in deciding to clean up the site and was entitled to recover "reasonable" remediation costs from the defendant. In fact, the defendant had made a $200,000 payment to the plaintiff prior to trial on account of remediation expenses. Further, the defendant had carried out some of the remediation itself. What was at issue in the case was whether all of the remediation cost incurred by the plaintiff was recoverable as being "reasonably incurred costs of remediation of the contaminated site".

The high profile aspect of the case is the decision by Madam Justice Kirkpatrick that a successful plaintiff can recover its reasonable actual legal costs incurred in pursuing responsible parties as a component of reasonable remediation cost.

That decision is one of statutory interpretation of what is now section 47(3)(c) of the Environmental Management Act which reads, in part, as follows:

"General principles of liability for remediation

47(1) A person who is responsible for remediation of a contaminated site is absolutely, retroactively and jointly and separately liable to any person or government body for reasonably incurred costs of remediation of the contaminated site, whether incurred on or off the contaminated site.

. . .

(3) For the purpose of this section, "cost of remediation" means all costs of remediation and includes, without limitation,

. . .

(c) legal and consultant costs associated with seeking contributions from other responsible persons . . ."

The defence argued that the reference to legal costs in the legislation ought to be interpreted as being limited to costs awarded pursuant to the British Columbia Supreme Court Rules (i.e. on a tariff basis).

It is this aspect of the decision which triggered applications by Canadian Petroleum Products, Imperial Oil, Petro-Canada and Weyerhaeuser for leave to intervene in the appeal so as to support the defence position. The applications for intervener status were recently denied (June 20, 2006) by the Court of Appeal on the basis that the proposed interveners were not directly affected by the decision and the issue would be adequately dealt with without intervention.

Other aspects of the decision of interest are:

(a) Remediation expenses incurred by a plaintiff which are not claimed against a defendant can, nevertheless, be raised by the plaintiff in determining whether the plaintiff's claims for remediation cost made against the defendant are "reasonable".

The court said at paragraph 76:

"Further, common sense suggests that where an owner has incurred costs of remediation and chooses to allocate only a portion of those costs to the person responsible for contamination, that must be considered to be fair and reasonable, provided that the costs are themselves reasonable. If an owner has fairly allocated those reasonable costs, that must be taken to be an indicator of reasonableness in the owner's position in respect of the claim to the costs of remediation."

(b) The plaintiff bears the onus of proving the reasonableness of remediation cost claimed. (The plaintiff argued that if the plaintiff proved that the remediation itself was reasonable then the onus would shift to the defendant to prove that the actual costs incurred were not reasonable. The plaintiff sought to draw an analogy with the principle of mitigation. The court did not agree.)

(c) Similarly, the court decided that in order for remediation costs to be recoverable they must be reasonable in the sense there must be an objective analysis of the costs in the particular circumstances of the case. (The plaintiff, again, argued that once the decision was made that the remediation was reasonable, all costs of remediation incurred must necessarily be reasonable, a position which the court, again, did not agree with.)

The court carefully considered all the remediation cost incurred by the plaintiff and, for the most part, found such costs to be reasonable and recoverable. This demonstrates that where a plaintiff has sought appropriate environmental advice and followed that advice and the costs incurred do relate to the contamination in question, it will be difficult for a defendant to argue that the plaintiff should have done things more cheaply. The court will likely give a plaintiff who cleans up a contaminated site some latitude about the manner, particulars and degree of expense incurred. This, it is submitted, is consistent with the general approach most courts take with respect to expense a plaintiff incurs in dealing with a problem of the defendant's making.

OTHER NEWS

California Tackles Climate Change

There were two significant climate change stories out of California recently.

The first story is that on September 27, 2006, Governor Arnold Schwarzenegger signed the California Global Warming Solutions Act of 2006. This historic piece of legislation marks California's dedication to curbing climate change and will no doubt influence the national debate on establishing a mandatory federal greenhouse gas (GHG) emissions reduction program.

The Act aims to reduce GHG emissions to 1990 levels by 2020 (a 25 percent reduction) and to 80 percent below 1990 levels by 2050. The California Air Resources Board is charged with developing regulations and market mechanisms in order to achieve these goals.

The Act can be viewed at:
http://www.leginfo.ca.gov/cgi-bin/postquery?bill_number=ab_32&sess=CUR

The second story is that on September 20, 2006, the Attorney General of California, Bill Lockyer, filed a novel lawsuit against the "Big Six" car manufacturers, alleging that GHGs from their vehicles have caused billions of dollars in damages.

The complaint alleges that the defendants, Chrysler Motors Corporation, General Motors Corporation, Ford Motor Company, Toyota Motor North America, Honda North America, and Nissan North America, have created a public nuisance by producing vehicles that collectively emit massive quantities of carbon dioxide and thereby contribute to climate change. As a result, the people of California have suffered "billions of dollars in damages, including millions of dollars of funds expended to determine the extent, location, and nature of future harms and to prepare for and mitigate those harms, and billions of dollars of current harm to the value of flood control infrastructure and natural resources such as the snow pack and coastline that are vital to the well-being of the State."

More information on this lawsuit is available at:
http://ag.ca.gov/newsalerts/release.php?id=1338.

New Executive Director of Sierra Club

Stephen Hazell has been appointed Executive Director of the Sierra Club of Canada. He succeeds Elizabeth May, who left to become the leader of the Green Party of Canada.

More information is available at:
http://www.sierraclub.ca/national/media/item.shtml?x=1013.

Gowlings Welcomes Michelle Fernando

Michelle Fernando has joined the environmental group at Gowlings as an associate in the Toronto office. Michelle holds a combined LLB and master's of environmental studies and worked at another national law firm after her call to the Bar in 2003.

EXCEL Sustainable CEO Forum

Mark Madras will be a participant in the 2006 EXCEL Sustainable CEO Forum to be held in Toronto on November 2, 2006. The forum will enable some of Canada's leading CEOs to share their visions of sustainable development in the increasingly competitive and risky climate of global business. Gowlings is a sponsor of the event.

Occupational Health and Safety and Environmental Law Course

Norm Keith and Jennifer Mesquita presented a joint one-day training session entitled "The Essentials of Occupational Health, Safety & Environmental Law in Canada" on September 9, 2006 in Ottawa, in partnership with the Canadian Society of Safety Engineering. The course covered the fundamentals of EH&S law in Canada, with a focus on federal and Ontario provincial legislation. Future sessions are planned for the western provinces.

Environmental Law & Due Diligence Course

Jennifer Mesquita and Ian Richler will be teaching a one-day course entitled "Environmental Law & Due Diligence" on October 25, 2006 in Mississauga, which will provide an overview of federal and provincial environmental law and will identify potential components of a sound due diligence system. For more information, please see:

http://www.gowlings.com/OHSLAW/pdfs/EnvironmentalLawDueDiligence2006.pdf.