On March 4, 2009, the federal government introduced Bill C-16, the “Environmental Enforcement Act,” omnibus legislation that keeps a Conservative Party campaign promise to strengthen the enforcement and penalty provisions in Canadian environmental statutes. Bill C-16 will amend the Canadian Environmental Protection Act, 1999 (“CEPA”) and eight other federal statutes, including the Migratory Birds Convention Act, the Canada Wildlife Act, and the Canada National Parks Act, to substantially increase fines and bring in mandatory minimum sentences even on a first offence.

Notably absent are two of the principal statutes under which federal environmental charges are routinely brought: the Fisheries Act and the Canada Shipping Act, 2001. At this point, the reason for this selective approach to the proposed amendments remains unclear, especially since changes to the enforcement provisions of the Fisheries Act have twice died on the Order Paper in recent years.

The key provisions of Bill C-16 significantly expand the scope of potential liability for an environmental offence.

Categories of Offenders

The proposed changes will codify financial liability for an environmental offence depending on the identity of the accused, as well as the type and number of past convictions the accused has received. To accomplish this, the Bill introduces a tiered liability regime that expressly distinguishes between three different types of offenders: individuals, “small revenue corporations” (those with gross revenues of less than $5,000,000 in the year preceding the offence), and other corporations. Bill C-16 also distinguishes between first and subsequent offences, and charges that are brought by way of indictment or summary conviction.

Significant Fine Increases and Minimum Fines

Currently the statutes being amended do not impose minimum fines. Bill C-16 imposes high mandatory minimum fines and significantly increases the maximum fines for various environmental offences.

Under the proposed penalty regime, a corporation would be liable for a fine of at least $500,000 for a first conviction for some indictable offences. For the majority of offences which proceed by summary conviction, the mandatory minimum sentence on a first conviction will be $100,000. For repeat offenders, the mandatory minimums double to at least $1,000,000 for indictable offences and $200,000 for summary conviction offences.

Bill C-16 also significantly increases maximum fines: for corporate offenders, to $6,000,000 for first-time indictable offences, and fines as high as $12,000,000 for repeat offenders. For summary conviction offences, the maximum fines increase from the current $300,000 to $4,000,000 on a first offence and double that ($8,000,000) for second and subsequent offences. Presently, the highest maximum fine for a first offence is $1,000,000, and the highest maximum fine for a subsequent offence is $2,000,000.

Even offenders defined as “small revenue corporations” under Bill C-16 face maximum fines of up to $4,000,000 for a first conviction on an indictable offence and $8,000,000 thereafter. Individuals face minimum fines of $5,000 (summary conviction) or $15,000 (indictable) on a first offence. Maximum fines for individuals will be $300,000 (summary conviction) or $1,000,000 (indictable). Both the mandatory minimum fine and the maximum fines double on a second or subsequent conviction.

The current provisions in CEPA and most of the other statutes that provide for continuing offences (where an offence that continues on more than one day may be treated as a separate offence for each day on which it is continued) remain in place. The mandatory minimum penalties could apply to multiple offences with huge resulting fines even without resort to the increased maximums for any one offence.

While Bill C-16 affords courts some discretion to impose a fine lower than the statutory minimum, this is decidedly limited: the court can only do so in cases of “undue financial hardship”.

Disclosure of Offences

Bill C-16 will create a public registry of offences that will retain information regarding violations for a fiveyear period. It will also require a corporate offender to notify its shareholders about the details of an offence.

Limitation Period More Than Doubled

Bill C-16 broadens the ambit of potential liability for environmental offences by more than doubling the limitation period for summary conviction offences from two years to five years.

Principles of Sentencing Toughened

The proposed legislation would make denunciation, deterrence, restoration, and the “polluter pays” principle the fundamental purposes of sentencing for an environmental offence. It would also codify a number of aggravating factors that, where applicable, should each result in a successive increase in the fine to be imposed on an offender by the courts. These factors include whether environmental damage is extensive, persistent, or irreparable; if the offender was reckless; if revenue increased through the offence; or if the offender failed to mitigate or remediate the damage.

Administrative Monetary Penalties Expanded

Bill C-16 introduces the Environmental Violations Administrative Monetary Penalties Act, which would authorize regulations to greatly expand the use of administrative monetary penalties (“AMPs”), effectively making certain environmental offences “ticketable” on the grounds of administrative efficiency. The potential financial liability for such offences, however, would be significant: up to $25,000 in the case of corporate offenders. Presently, the maximum fine that can be imposed by way of an AMP (in the statutes that provide for them) is $500.

Enforcement Officers

Bill C-16 broadens the scope of powers provided to enforcement officers to enforce environmental statutes while shielding them from personal liability for good faith acts carried out in the course of their duties. Enforcement officers may intervene to carry out compliance orders if the target of the order does not do so. Compliance orders will become reviewable by a “Chief Review Officer,” to be appointed under CEPA.

To ensure the enhanced enforcement and penalty approach is applied, the government also announced that Environment Canada will increase the number of its enforcement officers in the field from the current 215 officers to over 320 officers. Environment Canada will also receive funding for implementation staff and resources (laboratory, training, technical support, and expert witnesses).

Environmental Damages Fund

Bill C-16 would direct all fines under the amended statutes to an Environmental Damages Fund. Monies in the Fund are to be used for protecting, conserving, or restoring the environment.

Conclusion

Taken together, Bill C-16’s proposed changes greatly expand the scope of potential liability for corporations and individuals convicted of an environmental offence. When facing charges, or a potential situation that could lead to charges, the need for prompt, effective legal advice has never been more important.