In April 2008, a late spring snowstorm resulted in the diversion of ducks from their flyway to a tailings pond (Aurora Pond) near Fort McMurray, Alberta, operated by Syncrude Canada Ltd. (Syncrude). The ducks landed on Aurora Pond and were killed by the toxicity of the pond. Syncrude was charged with two offences related to the deaths of 1,606 waterfowl: failing to store a hazardous substance in a manner that ensured that it did not come into contact with any animals, contrary to s. 155 of the provincial Environmental Protection and Enhancement Act (Alberta) (EPEA); and, depositing a substance harmful to migratory birds in an area frequented by migratory birds, contrary to s. 5.1(1) of the federal Migratory Birds Convention Act (Canada) (MBCA), a charge usually used to regulate bird hunting.

Over the course of a nine week trial, the Crown argued that migratory birds use the Aurora Pond every year, which is the reason why Syncrude typically installs sound cannons to deter birds from landing on Aurora Pond. Syncrude stated that the storm prevented it from installing these cannons.

Syncrude further argued that the charges brought against it were inappropriate as environmental legislation generally prohibits hazardous substances from being released into the environment. However, there was no release in these circumstances because the hazardous substances (mainly bitumen) were contained within the Aurora Pond. Syncrude also argued that the Aurora Pond was licensed by the Alberta Government and as a result the provincial Government authorized the Aurora Pond to be used to hold tailings, the hazardous substance involved in the offences. Finally, Syncrude contended that the Aurora Pond was not a natural nesting area for migratory birds and therefore could not fall within the purview of the MBCA.

The due diligence defence figured prominently. It was Syncrude’s primary defence, however, Syncrude was unsuccessful in establishing due diligence. Provincial Court Judge Ken Tjosvold found the hazardous nature of the Aurora Pond foreseeable, and that Syncrude had not taken sufficient steps to ensure that birds would not be harmed. The Court found that Syncrude had reduced its deterrence measures and staffing with respect to bird protection and that there were reasonable legal alternatives to the measures employed by Syncrude that would have met the criteria of the due diligence defence.

The conviction decision was issued by the Alberta Provincial Court on June 25, 2010. Syncrude was found guilty pursuant to both the provincial and federal charges, with a sentencing hearing to follow. Counsel for Syncrude indicated that Syncrude intended to appeal the decision. However, Syncrude then changed counsel and commenced negotiations on a sentencing proposal. On October 22, 2010, the Alberta Provincial Court made a sentencing order accepting the arrangements struck between Syncrude and the Crown under which Syncrude agreed to a total penalty of $3,000,000 (the Sentence).

The Sentence includes both fines and additional penalties. The Crown and Syncrude negotiated the Sentence, taking into consideration s. 16 of the MBCA and s. 234 of the EPEA. These “creative sentencing” provisions authorize penalties in addition to the fines set out in these statutes. Typically, the additional penalties are used to fund education and environmental protection programs. A sentencing order issued pursuant to either of these provisions will consider the nature of the offence and the circumstances surrounding its commission to determine how the additional penalties may be directed consistent with the purpose of the statutes.

Syncrude was sentenced to the maximum fine available under the MBCA charge ($300,000 on summary conviction) and the maximum fine under the EPEA ($500,000), for a total of $800,000, of which $250,000 of the EPEA penalty will be applied towards the creation of a program for bird protection and monitoring, integrated with aboriginal training, at Keyano College in Fort McMurray, Alberta.

The additional penalties under the MBCA and EPEA totalled $2,200,000 to be applied to environmental projects: $1,300,000 to the University of Alberta for funding the Research on Avian Protection Project; and $900,000 to the Alberta Conservation Association to acquire land for the Golden Ranches Waterfowl Habitat Project. All of the projects include monitoring and accountability measures.

The Court did not issue reasons analyzing the proposal and the Sentence. The Court accepted the joint submission as sufficiently addressing the applicable sentencing principles. Accordingly, the Sentence may have less precedential value in future application to other cases however it demonstrates that a Court may apply the maximum fine in appropriate circumstances as well as further penalties given consideration of the nature and the surrounding circumstances of the offence.

This case demonstrates how important it is to exercise due diligence and take all reasonable precautions to protect wildlife from foreseeable environmental hazards created by business operations. Employing adequate preventive measures during the course of operations should ensure that a due diligence defence is available if similar charges are prosecuted.

It is important to note that historically charges have only been laid in similar circumstances pursuant to provincial authority. As the Crown was successful in also prosecuting the federal MBCA charge, there is now a heightened possibility of both federal and provincial charges being laid in environmental matters in the future for a single incident. Moreover, the Sentence indicates that maximum fines, and additional further penalties, may be applied pursuant to both federal and provincial environmental legislation.

The interesting legal issues raised by multiple environmental convictions (federal and provincial) for the same incident were expected to figure prominently on the appeal by Syncrude. However, the negotiated Sentence means no appeal will proceed.

Finally, it should be noted that Syncrude was charged prior to the new enforcement provisions for the MBCA, pursuant to federal Bill C-16 which received Royal Assent on June 18, 2009, but which are not yet in force. These much tougher enforcement provisions will see a “large company” (defined as $5,000,000 in annual gross revenue) facing a potential maximum fine under the MBCA of $4,000,000 (summary conviction) to $6,000,000 (indictable offence), with a minimum fine of $100,000 (summary) to $500,000 (indictment), as well as the additional penalties available under the creative sentencing provisions in the MBCA and used with Syncrude.

For further information or any related inquiries pertaining to environmental law, we invite you to contact the Borden Ladner Gervais Environmental Law Focus Group (the Group). Our national Group draws upon the extensive experience of its members so as to respond to the increasing number of individuals and corporations which need to take into consideration both the business and legal implications associated with environmental issues. The members of our Group have wide-ranging experience and expertise in this area. The Group is committed to providing responsive, cost effective and specialized services which can help you to take into consideration issues of environmental law.