On March 4, 2009, the Honourable Jim Prentice, Canada’s Minister of the Environment, introduced 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, (otherwise known as the “Environmental Enforcement Bill”) (the Bill), in the House of Commons.
The proposed Environmental Enforcement Bill amends nine existing Acts to render the provisions of those Acts regarding the liabilities and duties of corporate directors, officers, agents and mandataries, and those of ship masters, chief engineers, owners and operators, consistent. Notably, the Bill also proposes a system for issuing administrative monetary penalties similar to the one adopted in Ontario, but with some important differences. The Bill also introduces a new fine regime and new sentencing powers and considerations that are intended to strengthen the government’s ability to investigate and prosecute infractions. The Bill provides enforcement officers with new enforcement tools by establishing new immunities under the Acts, broadening powers to investigate cases and extending the authorized use of analysts and experts to assist in inspections and investigations.
The Bill amends the penalty provisions of the Acts by delineating fine ranges according to the nature of the offence and the type of offender, including individuals, ships and corporations of different sizes. In addition, the Bill stipulates minimum fines for serious offences, increases maximum fines, doubles the fine amounts for second-time and subsequent offenders, and requires the courts to add profits gained or benefits realized from the commission of an offence to fine amounts. The Bill directs that all fines be paid into a new Environmental Damages Fund to be available for environmental projects or the administration of the fund.
Interestingly, the new fines regime introduced by the Bill penalizes large corporations more than small corporations or individuals. For example, the proposed range of fines for small revenue corporations committing “serious offences” is $25,000 to $4 million, while the fines for large revenue corporations committing the same offences will range from a minimum of $100,000 to a maximum of $6 million. A corporation will be considered a “small revenue” corporation under the Bill if its revenues for the 12 months leading up to the commission of the offence are not more than $5,000,000.
Environment Canada has stated that the new fines regime is intended to reflect the concern that, while many of Canada’s environmental statutes provide for maximum fines, the lack of minimum fines may leave courts with little guidance on appropriate fines. For example, despite maximum possible fines of $1 million per day under the Canadian Environmental Protection Act, 1999, the courts have never imposed a fine under that Act greater than $100,000.
The Bill adds a new clause to each Act setting out the fundamental purposes of sentencing, including deterrence, denunciation and restoration. The Bill also specifies certain aggravating factors that, if associated with an offence, will contribute to higher fines. Such factors include the actual nature or risk of environmental damage and the risk to human health; whether the commission of the offence was intentional or reckless; whether the offender failed to take reasonable steps to prevent the offence despite having the financial means to do so; whether the offender stood to benefit financially from the offence; and whether attempts were made to conceal the offence after it was committed. The courts may also take into account the offender’s “history of non-compliance” as an aggravating factor. That history can include non-compliance with provincial laws of similar effect.
The Bill also expands the power of the courts to make additional compliance orders and orders to cancel or suspend licenses and/or permits having regard to the nature of the offence and the circumstances surrounding its commission. Further, the courts will be required to order corporate offenders to disclose details of convictions to their shareholders.
Public Registry of Offenders
To encourage corporate compliance with the nine amended Acts, the Bill requires the Minister of the Environment to create and maintain a public registry containing information about all corporate offenders. The Minister must maintain the information contained in the registry for a minimum of five years.
Administrative Monetary Penalty Scheme
The Bill also contemplates the enacment of the Environmental Violations Administrative Monetary Penalties Act (MPA). This Act would establish an administrative monetary penalty scheme applicable to the nine Acts amended by the Bill. The scheme takes an approach similar to the one adopted in Ontario, but with some important differences. While, as in Ontario, it removes the defences of “mistaken belief in a set of facts that, if true, would render the act innocent” and “due diligence,” it apparently does not impose reverse onuses and it explicitly prohibits “double jeopardy” (i.e., being charged and, if convicted, being subject to a fine or other punishment, despite having paid a monetary penalty). In addition, individuals (including directors and officers) can clearly be subject to monetary penalties, unlike in Ontario where it would be very unusual for an individual to be subject to the province’s environmental penalty regime.
The MPA grants the Governor in Council the authority to develop administrative monetary penalties by regulation for: contravention of any specified provision of an environmental Act or of any of its regulations; the contravention of any order or direction made under any provision of an environmental Act or of any of its regulations; the failure to comply with any obligation arising from an environmental Act or any of its regulations; or the failure to comply with any condition of a permit, licence or other authorization issued under an environmental Act or any of its regulations. The penalties to be levied for these less serious violations of environmental laws would be relatively modest. For example, the maximum penalties contemplated under the MPA are $5,000 for individuals and $25,000 for other persons or ships or vessels.
Additional Staff and Funding
In addition to the new measures on fines, sentencing and enforcement tools, Environment Canada has stated that it will increase the number of enforcement officers in the field from approximately 215 to over 320 through $22 million in additional funding announced in Budget 2007. Moreover, Budget 2008 provides an additional $21 million over two years to Environment Canada to allow for the implementation of the stricter enforcement regime contemplated by this new legislation. The additional staff and resources are intended to help Environment Canada more effectively provide expert laboratory service, technical expertise, data interpretation and expert witness testimony.
The Bill amends certain enforcement, offence, penalty and sentencing provisions of the following nine Acts:
- the Antarctic Environmental Protection Act;
- the Canada 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.