Originally published in Blakes Bulletin on Environmental Law, June 2007
Ontario has finalized regulations bringing into force new civil penalties under its environmental legislation effective August 1, 2007. The regulations, authorized under the Environmental Protection Act and the Ontario Water Resources Act, introduce a severe penalty regime initially targeting certain major industries.
The much criticized regime allows the government to impose civil penalties for a broad variety of environmental offences in addition to or instead of the traditional enforcement tool of prosecuting violations in the courts. There is no due diligence defence available under the new regime and the same act can result in both civil and quasi-criminal penalties.
Entities Subject to Environmental Penalties
The entities that will initially be subject to civil environmental penalties are facilities whose operations discharge directly into a surface water body, and are covered by the Municipal Industry Strategy for Abatement (MISA) wastewater discharge regulations. These sectors are: petroleum, iron and steel, industrial minerals, inorganic chemicals, organic chemicals, pulp and paper, metal mining, metal casting, and electric power generation facilities. The civil environmental penalties will not apply to municipalities, agricultural operations or food processing facilities and will only apply to land and water violations at present.
Calculating Civil Environmental Penalties
Three factors are involved in assessing a civil environmental penalty:
- the gravity, or the seriousness, of the violation and its consequences
- the monetary benefit, if any, that the facility gained from non-compliance with Ontario’s environmental laws
- the number of days the violation continues
The type and the seriousness of a violation are of primary concern in this calculation. Types of violations range from improper recording and record-keeping to exceeding discharge limits of certain substances and committing unlawful spills. The amount of penalty is increased if one of 113 toxic substances, listed under "Environmental Penalties—Code of Toxic Substances," (incorporated by reference into the regulations) is present in an unlawful spill or discharge.
Penalties for some violations are capped under the regulations (CAD 60,000 for minor violations; CAD 100,000 for failure to report a spill) but there is no cap on penalties for more major violations such as spills.
Penalties can be reduced if the violating party has taken preventative and mitigating measures prior to the spill. Similarly, entering a settlement agreement can lead to a reduction in the environmental penalty if the offending party agrees to invest in an environmental project at the facility in violation. This project must not only take the facility beyond compliance with environmental laws, but also aim to yield environmental or human health benefits.
Implementation
The new civil environmental penalties will be implemented in two phases, allowing industry sixteen months to fully adapt to the penalty structure. The first phase will begin on August 1, 2007. During this phase penalties will apply only to major violations such as spills and discharge exceedences. The second phase will begin December 1, 2008. From that date forward other violations will also be subject to penalties.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
