THE REGIONAL MUNICIPALITY OF YORK
REPORT NO. 3
OF THE REGIONAL SOLICITOR
For Consideration by
The Council of The Regional Municipality of York
on December 16, 2004
1
Bill 133 - AN AMENDMENT TO THE ENVIRONMENTAL PROTECTION ACT AND THE ONTARIO WATER RESOURCES ACT
1. RECOMMENDATIONS
It is recommended that:
1. Regional Council direct the Regional Solicitor to make submissions to the Ministry of the Environment outlining the Region's concerns with Bill 133.
2. The Regional Solicitor report back to Council at such time as Bill 133 receives Royal Assent.
2. PURPOSE
Bill 133 was given its First Reading in the Provincial Legislature on October 27, 2004. The purpose of this Report is to inform Council of the potential impact to the Region should Bill 133 be passed into law. This Bill proposes significant changes to the Environmental Protection Act ("EPA") and the Ontario Water Resources Act ("OWRA"). These changes may have a serious negative impact on the Region.
The Report will explain the concerns that have been identified by the Transportation and Works Department and the Regional Solicitor regarding Bill 133. Having identified areas of concern, if Council so directs, the Regional Solicitor proposes to make a submission to the Ministry of the Environment ("MOE") outlining the Region's concerns with Bill 133 in its current form. The deadline for submissions to the MOE is January 7, 2005.
3. BACKGROUND
The EPA and the OWRA are the principal statutes in Ontario pursuant to which the MOE prosecutes for unlawful discharges of contaminants to the environment ("spills"). The EPA and the OWRA define what constitutes an unlawful discharge to the environment. The statutes also contain penalty provisions that are applied against individuals or corporations who cause or permit illegal spills. The penalties include fines and even
potential incarceration for those who are convicted. In addition to the fines and potential incarceration, the EPA and the OWRA both contain provisions for the imposition of "Administrative Monetary Penalties" (AMPs). AMPs are monetary penalties that can be imposed by regulatory officials upon the discovery of a spill. Although the AMPs are present in both the EPA and the OWRA, they have never been Proclaimed, and are therefore not in force.
Bill 133 is a reflection of the provincial government's "get-tough" approach to all forms of environmental degradation. By amending EPA and the OWRA the Bill purports to:
� Revive the unproclaimed AMPs in the form of "Environmental Penalties ("EPs").
� Have money generated from EPs go into the Province's Consolidated Revenue Fund.
� Allow for the imposition of the EPs while at the same time seeking to impose fines pursuant to prosecution in the Ontario Court of Justice.
� Bar a "due diligence" defence against the imposition of EPs.
� Increase the penalties upon conviction for individuals and corporations accused of discharging into the environment.
� Institute minimum penalties and sentencing guidelines upon conviction.
� Lower the threshold and expand the criteria for laying charges involving spill events, making it easer to obtain convictions and more difficult to defend.
� Lower the threshold and expand the criteria requiring mandatory reporting of spill events to MOE.
� Institute a reverse onus requiring persons charged to demonstrate that they took all reasonable steps to prevent a discharge.
� Impose liability on Officers, Directors, employees and agents of companies who are not able to discharge the onus of proving they took all reasonable steps to prevent a discharge.
4. ANALYSIS AND OPTIONS
4.1 Environmental Penalties
Bill 133 would impose EPs of up to $20,000.00 per day for individuals and $100,000.00 per day for corporations who are responsible for unlawful discharges. The penalties would be assessed administratively by MOE officials at or shortly after a spill event. In addition to EPs, individuals and corporations could still face prosecution, and by extension, fines and potential incarceration pursuant to convictions obtained under the EPA and the OWRA. This could be viewed as a form of legal "double jeopardy".
At the present time, funds generated by fines imposed for convictions under the EPA and the OWRA are paid to municipalities to offset court administration costs. Bill 133 proposes that the EPs would be paid into a special purpose account in the Province's Consolidated Revenue Fund. The Bill contemplates that the monies collected pursuant to the EPs and subsequently deposited into the special purpose account would be paid out to persons who suffer losses or damages as a result of a spill and to provide financial
assistance to persons who undertake environmental remediation programs and for undefined "other purposes" as may be prescribed by the Regulations.
As presently written, Bill 133 indicates that EPs will be imposed even if the person took all reasonable steps to prevent the spill and even if, at the time of the contravention, the person had an honest and reasonable belief in a mistaken set of facts that, if true, would have rendered the contravention innocent. In effect, there is no defence of due diligence available where an EP would be imposed. This concept is known as "strict liability".
The imposition of an EP could be disputed along very narrow grounds before the Environmental Review Tribunal within 7 days of the EP being issued. It is presently not clear whether an individual or corporation who successfully challenges an EP before the Tribunal could still face prosecution relating to the same spill; however, it remains a distinct possibility.
4.2 Expansion of the Definition of "Discharge" under the EPA and OWRA
Bill 133 also proposes to expand the definition of what would constitute an "unlawful discharge" under the EPA. Presently, the "release of a contaminant" is considered to be an unlawful discharge. A "contaminant" is defined as, "material, odour, heat or sound resulting from human activities that causes or is likely to cause an adverse effect". Under Bill 133, the second part of the definition of contaminant would be considerably broadened to include anything that "causes or may cause an adverse effect".
Bill 133 proposes a similar expansion in the definition of what would constitute an unlawful discharge under the OWRA. Presently, discharges are prohibited if such discharges "may impair water quality". Under Bill 133, the factors constituting an impairment of water quality would be broadened so that water would be deemed to have been impaired if the material released:
(a) Injures or interferes with any living organism in any water;
(b) Injures or interferes with any living organism that uses or consumes the water or any organism in the water;
(c) Degrades the appearance, taste or smell of the water; or
(d) Is demonstrated to injure or interfere with any living organism in a toxicity test.
The net effect of the wording changes to the EPA and the OWRA described above will be to greatly increase the number of unlawful discharges and the number of reportable discharges. This is because the proposed change in the wording of what constitutes an
unlawful discharge under both statues suggests that the release of any contaminant into the environment, whether actually adverse or not, may be considered to be a chargeable offence. How strictly this may be applied by MOE Investigators and Prosecutors appears to be limited only by their resources and imaginations.
4.3 Toxicity Tests
Of particular concern is the proposal in Bill 133 that water quality will be deemed to have been impaired if the discharge of the material in question can be determined to be adverse to organisms under laboratory conditions�the "toxicity test" referred to above. This would mean that material might be found to be adverse in laboratory toxicity tests even though it may not have actually had adverse results to organisms in the receiving watercourse due to the natural ability of watercourses to deal with contaminants. This significant lowering of the threshold of what constitutes an adverse effect on organisms in the water as determined by laboratory toxicity testing certainly supports the MOE's much publicized "zero tolerance" position in relation to any discharge.
4.4 The Imposition of Reverse Onus and the Expansion of Personal Liability
Another very serious effect of Bill 133, as proposed, would be the requirement of the officers and directors of a company charged with a spill to prove that they took "all reasonable steps to prevent the spill". Requiring accused persons to prove their own innocence as opposed to having the Crown prove guilt beyond a reasonable doubt is referred to as a "reverse onus". A failure to discharge this onus could result in a conviction with sentences ranging from fines to potential incarceration of up to five years. Practically speaking, jail time would only be imposed in the clearest and most serious cases. However, the threat remains.
In addition to directors and officers of corporations (including municipalities), EPs and charges under both the EPA and the OWRA could be laid against any individual who "engages in a prescribed business or activity or has or needs a certificate of approval for that activity". Under such a legislative scheme, an employee found to have been involved in a discharge event, at any level in a corporation could find him or herself exposed to the imposition of EPs and quasi-criminal liability. Such exposure could potentially include outside staff such as consultants or even lawyers, and would therefore likely have a significant impact on the cost of liability insurance for these outside agents, which would be passed on to the Region.
4.5 No Exemptions for Normal Municipal Wastewater Practices
Although there are specific exemptions in Bill 133 for animal wastes from normal farming practices, there are no provisions for normal municipal wastewater practices. This is particularly troubling in the area of wastewater management, where sewage by-passes are quite possible even where all precautions have been taken and all best practices have been applied. Combined with the reverse onus provisions already discussed, the omission of exemptions for municipalities akin to the exemptions provided for farmers is a serious issue.
4.6 The Issuance of MOE Orders
Bill 133 proposes that the MOE may issue Orders for control, remediation or preventative measures if a discharge or the presence of a contaminant may cause damage. As well, orders may be issued to compensate the Province or a municipality for costs and expenses
associated with clean-up or prevention of a discharge. In addition, there is a proposal under the OWRA to remove the requirement for advance notice before certain directions, reports and notices are made, given or issued.
5. FINANCIAL IMPLICATIONS
The proposed change to the structure of monetary fines is a tiered approach, dependant on the severity of the discharge and the frequency of offenses.
|
|
Current |
Proposed |
|
Tier 1 (individual) |
$20,000 per day (first conviction) |
$50,000 per day (first conviction) |
|
|
$50,000 per day (subsequent conviction) |
$100,000 per day (subsequent conviction) |
|
|
Imprisonment of 1 year |
|
Tier 1 (corporation) |
$100,000 per day (first conviction) |
$250,000 per day (first conviction) |
|
|
$200,000 per day (subsequent conviction) |
$500,000 per day (subsequent conviction) |
|
Tier 2 � serious offenses (individual) |
N/A |
$5,000 per day to a maximum of $4,000,000 per day (first conviction)
$10,000 per day to a maximum of $6,000,000 per day (second conviction)
$20,000 per day with a maximum of $6,000,000 per day (subsequent conviction) |
|
|
Imprisonment of 5 years less one day |
|
Tier 2 � serious offenses (corporation) |
N/A |
$25,000 per day to a maximum of $6,000,000 per day (first conviction)
$50,000 per day to a maximum of $10,000,000 per day (second conviction)
$100,000 per day with a maximum of $10,000,000 per day (subsequent conviction) |
There has been no proposed 'cap' on the amount of the EPs for an individual or corporation. Theoretically, one could have EPs applied for each day that a spill or damage occurred and then have fines applied for the same number of days. If that is the
case, individuals and corporations could be facing monetary penalties in the millions of dollars. At the same time, minimum fines for serious offences and mandatory sentencing
guidelines would be introduced, reducing the flexibility of prosecutors and accused individuals or corporations to enter into mutually satisfactory disposition arrangements.
6. LOCAL MUNICIPAL IMPACT
All local municipalities will face the same challenges identified previously if Bill 133, as proposed, receives Royal Assent.
7. CONCLUSION
The proposed amendments to the EPA and the OWRA which are set out in Bill 133 will pose many challenges to the Region, particularly within the areas of water, wastewater and solid waste management, road construction and maintenance, and infrastructure construction.
York Region has the opportunity make comments to the MOE up until January 7, 2005. It is suggested that the Region's comments should be in the form of submissions from the Regional Solicitor detailing the concerns which have been identified in this report. It is proposed that the Regional Solicitor's submissions to the MOE include:
� The Region's concern about the increase in reportable offences under the EPA and the OWRA and the subsequent impact on municipal and provincial resources as a result of this.
� The Region's concern about the significant expansion of what constitutes a discharge under the EPA and the OWRA and the lowering of the threshold for the determination of whether an adverse effect has been caused.
� The Region's concern over the potential for prosecution even where an EP is successfully challenged before the Environmental Review Tribunal.
� The Region's concern about the unregulated flow of EP funds into and out of the special purposes account in the Consolidated Revenue Fund.
� The Region's concern about the removal of the defence of due diligence where EPs are imposed.
� The Region's concern about the infringement of Charter rights as a result of the imposition of reverse onus.
� The Region's concern about the imposition of liability on officers, directors, employees, consultants and agents and the onerous costs that will be associated with such liability.
� The Region's concern about the lack of a specific exemption from liability for EPs for municipalities who employ normal municipal wastewater practices.
Respectfully submitted,
December 9, 2004 Joy Hulton
Newmarket, Ontario Regional Solicitor
(Report No. 3 of the Regional Solicitor was adopted, without amendment, by Regional Council at its meeting held on December 16, 2004.)