Dealing with environmental regulators

Things to know

Companies carrying on business in Canada are subject to overlapping environmental regulation by all levels of government — federal, provincial/territorial and municipal.
Each province has environmental protection laws and has a regulator charged with administration and enforcement.
All jurisdictions generally take a “laddered approach” to enforcement, ranging from voluntary compliance through inspections and education to compulsory tools such as broad order powers, administrative penalties, investigation, charges and prosecution powers.
Environmental offences in Canada are quasi-criminal “strict liability” charges, potentially subject to significant fines and/or imprisonment.
Most environmental statutes extend a regulator’s reach to persons in “management or control” of the business and/or property, potentially including current/former owners, current/former landlords/tenants/occupants and current/former directors and officers.
Directors and officers may be exposed to personal liability, including being named personally in orders and prosecution.
Depending on the circumstances, bankruptcy or insolvency may not relieve a company from complying with a regulator’s order to deal with contamination.

Regulators inspecting your premises have broad powers, and you have corresponding statutory obligations. In contrast, regulators investigating potential offences have more limited powers. Know the difference and call your lawyer.
Implement a robust Environmental Management System, with written procedures, training and follow up, to assist in a due-diligence defence in the event of any investigation or potential charges by a regulator.
Work with your regulator to achieve compliance, get feedback and develop goodwill and trust. Consider negotiating timing and scope of compliance requirements, in a way that demonstrates that the regulator’s perceived risks would still be addressed.

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