The Ontario Ministry of the Environment finally released its draft regulations on administrative monetary penalties (AMPs). The penalties can be imposed for contravention of environmental legislation, regulations or terms of environmental approvals or orders. The stated intent of AMPs is to encourage companies to prevent violations, mitigate the effects of violations, and to comply with orders that remedy violations or reduce the risk of reoccurrence.
An environment ministry director has the authority to issue a notice of an AMP. The notice requires payment for each day on which the contravention or failure occurred or continued. The director may also issue a notice to an officer of a corporation that engages in an activity that may result in the discharge of contaminants into the natural environment, or who has failed to take all reasonable care to prevent an unlawful discharge.
Generally a recipient will have 30 days to pay the AMP from the date of service of the notice. When paid, the recipient cannot be charged with an offence in respect of that contravention. Failure to pay may result in enforcement as if it were an order of the court.
Within 15 days a recipient may require the Environmental Review Tribunal to hold a hearing, whereby the requirement to pay is stayed. The tribunal may confirm, rescind or amend the AMP, but is not entitled to vary the amount unless it considers the amount to be unreasonable.
Subject to certain exceptions, the director must provide advance notice of the intent to issue an AMP. The advance notice must: describe the contravention and specify the base penalty and any increased penalty as a result of previous violations; set out the days on which the contravention occurred or continued, and that the total amount payable applies to each day; describe the time and manner of payment; and, state the ability to request a reduction.
Advance notice is not required in situations where it only applies to one contravention, the AMP is only in respect of a day or part of a day, or if the applicable base penalty is $3,000 or less.
Those who receive an advance notice may, within 15 days, request a reduction. Such a request must state the grounds on which the reduction is requested, the amount of reduction requested and any other information worth considering.
The regulations set out the factors to assess whether the recipient took all reasonable steps to prevent the contravention. Such factors can include: a fully implemented and adequate system, compliance with industry standards, if the contravention was reasonably foreseeable, if there were feasible alternatives, and whether there was an appropriate degree of control exercised over employees and agents at the time of the contravention.
The regulations also set out the factors to assess reasonable mitigation efforts, such as whether the recipient took steps to prevent the continuation or reoccurrence of the contravention, eliminate or reduce any risk of damage, and whether there was full cooperation with public authorities.
A person who receives an advance notice may, within 15 days, propose to the director that an order be made to remedy the contravention or reduce the risk of its reoccurrence.
The director determines the base amount of the AMP by referring to a schedule of penalties related to specific contraventions. A “notional” amount is determined by considering previous violations that occurred in the five years prior to the current contravention. The lesser of $50,000 or the sum of all the notional penalties from the past five years is used in a formula to calculate the increased penalty to be added to the base penalty.
The final amount may be reduced by up to fifty per cent as part of a request for a reduction if the director is satisfied that the person took all reasonable steps to prevent the contravention. The original amount (or the reduced amount) may also be reduced by fifty per cent if the director is satisfied that the person took all reasonable steps to mitigate the effects of the contravention, but only where there is no consent order.
When an advance notice is issued, the maximum amount of reductions that a person can receive is 75 per cent of the penalty set out in the advance notice.
If no advance notice is issued, the AMP is informally referred to as a field AMP. The amount of a field AMP cannot be increased based on previous violations. The base amount is determined by referring to a schedule that sets out penalties related to specific contraventions. The AMP payable is (for each day on which the contravention occurred or continued) the base penalty.
However, the AMP can be reduced to half of the base penalty if the notice invites the recipient to consent to an order to remedy the contravention or reduce the risk of its reoccurrence within seven days.
Rosalind Cooper, LL.B. is a partner with Fasken Martineau DuMoulin LLP, with offices across Canada. Ms. Cooper is based in Toronto, Ontario.