Environment Committee on Feb. 1st, 2021

[The Chair, Liberal, Francis Scarpaleggia]

Welcome, everyone, to the first meeting of the committee this year.

Today is our second meeting as part of the study on CEPA enforcement. We have with us today three witnesses: Maître Ariane Gagnon-Rocque, lawyer; Dr. Mark Winfield, from York University; and Ken Bondy, representing Unifor.

Before we get started, I want to mention that we only have until 5:30 today because of a committee meeting following ours. I'll give the witnesses maybe three minutes to make a statement, and then we'll go to the questioning. I think we might be able to get in a couple of rounds. I will need about 10 to 15 minutes at the end to go over some future business items, but it won't take very long, and that will take us to about 5:30.

We're going to start with Ms. Gagnon-Rocque, who will have about three minutes. She'll be followed by Mr. Winfield and Mr. Bondy.

Go ahead, Ms. Gagnon-Rocque.

[Ariane Gagnon-Rocque, Lawyer, As an Individual]

Good afternoon, Mr. Chair and members of the committee.

I'll try to be brief. First of all, I want to take this opportunity to thank you for inviting me to share my knowledge and opinion. It's a tremendous honour to be here this afternoon.

I come before you in a personal capacity to share my knowledge and opinions. As such, I want to advise you that I am not advocating for any cause or organization. I know that one of the triggers for this series of meetings on the enforcement of the Canadian Environmental Protection Act, or CEPA, is the Volkswagen case. I would be pleased to discuss it with you within the limits of my knowledge of this issue.

First of all, I would like to urge you not to overhaul a system on the basis of a single exceptional case. We must always keep in mind that this system, while it sometimes applies to exceptional cases such as Volkswagen and must be prepared to respond to them, applies more often to “average” citizens. In my opinion, they are the ones who should be the most concerned.

This brings me to two main points: the severity of the sentence and the certainty of being prosecuted. Together with the promptness of the sentence, they help deter potential offenders from committing a criminal or penal offence.

In terms of the severity of the penalty, I see no need to amend CEPA. It provides penalties that are sufficiently severe to deal with environmental crime. For example, the maximum penalty per count for the offences with which Volkswagen was charged was set at $6 million. Under the regulations, the maximum fine was never imposed. The company was fined a maximum of $4,466,000 on some counts.

Furthermore, if one count per imported vehicle had been chosen and the maximum fine for each count had been imposed, which would have been completely disproportionate, the total fine would have been $768 billion. In short, CEPA has what it takes to adequately punish environmental disasters, should they unfortunately occur.

It isn't in terms of the potential severity of the sentence that we should seek to do better. In fact, we all know that in reality, it isn't the severity of the sentence that is a deterrent, but rather the certainty of being prosecuted. This is where I think you need to focus your efforts.

The statistics speak for themselves: criminal prosecutions are rare under CEPA. I can provide you with those statistics.

Environment and Climate Change Canada initiates very few investigations and lays few criminal charges under CEPA. It's clear that our citizens are far from certain that they'll be prosecuted if they exceed the requirements of CEPA. This isn't surprising, since the Compliance and Enforcement Policy for CEPA states that the choice of enforcement measures under the act will promote “the effectiveness of the response in securing compliance as quickly as possible with no recurrence of violation”. For this reason, enforcement officers will first consider a warning before criminal prosecution.

I believe that if criminal prosecutions were seen as a realistic and credible threat, corporations and individuals would likely take more proactive steps to comply with their environmental obligations.

I also believe it's time for Environment and Climate Change Canada to take full ownership of its administrative monetary penalty system, or AMPS, and even increase the basic penalties slightly.

[The Chair, Liberal, Francis Scarpaleggia]

Could you please wrap up, Ms. Gagnon-Rocque?

[Ariane Gagnon-Rocque]

I was just finishing, Mr. Chair.

[The Chair, Liberal, Francis Scarpaleggia]

Okay.

[Ariane Gagnon-Rocque]

The AMPS are an excellent compromise between the simplicity and quickness of a warning and the punitive nature of criminal prosecution.

Thank you very much for your attention.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you, Ms. Gagnon-Rocque.

Mr. Winfield, the floor is yours now.

[Dr. Mark Winfield, Professor, Faculty of Environmental and Urban Change, York University, As an Individual]

Thank you, Mr. Chair.

My name is Mark Winfield. I'm a professor of environmental and urban change at York University. I also run the joint program on environmental studies and law that we offer in conjunction with Osgoode Hall Law School.

I want to thank the members for the opportunity to speak to the committee today about these important issues related to the administration and enforcement of CEPA. I have a long history of engagement with the act. I was very involved with the original CEPA review back in 1995, when the late Honourable Mr. Caccia was in the chair. The committee led the review that led to essentially the current version of the act. I have continued to follow this over the years, particularly with respect to the federal-provincial dimensions. Most recently, I was an adviser to the commissioner of the environment and sustainable development on their most recent audit of the act.

I will focus on the wider issues around the enforcement of CEPA and not so much on the specifics of the Volkswagen case. Others have spoken to that. I think we need to think of the Volkswagen case as a bit of an outlier in terms of the overall enforcement story around CEPA. I really want to focus on that narrative. This is a complicated story, and that reflects the scope of the act.

In approaching this, I had a look back at the report that was done through the commissioner's office and the annual reports under CEPA. A number of things come out very strongly in this. One is that there's really a number of regulations under CEPA, but the enforcement activities on the part of the department seem to be relatively focused on a fairly short list of those regulations: PCBs; the import and export of hazardous waste; and in 2017-18 a lot on the environmental emergencies and also on petroleum storage tank regulations that apply on only federal lands and federal jurisdiction.

The implication of this that is you have a wide range of regulations. Some are very significant from an environment and health perspective, around which there seems to be very little enforcement activity in terms of inspections and warnings. We have already heard about the relative rarity of actual prosecutions. Thinking about pulp and paper regulations, new substances regulations, rules around the national pollutant release inventory, and ocean disposal, an area where the federal government is the primary regulator, we're seeing relatively little activity.

The other area I want to highlight to the committee members is a perpetual one: The enforcement of certain regulations falls under administrative or equivalency agreements with some provinces, and from an information perspective, that situation is fairly opaque. We get very little meaningful information about what's happening under those agreements at the provincial level. I also note that we do have a new wave of these agreements emerging, particularly around climate change measures related to coal-fired electricity and methane.

Thank you.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you, Dr. Winfield.

We will go now to Mr. Bondy from Unifor.

You have three minutes, please.

[Ken Bondy, National Representative, Health, Safety and Environment, Unifor]

Thank you, Chair.

My name is Ken Bondy, and I am a national representative in the health, safety and environment department of Unifor Canada, the largest private sector union in Canada. We represent 315,000 members. On behalf of our president, Jerry Dias, I want to thank the committee for this invitation.

Our union believes that the Volkswagen emission scandal and the meagre penalties imposed on the automaker under CEPA certainly warrants review by this committee. Unifor, as the leading voice for auto workers in Canada, would like to have that opportunity to look further into this issue. The revelations of Volkswagen’s violations raised concern among our members, as you can imagine, throughout the auto industry. How could a company that intentionally contravened our laws receive a paltry $200-million fine? It remains unclear why Canada took such a passive approach.

We have seen what happened in the United States, where their prosecution ended with a settlement of $25 billion from Volkswagen. That's 130 times the amount of the Canadian settlement. The U.S. is using this money to bolster its needed electric vehicle infrastructure, and it's a natural offset of course for both the economic and environmental damage the automaker’s action caused. On top of this, and at the same time, VW committed to introducing new EV programs in its Chattanooga, Tennessee, assembly plant.

However, in Canada, we have let them carry on with business as usual with no investment at all. We need all companies to take climate commitments seriously. CEPA is our rule book; it allows us to punish those who contravene the laws.

Our union commends the federal government for many of its recent actions to take a lead on emissions reductions efforts and to meet the Paris targets, but bolstering our approach to CEPA enforcement must be part of the plan. It is painfully clear that Canada’s approach to enforcement and prosecution of violations under CEPA needs strengthening. The CEPA language might not need to change, but guidance with regard to the environmental enforcement directorate’s approach is important. Authorities must prioritize these high-risk violators.

I want to end by saying that the Volkswagen scandal shows us why corporate accountability measures are essential to uphold our social values, our workplace rights and our support for working Canadians.

Thank you.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you, Mr. Bondy.

Judging by the opening remarks, a stimulating discussion awaits us. We're going to start the first round of questions.

Mr. Albas, you have six minutes.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Thank you, Mr. Chair.

My questions today will start with Mr. Winfield.

Mr. Winfield, you focused a little bit more on the general application of CEPA. You've been involved with it for a long time. One thing you touched on in your opening statement was the scant—or in some cases, varied—enforcement. In the last Parliament, I heard a lot of concerns from small operators, particularly those in the dry cleaning industry, who were asking why the federal government—in this case, Environment and Climate Change Canada—was attacking them as small businesses. When you see the outlier, as you called it, of VW, it does kind of beg the question: Why does there seem to be enforcement on certain individuals and certain types of industry versus on others?

[Dr. Mark Winfield]

I think that's a very good question and one to which I must admit I don't have an immediate answer other than that there seems to have been a pattern around this for some time, with a very strong focus on the dry cleaners, for example. Now, there is a significant issue there around the trichloroethylene regulations. The commissioner in her report flagged why seemingly so much effort was going into the enforcement of those regulations and why all the tickets we see seem to be around what are mostly smaller operators and a few distributors while on some of these larger-picture regulations, pulp and paper being an obvious one but also more industrial-type sources, there seems to be very little activity.

The department apparently prioritizes things year to year in terms of the inspection effort, but one is left wondering why certain things are getting a lot of attention and other things seem to not get very much at all. We have to go back to the department again to ask what informs its approach here in terms of how efforts are prioritized. It may be that the dry cleaners are easier and less able to defend themselves than are the larger industrial facilities, but I think that's an obvious question to ask the department.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

You've raised a number of points. One is the equivalencies and the lack of the transparency. You've said that you've noted they're rather opaque.

Again, I heard mainly from small businesses in Ontario. There were some in British Columbia as well. In speaking to other members of Parliament, it just didn't seem to be an issue in other provinces. Is this the case where there is one law that's being applied differently in other parts of the country? That isn't fair, and I think that when a company is as big as Volkswagen, I'm sure it would not be appropriate to have these kinds of provincial equivalencies where provinces are having to take on large companies like VW.

[Dr. Mark Winfield]

Yes, and in the VW case, the relevant regulations—and part of this is also a Criminal Code matter too—are essentially federal, and they're not ones that lend themselves to equivalency or administrative agreements. Those mostly relate to things that are physically located in a province, with a pulp and paper mill being the most obvious example, where the inspection functions and effectively the enforcement functions get delegated to a province. In some areas, vehicle emissions and things like that are fundamentally federal jurisdiction through the trade and commerce power, so it's really the federal government's role to be enforcing there.

The concern with the administrative and equivalency agreements—this is one that goes back to to the original CEPA review—is that they are a bit of a black hole in terms of what is happening in the provinces, and they don't apply in all provinces. They only apply in some provinces. We seem to have very little public information about what's happening where those agreements are in place. That said, we're also seeing very little enforcement, period, around the regulations that are generally covered by those agreements. It's principally the pulp and paper ones, historically, more than anything.

We're now seeing a newer set of them coming up around coal-fired electricity and methane from industrial sources. This is where the next round of equivalency agreements is emerging. Again, the same sorts of questions arise about how we're going to know from a federal perspective of what's happening, and that does beg questions of unevenness between provinces about how much enforcement effort actually goes into these areas.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

For my next question, I know you've said that you didn't want to necessarily focus on VW, but it is a high-profile case, and if people do not see a level approach.... I'll just simply ask you this. Do you think the fines levied against VW were measured? We've heard from some witnesses who said that the United States had far higher fees and that the damage was identical on a per capita basis for a VW in Canada versus a VW in the United States. There were a lot of questions on whether the Canadian government just gave VW a slap on the wrist. What is your opinion?

[The Chair, Liberal, Francis Scarpaleggia]

Could we have a 20-second answer, please?

[Dr. Mark Winfield]

I think it's a legitimate question, even allowing for the order of magnitude in differences between Canada and the United States. The scale of the penalty does beg questions: Did we let them off the hook a little easier given the scale of this? Part of this, too, is that we haven't seen anything on this scale in our experience under CEPA so far.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

We'll go now to Mr. Saini for six minutes.

[Raj Saini, Liberal, Kitchener Centre, ON]

Thank you to all the witnesses for coming today. I really appreciate it.

I'll start with you, Dr. Winfield.

As you're quite aware, there's a lot of talk in society and also in this committee about trying to eliminate waste and move towards a more circular economy where we aren't dependent on the endless consumption of products. Do you find that there's a role for a strengthened CEPA to play in this goal? What changes would you suggest we need to make this work?

[Dr. Mark Winfield]

That's a complicated question, and I'd be tempted to defer to my post-doctoral student who's the expert on waste matters.

I think that there is a federal role. It's complicated by the nature of the jurisdictional needles that are being threaded through CEPA. The structure tends to be product-specific or substance-specific in relation to toxic substances, so it becomes a question of whether you set extended producer responsibility rules in relation to specific types of products to push post-consumer management costs back onto the original designers and producers.

There may be a role around the import and export of waste rules. I'd have to think about that a bit. At the end of the day, the federal government does have control over transboundary movements of waste in and out of Canada and between provinces, depending on how much it wants to exercise that control. One would have to think a little bit about how to incorporate that into an extended producer responsibility regime, and in particular how one would coordinate what's happening with the provinces in that area. They tend to end up as the primary regulators. However, especially, with the movements around plastics, the implication is that once they're on schedule 1, the federal government can exercise regulatory control. The question is then how to design something that gets you where you may want to get to in terms of extended producer responsibility and circular economy.

[Raj Saini, Liberal, Kitchener Centre, ON]

Let me take you in different direction.

I want to ask your opinion on the environmental damages fund. You know that fines levied under CEPA are to be used to restore the environment, so currently the court may direct funds to be used to repair the specific damage that the fines were levied for.

Should this remain at the discretion of the court, or should there be some statutory requirement...?

[Dr. Mark Winfield]

The tricky part is that, in a sense, it partially ends up falling to the Crown, which is making the plea around what the nature of the penalty should be. Given the variety of issues that could come up, one would have to think carefully about what sort of statutory constraint one wants to impose. Do you tie it tightly to the specific damage that occurred, or do you want to provide a little more discretion on the part of both the judge, and, as I said, typically the Crown, in making the case as to where those resources should go?

[Raj Saini, Liberal, Kitchener Centre, ON]

When we're trying to improve our environmental oversight, and our enforcement works so closely with the United States in terms of testing and emissions, should we be accepting the United States EPA certificates of conformity for vehicle emissions to make us more aligned with them and maybe increase some efficiencies?

[Dr. Mark Winfield]

Again, this is a complicated one. Recent events demonstrate both the advantages and the pitfalls, in the sense that typically the U.S. EPA has been seen globally as the world's most competent environmental regulator. Obviously in the last four years that changed somewhat in terms of the landscape, and in a sense caused us to think again about whether we simply want to accept what they have accepted or whether we want to be having a look at it ourselves.

There's also an implication in some cases that.... Again, as with the experience we've been through, there can also be situations where we would in fact want to retain the discretion to require higher standards. You've had the Californias of the world saying they'd prefer a higher bar, and in this unusual situation, the U.S. EPA effectively being pushed by the administration downwards. Again—