Environment Committee on Feb. 22nd, 2021

[Monique Pauzé, Bloc, Repentigny, QC]

Thank you, Mr. Chair.

Good afternoon, Ms. Pelletier.

Your work is extremely important, especially when it comes to the health of the public.

You mentioned in your speech that the Enforcement Branch has enhanced its capacity for conducting investigations. However, one witness told us that Environment and Climate Change Canada has conducted fewer investigations under the Canadian Environmental Protection Act and that there has been a decrease in the number of inspections.

For example, in 2014-15, there were 4,915 inspections, while in 2018-19, there were 1,608. In addition, there were 60 investigations in 2014-15, compared to 16 in 2018-19, which were therefore conducted prior to the pandemic.

What explains this significant drop in the number of investigations?

[Anne-Marie Pelletier]

Our current risk assessment makes the issue much more complex. A decrease isn't necessarily representative of the magnitude of what we're doing.

We also have other tools. We've talked about monetary penalties and tickets, for example. We use tools that the numbers don't show, but they have a big impact. The numbers don't tell the whole story.

I'd like to ask our director general, Donald Walker, to provide further clarification on this matter.

[Monique Pauzé, Bloc, Repentigny, QC]

I'd ask Mr. Walker to provide a quick response, since I have a limited amount of time.

[Donald Walker, Director General, Environmental Enforcement, Department of the Environment]

Absolutely.

There are a variety of factors to look at here, the critical one being the types of inspections and investigations that are undertaken in a given year. There can be some fluctuation, particularly as we move to a more risk-based approach, so looking at specific industries to determine levels of non-compliance as a baseline, and where we should be focusing our efforts. Some that are more straightforward to investigate will naturally move faster, particularly if they're all located in urban areas, whereas others will require more legwork, more collection of evidence, longer periods of time to analyze the evidence, as well as additional effort in terms of where we send resources in order to collect samples and the like.

[Monique Pauzé, Bloc, Repentigny, QC]

Do you consider your human resource capacity to be sufficient, given the distance you have to cover to gather the evidence?

[Donald Walker]

That's an interesting question.

What I would say is that our responsibility as an enforcement branch is to make sure we're making the most effective use of the resources we have. That's why we have moved to a risk-based approach. We're looking both at the impact of non-compliance and at the likelihood of non-compliance when we're determining how we use the human resources we have.

I might turn to Michael Enns again to describe a little bit more on how that works in terms of our planning process.

[Michael Enns]

Sure.

The main concern of any enforcement branch, in my view, trying to make effective use of resources is twofold: recruitment and training. We want to get the right people in, and we want to train them in the best possible way.

We've made investments over the course of the last few years to make that training the best it can be in terms of understanding the detailed requirements of the CEPA regulations, the nature and extent of non-compliance, and all of the possible tools to bring back conformity.

In terms of recruitment, again, we invest heavily there to bring in people who have backgrounds that are diverse and scientific in nature, combined with good and detailed knowledge of policing techniques.

That's how we make the most effective use of resources. Recent investments in the enforcement branch have allowed us to double down on those efforts to make even more improvements, which is a big priority for our branch.

[Monique Pauzé, Bloc, Repentigny, QC]

Since you're offering more training, do you think you'll be able to increase the number of investigations in the near future?

Have you developed a plan to do this?

[Anne-Marie Pelletier]

Yes, we've developed a plan for priorities.

I can't say whether it will increase the number of investigations. However, it will certainly help us to target the investigations to be conducted.

The plan will target situations that correspond to a high level of risk, which is often much more complex. The regulations will be improved over time, and they will become much more complex. This means that our officers will have to be trained to comply with the new regulations.

As I said, the number of investigations isn't always an accurate reference. We have different mechanisms for receiving requests for investigations or inspections from the public. Perhaps Mr. Walker mentioned this. Our data isn't necessarily limited to what we find. It's another situation that illustrates how difficult it is to put a dollar figure on what we do.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

We'll now give the floor to Ms. Collins.

[Laurel Collins, NDP, Victoria, BC]

Thank you so much.

Mr. Chair, my motion specifically indicated “in light of the recent charges brought against Volkswagen in December 2019 under the CEPA, following this investigation by Environment and Climate Change Canada”. That was the language in the motion. I have to admit I'm feeling a little bit disappointed that we have witnesses who were not there at the time and cannot necessarily speak to the direct experience of what happened. Being briefed on what happened is different from actually being able to question someone who was involved in the investigation.

With that said, I think the Volkswagen case has been referred to as one of the worst environmental crimes committed in Canada, and Canada's response to it has been characterized as hesitant, weak, inadequate. One of the criticisms was around the length of time it took. In the U.S., the EPA issued a notice of violation to Volkswagen in September 2015, and about a year and a half later the company pleaded guilty—actually less than that, in January 2017—to three criminal felonies, whereas Environment and Climate Change Canada began investigating in September 2015, and charges were only laid four years later, December 2019.

We've heard testimony that the agreed statement of facts from the U.S. would be legally admissible in Canadian courts, that the testing done in Canada was used as evidence by the U.S. government, so why did it take four years to charge Volkswagen here in Canada?

[The Chair, Liberal, Francis Scarpaleggia]

Who wants to answer the question?

[Anne-Marie Pelletier]

I'll ask Mr. Walker, director general at the Department of the Environment, to speak to that.

[The Chair, Liberal, Francis Scarpaleggia]

Okay.

Mr. Walker, you have the floor.

[Donald Walker]

With a case of this magnitude, it's not unusual for the investigation to take multiple years. It's certainly correct that, as Ms. Collins mentioned, under section 23 of the Canada Evidence Act, records of proceedings from certain foreign courts, including the United States, can be introduced as evidence in Canadian courts.

However, that doesn't vitiate the need for Environment Canada to conduct its own investigation under Canadian law—

[Laurel Collins, NDP, Victoria, BC]

I'm sorry to interrupt. Could you please speak to the comparison. It took a year and half, less than that, a year and a few months, for the U.S. to complete this, and they actually laid criminal charges, whereas it took us four years, and the charges were in no way comparable. What was the difference between our investigation and theirs, especially given that they had already completed theirs and we could use their statement of facts? You'd think that would speed it up.

[Donald Walker]

Absolutely, while it is possible to enter their statement of facts as evidence for a Canadian prosecution, the fact is that the charges laid in the United States were under U.S. law and weren't the same as what was pursued in Canada under the Canadian Environmental Protection Act.

The testing of vehicles is certainly one component. There's also the investigation of the defeat devices themselves, which actually required some level of reverse engineering in Canada because it was not to simply demonstrate that the vehicles were not performing the way they were expected to, but to show that there was a device that was designed to do this.

I may actually turn it over to Monsieur Couroux to speak a little bit about the technical aspect of testing, as well as the facts about the co-operation with the U.S. on testing.

[Laurel Collins, NDP, Victoria, BC]

In the interest of time, I'll move on to my second question, which is around the proportionality of the Canadian side. Even adjusting for population and the number of vehicles sold, the $196-million fine paid by Volkswagen Canada is much smaller than the $4.3 billion in civil and criminal penalties paid in the U.S.

I'm curious about the recommendations that the enforcement officials made to the Crown prosecutor with regard to Volkswagen and the rationale behind those recommendations. I'd specifically like to know, because the recommendations are made on behalf of the minister, what input, if any, did the minister's office have on those recommendations? What input, if any, did the Prime Minister's Office have on those recommendations? Under CEPA, compliance and enforcement policy is the responsibility of enforcement officials, but it's on behalf of the minister and they made recommendations to these Crown prosecutors around penalties, proportionality and nature or gravity of the offence, etc.

[Donald Walker]

That's a really interesting question.

I think this goes back to the creation in 2005 of the enforcement branch, which was designed to create an independent and impartial investigative body that could undertake enforcement activities under CEPA.

To the best of my knowledge, there is no interaction with the minister's office or the Prime Minister's Office to influence the work of the Public Prosecution Service of Canada in the discussions of the actual penalty amount.

I would, however, go back to Justice Rondinelli's reasons associated with his accepting the plea agreement. They indicate that this is a new era, in terms of the scope and size of penalties. He recognizes that this penalty of $196.5 million, which goes back into environmental projects in Canada, is 26 times the next highest amount that had previously been collected.

[Laurel Collins, NDP, Victoria, BC]

Thank you, Mr. Walker.

[The Chair, Liberal, Francis Scarpaleggia]

This discussion is very interesting, and I hope it will continue along these lines as we go into our second round, which includes five minutes from Mr. Redekopp.

[Brad Redekopp, Conservative, Saskatoon West, SK]

Thank you.

Thanks to all the witnesses for being here.

I'm going to ask Mr. Couroux a question.

In her opening remarks, Madam Pelletier said that the enforcement branch and the relevant programs have taken to heart the recommendations of this committee, which I assume is a reference to the 2017 study by this committee on CEPA.

In the government response, then-environment minister McKenna wrote to the committee saying that “some of the...recommendations would be best realized through implementation rather than statutory change”. Then Madam Pelletier listed some of the changes that have happened.

Mr. Couroux, with these changes and these tools in place as they are now, would your enforcement officers have been able to uncover what Volkswagen was doing?

[Stéphane Couroux, Director, Transportation Division , Environmental Protection Branch, Department of the Environment]

To clarify one thing, I'm not with the enforcement branch; I'm part of the program that supports enforcement when they are conducting investigations. I can, though, certainly answer the question of what we have implemented since the Volkswagen situation to improve our testing and finding of those defeat devices.

First, we have implemented a risk approach to selecting test specimens to ensure that we have the broadest scope and that we focus on those vehicles or engines that could provide more likelihood of having exceedences.

We've also increased the funding for what we call the enhanced compliance verification approach. In that regard, we are conducting more testing than we were before Volkswagen. Also, we are conducting testing that is different—testing that we do while trying to be unpredictable and find issues such as what we found in the Volkswagen situation.

We're thus no longer only conducting laboratory testing but are also moving ahead to conduct on-road testing using portable emission measurement devices. We're also conducting testing, on an unpredictable cycle, whereby we monitor all of the computer systems and other parameters to try to ensure that the vehicle is always operated in the same way it would be in a laboratory.

[Brad Redekopp, Conservative, Saskatoon West, SK]

In your opinion, then, would there have been a much higher chance that you would have caught VW in this case?

[Stéphane Couroux]

What I'm saying is that with the resources we have at our disposition we're working towards ensuring that we are as efficient as possible to test the widest spectrum of vehicles and also trying to find evidence as much as we can.