The Supreme Court of Canada has granted leave to appeal in a case that could significantly expand the jurisdiction of environmental regulators, and increase the costs of compliance for the private sector. Castonguay Blasting will require the Court to determine whether the discharge of contaminants into the natural environment must be reported even if it does not cause an adverse environmental effect, but only results in property damage.
The appellant in Castonguay was engaged in blasting operations at a highway construction site, when it sent rock debris flying 90 metres through the air, landing on and damaging a nearby house and vehicle. The owners of the property were compensated for the damage, and the appellant reported the incident to Ontario’s Ministry of Labour and Ministry of Transport. However, it did not report the incident to the Ontario Ministry of the Environment. The appellant was later charged with failing to report the discharge of a contaminant into the natural environment, contrary to s. 15(1) of Ontario’s Environmental Protection Act (the “EPA“), which states:
15. (1) Every person who discharges a contaminant or causes or permits the discharge of a contaminant into the natural environment shall forthwith notify the Ministry if the discharge is out of the normal course of events, the discharge causes or is likely to cause an adverse effect and the person is not otherwise required to notify the Ministry under section 92.
Comparable provisions are found in many other statutes and regulations throughout Canada.
The appellant’s defence was that the rock debris did not have an “adverse effect” in an environmental sense, but only in the sense that it caused damage to private property. It argued that the term “adverse effect” in s. 15(1) should be construed to require more than trivial or minimal harm or impairment to the natural environment. The defence thus turned upon the definition of “adverse effect” in s. 1(1) of the EPA, which provides:
“adverse effect” means one or more of,
(a) impairment of the quality of the natural environment for any use that can be made of it,
(b) injury or damage to property or to plant or animal life,
(c) harm or material discomfort to any person,
(d) an adverse effect on the health of any person,
(e) impairment of the safety of any person,
(f) rendering any property or plant or animal life unfit for human use,
(g) loss of enjoyment of normal use of property, and
(h) interference with the normal conduct of business.
The appellant was initially acquitted in the Ontario Court of Justice, but that decision was overturned by the Ontario Superior Court. Ray J. held that there was nothing in the EPA to suggest that s. 15 should be limited to adverse events in respect of the natural environment.
In a split decision, the Ontario Court of Appeal upheld the appellant’s conviction. Relying upon his own earlier judgment in Dow Chemical, MacPherson J.A. (Simmons J.A. concurring) found that only subparagraph (a) of the above definition of “adverse effect” required there to be an impairment of the environment. Accordingly, reading the definition disjunctively, MacPherson J.A. concluded that an “adverse effect” under the remaining subparagraphs did not need to involve injury to the environment, but could include mere injury to property in the nature of what occurred through the appellant’s blasting operations. MacPherson J.A. also found this interpretation to be consistent with the purposes of the EPA:
My colleague is correct to regard the protection of the environment itself as a key purpose of the EPA. That is why para. (a) and, to a lesser extent, paras. (b) and (f) relating to plants are included in the definition of “adverse effect.”However, the EPA is, in my view, also concerned with uses of the environment that cause harm to people, animals and property – for example, as a conduit for contaminants that cause damage or harm to people, animals or property. Blasting is a perfect example. In many cases, blasting will not harm the environment; para. (a) of the definition of “adverse effect” will not be triggered. However, where blasting causes the discharge of a contaminant, such as fly-rock, into the natural environment, blasting may harm people, animals or property. That is what happened in this case. A blasting activity gone wrong (as the appellant concedes) may not have caused more than trivial or minimal harm to the air, land or water. However, the fly-rock generated by the blasting did cause significant harm to property, a different adverse effect under the Act. Importantly, the direct conduit resulting in this harm was the appellant’s use of the environment (the air) to disperse a contaminant (fly-rock).
In conclusion, I see no policy reason for limiting the coverage of the EPA to fact situations where serious adverse effects to people, animals and property can be considered only if the environment is also harmed by the impugned activity. In this case, the discharge of fly-rock into the air during a blasting operation was a sufficient trigger for scrutiny under the EPA. [emphasis in original] (paras. 75-77)
In a strong dissent, Blair J.A. would have found that the “adverse effect” definition requires there to be something more than trivial or minimal harm or impairment to the natural environment, regardless of which particular subparagraph of the “adverse effect” definition was at issue.
The Supreme Court’s decision in Castonguay will be of great interest to businesses whose operations involve a significant environmental component. If the Court of Appeal’s decision is upheld, it will mean that such businesses must report the discharge of contaminants under legislation like the EPA even in cases where a non-trivial impact upon the environment itself is absent. Simply causing property damage, or even interfering with the normal conduct of someone else’s business, will be enough to trigger the obligation to report. In addition, the Supreme Court’s decision could enlarge the scope of environmental liability more generally, since many provisions – like s. 14(1) of the EPA - make it an offence for a person simply to discharge a contaminant into the natural environment that causes an adverse effect, quite apart from whether or not the discharge is reported. Finally, the decision may also be important to regulatory prosecutions more generally, since the Supreme Court will likely address the principles of interpretation that apply to strict liability offences.
SCC Court File No.: 34816
Date Leave to Appeal Granted: September 27, 2012