“Adverse Effect” Does Not Require Significant Impact on...

Posted on: Friday, October 26th, 2012

On March 16, 2012, the Ontario Court of Appeal released an important decision pertaining to the definition of an “adverse effect” under the EPA. The case, Ontario (Environment) v. Castonguay Blasting LTD, involved a situation in which the defendant (Castonguay) was charged with a violation under the EPA because of a blasting operating that went awry and resulted in the discharge of flying rock debris. This discharge caused damage to private property (specifically a house and vehicle) which was outside of the intended blasting area. Due to the company’s failure to report the incident to the MOE, the MOE charged Castonguay with a failure to meet reporting requirements under the EPA, which is an offence with a minimum $25,000 fine.

The charges were made in relation to Section 14(1) of the EPA, which sets out the offence of discharging a contaminant into the natural environment, as well as Section 15(1), which requires that such a discharge is to be reported to the MOE when it “causes or is likely to cause an adverse effect”. What was at issue in this case is whether or not it can be said that flying rock debris constitutes a discharge in the form of an environmental contaminant, and whether or not the discharge caused, or was considered likely to cause, an adverse effect to the environment, people, plants, animals and/or property.

At the time the incident occurred, Castonguay was working on a project for the Ontario Ministry of Transportation (“MTO”). The contract specifically detailed who was to be notified in the event of fly-rock being expelled out of the boundaries of the work site. Within the contract, it was not specified that the MOE should be notified of such an event, nor has the MOE ever asked companies in the blasting industry to report such events. Furthermore, Castonguay was not considered negligent as there were no errors specifically made in the blast itself, and they followed the reporting procedure as set out in the contract with the MTO. Additionally, Castonguay took responsibility for the property damage that occurred, provided full compensation to the property owners, and notified their contract administrator, who subsequently reported the event to both the MTO and the Ministry of Labour.

Both the contract administrator and Castonguay did not believe this incident resulted in the requirement to report the event to the MOE, as neither of them considered the fly-rock to be a “discharge” of a “contaminant” that was likely to have adverse impacts to the natural environment. Initially, the Ontario Court of Justice agreed with this view, and acquitted Castonguay of the charge. However, the MOE appealed this matter to the Superior Court of Justice where Mr. Justice Ray reversed this decision. A final appeal was undertaken by Castonguay to the Ontario Court of Appeal in order to set aside the conviction, however, the appeal was dismissed and the conviction was upheld in a 2-1 decision in favour of the MOE.

The dissenting judge, Mr. Justice Blair, came to the conclusion that the requirement to report an incident to the MOE only arises when there is both harm to the natural environment, as well as an adverse effect on people, plants, animals or property. He found that the fly-rock did not have anything more than a trivial or minor impact on the natural environment, that it did not constitute a “contaminant”, and that it was unlikely to cause an adverse effect for the purposes of the EPA. In his opinion, liability relating to the discharge of a contaminant was only to be triggered when that discharge amounted to something more than trivial or minimal harm to the natural environment. He went further to argue that to interpret the statute to require notification to the EPA even when an event is considered trivial, is to allow the Act “to overreach its intended mandate [as] it is not super-legislation governing every aspect of life.”

The majority, however, disagreed with this position and found that the reporting requirement can in fact be triggered even in cases where there is no significant impairment to the natural environment. This is because the EPA is intended to be interpreted broadly in order to ensure the protection and preservation of the environment. The majority position, as outlined by Mr.Justice MacPherson, was that the application of the EPA should not be restricted only to cases that involve a real threat to the natural environment, as the EPA is also concerned with various uses of the environment that can result in harm to people, animals and property.

Although it was acknowledged that in many cases, blasting rock will not result in an adverse effect, it was argued that in this case it did, because the way in which the environment was used (blasting rock into the air) resulted in harm to property. This led to the majority position that the fly-rock discharged into the natural environment from Castonguay’s blasting operation did in fact constitute a discharge of a contaminant into the air. Furthermore, that the adverse effect of this discharge was the damage to private property, which constituted an adverse effect for the purposes of the EPA.

On September 27th, the Supreme Court of Canada granted Castonguay with a leave to hear an appeal on this conviction. Overall, the decision that is made from this case may have some broad implications, particularly on how businesses approach reporting requirements under the EPA, as this decision provides a cautionary tale as to whether the EPA may apply to certain operations even when there is trivial or minimal adverse effect on the environment. The moral that can be learned from this decision is that when in doubt, companies should always be cautious and report incidents to authorities. It is also important that companies create clear policies on reporting requirements in relation to environmental law and its jurisdiction so as to avoid any potential claims.

The full case can be accessed by clicking here.

This article can also be found in our October 2012 Environmental Newsletter by clicking here.

The content of this article is intended to provide a general guide to the subject matter. The information does not constitute legal advice and a solicitor and client relationship is not created.

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