LICENCE W I N T E R IN THIS ISSUE. Stephanie Lysyk (Vancouver Office)

Transcription

1 W I N T E R E N V I R O N M E N TA L L AW N E W S IN THIS ISSUE 1 COURT ORDERS CROWN TO CONSULT FIRST NATION BEFORE REMOVING PRIVATELY OWNED FOREST LAND FROM TREE FARM LICENCE - Stephanie Lysyk LEGISLATION AND POLICY DIGESTS 5 CLIMATE CHANGE UPDATE - Carleigh Whitman Joe Pagé (Articled Student) 7 ONTARIO PROPOSES CLEAN WATER ACT - Rick Coburn 7 NEW STATUTORY RIGHT OF ENTRY FOR ALBERTA OPERATORS - Dean Watt 8 ALBERTA ENVIRONMENTAL PROTECTION COMMISSION ISSUES REPORT ON EMERGENCY RESPONSE - Dean Watt CASE DIGESTS 8 SUPREME COURT DISMISSES LEAVE TO APPEAL PESTICIDE USE DECISION - Rick Coburn 9 COURT RULES MINISTER S AUTHORITY TO ORDER A REVIEW PANEL CONFINED TO PLANNING PHASE - Dean Watt 9 LARGE FINES UNDER ENVIRONMENTAL LEGISLATION UPHELD - Dean Watt 11 ONTARIO COURT OF APPEAL CERTIFIES ENVIRONMENTAL CLASS ACTION - Gabrielle Kramer C O U R T O R D E R S C R O W N T O C O N S U LT F I R S T N AT I O N B E F O R E R E M O V I N G P R I VAT E LY O W N E D F O R E S T L A N D F R O M T R E E FA R M L I C E N C E Stephanie Lysyk (Vancouver Office) In Hupacasath First Nation v. British Columbia (Minister of Forests), released in December 2005, the British Columbia Supreme Court held that the Provincial Crown owed, and failed to meet, a duty to consult and to accommodate the Hupacasath First Nation when removing 70,000 hectares of privately held forest land from Tree Farm Licence 44 ( TFL 44 ). Based on this decision, the Crown can now be found to have a duty to consult and accommodate First Nations with respect to activities on privately owned lands. This finding may have far reaching implications and will likely be of concern to private land owners. C O N T E X T O F T H E D I S P U T E Weyerhaeuser Company Limited ( Weyerhaeuser ) owned forest land in the central portion of Vancouver Island in an area covered by TFL 44. The land had been privately owned since 1887 when Canada transferred it to the Esquimalt and Nanaimo Railway Company. The lands were originally made part of TFL 44 in 1945, and had been moved in and out of the licence since then. Under the legislative regime in British Columbia, privately held forest land adjacent to a tree farm licence can be included in the licence in order to permit the unified management of a logging operation. Once added to a licence, however, certain conditions are imposed on the owner: the land must be used for forestry purposes, and the owner cannot alienate the land, or any interest in it, to a third party without obtaining the consent of the Minister of Forests under section 54.7 of the British Columbia Forest Act. The Hupacasath First Nation claimed aboriginal rights and title over a territory of some 232,000 hectares in the central part of Vancouver Island, including parts of TFL 44. In 1998, while still negotiating as part of the Nuu-chah-nulth Tribal Council in the British Columbia Treaty Process, the Hupacasath asserted rights and title over lands that included both privately owned and Crown lands within TFL 44.

2 2 W I N T E R While the court was careful to suggest that the circumstances in Hupacasath were unique and unusual, it was in the court s view the Minister s authority to make a decision that could potentially have serious impacts on aboriginal rights that gave rise to the Crown s duty to consult and accommodate the claimants with respect to activities on privately owned lands. The Province had been consulting with the Hupacasath and Weyerhaeuser in relation to forestry activities on both private and Crown lands in TFL 44 since Between 1998 and June of 2004, representatives of Weyerhaeuser and the Hupacasath met almost monthly to consult. By 2001, they had developed such an efficient process for integrating aboriginal interests into the operational-level planning of forestry operations that Ministry intervention was rarely required. Hupacasath representatives also attended regularly at meetings of the West Island Woodlands Community Advisory Group (or WIWAG ), a group sponsored by Weyerhaeuser that brought together representatives from small business, the Ministry of Forests, First Nations, and others engaged in or affected by forestry development in the region. In September 2002, Weyerhaeuser announced during a WIWAG meeting that the company was trying to change the status of Private Lands inside of the TFL 44. On December 5, 2003 Weyerhaeuser requested the removal of privately owned land from Tree Farm Licence 39 and TFL 44. Five days later, Hupacasath filed a writ claiming aboriginal title to lands within its traditional territory. In a further WIWAG meeting in February of 2004, Weyerhaeuser advised that it was actively seeking to remove its private lands from the TFL 44. Although Hupacasath had been represented at both WIWAG meetings, the court found it significant that no one representing the Minister of Forests had ever contacted Chief Sayers to propose consultation on the removal of Weyerhaeuser s land from TFL 44. The Ministry of Forests authorized the removal of the privately held lands (the Removed Lands ) on July 9, Weyerhaeuser s future use of the Removed Lands was made subject to certain conditions. Notably, Weyerhaeuser was obliged to endeavour to provide notice if the company s use of the Removed Lands was likely to interfere with the exercise of an aboriginal right. On receiving notice of the decision, the Hupacasath informed the Ministry of Forests that the removal authorization infringed the First Nation s aboriginal rights and title. In August of 2004, the Chief Forester amended the annual allowable cut ( AAC ) to take account of the land removal, reducing the AAC by a quantity proportional to the relative areas of the Removed

3 3 E N V I R O N M E N T A L Lands and the pre-removal licence. On December 14, 2004, Brascan Corporation ( Brascan ) purchased Weyerhaeuser s coastal timber assets, including the Removed Lands. Hupacasath filed its judicial review petition with respect to the Minister s removal decision the next day. T H E L E G A L T E S T A N D C O U R T S D E C I S I O N In order to prove that the Crown had not met its obligation to consult on the removal authorization or the ensuing reduction of the AAC, Hupacasath had to show that the Crown knew of the potential existence of aboriginal rights in the Removed Lands and surrounding Crown lands at issue. The Hupacasath were then required to show that these decisions could have an adverse effect on the First Nation s asserted rights and title. If these circumstances could be shown, the court was required to undertake an analysis of the strength of the Hupacasath s claim of rights and title on both the privately owned and Crown lands in order to determine the level of consultation required with respect to the impugned decisions. If the requisite level of consultation was not met, an appropriate remedy for the breach of the Hupacasath s right to consultation and accommodation would be determined. The court found that the Province had knowledge of the potential existence of Hupacasath rights in the Removed Lands and surrounding Crown Lands as a result of treaty negotiations, prior consultations, publicly available information, and the evidence in an earlier case involving the Hupacasath. The court went on to discuss whether rights or title continued to exist in relation to privately held land. With respect to aboriginal use rights, the court noted that the Supreme Court of Canada in R. v. Badger and the British Columbia Court of Appeal in R. v. Alphonse had affirmed that treaty or aboriginal use rights could in some circumstances be exercised on undeveloped private land. Although agreeing that the Hupacasath could possess aboriginal use rights in relation to the Removed Lands, the court nevertheless clarified that whatever remains of aboriginal rights (short of title) with respect to private land, the owner of that land can preclude access as part of the owner s rights to exclusive use and possession. With respect to aboriginal title, the court noted that although counsel for the Crown had argued that any aboriginal title to the Removed Lands might have been extinguished by the federal Crown grant to the Esquimalt and Nanaimo Railway Company, counsel had, at the same time, urged the court not to reach a conclusion on this point. The court found that the jurisprudence to date left open the question of what meaning, if any, aboriginal title continues to have once the land over which it is asserted has been granted in fee simple to a third party. However, the court rejected the respondents attempt to distinguish the recent Supreme Court of Canada decisions in Haida First Nation v. British Columbia (Minister of Forests) ( Haida ) and Taku River Tlingit First Nation v. British Columbia (Project Assessment Director) on the grounds that those cases had involved Crown rather than privately owned land. The court held that the principles set out in these decisions could apply outside the context of Crown land (para. 199): The Crown s honour does not exist only when the Crown is a land-owner. The Crown s honour can be implicated in this kind of decision-making affecting private land. Here, the Crown s decision to permit removal of the lands from TFL 44 is one that could give rise to a duty to consult and accommodate.

4 4 W I N T E R The decision in Hupacasath may also be disconcerting to private land owners insofar as it confirms that a land owner s own attempts to consult with or accommodate aboriginal interest holders are irrelevant unless the Crown explicitly delegates its duty and even then only the procedural aspects of the duty to consult can ever be delegated. The court concluded that the Minister of Forests knew, or ought to have known, that his decision to remove lands from TFL 44 had the potential to adversely affect Hupacasath aboriginal rights. In the court s view, the removal decision would result in a lower level of government intervention in the activities on the land. The Hupacasath s access to the land, although it had always been dependent upon the owner s good will, would become less secure. The Crown land remaining in TFL 44 would be subject to additional pressure with respect to resource extraction. Perhaps most significantly, the Removed Lands could be developed and re-sold without Ministerial approval. The court found that the Hupacasath had established a strong prima facie case for aboriginal rights including title with respect to the portion of their asserted traditional territory on the Crown land which is not subject to any overlapping claims. Over those areas where an overlapping claim had been made, the court found a good prima facie case for aboriginal rights, albeit a weaker case for title (which requires exclusivity). In relation to the Removed Lands, the court found a prima facie case for aboriginal rights and also for title on those areas not subject to an overlapping claim, although the court acknowledged that the title might have been extinguished with respect to the Removed Lands. Noting that the extent of the Crown s duty was proportionate to the seriousness of the potential adverse effect on the claimed aboriginal rights, the court held that the duty to consult was at a moderate level with respect to the Crown lands, and at a lower level with respect to the Removed Lands. The court concluded that with respect to the decision to remove land from TFL 44, the Crown had not met its duty to consult and accommodate. The court took notice of the history of consultation between Weyerhaeuser and the Hupacasath, but, relying on the Supreme Court s ruling in Haida, held that the Crown could not delegate to industry substantive aspects of its duty to consult and accommodate. In the court s view, there was no evidence that the Crown delegated the procedural (or any) aspects of consultation to Weyerhaeuser. The conditions imposed on Weyerhaeuser in the removal decision were irrelevant to the question of whether the Hupacasath had been adequately consulted, since the Hupacasath had no input into the formulating of the conditions. The court concluded that the Crown s duty with respect to alleged aboriginal rights on the Removed Land was at a low level. The Crown had to engage in informed discussion with the Hupacasath, and to allow the First Nation an opportunity to advance their views for the Crown s consideration in good faith and, where possible, for integration into the Crown s planning. The Crown had not met that duty. The Crown s duty with respect to the effect of the removal decision on aboriginal rights asserted on adjacent Crown land was deemed to be higher, requiring something closer to deep consultation. Without describing what this higher duty might involve, the court was satisfied that the Crown had not, on the evidence, met the obligation. With respect to consultation on the changes to the AAC, the court confirmed that the Chief Forester had a duty to consult, but as his decision was only capable of producing minor adverse effects, the duty was accordingly at a low level. The court concluded that in these circumstances, where the Crown gave notice and disclosed information regarding its decision, and where there is no evidence that it failed to respond to concerns raised by the Hupacasath, the Crown s duty to consult had been fulfilled.

5 5 E N V I R O N M E N T A L The court issued declaratory relief with respect to the Crown s duty to consult, but refused to set aside or to stay the effects of the Minister s removal decision because of the significant prejudice this would likely cause to Brascan and its successors. Nevertheless, and although no fault had been alleged or found with respect to the third party land owner s actions, the court held that a meaningful remedy could be constructed by imposing temporary conditions on Brascan restricting the company s use of its privately owned land. The conditions included the maintenance of access for aboriginal groups to the Removed Lands and the provision of seven days notice to the Hupacasath of any intention to conduct activities on the land which may interfere with the exercise of aboriginal rights asserted by the Hupacasath. The court also ordered the Crown and the petitioners to agree on a consultation process or, if that proved impossible, to seek mediation. C O M M E N T While the court was careful to suggest that the circumstances in this case were unique and unusual, it was in the court s view the Minister s authority to make a decision that could potentially have serious impacts on aboriginal rights that gave rise to the Crown s duty to consult and accommodate the claimants with respect to activities on privately owned lands. This principle seems certain to have far-reaching implications, and further judicial guidance will be needed to determine in relation to what kinds of privately owned lands and what sorts of planning decisions the principle will apply. The decision may also be disconcerting to private land owners insofar as it confirms that a land owner s own attempts to consult with or accommodate aboriginal interest holders are irrelevant unless the Crown explicitly delegates its duty and even then only the procedural aspects of the duty to consult can ever be delegated. It is noteworthy that despite the Supreme Court of Canada s criticism in Haida of the Court of Appeal s decision in that case to impose a duty on Weyerhaeuser to cure the Crown s failure to consult, the remedy devised by the court in this case imposed some important restrictions on Brascan. L E G I S L AT I O N A N D P O L I C Y D I G E S T S C L I M AT E C H A N G E U P D AT E L E G I S L AT I O N Carleigh Whitman Joe Pagé (Articled Student) (Vancouver Office) Two updates to federal regulations intended to address climate change have taken place since the publication of our Fall 2005 edition of the Environmental Law News. On November 21, 2005, six greenhouse gases were added to Schedule 1 of the Canadian Environmental Protection Act, 1999 ( CEPA ). Their inclusion in the Schedule means that these gases are now considered toxic substances for the

6 6 W I N T E R Of note to Canadians, the conference also confirmed the carbon sequestrating benefits of afforestation and reforestation projects for the first Kyoto Protocol commitment period ( ). purposes of CEPA and can be regulated as such under the Act. Subsequently, on November 28, 2005, the federal government released a draft of the cross-cutting (i.e., common to all sectors) components of the proposed Large Final Emitters Regulations to be promulgated under CEPA. These draft provisions, slated for publication in the Canada Gazette, Part I in early 2006, include a prohibition against the release of prescribed greenhouse gas emissions from covered activities above an aggregate threshold. In addition, the draft addresses reporting requirements and the issuance of domestic credits. Also on the horizon in 2006 is the publication for public comment of sector-specific greenhouse gas emission target regulations, which will set emission targets and reporting obligations for each of the sectors within the Large Final Emitters program. P A R T I E S T O T H E K Y O T O P R O T O C O L M E E T Canada recently hosted the First Meeting of the Parties to the Kyoto Protocol in conjunction with the 11th Session of the Conference of the Parties to the Climate Change Convention. The objective of this round of meetings (held in Montréal from November 28 to December 10, 2005) was to implement the Kyoto Protocol. Although the Protocol came into force on February 16, 2005, most of its operational components had yet to be agreed upon. At the meeting, the parties adopted the Marrakesh Accords, which are the technical components key to the functioning of the Protocol. The Montréal conference confirmed a number of Protocol implementation plans, including: (a) emissions trading ; (b) joint implementation, through which developed countries invest in emission reducing activities in other developed countries in exchange for reduction units; and (c) clean development mechanisms, which involve developed countries investing in developing countries to earn reduction units to be applied against their own domestic emissions. Of note to Canadians, the conference also confirmed the carbon sequestrating benefits of afforestation and reforestation projects for the first commitment period ( ). In addition, the parties have agreed to begin talks on setting emissions targets for the next commitment period ( ). Those discussions will focus on adherence to the Protocol by large developing countries such as China and India. An unexpected result of the conference was to bring the U.S. back into the UN s climate negotiations. Although the U.S. has not ratified the Protocol, it has agreed to further talks. For more information on the outcome of the conference, consult the UN s website at: The next meeting will take place in Kenya in November 2006.

7 7 E N V I R O N M E N T A L O N TA R I O P R O P O S E S C L E A N WAT E R A C T Rick Coburn (Toronto Office) On December 5, 2005, the Ontario Legislature gave first reading to Bill 43, the proposed Clean Water Act, The proposed legislation implements and expands upon certain recommendations of the Walkerton Inquiry, which investigated the tragic consequences of the contamination of the public water supply system in Walkerton, Ontario. The new legislation will put drinking water source protection at the forefront of planning and development activity in Ontario. The proposed Act creates new roles for conservation authorities and municipalities, with tools to implement these new roles. Traditionally, conservation authorities have exercised a relatively limited range of regulatory powers in relation to watercourses. While drinking water supply systems are regulated by the Safe Drinking Water Act, 2002, the purpose of the proposed legislation is to protect existing and future sources of drinking water. The legislation would identify the jurisdictional areas defined by the Ontario Conservation Authorities Act as drinking water source protection areas. Local conservation authorities would be required to establish committees to undertake watershed assessments and formulate source protection plans in consultation with the local municipalities. In unorganized territories, these functions will be fulfilled by the Province of Ontario and designated planning boards. Once a drinking water source protection plan is in place, local planning decisions must also conform with the plan. Watershed assessments must identify and characterize the quality and quantity of each watershed, set out water budgets, and identify groundwater recharge areas and vulnerable aquifers. The assessments must also identify those activities which might constitute threats to water sources. Conservation authorities would exercise and perform the powers and duties of drinking water source protection authorities for the purposes of the Act. Municipalities would be responsible for enforcing the legislation and appointing permit officials and inspectors for that purpose. N E W S TAT U T O R Y R I G H T O F E N T R Y F O R A L B E R TA O P E R AT O R S Dean Watt (Calgary Office) Amendments to the Alberta Surface Rights Act came into force December 1, The amendments assist those who are operators under section 134(b) of the Environmental Protection and Enhancement Act and who have received notice of cancellation of a reclamation certificate or who otherwise have a duty to reclaim land affected by the working of a mineral or pipeline-related activities. Application can be made to the Surface Rights Board for a right to enter land in order to carry out the required reclamation.

8 8 W I N T E R A L B E R TA E N V I R O N M E N TA L P R O T E C T I O N C O M M I S S I O N I S S U E S R E P O R T O N E M E R G E N C Y R E S P O N S E Dean Watt (Calgary Office) On August 3, 2005, 43 rail cars went of the tracks beside Lake Wabamun in Alberta, spilling oil into the lake and resulting in a major environmental, social and economic disaster. The response of various levels of government to the incident was characterized by delay, confusion, inadequacy of equipment and inability The appeal to the Supreme Court was pursued by Croplife Canada in part over concerns of the potential for farmers and others to be impacted by municipalities regulating and banning pesticides otherwise approved for use and regulated at the federal level. to coordinate efforts. The Alberta government established the Environmental Protection Commission as a measure to use the experience of the Lake Wabamun incident to review Alberta s emergency response model and recommend changes for the future. The Commission s report, entitled A Review of Alberta s Environmental and Emergency Response Capacity: Learning the Lessons and Building Change, may be found on Alberta Environment s website at the following link: C A S E D I G E S T S S U P R E M E C O U R T D I S M I S S E S L E A V E T O A P P E A L P E S T I C I D E U S E D E C I S I O N Rick Coburn (Toronto Office) On November 17, 2005, the Supreme Court of Canada dismissed, without reasons, the application for leave to appeal from the decision of the Ontario Court of Appeal in Croplife Canada v. Toronto (City). The Court of Appeal had upheld a bylaw enacted by the City of Toronto that regulated the use of pesticides. The bylaw was enacted pursuant to section 130 of the Ontario Municipal Act, 2001, which authorizes bylaws for the protection of the health, safety and well-being of residents of the municipality. The Ontario Court of Appeal held that this general power would be available only if there was no specific municipal power to regulate pesticide uses contained in the Municipal Act, 2001 or any other Ontario statute, and that no such specific municipal power existed. The case was heard by the Ontario Court of Appeal after the Supreme Court had rendered its decision upholding a very similar bylaw in the case of Canada Ltée (Spraytech) v. Hudson (Town) ( Spraytech ) under the general provisions of the Quebec Cities and Towns Act. The Ontario Court of Appeal found no basis for distinguishing the case from Spraytech in terms of the legislative authority governing the bylaws, and no conflict with other provincial laws as would render the bylaw inoperative. The court noted expressly that the bylaw was not supportable on the basis of the precautionary principle referenced in Spraytech, but that the bylaw fell squarely within the scope of the City s express legislative authority under the statute. The appeal to the Supreme Court was pursued by Croplife Canada in part over concerns of the potential for farmers and others to be impacted by municipalities regulating and banning pesticides otherwise approved for use and regulated at the federal level.

9 9 E N V I R O N M E N T A L C O U R T R U L E S M I N I S T E R S A U T H O R I T Y T O O R D E R A R E V I E W PA N E L C O N F I N E D T O P L A N N I N G P H A S E Dean Watt (Calgary Office) At issue in Bennett Environmental Inc. v. Canada (Minister of the Environment) was whether the Canadian Environmental Assessment Act ( CEAA ) authorized the federal Minister of the Environment to refer to a review panel for assessment a facility for cleaning contaminated soil when all provincial approvals for the construction of the facility had been obtained and the construction of the facility was substantially complete. When the Minister announced that he was referring the Bennett facility to a joint panel review under CEAA all necessary provincial approvals for the construction of the facility had already been obtained and the construction of the facility was over 90 percent complete. No federal approvals were required for the construction or operation of the facility. Bennett successfully applied to the federal court for a review of the Minister s decision on the basis that the facility did not fit within the CEAA definition of a project as it was substantially complete. On appeal by the Minister, the Federal Court of Appeal upheld the lower court s decision. In its decision issued July 19, 2005, the appellate court expressed the opinion that CEAA is to operate by ensuring that the potential environmental effects of an activity are assessed in the planning phase. The appellate court noted also that the CEAA definition of project refers to the proposed construction of a physical work. Given the status of the provincial approvals and because the construction of the facility was nearly complete, the facility was no longer a project and the Minister was acting without authority by referring the facility to a review panel. The Minister s opportunity to exercise his authority in respect of the construction and the operation of the facility had expired. L A R G E F I N E S U N D E R E N V I R O N M E N TA L L E G I S L AT I O N U P H E L D Dean Watt (Calgary Office) In R. v. Terroco Industries Limited (released April 8, 2005), the Alberta Court of Appeal addressed appropriate sentencing considerations for convictions under environmental legislation. In this case, as a result of the improper mixing of chemicals in a transport tank by an employee of the defendant Terroco, chlorine gas was released into the environment injuring a fellow employee. The liquid mixture dissolved the seals on the tank resulting also in a release of liquid to the environment. These releases are offences under Alberta s Environmental Protection and Enhancement Act (the EPEA ) and Dangerous Goods Transportation and Handling Act (the Dangerous Goods Act ). At the initial sentencing, Terroco was sentenced to a $50,000 fine under the EPEA and a $500 fine under the Dangerous Goods Act. The Crown successfully appealed the sentence to the Court of Queen s Bench and the penalties were increased to $150,000 and $15,000 respectively.

10 1 0 W I N T E R At the initial sentencing, Terroco was sentenced to a $50,000 fine under the EPEA and a $500 fine under the Dangerous Goods Act. The Crown successfully appealed the sentence to the Court of Queen s Bench and the penalties were increased to $150,000 and $15,000 respectively. Terroco appealed the increased fines to the Alberta Court of Appeal. On appeal, the court upheld the higher penalties. As an important reference point, the appellate court examined the manner in which the following five principles are considered when sentencing occurs under environmental statutes: 1. Culpability: The dominant factor for consideration in sentencing is culpability. Where the act that led to the offence was unintentional, the degree of carelessness will be a factor and due diligence, or the steps taken to prevent the unwanted consequences, will be assessed on a sliding scale. The failure of a defendant to take inexpensive steps to prevent the offence, especially where the danger is obvious, demonstrates a higher level of culpability and would serve to increase the range of appropriate penalty. 2. Prior Record: A prior record of similar offences or warnings by the authorities respecting the offender s conduct may be an aggravating factor. 3. Responsibility and Remorse: Acceptance of responsibility and remorse are significant mitigating factors, although the existence of a prior record may undermine the positive impact of this factor. The foreseeability of a spill is instructive to a sentencing judge when assessing the offender s acceptance of responsibility or remorse, as is the failure of an offender to immediately take reasonable steps to address the release. Voluntary payment of damages is a mitigating factor. 4. Harm: The existence, potential, duration and degree of harm are factors to be fully considered in sentencing for environmental offences. The unexceptional nature of the site of an environmental offence is not a mitigating factor; however, a delicate site that, once harmed, is not easily rejuvenated may be viewed as an aggravating factor, as may be a site that is person-sensitive, such as a playground. The cost of repairing or addressing damages, including costs of enforcement and ensuring compliance may be a factor in determining harm. 5. Deterrence: Specific and general deterrence are key factors in sentencing. The degree of remorse informs the need for specific deterrence. Specific deterrence for corporate offenders may include directing the offender to publish the facts relating to the conviction. With respect to general deterrence, the penalty imposed should deter others in that industry who may risk offending. The sentencing of a corporate offender must be such that the fine imposed appears to be more than a licensing fee for illegal activity or the cost of doing business, but should not result in economic inviability for the offender.

11 1 1 E N V I R O N M E N T A L O N TA R I O C O U R T O F A P P E A L C E R T I F I E S E N V I R O N M E N TA L C L A S S A C T I O N Gabrielle Kramer (Toronto Office) On November 18, 2005, the Ontario Court of Appeal certified the class action brought by Wilfred Pearson against Inco Limited for property damage caused by historic emissions from the company s former nickel refinery in Port Colborne. We last reported on this case in our Fall 2002 edition of the Environmental Law News. Certification was initially refused by both the Superior Court and Divisional Court. However, since that time, the scope of the claim was reduced and limited to damages for the reduction in the value of real property as a result of soil contamination. In addition, the Ontario Court of Appeal directed that a more liberal approach be taken to certification of class proceedings. These two developments resulted in the certification of this environmental class action. In September 2000, the Ministry of the Environment announced that there were high levels of nickel contamination in Port Colborne. The plaintiffs allege that this announcement resulted in a reduction of property values of up to 45 percent and damages of up to $500 Million. The plaintiff s amended claim was based on negligence, trespass and strict liability. The cause of action was brought on behalf of all persons owning property since March 1995 within the area of the City of Port Colborne. The court stated that this was an identifiable class established by objective criteria. Evidence was adduced showing that property values in the area declined after the Ministry s announcement. The usual difficulty in ensuring that all proper plaintiffs were before the court was overcome in this case. The court cautioned against finding that a class was underinclusive to deny certification in the context of environmental claims. It noted that the very nature of pollution is that its effects are often widespread and diffuse. The court reasoned that it would be counter-intuitive if Inco Limited were permitted to defend certification by showing it had contaminated a wider area. The court found that a class proceeding was the preferable procedure. Firstly, there was judicial economy in that the issue of determining a reduction in property values constituted a substantial element of each class member s claim. The individual assessment of impact would be a relatively minor aspect of the case. Secondly, the existence of a voluntary compensation scheme provided by Inco Limited did not address the core issue of this lawsuit, which was the widespread damage to land values. The court also noted that many of the property owners were most vulnerable and least able to prosecute individual claims. Thirdly, the court found that the Motions Court took too narrow a view of behaviour modification. Behaviour modification should be directed not just to the particular defendant, but to similar defendants. Significantly, the court stated that environmental polluters have been able to avoid the full cost of the consequences of their polluting activities precisely because the impacts are so diverse and often there is a minimal effect on any one individual. As a consequence, the court observed that environmental claims are particularly well suited to class proceedings. The court s decision represents a significant opening for environmental class proceedings in Ontario. Prospective plaintiffs and defendants will need to carefully consider the court s reasons. We understand that Inco Limited will be seeking leave to appeal to the Supreme Court of Canada.

12 W I N T E R The Borden Ladner Gervais LLP Environmental Law News is necessarily of a general nature and cannot be regarded as legal advice. The firm would be pleased to provide additional details and to discuss the possible effects of these matters in specific situations. Our Environmental group is chaired by: William K. McNaughton (Vancouver) (604) Our Environmental group regional contacts are: Calgary Stephen C. Lee Montréal Christine Duchaine (403) (514) Ottawa Janet E. Bradley Vancouver William K. McNaughton (613) (604) Toronto F.F. (Rick) Coburn (416) CO-EDITORS: Jason Z. Murray Tracey L. Sandgathe (604) (604) jmurray@blgcanada.com tsandgathe@blgcanada.com To obtain additional copies of the Borden Ladner Gervais LLP Environmental Law News or to change your mailing address, please contact one of the editors. Or, visit our website at where you can view the Environmental Law News and other Borden Ladner Gervais LLP publications. This newsletter has been sent to you courtesy of Borden Ladner Gervais LLP. We respect your privacy, and wish to point out that our privacy policy relative to newsletters may be found at If you have received this newsletter in error, or if you do not wish to receive further newsletters, you may ask to have your contact information removed from our mailing lists by phoning BLG-LAW1 or by ing subscriptions@blgcanada.com Borden Ladner Gervais LLP Borden Ladner Gervais LLP Lawyers Patent & Trade-mark Agents Ca l g a r y 1000 Canterra Tower 400 Third Avenue S.W. Calgary, Alberta, Canada T2P 4H2 tel: (403) fax: (403) M o n t r é a l 1000 de La Gauchetière Street West Suite 900, Montréal, Québec, Canada H3B 5H4 tel: (514) fax: (514) Ottawa World Exchange Plaz a 100 Queen Street, Suite 1100 Ottawa, Ontario, Canada K1P 1J 9 tel: (613) Legal fax: ( 613) IP fax: (613) Toronto Scotia Plaza, 40 King Street West Toronto, Ontario, Canada M5H 3Y4 tel: (416) fax: ( 416) Va n c o u v e r 1200 Waterfront Centre 200 Burrard Street, P.O. Box Vancouver, British Columbia, Canada V7X 1T2 tel: (604) fax: (604) Wa t e r l o o Region 508 Riverbend Dr., Suite 303 Kitchener, Ontario, Canada N2K 3S2 Tel.: (519) Fax: (519) Borden Ladner Gervais LLP is an Ontario Limited Liability Partnership Printed in Canada