Minimum Fines & the OWRA: The Court of Appeal Sets the Bar High For Relief
The Ontario Water Resources Act (“OWRA”) provides for minimum fines for defendants convicted of a number of offences, including ss.30(1):
Every person that discharges or causes or permits the discharge of any material of any kind into or in any waters or on any shore or bank thereof or into or in any place that may impair the quality of the water of any waters is guilty of an offence.
On a first conviction, a corporate defendant faces a minimum fine of $25,000, on a second a minimum of $50,000 and on a third a minimum of $100,000 (with corresponding maximums of $6, $10 and $10 million). Minimum fines are also required for individuals, starting at $5000. Other environmental statutes have similar minimum fine provisions.
In November 2014, a Niagara wine producer was suspected of having contaminated two ponds located on a neighbouring property. The Ministry of Environment, Conservation and Parks (“MOECP”) determined that some two weeks earlier, the wine producer had treated its land with a mixture of cattle manure and grape pomace. Wet conditions could have prevented the mixture from becoming incorporated in the soil and could have caused it to enter the ponds through a tile drain.
In response, the wine producer immediately retained a consultant to assess the situation and prepare a remedial action plan. It purchased a pump to assist the neighbour in aerating the ponds and arranged for vacuum trucks to clean black organic matter from the ponds’ entrances. The total cost to it was about $12,000.
Despite: (1) what can fairly be described as the minimal impairment to water quality (at most a temporary aesthetic impairment?); (2) arising from an activity that is commonplace in provincial agriculture; and, (3) the alleged source’s complete and immediate co-operation in remedying the situation, the wine producer was charged by way of an Information laid under Part III of the Provincial Offences Act (“POA”) with having breached ss.30(1).
At the trial stage, the defendant opted to plead guilty. In sentencing, it sought a fine lower than the prescribed minimum, relying on ss.59(2) of the POA:
Although the provision that creates the penalty for an offence prescribes a minimum fine, where in the opinion of the court exceptional circumstances exist so that to impose the minimum fine would be unduly oppressive or otherwise not in the interests of justice, the court may impose a fine that is less than the minimum or suspend the sentence.
The trial justice of the peace found that the nature of the offence and the defendant’s immediate remedial actions constituted exceptional circumstances and fined it $600. Influential in her reasons were what she considered to be weaknesses or shortcomings in the Crown’s case, coupled with the Crown’s failure to proceed by way of Part I of the POA instead of Part III by issuing a Certificate of Offence akin to a speeding ticket for a fixed fine substantially less than prescribed minimum (more on this below).
On the Crown’s appeal, Ontario Court Justice Nadel increased the fine to $5000, finding that the trial justice had erred in second-guessing the Crown’s discretion in prosecuting under Part III instead of Part I of the POA. However, he agreed that the facts were so minimal that they could be seen as exceptional circumstances under ss.59(2). It would be patently unfair and therefore not within the interests of justice to impose the statutory minimum fine.
The Crown was granted leave to appeal to the Court of Appeal for Ontario (CAO), which released its decision in December 2018, allowing the appeal. At the root of its decision was the Court’s re-affirmation that deterrence, not proportionality, is the primary sentencing consideration for regulatory offences, including those in the OWRA. It found at paragraphs 39 and 40:
Minimum fines apply without regard to the circumstances of individual offenders or the circumstances surrounding the commission of particular offences, and so necessarily risk over inclusion. They reflect a legislative judgment that nothing less than the minimum fine is sufficient to achieve deterrence in light of the nature of the offence committed.
The Legislature established that all corporations that breach s. 30(1) of the OWRA are liable to a minimum fine of $25,000. Whether, or to what extent, the minimum fine succeeds in promoting deterrence is of no moment for the purposes of sentencing. It is the approach chosen by the Legislature and the court’s responsibility is to apply that approach. The trial judge’s sentencing discretion is limited to determining whether a fine above the minimum (and below the maximum) is warranted.
As to the relevance of a Part I POA proceeding, the Court found that, as a matter of prosecutorial discretion, it could be used to mitigate the “strictures of a minimum fine regime”.
Subsection 59(2) of the POA did not assist the defendant. The Court found that it is an exceptional remedy available only in unusual cases. What is unduly oppressive is a measure of personal hardship, but it is more than mere difficulty in paying the minimum fine. What is in the interests of justice requires a consideration of both the defendant’s and community interests protected by the legislation. Trial justices should not apply ss.59(2) arbitrarily, meaning in their reasons they must demonstrate the circumstances they find exceptional and how it would be unduly oppressive or not within the interests of justice to apply the minimum fine. Although ss.59(2) can been seen as promoting fairness in sentencing, it is not a freestanding test for determining its application. Consequently, Nadel J. erred in refusing to impose the statutory minimum on the basis that it would be unfair in the circumstances to do so.
Given the plain language of ss.59(2), this is not a surprising decision but nevertheless one that disappoints. There is no doubt that in some select situations minimum fines can play a positive role in deterring offences. One – referred to by the Court of Appeal – is under the Compulsory Automobile Insurance Act. It requires a minimum fine of $5000 for persons convicted of driving without insurance. The minimum reflects the high cost of insurance the convicted sought to avoid paying. But, when it comes to environmental regulation, it is not that straightforward. Strictly regulated enterprises can make mistakes and have upsets that arise out of any number of circumstances that may have nothing to do with cutting financial corners. Moreover, just as in this case, a mistake or upset may have caused questionable, if any, harm to the natural environment, but the enterprise can still be charged and exposed to a minimum fine. Here, the Court was obviously concerned about opening the floodgates, but a more flexible approach to the interpretation of “the interests of justice” reflecting the varying regulatory contexts utilizing minimum fines may have been warranted.
Respectfully, suggesting the Part I option as a procedure available to skirt the application of statutory minimums simply has no air of reality to it, at least in relation to this case and other environmental prosecutions. Subsection 3(2) of the POA requires that a Part I prosecution be commenced by a Certificate of Offence within 30 days of the commission of the offence. The MOECP investigates violations through its Investigation and Enforcement Branch (“IEB”). Only in the most serious situations will one see an active investigation commenced within 30 days. Indeed, most IEB investigations take most of the two-year limitation period to be commenced and completed, as evidenced by this proceeding.
Sentencing is a discretionary exercise that is entitled to deference by an appeal court. Deference requires an appeal court to refrain from intervening unless the sentencing court has erred in the manner it exercised its discretion and not because the appeal court may have decided the outcome differently. Going forward, so long as a sentencing court follows the directions of the Court of Appeal in applying ss.59 (2), its decision to levy a fine less than a statutory minimum should withstand scrutiny. Time will tell.