Enforcement: appearance before the Standing Committee

Volkswagen (including the Environmental Damages Fund)

Q. Why was Volkswagen fined?

• German automaker, Volkswagen Aktiengesellschaft (Volkswagen AG), was ordered to pay an unprecedented fine of $196.5 million after pleading guilty to 60 counts of contravening the Canadian Environmental Protection Act, 1999. The charges relate to unlawfully importing nearly 128,000 vehicles that were equipped with a defeat device in contravention of prescribed vehicle emission regulations, and, in addition, providing misleading information to Environment and Climate Change Canada.
• Testing completed at Environment and Climate Change Canada’s (ECCC) Transportation Division vehicle testing facility indicated that emissions from the affected vehicles, under certain conditions, could sometimes be up to 27 times higher than the prescribed standard set out in regulations.
• These charges are the result of a complex, methodical and thorough investigation initiated in September 2015. Over the course of the investigation, Environment and Climate Change enforcement officers gathered substantial evidence from foreign and domestic sources.

Q. Why did this investigation take years here but only months in the United States?

• The legal and regulatory environments in Canada and the United States (U.S.) are very different. Court settlements and/or fines in the U.S. cannot be automatically replicated in Canada.
• In general, the length of an investigation depends on the complexity of the situation and the amount of information that needs to be gathered and analyzed to establish proof of an offence. It is not unusual for an investigation of this nature to take years to complete.
• ECCC’s investigation was thorough and proceeded in a comprehensive and methodical manner. This was a complex case involving a number of domestic and foreign organizations, and a number of potential offences under the Canadian Environmental Protection Act (CEPA). Investigators needed to take the necessary time to gather sufficient evidence. There was also an international element to this investigation, which in some cases required international information-sharing agreements. Time was needed to analyse a massive amount of information and to gather relevant evidence. The Public Prosecution Service of Canada determines what charges can be sustained and it has the sole discretion to decide to pursue a prosecution.
• Canadians can be confident that ECCC enforcement officers are deeply committed to enforcing the laws and regulations that protect Canada’s environment and wildlife. When enforcement officers find sufficient evidence of violations, they take action and they do not hesitate to enforce the law.

Q. Is the Government of Canada satisfied with this outcome?

• This fine is the largest penalty ever levied in Canada against a company for an environmental violation. In fact it is 26 times higher than the next largest fine. It reflects the gravity of the offence.
• The outcome of this case demonstrates that companies will be held accountable for contravening Canadian laws that protect the environment and human health.

Q. Why wasn’t the fine higher? In the U.S., the fine was a $2.8 billion criminal penalty or $4745 per vehicle. Why were the fines so much higher in the United States? (590,000 vehicles)

• It is important to note that penalties are based on precedents. This result has raised the bar on environmental fines in Canada.
• It is difficult to compare the situation in the U.S. with that in Canada. These are different jurisdictions with different legislation and legal processes.

Q. Why is the outcome of the investigation in Canada different than the U.S.?

• The legal and regulatory environments differ between Canada and the U.S., and a court settlement and fines in the U.S. are not simply replicated in Canada. This was a complex case which required enforcement officers to investigate both domestic and foreign organizations in order to prove by way of evidence that a number of offences were committed in Canada under the Canadian Environmental Protection Act, 1999 (CEPA).

Q: What is the role and accountability of the Minister of Environment and Climate Change Canada when it comes to the enforcement process?

• Accountability for Environment and Climate Change Canada’s (ECCC) Enforcement Branch rests with the Chief Enforcement Officer who reports directly to the Deputy Minister. While I provide strategic direction to the entire department, my role is independent from the Chief Enforcement Officer’s role regarding enforcement operational decision making to:
  • Protect the integrity of the law enforcement process, and
  • Protect all parties from claims of conflict of interest, influence, or misuse of public office.
• ECCC’s compliance and enforcement policies offer information about the roles of myself, enforcement officers and other departmental officials.
• Laws and regulations must be administered and enforced in a fair, predictable, and consistent manner. ECCC is responsible for administering and enforcing the Canadian Environmental Protection Act, 1999, the Species at Risk Act, the Canada Wildlife Act, the Wild Animal and Plant Protection and Regulation of International and Interprovincial Trade Act, the Migratory Birds Convention Act, 1994 as well as the pollution prevention provisions of the Fisheries Act.
• Decisions regarding the conduct of law enforcement operations such as investigating an alleged violation are guided by long-standing internal policy. Where there is sufficient evidence of an alleged violation, enforcement officers may take appropriate action in accordance with the compliance and enforcement policy. An officer may consider recommending prosecution in accordance with the compliance and enforcement policy. Any decision to prosecute is solely at the discretion of the Public Prosecution Service of Canada (PPSC). PPSC considers whether there is a reasonable prospect of conviction and whether prosecution would best serve the public interest.

Q. The Volkswagen fine of $196.5 million is significantly more than the Environmental Damages Fund has managed in 25 years. What will you do with the money?

• The Volkswagen fine represents the largest amount of money ever directed to the Environmental Damages Fund. As with other large fines received, since 2015, the department will determine the most effective and impactful way to use the money in an efficient and timely manner for environmental benefit.
• On June 20, 2012, the Environmental Enforcement Act came into force, resulting in 10 federal statutes automatically directing fines to the EDF, and five federal statutes having the discretionary ability to do so. Since that time, the number of penalties directed to the EDF has increased as well as the fine amounts.

Q: When can interested parties apply for funding?

• Timing of available monies will depend on a number of factors, including the recommendation of the presiding judge.

Q. Why was PMO meeting with Volkswagen (VW) and were you aware?

• I was not aware that PMO was meeting with VW, and as such, am unable to speculate on the nature of their meeting.

Q. Did ECCC officials provide a briefing to the Minister of Environment and Climate Change Canada on the VW investigation?

• No, ECCC officials did not provide me with a briefing on the investigation. The department provided briefings to my staff on the enforcement process, in particular, the timing and general steps an investigation may follow, as well as communication products.

Mount Polley

Q. What is the current status of the laying of charges relating to the Mount Polley incident?

• Environment and Climate Change Canada, Fisheries and Oceans Canada, and the British Columbia Conservation Officer Service have carried out an extensive joint investigation in relation to alleged offences pursuant to the federal Fisheries Act. On April 2, 2019, the Mount Polley Integrated Investigation Task Force delivered its Report to Crown Counsel to the Public Prosecution Service of Canada (PPSC). The PPSC, which is leading the prosecution team, has begun the charge assessment process. They are being supported by Crown Counsel from the British Columbia Prosecution Service, Environment and Climate Change Canada, Fisheries and Oceans Canada, and the British Columbia Conservation Officer Service.
• The fact that, as of August 4, 2019, five years have elapsed since the date of the pollution incident does not prevent prosecution under the Fisheries Act. There is no deadline for charges for an indictable offence.