Environmental Law 2022

Last Updated October 21, 2022


Law and Practice


Lawson Lundell LLP differentiates itself as one of the largest and most experienced law firms in Western Canada. It is a leading, full-service, business law firm, with over 180 lawyers located in offices in Vancouver, Calgary, Kelowna and Yellowknife. The environmental practice group comprises 20 lawyers, who provide their expertise to clients in a wide range of industries, including banking, construction, energy, forestry, government, mining, real estate, transportation and utilities. The team provides advice and assistance to clients in all aspects of environmental law, including commercial transactions, environmental management systems, environmental project assessment, regulatory and licensing requirements, contaminated sites, reclamation, closure and remediation, and environmental offences.

In Canada, the federal (national) and provincial/territorial (regional) governments have responsibility for the protection of the environment. Federal laws generally apply to all projects or operations throughout the country, while provincial/territorial laws apply only to those projects or operations located within the specific province or territory.

The key federal laws governing environmental protection include:

  • the Canadian Environmental Protection Act, 1999;
  • the Fisheries Act;
  • the Impact Assessment Act;
  • the Transportation of Dangerous Goods Act;
  • the Species at Risk Act; and
  • the Canadian Navigable Waters Act.

Provinces bolster these laws with legislation within their jurisdiction, such as British Columbia’s Environmental Management Act or Ontario’s Environmental Protection Act. Territories also have legislation within their jurisdiction, such as Nunavut's Environmental Protection Act.

Each one of these acts is underscored by regulations, orders and guidelines designed to ensure compliance and further the goals of each respective act.

The key federal regulatory authorities in Canada include:

  • Environment and Climate Change Canada;
  • Fisheries and Oceans Canada;
  • the Impact Assessment Agency of Canada;
  • Crown-Indigenous Relations and Northern Affairs Canada;
  • Transport Canada;
  • Parks Canada; and
  • Natural Resources Canada.

Other key regulatory authorities exist in each province or territory, many of which will co-ordinate their approach to regulation and enforcement with their federal counterparts.

Most regulatory authorities employ officers or other enforcement personnel, who are often granted the power to conduct inspections and investigations. These inspections and investigations may be routine or in response to suspected regulatory breaches. For example, a federal fishery officer may enter and inspect a facility or vessel if they have reasonable grounds to believe that federal fishery regulations are being breached. In this example, they may also open containers, examine fish or take samples of them, conduct tests, or take copies of documents. Regulatory officers investigating an offence may be required to obtain search warrants or may request voluntary disclosure.

The approach to the enforcement of environmental law varies according to the severity of the environmental incident or breach of the regulation. Whenever possible, Canadian authorities enforce environmental law through voluntary agreements and specific orders to comply. Canadian authorities will hold polluters responsible for the clean-up costs of pollution or contamination, and may seek further penalties where necessary.

Types of Permits

Environmental permits are issued by the federal and provincial/territorial governments, depending on the nature and location of the activity.

Environmental permits may be necessary for a wide variety of activities. For example, activities that may harm a threatened or endangered species will require a permit under the federal Species at Risk Act, while activities related to forestry will require a permit from the relevant provincial or territorial regulatory authority. While federal and provincial jurisdictions may not strictly overlap in this instance, environmental activities often require both federal and provincial permits and authorisations, thereby increasing compliance concerns for businesses. Some activities will also require municipal or regional permits and authorisations.

Depending on the circumstances, some projects may be able to obtain multiple environmental permits through a single process, but this is not always the case. Project proponents or operators in Canada will need to obtain permits from each of the responsible government authorities, at the federal and provincial/territorial levels, as required. As noted above, either federal or provincial environmental assessment (or both) may be required before permits may be issued.

Change of Control

Investors looking to purchase Canadian projects or operations will want to ensure they acquire the project’s associated permits. Most environmental permits can be transferred, but government consent may be required to do so. This can require a lengthy process in some circumstances, which may trigger consultation with Indigenous groups. Usually, change of control will not trigger the need for government consents, but the specific requirements of the applicable legislation as well as the language of the permit itself must be carefully reviewed to determine whether government consent is required.

Time Limit

Environmental permits are usually time-limited, but the duration of the authorisation will depend on the nature of the activity being permitted. Permits can often be renewed, but may require additional regulatory processes in order to secure a renewal.


Permits typically contain conditions that accord with the requirements of the legislation under which they are granted.

Environmental permits are generally obtained by applying to the appropriate government authority with responsibility over the permitting scheme; for example, permits around fish or fish habitats will commonly be obtained from Fisheries and Oceans Canada.

In many cases, the applicable legislation explicitly states that environmental permits will only be granted to individuals or businesses that can show they are qualified to hold them. As an example, the federal Nuclear Safety and Control Act forbids transfers of licences unless the licensee can show that they are authorised to carry out the particular activity granted under the licence.


Some permitting regimes, but not all, will allow for an appeal to a quasi-judicial authority (often an administrative tribunal) or a member of the federal government – ie, a minister. In all cases, the decision to grant or refuse a permit can be reviewed by the courts through an application for judicial review. Further appeals from these decisions may find themselves in courts of competent jurisdiction.

The key types of liability faced by project proponents or operators in Canada for environmental damage or breaches of environmental law include monetary fines, remediation orders, the loss of environmental permits and prosecution.

Environmental legislation, such as the Fisheries Act, includes a provision that makes it an offence to fail to comply with the legislation. Furthermore, the Fisheries Act and others like it state that any committed or continued offence that occurs over time will be considered a separate offence for each day the contravention occurred. The result is that offenders may be subject to multiple convictions and large monetary fines should environmental breaches continue. It is often possible for an employee, agent or a director or officer to be held personally responsible for an offence under environmental legislation.

Subject to available defences, a current or purchasing operator or landowner will be subject to liability if they acquire contaminated land. The Canadian liability regime is designed to ensure that liability always falls on either past or present owners or operators of land in order for federal and provincial governments to avoid incurring remediation costs.


Most environmental legislation in Canada operates on the “polluter pays” principle, which requires the party that caused the harm to the environment to bear the ultimate cost of any clean-up or remediation.

However, Canadian contaminated sites legislation can impose liability for historic environmental incidents or damage on a current operator or landowner of contaminated land; for example, if the new landowner is aware of the contamination and takes no steps to mitigate its spread, then the new landowner may be liable (subject to the various defences set out in the legislation).

There are several types of liability for environmental incidents or damage in Canada. Project proponents, operators, or suppliers and transporters of products may face liability for pollution or harm to the environment, for failing to comply with specific environmental regulations or permits; for the ownership, operation or control of contaminated sites; or for the supply of products to contaminated sites. They may also face claims of nuisance or negligence from private parties affected by contamination.


A defence of due diligence is normally available to parties accused of breaching environmental legislation, as well as various common law and equitable defences. However, there are some offences where due diligence is not available.

A Relevant Case

A case that demonstrates many of the key principles and issues in a contaminated sites context is JI Properties Inc v PPG Architectural Coatings Canada Ltd, 2015 BCCA 472. This appellate decision provides commentary on the legislative/regulatory regime, the status of pre-legislation comfort letters and due diligence by the defendants, the operation of limitation periods on environmental damage, and the scope of reasonably incurred remediation costs.

As previously noted, Canada has adopted the "polluter pays" principle for environmental liability, and this includes corporations. Corporate entities that damage the environment or breach environmental legislation will be liable for the harm caused. This can include damage caused by oil spills and sewage pollution, or breaches of regulations around wildlife, fisheries, the transportation of dangerous goods, the disposal of hazardous materials and contaminated sites.

It is uncommon in Canada for the shareholders or parent company of a polluting corporate entity to be held liable for environmental damage. However, Canadian contaminated sites legislation contains broad liability provisions that may apply to shareholders or a parent company that owns, controls, or manages a contaminated piece of property. Also, in very rare circumstances, a party or government may seek permission from the court to “pierce the corporate veil” and sue the parent company for actions taken by the subsidiary.

Several pieces of federal environmental legislation impose responsibilities on directors and officers for their company’s environmental performance. Penalties for environmental damage or breaches of environmental law can include:

  • being fined or imprisoned for the corporation's pollution, even if the corporation has never been prosecuted or convicted;
  • being fined for the corporation's failure to obtain the necessary permits or approvals, follow required environmental processes, or report spills;
  • being prosecuted for failure to take all reasonable care to prevent the corporation from causing or permitting pollution;
  • being heavily fined or imprisoned for the corporation’s contempt of court where there are repetitions of events that led to a previous environmental conviction; or
  • being personally liable for the costs of remediating historic and current property contamination associated with any real estate that the corporation owns, controls or occupies, or formerly owned or controlled.

Most directors and officers in Canada rely on director and officer insurance to insure them against any errors and omissions made in the course of their duties. Given the serious consequences of potential environmental breaches, it is not uncommon for directors and officers to have coverage for environmental breaches as part of their insurance policies. However, such policies are often additional and expensive, as they are not traditionally included as part of standard policies.

Directors and officers may seek further indemnification from the company itself for any liability that arises from their role in the company; however, this may be of little help if the company becomes insolvent due to environmental penalties.

It is unlikely that financial institutions or lenders will be liable for the environmental damage caused by one of their clients. However, Canadian contaminated sites legislation contains broad liability provisions that may apply to a lender who owns, controls or manages a piece of property. For example, if a lender realises on security taken on real property assets that are contaminated, the lender may have sufficient "control" over the situation to incur liability for the clean-up.

To protect themselves from liability risk, lenders should investigate the potential environmental liabilities inherent in an undertaking before investing, and should ensure that money is allocated towards meeting environmental contingencies. Furthermore, lenders can make it a term of any lending agreement that the owner or operator of a site meets and/or exceeds any environmental regulations or policies in furtherance of the agreement. Finally, a lender could ask for an indemnity or for the provision of an insurance policy naming them an additional insured in order to further mitigate any potential fallout from an environmental offence.

Civil claims for compensation or other remedies can be brought through common law causes of action, such as nuisance, negligence, trespass, or loss of property value, or through statutory causes of action set out in environmental legislation.

Canadian courts of inherent jurisdiction almost always have jurisdiction to award exemplary or punitive damages. However, generally speaking, they are unlikely to award such damages unless the conduct in question is high-handed, malicious, arbitrary or highly reprehensible. The bar for awarding punitive damages is high, but punitive damages have been awarded in certain jurisdictions, such as Alberta, for breaches of environmental responsibilities.

Class actions are available for environment-related civil claims. However, class actions in Canada must first be “certified” by a court in order to proceed. This process ensures that the claim raises common issues and that a class proceeding is the preferred way to resolve those issues. However, few environment-related cases have made it past this initial threshold.

Two appellate decisions, released in 2013 and 2014, confirmed that class action regimes are not often appropriate to remedy environmental harms: Canada (Attorney General) v MacQueen, 2013 NSCA 143 and Windsor v Canadian Pacific Railway Ltd, 2014 ABCA 108. Although environmental causes of action may seem to involve common issues among class members, proof of those claims is often an individual issue.

Indemnities and other contractual arrangements can be used to transfer or apportion liability for environmental pollution or breaches of law, although the appropriate terms for each set of parties will be fact-specific. However, third parties – including regulators – are not likely to be bound by such agreements, and are entitled to prosecute or seek compensation from the party who is liable at law. Polluters relying on such indemnities and contracts must seek indemnification or compensation through those mechanisms on their own.

Most commercial general liability policies in Canada exclude pollution liability. Businesses can purchase an optional pollution liability extension, although such extensions will be subject to strict exclusions.

Instead, Canadian businesses may purchase an environmental liability policy from one of a variety of insurers in Canada. These policies can provide coverage for liability arising from a sudden or gradual pollution event, waste management services, storage tanks and contractors, among other things.

Jurisdiction over contaminated sites is divided between the federal and provincial/territorial governments in Canada. The federal government has some powers to issue remedial and preventative orders regarding water and soil contamination, and has jurisdiction over any federal lands. All other lands are governed by provincial contaminated sites legislation.

Provincial Contaminated Sites Legislation

This legislation details hazardous waste disposal and storage, site investigations, permitting and authorisations, pollution prevention, site remediation, administration, penalties, etc. All of these fall under provincial jurisdiction relating to the environment and property management.

Contaminated sites are defined as areas of land where the soil, sediment, vapour or groundwater contains a prescribed substance in quantities or concentrations exceeding risk-based criteria, standards or conditions. Prescribed substances generally include hazardous substances such as sulphur, petroleum hydrocarbons, heavy metals and chlorofluorocarbons (CFCs).


When a “responsible person” has not remediated an identified contaminated site, a regulatory authority can issue a remediation order to ensure remediation is carried out. This could occur if the contamination is severe, or if the responsible person will not voluntarily carry out the remediation requirements.

Persons who may be liable for the costs of remediating a contaminated site include the current owner or operator of a site, a previous owner or operator of a site, persons who produced the prescribed substance found on the site, and persons who transported the prescribed substance found on the site.


Specific exclusions apply. For example, a prior owner or operator might not be found liable if they can demonstrate that the site was not contaminated at the time they owned or controlled it, and that they did not contribute to the contamination. Similarly, a current owner who can demonstrate that none of their conduct exacerbated or contributed to the costs of remediation may not be found liable.

Limiting liability

More than one person can be liable for remediation of contaminated land, with liability typically apportioned according to the degree of fault or contribution by the parties to the pollution. Gehring et al v Chevron Canada Limited et al, 2006 BCSC 1639 provides commentary on the allocation of remediation costs. The recent appellate case Victory Motors (Abbotsford) Ltd v Actton Super-Save Gas Stations Ltd, 2021 BCCA 129 confirmed that, at least in British Columbia, remediating parties may claim both litigation legal costs and legal costs incurred throughout the actual remediation of the contaminated site.

A person liable for remediating contaminated land can seek recourse from the original polluter or former landowner. Such actions may be available in contract law, in negligence, or through a statutory cause of action in some provinces.

A polluter or landowner can transfer liability for a contaminated site to a purchaser by way of contract. However, environmental legislation in most provinces permits regulators to order those who formerly owned or controlled contaminated property to carry out remediation measures. Parties seeking to rely on contractual terms to recover their costs or limit liability will need to seek a remedy through those mechanisms.

Although a large part of the Canadian economy is resource-based, the country’s economy varies greatly from coast to coast. The strategies to combat climate change have therefore been as varied as the economies in which they are implemented. As it currently stands, Canadian provinces have a patchwork of different environmental policies in play, with varying adherence to policies concerning carbon credits, renewable energy credits and emission standards.

The Canadian Net-Zero Emissions Accountability Act

Canada is a signatory to the major international climate change conventions. As a party to the Paris Agreement, Canada has committed to an economy-wide target to reduce greenhouse gas emissions by 40–45% below 2005 levels by 2030. The Canadian Net-Zero Emissions Accountability Act formalises Canada’s target to achieve net-zero emissions by the year 2050, and establishes a series of interim emissions reduction targets at five-year milestones towards that goal.

Although the federal government signed the Paris Agreement and has set emission targets, Canada is a federal system and the federal and provincial levels of government have jurisdiction to regulate matters concerning the environment.

Federal and Provincial Regulations

The Pan-Canadian Framework on Clean Growth and Climate Change

In recognition of the collaborative approach needed for progress on climate change, the federal and provincial ministers of the environment developed the Pan-Canadian Framework on Clean Growth and Climate Change, which required all provinces and territories to have carbon pricing initiatives in effect by 2018. However, the framework gives the provinces and territories the flexibility to design their own policies to meet emission-reduction targets through the different initiatives or mechanisms that best suit their individual economies.

A Healthy Environment and a Healthy Economy

The federal government subsequently issued a further climate plan in 2020 – A Healthy Environment and a Healthy Economy. The plan builds on the efforts that are currently underway through the Pan-Canadian Framework.

2030 Emissions Reduction Plan

Furthermore, in March 2022, the federal government introduced Canada’s 2030 Emissions Reduction Plan, which provides a road map for the Canadian economy to achieve 40–45% emissions reductions below 2005 levels by 2030, building upon the actions outlined in Canada’s previous climate plans.

Energy efficiency

Canada maintains a number of legal requirements with respect to energy efficiency. Regulations apply to a range of products, including appliances, light bulbs, heating and cooling systems, and vehicles. Many incentive programmes also exist to support the construction of energy-efficient homes and buildings, and the development of energy-efficient industries and businesses.

Carbon pricing

In 2017, the federal government announced that the provinces and territories in Canada had to develop their own carbon pricing system that met federal standards or the federal government would impose its own programme on the provinces and territories. Since 2019, every jurisdiction in Canada has had a price on carbon pollution, either their own pricing system tailored to local needs or the federal pricing system. If a province or territory decides not to price pollution, or proposes a system that does not meet the minimum standards set by the federal government, the federal system is put in place.

Clean Fuel Regulations

In June 2022, the Clean Fuel Regulations under the Canadian Environmental Protection Act, 1999 were registered. The Clean Fuel Regulations seek to reduce greenhouse gas emissions in Canada by requiring liquid fossil fuel suppliers to gradually reduce the carbon intensity of the fuels they produce and sell for use in Canada over time. The Clean Fuel Regulations set carbon intensity limits for fuel types and the fuel suppliers must lower the carbon intensity of the fuels they produce in accordance with those limits. Suppliers can maintain compliance with the established limits by participating in a credit market established by the Clean Fuel Regulations. Credits can be created by undertaking projects that reduce the carbon intensity of fuels, supplying low carbon fuels, or supplying fuel or energy to advanced vehicle technology (eg, electric or hydrogen vehicles). Overall, this new regulatory scheme aims to reduce emissions while simultaneously driving innovation in low-carbon and clean energy sectors. The carbon intensity reduction requirements under the Clean Fuel Regulations will come into force on 1 July 2023.

Legislation and History of Asbestos Usage

Asbestos management in Canada is governed by occupational health and safety legislation and environmental legislation. It is governed federally by legislation such as the Hazardous Products Act and the Canada Consumer Product Safety Act, and provincially by legislation such as the Workers' Compensation Act. The federal Prohibition of Asbestos and Products Containing Asbestos Regulations prohibit the import, sale and use of asbestos, as well as the manufacture, import, sale and use of products containing asbestos (with some exceptions).

The responsibility for removing or managing asbestos present in a building generally falls on the building owner. However, in some provinces the occupier of a building, such as a tenant or project developer, may also bear some responsibility.

Landowners or occupiers must conduct a pre-work assessment before commencing certain building work. Any asbestos found must be removed, enclosed, encapsulated, or carefully managed prior to renovations or alterations. The legislation mandates that specific procedures must be implemented during asbestos removal, relating to ventilation, waste containers and decontamination.

Asbestos was used frequently in Canadian insulation, fireproofing and construction until the 1980s. Canada was also an active producer of asbestos until 2011. As a result, Canadian exposure to asbestos has been relatively widespread, and asbestos-related diseases continue to be one of the top causes of workplace death in Canada.


Despite this, asbestos litigation against employers is relatively uncommon. Canada has a socialised medical insurance system and most provinces operate a mandatory workers' compensation scheme, which means that the majority of workers injured by asbestos exposure will receive medical treatment and compensation without resorting to litigation.

Where asbestos litigation has been undertaken, it has been initiated by workers' compensation boards, the bodies responsible for administering the workers' compensation schemes, and brought against manufacturers of asbestos products to recover the costs of paying out compensation to workers and their families.

To establish a claim for damages for asbestos exposure, a litigant must demonstrate actual physical harm or injury. However, the long latency period of asbestosis and mesothelioma means that the injury or harm may not be realised, and litigation not commenced, for decades.

This has created challenges for Canadian courts. Litigants have often been exposed to asbestos from a variety of sources over a long period of time, making causation and the proper apportionment of liability a difficult issue. More recent jurisprudence suggests courts will take a more relaxed approach to causation in such cases; see Clements v Clements, 2012 SCC 32.

One of the leading cases with respect to asbestos liability in Canada is Privest Properties Ltd v The Foundation Co of Canada Ltd (1995), 11 BCLR (3d) 1 (SC), aff’d (1997), 31 BCLR (3d) 114 (CA). Privest was the first suit to be tried in Canada involving asbestos in buildings. The court rejected the plaintiffs’ position that the building in question had been contaminated by the presence of asbestos-containing spray fireproofing. The court concluded that the substance at issue was not an inherently dangerous product, because the fireproofing contained chrysotile, rather than crocidolite or amosite forms of asbestos. This decision set a meaningful precedent in Canada by constraining liability with respect to the use of asbestos in fireproofing and construction. It also departed significantly from decisions made by earlier US authorities.

In Canada, the responsibility for managing and reducing waste is shared among federal, provincial, territorial and municipal governments. The federal government regulates the export and import of waste and the interprovincial movement of waste, while the provinces regulate the use and disposal of waste. Both “extended producer responsibility” and “product stewardship” programmes are used to manage products at their end of life.

Whether or not a producer or consigner of waste retains liability for waste after it has been disposed of by a third party depends on the province in question. In some provinces, the legislation includes an automatic ownership transfer provision that is triggered once waste is accepted by an authorised waste management facility, which limits further liability of producers or consigners.

In provinces where such a provision does not exist, any past or present owner or person that possessed, controlled or managed the waste remains exposed to liability for the waste after it has been disposed of by a third party. However, generally speaking, some direct involvement in the release is necessary in order for the liability to crystallise. Under both schemes, producers or consigners remain liable for any damage caused while the waste was in their possession or in transport.

Producers in Canada are not generally required to take back, recycle or dispose of goods once they become waste. However, legislation across Canada is widely used to impose some or all of the costs of recovery, recycling and disposal of goods on the producers of waste. These laws are intended to incentivise producers to design products that can be disposed of responsibly.

Furthermore, in June 2022, the federal government published the Single-Use Plastics Prohibition Regulations under the Canadian Environmental Protection Act, 1999. Under these new regulations, the manufacture, import, export and sale of six categories of single-use plastics will be banned by the end of 2025, including checkout bags, cutlery and straws. The regulations adopt a staggered timeline to put the ban in place, beginning with prohibitions on the manufacture and import of the identified plastics for sale in Canada in the initial stage (effective December 2022–2023) to a more total prohibition on manufacture, import and export sales by the end of 2025.

There are requirements to self-report environmental incidents or damage to regulators in Canada. These requirements often apply to spills or releases of environmentally harmful substances such as oil, sewage and ozone-depleting substances. Larger spills or releases may also be required to be reported to the public at large.

In addition to legal requirements to report spills or other environmental breaches, a failure to notify may be used against an offender as evidence of conduct worthy of sanction via punitive damages or an increased fine for a conviction.

Canadian government agencies often publish environmental information on their websites. The public may also request government documents and information through access to information requests, which apply to nearly all public authorities and bodies and nearly all government documents.

The disclosure of environmental information in annual reports is still largely voluntary in Canada. However, under Canadian securities rules, reporting issuers (which are largely public companies) must disclose all material information, including material information about environmental and social issues. Report issuers may also have disclosure obligations under the policies of a particular stock exchange.

Environmental due diligence is typically conducted on M&A, finance and property transactions in Canada. The level of due diligence conducted may vary according to the level of risk a particular property may present (such as a gas station or dry cleaner).

Share Sale

In a share sale, all the assets and liabilities of the target company remain with the company, meaning that the buyer will absorb any outstanding environmental liabilities for historic environmental damage or breaches of environmental law.

Asset Sale

In an asset sale, the buyer typically does not inherit the pre-acquisition environmental liabilities associated with the purchased assets. However, by law, the buyer may inherit liability for the pre-existing environmental condition of the assets, especially in the case of a contaminated site. A buyer may also be liable where it takes over an ongoing situation of regulatory non-compliance.

Review of Studies, Reports, etc

Typically, a purchaser of Canadian shares or assets will request the relevant environmental studies, reports, permits, orders, key correspondence from regulatory authorities and other critical environmental documents from the vendor. A purchaser can also search public registries for information regarding the target company’s environmental compliance, conduct interviews with senior environmental employees of the target company, or obtain an environmental audit or site assessment.

Private companies may provide Phase I and Phase II assessments, with Phase I inspections consisting of database and visual searches while Phase II inspections consist of site inspection, sample collection and analysis, and often the provision of a review and recommendations regarding the site and potential remediation.


There is little legislation that mandates the disclosure of environmental information to a purchaser. In some jurisdictions, for example, provincial legislation will require a vendor of real property who knows or should know that the property has been used for an industrial or commercial purpose to provide a site disclosure statement to a prospective purchaser. More commonly, the requirement to disclose environmental information to a purchaser is built into Canadian contracts. Robust representations and warranties regarding the property or the company’s environmental status will create liability where those statements prove untrue.

Warranties and Indemnities

There are no "typical" environmental warranties, indemnities, or similar provisions in a share or asset sale; the allocation of risk depends on the parties themselves. However, it is common in Canadian business transactions to include representations, warranties and indemnities that will affect the allocation of environmental liability. Topics that may be covered by these provisions include the state of the property, the absence of contamination and the company’s environmental compliance status. Often, such warranties and indemnities will be limited in time.

In Canada, environmental taxes are imposed on activities or products that have a negative impact on the environment. They are designed to limit environmentally harmful behaviour through a price incentive, and are levied on the tax bases of energy, transportation, pollution and natural resources, among other things. Examples include federal and provincial fuel consumption taxes, and provincial taxes on mineral use, waste management and carbon emissions. Other provisions may allow businesses to recoup costs or receive accelerated depreciation write-offs for pollution control or energy conservation equipment and machinery.

Lawson Lundell LLP

Suite 1600
Cathedral Place
925 West Georgia Street
British Columbia V6C 3L2

+1 604 685 3456

+1 604 669 1620

inquiries@lawsonlundell.com lawsonlundell.com
Author Business Card

Trends and Developments


Miller Thomson LLP is comprised of approximately 500 lawyers situated in 12 strategically placed offices across Canada. The firm’s environmental law group is a trusted partner to national and multinational businesses that must navigate Canada’s environmental laws and regulations, which evolve constantly and vary from province to province. The team at Miller Thomson helps these businesses manage environmental risk, including undertaking environmental due diligence, ensuring environmental regulatory compliance, preventing and defending against regulatory prosecutions, pursuing or defending environmental civil claims, structuring transactions involving environmental risk, and keeping up with this fast-moving area of the law. Its lawyers include legal planners, negotiators, former regulators and advocates who have the expertise that comes with deep experience and an understanding of the complex issues that face corporate decision-makers, lenders and regulators.

National Developments

Courts retain COVID-19 adaptations

As Canada emerged from the pandemic, courts around the country re-opened to in-person hearings. However, a new hybrid model has emerged with a significant number of court appearances continuing to be facilitated by remote technology such as audio and video-conferencing. It appears that the courts are willing to continue to allow the use of this technology having seen the efficiencies this creates, especially in managing busy court dockets.

Mediators and arbitrators have also continued to use virtual tools which, especially in an expansive country such as Canada, has significantly eased the time and cost burden of matters involving participants in different jurisdictions. There seems little doubt that these changes are here to stay.

Enhanced focus on environmental, social and governance (ESG)

Momentum on issues surrounding ESG has continued to swell as more companies integrate ESG matters into their practices. While some organisations voluntarily report on ESG issues, others are mandated to do so in compliance with strengthened regulatory requirements.

In May 2022, the federal government’s Office of the Superintendent of Financial Institutions (OSFI) issued draft Guideline B-15: Climate Risk Management to set out its expectations on how federally regulated financial institutions handle the governance and management of climate-related risks as well as disclose financial risks related to climate change. OSFI has completed the consultation period for this guideline and plans to issue the final guideline in early 2023.

The Task Force on Climate-Related Financial Disclosures (TCFD) has continued to gain recognition in Canada. In late 2021, the Canadian Securities Administrators published the Proposed National Instruction 51-107: Disclosure of Climate-Related Matters, which aligns with the core disclosure recommendations of the TCFD. This instrument, alongside an accompanying policy and forms, would introduce disclosure requirements for reporting issuers regarding climate-related matters, including governance, strategy, risk management, metrics and targets, and greenhouse gas emissions. Should this policy become effective on 31 December 2022, public companies (with a financial year-end of 31 December) would be required to start making disclosures in March 2024.

Responding to the climate crisis

Canadian climate laws and policies continue to evolve. Under the federal Impact Assessment Act, the Minister of Environment and Climate Change is directed to consider how a designated project would help or hinder Canada’s abilities to meet its domestic and international climate commitments. The Strategic Assessment of Climate Change outlines what climate and emissions information project proponents ought to submit throughout a federal impact assessment, as well as providing guidance on how climate change will be considered throughout the impact assessment process.

Building on Canada’s first-ever climate accountability legislation, the 2021 Canadian Net-Zero Emissions Accountability Act, Canada announced its 2030 Emissions Reduction Plan: Clean Air, Strong Economy, which outlines a sector-by-sector path for Canada to reach its 2030 emissions target. The plan includes CAD9.1 billion in new investments in sectors that include buildings, renewables and electric vehicles, and reduction of greenhouse gas emissions from the oil and gas sectors.

This year saw greater attention devoted to carbon capture and storage (CCUS) technology with the 2022 Federal Budget proposing a tax credit for businesses investing in CCUS. The credit is expected to cost CAD2.6 billion for the next five years and CAD1.5 billion annually after that until 2030.

Continued attention to issues impacting Indigenous peoples

In May 2021, the remains of 215 Indigenous children were found at the site of a former residential school in British Columbia (BC), sparking investigations at other former school sites across the country. As of August 2021, more than 1,300 unmarked graves had been found at five former residential school sites; many more sites have not been searched. In June 2022, the federal government appointed an Independent Special Interlocutor for Missing Children and Unmarked Graves and Burial Sites associated with Indian Residential Schools.

The repercussions of these disturbing discoveries continued in 2022 with heightened attention resulting from a visit by Pope Francis in July 2022 that focused on apologising for the Catholic Church’s role in the Canadian residential school system. Greater focus on Indigenous rights will continue to impact the development of environmental laws, policies and private projects.

Traction towards recognition of the right to a healthy environment in Canada

In July 2022, the United Nations General Assembly (UNGA) passed a resolution recognising the right to a clean, healthy and sustainable environment. Canada voted in favour of the UNGA resolution.

In February 2022, the Senate introduced amendments to the Canadian Environmental Protection Act, 1999 (CEPA) which would recognise that every individual in Canada has a right to a healthy environment, mandate the federal government to protect that right, and require the government to develop an implementation framework setting out how to consider the right in administering CEPA. The bill passed through the Senate, and the House of Commons completed its first reading of the bill in September 2022. The passing of this bill would see the entrenchment of the right to a healthy environment in Canada and quite possibly open the door for a new wave of litigation.

British Columbia (BC)

Climate lawsuit launched against the province

In March 2022, the Sierra Club of British Columbia Foundation (the “Sierra Club”) filed a petition against the province seeking judicial review of the 2021 Climate Change Accountability Report (the “Climate Report”), which was prepared pursuant to the Climate Change Accountability Act, SBC 2007, c 42 (CCAA). 

The Sierra Club’s petition seeks to quash and set aside the Climate Report on the basis that it violates the CCAA’s requirements to include:

  • a plan to continue progress towards achieving the 2025 emissions reduction target;
  • a plan to continue progress towards the 2040 and 2050 emissions reduction targets; and
  • a plan to continue progress towards the oil and gas sector’s emissions reduction target.

In its violation of the CCAA’s statutory requirements, the Climate Report is regarded as an unreasonable exercise of the minister’s statutory reporting obligations under the CCAA, according to the Sierra Club, which also states that the province’s failure to produce detailed plans has enabled it to continue approving new fossil fuel projects without demonstrating how it will achieve its emissions reduction targets.

This case was heard at the BC Supreme Court in October 2022.

DRIPA Action Plan released

Following BC’s enactment of the Declaration on the Rights of Indigenous Peoples Act (DRIPA) in 2019, which requires the province to harmonise its laws with the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), BC released its first DRIPA Action Plan in May 2022. This plan contains 89 actions which the province intends to undertake over the next five years in the areas of self-determination and self-government; title and Aboriginal rights; ending Indigenous-specific racism and discrimination; and social, cultural, and economic well-being.

Government laws and policies regarding Indigenous involvement with proposed projects will likely continue to evolve as the province implements the actions, and should be regularly monitored by proponents working in the province.

Provincial hydrogen strategy released

Shortly after Canada released a national hydrogen strategy in December 2020, BC released its comprehensive hydrogen strategy in July 2021, and declared itself the first Canadian province to do so. In March 2022, the province established a BC Hydrogen Office to help attract investments and simplify the permitting process. There are already 40 hydrogen projects proposed or underway in the province, which represent CAD4.8 billion in proposed investment. BC has also developed the first cluster of public hydrogen-fuelling stations in Canada as part of its efforts to increase demand for zero-emission vehicles.

Given that two thirds of BC’s energy used for transportation, buildings and industry currently comes from fossil fuels, transitioning to a cleaner, low-carbon energy system will be pivotal in order for BC to meet its 2050 target. BC is geographically well positioned in its proximity to key trading partners, with the export markets of China, Japan, South Korea and California predicted to supply nearly half of the total global hydrogen demand by the year 2050.


In March, the government of Alberta announced restrictions on coal development on the eastern slopes of the Rockies. The restrictions on new developments will be in place pending the development of updated regional land-use plans. The government also released the final report of the Coal Policy Committee which has documented the change in public and political attitudes towards coal development in Alberta since the original official Coal Policy was published in 1976. The report, which was prepared after extensive public consultation, noted that “Albertans considered the environmental impacts of potential coal mines to be a ‘top-of-mind issue’” and that “85% of Albertans indicated they were not at all confident that coal exploration and development are properly regulated”.

The consultation process also noted, however, that “Certain communities, including Indigenous communities that would potentially experience economic benefits from new coal mines, understandably expressed support for new potential development projects. However many Albertans were deeply concerned about or opposed to such proposed projects…” This statement succinctly summarises a perennial problem for all Canadian policy makers who continue to struggle with finding a balance between the ongoing, if essentially finite, benefits of an economy based on resource extraction, with the short and long-term environmental impacts of that extraction.

One such effort that is of keen interest to Alberta is the development of working facilities that will bring to reality the promises made by proponents of carbon capture and storage projects. To this effect, Alberta has committed CAD1.24 billion through 2025 to two commercial-scale carbon capture, utilisation and storage projects. The goal is to reduce CO₂ emissions from the oil sands and fertiliser sectors by up to 2.76 million tonnes each year, which is the equivalent of yearly emissions from 600,000 petrol vehicles.

In March of 2022, the Quest Project reported in its 2021 Annual Report to the government of Alberta that “as of December 2021, Quest surpassed 6.8 million tonnes of injected CO₂ since project start-up” and that Quest had combined “strong integrated project reliability performance with operational availability at 97.8% since start-up.”

The second project, the Alberta Carbon Trunk Line Project’s 2021 “Knowledge Sharing Report”, also published in March 2022, indicated that in 2021, the first full year of commercial operations for the project, the cumulative injection of CO₂ reached two million tonnes “as of November”.

Proponents of these projects see them as a viable solution to address the impact of CO₂ emissions from extractive industries such as the oil and gas sector. Of course, these projects are not without their critics, who point to the large amounts of money and energy required and also express concerns related to the long-term integrity of the storage facilities. In many ways, the public discourse around carbon capture and storage is only just beginning.

In May, the Alberta Court of Appeal ruled that the federal Impact Assessment Act is unconstitutional. The legislation establishes a public process for information gathering and decision making on the impacts of major projects within federal responsibility, such as fisheries, migratory birds and Indigenous peoples. The majority of the court ruled the legislation unconstitutional and claimed it interfered with the provinces’ jurisdiction over their natural resources and other powers granted to the provinces by Canada’s constitution. The majority opinion was highly critical of the legislation saying that it was “a breathtaking pre-emption of provincial authority” and that “Parliament has taken a wrecking ball to the constitutional rights of the Citizens of Alberta and Saskatchewan and other provinces to have their... natural resources developed for their benefit”. The federal government has appealed the decision to the Supreme Court of Canada.


Creation of a Clean Energy Credit registry

In January the Ontario government announced its intention to establish a provincial Clean Energy Credit (CEC) registry. The purpose of the registry is to track the trading of credits from “non-emitting facilities” for energy generated and consumed in Ontario.

In an official posting about the CEC in Ontario’s Environmental Registry, the Ontario Ministry of Energy notes that over 90% of electricity generated in Ontario in 2021 was emissions-free. This consisted of 55% from nuclear power, 23% from hydro-electric facilities, 9% from wind, 2.5% from solar and 0.5% from bio-energy.

Several jurisdictions in North America provide electricity consumers with the ability to purchase Clean Energy Credits, also sometimes referred to as Voluntary Energy Credits (VECs) or Renewable Energy Credits (RECs). This is intended to provide consumers with the certainty that the power they consume comes from a known (and presumably, environmentally desirable) source.

The Ontario registry is intended to be a central system for tracking the transfer and retirement of CECs. It is not a market nor is participation mandatory. Yet the Ontario government says the CEC “could help businesses meet their environmental and sustainability goals, support ratepayers by enabling proceeds from CEC sales to flow to the rate base, and help [Ontario’s] efforts to further decarbonise by supporting investment in new clean or renewable generation”.

It will be interesting to see how participation in the registry is influenced by other factors including public perception and acceptance of the concept that the selected generators are indeed environmentally desirable. The fact that 55% of Ontario’s current generation is nuclear makes the Ontario system particularly vulnerable to criticism by those who would challenge nuclear power’s claim to be emissions free. It is also unclear whether such a system would indeed facilitate investment in new clean or renewable generation given the existence of a supply system that claims to already be over 90% “emissions free”.

Other Ontario developments

In February, Ontario passed a new regulation designed to impose new limits on sulphur dioxide emissions from petroleum facilities. There are only five such facilities in Ontario. Reduced emission limits and greater reporting obligations are to be phased in over a ten-year period (2022–2031).

In May, a significant storm across some of the most heavily populated parts of the province (causing estimated insured damage of CAD875 million) brought increased discussion of extreme weather events and the likelihood of climate change causing more severe and more frequent occurrences. However, there was no indication that this discussion was likely to translate into any significant legislative changes in the near future.

The Law Commission of Ontario (LCO) commenced public consultations on Ontario’s Environmental Bill of Rights Legislation (EBR). Noting that the EBR has been in place for more than 25 years, the LCO wishes to consider the need to reform the EBR’s provisions for public participation in government decisions that impact the environment and to consider how to take into account concepts such as “environmental justice”, the “right to a healthy environment” and Indigenous rights. The final report is expected in early 2023.

In an otherwise generally quiet year in terms of changes to environmental rules in Ontario, several statutes were modified to continue the current administration’s efforts to encourage investment in Ontario and streamline the permitting and approvals process for projects with low environmental risks. As in many other jurisdictions, a challenging economic climate is likely to weigh heavily on any political decision that might be a disincentive to economic growth. The challenge for Ontario, as elsewhere, is how to develop policies that continue to allow for a truly sustainable economy at a time when the predicted impacts of climate change are increasingly gaining public attention.


Energy transition in Quebec

The 2030 Energy Policy and its implementation

This policy defines Quebec's energy transition strategy until 2030. Its objectives include promoting a low-carbon economy, making optimal use of Quebec's energy resources and taking full advantage of the potential of energy efficiency.

To achieve these objectives, the government has adopted five targets to be met by 2030, including increasing the share of renewable energy in total energy production by 25% and increasing bio-energy production by 50%.

The first implementation action amended the Act with respect to the Régie de l'énergie (Quebec’s energy regulator) to introduce the concept of renewable natural gas (RNG). This, in turn, led to the adoption of a regulation that requires natural gas distributors to deliver a minimum volume of RNG to their customers each year.

The 2030 Plan for a Green Economy

This plan aims to reduce greenhouse gas emissions by 37.5% compared to 1990, by 2030, through the implementation of measures such as increasing the electrification of transportation and buildings, reducing the free allocation of emissions allowances to the industrial sector and increasing the use of other forms of renewable energy.

While several renewable hydrogen production projects aimed at adding hydrogen to natural gas are already under development in Quebec, these projects have evolved until now in the absence of standards and regulations adapted to allow the development of this new form of renewable energy.

However, on 30 September 2021, the National Assembly adopted Bill 97, which, among other things, amends the Act with respect to the Régie de l'énergie to include hydrogen as a “renewable source” natural gas. Thus, like RNG, hydrogen will now be qualified as natural gas from a renewable source, which should allow for the accelerated development of the green hydrogen industry in Quebec. 

Regulation on RNG 2022

On 17 August 2022, the government of Quebec adopted a regulation (the “Regulation”) to amend the previous regulation with respect to the quantity of renewable natural gas to be delivered by a distributor. The Regulation comes into force on 1 January 2023.

In accordance with the Regulation, natural gas is regarded as being from a renewable source if it is:

  • produced from non-fossil organic matter that is degraded by biological processes, including anaerobic digestion, or by thermochemical processes, including gasification; or
  • hydrogen produced in accordance with the second paragraph and non-fossil carbon monoxide or carbon dioxide.

The Regulation also provides that another substance added to natural gas is regarded as being from a renewable source if it is hydrogen that is produced:

  • from non-fossil organic matter degraded by thermochemical processes, in particular by gasification;
  • by electrolysis of water using electricity generated exclusively from renewable energy sources; or
  • by an industrial process that has a function other than obtaining hydrogen and that is fuelled by energy derived exclusively from renewable sources.

Under the amended Regulation, the minimum volume of RNG to be delivered must reach a rate of 7% by 2028 and 10% by 2030. This obligation is also accompanied by an additional condition requiring that the minimum annual volume of renewable natural gas to be delivered must be “for final consumption in the territory in which its exclusive distribution rights are held”.

Finally, under the Regulation, where the RNG delivered annually by a distributor is hydrogen produced in accordance with the Regulation, only one third of such hydrogen may be considered in the calculation of the volume of RNG that a distributor must deliver to meet its annual obligation.

Zero-net greenhouse gases (GHG) for Quebec buildings as soon as 2040

In December 2020, the City of Montreal adopted its 2020–2030 Climate Plan (the “Climate Plan”), which aims to achieve carbon neutrality by 2050. Specifically, the Climate Plan calls for a complete ban on the use of fossil fuels in all municipal buildings and their replacement with renewable energy by 2030.

While the city’s carbon neutrality goal was set to be met by 2050, the current administration announced last May that it was bringing it forward by ten years by publishing its Roadmap towards zero-emission buildings in Montreal by 2040 (the “Roadmap”).

For new buildings, the Roadmap calls for the adoption of a new regulation by 2023 that will require a zero-emission performance threshold for new building permit applications. As for existing buildings, the city plans to impose gradual GHG reduction performance thresholds so that all buildings can be supplied with 100% renewable energy by 2040.

These new obligations are in addition to By-law 21-042, with respect to GHG emission disclosures and ratings of large buildings, adopted in 2021 and already in force, which requires building owners to disclose each year the level of GHG emissions resulting from energy consumption in their buildings in order to allow the city to implement measures to reduce these GHG levels.

Other cities and municipalities in the province are moving to adopt climate plans and to impose new obligations for building owners with the objective of reducing GHG emissions. This will have a direct financial and administrative impact on building owners who will need to comply with new standards and requirements within a relatively short timeframe.

Contaminated soil management

In June 2021, Quebec adopted the final version of the highly awaited regulation with respect to the traceability of excavated contaminated soil. It has been gradually enforced since 1 November 2021. The adoption of this new regulation aims, among other things, to put an end to the unethical practice of burying contaminated soil excavated in Quebec outside the province, particularly in Ontario.

Other measures have also been taken to tighten the framework for contaminated soils. These include amendments to the Land Protection and Rehabilitation Regulation and to the regulation respecting contaminated soil storage and contaminated soil transfer stations, as well as the adoption of the regulation with respect to the regulatory scheme applying to activities on the basis of their environmental impact (REAFIE).


Canadian environmental law continues to evolve at a rapid pace. Climate change, issues impacting Indigenous peoples, and day-to-day pollution regulation remain the active focus of most Canadian lawmakers and courts. All signs point to these trends continuing for the foreseeable future.

Miller Thomson LLP

Scotia Plaza
40 King Street West
Ontario M5H 3S1

+1 416 595 8500

+1 416 595 8695

toronto@millerthomson.com www.millerthomson.com
Author Business Card

Law and Practice


Lawson Lundell LLP differentiates itself as one of the largest and most experienced law firms in Western Canada. It is a leading, full-service, business law firm, with over 180 lawyers located in offices in Vancouver, Calgary, Kelowna and Yellowknife. The environmental practice group comprises 20 lawyers, who provide their expertise to clients in a wide range of industries, including banking, construction, energy, forestry, government, mining, real estate, transportation and utilities. The team provides advice and assistance to clients in all aspects of environmental law, including commercial transactions, environmental management systems, environmental project assessment, regulatory and licensing requirements, contaminated sites, reclamation, closure and remediation, and environmental offences.

Trends and Development


Miller Thomson LLP is comprised of approximately 500 lawyers situated in 12 strategically placed offices across Canada. The firm’s environmental law group is a trusted partner to national and multinational businesses that must navigate Canada’s environmental laws and regulations, which evolve constantly and vary from province to province. The team at Miller Thomson helps these businesses manage environmental risk, including undertaking environmental due diligence, ensuring environmental regulatory compliance, preventing and defending against regulatory prosecutions, pursuing or defending environmental civil claims, structuring transactions involving environmental risk, and keeping up with this fast-moving area of the law. Its lawyers include legal planners, negotiators, former regulators and advocates who have the expertise that comes with deep experience and an understanding of the complex issues that face corporate decision-makers, lenders and regulators.

Compare law and practice by selecting locations and topic(s)


Select Topic(s)

loading ...

Please select at least one chapter and one topic to use the compare functionality.