In R v Great Lakes Stevedoring Company Ltd,[1]companies are given a stark reminder that provincial environmental laws and regulations must be complied with notwithstanding compliance with all applicable federal laws and regulations and operating exclusively on federal property.
Great Lakes Stevedoring Company Ltd. (“Great Lakes”), a stevedoring operation on the Welland Canal in the St. Lawrence Seaway was charged with violating Ontario’s Environmental Protection Act (the “EPA”).[2]
Prior to trial, Great Lakes challenged the application of the EPA provisions arguing they offended two constitutional principles: (1) the doctrine of interjurisdictional immunity; and (2) the doctrine of federal paramountcy.
Justice J. De Fillipis of the Ontario Court of Justice disagreed with the position taken by Great Lakes, confirming that companies operating in compliance with federal legislative requirements does not automatically mean that they do not have to comply with the provincial legislative requirements.
Background
Great Lakes operates as a private federal corporation.
The history of Great Lakes is as follows – Great Lakes amalgamated with Quebec Stevedoring Company Ltd. also a private federal corporation. Great Lakes was a 50% shareholder of Port Weller Marine Terminal Inc. (“Port Weller Marine”) whose sole business is providing stevedoring services at the terminal located in Port Weller, Ontario on the Welland Canal (“Terminal”). Port Weller Terminal provides logistical services for the loading and unloading of cargo at the Terminal, including vessels travelling to and from foreign ports. Great Lakes acts as the broker for Port Weller Marine.
Federal White Cement Inc. (“Federal White”) purchased cement clinker, a solid that becomes highly toxic when wet and can burn the eyes and skin. The cement clinker was shipped by Federal White on a vessel called the “Puffin” to the Terminal. Federal White contracted with Great lakes to handle the cement clinker through the Terminal.
The St. Lawrence Seaway is an area of overlapping federal and provincial jurisdiction. It is governed by various statutes, including the federal Canada Marine Act (the “CMA”),[3] and the Seaway Property Regulations.[4] The purposes of the CMA includes strengthening the competitiveness of Canadian ports and the commercial activities of the St. Lawrence Seaway, as well as providing a high level of safety and environmental protection.
The Events
The stevedoring activities took place on federal Crown lands. In April 2016, Great Lakes began unloading the first shipment of cement clinker from the Puffin. A provincial Ministry of Environment, Conservation of Parks (“MECP”) Officer received prior notice of the arrival of the Puffin. The MECP advised federal authorities that the stevedores should take appropriate measures to control any fugitive dust associated with the unloading of the cement clinker.
The MECP Officer instructed Great lakes to provide a dust mitigation plan to ensure that its handling of the cement clinker complied with the provisions of the EPA. Following the provincial Officer’s visit to Port Weller Marine, a federal investigator instructed the stevedores to stop unloading the cement clinker from the Puffin. The federal and provincial authorities advised Great Lakes of its concerns with the cement clinker and its environmental obligations. In response to the comments received from the federal and provincial authorities Great Lakes submitted a dust mitigation plan. The federal authority eventually approved a revised mitigation plan and authorized the company to unload the cement clinker. Relying on the authorization given by the federal authorities Great Lakes received another shipment of the cement clinker in July 2016.
In July 2016, the MECP Officer forwarded a dust complaint from an area resident in proximity to the Terminal to the federal environmental adviser. The federal environmental adviser went to the Terminal and advised the MECP Officer that the dust mitigation measures in place were satisfactory.
On August 12, 2016, Environment Canada warned Great Lakes that they had violated the Fisheries Act by discharging contaminants in the water. No charges were laid by Environment Canada. In December 2017, shortly after the expiry of the one-year limitation period for charges under the CMA, the MECP proceeded with charges under the EPA noting that the MECP “would not treat a federal property differently than a privately owned or provincially owned or any other property” and that the MECP does not enforce the EPA unless the impact is offsite.
The charges were recommended by the MECP absent considering whether Port Weller Marine was complying with the dust mitigation protocol approved by the federal authorities. The MECP also did not consider the impact that the charges would have on Great Lakes’ business operations. The MECP’s actions, including the charges under the EPA and the changes required to be made to Great Lakes’ operating procedures for offloading cement clinker, resulted in additional costs, delay in deliveries, and ultimately Federal White choose not to renew its contract with Great Lakes resulting in a 50% decrease in business.
The Charges and Relevant Statutory Provisions
In December 2017, Great Lakes’ was charged with discharging a contaminant into the natural environment contrary to section 14(1) of the EPA and failing to report this discharge contrary to section 92(1)(a). The MECP alleged that dust contaminants from the cement clinker impacted residential properties in the Port Weller neighbourhood, covering the surface of homes, patio furniture and cars in a way that prevented normal use of the personal property.
(1) The Interjurisdictional Immunity Argument
Interjurisdictional immunity protects the core of each head of legislative power entrenched in sections 91 and 92 of the Constitution Act. The Supreme Court of Canada has held that the doctrine of interjurisdictional immunity will only apply if the law impairs the core of a federal power or undertaking:
Impairment is a higher standard than “affects.” It suggests an impact that not only affects the core federal power but does so in a way that seriously or significantly trammels the federal power. In an era of cooperative, flexible federalism, application of the doctrine of the doctrine of interjurisdictional immunity requires a significant or serious intrusion on the exercise of the federal power. It need not paralyze it, but it must be serious.[5]
The defendants argued that the challenged provisions of the EPA impaired two activities falling under the federal head of power: navigation and shipping (section 91(10)) and federal public property (section 91(1A)).
Navigation and Shipping
The Court acknowledged that the doctrine was engaged due to the federal government’s exclusive jurisdiction over navigation and shipping, which includes stevedoring activities. The Court concluded that the challenged provisions under the EPA did not encroach on any activities necessary for the stevedores or Great Lakes to load and unload cargo from ships, or to remove cargo from a port.
Justice J. De Filippis found that Great Lakes were simply required to load and unload cargo from ships in a manner that did not discharge contaminants into the natural environment, and further to report to the MECP such discharges if they occurred. Based on these findings, the MECP charges did not impair the practices of navigation and shipping, nor did they encroach on the federal power over this activity.
Federal Public Property
The Court also found that the use or management of the federal property where the Terminal was located was not restricted beyond the general environmental requirements imposed on activities that took place on the land. The EPA does not propose to regulate how the federal land was to be used and as a result did not impair the core of federal power over this matter.
(2) The Federal Paramountcy Argument
The doctrine of federal paramountcy arises when a federal law and a provincial law are both valid, but inconsistent. In these circumstances the federal law prevails. In this case, Great Lakes argued that the challenged provisions under the EPA frustrated the purposes of the federal CMA and its regulations.
The Court noted that the CMA contemplates a balancing between economic and environmental concerns, and gives the federal authority jurisdiction to bar activities that are likely to cause environmental harm in addition to authorizing such activities subject to mitigation measures.[6] The EPA however applies a different test and addresses actual outcomes – in this case, the impacts associated with, or arising from, the cement clinker. Great Lakes argued that this inconsistency frustrated the statutory mandate given to the federal authority to approve or authorize its conduct under the CMA.
Section 4 of the CMA outlines that the purpose of the Act is to:
(a) implement marine policies that provide Canada with the marine infrastructure that it needs and that offer effective support for the achievement of national, regional and local social and economic objectives and will promote and safeguard Canada’s competitiveness and trade objectives; [and]
…
(d) provide for a high level of safety and environmental protection…[7]
It was found that the CMA specifically calls for a balance between economic objectives and other interests, including environmental concerns. The Seaway Property Regulations requires that the manager of the terminal, as agent of the federal crown, to harmonize and balance these competing interests. In the event of an activity that is likely to produce a prohibited result, such as an environmental harm, the federal manager has jurisdiction to bar the activity entirely or impose conditions to mitigate the results. In this case the federal authority required the preparation and submission of a dust mitigation plan.
The Court found that it was reasonable to interpret the purposes of the CMA and its regulations in a manner that was consistent with the challenged provisions under the EPA. The Court confirmed that there is no conflict between the provincial and federal statutes even if the EPA is more restrictive than the CMA as the CMA does not confer a positive right. Most importantly, the Court found that permission of the activity by the federal authorities did not relieve Great Lakes from its obligations to comply with valid provincial legislation. Also, there was no clear statutory language in the CMA that reflected a firm Parliamentary intention to oust provincial jurisdiction over the environment or to “occupy the field”.
The
application brought by Great Lakes’ was dismissed and the EPA charges proceeded
to trial.
This article was written with the assistance of Madison Goodacre, student-at-law .
[1] 2019 ONCJ 895.
[2] RSO 1990, c E.19.
[3] SC 1998, c 10.
[4]SOR/2003-105.
[5] Quebec (Attorney General) v Canadian Owners and Pilots Association, 2010 SCC 39 at para 45, [2010] 2 SCR 536.
[6] Supra note 3, ss 22, 30(2), and 34.
[7] Ibid, s 4.