• Pacesetter Mills Ltd. v. District Director, Environmental Management Act

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    Decision Date: April 12, 2021

    Panel: Darrell Le Houillier

    Keywords: Environmental Management Act – s. 115; Administrative Penalties (Environmental Management Act) Regulation – ss. 7, 12(5); contravention; administrative penalty; air emissions

    Pacesetter Mills Ltd. (the “Appellant”) appealed a determination of contravention and administrative penalty issued by the Director, Environmental Management Act (the “Director”), Ministry of Environment and Climate Change Strategy (the “Ministry”).

    The Appellant operates a small sawmill in Quesnel, BC. Under section 6(2) of Environmental Management Act (the “Act”), a person must not introduce waste into the environment while conducting a prescribed industry, trade or business, unless the person holds a valid authorization under the Act. The Appellant’s sawmill is a prescribed industry for the purposes of section 6(2).

    In August 2017, Ministry staff inspected the sawmill and observed air contaminants being discharged. The Appellant did not have a permit to discharge air contaminants. The Ministry issued a warning letter to the Appellant, stating that it needed to apply for authorization to discharge waste to the environment, and failure to do so may lead to escalating enforcement action.

    In October 2017, the Ministry received a preliminary application from the Appellant for a permit to discharge waste. After reviewing the application, the Ministry requested that the Appellant provide additional information that was needed to assess the application. The Ministry received no response.

    In July 2019, Ministry staff observed air emissions discharging from the Appellant’s sawmill and conducted an inspection. In September 2019, the Ministry issued an inspection report to the Appellant, stating that it continued to contravene section 6(2) of the Act, and the matter was being referred for an administrative penalty.

    In September 2020, the Director issued a notice to the Appellant, recommending a penalty of $11,000 for the contravention of section 6(2) of the Act. The notice offered the Appellant an opportunity to make submissions, and it did so.

    In November 2020, the Director issued a determination that the Appellant had contravened section 6(2) of the Act. The Director levied a penalty of $5,500 for the contravention. The penalty was reduced from the proposed penalty of $11,000 based on the Appellant’s submissions. In particular, the Director found that the Appellant had recently made efforts to complete the permit application process, was a small operator, the waste discharge was localized, and there was no evidence that the waste discharge adversely affected the environment.

    The Appellant appealed the penalty. It acknowledged that the contravention had occurred, but it asked the Board to rescind or reduce the penalty. The Appellant sought a further reduction of the penalty based on the Appellant’s alleged financial difficulties. The Appellant suggested that the penalty could be reduced to equate to the annual fees it would have paid if it had obtained a permit in 2017.

    The Board considered the parties’ submissions and evidence, the Director’s rationale for the penalty, the factors in section 7 of the Administrative Penalties (Environmental Management Act) Regulation, and the maximum penalty for contravening section 6(2) of the Act. The Board agreed with most of the Director’s findings regarding the penalty amount.

    In addition, the Board found that the Appellant provided insufficient evidence to support its assertion that it was experiencing financial difficulties. Further, regarding the Appellant’s suggestion that the penalty should be reduced to equate to the annual fees it would have paid if it had obtained a permit in 2017, the Board found that the purpose of an administrative penalty is not simply to allow the government to recoup fees that would have been paid if the Appellant was in compliance. Administrative penalties act as a deterrent to prevent future non-compliance. An administrative penalty that only amounted to the cost of unpaid fees would be ineffective as a deterrent, and insufficient for a contravention of this nature. This was particularly so given that the Appellant seems to have only been motivated to enduringly attempt to comply with the Act after receiving notice that the matter was being referred for a penalty.

    Finally, the Board noted that section 7(2) of the Penalties Regulation provides that separate administrative penalties may be imposed for each day that a contravention continues. Given that the contravention in this case continued for hundreds of days between September 2017 and September 2019, the Director could have imposed more than one penalty, but chose not to. This was a potential reason to increase the penalty, but as neither party had argued this point, the Board did not order an additional penalty.

    In conclusion, the Board confirmed the penalty, and dismissed the appeal.