Administrative monetary penalties (“AMPs”) are an enforcement tool for regulatory bodies to deter non-compliance. AMPs impose financial sanctions for regulatory contraventions in an efficient manner as they do not require a traditional court proceeding. Since AMPs are applied through an administrative process and do not result in a criminal record, they are viewed as administrative or civil rather than penal in nature. In some regimes, AMPs may reach the million dollar and beyond range, which raises constitutional concerns about due process and the lack of safeguards to prevent wrongful determinations of liability for contraventions.
In June 2009, Parliament enacted the Environmental Violations Administrative Monetary Penalties Act (“EVAMPA”), initiating the use of AMPs to prevent violations of environmental laws.[1] EVAMPA provides that AMPs are enforced on an absolute liability basis as the due diligence defence and the mistake of fact defence are not available.[2] The Act also set limits on the AMPs, with a maximum penalty for a violation by an individual being $5,000 and that of a corporation being $25,000.[3] The regime was completed in June 2017 when the Environmental Violations Administrative Monetary Penalties Regulations (the “Regulations”) came into force.[4] The Regulations provide the formula for calculating an AMP, including baseline penalties for different violations and aggravating factors that increase the amount of the penalty. The aggravating factors consist of a history of non-compliance, the extent of environmental harm caused, and the amount of economic gain resulting from the violation.[5]
The enforcement of AMPs for environmental violations serves as a clear application of the polluter pays principle. The principle, established during the 1992 United Nations Earth Summit, holds responsible parties accountable for the costs associated with restoring the damages they cause to the environment.[6] All funds received for AMPs are paid into the Environmental Damages Fund to be used for the protection, conservation, and restoration of the environment and the administration of the Fund.[7] By directing the financial penalties into a dedicated fund, rather than the Consolidated Revenue Fund, the AMP regime ensures violators are bearing the cost of environmental remediation.
Since AMPs are generally considered administrative in nature, violators are not afforded the protections under the Charter, such as the presumption of innocence or the right to a fair and public hearing before an independent tribunal.[8] As such, AMP regimes have faced constitutional challenges but have been consistently upheld by the courts.[9] This trend continued with the recent decision upholding the constitutionality of EVAMPA.[10]
In BGIS Global Integrated Solutions Canada LP v Canada (Attorney General), Madam Justice Go of the Federal Court upheld two administrative monetary penalties imposed for the release of halocarbons from chiller systems in two buildings managed by the Applicant.[11] The Environmental Protection Tribunal of Canada affirmed the AMPs in a November 2023 decision which became the subject of the judicial review. Justice Go ultimately found that paragraph 11(d) of the Charter, which guarantees the presumption of innocence for any person charged with an offence, does not apply to the absolute liability regime under EVAMPA.
In assessing the correctness of the Tribunal’s finding that EVAMPA’s barring of the due diligence defence does not infringe section 11(d), Justice Go conducted a fresh analysis of the Wigglesworth test.[12] The Wigglesworth test provides that a matter triggers section 11 of the Charter when either of the following are met:
- The proceeding is criminal by nature, or
- A conviction may lead to a true penal consequence.[13]
On the first branch, Justice Go found that although EVAMPA serves a public purpose of environmental protection, this alone is not determinative of a criminal proceeding. Instead, the scheme is administrative in nature, designed to promote compliance through fair and efficient enforcement mechanisms. Violations under EVAMPA do not result in criminal convictions, carry no risk of imprisonment, and are clearly framed as regulatory contraventions.[14]
Under the second branch, Justice Go rejected BGIS’s claim that the penalties imposed amounted to true penal consequences. While the penalties may serve a deterrent purpose and have potential reputational impacts, their modest monetary value, absence of imprisonment, and lack of proven moral stigma are characteristic of a regulatory rather than penal purpose. The penalties are calculated based on statutory factors tied to compliance, not criminal sentencing principles.[15] As neither branch of the Wigglesworth test was met, Justice Go held that section 11(d) of the Charter was not engaged.[16]
Notably, Justice Go did acknowledge the potential for environmental violations to be viewed as criminal in nature in the future, stating:
It may well be that, as more Canadians become concerned about climate change and attach ever greater importance to the need for environmental protection, there will be those who consider breaches of environmental law immoral and liken such breaches to criminal acts. However, in this case, other than stating there exists such social stigma, BGIS presents no evidence to support its assertion.[17]
We commend Justice Go for this forward-looking comment, which acknowledges the potential evolution of the law in this area. In future cases, this may serve as an invitation for applicants to consider the types of evidence they could present to substantiate claims of social stigma, whether through social science studies, empirical data, or affidavit evidence.
This observation may also signal a future shift in how courts may assess the nature and consequences of environmental AMPs. Justice Go’s decision was based on the specific facts before her, including relatively low penalties of $5,000 per violation and the lack of compelling evidence of stigma. It thus leaves open the possibility that different factual circumstances, such as larger penalties, demonstrable reputational harm, or more severe regulatory consequences, could engage the Charter in respect of AMPS for environmental violations.
The constitutionality of AMPs for environmental violations is critical to ensure that EVAMPA achieves its intended purpose without imposing disproportionate harm to violators. Given EVAMPA’s absolute liability framework, individuals and corporations may be penalized even when they exercised all reasonable efforts to prevent or mitigate environmental harm.[18] That said, EVAMPA does permit those factors to be considered in determining the quantum of the penalty.
In our view, the discussion of stigma in the cases concerning AMPs has led us down the wrong path. Since the standard of proof when an AMP is reviewed is the balance of probabilities, there is a risk of wrongful findings of violations.[19] Concern for this possibility was discussed in Kenneth Jull’s recent article “Wrongful Violations and Innocence in the Regulation of the Digital Economy”. If someone is held financially liable for violations which they did not cause, this poses risks of significant and underserved financial and reputational damages.[20]
This risk is heightened under EVAMPA as the regime does not provide a mechanism for violators to request removal of a violation from their record.[21] This stands in contrast to other AMP frameworks which have withstood constitutional scrutiny in part because they included such mechanisms. In such cases, courts have found that the ability to remove a violation after a fixed period mitigates any stigma associated with the penalty.[22]
Ongoing reputational harm may be particularly unfair where the AMP has already served its regulatory function. Once a violator has paid the penalty, the polluter pays principle is satisfied and additional consequences go beyond deterrence.
Given the courts’ consistent trend of upholding the constitutionality of AMP regimes, it is likely these enforcement tools will remain a fixture of regulatory compliance. Accordingly, the procedural protections afforded to individuals and corporations facing AMPs must continue to evolve. We would propose reform to amend EVAMPA to allow for the removal of records of violations after a defined period or upon further review. This would help reduce the long-term reputational harm associated with even minor or unintentional breaches.
Another potential reform, suggested in Kenneth Jull’s article, is the adoption of a tiered enforcement model that aligns the severity of penalties with corresponding evidentiary standards and adjudicative safeguards.[23] The proposed model includes the following tiers, ranked from most to least severe:
- Regulatory offences and/or criminal offences;
- High stakes AMPs - AMPs with high potential penalty or significant risk of reputational impact; and
- Low stakes AMPs - AMPs with low potential penalty or minimal risk of reputational impact.
The criminal standard of proof, beyond a reasonable doubt, applies to regulatory offences and criminal offences. Low stakes AMPs would employ the current balance of probabilities standard. For high stakes AMPs, those involving significant financial or reputational consequences, a higher standard of proof, such as “clear and convincing”, or in mathematical terms 75% should be required. The difficulty lies in drawing the lines between each tier. At the top, the distinction must draw the line as to what level of AMP is unconstitutional. Such an amount must exist, otherwise the Guindon test to assess the constitutionality of AMP schemes is meaningless.[24] To remind readers, that test determines whether an outcome is punitive as follows:
Whether this is the case is assessed by looking at considerations such as the magnitude of the fine, to whom it is paid, whether its magnitude is determined by regulatory considerations rather than principles of criminal sentencing, and whether stigma is associated with the penalty.[25]
For the boundary between low and high stakes AMPs, a set monetary threshold may be inadequate, as the same penalty can have vastly different impacts depending on the size of the regulated entity. A more equitable approach may be to base tier distinctions on a percentage of the violator’s gross annual revenue. Such a formula is being used in the Competition Act, which was referred to and discussed in the case of Cineplex.[26] This would ensure the categorization of penalties reflects their actual potential impact on the regulated party. Given these complexities, a study by the Law Commission of Canada should be undertaken to guide the legislature in designing more proportionate and constitutionally sound AMP regimes.
Administrative monetary penalties can be an important and effective regulatory tool serving the polluter pays principle, but they must do so in a manner that respects fundamental fairness. While upholding the polluter pays principle is central to environmental regulation, enforcement must be balanced. To reiterate, as Justice Go pointed out, there may be evolution in this area, and, as that evolution occurs, AMPs should adapt accordingly. AMP regimes should be designed not only to deter non-compliance and remediate harm but also to protect against disproportionate or unintended consequences. As these tools become more entrenched in regulatory frameworks, maintaining public confidence in their fairness and legitimacy is essential to their continued effectiveness.
[1] Environmental Violations Administrative Monetary Penalties Act, SC 2009, c 14, s 126 [EVAMPA].
[2] EVAMPA, s. 11(1).
[3] EVAMPA, s. 5(4).
[4] Environmental Violations Administrative Monetary Penalties Regulations, SOR/2017-109 [EVAMPR].
[5] EVAMPR, ss. 4, 6, 7, and 8.
[6] United Nations. (1992). Report of the United Nations Conference on Environment and Development. Retrieved from https://www.un.org/en/development/desa/population/migration/generalassembly/docs/globalcompact/A_CONF.151_26_Vol.I_Declaration.pdf.
[7] EVAMPA, s. 27(3).
[8] Guindon v. Canada, 2015 SCC 41 (CanLII), [2015] 3 SCR 3 [Guindon].
[9] Guindon; Rowan v Ontario Securities Commission, 2012 ONCA 208 (CanLII); 3510395 Canada Inc. v. Canada (Attorney General), 2020 FCA 103 (CanLII), [2021] 1 FCR 615.
[10] BGIS Global Integrated Solutions Canada LP v Canada (Attorney General), 2025 FC 1213 (CanLII) [BGIS].
[11] 2025 FC 1213 (CanLII).
[12] BGIS at paras 57 – 102.
[13] R. v Wigglesworth, 1987 CanLII 41 (SCC), [1987] 2 SCR 541.
[14] BGIS at paras 63 – 86.
[15] BGIS at paras 92 – 101.
[16] BGIS at para 102.
[17] BGIS at para 99.
[18] EVAMPA, s. 11(1).
[19] EVAMPA, s. 20(2); Kenneth Jull and Anna-Gabriella Bismarji, “Wrongful Violations and Innocence in the Regulation of the Digital Economy” (Presented at the Internation Telecommunications Society 33rd European Conference, Edinburgh, 30 June 2025), at page 56 [Wrongful Violations].
[20] Wrongful Violations at pages 50 – 52.
[21] BGIS at para 97.
[22] Mario Côté Inc v Canada (Canadian Food Inspection Agency), 2015 CART 25 (CanLII) at para 36.
[23] Wrongful Violations at pages 60 – 62.
[24] Wrongful Violations at pages 11 – 20.
[25] Guindon v Canada, 2015 SCC 41 (CanLII), [2015] 3 SCR 3 at para 76.
[26] Competition Act, RSC 1985, c C-34; Canada (Commissioner of Competition) v. Cineplex Inc., 2024 Comp. Trib. 5.
