Territorial Court

R. v. Northwest Territories Power Corporation, 2011 NWTTC 03			
Date:  2011 01 19
File:  T1-CR-2008 001484
		          			


IN THE TERRITORIAL COURT OF THE NORTHWEST TERRITORIES


	BETWEEN:

HER MAJESTY THE QUEEN


- and -


NORTHWEST TERRITORIES POWER CORPORATION



REASONS FOR SENTENCE
of the
HONOURABLE JUDGE GARTH MALAKOE




Heard at:	Yellowknife, Northwest Territories
	May 5th to 7th, 2010, September 1st to 3rd, 2010 and October 14th to 15th, 2010

Reasons Filed:			January 19, 2011

Counsel for the Crown:		John Cliffe

Counsel for the Accused:		William McNaughton

[s. 36(3) of the Fisheries Act]



R. v. Northwest Territories Power Corporation, 2011 NWTTC 03
Date:  2011 01 19
File:  T1-CR-2008 001484

IN THE TERRITORIAL COURT OF THE NORTHWEST TERRITORIES



BETWEEN:

HER MAJESTY THE QUEEN

- and -

NORTHWEST TERRITORIES POWER CORPORATION


REASONS FOR SENTENCE


A.	BACKGROUND AND ISSUE
[1]	On June 15, 2006, a dyke holding back waters in a reservoir above a hydro- electric generating station was breached.  Over the next 13 days, water from the reservoir flowed through the breached dyke.  The flowing water carried vegetation, earth and permafrost soils in its path into Strutt Lake.  This resulted in the deposit of sediment into Strutt Lake and the downstream waters of the Snare River system.  The Northwest Territories Power Corporation (“NTPC” or the “Corporation”) has accepted responsibility for depositing a “deleterious substance” into water occupied by fish and has entered a guilty plea to violating section 36(3) of the Fisheries Act.  The Court must impose a suitable sentence.
[2]	 The Crown and NTPC are in agreement as to how the breach occurred, the quantity of material that was washed into Strutt Lake and the downstream waters and the types of fish that inhabited Strutt Lake.  The parties were unable to agree on the effects of the sediment on the fish and fish habitat in Strutt Lake and the downstream waters.  As a result, the Court heard six days of evidence and two days of submissions in this regard.  The impact of the sediment deposit on the fish and fish habitat is a factor to be considered in sentencing.
[3]	The Crown proposes a financial penalty in the range of $600,000 to $700,000, comprised of a fine of $25,000 and an order for the balance to be paid to Her Majesty the Queen, as represented by the Minister of Fisheries and Oceans to be spent for the purposes of promoting the conservation and protection of fish and fish habitat in the Northwest Territories (the “conservation and protection order”).
[4]	The Corporation suggests that a proper and fit sentence is a financial penalty of $200,000 comprised of the $25,000 fine and a $175,000 conservation and protection order.

B.	APPLICABLE LAW
[5]	The accused entered a guilty plea to the following charge as particularized on the Information:
On or between June 15th, 2006 and June 28th, 2006 at or near the Strutt Lake Hydro Facility of the Northwest Territories Power Corporation, at Strutt Lake, near Behchoko, in the Northwest Territories,
The Northwest Territories Power Corporation did unlawfully deposit or permit the deposit of a deleterious substance, to wit:  sediment, in water frequented by fish, to wit:  the waters of Strutt Lake and the downstream waters of the Snare River system, in violation of section 36(3) of the Fisheries Act and did thereby commit an offence contrary to section 40(2) of the Fisheries Act.
[6]	The prohibited act committed by NTPC is described in Section 36(3) of the Fisheries Act, R.S.C. 1985, c.F-14, as amended (the “Act”) which states:
36. (3)  Subject to subsection (4), no person shall deposit or permit the deposit of a deleterious substance of any type in water frequented by fish or in any place under any conditions where the deleterious substance or any other deleterious substance that results from the deposit of the deleterious substance may enter any such water.
[7]	Subsection (4) of section 36 does not apply in this case.  The Crown elected to proceed by indictment and the applicable penalty section states:
40. (2) Every person who contravenes subsection 36(1) or (3) is guilty of
. . .
(b)	an indictable offence and liable, for a first offence, to a fine not exceeding one million dollars and, for any subsequent offence, to a fine not exceeding one million dollars or to imprisonment for a term not exceeding three years, or to both.
[8]	For the purposes of this sentencing, it is accepted that the Court is dealing with a “first offence”.
[9]	In addition to a fine, section 79.2 of the Act grants the Court the discretion to make orders of prohibition, direction or requirement including:
(f) 	directing the person to pay Her Majesty an amount of money the court considers appropriate for the purpose of promoting the proper management and control of fisheries or fish habitat or the conservation and protection of fish or fish habitat;
(i)	requiring the person to comply with any other conditions that the court considers appropriate for securing the person’s good conduct and for preventing the person from repeating the offence or committing other offences under this Act.
[10]	The Act contains no limit to the amount of money payable pursuant to a conservation and protection order granted under section 79.2(f).
[11]	In determining a proper and fit sentence in these circumstances, the Court, by virtue of subsection 34(2) of the Interpretation Act, R.S.C. 1985, c.I-21, as amended, should also consider the provisions of the Criminal Code which relate to sentencing for indictable offences.
34.  (2) All the provisions of the Criminal Code relating to indictable offences apply to indictable offences created by an enactment, and all the provisions of that Code relating to summary conviction offences apply to all other offences created by an enactment, except to the extent that the enactment otherwise provides.
[12]	 In particular, the Court should consider the applicable sentencing principles contained in section 718 of the Criminal Code
[13]	 As indicated in the introduction above, counsel for both the Crown and the Corporation are in agreement that the Court should consider the imposition of a fine and a conservation and protection order.  It is the quantum of the conservation and protection order which is in issue.

C.	SENTENCING OBJECTIVES AND FACTORS
[14]	Determining a fit and proper sentence in an environmental case such as the one before the Court involves an application of the provisions of the legislation and the case law to the facts of the offence.  Ultimately, the goals of the prosecution and sentencing process are “to stop the offending behaviour, to clean up, mitigate or repair any damage that has been done to the environment and to prevent a recurrence of the offence.  In addition to having the effect of ‘specific’ deterrence, the prosecution should also deter others from engaging in similar behaviour.”  These goals were stated at page 1 of Sentencing in Environmental Cases, a Study Paper prepared for the Law Reform Commission of Canada by John Swaigen and Gail Bunt.
[15]	The Court is guided by certain sentencing principles along with a number of sentencing factors, which have been judicially developed and considered in the last thirty or so years.  These principles and factors are applied in an attempt to achieve the stated goals of abatement, remediation and prevention.
[16]	    The main sentencing principles are:  protection of the public, retribution or punishment, and deterrence (see pages 8 to 16 of Sentencing in Environmental Cases).   Each of the sentencing factors which are discussed below will relate to one or more of these principles.  Quite often, the sentencing factors are in conflict since the sentencing principles themselves conflict with respect to their effect on the sentence.  For example, in a situation where a large multi-million dollar corporation has taken almost all reasonable steps to prevent an offence from occurring so that it has a “near miss” from establishing a due diligence offence, the sentencing factor of culpability, by itself, should result in a low fine.  On the other hand, applying a general deterrence factor would result in a high fine.
Public Protection
[17]	A useful starting point in examining the relationship between the various principles and factors is to start with the requirement to protect the public.  Damage to the environment affects everyone and in order to prevent this damage from occurring, it is not sufficient to prosecute only those offenders (usually corporations) who intentionally cause harm.  Consequently, the Courts have treated these “public welfare offences” differently from criminal offences.  The major difference is that in order to prove that an environmental offence such as the offence under section 36(3) of the Fisheries Act has been committed, there is no need to prove mens rea.  A public welfare offence is a strict liability offence where an offender can be convicted if the offender is shown to be negligent.  This is a policy decision of the legislation.
[18]	A public welfare offence is an offence where the offender has taken an action which harms the public as a whole as opposed to causing harm to one individual or some identified group of individuals.
[19]	As Dickson J. stated in R. v. City of Sault Ste. Marie, [1978] 85 D.L.R. (3d) 161 at page 172:
Public welfare offences obviously lie in a field of conflicting values.  It is essential for society to maintain, through effective enforcement, high standards of public health and safety.  Potential victims of those who carry on latently pernicious activities have a strong claim to consideration.
. . .
Public welfare offences involve a shift of emphasis from the protection of individual interest to the protection of the public and social interests . . .
[20]	Often, the harm resulting from an environmental offence is not immediately ascertainable.  For example, the deposit of a few litres of hydrocarbons in a river system may not kill any fish; however, if the act is repeated, there will be a cumulative effect that will be harmful.  Yet, the first offender who deposits the hydrocarbons even where the harm is not ascertainable should be treated in the same way as the last offender whose incremental deposit results in ascertainable harm.
[21]	Normally, public welfare offences occur in the context of regulatory legislation.  Modern industries, to achieve their valid corporate objectives, may discharge certain waste or use certain resources.  The government determines what allowable levels of discharge or use should be and regulates the industry.   When a corporation exceeds these allowable levels, they are creating actual or future harm.
Retribution
[22]	The sentencing principle of retribution is based on the theory that each offence and the immoral behaviour of the offender in committing that offence should attract a certain penalty which reflects society’s condemnation or opprobrium of that behaviour.  It is based on a model of society where each member (including corporations) is to behave in a certain way.  When a member commits an offence, he or she is taking an advantage that other members do not and that advantage must be removed and the offender punished.  The punishment is a reflection of society’s condemnation of that immoral behaviour.  Section 718.1 of the Criminal Code is a statement of this principle:  “a sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender.”
[23]	Applying retribution by itself in the absence of other sentencing principles would mean that an environmental offender who was negligent but not morally blameworthy should receive little or no penalty.
Deterrence
[24]	The sentencing principle of deterrence is based on a model which punishes the offender sufficiently that he or she will not offend again (specific deterrence) and to such a degree that others who are in the same position as the offender was in, will not offend because they do not want to incur the same penalty (general deterrence).
[25]	Neither of the principles of retribution or deterrence alone account for the factors that are appropriate in determining sentences in environmental cases.  As stated earlier, regulatory or public welfare offences do not require moral culpability.  Yet, we will see that even in situations where there may be no moral culpability, there is still a requirement to punish the offender so that this offender or potential offenders will not commit this offence in the future.
Parity
[26]	In addition to the three basic sentencing principles of public protection, retribution and deterrence, the Court should also respect the principle of parity.  This is stated in section 718.2(b) of the Criminal Code as:  “a sentence should be similar to sentences imposed on similar offenders for similar offences committed in similar circumstances” and noted by the Alberta Court of Appeal in R. v. Terroco Industries Ltd., [2005] A.J. No. 361 at paragraph 65.
[27]	As a final note with respect to sentencing principles, I have not included “rehabilitation or reform” as a sentencing principle, although it is clearly a principle in the sentencing of criminal matters.  I adopt the logic of the authors of Sentencing in Environmental Cases (at page 13) that “terms such as rehabilitation should be restricted to human offenders and methods of correcting, reforming or otherwise changing corporate conduct are more appropriately discussed in the context of deterrence.”
[28]	I have included the above-noted comments on the principles of sentencing in environmental cases since these principles animate the factors that will be applied below.  As a factor is applied in a particular case, however, it is sometimes necessary to step behind the factor to determine the objective.
[29]	It is largely because of the characterization of environmental offences as public welfare offences that the sentencing approach in an environmental offence has to be different from that in a criminal case.  A special approach has to be taken. As stated in R. v. United Keno Hill Mines (1980), 10 C.E.L.R. 43 (Y. Terr. Ct.) at paras. 6:
In sentencing corporations and in dealing with environmental offences, courts on both sides of the border have evolved a body of sentencing law that is a special application of common sentencing principles.  In R. v. Kenaston Drilling (Arctic) Ltd., (1973) 12 C.C.C. (2d) 383, the Court explicitly acknowledges a “special approach” is required in sentencing corporate environmental offenders.  What is this special approach?  Why is there a need for a special approach in the case of corporate offenders committing breaches of environmental laws?  In setting out the considerations underlying the sentence in this case, I will deal with some of the numerous issues raised in the evolution of this “special approach.”  It is an evolution spurred on by the legislators and courts in their search for an equitable yet effective scheme to prevent environmental offences.
[30]	In stating that the sentencing approach for an environmental offence is different than for a criminal offence, I am not suggesting that environmental offences are not crimes.  To the contrary, I adopt the Court’s statement at page 47 of the United Keno Hill Mines case:
The range of inherent criminality in pollution offences can be extreme.  Actions may be negligent or premeditated and the ramifications may range from trivial littering offences to offences precipitating untold destruction to resources, property and in some cases death.  Each offence must be sentenced in accord with its specific facts – but pollution offences must be approached as crimes, not as morally blameless technical breaches of a regulatory standard.
[31]	The Alberta Court of Appeal in the Terroco case stated that the relevant factors in an environmental sentencing case included the following:
(a)	culpability of the offender;
(b)	prior records and past involvements with the authorities;
(c)	acceptance of responsibility;
(d)	damage/harm; and
(e)	deterrence.
[32]	In public welfare offences, an offender is guilty of the offence if the actus reus stated in the legislation occurred and the offender is unable to establish that he or she took reasonable steps to prevent its occurrence.  If the offending act took place but the accused can establish due diligence, then the accused is not guilty.
[33]	So from a culpability point of view, an offender who is convicted of a public welfare offence can be placed on a scale with two extremes.  At one end is the offender who took almost all reasonable precautions to prevent the breach of the law from occurring but is not able to establish the defence of due diligence.  This can be described as a “near miss”.  At the other end of the scale is the offender who intentionally broke the law.
[34]	From a retribution point of view, the “near miss” offender should be punished less severely than the “intentional” offender.
[35]	An offender who has been warned by regulatory officials in the past or who has committed the same offence in the past is, by committing the offence again, demonstrating either a disregard for the law or an indication that the penalty imposed in the past was insufficient to deter his or her activity.  An offender who is dealing with the regulatory officials for the first time will normally receive a lesser penalty than one who has dealt with officials in the past.
[36]	Offenders who exhibit remorse for committing the offence are treated more leniently.  The theory is that the remorseful offender is already indicating signs that he or she will not re-offend and therefore specific deterrence is not an issue.  Indications of remorse which are recognized by the Court include a guilty plea, statements and actions of remorse by the officials of the corporation, changes to policies and procedures to prevent similar offences in the future, immediate reporting and cooperation with authorities and immediate measures to mitigate and clean up any damages.
[37]	It is recognized that apparent expressions or actions of remorse have to be examined within the context that the offender gives them and not simply accepted, without scrutiny, as mitigating the sentence.  For example, a guilty plea which is entered by a corporate offender in a situation where a finding of guilt would be inevitable is of limited value.  Similarly, if the offence was clearly the result of inadequate or improper procedures or policies which should have been obvious to the offender prior to the offence, then changing the policies and procedures after the offence is to be expected. Finally, legislation such as the Fisheries Act contains provisions which create liability for failure to report breaches of the Act or failure to clean up spills.  It is not a mitigating factor if the offender is simply complying with the legislation.
[38]	  It is established law that within the context of environmental offences, damage or harm to the environment need not be established to prove the offence.  Environmental legislation is aimed at acts which have the potential to harm the environment.  An offender who is negligent and commits a prohibited act which does not result in actual harm or damage to the environment or for which the harm is not ascertainable is still guilty of the offence.  If the harm is proven to have occurred, then this is considered to be an aggravating factor which increases the penalty depending on the severity of the harm caused.
[39]	As stated in R. v. Shamrock, an unreported case of the Ontario Provincial Offences Court on February 13, 1989, at page 7:
If public welfare offences are “preventative” and their purpose is to set high standards, no actual damage should be necessary to attract substantial penalties.  The degree of risk or potential harm inherent in the activity should be the primary criterion for a substantial penalty, and actual harm an aggravating factor.  This view is reinforced by the fact that actual harm is not an element of many environmental offences.  Where conviction can be based on a mere possibility or a likelihood of harm, the fact that no serious harm resulted should not necessarily lead to an inconsequential penalty.
[40]	The issue of potential damages versus actual damage was also considered by the Nunavut Court of Justice in R. v. City of Iqaluit, Unreported Decision, August 8, 2002:
[6]  There is no evidence in this case that the discharge of sewage in this case resulted in any fish kills or any other readily identifiable signs of environmental degradation.  However, it is the potential for harm to the environment that is the gravamen of this offence. Actual damage where proved, is an aggravating circumstance that would likely elevate the sentence that would otherwise be imposed.
[41]	In any situation where damage to the environment is ascertainable, it is expected that the offender will pay the cost of remediation.  An offender who does not clean up the environmental mess that it has created will pay for the clean up as part of the penalty associated with sentencing.  This is the “polluter-pay principle” referred to in Nova Scotia Attorney General v. Marriott (2008), NSSC 160 and described at paragraph 39 as “being firmly entrenched in environmental law in Canada”.
[42]	Many cases have stated that deterrence is the single-most important factor in sentencing environmental offenders.  If the goals of sentencing in environmental cases are to “abate, mitigate and prevent”, as indicated in the introductory remarks, then a penalty which prevents a particular offender and other potential offenders from committing offences in the future is necessary in order to achieve the last of these goals.
[43]	The combined effect of prosecution and a fine in providing both general and specific deterrence is stated in the following quote from pages 14 and 16 of Sentencing In Environmental Cases:

The basic rule in environmental cases, as in other cases, is that “without being harsh, the fine must be substantial enough to warn others that the offence will not be tolerated.  It must not appear to be a mere licence fee for illegal activity.” . . . [O]ffenders often respond to prosecution by making substantial improvements even when faced with small fines.  Thus, prosecution does provide “specific” deterrence.  Whether it also results in general deterrence is questionable, and potential exposure to higher fines may be important in this respect.  Regardless of the accuracy of this perception of undue leniency, it must be dealt with or it will result in erosion of respect for environmental laws and their enforcement
[44]	In the context of a monetary penalty, the fine must be not less than an amount which will cause the offender to take all reasonable precautions to prevent the offence from occurring again.  If it is more economic for the offender to pay the fine instead of taking the reasonable precautions, then specific deterrence will not be achieved.  Other corporations who are in similar situations as the offender will make the same economic assessment.
[45]	In order to determine the appropriate quantum of fine to achieve deterrence, the Court must know something about the financial position of the offender.  Normally, this would include the information on a balance sheet of the corporation along with revenue and expenditures.
[46]	It is not unusual in environmental sentencing cases to have an offender who requires little or no specific deterrence.  It may be obvious that a particular offender “has learned its lesson and this will never happen again.”  In such a case, the principle of general deterrence will still require the imposition of a penalty which will deter others.
[47]	Finally, with respect to deterrence, there are non-monetary penalties which may be effective to deter future offences.  Negative publicity can be very effective with respect to certain types of corporations.

D.	APPLICATION OF SENTENCING FACTORS
[48]	Before applying the above-noted sentencing factors and principles to the case before the Court, it is useful to make some general observations about the facts in this case, and in particular the circumstances which present challenges when determining a fit and proper sentence.
[49]	At a broad level, this case involves water and land and hydro-electricity generation.  By the nature of the industry, the generation of electricity using water requires the reconfiguration of land and water in a controlled way.  Permits are obtained.  Dams are built.  Reservoirs are created.  Land is flooded.  What was once dry terra firma becomes a lake bed.
[50]	In the offence before the Court, a dyke was breached and the contents of a reservoir spilled through the breach into Strutt Lake.  Water rushing into a lake, by itself is not an offence.  An offence occurred because the rushing water acted as the transporter for 111,000 m3 of vegetation, earth and permafrost soils into Strutt Lake.
[51]	Once the dyke breach was plugged and the rushing water stopped, the land and water had been reconfigured, albeit in an uncontrolled way. NTPC admits that the sediment deposited in this quantity and with this force was the deposit of a substance which was deleterious to fish and fish habitat.
[52]	In simplistic terms, the position of NTPC is that nature will adapt or has already adapted to this reconfiguration.  The sediment is inert.  It will become or has already become the home of primary and secondary fish food producers and there are signs that the impacted area once again supports the presence of fish.
[53]	The position of the Crown is that there was a catastrophic event which resulted in certain changes that are irrevocable and there is no proof of recovery to any substantial extent.
[54]	Regardless of how each party characterizes the effect of the sediment deposit, it is clear that the parties have accepted that there is no cleaning up the sediment that was deposited into Strutt Lake and the downstream waters.  The sediment has settled where it has settled (subject to re-suspension) and no one is suggesting that the Corporation take steps to change this.  This means that a cost which is usually incurred by the offender in pollution cases, i.e., the cost of cleaning up the pollutant, is not present in this case.
[55]	In the paragraphs that follow, I will review and apply the sentencing factors in the context of this case and deal with the contentious issue of damages or harm.
Culpability of the Offender
[56]	The Alberta Court of Appeal in Terroco suggested that the judge, when sentencing in an environmental case, should first decide where on the sliding scale of culpability the offending act should be placed.  As the offender’s culpability increases and approaches “intentional”, the severity of punishment should increase.
[57]	On June 14, 1996, the NTPC plant operator at the remote site where the dyke breached noticed ponding on Dyke 1.  This was an indication that the level of the water in the reservoir had reached the level of the dyke.  NTPC arranged to have heavy equipment operators flown into the site. The operators were delayed because the charter flight was delayed.  By the time the crew arrived on June 15, 1996 at 2:15 p.m., the breach in the dyke had already occurred.  The breach was 30 meters to 40 meters wide.
[58]	No evidence was called with respect to the mechanics of the dyke breach.  To a layperson, it might be expected that if the water level of a container exceeded the height of the walls of the container, then the excess water would simply spill over the top.  In this case, instead of the water spilling over the “wall” of the “container”, i.e., Dyke 1 of the Forebay Reservoir, the water eroded the material forming the dyke; the dyke breached and let the contents of the reservoir escape.
[59]	Because Dyke 1 was a semi-permeable dyke, water was passing through it even when it was intact.  This water followed a path to Strutt Lake (the “pre-breach channel”).  When the dyke breached, the water followed a similar path; however, because of the quantity of water and its force, the channel was made much wider and deeper as the 111,000 m3 of vegetation, earth and permafrost soils were eroded (the “breach channel”).
[60]	NTPC operates 28 separate power systems that span more than 1.1 million square kilometres.   I can only assume that with the Corporation’s experience and because the Corporation did not present evidence to the contrary, it was entirely foreseeable that if the water level in the Forebay Reservoir exceeded the crest height of Dyke 1, that the dyke would be breached.
[61]	The issue of forseeability is important to the issue of culpability.  If it was reasonably foreseeable that if the water of the reservoir exceeded the dyke height that the dyke would breach and the water would carry the vegetation and soils into Strutt Lake, then the Corporation was aware of the seriousness of the consequences of a breach.  Consequently, these consequences, in part, dictated the reasonableness of the precautions that should have been taken and the duty of care that should have been exercised by the Corporation.
[62]	This likelihood of harm required that the Corporation take more care in preventing the breach from occurring.   As stated at page 52 of R. v. Placer Developments Ltd. (1984), 13 C.E.L.R. 42 (Yukon Terr. Ct.):
. . . The greater the likelihood of harm, the higher the duty of care.  What particular facts heighten or diminish the likelihood of an accident will vary in each case.   Assessment of the likelihood of harm is based on what an appropriately qualified expert might reasonably predict.
The size of the operation, remoteness, special climactic conditions, the inherent risks in the activity or in the materials used, all weigh heavily in determining the likelihood of risk. . .
[63]	That the water level was allowed to exceed the crest level has been attributed to the failure of an NTPC engineering staff member to tell operating staff that the crest level of Dyke 1 was 174.7 meters, which was 0.9 meters lower than what the operating staff had been advised.  This information was contained in a report resulting from a centreline survey performed in August of 2005.
[64]	This omission does make the offence a “near miss” of due diligence.  The interaction between water levels in reservoirs and the surrounding restraining structures is central to the business of hydro-electrical generation.  The consequences of a failure to forward the height of a dyke to the people monitoring the water level are very serious from a business point of view and more importantly for our purposes, from an environmental point of view.  The accused should have had procedures and redundancies in place that would have prevented such an omission from occurring.
[65]	In placing the offender in the lower to mid range of the culpability scale, I also take into account that the Corporation had arranged for regular dam safety reviews by independent consultants and for regularly scheduled internal inspections.
Prior Record and Past Involvement with Authorities
[66]	The offender has one previous conviction under the Fisheries Act, being a conviction on December 6, 1989.  The Corporation received a fine of $15,000 after pleading guilty to allowing the spill of 3,000 litres of fuel oil into the waters of Hudson Bay.  The offence took place approximately 3 months after the formation of NTPC and the takeover from the Northern Canada Power Commission.  It occurred in Rankin Inlet, which was then part of the Northwest Territories and is now in Nunavut.  The offence had nothing to do with the hydro power system operated by NTPC.  The Rankin Inlet facility is now owned by Qulliq Energy Corporation.
[67]	Given that the previous offence occurred over 21 years ago, that it is unrelated to the current operations of NTPC and that none of the people involved with the site where the prior offence occurred are currently employed by NTPC, the conviction is not relevant for the purposes of the sentence to be imposed.
[68]	No other past involvements between NTPC and authorities acting under the Fisheries Act were brought to this Court’s attention.
Acceptance of Responsibility
[69]	As indicated earlier, the acceptance of responsibility by the offender is an important factor in sentencing.  A greater acceptance of responsibility is an indication that specific deterrence has already been achieved.  It also saves the public the cost of investigation and prosecution.  In the case before the Court, NTPC submits that the following are factors related to acceptance of responsibility which should result in a mitigation of sentence:
(a)	guilty plea;
(b)	early reporting, cooperation and remedial actions;
(c)	changes to practice and procedures; and
(d)	personal appearance of corporate representative.
[70]	In my view, the offender should be given some substantial credit for its guilty plea.  The Court was advised that a guilty plea was part of the discussions between the Crown and NTPC prior to the Information being laid in November 2009.  The guilty plea by the Corporation was subject to reaching agreement with respect to the Statement of Agreed Facts.
[71]	Had the Crown been forced to prove its case, I anticipate the trial would have required substantial court time and resources.  The Crown would have been required to call expert testimony on the standard of care with respect to the maintenance of the dykes and proper internal procedures. The guilty plea removed the requirement for this cost.  In addition, the guilty plea, along with the other actions taken by the offender, demonstrate that NTPC has directed its energies to remedying the problem as opposed to “fighting the charge.”
[72]	 The evidence before the Court shows that NTPC reported the dyke breach to the appropriate authorities very shortly after the incident.  In addition, the Corporation had a crew and equipment on site immediately to try and close the breach.  There is no doubt that the efforts by NTPC in this regard were quick and rigorous.
[73]	Finally, once the dyke was repaired, the Corporation took action to ensure that the breach channel was stabilized so that further sediment being carried into Strutt Lake was minimized.  There was one further involvement of the Department of Fisheries and Oceans on September 12, 2006, when it issued a Direction regarding the measures taken in the breach channel to prevent further sedimentation.  This was complied with quickly by the Corporation.
[74]	As stated earlier, I am able to recognize these as being the actions of an offender who has accepted responsibility for the offence.  In the context of the Fisheries Act, however, there are statutory requirements for reporting the deposit of a deleterious substance (see section 38(4)) and to “counteract, mitigate or remedy any adverse effects that result or may reasonably be expected to result from” the incident (see section 38(5)).  In addition, section 78.1 of the Act provides that a contravention of the Act committed or continued on more than one day constitutes a separate offence for each day on which the contravention is committed or continued.
[75]	This means that the offender would be liable to additional penalties if it did not report the incident; if it did not take immediate action to remedy the breach and if it did not take remedial action with respect to the effects.
[76]	For these reasons, in the context of the Fisheries Act, the early reporting, cooperation and remedial actions are neutral actions with respect to sentencing.
[77]	With respect to the continuing nature of the offence over 13 days, I accept that the water escaped through the breached dyke and through the breach channel for that period of time.  There is no evidence, however, as to whether the sediment was deposited into Strutt Lake throughout the 13 day period or whether it was all washed into Strutt Lake at the beginning of that time period.
[78]	Prior to the incident, NTPC commissioned a “Comprehensive Dam Safety Review.”  The review was conducted after the incident.  The Corporation has implemented recommendations contained in the report along with a system to ensure better coordination between the operations and engineering departments.  In addition, further preparedness planning was implemented by stockpiling material for dyke repair, purchasing equipment and instituting a preventive maintenance system.
[79]	From a sentencing point of view, these are clearly indications that the offender has “learned from its mistakes”.  I do not regard these actions as mitigating the sentence.  They are measures that one would have expected to have been in place prior to the incident.  Had the Corporation not taken these actions after the incident, I would have considered the failure to be aggravating.
[80]	The President and Chief Executive Officer of NTPC, Leon Courneya, was present during the entire sentencing proceedings.  This demonstrates a commitment on the part of the Corporation to dealing with the offence and preventing it from happening again.  This appearance is a mitigating factor on sentencing; however, the effect is somewhat limited without some statement or participation by the corporate representative.
Damage/Harm
[81]	When considering the sentencing factors other than damage and harm, the Court has proceeded based on the facts that were contained in the Agreed Statement of Facts.  Although the Crown and NTPC have each made different submissions as to how the law should be applied to the facts with respect to these sentencing factors, there was no controversy about the facts themselves.
[82]	With respect to the amount of actual damage or harm that was caused to the fish and fish habitat in Strutt Lake and the Snare River system, there was no agreement between the Crown and NTPC.  As a result, the Crown called Paul Donnelly, a Fishery Officer at the time of the offence; Dr. Ian Birtwell, an expert in the effect of sediment on fish and fish habitat; and Dr. Cheryl Podemski, an aquatic biologist specializing in fresh water benthic invertebrates.  NTPC called Brian Kirkham, a biologist and Dr. Peter Chapman, an expert in aquatic ecology and the impacts of stressors including sediment on aquatic ecology systems.  This viva voce evidence took six days to hear.
[83]	   In a sentencing hearing, the Crown must prove aggravating facts beyond a reasonable doubt.  This requirement is stated in section 724(3)(e) of the Criminal Code and explained in R. v. Gardiner, [1982] 2 S.C.R. 368 at p.26.
[84]	With respect to the immediate and short term effects of the incident on the fish and fish habitat in the waters of Strutt Lake and the downstream waters of the Snare River system, I accept the following description of Dr. Birtwell:
Clearly, at the junction of the erosion channel with Strutt Lake, the extensive deposition of material that created a delta would have obliterated the previous habitat in that area and its biological components and replaced it with that from the land.  It would also have displaced a volume of water, and radically changed the aquatic habitat.  The habitat in that location has been irreparably changed, and at distances from this location one would expect a gradation of depositional impacts as well as those from suspended sediment and turbidity.  The impacts therefore would encompass the water column, the substrate beneath, and their biological communities.  This was a catastrophic event for such pristine waters that resulted in large scale damage to fish and fish habitat.  Furthermore, without stabilization of the erosion channel, it would be expected that turbid water will enter Strutt Lake from the channel during the warmer ice-free times of the year; conveyed there by the continued flow of water through the upstream permeable dyke.

It was estimated that a significant amount of organic material entered the lake.  This soil and vegetation would, over time, contribute to the organic enrichment of the lake.  It could also lead to reduced oxygen conditions under ice which has implications for over-winter habitat for fish, and to other organisms.

The timing of this erosion event coincided with predicted seasonal, and significant, fish use of critical shallow water areas for reproductive purposes, and it occurred during the summer period when biological production is typically high:  a time when fish must garner enough food to enable them to survive winter conditions.  Furthermore, some fish disperse in the upper water column (e.g., larval walleye), and so would be exposed to turbid waters at this time.  Certain life stages of fish and other organisms would display different tolerances to the sub-lethal stress imposed by the erosion event.  However irrespective of these attributes and adaptations, every species of fish in the Strutt Lake – Snare River system would have been adversely affected by the erosion event and perhaps no life stage more so than their eggs, larvae and juveniles which would have been in shallow waters at that time.

The foregoing information and assessment reveal that sediment levels in waters entering and within Strutt Lake were elevated to values that, in my opinion, would be harmful to fish and their habitat.  It is also deduced that in some locations there has been irreparable harm to fish habitat.

In conclusion, it is my opinion that the erosion of land caused by the flow of water from the breaching of Dyke #1 at the Snare Forks Hydroelectric Facility, and its entry into Strutt Lake, would have destroyed fish habitat and fish:

	the elevated concentrations of suspended sediment in the waters of Strut Lake and waters downstream would have been harmful to fish; and
	the eroded land that was deposited into Strutt Lake, and the associated reduced clarity of water harmfully altered, disrupted, and destroyed fish habitat (including food organisms) and also had a detrimental effect on fish.
[85]	Based on the examination and cross-examination of Dr. Birtwell, I did not take him as opining that:
(a)	the areas in Strutt Lake and downstream which were affected by the sediment deposit would never be a fish habitat or support fish;
(b)	a quantifiable number of fish or fish eggs were killed by the breach;
(c)	the deposit of sediment in various parts of Strutt Lake and the Snare River system was measurable; or
(d)	the pre-breach “pristine waters” of Strutt Lake and the Snare River system did not include some natural turbidity.
[86]	I took Dr. Birtwell’s testimony as stating that there had been changes to the habitat which would never be reversed to their pre-breach conditions.  Aside from the delta formed at the mouth of the breach channel, over some unquantifiable period of time, fish would again be supported in the affected area.
[87]	I accept the observations of Byron Kirkham and the resultant conclusions of Dr. Chapman that there are signs of existence of secondary production (aquatic invertebrates) and tertiary production (fish, including juveniles/fingerlings and adult fish) in the affected areas.  Although I accept that Mr. Kirkham’s sampling may be flawed from a scientifically rigorous point of view, it is a qualitative study which does show the existence of secondary and tertiary production.
[88]	I do not fault the Crown for failing to provide evidence of the exact nature and extent of the damage caused by the deposit of 111,000 m3 of vegetation, earth and permafrost soils into Strutt Lake and the downstream waters.  Exact measurements of turbidity, total suspended solids, fish and fish habitat were not available for the pre-breach waters.  There was nothing to compare post-breach measurements to.  In this regard, I am presuming that the turbidity measurements in the Rescan Report entitled “Biological Characterization of the Snare River System” (Exhibit 28) were insufficient for this purpose.
[89]	The difficulty of proving an ascertainable and quantifiable harm is present in most environmental cases, not just this one. In the end, I accept Dr. Chapman’s conclusion that:
Although some habitat has been lost, new habitat has also been created.  In the absence of before and after data, it is not possible to quantify habitat gains and losses.  Thus, although recovery will not be to exactly the same structural conditions as pre-breach, the ecology of Strutt Lake and downstream lakes has not been irreparably damaged.
[90]	Fish were killed.  Fish habitat was destroyed.  The Crown has not shown beyond a reasonable doubt that the fish population and fish habitat will not recover, where “recovery” means a fish population and fish habitat at the same level of productivity as it was pre-breach.
[91]	Having come to this finding, I am still of the view that this was a “catastrophic event” as stated by Dr. Birtwell.   The ability of nature to adapt to such an event is not something that should mitigate a sentence.  The magnitude of the sediment deposit and the killing of fish and the obliteration of fish habitat is an aggravating factor on sentencing.
[92]	With respect to the issue of harm, the nature of the environment is a factor to be considered.   Many cases from Northern Canada including United Keno Hill Mines recognized that the nature of the environment damaged may be an aggravating factor.  At page 47 of United Keno Hill Mines, the Court stated:
In sentencing assault cases, the courts consider the nature of the victim (relative ability to defend, provocation) and the degree of injury (permanent or temporary disability, etc.).  Similarly, in environmental cases, the courts do and should vary the severity of sentence in accord with the nature of the environment affected and the extent of damage inflicted.
a.  Nature of Environment.  A unique ecological area supporting rare flora and fauna, a high use recreational watershed, or an essential wildlife habitat, are environments calling upon users to exercise special care.  Any injury to such areas must be more severely condemned than environmental damage to less sensitive areas.
[93]	With respect to Strutt Lake and the downstream waters, it was agreed that these were “remote northern waters frequented by a number of species of fish.”  The waters are oligotrophic.  The breach channel consisted of vegetation, earth and permafrost soils. The environment threatened and affected are the lands of the Tlicho peoples.
[94]	There is no evidence before the Court that the environment affected was of the fragile nature described in United Keno Hill Mines, R. v. Kenaston Drilling (Arctic) Ltd. (1973), 12 C.C.C. (2nd) 383 (N.W.T. S.C.) or R. v. City of Iqaluit.
Deterrence
[95]	As has been stated earlier, this factor is the dominant factor in environmental sentencing.  What is the penalty that will deter NTPC from allowing this type of offence to occur again and will deter other corporations from allowing this type of offence to occur in the future?  Stated from a positive point of view, what is the penalty that will cause NTPC and other corporations to review and if necessary, take further precautions so such an incident will not occur in the future?
[96]	Given what has been stated earlier about the acceptance of responsibility by NTPC, the objective of sentencing as specific deterrence appears to have been largely met by the process of investigation, prosecution and sentencing.
[97]	With respect to general deterrence, a third party will note the penalty assessed to NTPC and recognize that if it offends in a similar fashion, it will be treated in the same way.  “Treated in the same way” cannot mean that the penalty will be exactly the same.  It simply means that the effect on the offender should be the same.  The deterrent effect of a monetary penalty is related to the offender’s ability to pay.  A million dollar fine to a corporation which has a yearly income of $100M may very well have less of a deterrent effect to that corporation than a $10,000 fine to another corporation which has a yearly income of $100,000.
[98]	In establishing the appropriate monetary amount to achieve deterrence in the case of NTPC, it is necessary to look at the size of the entity.  NTPC is a profitable public corporation which in 2008/2009 had a net income of $7,201,000.  As of the same time period, it had property, plant and equipment after amortization and including construction work in progress worth $262,267,000.
[99]	The Court was advised that to April, 2010, NTPC had expended approximately $1,158,000 on site remediation in respect of the breach of Dyke 1.  This includes approximately $574,000 on environmental work and $584,000 on engineering work (including the repair of Dyke 1).
[100]	A penalty in the amount of $200,000 would be 2.78% of the Corporation’s annual net income.  A penalty in the amount of $700,000 would be 9.72% of its annual net income.

Maximum Penalty under the Fisheries Act
[101]	As stated earlier, the maximum fine that can be imposed with respect to an indictable first offence contrary to section 36(3) of the Act is $1,000,000.  A conservation and protection order under section 79.2(f) has no monetary limit.
[102]	In a situation where there has been some identifiable, ascertainable and quantifiable (from a monetary aspect) damage which is to be addressed by the conservation and protection order, then I do not see that the combined amount of the fine and conservation and protection order need be limited by the $1,000,000 maximum fine amount in section 40(2)(b) of the Act.
[103]	In the case before the Court, the parties have given me no reason to believe that the separation of the monetary penalty into a section 40(2)(b) component and a section 79.2(f) component is anything but a desire to ensure that the money stays in the Northwest Territories in order to address the conservation and protection of fish and fish habitat.
[104]	For this reason, in these circumstances, I consider the appropriate range of overall penalty that should be imposed to be limited to the $1,000,000 maximum.
[105]	With respect to environmental sentencing cases, a fine at the high end of the sentencing range is reserved for those cases involving intentional or wilfully reckless conduct.  The Court in R. v. Panarctic Oils Ltd. (1983), 12 C.E.L.R. 78 (N.W.T. Terr. Ct.) at paras. 27-28 held that a maximum or near-maximum penalty must be reserved for “the worst case category” citing with approval the following passage of the Yukon Court of Appeal in R. v. Cyprus Anvil Mining Corporation (1976), 5 C.E.L.N. 117 (Y. C.A.) at paras. 12-13:
I am of the opinion that although the quantity [of the substance discharged] comes into the “worse case category,” there are other matters which one can envisage which make this situation worse, such as deliberateness, recklessness, a cavalier disregard for the regulations, and the instructions of various environmental authorities.  The maximum penalty must be reserved for those cases.
[106]	Given my findings with respect to culpability, I do not find that the case before the Court is in the “worst case category”.
Parity
[107]	The principle of parity directs courts to give similar sentences to similar offenders for similar offences committed in similar circumstances.  In reviewing environmental sentencing cases, it is soon apparent that finding a “similar case” is no easy task.  As the Court of Appeal said in at paragraph 65 in Terroco, “Offences under these statutes are similar to manslaughter in that they may be committed in practically infinite variety. Manslaughter ranges from near accident to near murder.  These offences range from incidents where due diligence is a near miss to ones where the Crown nearly establishes intentional conduct.”  Moreover, the nature and extent of damages adds another dimension of complexity.
[108]	I have reviewed the cases provided by counsel for the principles contained therein.  These include the cases cited throughout these Reasons for Sentence along with R. v. Alpha Manufacturing Inc. (2005), 18 C.E.L.R. (3d) 194 (B.C. S.C.); R. v. Amoco Canada Petroleum Co. (1993), 13 C.E.L.R. (N.S.) 317 (Alta. Prov. Ct.); R. v. Brown, [2010] B.C.J. No. 1085 (B.C. C.A.); R. v. Canadian Forest Products Ltd. (1977), 24 C.E.L.R. (N.S.) 6 (B.C. Prov. Ct.); R. v. Canadian National Railway Company (25 May 2009), North Vancouver 49026-1 (B.C. Prov. Ct.);  HMTQ v. Canadian National Railway Company, (May 25, 2009) Alberta Provincial Court (Docket Nos. 060656030P1 and 080152564P1); R. v. Dawson (City) (2003), 50 C.E.L.R. (N.S.) 99 (Y. Terr. Ct); R. v. Demolition & Recycling Inc. (2009), 45 C.E.L.R. (3d) 222 (Ont. C.J.); R. v. Echo Bay Mines, [1993] N.W.T.J. No. 44 (QL) (N.W.T. Terr. Ct.); R. v. Gulf Canada Corp. (1987), 2 C.E.L.R. (N..) 261 (N.W.T. Terr. Ct.); R. v. Iqaluit (City) (2002), 20 C.E.L.R. (N.S.) 116 (Nun. Ct. J.);  R. v. Northwest Territories (Commissioner) (1993), 12 C.E.L.R. (N.S.) 55 (N.W.T. Terr. Ct.); R. v. Royal Oak Mines Inc., [1992] N.W.T.J. No. 72 (QL) (N.W.T. Terr. Ct.); R. v. Suncor, [1994] A.J. No. 854 (QL) (P.C.); R. v. Tioxide, [1993] J.Q. No. 852 (QL) (Q. S.C.); R. v. Whitley, [2000] O.J. No. 5799 (QL) (On. C.J.).
[109]	Having analyzed and balanced the sentencing factors indicated above and recognizing the ultimate goals of environmental sentencing, it is my view that a penalty in the amount of $450,000 is a proper and fit sentence.

E.	SUMMARY

[110]	NTPC is ordered to pay a fine of $25,000 pursuant to section 40(2)(b) of the Act.  In addition, the Corporation is ordered to make a payment of $425,000 to Her Majesty the Queen as represented by the Minister of Fisheries and Oceans to be spent for the purposes of promoting the conservation and protection of fish and fish habitat of the Northwest Territories, pursuant to section 79.2(f) of the Fisheries Act.   In the absence of further submissions by counsel, the Corporation will have three (3) months to make these payments.



		
		Garth Malakoe
J.T.C.
Dated at Yellowknife, Northwest Territories, this 19th day of January, 2011.		

	
T1-CR-2008 001484


IN THE TERRITORIAL COURT OF THE NORTHWEST TERRITORIES



BETWEEN:

HER MAJESTY THE QUEEN

- and -

NORTHWEST TERRITORIES POWER CORPORATION





REASONS FOR SENTENCE
of the
HONOURABLE JUDGE GARTH MALAKOE