Starting August 13, 2026, certain companies engaged in industrial activities deemed high-risk will be subject to minimum fines ten times higher in the event of a violation of the Environment Quality Act (EQA). This reform is part of a broader trend aimed at strengthening the deterrent effect of environmental sanctions and encouraging companies to ensure their compliance with applicable legislative and regulatory requirements.
A Major Tightening of the Environmental Penalty Regime
On August 12, 2026, the Ministry of the Environment, the Fight Against Climate Change, Wildlife and Parks (MELCCFP) announced the entry in force of a new regime applicable to companies carrying out certain industrial activities deemed high-risk. According to the government, this reform aims to better align penal sanctions with the environmental risks associated with certain industrial activities and their potential impacts on the environment.[1] The previously established fines were deemed insufficient by the MELCCFP to ensure an adequate deterrent effect in several sectors of activity.
The changes are based on both amendments to the EQA and amendments to the Regulation respecting the regulatory scheme applying to activities on the basis of their environmental impact (REAFIE). The government has notably added a mechanism to the REAFIE allowing for the identification of industrial activities whose operators will now be subject to higher minimum fines.[2] This new regime came into effect on August 13, 2026.
Minimum Fines Multiplied by Ten
The announced increases are substantial and target the most common infractions within the activities of any company subject to the provisions of the EQA:
|
Offence |
Former minimum fine |
New minimum fine |
|
Failure to comply with a condition of a ministerial authorization |
$7, 500 |
$75, 000 |
|
Carrying out an activity without ministerial authorization |
$15, 000 |
$150, 000 |
|
Release of a contaminant into the environment |
$30, 000 |
$300, 000 |
Although the courts retain their power to consider the specific circumstances of each case when determining the final penalty, the increase in minimum thresholds considerably reduces the leeway available to offenders in the event of a conviction, as the courts are bound by this new minimum fine.
Which Industries Are Targeted?
These increased minimum fines apply exclusively to certain industrial activities identified in the REAFIE. The specifically identified sectors include:
- certain establishments already subject to the Regulation respecting the operation of industrial establishments (notably certain establishments in the mining, aluminum, foundry, cement, steelmaking, lime production and pulp and paper sectors);
- certain cell and battery manufacturing facilities with an annual capacity exceeding a certain threshold;
- chemical manufacturing facilities whose production capacity reaches certain thresholds;
- tire manufacturing plants;
- explosives manufacturing facilities;
- certain production or processing facilities related to critical and strategic minerals, including lithium, rare earths and certain radioactive elements;
- certain particleboard or wood-composite material manufacturing plants; and
- oil refineries, petrochemical plants and certain gas and coal product processing or synthesis facilities.
Several of these sectors are already subject to the Programme de réduction des rejets industriels (PRRI) (Industrial Discharge Reduction Program) due to the nature of their activities and the regulatory framework applicable to them.
Consequences for Businesses
For impacted businesses, this reform significantly changes the risk associated with certain environmental offences. The tenfold increase in the minimum fine for an offence committed in the normal course of a business’s operations (such as a minor discharge of contaminants or a minor failure to comply with a condition of a ministerial authorization) will now force companies to review their internal compliance processes, especially in the case of recurring non-compliance.
Beyond their immediate financial consequences, these changes could also have repercussions for corporate governance, as well as for financing, as a financial institution may consider this new exposure in its assessment.
Key Takeaways
These new increases are significant. Failure to comply with a condition of a ministerial authorization or conducting an activity without the required authorization under the EQA may now result in minimum fines significant enough to shift how a company manages the occurrence of any of the targeted infractions, even minor ones.
By targeting certain industrial sectors identified in the REAFIE, a list that is subject to change in the future, the government is expanding its enforcement toolkit to promote compliance with the EQA and is continuing a trend observed for several years toward more rigorous oversight of the requirements and prohibitions provided for under the EQA.
