​Environmental Indemnity And The Costs Of Regulatory Compliance

Resolute FP v Ontario, 2019 SCC 60

On December 6, 2019, the Supreme Court of Canada (SCC) held two forest products companies liable for the costs of remediating and maintaining a waste disposal site at the Dryden paper mill in northern Ontario. The decision reinforces that parties must use caution and diligence when drafting environmental indemnities.

Background: the Dryden paper mill

In the 1960's, the Dryden pulp and paper mill operators dumped waste product from the paper bleaching process into nearby rivers. The harmful discharges caused mercury poisoning in residents of the Grassy Narrows and Islington First Nations living downstream. In response to the harmful pollution, the Government of Ontario required the owner of the mill to construct a Waste Disposal Site (WDS) to contain toxic waste from the plant to prevent future release into the environment.