In the Ontario Court of Justice, Volkswagen AG was ordered to pay an unprecedented C$196.5 million fine after pleading guilty to 60 charges for offenses under federal environmental legislation.

Volkswagen AG pleaded guilty to 58 counts of contravening section 154 of the Canadian Environmental Protection Act, 1999 by unlawfully importing into Canada vehicles that do not conform to prescribed vehicle emissions standards, which is an offence under paragraph 272(1)(a) of the Act. The company also pleaded guilty to two counts of providing misleading information, an offence under paragraph 272(1)(k) of the Act. The fine will be directed to the Government of Canada’s Environmental Damages Fund.

In September 2015, Environment and Climate Change Canada launched an investigation regarding the importation into Canada of certain vehicle models that were allegedly equipped with a prohibited “defeat device”. The defeat device consists of software that reduces the effectiveness of the emission control system during normal vehicle operation and use.

The investigation revealed that between January 2008 and December 2015, the company imported into Canada nearly 128,000 two- and three-liter diesel engine Volkswagen and Audi vehicles equipped with defeat devices. It also revealed that the use of software to reduce the effectiveness of the emission control systems involved significant deception and showed that the company knowingly circumvented national vehicle emissions regulations.

As a result of the conviction, Volkswagen AG will be added to the Environmental Offenders Registry. The registry contains information on convictions of corporations for offences committed under certain federal environmental laws, including the Canadian Environmental Protection Act, 1999.