The Ontario Court of Justice ordered Volkswagen Aktiengesellschaft (Volkswagen AG), a German-based car manufacturer, to pay an unprecedented $196.5 million fine after pleading guilty to 60 charges for offences under federal environmental legislation.

On January 22, 2020, 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, led by Environment and Climate Change Canada’s Enforcement Branch, involved gathering of evidence and information relevant to a suspected violation of the federal On-Road Vehicle and Engine Emission Regulations under which defeat devices are regulated. The investigation revealed that between January 2008 and December 2015, the company imported into Canada nearly 128,000 two- and three-litre 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.

Transportation is one of the largest sources of air pollution and greenhouse gases in Canada.

For further information regarding this case and the On-Road Vehicle and Engine Emission Regulations, click here.

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