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Abstract: In 2019, the treatment of environmental remediation costs in Canadian insolvency proceedings shifted significantly when the Supreme Court of Canada (SCC) decided Orphan Well Ass'n v. Grant Thornton Ltd. (Redwater). The SCC's Redwater decision gave significant support to the “polluter pays” principle, holding, in essence, that environmental clean-up orders were duties owed to the public that must be fulfilled, rather than unsecured claims that could be given low priority in a bankruptcy. Redwater is so significant that it has been covered twice before in this publication.
More than five years have passed since the SCC decided Redwater, and courts, practitioners and parties to insolvency proceedings in Canada have been both adapting to the decision's impacts and testing its reach. This article explores two recent cases interpreting this decision, showing that Canadian case law still has many issues to tackle when it comes to Redwater's reach.
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