Elaborate Imaginings: Rethinking Environmental Obligations in Canadian Insolvency Law

Abstract

Abstract:Environmental obligations fit uncomfortably into the framework of federal insolvency law. Canadian courts have struggled to articulate which environmental obligations should be stayed, compromised, and discharged in insolvency proceedings and which should remain fully enforceable. In its 2019 decision, Orphan Well Association v Grant Thornton Ltd, the Supreme Court of Canada drew a distinction between two types of environmental obligations: debts and public duties. Debts are subject to being stayed, compromised, and discharged, whereas public duties remain enforceable notwithstanding the obligor's insolvency proceedings. This article elaborates the distinction drawn by the Supreme Court of Canada between debts and public duties by considering who constitutes the public. It offers three answers. The public could include existing members of the human community, future generations of humanity, or non-human environmental entities. The article synthesizes the legal precedents supporting the different conceptions of the public and traces their implications for insolvency practice. Critics charge that the Supreme Court of Canada's decision in Orphan Well has improperly given environmental obligations a super-priority in insolvency proceedings and that such a reordering of insolvency priorities should have been left to Parliament. Yet careful attention to the 'public' character of environmental obligations justifies judicial interventions like the Court's decision in Orphan Well. As humanity faces the existential threat of climate change, the common law provides scope for reimagining legal concepts to better serve the needs of our communities.