Environmental Enforcement Trends: Higher Penalties and Prosecutorial Focus on PFAS

Both in Canada and internationally, there has been increased regulatory focus on per- and polyfluoroalkyl substances (PFAS) due to their persistence in the environment and concerns regarding their health and ecological effects. As governments adopt more stringent regulations and increase enforcement activity related to PFAS, companies, particularly those involved in manufacturing, importing or selling consumer goods, are facing heightened compliance risks. A recent prosecution under the Canadian Environmental Protection Act, 1999 (CEPA) involving Estée Lauder Cosmetics Ltd. (Estée Lauder) illustrates the substantial consequences faced by companies that fail to comply with CEPA’s toxic substance notification requirements and the conditions of compliance orders issued under CEPA, especially where PFAS are concerned.

Overview of the Prosecution

On January 13, 2026, the Ontario Court of Justice issued a C$750,000 fine to Estée Lauder, after the company pled guilty to two counts of violating CEPA. The offences were related to Estée Lauder:

1. failing to inform the government regarding a “significant new activity” pursuant to subsection 81(4) of the CEPA; and
2. failing to comply with a compliance order.

In addition to the fine, Estée Lauder was ordered by the Court to notify its shareholders of the conviction and had its name added to Canada’s Environmental Offenders Registry.

During a routine inspection by Environment and Climate Change Canada (ECCC) in May 2023, the company was found to be selling eyeliner products containing perfluorononyl dimethicone. This substance is a silicone polymer used in cosmetics to increase hold, durability, and water or oil resistance. It is also a member of the PFAS family of chemicals, often referred to as “forever chemicals” due to their persistence in the environment.

Under section 81 of CEPA, Estée Lauder was required to notify ECCC and Health Canada before importing, selling or distributing products containing perfluorononyl dimethicone, as the substance has been designated as subject to the “significant new activity” provisions of CEPA. This requirement is intended to allow the federal government time to assess the potential health or environmental risks of a new activity involving a substance in advance of those proposed activities. ECCC took the position that the company’s failure to notify resulted in a violation of section 81(4) of CEPA.

Following the enforcement officer’s investigation, ECCC issued an environmental protection compliance order on June 8, 2023, to Estée Lauder as part of a cosmetics industry-wide enforcement push, which also saw other companies manufacturing, selling or distributing PFAS-containing products face compliance and enforcement action. The order issued to Estée Lauder required the company to take specific steps to become compliant with CEPA’s “significant new activity” requirements. ECCC charged the company when it failed to comply with the order, resulting in a violation of subsection 238(1) of CEPA.

Key Takeaways

The Estée Lauder matter highlights several key considerations for companies that may be subject to CEPA’s “significant new activity” requirements, including:

• ECCC is actively prioritizing compliance and enforcement actions related to PFAS, specifically in consumer products. An earlier prosecution brought by ECCC in 2024 against Groupe Marcelle Inc. resulted in the cosmetics manufacturer pleading guilty to one charge of violating CEPA by marketing beauty products containing perfluorononyl dimethicone. In that case, a fine of C$500,000 was imposed.
• The C$750,000 penalty in this case represents a notably high fine for offences not directly linked to significant or long-term environmental damage, such as large-scale spills or illegal dumping of hazardous waste.
• Companies can mitigate potential enforcement risk by implementing compliance verification measures, such as ingredient screening, supply chain oversight, internal auditing of PFAS use and early review of potential “significant new activities”, ensuring they identify regulated substances and meet toxic substance notification requirements under CEPA. Companies would be well advised to integrate appropriate compliance measures to address these risks when developing environmental management systems (EMSs) or reviewing the effectiveness of existing EMSs.

For more information, please contact the authors or any member of our Environmental group.