Monday, June 8, 2026
On June 30, 2026, Canada’s new Prohibition of Certain Toxic Substances Regulations officially kick in. While the federal government is focused on banning the manufacture and import of “forever chemicals” (PFAS), water utilities and municipal managers are facing a completely different problem: an aggressive new wave of legal liability. Managing contamination is no longer just a technical engineering puzzle. It is a high-stakes legal minefield.
Water Canada sat down with Michael Hebert (Counsel & Environmental Law Practice Leader) and Nathan Adams (Associate, Environmental Law Group) at Mann Lawyers LLP. Based in Ottawa, they are the legal team behind the landmark Egan v. National Research Council of Canada (NRC) PFAS contamination class action case, which recently shook the sector by certifying $2 million in additional punitive damages specifically for a multi-year delay in telling the public about groundwater contamination. Readers can review the full 2026 ONSC 1429 punitive damages court decision here. For a deeper look at the legal context and case history, readers can review the full Egan case punitive damages analysis by Mann Lawyers LLP here.. Michael and Nathan are also the legal team behind the proposed PFAS contamination class action case of Sway and Currie v. the Attorney General of Canada and the Corporation of the City of North Bay.
Michael Herbert (left) and Nathan Adams (right).
They walked us through the limits of incoming regulations, the rising threat of property “stigma” lawsuits, and why the era of “hide and assess” is officially over.
Water Canada: The Egan decision in March certified punitive damages for delayed disclosure of PFAS contamination. What message does this send to municipalities and government bodies about their duty to notify the public?
Michael: The message is clear. If you have good reason to believe that you have PFAS on your site, and you have good reason to believe it could be migrating off-site and potentially contaminating wells used for drinking water, you need to notify the potential recipients immediately so they can take action. You cannot let residents continue to potentially consume contaminated water without notifying them.
If you delay, the courts will entertain an application for punitive damages. It is vital to understand that punitive damages are entirely separate from standard property diminution in value claims due to contamination stigma. It’s a distinct hammer the courts use to punish malicious and oppressive conduct they deem unacceptable.
Nathan: The wording in the court’s decision to certify punitive damages for the delay in informing the Mississippi Mills community they could potentially be drinking PFAS-contaminated water was incredibly broad. In this case, the NRC had environmental reports in its possession as far back as 2004 expressing concerns about the discharge of fire-fighting wastewater, and as far back as 2009 showing the inferred groundwater flow was in the direction of the residential community, and that since 1981 the NRC discharged 100 per cent of PFAS chemicals it used directly into the natural environment and confirmed PFAS contamination on site in March 2013. On the basis of this evidence, the court accepted that there was evidence that the NRC knew or ought to have known that PFAS migrated offsite and could have contaminated the residential community’s drinking water, about 2.5 years before the community was warned in December 2025. At paragraph 21 of the decision, the court stated that “the failure to warn the neighbouring residents that their drinking water was or may be contaminated by PFAS chemicals may be found to ‘offend the court’s sense of decency.’” Accordingly, punitive damages were certified on the basis that if you own or operate a PFAS-contaminated site, and you know or ought to know that this material could be migrating offsite into residential drinking water, you shouldn’t wait before disclosing that possibility to residents. The court emphasized the words “could” and “ought” multiple times. This sets an important legal precedent for other similar class action claims and creates a very wide net for potential liability for additional punitive damages apart from property value claims.
Water Canada: Does that mean a legal duty to disclose is triggered only if contamination breaks a specific threshold, like Health Canada’s 30 ng/L objective, or do they have to report even if it’s lower?
Michael: We don’t accept the Health Canada 30 ng/L threshold or the Ontario Ministry of the Environment 70 ng/L threshold as a get-out-of-jail-free card. There is no scientific proof that any level of this contamination is safe. In fact, if you read the Health Canada Guidelines in full, they state that the objective we need to achieve is ALARA—As Low As Reasonably Achievable. Period. Not 30 ng/L, not 70 ng/L.
Nathan: We do not subscribe to the government’s reliance on these various guidelines to claim there is a “safe” or “acceptable” minimum level of PFAS in drinking water. The March 2025 Health Canada and Environment Canada Final State of PFAS Report reports explicitly states that PFAS causes severe health issues at lower concentrations than previously understood, that there are over 100 federal sites nationwide with confirmed/suspected PFAS contamination due to historical AFFF use, many of which are sites with residential communities relying on private groundwater wells in close proximity. The fact that the federal guidelines are 30 ng/L, while Ontario provincial guidelines sit at 70 ng/L, neither of which are established on any health-based criteria, shows how arbitrary this is. Government reliance on conflicting guidelines to decide whether or not to provide bottled water, install PFAS filtration, or disclose any information of potential drinking water to residential communities is entirely inappropriate.
Water Canada: With the 30 ng/L drinking water objective and the new federal restrictions arriving this June, do you expect a spike in “contamination stigma” lawsuits over falling property values near affected aquifers?
Michael: Yes, but it doesn’t actually stem from the regulations themselves. It is driven by growing public awareness of the problem, including both national media coverage and federal reporting on PFAS-contaminated hotspots sites nationwide. Frankly, these new regulations coming into effect on June 30th are not that significant in my books. They add a couple of prohibited substances to a forbidden list, but big deal. Most of those substances have already stopped being imported or used anyway. They don’t do anything particularly exciting. The real driver is that the public is waking up to the threat of potential PFAS contamination in their drinking water, particularly around airports and military bases, which is exacerbating contamination stigma and impacting property value in such communities
Water Canada: From a stigma perspective, if a municipality installs a multimillion-dollar carbon filtration system that brings PFAS levels back to zero, does that property stigma damage disappear, or is the market value permanently altered?
Michael: The market value is permanently altered, full stop. Treatment systems and while helpful, filters are not infallible and do not completely remove PFAS from drinking water. If the source aquifer feeding your home is severely contaminated by PFAS, it is never a good thing to just have a mechanical filter sitting between you and toxic water. Properties in that category will absolutely continue to suffer from valuation stigma.
Nathan: To double down on the reality of property stigma: imagine trying to sell your home and having to disclose to a potential buyer: “The house is lovely, but the military or government officials are going to come by every couple of weeks to drop off bottled water, and engineers will be coming into your basement four times a year to change your filters and test your water for PFAS contamination.” Most people likely wouldn’t purchase that property only do so at a significant discount.
Michael: It’s pretty simple. If you have two identical subdivisions—one completely virgin and untouched, and one with all this environmental “noise” on it—which one are you going to buy? You’ll only buy the one with the noise if you get a massive, steep discount. That is what stigma is all about.
Water Canada: Nathan, given your environmental science background, how difficult is it to legally prove causation and track liability when a “forever chemical” has been migrating through groundwater for decades?
Nathan: Analytical science has evolved significantly over the last decade. Our ability to detect PFAS in well water has vastly improved. Legally, you look at groundwater flow direction to establish a clear path from the source of the spill to the residential well.
In many of the communities we represent and nationwide, the federal government has been monitoring residential well water samples on a quarterly basis. Because of that, there is already an ample paper trail in the residents’ possession showing that PFAS has migrated off-site from these federal PFAS-contaminated facilities. From a litigation perspective, having those extensive scientific reports makes proving causation uniquely viable.
Michael: Groundwater and surface water will naturally carry the chemical along their flow paths. The real hurdle with causation isn’t tracking the movement. It’s identifying the source if there are multiple potential polluters. If you have 10 industrial facilities clustered close to an affected property, you are going to have a devil of a time sorting out who is responsible. But if you have an isolated area with only one clear source of PFAS—like an airport, military base or an NRC fire lab site—and the surrounding land has no history of using those chemicals, it’s pretty obvious. You put A and B together.
Water Canada: PFAS is everywhere now—it’s in rainwater, consumer wrappers, and common products. How do you isolate background environmental noise from a localized corporate polluter?
Michael: It comes down to quantity. The defense lawyers for polluters always jump up and say, “Oh, PFAS is everywhere, it’s in everything.” But we are talking about massive concentrations. While we do not subscribe to the current federal and provincial PFAS drinking water guidelines, in these cases, there is reporting available of nanograms per litre orders of magnitude above both the federal and provincial PFAS guidelines. That isn’t background noise. That is severe localized contamination. And the science is clear that that level of contamination causes serious health problems, cancers, and death.
Water Canada: Water utilities don’t create PFAS, but they are stuck treating it. Will legal liability ultimately stay with original polluters, or do municipalities face exposure if they can’t upgrade infrastructure fast enough?
Michael: The problem with PFAS is that many of these spills have taken place over 50 to 75 years and have spread across massive geographical areas. Complete remediation of these downgradient sites is simply not possible. Polluters and municipalities are stuck trying to figure out how to live with it—whether that means supplying bottled water or installing treatment filters so the water people use to bathe and drink is somewhat manageable.
But as a municipality, if you are stuck managing those systems, you inherit the operational liability of filter failures. You also face residents who are angry about permanent losses in their property values and concerned about the potential health impacts of ingesting PFAS.
Water Canada: Should commercial property buyers or developers be explicitly demanding PFAS testing on new developments, and are traditional Phase I and II Environmental Site Assessments (ESAs) missing the mark?
Michael: Right now, it isn’t much of a factor in traditional assessments, but that is shifting. I won’t give direct advice on what buyers should do, but I will tell you this: insurers are broadly discussing this problem and they are deeply concerned about this exact issue. There is a heck of a lot of PFAS to clean up across this country due to the last 75 years of history. Moving forward, utilities and municipalities have to focus on minimizing harm right now. As per the recent decision in our Egan class action case, shifting into “hide and assess” mode or delaying public disclosure is no longer an option. The courts simply will not tolerate it anymore.
