Daily Management Review

C$196.5Mn Fine On VW For Diesel Scandal Imposed By Canadian Judge


Even after five years since it was revealed, the diesel emission scandal is still affecting the German auto major Volkswagen.
A C$196.5 million ($149.7 million) fine against Volkswagen was approved by a judge in Canada following the German auto maker pleading guilty to charges going in to dozens of counts filed against it in relation to the diesel emissions violation scandal.
In December, the German car maker was charged of importing almost 128,000 vehicles into Canada which had violated emissions norms and standards of the country. Volkswagen was charged with violating 60 counts of breaching the Canadian Environmental Protection Act and providing misleading information to which the company pleaded guilty for all the charges.
Prosecutors said that this fine that has been approved for Volkswagen is the largest ever in Canada imposed because of breach of environmental norms by businesses.
“This resolution serves the public interest. It reflects the gravity of the conduct, and is consistent with Canadian sentencing principles,” said prosecutor Tom Lemon in a statement. “This is an unprecedented fine in Canada. It is 26 times greater than the highest federal environmental fine ever imposed.”
Earlier on Wednesday, prosecutors had proposed the fine to resolve the issue.
“The resolution acknowledges the extensive measures by Volkswagen to make things right in Canada and strengthen its global compliance policies. The payment from the company will be used to support environmental projects nationally and in the provinces across the country,” Volkswagen said in a statement.
In 2015, the German car maker had conceded that it had used illegal software in the US to cheat in diesel emission tests for its vehicles. That resulted in a number of investigations against the company and scores of court cases all over the world. So far, the diesel emission cheating scandal has cost the company about 30 billion euros or $33.3 billion in fines, penalties and buyback. And as the company still continues to face penalties and lawsuits around the world, it announced in May 2019 that it would be setting aside an additional 5.5 billion euros in contingent liabilities in relation to the diesel emission scandal.
Charges of misleading customers about the emissions of its vehicles were placed in Poland and the country’s watchdog, UOKiK, said last week that it would impose a fine of more than 120 million zlotys or $31.4 million on the German company.
Earlier, up to C$2.4 billion or $1.8 billion was agreed to be spent by the German car maker to buy back or fix 125,000 polluting diesel cars as well as for giving out compensation to the owners of those vehicles in Canada. In order to resolve a Competition Bureau investigation, a settlement fine of C$17.5 million or $13.3 million in Canada has already been paid by Volkswagen.