Husky Energy is going to have to pay a total penalty of $3.8 million for a large pipeline spill into the North Saskatchewan River in 2016.

On Wednesday, Husky pleaded guilty to permitting the spill of 225,000 litres of "heavy crude oil in water frequented by fish" near Maidstone, Sask. That's the equivalent of roughly 1,400 barrels of oil.

The Crown withdrew other charges against Husky, including not immediately notifying authorities and not taking immediate remedies to prevent or counteract the effects of the spill.

The federal Crown asked for a fine of $2.5 million, as well as a further $200,000 from the company to fund fish and bird conservation projects in the area.

The provincial Crown prosecutor asked for a total amount of $1.12 million, which would include a $800,000 fine plus a $320,000 victim surcharge.

"This is the most significant [environmental] incident that's ever happened in this province," said Matt Miazga.

He said the agreement was one of the most complicated cases he's ever worked on, and both sides had tried for weeks to come to an agreement.

The judge in the case estimates a trial could have lasted anywhere between two to four weeks.

Search for leak's origin

A lawyer for the provincial government blamed the leak on shifting ground near the riverbank that led to increased pressure on the pipeline and an eventual break, and said the slumping riverbank was a rare occurrence in the area.

The pipeline's leak detection alarms apparently didn't signal the cause or exact location of the break.

Aerial images submitted to court showed the extent of the oil spill along the shores of the North Saskatchewan River. (Submitted by Government of Saskatchewan)

The Crown prosecutor told court the spill was first reported to Environment Canada by a civilian and then by a "third-party operator."

Husky shut down the pipeline at 10 a.m. on July 21. The spill had started the previous day and the company didn't notify authorities of it until 1:50 p.m. that day.

Environment Canada and Husky eventually took joint command to respond to the spill. Crews searched over 900 kilometres of shoreline to trace the origin of the leak, including which pipeline in the area was damaged.

The Crown said the pipeline was not built to take into account thermal pressure caused by the moving ground. A company hired by Husky said it wasn't feasible to actively mitigate the slumping ground, only to monitor the situation.

Husky said the pipeline was built to industry standards.

The spill affected many towns and cities located downstream. Many cities that relied on the North Saskatchewan River for drinking water immediately shut down their water intakes.

The piped water supply of the Saskatchewan Hospital mental health facility in North Battleford was cut off for almost two months, and water had to be trucked into the area.

Prosecutors agreed the timeline of the spill was limited to July 20-21 rather than the timeline of July 20-26 that was laid out in the initial charges.

Speaking to the court, lawyers for Husky said the company has made changes in the wake of the spill.

Husky has instituted a new policy where sections of pipelines are shut down if the cause of an alarm isn't pinpointed within 30 minutes.

While the company recognizes the spill did damage to downstream communities and wildlife, it says water tests taken one month after the spill did not show any signs of contamination.

The company also bought six boats to add to its spill-response team.

"From the outset we accepted full responsibility for the spill," Duane Rae, vice-president of pipelines for Husky Energy, said.

A lawyer for the provincial government blamed the leak on shifting ground near the riverbank that led to increased pressure on the pipeline and an eventual break. (Submitted by Government of Saskatchewan)

"We recognize that the spill had a significant impact on communities along the North Saskatchewan River, and we're deeply sorry for that."

The company was ordered by the judge to complete further studies and analysis. Rae said Husky Energy was planning to do that work.

He said in all of its pipelines across the country the company now conducts routine geo-technical monitoring, and it has made changes to control room operations with more "rigid standards and procedures."

"We've really advanced the way we build pipelines," Rae said. "Where we're building a new crossing of the North Saskatchewan River, we're drilling 1.8 kilometres under the valley… very deep under the river."

The company is using thicker pipe and fibre optic monitoring in the new crossing, according to Rae.

'Inadequate and incomplete'

Chief Wayne Semaganis of the Little Pine First Nation, which is downstream from the spill, delivered a victim impact statement at Wednesday's hearing.

Semaganis said the response to the spill was delayed, which damaged the environment and reserve lands along the river.

"The cleanup is inadequate and incomplete," he told the court.

The chief went on to say the James Smith Cree Nation, which is further down the North Saskatchewan, saw excessive levels of contamination in fish spawning beds.

Semaganis said people no longer farm, fish or collect medicinal plants near the river for fear of being poisoned.

Representatives from the cities of North Battleford and Prince Albert also read out victim impact statements.

A representative from North Battleford said drinking water continues to be affected. The city still operates an additional filtration plant.

The representative said the impact was "dire and ongoing," although Husky had been diligent in taking responsibility.

Oil-covered fish

During field studies performed after the spill, a number of oil-covered fish were recovered but were too decomposed for an autopsy to be performed.

A Husky Energy assessment said health risks from drinking water from the river were negligible.

The federal Attorney General's Office said Husky was co-operative with investigators throughout the incident.

The company has spent $144 million in response to the spill. In 2018, Husky Energy reported a $1.46 billion net profit.

CBC reporter Guy Quenneville is reporting live from today's court appearance. On mobile? Click here.