Removal of WWI Artillery Boosters from Jersey Shores

Arcadis, a design and consultancy firm, recently completed an approximate $8 million contract by the U.S. Army Corps of Engineers (USACE) Baltimore District to locate and safely remove pieces of World War I-era artillery boosters from three New Jersey beaches.  The project follows Arcadis’ selection as one of nine contractors for the Multiple Award Military Munitions Services II contract valued at up to $240 million over five years to support the USACE Baltimore District with military munitions and environmental response services.

The artillery fusing pieces were inadvertently placed onto the beaches during the pumping of sand from the ocean when screening baskets failed to capture the small objects.  The sand was brought ashore as part of a coastal storm risk management project after Hurricane Sandy along 7,600 feet of beach in Loch Arbour, Allenhurst and Deal in New Jersey.

The boosters, similar in size to a C battery and made of brass, are part of components that would connect a fuse to the explosives in an artillery round to make up a WWI-era projectile. While not armed, the boosters may contain aged explosives.

To fully address the hazard, USACE Baltimore enlisted Arcadis to excavate and screen the sand placed during the beach-fill operation.  The project was successful in safely removing the munitions and allowed beach activities to return to normal prior to the 2017 beach season. Removal and screening operations began in late-2016 and were completed before the end of March 2017. Portions of the beaches were closed during the project to keep the public safe from heavy equipment.

As the prime consultant, Arcadis was responsible for all excavation and screening across more than 70 acres of shoreline, public outreach including health and safety briefings, distribution of informational materials and the involvement of local businesses through the duration of the project.

Aviva Insurance Co. of Canada v. Intact Insurance Company.

Aviva Insurance Co. of Canada v. Intact Insurance Company1

The outcome of the decision of Aviva Insurance Co. of Canada v. Intact Insurance Company1 should remind insurers that even though the insurance industry has taken steps to ensure that contemporary CGL policies contain wording that is characterized as the “absolute pollution exclusion,” old wording, generally described as the “qualified pollution exclusion,” can still come back to haunt them.

The outcome in Aviva v. Intact was well-reasoned, though perhaps frustrating for those who continue to wait patiently for a clear line of authority on the issue of whether the phrase “sudden and accidental” has a temporal component. Although Justice Cavanagh, who presided over the Aviva case, declined to address this issue, he did provide some clear directives in the event insurers are faced with a coverage application which calls for an interpretation of the qualified pollution exclusion, and namely the word “sudden.”

In Aviva v. Intact, Aviva and Intact had insured Avondale, the operator of a gas station business adjacent to the plaintiff’s property (Intact from 1983-1991, and Aviva from 1993-1999). The plaintiff alleged that contaminants from the property from where Avondale operated (“Source Property”) had migrated onto the plaintiff’s property, causing damage.

Aviva brought an application for a declaration that Intact had a duty to defend Avondale with respect to the allegations made by the plaintiff.

Aviva denied coverage under its CGL policies on the basis of the wording of the absolute pollution exclusion, however, it also insured Avondale under several umbrella policies (from 1993-1997), in which the pollution exclusion contained the words “sudden and accidental”.  As such, and based on the pleadings (discussed below), Aviva acknowledged the duty to defend for these specified policy periods.

Similarly, Intact’s CGL policies (1983-1986) contained the following qualified pollution-exclusion language:

It is agreed that this policy does not apply to bodily injury or property damage arising out of the discharge, dispersal, release or escape of smoke, vapours, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants into or upon land, the atmosphere or any water of any description no matter where located or how contained, or into any watercourse, drainage or sewerage system, but this exclusion does not apply if such discharge, dispersal or escape is sudden and accidental. [emphasis added]

Despite this language, Intact maintained that the wording in the Statement of Claim led to the conclusion that the contaminants had not escaped in a “sudden” or “accidental” fashion. Specifically, the word “migrate” had been used throughout the Statement of Claim, and, on a plain reading, “migrate” is not synonymous with “sudden.” Accordingly, Intact argued that the exception to the exclusion (immediately above, in bold) did not apply.

Decision of the Court

Justice Cavanagh turned to case law that addressed the “sudden” aspect of the qualified pollution exclusion, including the decisions in Murphy Oil Co.2Zatko3, and BP Canada Inc4.  After reviewing the particular facts of each case, he reasoned that it was how the contaminants escaped that mattered, not the manner in which alleged property damage occurred. He was then able to dismiss Intact’s reliance on the allegations in the Statement of Claim – that the contaminants had migrated from the Source Property onto the plaintiff’s property. In doing so, he reasoned (at paragraph 33):

…While the damage to the Contaminated Property may have been slow and gradual because of migration of contaminants from the Source Property over a period of months or years, the exception may still apply, in my view, if the discharge, dispersal, release or escape of Contaminants onto the Source Property was accidental or happened over a brief period of time. Such a determination is possible whether or not the word “sudden” as used in the exception, properly interpreted, has a temporal component.

Accordingly, the Court held that the Intact policies from 1983-1986 had been triggered by the allegations against Avondale, and consequently, Intact was obliged to provide a defence.

Other Notable Aspects of the Case

Justice Cavanagh also made an interesting ruling on the apportionment of defence costs.

Recently, courts have appeared reluctant to make such a ruling so early in the game. Rather, they have concluded that the apportionment of defence costs is something to be agreed upon by the parties, and/or to be determined at the end of the proceedings.  This often resulted in further speculation and delay – an unenviable position for insurers to be in.

Aviva submitted that it had incurred over $100,000 in defence costs. As evidence, it submitted invoices which were almost entirely redacted save for counsel’s name and the billable time spent.  Intact responded that it would not make a contribution without being able to examine the un-redacted invoices. Though Justice Cavanagh had “no reason to question the reasonableness of the charges”, he agreed that Intact should be provided with further information before having to pay 50 percent of past expenses.

With respect to ongoing defence costs, Justice Cavanagh reasoned that such a determination should be governed by “equity and good conscience”, and that since both the Intact and Aviva policies were engaged for approximately four years, Intact should share defence costs equally with Aviva going forward.  Interestingly, there was no indication that either insurer would be able to seek a re-apportionment of those defence costs at the conclusion of the underlying litigation. This certainly breaks from tradition, wherein insurers are able to seek re-apportionment of defence costs at the conclusion of the matter, based on the facts determined at trial.

What Does This Mean for Insurers?

The Aviva decision ought to be a warning to insurers who may be asked to provide coverage under exclusions that contain the word “sudden.” The qualified pollution exclusion has gone the way of the dodo, and for good reason. Insurers should take comfort, however, in the fact that the Aviva case provides certainty and clear guidance to insurers on the qualified pollution exclusion: when faced with situations where old policies with old wording are at issue, insurers should focus on the source of liability, not the cause of the damage.

This decision also provides an example of defence costs being apportioned before the facts of the case are decided. This may be helpful in providing certainty to insurers, but on the other hand, the decision to apportion defence costs on a 50/50 basis going forward may prove to be inequitable once further facts are discovered. It will be interesting to see if courts follow this aspect of the ruling in future cases.

Footnotes

  1. 2017 ONSC 509.
  2. Murphy Oil Co. Ltd. et al. v. Continental Insurance Co., 1981 CanLII 1895 (ON SC).
  3. Zatko v. Paterson Spring Services Ltd., 1985 CarswellOnt 796 (Ont. S.C.).
  4. BP Canada Inc. v. Comco Service Station, 1990 CarswellOnt 637 (Ont. S.C.).

 

_________________

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

 About the Author

 

Jennifer O’Dell’s ability to drive a file forward to a successful conclusion is a hallmark of her growing insurance litigation practice.  Known for her persistence and ability to quickly assess the strengths and weaknesses of a case, Jennifer is able to resolve files quickly, and in some instances, before a formal Statement of Defence is ever issued.  Jennifer’s clients, and senior counsel at the firm, rely on her commitment to quality and her ability to deliver timely results.

Jennifer believes that advocacy requires excellent communication with counsel, the courts and her clients.  Though always willing to use to the court system to further her client’s interests, she has a keen understanding that the success of her files often starts with an initial phone call to opposing counsel.

Jennifer’s practice includes insurance coverage, personal injury, professional liability, property damage, environmental claims and occupiers’ liability. The varied nature of these matters requires Jennifer, above all, to find both comprehensive and practical solutions to her client’s complex legal questions.

AntiFog Expanded-View Visor for Hazmat Situations

One of the most perplexing problems for protective clothing users now has a clear solution — literally.  An AntiFog Expanded-View Visor, developed by Kappler, means no more fogged-up face visors for gas-tight suit wearers.  A video demonstration may be viewed here: http://www.kappler.com/index.php/products/antifog.

There have been many efforts to address this common problem over the years, from wipes to sprays to homemade concoctions. But cost-effective solutions have eluded protective apparel manufacturers until now.

“The anti-fog innovation is a huge advance for hazmat responders and chemical workers, where seeing better means working safer,” said Laura Kappler-Roberts, president and CEO of Kappler, Inc. “The response has been tremendous, which is really gratifying considering how long the industry has been trying to solve this problem.”

The patent-pending visor technology is being combined with another key “see better, work safer” improvement: A large, expanded-view visor which significantly increases the suit wearer’s field of vision with 17% more visor surface area.

The AntiFog Expanded-View Visor is being incorporated as a standard feature on all Kappler gas-tight suits made with Zytron® and Frontline® fabrics, including NFPA-certified styles.

 

E-Bikes Part of Emergency Response Network

As reported in Israel21C, Israel’s national ambulance, blood-services, and disaster-relief organization (Magen David Adom – MDA) recently launched a new emergency response unit called “Life Riders” that consists of emergency response personnel being equipment with electric bicycles (“e-bikes”).

Each of the 1000 members of the voluntary unit is provided with resuscitation equipment and other medical supplies and can be summoned to scenes within a radius of 10-kilometers as first responders.  The additional of e-bikes will allow unit members to reach very crowded areas, or areas where ambulances and Medicycles can’t drive through, such as boardwalks, markets and alleys.

 

Life Riders marks the first time electric bikes have been used for first response anywhere on an organized basis.  The idea is that they can maneuver in tight spots better than motorcycles and ambulances.

“MDA has a wide variety of lifesaving vehicles compatible with a variety of scenes and conditions. In order to cut emergency response times, we’ve decided to integrate electric bikes into our array of vehicles – something that’s unheard of in any other EMS organization around the world,” said Eli Bin, MDA Director General.

MDA first piloted the electric-bike squad near the light-rail construction zones in Tel Aviv, the Bat Yam boardwalk and the market in Petah Tikva.

“As a volunteer in the Old City, we often face alleyways and narrow streets where regular ambulances can barely reach,” said Yosef Kasuto, an MDA emergency medical technician who lives in the Old City of Jerusalem. “The new bikes will definitely help us save more lives.”

Market Insight: trends in UK contaminated land consulting (part I)

In the first of our two-part market review, Environment Analyst explores changes to the competitive landscape, how firms are coping with the skills gap, and how regulation and funding changes are impacting the provision of contaminated land and remediation consulting services.

BY CHARLOTTE EDWARDS, Market Analyst

Environment Analyst’s previous examination of the contaminated land consulting sub-sector three years ago revealed companies were enjoying a tentative return to growth boosted by growing demand from the infrastructure sector, having weathered the downturn brought about by the credit crunch and recession (Environment Analyst 02-Oct-14). Recruitment to boost specialist teams was on the up following several years of redundancies, with firms at that time on the whole predicting continued growth for specialist services in this area.

Although the recovery has not been as fast as many would have hoped for, with the revenues still not quite reaching the £253 million peak recorded in 2008 according to Environment Analyst’s latest market figures (see Figure 1). But positively the contaminated land/remediation consulting segment did grow by 14% to account for a 14.6% share of total UK EC market revenues in 2015, cementing its position as the second largest EC sector for the fifth consecutive year – have been previously knocked off its long-held top spot by the environmental impact assessment & sustainable development service area in 2010.

Many environmental consultancies are now experiencing continuous growth within their contaminated land activities even despite the difficult conditions in some sectors such as oil and gas, largely thanks to the recent strength of the UK’s infrastructure and housing markets. Although the recent solid economic performance indicators have given many the confidence to drive forward recruitment strategies in this area over the last couple of years, the ramifications and uncertainties surrounding Brexit has impacted how they are now viewing the outlook in terms of growth prospects going forward.

 

 

Regulation and funding drivers

The realities of the government’s post-recession austerity measures and a decision by the ex-chancellor George Osborne to wind down funding for the Part 2A scheme as of April 2014 – which is set to stop altogether in April this year – has left most local authorities unable to continue their own contaminated land investigations. Consequently the driving force for contaminated land sector has switched even more heavily towards private sector developers and their efforts to identify land ripe for new housing schemes and the planning process itself.  The current Conservative government seems happy to leave it this way, having pledged to introduce a statutory brownfield site register for which they want LAs to allow 90% to gain planning permission by 2020. However, this could of course conceivably all change with the impending general election.

Landmark’s head of consultancy and customer services, Chris Loaring, comments: “Councils just don’t have the funding or adequate resources so they have reverted to a different regulatory mechanism, the planning process. Unless a site is severely high risk, they are now deferring all Part 2A site investigation work necessary to the planning process. Putting conditions on applications then makes it the developers responsibility to prove there is not a contaminated land risk on a site.”

Although the government-funded Part 2A work on behalf of LAs itself has itself been winding down, many hard-pressed councils that have seen a brain drain of in-house expertise as a result of funding cuts have been forced to turn to external consultants on an ad-hoc basis to fill the gaps when enforcing the regime. Loaring describes how Landmark has essentially benefited from this trend: “We recently won a tender to fulfil the regulatory Part 2A function of Christchurch and East Dorset Council. We see the trend of councils tendering the work previously designated for a contaminated land officer as one which will absolutely accelerate. We are now in a position where the regulator is outsourced to a private enterprise – which is quite interesting”.

WSP too has seen some key shifts in its customer base as a result of these and other changes, with Moore explaining: “Business in this area has been moving back to how it was before 2007. Property and construction is now our biggest contaminated land market, followed by oil and gas and industrial. We have slightly more private sector clients than public, with approximately a 60:40 split”.

Lucy Thomas says that the developer side of the market is extremely important for RSK too, stating: “We now have more clients looking at what were quite marginal sites, such as landfills, for residential or commercial development. So much so that 60-70% of our UK geosciences contaminated land work comes from the property and development market, and within that market our clients are largely developers.”

The 85-strong consultancy OHES has also sought to extend its services to the development sector having previously focused elsewhere. Bryan Cherry comments: “Before the recession we relied very much on the fuel market rather than property, so we were able to ride out that period of uncertainty. But in the last three years we have expanded outside that market – we are doing more for developers now in property and also supporting business mergers, property sales and acquisitions.

“Taking on people with varying skillsets enabled us to expand outside our original markets, by combining them with our due diligence experience in the oil & gas market.”

 

Recruitment and skills

Recruitment to help fulfil the expanding order books remains a challenging area for many of these firms, with the sector now paying the price of the loss of talent through redundancies made during the recession years – meaning today that competition for fresh talent is intense.

Moore states: “Recruitment is still very challenging – for skilled and experienced candidates it’s almost a free market, there are lots of opportunities. Another factor is that we’re starting to see consultants retire and leave the industry altogether, but we still need to grow and so need lots of new staff. This all makes recruitment a lot more difficult than its was before the recession.”

Golder concurs on the present difficulties. Business unit lead for site characterisation and remediation Robert Noden says: “Recruitment can be tough, finding the right people is difficult, especially at an intermediate and senior level. However we have good staff retention which makes this easier.

“We have entered a phase of focused growth and have recruited two new employees through our targeted graduate recruitment scheme just in the past week, bringing our specialist SCR team to approximately 45 staff.”

Thomas from RSK also agrees that it can be very difficult to fill senior position vacancies, stating: “The challenge we have is that there isn’t the right number of candidates available with the right skills. People left during the recession and firms took on less graduates but now we see the shortage of staff with three to five years experience.

“And once we have recruited and trained our own graduates, because of the skills shortage across the industry we’re then faced with the challenges of staff retention.”

WSP’s solution has been to go on the offensive with an tactical recruitment strategy. “We have stepped forward and promoted ourself in the marketplace by showcasing key projects we are involved in to attract the best people,” explains Moore. “We are starting to see some evidence it is working and are keen to continue.”

 

Quality scheme

This year saw the launch of a new qualification for contaminated land management professionals. The National Quality Mark Scheme (NQMS) should help further improve the standards of work and quality of submissions under the various regulatory regimes – including planning applications – relating to previously used land. It will provide visible identification of documents that have been checked by suitably qualified and experienced persons (SQPs) prior to submission.

For candidates to be recognised as an SQP they must possess a recognised and assessed level of experience and knowledge. Persons already registered under the established specialist in land condition (SiLC) scheme are able to qualify as an SQP by undertaking a conversion course.

When asked about the impact of the scheme on professional standards, RSK’s Thomas comments: “I myself am an SQP so clearly support it, about 8% of our contaminated land staff have taken the SiLC conversion course. I think overall the NQMS is a positive scheme – we have clients asking about it already although to date we haven’t put project deliverables through the scheme.”

WSP’s Andy Moore is also an SQP. He says: “I think it’s important the industry steps up at a time when regulations are changing. NQMS is based on the principles of ensuring consistent quality work for clients and I’m 100% behind it. Hopefully it will mean regulation can concentrate on where problems really are. I don’t want to see regulation replaced – I want to see it work alongside the scheme.”

Overall he believes “it’s very encouraging to see the industry upscaling and ensuring professional qualifications are in place”.

Cherry’s opinion of the scheme is a little more reserved. He cautions: “I’m a big believer in driving quality in the industry, to make sure we give clients the greatest possible advice. My only concern is that the scheme is based on providing assurance the work has followed guideline principles and ensuring reports are reviewed and approved with a quality stamp. As such I strongly believe there should also be an emphasis on bringing out something similar to a UCAS accreditation for labs. As consultants we can follow procedure for assessment but if the data is wrong then everything else falls.”

At the same time, he says that OHES is looking into it and “if we do, it will be something we do on top of our standard practice as our emphasis has always been on putting the right qualified people to do the work in accordance with a solid procedure.”

Golder’s Noden remains more sceptical, having seen similar qualifications drop off in the past due to a lack of demand. He states: “It is something we are keeping an eye on; however, at this time we are not seeing the client demand. All clients expect high quality; for example, we provide suitably qualified and experienced people to the nuclear sector. We also have qualified SiLCs and are looking to increase the number of these in our organisation. So we have everything in place to achieve the qualification if and when the time is right.”

Thomas hopes the scheme will have a long-term positive impact on the sector, including she believes “the streamlining of the planning process, as some of the simpler sites could go through the process a lot more quickly, benefiting developers”.

“It will ensure that submissions will have had a level of scrutiny over and above a typical technical review, so authorities will have more confidence in the report. What’s more hopeful is that it will improve quality standards across the industry as it becomes the norm rather than a more robust level of site assessment,” she concludes.

___________________

Part II of this special Market Insight, coming shortly, will focus on the potentially destabilising influence of Brexit and the domestic political scene as many firms are increasingly looking to exploit international contaminated land market opportunities

 

This article has been republished and first appeared at https://environment-analyst.com/55824/market-insight-trends-in-uk-contaminated-land-consulting-part-i.

Canada supports the listing of chrysotile asbestos to the Rotterdam Convention

In December 2016, the Government of Canada announced a government-wide strategy to protect Canadians from exposure to asbestos.  As part of this strategy, Environment and Climate Change Canada and Health Canada are developing new regulations to prohibit asbestos and products containing asbestos, by 2018.

The Minister of Environment and Climate Change, the Honourable Catherine McKenna, recently announced that the Government of Canada will fully support the listing of chrysotile asbestos to the Rotterdam Convention and will advocate for it at the upcoming eighth meeting of the Conference of the Parties, in Geneva next week.  The Government supports the objective of the convention, which is to protect human health and the environment by promoting informed decisions about the import and management of certain hazardous chemicals.

In addition, the Government recently published a consultation document describing the proposed regulatory approach to manage asbestos and to solicit Canadians’ views on the proposed measures.

Canada is a party to the Rotterdam Convention, whose objective is to protect human health and the environment by promoting informed decisions about the import and management of certain hazardous chemicals.  Asbestos was declared a human carcinogen by the World Health Organization’s International Agency for Research on Cancer, in 1987.  At the height of its use, asbestos was found in more than 3000 applications worldwide; however, production and use have declined since the 1970s.

ONEIA seeks nominations for the Errick “Skip” Willis Memorial Award

Several years ago, ONEIA introduced an annual award in honour of Errick “Skip” Willis, one of the Canada’s prominent leaders in environmental business, one of the pillars of ONEIA and a strong advocate for the engagement of the environment business sector and the government. In honour of his vision, integrity and leadership, the award is given annually by ONEIA to a deserving individual who, following Skip’s outstanding example, helps creating a better Ontario through a green economy.

A description of the award and a nominations form are available on the ONEIA website.

The award will be handed out during the ONEIA 25th Anniversary Celebration Dinner

If you would like to nominate a worthy individual, please send completed form to Marjan Lahuis, info@oneia.ca or by hard copy to:

Ontario Environment Industry Association

215 Spadina Avenue, Suite 410

Toronto ON

M5T 2C7

Attention: Marjan Lahuis

Vapour Intrusion Webinar – May 31st

Land Science is pleased to present a webinar with Dr. Kenneth S. Tramm, a founding Principal with Texas-based engineering firm, Modern Geosciences.  In our previous webinar, Dr. Tramm discussed how vapor intrusion is impacting the environmental due diligence industry, with a focus on screening for vapor intrusion.  During this upcoming free webinar, Dr. Tramm will provide us with an overview on investigating vapor intrusion and understanding risk.

Joining Dr. Tramm will be Thomas Szocinski, Director of Vapor Intrusion at Land Science, who will share successful vapor mitigation case studies.

Key vapor intrusion topics include:

  • Assessment of vapor intrusion
  • Installation of soilgas monitoring points
  • An overview of the tailored vapor intrusion evaluations that are possible

Date and Time

Wednesday, May 31st, 2017 11am Pacific / 2pm Eastern

Registration

To register for the webinar, visit http://www2.regenesis.com/kenneth-tramm-webinar-may-2017

Failure to Report Spill results in $50,000 Fine

Agnico Eagle Mines Limited, headquartered in Toronto, recently plead guilty to one offence under the Canadian Fisheries Act for failing to report a spill.  The case was heard in the Nunavut Court of Justice.  The court ordered the company to pay a total penalty of $50,000, which will be directed to the federal Environmental Damages Fund.  As a result of this conviction, the company’s name will be added to the Environmental Offenders Registry.

The guilty plea arose from an incident that occurred in August 2013 at the Meadowbank Gold Mine in Nunvut.  An inspection by inspectors from the Environment Canada and Climate Change (the Canadian equivalent to the U.S. EPA) revealed seepage from the tailings impoundment area into an area immediately next to a fish-bearing waterbody.  The release had not been reported to an Environment and Climate Change Canada inspector or to the territorial spill line.  Following an investigation by the Department’s enforcement officers, the company was charged under subsection 38(4) of the Fisheries Act -failing to notify an inspector following the unauthorized deposit of a deleterious substance into water frequented by fish.

 

Funding for Clean Technology in Ontario

As reported by Gowlings LLP, The Ontario Ministry of the Environment and Climate Change (MOECC) recently took another step toward implementing the goals in the Ontario Climate Change Action Plan (CCAP).  By filing the Ontario Climate Change Solutions Deployment Corporation regulation, the MOECC created a new non-share capital corporation to stimulate the development of clean technology and assist with reducing barriers that may inhibit the implementation of the CCAP and its goals.

What you need to know

The corporation, called the Ontario Climate Change Solutions Deployment Corporation (“OCCSDC”), was designed to further the provincial deployment of clean technology for reducing greenhouse gas emissions. It is tasked with meeting this broad purpose by:

  • providing information;
  • engaging in marketing;
  • providing services and arranging for others to be provided with services;
  • providing incentives and engaging in financing activities;
  • stimulating private sector financing; and
  • researching market barriers inhibiting the deployment of clean technology.

Interestingly, research and development are expressly excluded from the scope of the duties of the OCCSDC.

The regulation places a focus on developing programs that will maximize absolute greenhouse gas reductions and stimulate the use of clean technology by low-income households.  Additional programs will be directed at:

  • switching from using fossil fuels to other sources of energy;
  • energy storage (of various forms);
  • renewable energy;
  • retrofitting existing structures to reduce or eliminate greenhouse gas emissions;
  • stimulating economies of scale in technology;
  • stimulating private sector financing; and
  • stimulating the construction of buildings that significantly exceed provincial energy efficiency requirements (think net-zero and net-positive construction).

The corporation will be funded in part by the proceeds of Ontario’s cap and trade program, which the Ontario Government estimates to be approximately $2 billion per year.

 

Why is this important?

Since the closure of Ontario’s coal power plants in 2014 (an event which went generally unnoticed by both the press and the general public), the province’s mighty electric power system has become one of the least carbon reliant in the world.  To reduce its GHG footprint further, Ontario must now look to sectors outside of the electricity sector.  Under Ontario’s CCAP, there are new clean-tech business opportunities arising in transportation, built infrastructure (buildings and homes), land use planning, commercial industry, First Nations Communities, agriculture and the MUSH sector.  There may also be opportunities in contaminated site clean-up and brownfield redevelopment.  The OCCSDC is intended to work in tandem with the CCAP to drive change and stimulate economic opportunities.

Ontario has the tremendous luxury of not being the first jurisdiction in the world to set up a green bank.  The UK, Japan, Australia and Malaysia have all cut a path through the forest.  Over the past nine years in the U.S., several green banks have been set up at the state level.  Of these, New York, California, Hawaii and Connecticut provide excellent examples.  Additionally, the concept of the green bank is essentially similar to that of an export development bank – something Ontario businesses are accustomed to working with at the federal level.  The key element of a green bank is that it uses public funds, tailored credit requirements and moderately innovative financing techniques to lever private sector finance and commercial innovation capacity in order to achieve specific policy goals.  With Ontario’s OCCSDC the focus will be – as it should be – on commercially viable technologies rather than research or early-stage innovation.

The best green banks bring global knowledge and understanding to local markets, use their strategic position to develop market capacity where the private sector would otherwise be unable to, use credit-enhancement, co-investment, securitization and other financing tools to diffuse risk, create scale and mitigate private sector project risk.  Ontario’s OCCSDC appears poised to do most of this and, in addition, it also promises to provide direct small-scale incentives and financing to consumers and to businesses to drive practical and attitudinal change.

 Where are the opportunities?

The key is to remember that the OCCSDC is intended to work in tandem with the CCAP to drive change and stimulate economic opportunities.  These mechanisms provide a “stick and carrot” approach.  The other thing to remember is, as several have already said, this is a big deal.  This program has the potential to impact most of the economy, including a number of key sectors and industries.

 What comes next?

The Board of the OCCSDC is currently being assembled.  After this happens, it will take time for programs to be developed and launched.  As well, key details on the operation of the new corporation – including reporting obligations, how it will interact with existing and emerging federal and provincial bodies such as the Ontario Energy Board and the emerging federal infrastructure bank – will need to be finalized and revealed.  That being said, there is significant pressure on the province to get things underway.

Given the grave, global impact of carbon and other GHG emissions and the very diffuse nature of the GHG problem for Ontario, the OCCSDC and its parent policy, the CCAP, promise to drive gradual and fundamental change and to create substantial economic opportunities across many sectors.  As with green banks elsewhere, early renditions are likely to have flaws and there will undoubtedly be missteps.  That being said, considering the sums involved and given the experience seen in other jurisdictions, the launch of the OCCSDC will create economic growth and innovation opportunity and, ultimately, should help Ontario meet its GHG objective.   This one’s, as the saying goes, got legs.

_____________

NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only.  It is not, and should not be taken as, legal advice.  You should not rely on, or take or fail to take any action based upon this information.  Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website.  Gowling WLG professionals will be pleased to discuss resolutions to specific legal concerns you may have.

 

About the Authors

 

Benjamin Ojoleck is an articling student in Gowling WLG’s Toronto office.   Benjamin graduated from Dalhousie University’s Schulich School of Law in 2016 with his Juris Doctor, and an additional specialization certificate in Environmental Law.  During law school, he pursued his interests by working as a research assistant to a law professor on a variety of environmental law-related topics, such as the development of renewable energy, including tidal energy, in Nova Scotia.

Thomas J. Timmins is a Partner in Gowling WLG’s Toronto office.  He is widely recognized as a leading lawyer in energy, infrastructure and commercial transactions, and his practice focuses on corporate, commercial and transactional law across a number of sectors. Tom has led several of the firm’s most significant power and infrastructure sector transactions and regularly acts for a wide range of corporations, investors, government agencies and financial institutions around the world.

The full article can be found at Gowlings WGP website here.