Halliburton building explosives facility in Nova Scotia

As reported by the CBC, International oil services company Halliburton is preparing to open an explosives storage facility in Nova Scotia’s Hants County next month. The location of the facility is the former barite mine, approximately two kilometres off the main road. It will be used to store explosives that are used in oil and gas exploration.

Natural Resources Canada’s (NRCan) Explosives Safety and Security Branch (ESSB) administers the Canadian Explosives Act and Regulations. Manufacturers, importers, exporters, transporters, sellers, or users of explosives are all subject to the Explosives Act and Regulations.

The buildings the explosives will be stored in are specially designed to help contain explosions.  Emily Mir, a spokesperson for Halliburton, said the facility will be comprised of several secured storage modules surrounded by a steel fence.

Explosives will be trucked from Halliburton’s Jet Research Center in Alvarado, Texas, to the Nova Scotia storage facility, where they will be stored until they’re needed at other locations in Eastern Canada. Explosives are used to create holes in the steel pipes at the bottom of exploration wells to allow oil or gas to flow into the pipe for extraction. They are also used to help remove pipes from wells when they are no longer in production.


The approximate location of a Halliburton storage facility that will begin operating at the end of February. – Google

Local politicians and residents have raised concerns about the facility and claim they have been kept in the dark about the construction and operation of the facility.

Abraham Zebian, the warden of the Municipality of the District of West Hants, said he was caught off guard by CBC’s questions about the project, as he had little information about it. But he said he does have concerns.

“That would be concerning to any resident, to have that in their backyard,” he said to the CBC. “Disasters ring a bell to me that have happened in Nova Scotia historically. That’s the first thing you start thinking about.”

The Barite mine where the explosives storage facility will located operated for approximately 40 years and used dynamite on a daily basis. An an unfortunate blast was made in one of the large fault zones in 1970 which resulted in flooding of the mine. It ended production 1978. During its operation it was Canada’s largest barite mine and one of the largest deposits in the world. 

The previous owner of the site had a tailings pond that overflowed into the Minas Basin. After Halliburton acquired the property they demolished the old buildings and built a safer berm around the tailings pond.

Ms. Mir told the CBC that the explosives will have the same grade of charges as those used in the mining industry. The amount of explosives stored on site will depend on demand, she said, adding that Halliburton expects to store substantially less than the company’s permit allows.

Legislation

Explosives are highly regulated by Natural Resources Canada under the Explosives Act and Regulations. Transportation of the explosives would need to conform with the federal Transportation of Dangerous Goods Act and Regulations. Ms. Mir said Halliburton received all necessary permits from Canada’s Department of Natural Resources – Explosives Regulatory Division for storage.

The Nova Scotia Environment Ministry, Margaret Miller, confirmed with the CBC that no provincial permits were required for the storage site.

The company did apply to Municipality of the District of West Hants and received a permit for the facility. The permit allows for an industrial accessory steel storage building for storage relating to future offshore oil and gas industry. The permit was issued Nov. 13, 2018, for a 16-foot by 60-foot single storage building.


The explosives storage facility is being built on a piece of property near Walton, N.S., that is owned by Halliburton. (Photo Credit: Robert Short/CBC)

​Ms. Mir said Halliburton has obtained all the necessary permits for the project from Natural Resources Canada as well as a building and development permit from the municipality.

The company said it has hired for three positions at the facility, which is expected to begin operations at the end of February.


City of Kawartha Lakes fined $75K for alleged violations under Fisheries Act

On January 31, 2019, the Corporation of the City of Kawartha Lakes entered into a diversion agreement with the Public Prosecution Service of Canada after Environment and Climate Change Canada (ECCC) laid charges under the Fisheries Act. The agreement requires the city to pay $75,000 to the Environmental Damages Fund; update their standard operating procedures for drain works; and publish a notice of the incident on the city’s website. Charges laid against the city will be withdrawn once all measures outlined in the diversion agreement have been met, as determined by the Public Prosecution Service of Canada.

The City of Kawathra Lakes in Ontario, approximately 70 kilometres northeast of Toronto. Kawartha Lakes is the size of a typical Ontario county and is mostly rural. It is the second largest single-tier municipality in Ontario by land area.

In August 2014, a city-hired contractor carried out maintenance work on the a drainage works. The work resulted in a sediment release into the fish-bearing waterway. Environment and Climate Change Canada enforcement officers investigated the incident and determined that the sediment concentrations released during the work were deleterious to fish. It was also determined that the work was undertaken without taking adequate steps to mitigate the release of sediments into the waterway.

Maintenance is performed on drainage works to prevent flooding

Kawartha Lakes communications manager Cheri Davidson told MyKawthra.com that there was concern that the method used to dismantle the blockage resulted in silt and sediment being released into that drain when one of the city’s silt controls failed, which in turn resulted in the death of fish. 

The City of Kawartha Lakes agreed to donate $75,000 to the Environmental Damages Fund (EDF) on condition that the charges laid by ECCC be withdrawn.

Kawartha Lakes has made changes to the way it looks after drains to reduce the possibility for sediment to escape into the surrounding environment. The municipality has also funded Kawartha Conservation’s update to the drain maintenance classification. 

Created in 1995, the Environmental Damages Fund is a Government of Canada program administered by Environment and Climate Change Canada. The Fund follows the polluter pays principle and ensures that court-awarded penalties are used for projects with positive environmental impacts.

The $75,000 donation from the City of Kawathra Lakes to Environmental Damages Fund will be available for the next five years to support projects within the municipality that focus on environmental restoration, environmental quality improvement, research and development, or education. To apply for funding, see:  https://www.canada.ca/en/environment-climate-change/services/environmental-funding/damages-fund.html

Environmental No-Fault EPA Orders Compelling Off-Site Investigations are Alive and Well in Ontario

Article by Marc McAree, Partner and Certified Environmental Law Specialist and Anand Srivastava, Associate, with assistance of Matthew Lakatos-Hayward, Student-at-Law, Willms & Shier Environmental Lawyers LLP

Ontario’s Environmental Protection Act (“EPA”), section 18 permits the Ministry of the Environment, Conservation and Parks (“MECP”) Director to issue an Order to any current or former owner or occupier of contaminated property. 

Section 18 Orders are no-fault Orders.  Section 18 Orders do not require the orderee to have any nexus to the polluting activity aside from the orderees’ current or former ownership and/or occupation of a contaminated property.

In Hamilton Beach Brands Canada, Inc. v Ministry of the Environment and Climate Change, [1] the the MECP Director issued a no-fault section 18 Order to the current owner of a contaminated property, former owners of the property, and the current tenant of the property. 

The orderees challenged the broad scope of the Director’s no-fault section 18 Order.  The orderees argued, inter alia, that Section 18 orders are “absurd”. 

The orderees appealed the section 18 Order to the Environmental Review Tribunal (“ERT”).  For purposes of the appeal only, the MECP agreed that the orderees did not cause historic contamination at the source property.

Reading the EPA, section 18 and applying principles of statutory interpretation, the ERT dismissed the orderees’ appeal.  The ERT confirmed that the MECP Director has jurisdiction to issue EPA, section 18 orders where:

  1. the orderees did not own the source property at the time of the contaminating activity
  2. the orderees did not operate at the source property at the time of the contaminating activity
  3. the contamination migrated from the source property to down-gradient, off-site properties
  4. the Order requires investigation and delineation of contamination at down-gradient, off-site properties, and/or
  5. an “adverse effect” (as defined in the EPA) has occurred, is occurring and/or may occur in the future.

The orderees then appealed the ERT’s decision upholding the MECP Director’s Order to the Ontario Superior Court of Justice – Divisional Court.  The orderees argued that the ERT’s decision was wrong and should be reversed on a standard of correctness.

The Divisional Court disagreed with the orderees and held that the ERT’s decision met both the standard of reasonableness (Dunsmuir) and the standard of correctness.

The Divisional Court concluded:

… the [ERT] carefully considered the [orderees’] interpretation … It rejected their interpretation of s. 18.  In doing so, it applied the principle of modern statutory interpretation … The [ERT] decision is transparent, justified and intelligible and falls well within the range of possible outcomes (Dunsmuir at para 47).  The Tribunal’s decision was reasonable and, in my view, correct and consistent with the modern principles of statutory interpretation.[2]

The Ontario Divisional Court upheld the MECP’s jurisdiction to issue no-fault Orders requiring off-site investigation.  

On December 12, 2018, the Ontario Court of Appeal denied the orderees leave to appeal from the Divisional Court’s decision.

The upshot of Hamilton Beach is that Ontario Environmental Protection Act, section 18 no-fault Orders requiring off-site environmental investigation are permitted even where the Orderee did not have any association with the polluting activity aside from the Orderee’s current or former ownership and/or occupation of the contaminated source property.


Footnotes

[1]      14 CELR (4th) 137 (Ont ERT) aff’d 2018 ONSC 5010 (Div Ct); Decision issued September 4, 2018

[2]      2018 ONSC 5010 at para 73.


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.
© Willms & Shier Environmental Lawyers LLP


About the Authors

Marc McAree is a partner at Willms & Shier Environmental Lawyers LLP and a Certified Specialist in Environmental Law.  He provides advice and solutions to a wide range of clients that help them overcome their environmental law and litigation issues. Marc also provides mediation on environmental issues. Marc is admitted to the bars of Ontario and British Columbia. Marc may be reached at 416-862-4820 or by e-mail at mmcaree@willmsshier.com.

Anand Srivastava is an associate at Willms & Shier Environmental Lawyers LLP.  He has expertise in assisting a broad range of clients with environmental law and litigation issues.  Anand draws on his science background to facilitate practical solutions to complex environmental legal issues.  Anand is called to the bar of Ontario. He may be reached at 416-862-4829 or by e-mail at asrivastava@willmsshier.com.

Proposed Changes to Ontario’s Toxics Reduction Program

The Ontario Ministry of the Environment, Conservation Parks (MOECP) recently issued a proposal that will change the regulation (O. Reg. 455/09) under the Toxics Reduction Act , 2009. Under the proposed regulatory amendments, the following changes would be implemented:

  • facilities with existing toxics reduction plans would no longer be required to conduct reviews of those plans;
  • certain facilities would be exempt from all future planning and reporting obligations for certain substances; and
  • facilities with existing plans would still be obligated to maintain annual reporting requirements.

The proposed exemptions would apply to the following facilities:

  • Facilities that have never planned or reported under the program, but now meet the reporting threshold for one or more toxic substances; or
  • Facilities that have been out of the program for three or more years for a toxic substance, but are coming back into the program because they meet a reporting threshold again; or
  • Facilities that are currently planning and reporting under the program, and now meet the reporting thresholds for a new toxic substance at the facility.

With respect to substances, the proposed exemptions would apply to the following obligations:

  • Creating a toxic reduction plan;
  • Tracking and quantifying toxic substances;
  • Annual Reporting on planned reductions; and
  • Reviewing the toxic reduction plan.

The rationale for the proposed changes to the regulation is that it overlaps with federal reporting requirements. The Ontario Toxics Reduction Program requires industry to report publicly on their use of toxic substances, and identify options to reduce those substances through toxic reduction plans. The Canadian federal Chemicals Management Plan requires industry to reduce the use and/or release of certain toxic substances. The federal approach is more comprehensive than the existing provincial program.

Another rationale for amending the regulation is that the MOECP claims that the Toxics Reduction Program has not achieved meaningful reductions. Preliminary results compiled by the MOECP indicate an overall reduction of 0.04% of substances used, created and released for all regulated facilities.

A costing analysis was carried out by the MOECP in conjunction with the Ministry of Economic Development, Job Creation and Trade, and it was found that the annual average net savings of this proposal will far exceed the annual average administrative costs.

The MOECP cost analysis estimated that the regulatory proposal will cost current facilities an annual average administrative cost of $818,000 to learn about the changes to the regulations and to continue reporting on existing toxics substances until 2021. These costs are offset by the total annual average administrative net savings of approximately $4 million for all facilities to stop planning and for the program to end in 2021 (when the federal government has completed its chemical assessments and taken action on many toxic substances). All cost analysis was calculated as Average Annual Present Value costs discounted at 2.5% over 10 years.

Toxics Reduction Program Map

The Ontario government maintains a website that shows the locations of facilities subject to the Toxics Reduction Act, 2009, the number of facilities with plans to reduce toxics use, and information on the number of toxics reported. Users of the website can search for for and access information from Ontario facilities that use, create, release, dispose and recycle toxic substances. They can also learn more about these substances and how facilities are taking action to reduce their creation and use to protect the environment and human health. Finally, users of the website can search by location, facility, or public health unit and use the advanced search filters such as year, sector or substance to improve your search results.

Public Comment Period Ends January 20th

The MOECP is accepting public comments to the proposal until January 20th, 2019. Comments can be submitted online or to Michael Friesen of the MOECP (416-314-0131).

Ontario Government’s Plans on the Environment: Impact on Brownfield Development

The Ontario Government released a Made-in-Ontario Environment Plan in late 2018 in partially in response to criticism that it had no plan for addressing climate change after it cancelled the greenhouse gas (GHG) cap-and-trade program of the previous government. The plan includes several proposals that should be on interest to persons involved in brownfield development.

The Ontario government 52-page document (entitled (“Preserving and Protecting or Environment for Future Generations: A Made-in-Ontario Environment Plan”) commits to protecting air, lakes and rivers; addressing climate change; reducing litter and waste; and conserving land and greenspace. Many of the measures establish a direction but the details will have to be further developed.

With respect to contaminated sites and brownfields, the document talks about the “polluter pay”, and engaging environment business and entrepreneurs. However, it is lacking in details.

Generating GHG from Brownfield Projects

The Ontario government’s proposed replaced to the scraped GHG trading regulation is the Creating the Ontario Carbon Fund. While details are to be worked out, the plan proposes to use $400M of government funding with the aim of leveraging additional private funds on a 4:1 basis to support “investment in clean technologies that are commercially viable.” The fund will also support a “reverse auction” model whereby emitters will “bid” for funding to support their GHG reduction projects.

There is a possibility that developers involved in brownfield redevelopment could be eligible for government funding depending on if clean technologies are employed in the clean-up and GHG reductions are realized versus the traditional dig-and-dump approach to site clean-up.

2010 Photo of the former Kitchener Frame Building (Photo Credit: Philip Walker/Record staff)

Streamlined environmental approvals

The Made-in-Ontario Plan notes that environmental approvals should be prioritized for businesses that want to implement low GHG technology or approaches. This is the latest promise from the Ontario government to speed up the approval process.

Seasoned veterans in the environmental sector remember similar promises made the government on fast-tracked approvals. There are still those who remember the Environmental Leaders Program in which speedy approval was promised to companies that committed to above-compliance environmental activities and targets.

With respect to this latest promise on speedy approvals, the document is silent on if “speed” will be applied to the Environment Ministry review of site specific risk assessments (SSRA’s) that are submitted to the Ontario Environment Ministry for approval instead of following the generic clean-up standards.

Measures to promote healthy, clean soils

The Made-in-Ontario Plan plan commits to “revise the brownfield regulation and record of site condition guide” as part of a basket of measures to promote clean soils. Again, the document is lacking in details.

The previous Ontario government had proposed reasonable changes to the Record of Site Condition Regulations (O. Reg. 153/04). One important aspect of the proposed change is related to road-salt impacts on a property. As the regulations currently stands, road salt-related impacts can only be exempted from clean-up if it can be proven they are related to the application of de-icing salts on a public highway. Under the proposed changes to the regulations, the exemption will include road salt applied to a property ‘for the purpose of traffic and pedestrian safety under conditions of snow/ice’. This one change, if implemented, would save thousands of dollars in clean-up costs at many sites undergoing redevelopment in Ontario.

The previous Ontario government had also proposed a much-need excess soil regulation. There has been extensive consultation on the proposed regulation over a five-year period. If implemented, the regulation would address the gaps surrounding the ability for enforcement on mismanagement of excess soils in Ontario. It would also open up the opportunity for beneficial reuse of excess soil.

Canada: Environmental Issues In Expropriation

Article by Chidinma Thompson, Borden Ladner Gervais LLP

A. Indirect Expropriation through Environmental Regulation

Claims for indirect expropriation may arise through environmental regulatory regimes. Where legislative schemes operate to interfere with existing property rights, such interference may constitute de facto, or indirect, expropriation. One example of a legislative regime that has been the subject of indirect expropriation claims is the federal Species at Risk Act1 (the “SARA”). Under the SARA, the Governor in Council is empowered to make emergency orders to provide for the protection of certain wildlife species.2 The emergency protection order may extend not only to Crown land, but also private property.3 The SARA provides for a limited compensation scheme. The Minister may provide for reasonable compensation for losses suffered “as a result of any extraordinary impact of the application of” the emergency protection order.4 The Governor in Council may make regulations with respect to the procedures to be followed and the methods to be used to determine the compensation.5

The sage grouse order exemplifies how a SARA emergency protection order may give rise to an expropriation claim. The sage grouse order was the first emergency protection order to be issued under section 80 of the SARA. It was issued to protect the greater sage grouse population in Alberta and Saskatchewan, and came into force on February 18, 2014. The sage grouse is an endangered species under the SARA and Alberta’s Wildlife Act.6 Under the Wildlife Act it is an offence to “willfully molest, disturb, ore destroy a house, nest or den” of sage grouse. The sage grouse order restricted activities on 1,672 km2 of provincial and federal Crown lands in southeastern Alberta and southwestern Saskatchewan.

A Sage Grouse (Photo Credit: Miles Tindal / Calgary Herald)

In The City of Medicine Hat et al v Canada (AG) et al,7 LGX Oil and Gas and the City of Medicine Hat, which had interests in the Manyberries oil production site that was affected by the sage grouse order, brought a judicial review and constitutional challenge of the sage grouse order at the Federal Court of Canada. The applicants successfully resisted a summary dismissal motion brought by the Crown and subsequently commenced an action at the Alberta Court of Queen’s Bench for $123.6 million in compensation (including accelerated reclamation costs) for de facto expropriation of existing oil and gas mineral rights, leases and rights-of-way. This case is ongoing. At this point, the Governor in Council has not made regulations with respect to compensation. The Crown pleads that the emergency protection order is regulatory and, in the alternative, that compensation under the SARA is discretionary. In the further alternative, the Governor in Council had chosen not to make regulations, and the emergency order did not have an “extraordinary impact” on the plaintiffs.

Another case was Groupe Maison Candiac Inc v Canada (AG).8 This case concerns the second emergency protection order made under the SARA, which protects the western chorus frog. The western chorus frog is listed on the SARA’s list of endangered species as a threatened species in the provinces of Ontario and Quebec. The emergency protection order prohibits excavation, deforestation and construction within a two km2 area in the municipalities of La Prairie, Candiac and St-Philippe, Quebec to protect the frog and its habitat. This order was the first time a SARA emergency protection order restricted development on private land.

As a result of the western frog order, Groupe Maison Candiac Inc. (“Groupe Maison”) was forced to reduce its residential development by 171 units after construction was already underway and Groupe Maison had obtained the requisite municipal and provincial approvals. Groupe Maison brought a judicial review of the emergency protection order by way of a constitutional challenge and an expropriation claim. The Federal Court dismissed the application, finding that: (1) section 4(c)(ii) of the SARA is within the federal government’s jurisdiction over criminal law; and protected by the doctrine of ancillary powers, including jurisdiction over peace, order and good governance; (2) the western chorus frog order did not amount to expropriation that required compensation; and (3) the Parliament had already provided a mechanism for compensation under the SARA that applies in “extraordinary circumstances.”

In 2017, the Minister of Environment and Climate Change received three petitions to recommend to the Governor in Council for an emergency order to protect the southern mountain woodland caribou population. The Minister conducted an Imminent Threat Assessment and, on May 4, 2018, determined that the southern mountain caribou faced imminent threats requiring intervention for recovery. An emergency protection order may be forthcoming for Alberta and British Columbia. The SARA public registry and the Canada Gazette will provide updates on this matter.

B. Polluter Pays in Expropriation of Contaminated Lands

Alberta’s Environmental Protection and Enhancement Act9 (the “EPEA”) is another environmental protection legislation that affects expropriation claims. As one of its purposes, the EPEA adopts the “polluter pays” principle to address contamination. The EPEA includes three regulatory mechanisms with respect to contamination: (1) Part 5 Division 1 concerns the release of substances generally; (2) Part 5 Division 2 concerns contaminated sites designation; and (3) Part 6 deals with conservation and reclamation. Further, the EPEA expressly acknowledges an affected person’s recourse to court through private civil claims.10 Some of the key concepts related to the three regulatory mechanisms are considered below.

Part 5 Division 1 of the EPEA deals with the release of substances into the environment. Under section 112, the person responsible for the substance has the duty to take remedial measures with respect to any release of same.11 Environmental protection orders may also be issued to the person responsible for the substance where the release is causing, has caused or may cause an adverse effect.12

The statutory definition of “person responsible” includes: (1) owner and previous owner of substance; (2) every person who has or has had charge, management or control of the substance; (3) successor, assignee, executor, administrator, receiver, receiver‑manager or trustee of (1) to (2); and (4) principal or agent of (1) to (3).13 The “person responsible’ excludes, unless they release new or additional substances: (1) a municipality in respect of land shown on its tax arrears list, or land acquired by it by dedication or gift of an environmental reserve, municipal reserve, school reserve, road, utility lot or right of way; (2) a person who investigates or tests the land for the purpose of determining the environmental condition of that parcel; and (3) the Minister responsible for the Unclaimed Personal Property and Vested Property Act, with respect to a parcel of land to which that Act applies. Thus, it appears that the notion of “person responsible” is based on one’s relationship to the substance/release only, and not based on the cause of the release.

Part 5 Division 2 of the EPEA provides for the designation of contaminated sites. Under section 129 of the EPEA, the Director may designate a site as a contaminated site and issue an environmental protection order to a person responsible for the contaminated site. The Director must consider several factors before issuing an environmental protection order for a contaminated site, including: (1) due diligence of the owner or previous owner; (2) whether the presence of the substance at the site was caused solely by the act or omission of another person, other than an employee, agent or person with whom the owner or previous owner has or had a contractual relationship; and (3) the price the owner paid for the site and the relationship between that price and the fair market value of the site had the substance not been present.14

The “person responsible for the contaminated site” means: (1) a person responsible for the substance that is in, on or under the contaminated site; (2) any other person who the Director considers caused or contributed to the release of the substance into the environment; (3) the owner of the contaminated site; (4) any previous owner of the contaminated site who was the owner at any time when the substance was in, on or under the contaminated site; (5) a successor, assignee, executor, administrator, receiver, receiver‑manager or trustee of a person referred to in any of subclauses (2) to (4); and (6) a person who acts as the principal or agent of a person referred to in any of subclauses (2) to (5). As was the case with Division 1, the definition of “person responsible for the contaminated site” again excludes municipalities and investigators. In this case, the test is based on the relationship to the substance/release and the property.

In practice, Division 2 is rarely used. Designation will only occur as a last resort when there are no other appropriate tools. There have only been five instances of designation of a contaminated site since 1993 and no environmental protection order appears to have been issued under Division 2. Division 2 offers options otherwise unavailable, including the allocation of responsibility to present and past site owners who may have contractually assumed liability for the pollution, remedial actions plans and agreements with the Director, and the apportionment of costs of remedial work among responsible parties. The Minister may also pay compensation to any person who suffers loss or damage as a direct result of the application of Part 5 Division 2.15

Environmental contamination may affect the valuation of expropriated property. Under the Expropriation Act,16compensation for expropriation is based on the market value of the expropriated land, which is in turn “the amount realized if sold in the open market by a willing seller to a willing buyer”,17 and provable damages. The determination of market value accounts for everything that is present in the site, except for the legislated exclusions found in section 45 of the Expropriation Act.

Contamination introduces issues in valuing expropriated property, given the uncertainty in liability exposure, scope, duration, risk and stigma. Below are some case law on the interaction between the expropriation of contaminated lands and the “polluter pays” principle.

In Toronto (City) v Bernardo,18 the respondent Bernardo was the registered owner of a property and permitted the corporate respondent’s scrap metal business on property rent-free by oral licence to occupy. The City of Toronto served and published notice to expropriate property. The City conducted environmental testing on property which showed contamination, and was advised that clean-up costs for property could be in range of $250,000 to $750,000. The appraised value of the property was $242,500 before taking into consideration site remediation or clean-up costs. Given the estimated cost of remediation which exceeded value of land, the City’s offer of compensation to the respondents was $1. The respondents did not request compensation hearing but refused to surrender possession. The City brought motion for order to take possession. The Ontario Supreme Court granted the City’s motion as the respondents had the opportunity to contest the City’s offer of compensation in proceedings before the Ontario Municipal Board and chose not to take any action to assert claims for compensation.

In Thompson v Alberta (Minister of Environment),19 the claimant had purchased land for the sum of $1 million. At the time of purchase, the land was not part of any property acquired by the Crown for a proposed transportation corridor. The Crown reviewed roadway plan within months of claimant’s purchase and determined that land was a necessary part of the corridor. The Crown expropriated land for $1,025,000. The claimant brought action for increased compensation. The action was allowed in part. The claimant was granted $1,120,000. The Crown’s valuation discounted the value of the property because of the unknown cost of filling or remediating a wetland (which is 50% of the property) for future residential development, which posed an economic challenge for a prospective purchaser. The Court found that the cost of remediation calculated by the Crown was based on premature assumption that land was to be developed in isolation with no possible cost sharing by adjacent developers. The Court, however, recognized that a discount must be applied for market value because of this possibility of remediation.

In Ville de Saint-Jean-sur-Richelieu c Cour du Québec,20 the subject property included a grocery store, snack-bar and a retail marina fuel distribution outlet for vessels navigating on Chambly canal, and a gas station for road vehicles. The issue before the Court was whether the costs of decontamination should be deducted from the compensation awarded for expropriation, based on the duty to remediate. It was argued that evidence demonstrated that there was a spill onto the neighbouring property, therefore the question as to cessation of activities no longer applied, and the mandatory provisions of the EQA regarding decontamination was triggered. The Tribunal Administratif du Québec (the “TAQ”) ruled that the total remediation cost of $450,000 be paid by the owner of the property, 9092-9340 Québec Inc. (“9092”) and should be deducted from its expropriation indemnity award. The value of the expropriated property, after deduction of the decontamination costs, was established as being $31,000.


Lock 9, the southern terminus of the Chambly Canal, is located in the town of St.-Jean-Sur-Richelieu.

The Court of Quebec allowed the appeal, holding that the finding of the TAQ was unreasonable and profoundly unfair. Were it not for the expropriation, 9092 could have ceased its activity at its own time, negotiated with a willing purchaser and, based upon the projects of the purchaser, negotiated the decontamination works remaining according to the circumstances. The City deprived 9092 of its right to complete the decontamination work at the time that it deemed the most suitable to its interests and subject to conditions that would have been more favourable. By forcing 9092 to assume the costs of decontamination estimated by the City engineer, the TAQ deprived the owner of the quasi-totality of the value of the expropriated property. The City brought a judicial review application which was subsequently dismissed. The Court found that the systemic analysis undertaken by the Court of Quebec highlights the significant defects and the fragility of the TAQ ruling to assign full liability to 9092 for the estimated costs of decontamination of the property.

Case law suggests that the law is not blind to the causation of the contamination when evaluating the market value of an expropriated property that has been contaminated. Liability for the remediation of contaminated land in Alberta clearly rests with “person responsible for the substance” and, in the rare case of designated contaminated sites, “person responsible for the contaminated site.” Liability for contamination does not run with the land in Alberta.

This leads to the question of what is the intent of the law in respect of a faultless landowner for the environmental depreciation of land in the expropriation context. The principles of statutory interpretation apply to deem the legislature as knowing all the law and the necessary statutory language to give effect to its intention. The EPEA and the Expropriation Act are meant to be interpreted harmoniously as a scheme in cases of expropriation involving contamination. The Expropriation Act is a remedial statute. Accordingly, it must be given a broad and liberal interpretation consistent with its purpose.

Currently, the right of a faultless landowner to recover from a “person responsible” remediation costs in civil claims (whether under the common law or the EPEA) is a chose in action. This chose in action does not appear to be considered in the calculation of market value in expropriation. In the new era of third-party litigation funding, a chose in action for remediation costs is a valuable element that may offset some or all of the discounts associated with contaminated land, even in an open market.

Footnotes

1 Species at Risk Act, SC 2002, c 29 [SARA].

2 SARA, s 80(1).

3 SARA, s 80(4)(c)(ii).

4 SARA, s 64(1).

5 SARA, s 64(2).

6 Wildlife Act, RSA 2000, c W-10.

7 The City of Medicine Hat et al v Canada (AG) et al, Federal Court of Canada File No. T-12-14. See also Federal Court of Canada, Proceeding Queries, Recorded Entries for T-12-14, online: click here.

8 Groupe Maison Candiac Inc v Canada (AG), 2018 FC 643.

9 Environmental Protection and Enhancement Act, RSA 2000, c E-12 [EPEA].

10 EPEA, ss 217, 219, 227-228.

11 EPEA, s 112.

12 EPEA, ss 113-114.

13 EPEA, s 1(tt).

14 EPEA, s 129(2).

15 EPEA, s 131.

16 Expropriation Act, RSA 2000, c E-13.

17 Expropriation Act, ss 41-42.

18 Toronto (City) v Bernardo, 2004 CanLII 5760 (ONSC).

19 Thompson v Alberta (Minister of Environment), 2006 ABQB 510.

20 Ville de Saint-Jean-sur-Richelieu c Cour du Québec, 2017 QCCS 4832.


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.

This article was first published on the BLG website. It is re-published with the permission of the author.

About the Author

Chidinma Thompson is a partner in Commercial Litigation Group at Borden Ladner Gervais LLP‘s Calgary office. She practices commercial litigation and arbitration, project approvals, environmental defence and compliance advisory. Her practice covers a broad range of sectors including oil and gas, electricity, renewable energy, municipal and land development. She has experience in regulatory hearings before the Alberta Energy Regulator and its predecessors, Alberta Utilities Commission, and the Calgary Subdivision and Development Appeal Board. She has appeared before the Alberta Provincial Court, Court of Queen’s Bench and the Court of Appeal.

Is Ontario “Open for Business” when it comes to Excess Soil Management?

by  Grant Walsom, XCG Consultants

Since the 2013 call for a review in the regulatory gaps surrounding the ability for enforcement on mismanagement of excess soils in Ontario, the Ministry of Environment (now called Ministry of Environment, Conservation and Parks – MECP) has tirelessly worked towards a proposed Excess Soil Regulatory package for Ontario.  The efforts have included an unprecedented process of stakeholder listening sessions, consultations and engagement group meetings and inter-Ministerial reviews over the past 5 years.

The proposed Excess Soil Regulatory Package was formed through 2 separate postings on the Environmental Bill of Rights (EBR) and is reportedly ready for Cabinet Approval.  Further, the regulatory package is formulated with general overall acceptance by the construction and development industry in Ontario as well as the supporting industries (i.e., legal, consulting, laboratories) and municipalities.  It is generally agreed that the proposed Regulation outlines possible opportunities for beneficial reuse with sustainable considerations (examples would be reduced truck traffic and reduced greenhouse gases creation).

We are coming to understand that the current Conservative Provincial Government is strongly opposed to a majority of initiatives created by the previous Liberal Government.  The Conservatives are in favour of the red-tape reduction, streamlining operations and fiscal responsibility.  In fact, there is now a Deputy Minister of Red Tape and Regulatory Burden Reduction in the Ontario Cabinet.  His job is to make Ontario “Open for Business.”  Any new Regulation such as those being reviewed by MECP could certainly be viewed as counter-productive in terms of red-tape reduction.    However, with the release of the Made-in- Ontario Environment Plan on November 29, 2018, it appears that Excess Soil Regulation will be enacted in some form in the not-to-distant future.  There will no doubt be some changes to the proposed Regulatory package, but it is good to see that Regulation will proceed.

To date, one of the biggest challenges that the enforcement regime of the Environment Ministry had was the gap in how excess soil (impacted with contaminants or not) could be classified as a “waste material” if it’s not managed properly or if it’s illegally dumped.  We have all seen the extensive media coverage of a number of illegal dump sites, innocent property owners mislead on the quality of the fill they are accepting, and private air-fields who have capitalized on the regulatory gaps in Ontario where excess soil is concerned.  Enforcement against illegal dumping or misrepresentation of the soil quality is not clear or easily achieved under the current Environmental Protection Act and regulations such as Regulation 347 (Waste Management).  Minor amendments to Regulation 153/04 (Brownfields Regulation) have also been proposed to assist in streamlining and simplifying filing of Records of Site Condition and redevelopment of Brownfield properties.  Further definitions of soil, waste and inert fill are also forthcoming in the new proposed Excess Soil Regulatory package.

One of the main benefits of the proposed Excess Soil Regulation is the clarity it provides in the expectations of appropriate management of excess soil along with the steps that would be followed to provide the level of certainty that the public would expect.  It puts a heavy onus on the generator of the excess soil (or the source site) to assess the quality against a set of new standards.  The Standards were developed as a subset of the O. Reg. 153/04 Brownfield Standards, aimed at assisting in identifying acceptable and beneficial re-use of the excess soil.

Beneficial reuse of excess soil has a strong consideration for soil quality in terms of chemical testing to assess for contaminants; however, Ontario soils are highly variable with respect to the geotechnical quality for engineered reuse (i.e., silt, clay, sands, gravels and poor quality mixed fill).  Recovered excess soil may require some screening/grading to classify the geotechnical qualities prior to identifying an appropriate engineered and beneficial reuse.  Market-based solutions and opportunities for excess soil supply and demand services are sure to be identified as creative Ontarians have historically shown innovation in finding geotechnical solutions for excess soil.  The new regulatory package allows for this to happen to the benefit of both sender and receiver parties. Increasingly, clients are also choosing to avoid moving soils by employing methods to limit or even eliminate the amount of soils that have to be moved from a poor fill site with things like landscaped architectural features or ground improvement to treat soils in place.

Another benefit of the proposed excess soil regulation is the placement of the responsibility to ensure and “certify” the quality of the excess soil and the appropriate handling and re-use of the material by the source site or generator.  This requires a shift in the thinking around management of any excess soil materials to be assessed and pre-planned at the beginning of a project, versus at the last minute and left to the excavation contractor, as has historically been done.  The shift in thinking and pre-planning may take time, but with the assistance of the “Qualified Person” community in Ontario, the planning can be simplified.  The industry is already starting to shift to a more responsible management of excess soils, with the knowledge of potential Regulatory changes. The proposed Excess Soil Regulatory package has a well-defined transition period of two full years to be fully enacted, giving the construction and development industry time to become used to the shift in thinking and pre-planning as well as the procurement groups to ensure that the appropriate assessment and characterization activities are completed.

The benefits of many aspects of the proposed Excess Soil Regulatory package are clear and are desired in Ontario.  The business community has hoped that the current Conservative Government in Ontario understands that the Excess Soil Regulatory package has been requested by the citizens of Ontario, and formulated through an exhaustive consultation and engagement of the various stakeholders in the Province. It has also been hoped that the current Provincial Government sees the value in many aspects of the proposed regulatory package for management of excess soils.  With reference to Excess Soil Regulation in the Environment Plan, it certainly appears that the current Provincial Government does see the value.  Further, the complimentary minor amendments to the soil and waste definitions are needed as are the proposed amendments to the Brownfield Regulation.

Since the June 2018 election, the construction and development industries in Ontario have been patiently waiting for clarity on how the current Provincial Government plans to proceed.  It is clear that this new legislative change will help to make Ontario open for business and it appears that the current Provincial Government agrees.  We will now see what changes to the proposed Regulatory Package will be made, hopefully, sooner than later.

This article was first published in the Geosolv website.

About the Author

Grant Walsom, P.Eng., is a Partner at XCG Consulting Limited and recognized as a Qualified Person in Ontario under the Record of Site Condition Regulation (O. Reg. 153/04). He proudly serves on the Board of Directors at the Ontario Environment Industry Association (ONEIA) and the Canadian Brownfields Network (CBN). Grant can be reached at grant.walsom@xcg.com.

GFL Fined $300,000 for illegal sale of PERC

On December 10, 2018, GFL Environmental Inc. was sentenced after pleading guilty in the Ontario Court of Justice to violating federal environmental legislation. The company was fined $300,000.

The charges were laid January 2017 after inspectors determined that GFL had supplied tetrachloroethylene, also known as PERC, to nine dry cleaning operations in Toronto, Newmarket, Scarborough, Mississauga, Waterloo, London and Cambridge that had not adhered to containment measures required by law.  According to an indictment filed with the court at that time, infractions noted by enforcement officers included inadequate wastewater containment systems and floor drain plugs that were not resistant to PERC.

The company, along with president and CEO Patrick Dovigi, vice-president of sales and marketing John Petlichkovski, and Louie Servos, identified as a GFL employee, were each charged with 16 counts under the Canadian Environmental Protection Act, 1999, according to the indictment.

The resolution presented in court on December 10th saw GFL pleading guilty to two counts. The remaining charges were withdrawn at the request of the Crown.

After an investigation led by Environment and Climate Change Canada enforcement officers, charges were laid and GFL Environmental Inc. pleaded guilty to two counts of contravening the Tetrachloroethylene (Use in Dry Cleaning and Reporting Requirements) Regulations (SOR 203/79) under the Canadian Environmental Protection Act, 1999 for selling tetrachloroethylene, commonly referred to as “PERC” to owners or operators of dry-cleaning facilities that did not meet regulatory standards.

GFL was fined $150,000 for each offence; the minimum fine for a first-time offender is $100,000. The Canadian Environmental Protection Act, 1999 allows courts to fine offenders up to a maximum of $4 million.

SOR 203/79 prohibits anyone from selling tetrachloroethylene to dry cleaners unless the dry-cleaning facility is compliant with the equipment specifications set out in the Regulations, which aim to reduce releases into the environment.

dry cleaning equipment

The Regulations are unique in that in places the onus of the seller of “PERC” to ensure that the buyer (typically dry cleaning facilities) have the proper equipment and training to prevent the release of PERC into the environment.

Tetrachloroethylene, used commercially since the early 1900s, has been an important chlorinated solvent worldwide. Tetrachloroethylene is a colourless, volatile liquid with an ether-like odour. It is also commonly referred to as perchloroethylene or PERC.

The most important routes of exposure to tetrachloroethylene for the general public are ingesting contaminated water and inhaling ambient air.  Improper disposal and releases from dry cleaning facilities and landfills can lead to groundwater contamination and potential environmental exposures.

PERC is a dense non-aqueous phase liquid (DNAPL), meaning that it is only slightly soluble and more dense than water.  When released in the subsurface, it will migrate downward, adsorbing into soil particles, slightly dissolving into groundwater, and eventually making its way to bedrock where it will pool and continue to dissolve into the groundwater.  As a result, PERC is very difficult to remediate from the subsurface.

As a result of this conviction, GFL Environmental Inc. will be added to the Environmental Offenders Registry.

The $300,000 fine will be directed to the Environmental Damages Fund.  The Environmental Damages Fund (EDF) is a specified purpose account, administered by Environment Canada, to provide a mechanism for directing funds received as a result of fines, court orders, and voluntary payments to priority projects that will benefit our natural environment. The Environmental Damages Fund (EDF) follows the Polluter Pays Principle to help ensure that those who cause environmental damage or harm to wildlife take responsibility for their actions.

Canada takes final steps to ban Asbestos

by Paul Manning, Manning Environmental Law

Environment and Climate Change Canada, along with Health Canada, published the Prohibition of Asbestos and Products Containing Asbestos Regulations in the Canada Gazette, Part II on October 17, 2018.

These new regulations apply to any person who manufactures, imports, sells or uses asbestos or products containing asbestos.

Thetford, Quebec open pit asbestos mine

The regulations prohibit the import, sale and use of all forms of asbestos as well as the manufacture, import, sale and use of products containing asbestos, with a limited number of exclusions:

  • ongoing exclusions for
    • the transfer of physical possession or control of asbestos or a product containing asbestos to allow its disposal
    • the re-use of asbestos in existing road infrastructure into new road infrastructure or in asbestos mining site restoration
    • the import, sale or use of military equipment serviced overseas with a product containing asbestos if there were no technically or economically feasible asbestos-free alternatives available
    • the import, sale or use of asbestos and products containing asbestos for display in a museum or for use in a laboratory
  • exclusions until
    • December 31, 2022 for the import, sale or use of products containing asbestos to service equipment in nuclear facilities, or to service military equipment, if there are no technically or economically feasible asbestos-free alternatives available,
    • December 31, 2029 for the import and use of asbestos for chlor-alkali facilities using asbestos diaphragm technology

The regulations include:

  • permit provisions for unforeseen circumstances where asbestos or a product containing asbestos is used to protect human health or the environment, if there is no technically or economically feasible asbestos-free alternative available
  • permit provisions for the import and use of products containing asbestos to service military equipment and equipment in a nuclear facility, if there is no technically or economically feasible asbestos-free alternative available
  • provisions requiring the submission of reports from museums, laboratories, and military, nuclear and chlor-alkali facilities, as well as permit holders, who import, use or display asbestos or products containing asbestos. The preparation and implementation of an asbestos management plan is also required in most cases

The regulations do not apply to:

  • asbestos integrated into a structure or infrastructure before the day on which the Regulations come into force (such as asbestos integrated into buildings and civil engineering works), or to products containing asbestos used before the day on which the regulations come into force (such as equipment installed in a facility, vehicles, ships, and airplanes)
  • asbestos and products containing asbestos in transit through Canada
  • mining residues, except for certain high risk activities which are prohibited, including:
  • the sale of asbestos mining residues for use in construction and landscaping activities, unless authorized by the province, and
  • the use of asbestos mining residues to manufacture a product that contains asbestos

In addition to these regulations, the existing Export of Substances on the Export Control List Regulations (ESECLR) and Schedule 3 to the Canadian Environmental Protection Act, 1999 were amended to prohibit exports of asbestos, with a limited number of exceptions.  These provisions ensure that Canada continues to meet its export obligations under international conventions, including the Rotterdam Convention. The regulations and related amendments to the ESECLR come into force on December 30, 2018.

This article is republished and first appeared on the Manning Environmental Law website.

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About the Author

Paul Manning is the principal of Manning Environmental Law and an environmental law specialist certified by the Law Society of Upper Canada. Paul has been selected as one of the world’s leading Environmental Lawyers by Who’s Who Legal: 2016.

Paul advises clients on a wide range of environmental law issues and represents them as counsel before tribunals and the courts. His practice focuses on environmental, energy, planning and Aboriginal law.

Paul holds a Masters degree in Environmental Law and obtained an accreditation in the UK as an expert in Planning Law. He is on the Executive Committee of the National Environmental, Energy and Resources Law Section of the Canadian Bar Association. Paul has a special interest in renewable energy and climate change regulation and holds a Certificate in Carbon Finance from the University of Toronto.

Canadian ban on asbestos and asbestos containing products

In the same week the cannabis became legal in Canada, the federal government announced the prohibition of asbestos and asbestos-containing products, according to a recent study published at DailyCBD.com.  The government action is considered the final step in the prohibition of asbestos and asbestos-containing products in Canada.

These new regulations are part of the government-wide strategy announced in 2016 to protect Canadians from exposure to asbestos. The new regulations prohibit the import, sale, and use of asbestos as well as the manufacture, import, sale, and use of asbestos-containing products, with a limited number of exclusions.

In addition, exports of asbestos and asbestos-containing products are now prohibited, with a limited number of exceptions, and the existing Export of Substances on the Export Control List Regulations and schedule 3 of the Canadian Environmental Protection Act, 1999 were amended to reflect that.

The new regulations and related amendments will come into force on December 30, 2018.  They will protect the health of Canadians by preventing new asbestos and asbestos-containing products from entering the Canadian market.

“This is the final step to ban asbestos in Canada.  We have followed through on our promise to deliver new, tougher rules to stop the import, use, sale, and export of asbestos in Canada. These measures will protect our communities and the health and safety of all Canadians,” stated Catherine McKenna in a news release.

Quick facts

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 3,000 applications worldwide.

The regulations do not apply to residues left from mining asbestos.  However, these asbestos-mining residues cannot be sold for use in construction or landscaping without provincial authorization, and they cannot be used to make a product that contains asbestos. The mining of asbestos in Canada ceased in 2011.

Risks related to asbestos-containing products that are already in use or installed—such as in existing buildings, equipment, and vehicles—will continue to be managed by existing federal, provincial, and municipal rules and regulations. There are no significant health risks if asbestos fibres are enclosed or tightly bound, in good condition, and left undisturbed.

The use, sale, and export of any asbestos-containing products that exist in inventories but that have not yet been installed are prohibited under the new regulations and related amendments.

The current Asbestos Products Regulations under the Canada Consumer Product Safety Act will be repealed as these new regulations are more comprehensive.