Penalty Creep: What is going on with Environmental Fines Across Canada?

Written by Aaron AtchesonBryan SmitsDanielle ParryJulia Zanetti, Miller Thomson

In July of this year, a fine of $2.7 million was levied against Kirby Offshore Marine Operating LLC following its guilty plea for violations of the Fisheries Act involving a spill of diesel fuel and lubricants near Edge Reef in British Columbia.[1] Approximately 107,552 litres of diesel fuel and 2,240 litres of lubricants were released into the waters, both of which substances are considered to be detrimental to fish and migratory birds under the Fisheries Act. The nearly $3 million fine represents the largest fine that has ever been imposed following one single spill incident of a deleterious substance into water frequented by fish.[2]

The news of this massive fine raises a broader question: are the fines now being handed out for environmental offenses rising faster than inflation? And if so, to what end? Our review of penalty levels in Canada looks at the legislative changes in the minimum and maximum environmental fines, and whether these changes in the law are actually having any real effects on the quantum of fines environmental offenders are receiving. The recent Kirby headline of its $2.7 million fine suggests they are. And finally, is there any indication that these larger fines are changing behaviour?

Up, up, up: The Recent Pattern in Environmental Fine Laws

Ushering in the legislative shift at the federal level was the new Environmental Enforcement Act (EEA) enacted by the Conservative government in 2009. This legislation introduced a new fine regime that establishes mandatory minimum fines for individuals and corporations, as well as higher maximum fines for a new category of “designated offences”. The maximum fine for an individual convicted of a designated offence, upon indictment, became $1 million, with a mandatory minimum fine of $15,000. For corporations, the jump was even larger: a corporation can be subject to a fine of $6 million and a mandatory minimum fine of $500,000 for these offences.[3] Further, upon second and subsequent offences for a “substantially similar” offence falling under the EEA, all fines are automatically doubled.[4]

This pattern of handing out much higher fines for corporations than those for individual offenders is a recent phenomenon not confined to the federal regime. Under Ontario’s Environmental Protection Act (EPA), there are similarly substantial differences between fines charged to corporations and those charged to individuals. For instance, individuals charged with an offence under the EPA are subject to a maximum fine of $50,000 upon first conviction and $100,000 upon subsequent conviction,[5] whereas a corporation charged with the same offence would be subject to a maximum fine of $250,000 upon first conviction and $500,000 upon subsequent conviction.[6] Under Alberta’s Environmental Protection and Enhancement Act, corporations are subject to fines 10 times those for individuals for the same offences: with a maximum of $100,000 for individuals and $1 million for corporations.[7]

Under Ontario’s EPA, the large majority of increases to maximum fines were enacted in 2005 under a provincial Liberal government. The maximum fine levels were almost doubled in 2005, and are now very significant amounts.[8] Even more dramatic has been the introduction of mandatory minimum fines for certain enumerated offences listed under subsection 187(3) of the Act.[9] For these specific offences, prior to 2005, individuals convicted would be subject, upon first conviction, to a maximum fine of $50,000 and upon subsequent conviction, a maximum fine of $100,000.[10] Following the 2005 changes, an individual is subject to not only a maximum fine of $4 million but also a mandatory minimum fine of $5,000.[11] This combination of maximum and minimum continues for second and subsequent convictions, resulting in an individual subsequently convicted of one of these offences facing a maximum fine of $6 million, and a mandatory minimum fine of $20,000.[12]

The provincial trend of increasing the maximum fines associated with environmental offences is not confined to Ontario and Alberta. The equivalent provincial legislation in Quebec, the Environment Quality Act[13], underwent a fivefold increase in its minimum and maximum fines in 2011.[14]

The introduction of these mandatory minimums is noteworthy, as it essentially removes judicial discretion in ordering a lower fine in appropriate circumstances; this contributes to the overall move towards higher fines. These substantial fines on the books signify a larger trend in the increasingly punitive way environmental offences are being enforced and penalized.

Application – Are these changes translating into higher average fines?

The recent pattern towards increased legislated maximum fines in and of itself is largely unsurprising, given the appeal of appearing “tough on environmental offences” in today’s political arena. But has this tough legislative stance actually had any bearing on the average fine being doled out to environmental offenders?

The short answer is that across Canada, in the past 2-3 years specifically, the data shows that regulators have been handing out stricter fines mirroring their tougher legislation, both in the frequency of fines being given for convictions and in the quantum of those fines on average.

While historically in Canada, environmental fines were used sparingly as enforcement tools to ensure environmental compliance compared to other jurisdictions, this approach underwent a dramatic shift in 2014.[15] As mentioned above, one significant aspect of this has been the introduction of mandatory minimums. This results in larger average fines, as judges no longer have the ability to order fines below applicable levels.

Further, the value of “large” fines (meaning, over $75,000) issued across Canada between 1991 and 2009 totalled an average of $1.4 million per year.[16] This has shot up to $3.9 million on average in 2015 to an average of $32.2 million in 2017.[17] While the total quantum of large fines and penalties has decreased to $15.7 million in 2018, the apparent “drop” in aggregate fines is based on one large fine having been levied in 2017 (see footnote)[18]. Excepting out this one fine, the trend has continued, as evidenced by an increase in the number of large fines and penalties issued, which has increased from 28 to 34 in 2018.[19] Compared against 2014, the total amount of fines issued in 2017 has increased by nearly $10 million.[20] Virtually all Canadian jurisdictions increased the amount of large fines issued in 2017 compared to 2016.[21]

Noteworthy Trends and Particularities

Although there has been a relatively consistent increase across Canada, there are a few regional particularities to take note of, including a regional divide from east to west regarding the focus of enforcement efforts. Western provinces have shown a commitment to cracking down specifically on water-related offences, while central and eastern Canada appear to target their large fines primarily on air matters.

The three provinces which have been the most consistent users of fines to enforce compliance with environmental laws are Ontario, British Columbia, and Alberta.[22] In particular, Ontario has always been one of the most active jurisdictions in terms of enforcement of environmental laws by way of fines; of the total $26 million worth of environmental fines issued by both provincial and federal governments from 1991 until 2010, a whopping $14 million was collected in Ontario alone.[23] Ontario continues to lead the pack when it comes to the current trend of heftier fines in recent years, as it has undergone a 63% increase each year in average fine amount and its total fine amount has increased by almost $10 million in 2017 compared with 2014.[24]

Although all jurisdictions have contributed to this pattern of increasing fines, the most significant increases to happen in recent years have been in Saskatchewan, Quebec, and Alberta.[25] Quebec has had a dramatic increase in large fines, issuing over $9 million in fines in 2017, accounting for 29% of the total fines issued in Canada that year.[26] This spike in environmental fines by Quebec has been an extremely recent phenomenon, as Quebec issued zero “large” fines in 2015.[27] As well, a newcomer to the top 5 list of fine issuers in Canada is Saskatchewan, which levied $2.6 million in fines for environmental offences in 2017.[28]

There is also a regional divide between west and central/east Canada in their fine-issuing patterns whereby western provinces including B.C., Alberta, and Saskatchewan appear to be focusing their enforcement measures on water-related environmental offences,[29] provinces in central/eastern Canada, including the big fine issuers of Ontario and Quebec, appear to be utilizing environmental fines more to target air-related offences.[30] However, there appears to be a decrease in 2018 in the number of air-related fines compared to past years, while the “other” category is on the rise from 4% in 2017 to 33% in 2018. As well, water offences have become more of a nationally recognized enforcement priority across the country, now accounting for almost half of all large fines issued in Canada in 2018.[31]

Effects on Behaviour?

So, while it has been established that there is an intention to increase environmental fines through changes in legislation, and that such increases have actually happened, are these efforts changing behaviour? The answer appears to be yes, to a degree. Even though there is some discussion about the effectiveness of increased regulatory penalties on the levels of pollution, and the likelihood of materially contaminating events occurring,[32] there is a general consensus that a stringent deterrence regime incorporating significant fines is at least an element of an effective environmental harm reduction strategy.[33]

It will be interesting to observe developments unfold as regulators continue to implement and enforce these new, stricter environmental fine regimes on the books. Currently, the bottom line seems to be that environmental offenders, whether corporate or individual, wherever located across Canada, can expect to be met with heavier-handed treatment of the law. And, so long as the regulatory authorities provide direction on how to comply and to reduce risk, and have a record of enforcing the laws in place, it is likely to contribute to reducing contaminating activities in jurisdictions across Canada.


[1] “Use and Environmental Management of Natural Resources in Canada”, Dragun Corporation Environmental Advisors”, https://www.dragun.ca/environmental-management-of-raw-and-refined-natural-resources/.

[2] Ibid.

[3] Government of Canada, Fine Regime Under the Environmental Enforcement Act (14 June 2017), online: https://www.canada.ca/en/environment-climate-change/services/environmental-enforcement/acts-regulations/about-act/fine-regime.html.

[4] Ibid.

[5] Environmental Protection Act, R.S.O. 1990, c. E.19 at s. 187(1) [EPA].

[6] Ibid at s.187(2).

[7]Environmental Protection and Enhancement Act, R.S.A. 2000, c. E.12 at s.228(1) [EPEA].

[8] For instance, whereas prior to 2005 the maximum fine for an individual upon first conviction was $20,000 and upon subsequent conviction was $50,000, now, upon first conviction, an individual is subject to a maximum fine of $50,000 and upon subsequent conviction, a maximum fine of $100,000. (Ibid at s. 187(1).)

[9] Includes offences related to liquid industrial or hazardous waste; discharge of contaminants; and failing to comply with a term or condition of an environmental compliance approval, or other license or permit under this Act in relation to contaminant discharges (EPA, supra note 5 at s.187(3)).

[10] Ibid at s. 187(5).

[11] Ibid.

[12] Ibid.

[13] Environment Quality Act, CQLR c Q-2 [Environment Quality Act].

[14] Before this shift, individuals convicted of certain offences including the release of containments were subject to a mandatory minimum fine of $2,000 and maximum of $20,000; this is contrasted with the current version of the Act which features mandatory minimum fine of $10,000 and a maximum of $1 million for individuals convicted of the same offences. (Ibid at s. 115.32)

[15] Ibid at p. 2.

[16] Ibid.

[17] Ibid at pp. 2-3.

[18] Note: The 2018 Berkley Canada Report shows that the quantum of Canada’s large environmental fines and penalties has been creeping up from 2014 until 2017 with what appears to be a sudden drop in 2018. However, it is important to note that this apparent decrease in 2018 is due in large part to a landmark case in 2017 wherein Volkswagen was fined $15 million as part of its settlement deal with the Competition Bureau of Canada, the most costly environmental fine ever given in Canada, for conducting misleading environmental marketing of certain diesel vehicles. Although this fine is noteworthy, it can alternatively be characterized as a Competition Act matter as opposed to a true environmental matter. Setting aside the Volkswagen fine, there was only a difference in total quantum of large fines handed out in 2017 compared to 2018 of $1.5 million. Additionally, the total number of large fines levied increased from 27 in 2017 to 34 in 2018. As a whole, the established pattern of Canada undergoing an overall increase in large environmental fines has continued into 2018.

[19] Berkley Canada White Paper, “Environmental Fines and Penalties Report, 2018 Update Report”, Berkley Canada White Paper (March 2019), at p. 4 [Berkley White Paper, 2018].

[20] Berkley Canada White Paper, “Environmental Fines and Penalties Report, 2017 Update” Berkley Canada White Paper (March 2018), at p. 6 [Berkley Canada White Paper, 2017].

[21] Ibid at p. 5.

[22] Ibid at p. 4.

[23] Nimonik, “Environmental Fines in Canada, 1990-2009” at p. 2 [Nimonik: Environmental Fines].

[24] Berkley Canada White Paper, 2017 supra note 19 at p. 5.

[25] Ibid at p. 5.

[26] Ibid at p. 4.

[27] Ibid at p.5

[28] Ibid at p 5.

[29] Some of the most noteworthy cases in recent years including offences and fines of $2.2 million for offences arising from logging operations and the improper construction of road and stream crossings in B.C., (“Canada: Logging Companies Fined $2.2 Million Under the Fisheries Act”, at: http://www.mondaq.com/canada/x/576972/Environmental+Law/Logging+companies+fined+22+million+under+the+Fisheries+Act.) $172,000 for a pipeline leak in Alberta (“Alberta Energy Regulator fines Murphy Oil $172,500 for 2015 Pipeline Spill”, at: https://calgaryherald.com/business/energy/alberta-energy-regulator-fines-murphy-oil-172500-for-pipeline-spill) $3.5 million for a wastewater leak from a dam failure in Alberta (“Coal Mine Fined $4.5 Million for 2013 spill that contaminated Athabasca River”, at: https://www.cbc.ca/news/canada/edmonton/obed-mountain-mine-fine-athabasca-spill-1.4154792.), and $1.4 million for the discharge of effluent into water frequented by fish in violation of the Fisheries Act in B.C. (“B.C. Coal Mine Company Teck Fined $1.4 Million for Polluting B.C. River, at: https://thenarwhal.ca/b-c-coal-mine-company-teck-fined-1-4-million-polluting-b-c-river/.).

[30] For example, handing out fines for offences such as fines of $175,000 for releasing incinerator ash into the environment in Ontario (“Toronto Company fined $175,000 for Environmental Protection Act Violations” at: https://news.ontario.ca/ene/en/2017/02/toronto-company-fined-175000-for-environmental-protection-act-violations.html.) $265,000 for selling of aerosol products containing ozone-depleting substances in Ontario (“Fastenal Canada fined $265K for selling aerosols with banned HCFCs” at: https://www.cbc.ca/news/canada/kitchener-waterloo/kitchener-fastenal-fined-environment-hydrochlorofluorocarbons-1.4289116.), and $765,000 for the release of PCBs into the environment and the failure to notify in Quebec (“The Hudson Bay Company located in Montreal fined $765,000 for a large release of polychlorinated biphenyls into the environment”, at: https://www.newswire.ca/news-releases/the-hudson-bay-company-located-in-montreal-fined-765-000-for-a-large-release-of-polychlorinated-biphenyls-into-the-environment-606054136.html.).

[31] Berkley Canada White Paper, 2018 supra note 18 at p. 5.

This miscellaneous ”other” category of fines which shot up in 2018 includes a $2.75 million fine arising from the death of migratory birds and a $1.25 million penalty arising from the importing of fuel in violation of the Renewable Fuel Regulation.

[32] Neil Gunningham, Enforcing Environmental Regulation, Journal of Environmental Law, Volume 23, Issue 2, July 2011, Pages 169–201, https://doi.org/10.1093/jel/eqr006 [Gunningham, Enforcing Environmental Regulation].

[33] Gunningham, Enforcing Environmental Regulation, supra note 31 at p. 186.

Bryan C. Williamson, Do Environmental Regulations Really Work?, The Regulatory Review, November 2016, https://www.theregreview.org/2016/11/24/williamson-do-environmental-regulations-really-work/.

Will Amos, Federal government’s enforcement of environmental laws is weak, Ecojustice Blog, December 2011, https://www.ecojustice.ca/federal-governments-enforcement-of-environmental-laws-is-weak-report/.

Joseph Castrilli, Canada’s main environmental law isn’t working, Canadian Environmental Law Association, August 2016, https://www.cela.ca/blog/2016-08-22/canadas-main-environmental-law-isnt-working.

This publication is provided as an information service and may include items reported from other sources. We do not warrant its accuracy. This information is not meant as legal opinion or advice.

This article has been republished under general permission of Miller Thomson.  It was first published on the Miller Thomson website.

Environmental Liability Policies: The Extent Of Coverage

Written by Robert Emblem, Partner and Gabrielle Dumas-Aubin, Senior Associate, Clyde & Co

The authors wish to thank Raphaëlle Dussault for her contribution to the article

Soil contamination can expose landowners and businesses to significant liability. But Clyde & Co recently secured a Quebec ruling that demonstrates they should not assume that environmental liability insurance policies offer blanket protections against environmental risks. Indeed, there are significant differences between the types of coverage that they can offer.

In its judgment, in Paquet & Fils Ltée the Quebec Superior Court ruled on the applicability of an environmental cleanup and liability insurance policy for storage tanks. The defendants, a pool of insurers, issued the policy to the plaintiff, Paquet & Fils Ltée, a distributor of petroleum products, for its gas station located in Saint-Damien-de-Buckland, Quebec.

This lawsuit came about following the plaintiff’s discovery of contaminated soils at its gas station. The plaintiff had not conducted environmental testing when it acquired the site, nor when it dismantled the gas station.

It presented a claim to the Encon Group Inc. (which was acting as an insurance manager for the defendants) under the policy for the cost of decontamination. Encon denied coverage on the grounds that the plaintiff did not prove that the source of contamination originated from a storage tank leak during the period of insurance, as required under the policy.

The plaintiff sued the defendants contesting the denial of coverage, claiming that by taking such a position, the defendants never assumed any risk under the policy. It also argued that the defendants have been acting in bad faith when they initially issued the policy and following the receipt of its notice of claim. In particular, the plaintiff asserted that before issuing the policy, the defendants should have investigated the risk further instead of relying on the plaintiff’s statements. The plaintiff also argued that the defendants failed to advise it of the importance of identifying the source and age of the contamination. Finally, had it not been for the defendants’ late denial, the plaintiff claimed, it could have resumed its commercial activities at the site without having to decontaminate it.

Clyde & Co lawyers responded for the defendants that they were justified in denying coverage since the plaintiff failed to demonstrate, on a balance of probabilities, the existence of a “release,” within the meaning of the policy, during the period of insurance.

Initial comments

The court began by reviewing general interpretation principles for insurance policies. It explained that it was up to the insured first to establish that the claimed damage or loss falls within the initial grant of coverage. Following that, the insurer could prove that an exclusion applied. The court also noted that when the policy is unambiguous, it should give effect to clear language, reading the contract as a whole.

The court added that the insured could meet its onus by any means, including a presumption of fact, provided that it is serious, precise and concordant. That said, it notes that a presumption of fact cannot be deduced from a pure hypothesis, vague suspicions or mere conjecture. The court concluded that no presumption of fact was of assistance to the plaintiff in this case.

Policy triggers

The court explained that for coverage to be triggered under the policy, the plaintiff must prove, among other things, (1) the source of the contamination (i.e. a “release” originating from a “storage tank system”) and (2) the age of the contamination (i.e. started on or after the “retroactive date” specified in the policy).

It emphasized that the policy only covers a “release” originating from a “storage tank system” as opposed to one that occurs in the context of the plaintiff’s operations. Reviewing expert opinions and testimony, it indicated that it could not reasonably infer that a “release” had occurred. Even the plaintiff’s expert could not exclude that the plaintiff’s operations might have been the source of the contamination.

The court noted that no one had noticed or recorded a leak or any irregularity, which might suggest that a leak originated from a storage tank during the coverage period (on or after the “retroactive date”). In particular, it stressed that none of the experts could determine when precisely the contamination happened or how recently.

The court concluded that, in the absence of serious, precise and concordant facts proving that a release started during the period of coverage, the plaintiff could not demand that the defendants pay for the decontamination.

Illusory coverage and the insurers’ failure to investigate

The court also rejected the argument that the defendants never actually covered any risk. If, during the policy period, the plaintiff had observed a leak originating from its “storage tank system,” had conducted a proper investigation as required by the policy, and notified the defendants, there is no reason why coverage would have been denied.

The court also found that the defendants had no obligation to collect additional information to assess the risk at the time of the application for insurance. It made a distinction between the present matter and the case where the defendants would seek to cancel the policy for misrepresentation or non-disclosure of the material facts that affected their acceptance of the risk or setting the premium.

As for the allegations of bad faith, the court noted that the claims adjuster advised the plaintiff early on that, in the absence of an investigation establishing a “release,” coverage could be denied. The claims adjuster had also asked for additional information related to the source and age of the contamination. What’s more, the court concluded that the plaintiff did not demonstrate the seriousness of its alleged intention to resume its commercial activities. As a result, the defendants did not act in bad faith.

Takeaway

Ultimately, it is the insured’s responsibility to conduct environmental testing, in particular when acquiring a property, applying for an insurance policy or before dismantling facilities. These tests could be crucial to determine whether and to what extent coverage is available under an environmental liability policy. The plaintiff has not appealed the judgment.

This article has been republished with the permission of the authors.  It it was originally published on the Clyde & Co website.


About the Authors

Robert Emblem, Partner

Having worked on secondment with a leading Lloyd’s syndicate in the mid-1990s, Bob has also developed a large insurance coverage and defense practice. He represents insurers, reinsurers and insureds in the areas of commercial general liability, professional liability, media/technology liability, directors’ and officers’ liability, fidelity, contingency and property insurance. In addition to providing coverage and regulatory advice to insurers and reinsurers, he regularly performs policy wording reviews and claims audits.

Bob is a member of both the Ontario and Quebec bars, has wide-ranging experience in both the Common Law and civil law systems, and is fluently bilingual in English and French. Bob regularly appears before all levels of the Quebec courts as well as arbitration and mediation panels throughout North America.

Bob is one of the leading experts in Canada in the area of course of construction insurance and co-authored Commercial General Liability Insurance published by Butterworths. He speaks regularly at conferences and delivers papers for the Barreau du Québec, the Canadian Institute, the Canadian Bar Association, Insight, Canadian Defence Lawyers, the Insurance Bureau of Canada and other organizations.

Gabrielle Dumas-Aubin, Senior Associate

Gabrielle joined Clyde & Co in 2016, where she provides advices on managing and monitoring claims and insurance coverage for Canadian and foreign insurers. Gabrielle analyzes complex claims and draws up legal opinions on professional liability and general liability risks.

She graduated from the University of Ottawa with the honorary mention summa cum laude. During her studies, Gabrielle received numerous scholarships and was a research assistant for various professors. She completed her studies with a master’s degree in law at Oxford University in 2014.  Gabrielle is a member of the Young Bar Association of Montreal and of the Bar of Quebec in 2013.

Hazardous Waste & Environmental Response Conference – November 25th & 26th

The Hazardous Waste & Environmental Response Conference is scheduled for November 25th & 26th at the Mississauga Convention Centre in Mississauga, Ontario.  The event is co-hosted by the Ontario Waste Management Association and Hazmat Management Magazine.

This 2-day conference provides an essential and timely forum to discuss the management of hazardous waste and special materials, soils and site remediation, hazmat transportation, spill response and cutting-edge technologies and practices. Valuable information will be provided by leading industry, legal, financial and government speakers to individuals and organizations that are engaged in the wide range of services and activities involving hazardous and special materials.

Attendees can expect an informative and inspiring learning and networking experience throughout this unique 2-day event. Session themes provide an essential and timely forum to discuss the management of hazardous waste and special materials, soils and site remediation, hazmat transportation, spill response and cutting-edge technologies and practices.

As the only event of its kind in Canada, delegates will receive valuable information from leading industry, legal, financial and government speakers who are actively engaged in a wide range of services and activities involving hazardous waste and special materials.

Company owners, business managers, plant managers, environmental professionals, consultants, lawyers, government officials and municipalities – all will benefit from the opportunity to learn, share experiences and network with peers.

CONFERENCE SCHEDULE

MONDAY, NOVEMBER 25 – GENERAL SESSIONS

8:00 am – Registration

8:45 am – Opening and Welcome Address

9:00 am – 9:40 am

OPENING KEYNOTE – Lessons Learned from Hazmat Incidents

Jean Claude Morin, Directeur General, GFL Environmental Inc.

Dave Hill, National Director Emergency Response, GFL Environmental Inc.

Jean Claude and Dave will discuss lessons learned from hazmat incidents in Canada, including, train derailments, truck turn-overs, and hazardous materials storage depot explosions. This presentation will also provide an overview of some of the more serious incidents in Canada and discuss the valuable lessons learned regarding best practices in hazmat response.

9:40 am – 10:10 am

Legal Reporting Requirements

Paul Manning, LL.B., LL.M, Certified Specialist in Environmental Law and Principal, Manning Environmental Law

Paul will provide an overview of the Canadian federal and Ontario legislation as it relates to the reporting requirements in the event of a hazmat incident and/or spill. Included in the discussion will be an examination of the case law related to hazmat incidents and failure to report.

10:10 am – 10:45 am – Refreshment Break             

10:45 am – 11:15 am

Hazmat and Spill Response Actions and the Utilization of Countermeasures

Kyle Gravelle, National Technical Advisor, QM Environmental

Kyle will be speaking on hazmat and spill response actions and countermeasures to prevent contamination. Included in the presentation will be real-world examples of incidents in Canada and advice on preparations and hazmat management.

11:15 am – 12:00 pm

PANEL DISCUSSION: Utilization of New Technologies for HazMat Emergency Response

Moderator:  Rob Cook, CEO, OWMA

James Castle, CEO & Founder, Terranova Aerospace

Bob Goodfellow, Manager, Strategic Accounts & Emergency Response, Drain-All Ltd.

Ross Barrett, Business Development/Project Manager, Tomlinson Environmental Services Ltd.

The hazmat and environmental response sector is quickly evolving. During this discussion, panelists will share their experiences on new technologies and methodologies for the management of hazmat and environmental incidents and provide advice on what companies should do to be better prepared for hazmat incidents.

12:00 pm – 1:30 pm – Luncheon Speaker

From Hacking to Hurricanes and Beyond – The New Era of Crisis Communications

Suzanne bernier, CEM, CBCP, MBCI, CMCP, President, SB Crisis Consulting, Founder & Author of Disaster Heroes

During any crisis, communicating effectively to all key stakeholders is key. This session, delivered by a former journalist and now award-winning global crisis communications consultant, will look at the evolution of crisis management and crisis communications over the past 15 years. Specific case studies and lessons learned from events like the recent terror and mass attacks across North America, as well the 2017 hurricane season will be shared, including Texas, Florida and Puerto Rico communications challenges and successes. The session will also review traditional tips and tools required to ensure your organization can communicate effectively during any crisis, while avoiding any reputational damage or additional fall-out that could arise.

1:35 pm – 2:15 pm

Fire Risk in Hazmat and Hazardous Waste Facilities – The Impact and Organizational Costs 

Ryan Fogelman, Vice President of Strategic Partnerships, Fire Rover

Fire safety is an important responsibility for everyone in the hazardous materials & waste sector. The consequences of poor fire safety practices and not understanding the risk are especially serious in properties where processes or quantities of stored hazmat and waste materials would pose a serious ignition hazard.

In an effort to prevent fires and minimize the damage from fires when they occur, owners, managers and operators of hazmat and related facilities will learn about fire safety and how to develop plans to reduce the risk of fire hazards.

Learn about:

  • Data and statistics on waste facility fire incidents
  • Materials and processes that create a fire risk
  • Planning and procedures to reduce fire risk
  • Tools and practices to detect, supress and mitigate fire damage.

2:15 pm – 2:45 pm

Implementation of Land Disposal Restrictions (LDR) in Ontario – Treatment Requirements & Associated Costs

Erica Carabott, Senior Environmental Compliance Manager, Clean Harbours Inc.

The field of hazardous waste management in Ontario is complex and places an onus on all parties involved, including, generators, carriers, transfer and disposal facility operators. Initiatives such as pre-notification, mixing restrictions, land disposal restrictions, recycling restrictions and the requirements of the Hazardous Waste Information Network (HWIN) all add to the cumbersome task. The Landfill Disposal Restrictions (LDR) place responsibilities on generators and service providers alike. This presentation aims to navigate the implementation of LDR in Ontario, with specific emphasis on the Clean Harbors Sarnia facility to accommodate LDR treatment and the significant costs associated with it.

2:45 pm – 3:15 pm – Refreshment Break

3:15 pm – 4:00 pm

New Requirements on the Shipment of Hazardous Goods – Provincial, Federal and International   

Eva Clipsham, A/Safety Policy Advisor for Transport Canada

Steven Carrasco, Director, Program Management Branch, Ontario Ministry of the Environment, Conservation and Parks (MOECP)

Current federal and provincial frameworks for regulating the movement of hazardous waste and materials are currently undergoing change. Manifesting systems are being upgraded and refocused as electronic systems that will provide efficiencies to both generators and transporters. Learn about the current federal and provincial systems and the changes that are anticipated to be implemented in the near future.

4:00 pm – 5:00 pm – All attendees are invited to attend the Tradeshow Reception!

TUESDAY, NOVEMBER 26

8:30 am – Registration

8:45 am – Opening & Welcome Address

9:00 am – 9:45 am

Management of contaminated sites & increasing complexity and cost

Carl Spensieri, M.Sc., P.Eng., Vice President Environment, Berkley Canada (a Berkley Company)

This presentation will explore the various elements contributing to the increasing complexity and cost of managing contaminated sites. Carl will examine emerging risks and speak to potential strategies we can use to mitigate them. This presentation will also highlight opportunities for conference participants to offer new services that help owners of contaminated sites best respond to existing and emerging challenges.

9:45 am – 10:10 am – Refreshment Break

TRACK 1: HAZARDOUS WASTE GENERATION, TRANSPORTATION, TREATMENT AND DISPOSAL

10:15 am – 10:55 am

A National Perspective on the Hazardous Waste

Michael Parker, Vice President, Environmental Compliance, Clean Harbours Inc.

Hear about the challenges and opportunities facing the hazardous waste, hazmat and emergency response sector from an industry leader with a national view. The industry is evolving and the business fundamentals are ever changing. Government administrative and technical burdens are increasing and the volume of hazardous waste is declining – what will the future hold?

11:00 am – 11:40 am

PANEL DISCUSSION: Hazardous Waste & Special Materials – Transportation & Transit Challenges

Jim Halloran, Regional Manager, Heritage – Crystal Clean Inc.

Doug DeCoppel, EH&S Manager, International Permitting and Regulatory Affairs, GFL Environmental Inc.

Frank Wagner, Vice President Compliance, Safety-Kleen Canada Inc.

This panel will discuss key transportation issues and compliance challenges faced by hazardous waste generators and service providers, including significant changes to the documentation, labelling, packaging, emergency planning, and reporting requirements for hazardous waste and special materials shipments resulting from updated regulations and proposed initiatives. The panel will also review key considerations when selecting service providers to manage hazardous waste and special materials.

Topics included in this discussion: E-manifests (provincial and federal – lack of e-data transfer capabilities), HWIN fees (300% increase in fees but no increase in service), Transboundary Permits (lack of e-data transfer capabilities), container integrity and generator awareness.

11:45 am – 12:25 pm

Factors Influencing Treatment and Disposal Options for Hazardous Waste in Ontario

Ed Vago, Director of Operations, Covanta Environmental Solutions

Dan Boehm, Director of Business Development, Veolia ES Canada Industrial Services Inc.

Learn about the many recycling, treatment and disposal options for hazardous waste and hazardous materials in Ontario. Hear about the regulatory and operational factors to consider when deciding on the best management approach.

TRACK 2: SITE REMEDIATION

10:15 am – 10:55 am

Soils – Dig and Dump vs. On-Site Remediation: Factors to Consider & Case Studies

Devin Rosnak, Senior Client Manager & Technical Sales Manager, Ground Force Environmental

D. Grant Walsom, Partner, XCG Consulting Limited, Environmental Engineers & Scientists

Mark Tigchelaar, P. Eng., President and Founder of GeoSolv Inc.

Developers of brownfield site are faced with decisions around how to manage excavated soils. Impacted soils and soils with hazardous characteristics as tested at the site of generation can be managed through on-site remediation, or can be removed from the site to a variety of remediation and/or disposal options. Learn about the key options and factors that contribute to determining the optimum approach to managing soils.

11:00 am – 11:40 am

The Legal Framework for the Management of Contaminated Sites and Materials      

John Tidball, Partner, Specialist in Environmental Law, Miller Thomson LLP

The management of contaminated sites and related materials, including soils, are constrained by both regulatory and legal framework. Hear from a legal expert with unparalleled experience about the regulatory and legal issues that all developers/excavators transporters and service providers should be aware of as the legal liabilities in this area can be significant.

11:45 am – 12:25 pm

Anaerobic Bioremediation & Bioaugmentation – from the Lab to the Field

Dr. Elizabeth Edwards (Professor), Dr.Luz Puentes Jacome, Dr. Olivia Molenda, Dr. Courtney Toth, Dr. Ivy Yang (all Post doctoral fellows in the lab), Chemical Engineering & Applied Chemistry, University of Toronto

Together with her Post-Doctoral team, Dr. Edwards will present an overview of anaerobic bioremediation and bioaugmentation with some examples from their research and its application to the field.

12:30 pm – 2:00 pm

CLOSING KEYNOTE & LUNCHEON SPEAKER

Andrea Khanjin, MPP Barrie-Innisfil, Parliamentary Assistant, Ministry of the Environment, Conservation and Parks (MOECP)


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Serving ‘Rough Justice’: Assessing Remediation Costs And Liability Allocation Pursuant To The British Columbia Environmental Management Act

Written by Menka Sull and Samuel Kim, Alexander Holburn Law Firm

The British Columbia Environmental Management Act, S.B.C. 2003, c. 53, and the Contaminated Sites Regulation, B.C. Reg. 375(96) (CSR), provide the framework for identifying, remediating, and determining responsibility for the remediation of contaminated sites in British Columbia.

There has been relatively little case law considering the EMA; however, a recent BC Supreme Court decision provides an instructive analysis of cost recovery actions. In doing so, Jansen Industries 2010 Ltd. v. Victory Motors (Abbotsford) Ltd., 2019 BCSC 1621 shed light on two key issues: (1) What costs are recoverable as part of remediation costs under the EMA, and (2) How will liability for the remediation be allocated among those considered to be “responsible persons” for contamination?

Factual Background

Between 2009 and 2010, two properties located in Abbotsford – the Jansen site and the Victory Motors site – were discovered to have been contaminated by leaking underground gasoline storage tanks (“USTs”). The contamination originated from the Victory Motors site which was used as a gas station from World War II to 1994.

Example of the leaking underground storage tank

Jansen Industries 2010 Ltd. (“Jansen”) and Victory Motors (Abbotsford) Inc. (“Victory Motors”), the respective owners of the two sites, each brought actions against Actton Super-Save Gas Stations Ltd. (“Super-Save”), which operated the gas station from 1982 to 1992. Chevron Canada Limited (“Chevron”) and Shell Canada Limited (“Shell”) were also previous operators on the site; however, they were released from the action before trial as they settled with the plaintiffs.

Before trial, plaintiffs carried out the required remediation to obtain certificates of compliance for the respective sites pursuant to section 53(3) of the EMA. It was agreed that Jansen was not a responsible party, so the main issues pertained to the scope of the recoverable remediation costs, and allocation of liability amongst the other entities, including Victory Motors, Super-Save, Chevron, and Shell.

Recoverable Remediation Costs

The parties agreed that the amount of $395,706 paid to an engineering consulting company to obtain certificates of compliance for the two sites were properly remediation costs.

In his reasons for judgment, Mr. Justice Sewell held a number of remediation costs claimed by the plaintiffs were not recoverable pursuant to the EMA given the facts of this case, including:

  1. Legal fees incurred in seeking contribution from other responsible parties;
  2. Loss of rental income with respect to a building on the Victory Motors site while remediation was undertaken; and
  3. Costs to defend an action for remediation of contaminants originating on the Victory Motors site.

Although these remediation costs were recoverable in principle, Justice Sewell held that the plaintiff failed to tender adequate evidence regarding these claims.

Stigma Damages

The plaintiffs also sought stigma damages against Super-Save on the basis that residual contamination decreased the value of the sites. Super-Save argued, and the Court agreed, that stigma damages cannot be recovered as remediation costs under the EMA. Only the cost of bringing a site into compliance with the requirements of the EMA were held to be recoverable in a cost recovery action, which, in this case, was the cost of obtaining the certificates of compliance for the sites. Any claim exceeding this cost would have to be recovered in tort, after showing that a property owner was precluded from making optimal use of that property.

Allocation of Fault

Justice Sewell then turned to allocating liability amongst Victory Motors, Super-Save, Chevron, and Shell, having regard to the factors set out in section 35(2) of the CSR.

Price Paid for the Property

Justice Sewell considered the proposition that a party should not be able to recover the full costs of remediation if the remediation increased the value of the property by an amount in excess of those costs.

Here, the facts were complicated. The current owners of Victory Motors struck a bargain when they bought out all of its shares from the previous owner in 2012. The building on the Victory Motors site was then renovated and leased out to high quality tenants. The Court declined to treat the purchase price of the shares as a de facto purchase price of the property. Therefore, the profits realized from purchase of the Victory Motors shares did not form a basis to modify the allocation of remediation costs.

Due Diligence, Amount of Contaminants, and Relative Degree of Involvement

There was little evidence before Justice Sewell that any of the responsible persons exercised due diligence on the sites. Super-Save’s ten-year operation did not have an adequate inspection regime to detect small leaks, which were found to be enough to place significant amounts of contaminants in the soil over time. Meanwhile, from 1994 to 2012, Victory Motors did not exercise any due diligence at all, despite knowing that the gasoline infrastructure had remained in place. As Chevron and Shell were no longer parties to the action, no evidence was tendered regarding their exercise of due diligence.

The Court also considered the relative periods of operation, the volumes and toxicity of gasoline sold, and the installation and use of USTs by each of the responsible parties.

Remedial Measures Implemented and Paid for by any Responsible Party

The only remedial measures were the costs to obtain the certificate of compliance, which involved decommissioning the infrastructure and pumping out the remaining USTs.

Any Other Factor Relevant to a Fair and Just Allocation

Here, Justice Sewell took into account the circumstances under which ownership of Victory Motors changed hands in 2012. As Victory Motors received the benefit of remediation costs while being a significant contributor to the contamination, a significant portion of the remediation costs was allocated to it. The Court held that Victory Motors ought to have known about the environmental consequences of allowing disused gasoline infrastructure to remain on the property for nearly two decades.

The lengthy period of time that had passed since the likes of Chevron and Shell operated on the site militated toward a lower allocation of responsibility relative to the parties of the litigation. However, the allocation of liability reflected that a Chevron-installed UST was only decommissioned in 2012.

In the end, responsibility for the majority of the remediation costs was shouldered by Victory Motors and Super-Save.

Takeaways

This decision is important for a number of reasons.

First, it highlights the importance of establishing a sufficient evidentiary basis for claiming remediation costs under the EMA. The costs sought by the plaintiffs were denied not because the categories of costs were inherently unrecoverable as remediation costs, but because the evidence did not adequately support the claims.

The decision also clearly identifies remediation costs under the EMA and stigma damages as occupying distinct territories, with differing rationales and legal tests.

Finally, this decision highlights the practical difficulties in litigating over the relative contributions to a site’s contamination over several decades. The courts may only be able to administer “rough justice”, with all the uncertainty it entails.

This article has been republished with the permission of the authors.  It was first published on Alexander Holburn’s website.


About the Authors

Menka Sull is a member of the firm’s Construction + Engineering, Insurance, Administrative Law and Environmental Practices. Her practice is litigation-focused and includes a variety of areas of law including contractual disputes, construction litigation, environmental contamination, occupiers’ liability claims and professional negligence and disciplinary matters. Within her professional liability practice, Menka specializes in representing the interests of engineers, architects and lawyers in litigation arising out of professional activities.

Samual Kim is a student at the firm.  He has a B.Sc. from the University of the Toronto and a Juris Doctor degree from the University of Victoria.

What are the safety risks when transporting radioactive materials?

Written by Stephen Pike, Argon Electronics

Radioactive materials have a wide variety of applications within the fields of medicine, power generation, manufacturing and the military – and just as with any other product, there are times when these materials may need to be moved from one location to another.

In the US, the Environmental Protection Agency (EPA) estimates that there are around three million shipments of radioactive materials to, from or within the US every year.  In the UK meanwhile, Public Health England (PHE) has reported that somewhere in the region of half a million packages containing radioactive materials are transported to, from or within the UK annually.

Regulation of transport of radioactive materials

Ensuring the safety and security of the transport of radioactive material – whether be it by road, rail, air or sea – is understandably a major priority and one that is highly regulated, depending upon the type, and the quantity, of radioactivity that is being transported.

Materials that are deemed to be low in radioactivity may be able to be shipped with no, or very few, controls.

Materials that are considered to be highly radioactive will be subject to controlled routes, segregation, additional security and specialist packaging and labelling measures.

The UK’s Office for Nuclear Regulation (ONR) has a primary role to play in advising on the safe and secure transportation of radioactive substances across a wide of sectors – from the movement of decommissioned nuclear reactors or the carriage of irradiated nuclear fuel to the shipping of medical radio-pharmaceuticals, or the transport of sealed radioactive sources used within the construction or oil industries.

What constitutes a radiation transport event?

The normal transport of radioactive materials can result in transport workers (and sometimes even members of the public) being exposed to small radiation doses.

The strict regulatory conditions of transport however are designed to minimise these exposures.

Accidents and incidents can occur for a variety of reasons – from seemingly minor administrative errors, to problems arising from insufficient packaging, mishaps that occur during loading or unloading of consignments or the theft or loss of a radioactive material being carried.

When such events do occur there is the risk of radiological consequences not just for those transport workers in the immediate vicinity but for emergency responders, HazMat personnel and the wider public.

According to the Radioactive Materials Transport Event Database (RAMTED) there were a total of 16 accidents or incidents involving the transport of radiological materials in the UK in 2012.

These included the receipt of a flask from a nuclear power station where one of the lid-chock locking bolts was found to be loose; the failure of lifting equipment when removing a type 30B uranium hexafluoride cylinder from its protective shipping packaging; and an incident involving the stealing of pipes and plates from a scrap meal facility that were found to have traces of orphan radioactive sources.

Public Health England differentiates radiation transport events into one of the five following categories:

  1. A transport accident (TA) – which is defined as any event that occurs during the carriage of a consignment of radioactive material and that prevents either the consignment, or the vehicle itself, from being able to complete its journey.
  2. A transport incident (TI) – comprising any form of event, other than an accident, that may have occurred prior to or during the carriage of the consignment and that may have resulted in the loss or damage of the consignment or the unforeseen exposure of transport workers or members of the public.
  3. A handling accident (HA) – encompassing any accident that occurs during the loading, shipping, storing or unloading of a consignment of radioactive material and that results in damage to the consignment.
  4. A handling incident (HI) – defined as any handling event, other than an accident, that may occur during the loading, shipping , storing or unloading of the radioactive consignment.
  5. Contamination (C) – defined an an event where radioactive contamination is found on the surface of a package or where the conveyance of a radioactive material is found to be in excess of the regulatory limit.

The role of radiation safety training

When formulating a radiation training strategy, it is vital that personnel are adequately trained to handle the hazards and the risks associated with incidents involving radioactive materials.

Radiation safety training and development programmes should ideally provide personnel with both the knowledge they need and the practical skills that they will rely on in order to carry out their duties safely and effectively.

While most radiation detection equipment is relatively easy to use, the key lies in ensuring that trainees understand the significance of the readings that they get, that they can recognise the implications of changes in units of measurement and that they have the opportunity to train in as life-like a setting as possible.


About the Author

Steven Pike is the Founder and Managing Director of Argon Electronics, a leader in the development and manufacture of Chemical, Biological, Radiological and Nuclear (CBRN) and hazardous material (HazMat) detector simulators. He is interested in liaising with CBRN professionals and detector manufacturers to develop training simulators as well as CBRN trainers and exercise planners to enhance their capability and improve the quality of CBRN and Hazmat training.

Researchers scaling up technology that destroys PFAS contamination

Researchers from the University of Purdue recently received funding from the U.S. Environmental Protection Agency (U.S. EPA) to scale up a patented technology that can destroy poly- and perfluoroalkyl substances (PFAS) in groundwater.

PFAS include perfluorooctanesulfonate (PFOS), perfluorooctanoic acid (PFOA) and other perfluoroalkyl acids (PFAAs) and are found at more than 600 military training sites across the United States where firefighter training involved the use of PFAS-containing foams. They also are found at airports, which use similar chemical foams to put out fires.

PFAS have been linked to cancer, thyroid dysfunction, liver disease, immune system impairment, and other serious medical concerns. The compounds also are found in contaminated drinking water.

Linda Lee, a professor of agronomy in Purdue’s College of Agriculture, has patented a technology that destroys PFAS through the use of a permeable reactive barrier constructed in the subsurface.  Ms. Lee stated, “Our approach is different from current technologies, which are focused on capture and not destruction. We target compound destruction with a design that has potential to be used as part of a permeable reactive barrier underground to eradicate these compounds in groundwater to keep them from spreading.”

compounds graphic

“This is a significant problem because these compounds, which are found in our blood, drinking water, homes and products, do not degrade naturally,” Lee said. “Our team has patented technology involving the use of nickel and iron nanoparticles synthesized onto activated carbon to capture, attack and destroy the compounds.”

Recently, Lee’s team received part of a $6 million science to achieve results grant from the U.S. Environmental Protection Agency to address the issue of the compounds ending up in waste streams and eventually drinking water. The latest award comes after the team received earlier funding from the National Science Foundation and the Department of Defense. The team’s recent work also has included international partnerships in Pakistan through The National Academies of Sciences, Engineering and Medicine.

Lee patented her nanoparticle innovation through the Purdue Research Foundation Office of Technology Commercialization. She is looking for additional partners to help scale up the work.

 

Greener Cleanup Metrics

The United States Environmental Protect Agency (U.S. EPA) “Principles for Greener Cleanups” provide a foundation for planning and implementing cleanups that protect human health and the environment while minimizing the environmental footprint of cleanup activities.

The U.S. EPA has developed 14 greener cleanup metrics that may be used to quantify specific portions of the footprint, such as the amounts of refined materials, public water or diesel fuel that are used or the amount of wastewater and hazardous waste that is generated.

 

Category Metric Unit of Measure
Materials
Refined materials used or conserved tons
Unrefined materials used or conserved tons
Waste Hazardous waste generated or avoided tons
Non-hazardous waste generated or avoided tons
Water Public water used or conserved million gallons
Groundwater used or conserved million gallons
Wastewater generated or avoided million gallons
Other water used or conserved million gallons
Energy Grid electricity used or conserved megawatt hours
Diesel used or conserved for equipment gallons
Diesel used or conserved for transportation gallons
Gasoline used or conserved for equipment gallons
Gasoline used or conserved for transportation gallons
Other energy used or conserved (variable)

The metrics provide an optional means for regulators, private industry and other cleanup partners to collect and track site-specific footprint information across multiple sites in a uniform and transparent manner. On a site-specific level, use of the metrics can help decision makers prioritize and select best management practices (BMPs) that could be implemented to minimize the footprint. The metrics may be applied to any type of site cleanup, including ones conducted through Superfund, RCRA or brownfield regulatory programs or voluntary initiatives.

Due to wide variations in cleanup project scopes and regional or local priorities, environmental footprints associated with other core elements of a greener cleanup may be quantified through additional metrics chosen by project stakeholders. Parties interested in quantifying a cleanup project’s environmental footprint at a more detailed level may use EPA’s Spreadsheets for Environmental Footprint Analysis (SEFA).

Questions about the Greener Cleanup Metrics may be forwarded to: Carlos Pachon, EPA/Office of Land and Emergency Management, or Hilary Thornton, EPA/Region 4.

 

Alberta Court Of Appeal Sets The Guideline For Extending Limitation Period For Environmental Claims Under The Environmental Protection And Enhancement Act

Written by Chidinma Thompson and Miles F. Pittman, Borden Ladner Gervais LLP

Introduction

In Brookfield Residential (Alberta) LP (Carma Developers LP) v Imperial Oil Limited, 2019 ABCA 35 (“Brookfield“), the Alberta Court of Appeal unanimously confirmed the Court of Queen’s Bench treatment of the test that applies when an application is made to extend a limitation period under Alberta’s Environmental Protection and Enhancement Act RSA 2000 c.E-12 (“EPEA“). This decision overruled the approach proposed in Lakeview Village Professional Centre Corp. v Suncor Energy Inc. 2016 ABQB 288 and has significant implications for parties to environmental claims. While the law in this area has advanced in a short period of time, there is an issue of whether contractual limitation period can be extended under section 218.

Background

Brookfield Residential (Alberta) LP formerly known as Carma Developers LP (“Brookfield”) brought a claim in negligence for environmental liability against Imperial Oil Limited (“Imperial”). Brookfield had acquired a property that had been a well site drilled and operated by Imperial 60 years prior to the action.

Imperial brought an application for summary dismissal, on the basis that the claim was statute barred under the Limitations Act RSA 2000, c L-12. Brookfield cross applied for an extension of the limitation period under section 218 of the EPEA.

The Court of Queen’s Bench Decision

The Court of Queen’s Bench dismissed Brookfield’s application to extend the limitations period pursuant to s.218 of the EPEA and granted Imperial Oil’s summary dismissal application on the grounds of no merit to the claim given the ultimate limitation period expiry. The Court applied the section 218 factors: (a) when the adverse effect occurred, (b) whether the claimant exercised due diligence in discovering it, (c) whether there would be prejudice to the defendant’s ability to defend the claim; and (d) any other criteria the court considers relevant.

The Court considered when the environmental damage occurred and determined that there was insufficient evidence to pinpoint when the damage had occurred. The Court found that Brookfield’s expert’s report contained instances of “mere speculation” and that the report “ignore[d] the years when the well was a flowing oil well and the years when it was used for salt water disposal.” The Court found that Brookfield had exercised a reasonable amount of due diligence in ascertaining environmental damage. The Court, having found no additional criteria was required to be considered pursuant to 218(3) (d), turned to whether Imperial would be prejudiced by the action if allowed to proceed. The Court found that Imperial would suffer prejudice if the limitations period was extended for the following reasons.

First, the passage of a great deal of time meant that there would be a significant number of lost witnesses, lost documents, and lost records. Further, Imperial would not have the ability to sample and test the contamination themselves, and therefore the ability to test various causation sources. The inability for Imperial to defend itself was at the heart of the prejudice.

Second, the Court found that the standard of care appropriate at the time in question would be nearly impossible to establish. As a claim in negligence, the standard of care required of Imperial at the time would be critical to both litigants’ cases. The Court held that “[e]volving standards of conduct and new standards of liability eventually make it unfair to judge actions of the past by the standards of today.”1The Court concluded that permitting an action to go ahead more than 60 years after the Defendant last was involved in the Well would be an abuse.

The Court of Appeal Decision

The Court of Appeal confirmed that section 218 applications under the EPEA are to be heard pre-trial. In doing so, the Court of Appeal rejected the approach proposed in Lakeview Village Professional Centre Corp. v Suncor Energy Inc. 2016 ABQB 288 (“Lakeview“) and held that Lakeview should not be followed. The Court in Lakeview approached section 218 as a procedural matter, suggesting that in some cases it would be possible to extend the limitation period under s. 218 in a preliminary application, but in other cases it might be appropriate to defer the decision until trial when there will be a full evidentiary record. The Court of Appeal determined that the Lakeview approach is wrong for two reasons.

First, it is inconsistent with the wording of section 218 which provides that the limitations period may be extended “on application.” Second, the approach is ultimately circular. Waiting until trial to decide a 218 application defeats the purpose and entire repose that the Limitations Act was intended to bring. It would deprive the defendant of the entire benefit of the limitations defence, which is avoiding the distractions, expense, and risks of litigation after the prescribed time has passed. The claim may proceed and be successful on its merits at trial, only to be defeated by the defendant’s limitations defence. Yet, the defendant has undergone the entire effort and expense of trial.

In assessing the 10 years ultimate limitation period in this case, the Court of Appeal confirmed that limitation period does not recommence every time the cause of action or the property is transferred. More importantly, the Court differentiated between the damage to the land (continuing adverse effect) from the continuous breach of duty or course of conduct that that would start the limitation period running anew every day. The Court of Appeal further confirmed that the competing policy objectives of the Limitations Act and the EPEA must be weighed in assessing a section 218 extension application. The Court of Appeal confirmed that the ultimate decision on whether or not to extend the limitation period includes an element of discretion that should not be disturbed unless they are based on an error of principle, consider irrelevant factors, or are clearly unreasonable. In this case, the decision by the chambers judge not to extend the limitation period was amply supported by the record.

Implications

Since the addition of section 218 to EPEA in 1998, extension of limitation period for environmental claims did not attract attention until Lakeview in 2016 and Brookfield in 2017. Jurisprudence was sparse and there was no defined judicial guidance on the application of the statutory factors in exercising the discretion to extend limitation period. Lakeview was the first attempt to articulate an approach which did not work in Brookfield. The Alberta Court of Appeal has established the required guidance in this decision. It is noteworthy that inLakeview there was no application by the defendants for summary judgment as in Brookfield, and this fact was irrelevant to the Court of Appeal’s determination that extension of limitation period under EPEA must be decided pre-trial.

This decision provides more certainty for environmental damage litigants. Given that the main battle will now be fought at the front end, a potential effect is that section 218 applications will invariably be followed by cross-applications for summary dismissal. Further, parties have to put forward their best case at this early stage and the evidentiary requirement is significant. However, the application of the section 218 factors is fact driven, and ultimately, the success of each case will depend on its own facts.

While section 218 expressly addresses statutory limitation period, a question has arisen as to whether the Court can extend contractual limitation period under section 218. We will continue to monitor developments in this area and provide further updates.

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 has been republished with the permission of the authors.  It was first published on the BLG website.


About the Authors

 

Second Opinions Can Offer a Distinctly-Different Path Forward

Written by Alan Hahn, Dragun Corporation

A story in the Washington Post from a year
ago discussed why second medical opinions can be very important.  In one case, a young man, at his mother’s
behest, got a second opinion and received life-saving surgery for cancer that
he would not have otherwise received. 
The other case they highlighted was a woman who did not get a second
opinion and had a double mastectomy and hysterectomy.  Neither, it turns out, were necessary.

A Mayo Clinic Study found
that as many as 88% of those looking for a second opinion left with a new or “refined
diagnoses,” and 21% had a “distinctly different” diagnoses.  

Medical second opinions can literally save
your life.

While environmental consultants are not in
the business of saving lives directly, in our experience,
environmental/scientific second opinions have provided some very stark results.

The intent of second opinions, medical, or
as is the case in our world, environmental, is not (or should not be) to
unjustly criticize.  The intent is to
objectively review the data and offer suggestions for a “refined diagnoses” and
occasionally offer a “distinctly different” path forward.

At Dragun Corporation, we began 30-plus
years ago providing second opinions, or, as we call them, peer reviews.  Below are very
brief discussions of some of these second opinions.

Second
Opinion of Groundwater Investigation

A site assessment and remediation program
that was confounding a company had many complicating factors.  When we were asked to review the project, it
was headed down a path of more investigation and remediation.  What we found, and why the subsurface data
were not making sense, was an underground storage tank that was “missed” early
in the investigation. The problem was compounded as they moved to each
subsequent phase of work.  Once this was
discovered, the other data began to make sense.  Collection of additional supporting data presented
to the regulators was convincing and the site was closed.

Second
Opinion of Remediation

An old industrial site with a lot of
“environmental history” was getting more complicated (and confusing) with each
subsequent set of data.  The calculated
groundwater flow at the site did not make sense, but a multi-million dollar
remediation was proposed nonetheless.  The
major issue uncovered in the peer-review process was improperly-screened
wells.  It was a “simple” mistake (and a
reminder of why field work is so important), but the potential consequences
could have been very expensive.  In this
case, a distinctly-different diagnoses led to a far-different (and less costly)
solution.

Second
Opinion Leads to Supreme Court

Another older industrial site that used a
common, but often problematic, chemical, trichloroethylene (TCE), was so
contentious that it ended up in a US State Supreme Court.  When the problem was first identified in the
groundwater, the client recognized that they had used TCE and “stepped up” to
take responsibility.  While operating a
groundwater pump-and-treat system to capture and treat the TCE plume, they were
approached by the state regulators to investigate a newly-discovered
plume.  The state theorized that the
plume had “escaped” the treatment system.  In this particular case, the client’s
consultant was not willing to “push back” and defend the client’s position;
they believed the best course of action was to do as the state directed.

The review of the data suggested that there
was no scientific reason to believe the escaped plume theory.  The subsequent technical and legal battles
ended in the State Supreme Court.  The
unanimous decision of the Supreme Court supported our scientific interpretation,
and the state was ordered to pay the client’s technical and legal costs (nearly
$4 million).

When should you consider a second
“environmental” opinion?  I don’t know if
there are any hard and fast rules.  From
our perspective, the requests for second opinions have come when someone is
considering a new scope of work for additional investigation, considering
remediation, or when a project is potentially headed toward litigation.  In each case, there are potentially-significant
expenses in the next step.

Often, but not always, legal counsel is
involved in this decision including vetting the firm that may be offering the
second opinion.  

Recently, we developed a list of issues we
have encountered more than once in providing second opinions.  You can download this list of “29 Potentially Costly
Soil and Groundwater Investigation Mistakes”
on our website.  This list may provide you with some guidance
as you review your data.

The findings published by the Mayo Clinic regarding medical second opinions providing both refined diagnoses and distinctly different diagnoses are quite remarkable.  And if our experience is any indication of environmental second opinions, it may be worth your effort to seek out a second opinion before taking significant action.   


About the Author

Alan Hahn works at Dragun Corporation, an environmental services headquartered in Farmington Hills, Michigan. His practical experience in the environmental business and the practical experience in marketing, allows him to develop realistic strategic business plans. His undergraduate and graduate studies are both in the environmental field (University of Michigan – Dearborn and University of Maryland). He also has substantial hands-on experience in the environmental field (both in an analytical laboratory and in collection of samples).

Environmental Site Assessments: In Search of Better Conclusions

Written by Bill Leedham, P. Geo., CESA, Down 2 Earth Environmental Services Inc.

Environmental consultants sometimes struggle with reporting their Phase One Environmental Site Assessment (ESA) findings and conclusions, especially for properties with limited available data, or where the identified environmental issues are deemed to be of low to moderate concern.

Environmental consultants are often in search of ‘Better Conclusions’. When I refer to “better conclusions”, I am talking about rational and defensible conclusions that are presented clearly and designed to meet the report objectives (as defined by regulation and client needs) and not simply stating that “no concerns were identified and no further action is needed” (which most clients would prefer).

As environmental consultants, we understand each site and report is unique and the conclusions are dependent on the available data, as interpreted by a qualified professional. The suggestions offered are by no means comprehensive or all inclusive, but are meant to generate some thoughtful discussion when writing and reviewing Phase One ESA reports.

Follow the Regulation(s)

Depending on the locale and client requirements, you could be following one of several ESA guidelines. Make sure you have conducted your ESA in accordance with the applicable and/or client-requested format, and that the content and wording of your conclusions follows the suggested or mandatory requirements. For example, CSA Z-768-01 requires ESA Conclusions to state either no evidence, or evidence of actual and/or potential contamination has been revealed.

Ontario Regulation 153/04, as amended for filing a Record of Site Condition requires, among other things, that the assessor’s conclusions specifically state whether the RSC can be filed on the basis of the Phase One alone; and whether a Phase Two ESA is required to file the RSC. Failure to include the mandatory statements with the specified wording can result in denial of the RSC application.

If the report is to be compliant with ASTM E1527-13, the conclusions must summarize all recognized environmental conditions; provide one of the ASTM-prescribed concluding statements; and include statements certifying that an Environmental Professional (EP) has conducted All Appropriate Inquires (AAI). The assessor should always be familiar with the most current ESA standards, and ensure that that the format they utilize is applicable to the Site and meets all regulatory and stakeholder objectives.

Know Your Client…. And Other Stakeholders

Phase One ESAs are conducted for a variety of reasons including transactional due diligence, mortgage financing, regulatory requirements or private/internal planning needs. The types and objectives of clients can also vary from Site owners to property buyers, sellers, or managers. Often other third parties such as banks, municipalities, government agencies or environmental regulators can have a significant impact on the content and acceptability of the report conclusions.

As an assessor you need to know in advance all the involved stakeholders, especially those that will require and expect reliance on your report in their decision making process. Different clients can tolerate varying degrees of environmental risk.

For example, a client that has owned and operated an industrial facility since first developed use, and has no plans to sell, redevelop or obtain bank financing may be comfortable with the simple identification of potential environmental concerns and decide not to undertake any further confirmatory investigations.

However, a bank financing a purchase of the same industrial property may have a lower risk tolerance, and will likely require a better understanding of the environmental issues, including Phase One ESA conclusions that clearly state whether or not a Phase Two ESA is recommended by the assessor.

To produce a valid report that assists the stakeholders in their decision making, the assessor must also know all stakeholder objectives, and understand their respective risk tolerance and required level of comfort.


About the Author

Bill Leedham is the Head Instructor and Course Developer for the Associated Environmental Site Assessors of Canada (www.aesac.ca); and the founder and President of Down 2 Earth Environmental Services Inc. You can contact Bill at [email protected].