Blakes Annual Overview. Environmental Law and Regulation in Ontario 2016

Transcription

1 Blakes Annual Overview Environmental Law and Regulation in Ontario

2 Blakes Annual Overview: Environmental Law and Regulation in Ontario 2016 Blakes Annual Overview: Environmental Law and Regulation in Ontario 2016 is intended as an introductory summary. Specific advice should be sought in connection with particular transactions. If you have any questions with respect to this Guide, please contact our Firm Managing Partner, Rob Granatstein, in our Toronto office by telephone at or by at Blake, Cassels & Graydon LLP produces regular reports and special publications on Canadian legal developments. For further information about these reports and publications, please contact our Chief Client Relations & Marketing Officer, Alison Jeffrey, in our Toronto office by telephone at or by at Contents 1. Introduction Key Recent Legislative/Regulatory Developments Ontario Cap-and-Trade System, Greenhouse Gas Reporting and the Ontario Climate Environmental Protection Act - Waste Management Green Energy Act Great Lakes Protection Act Canada Climate Change Ontario Environmental Law and Regulation Environmental Protection Act Environmental Approvals Air Emissions Waste Management Spills and Contaminated Sites Clean-Up Enforcement Green Energy Act Ontario Water Resources Act Safe Drinking Water Act Clean Water Act Toxics Reduction Act Environmental Assessment Act Liquid Fuels Handling Code Natural Resources Legislation Crown Forest Sustainability Act Mining Act Aggregate Resources Act Fish and Wildlife Legislation Fish and Wildlife Conservation Act Endangered Species Act Blake, Cassels & Graydon LLP

3 3.11 Environmental Bill of Rights Fire Protection and Prevention Act Dangerous Goods Transportation Act Pesticides Act Nutrient Management Act Invasive Species Act Federal Environmental Law and Regulation Canadian Environmental Protection Act Toxic Substances National Pollutant Release Inventory Air and Sea Pollution Climate Change Environmental Emergencies Enforcement Public Participation and Consultation Transportation of Dangerous Goods Act Hazardous Products Act Pest Control Products Act Canadian Environmental Assessment Act Fisheries Act Canada Shipping Act Marine Liability Act Navigation Protection Act Oceans Act Canada National Marine Conservation Areas Act Species at Risk Act Migratory Birds Convention Act Canada National Parks Act Environmental Violations Administrative Monetary Penalties Act Criminal Law National Energy Board Act Blake, Cassels & Graydon LLP

4 Blakes Toronto Environmental Group The members of the Blakes Toronto Environmental group provide legal services in all aspects of environmental and energy law, including: Corporate/commercial transactions and due diligence Litigation, prosecutions, hearings and appeals Environmental compliance reviews and impact assessments Natural resource and renewable energy development, including First Nations engagement Federal and provincial environmental assessments Contaminated sites and brownfield development Environmental due diligence training Endangered species Climate change regulation and carbon transactions Renewable energy and clean technologies For a more detailed list of the services we provide, please refer to the section entitled Environmental Legal Services at the end of this Overview. Blakes environmental lawyers have developed an extensive knowledge of environmental legislation and contacts with regulatory authorities to provide timely, efficient and effective advice to assist clients in this complex field. We have been involved in the development of major projects in a variety of industries, the redevelopment of old industrial lands, the disposal of hazardous waste, the development of landfill operations, the import and export of toxic and non-toxic substances and the clean-up of contaminated sites. Our environmental lawyers have in-depth knowledge of the energy (conventional and renewable), forest/pulp and paper, mining and land development sectors. We focus on the emerging opportunities and challenges for our clients created by clean technologies and climate change regulations. In particular, our environmental lawyers have significant expertise in advising clients on various aspects of alternative energy projects and regulatory compliance, as well as the emerging carbon markets. We frequently assist businesses in making submissions to government regarding proposed environmental laws and amendments to existing laws. Members of the group are often called on to defend corporations and individuals charged with significant environmental offences under federal provincial and local laws. Group members work closely with the Real Estate, Financial Services, Corporate & Commercial, Forestry, Oil & Gas, Energy, Power, Aboriginal Law, and Creditors Rights groups within Blakes to provide environmental law advice to clients. We have been responsible for overseeing environmental site assessments and compliance reviews as part of major business transactions involving multiple properties across the country and around the world. Blake, Cassels & Graydon LLP

5 Jonathan Kahn is widely regarded as onee of Canada's leading environmental lawyers. For almost 25 years, he has provided representation and advice in a broad spectrum of environmental law and related forms of regulatory law. Jonathan's wide-ranging expertise includes representing accused corporationss in significant environmental prosecutions; acting for proponents in major mining, renewable energy and infrastructure projects and providing environmental law advice on significant transactions. jonathan.kahn@blakes.com; Telephone: Ben Jetten has a diverse and complex litigation, administrative regulatory advocacy and dispute resolution practice, before the federal and Ontario courts and administrative tribunals. Ben's advocacy experience extends from corporate, real property, tax and professional negligence litigation to public law litigation including, in particular, a focus in the areas of aboriginal and environmental. Benn has advised or represented clients ranging from corporations in the private sector to First Nations and Inuitt governments, and municipalities. ben.jetten@blakes.com; Telephone: Charles Kazaz practises all aspects of environmental law. He advises clients in the commercial, industrial, mining and waste-management sectors. Other areas include natural- has resource permitting and compliance withh mining and forestry regulations. Charles advised several major mining companies in matters including mine acquisitions and divestitures, mine reclamation and closure issues, and mineral rights concerns. He has also been involved in negotiating agreements with First Nations. charles.kazaz@blakes.com; Telephone: Doug Taylor s practice focuses on environmental, climate change and energy law, particularly with respect to contentious and non-contentious issues in the environmental, renewables and electricity sectors. He has significant international experience managing and working with cross-disciplinary teams advising on environmental aspects of numerous corporate, real estate, investment, finance and infrastructure transactions.. He also has experience structuring renewable energy projects. doug.taylor@blakes.com; Telephone: Iris Antonios has a broad commercial litigation and arbitration practice, with experience including regulatory investigations, mining, environmental and aboriginal matters, construction litigation, and injunctions, in addition to all manner of complex commercial disputes. In her environmental law practice, her experience includes responding to judicial review challenges to federal and municipal environmental assessment processes. iris.antonis@blakes.com; Telephone: Sarah Emery has a broad civil and commercial litigation practice that includes experience dealing with environmental law, class actions, product liability, food and beverage labelling, and constitutional law. In her environmental law practice, she has experience in a range of matters, including remediation of contaminated properties, environmental permitting, municipal and hazardous waste management, and extended producer responsibility regimes. sarah.emery@blakes..com; Telephone: Blake, Cassels & Graydon LLP

6 1. Introduction As Canadians become ever more vigilant about the state of the environment and insistent that offenders of environmental laws be held accountable, we have witnessed an increasing degree of government regulation aimed at protecting the environment. Indeed, in light of the emergence of climate change as perhaps the major environmental issue of our time, the environment has become such an important issue that it is imperative for anyone in a business venture to be fully informed on what the relevant environmental laws allow and prohibit, and how to respond to the demands of governments and the public. All levels of government across Canada have enacted legislation to regulate the impact of business activities on the natural and human environment. Environmental legislation in Canada is not only complex, but also often discretionary in the manner in which it is enforced. Courts have been active in developing new standards and principles for interpreting environmental legislation. In addition, civil environmental lawsuits (including class actions) are now commonplace in Canadian courtrooms, involving claims over contaminated land, air emissions and environmental agreements. The result has been a proliferation of environmental rules and standards to such an extent that one needs a road map to work through the legal maze. The environment is not named specifically in the Canadian Constitution, and consequently, neither federal nor provincial governments have exclusive jurisdiction over it. Rather, jurisdiction is based upon other named heads of power, such as criminal law, fisheries or natural resources. For many matters falling under the broad label known as the "environment," both the federal and provincial governments can and do exercise regulatory responsibilities. This is referred to as "concurrent jurisdiction," which, in practical terms for business managers, means both provincial and federal legislation, and regulations must be complied with. Historically, the provinces have taken the lead with respect to environmental conservation and protection. However, the federal government is increasing its role in this area, and some municipalities are becoming more active through their use of bylaw authority. Environmental laws frequently create offences for non-compliance that can lead to substantial penalties, including significant fines and/or imprisonment. Many laws provide that maximum fines are doubled for subsequent offences and can be levied for each day an offence continues, and some set high minimum penalties. Most environmental statutes impose liability on directors, officers, employees or agents of a company where they authorize, permit or acquiesce in the commission of an offence, whether or not the company is prosecuted. Companies and individuals may defend against environmental charges on the basis that they took all reasonable steps to prevent the offence from occurring. Some statutes create administrative penalties, which are fines that can be levied by the government regulators and boards, instead of courts. Enforcement officers generally have rights to inspect premises, issue stop-work and other orders, investigate non-compliance, obtain warrants to enter and search property, and seize anything believed to be relevant to an alleged offence. Most activities and projects in Ontario, including those involving natural resources and renewable-energy development need to consider and address the potential impacts to aboriginal rights, which are constitutionally protected in Canada. The law has been rapidly developing in this area over the last decade. It is both a matter of provincial and federal government authority. While it is beyond the scope of this overview to discuss these considerations, governments must carry out consultation with First Nations on proposed activities on government land and, where necessary, accommodate the interests of First Nations. The scope and meaning of this will depend on the nature of the potential impact to a First Nation's rights. This overview is designed to assist the reader to understand the environmental regulatory maze in Ontario, but it is not intended to provide legal or other professional advice. Readers should seek specific legal advice on particular issues with which they are concerned. For more information on how we can help you meet your business objectives, visit our website at or contact any member of the Blakes Toronto Environmental group. The law is stated as of November Key Legislative/Regulatory Developments Blake, Cassels & Graydon LLP Page 1

7 2. Key Recent Legislative/Regulatory Developments 2.1 Ontario Cap-and-Trade System, Greenhouse Gas Reporting and the Ontario Climate The Ministry of the Environment and Climate Change (MOECC) has identified carbon pricing as a key climate critical action to help the province address climate change through the reduction of greenhouse gas (GHG) emissions. On April 15, 2015, the Ontario government signed an agreement with Quebec to create a joint cap-andtrade system to reduce GHG emissions. On December 7, 2015, the Ontario government signed a memorandum of understanding with Quebec and Manitoba to facilitate their intent to link the cap-andtrade programs in all three provinces. Ontario has indicated that it will impose a hard ceiling on the amount of GHG emissions that each sector of the economy is allowed to produce. By linking Ontario s system with Quebec s and tying into the Western Climate Initiative cap-and-trade system already being operated in Quebec and California, Ontario will join North America s largest carbon market and more than 75 per cent of Canadians will live in a province with some form of carbon pricing. On May 18, 2016, the Climate Change Mitigation and Low-carbon Economy Act, 2016 (Ontario CC Act) was enacted. Since the passage of that legislation, Ontario has launched or expanded a series of initiatives to facilitate meeting its targeted reductions in GHG emissions, including the implementation of a cap-and-trade regime; and the Ontario Action Plan and implementation of related initiatives. The stated purposes of the Ontario CC Act are to create a regulatory scheme: to reduce GHG emissions in order to respond to climate change, to protect the environment and to assist Ontarians to transition to a low-carbon economy; and to enable Ontario to collaborate and coordinate its actions with similar actions in other jurisdictions in order to ensure the efficacy of its regulatory scheme in the context of a broader international effort to respond to climate change. The Ontario CC Act establishes the following targets for the reduction of GHG emissions as compared to 1990 levels: 15 per cent by the end of 2020; 37 per cent by the end of 2030; and 80 per cent by the end of The legislation also requires the Ontario government to prepare a climate change action plan, setting out actions that will enable Ontario to achieve the targets. Ontario implemented two new regulations: The Cap and Trade Program Regulations (Cap and Trade Regulations), which took effect on July 1, 2016, and the Quantification, Reporting and Verification of Greenhouse Gas Emissions Regulations (Emissions Regulations), which will take effect on January 1, The Emissions Regulations provide the methodology by which participants in the cap-and-trade program will quantify and verify their emissions. Under the Cap and Trade Regulations, a facility can only emit as much carbon as it has allowances for. Businesses will have a GHG emissions quota or emission credits. Over time, the cap is lowered, and as a result, greenhouse gas pollution is reduced. An emission allowance is equal to one metric tonne of CO2e. If a company does not use all of the credits by emitting less than its allotted share, these credits can be sold or traded to other companies that are at risk of surpassing their emissions quota. An aim of the capand-trade system is to reward innovative companies by incentivizing a reduction in GHG emissions, provide certainty for industries and create more opportunities for investment. The first compliance period will be from January 1, 2017, (when the cap-and-trade system begins) until December 31, The total number of allowances for all facilities (i.e., the cap) is provided in the Cap and Trade Regulations for the years 2017 to 2020 and will steadily decline each year. Blake, Cassels & Graydon LLP Page 2

8 A certain number of allowances will be reserved each year for free distribution to participants. Eligible participants must apply for free allowances in respect of the activities engaged in at each facility and the number allocated will be determined according to the published Methodology for the Distribution of Ontario Emission Allowances Free of Charge. Allowances that are not freely distributed will be auctioned. The first auction is scheduled for March If the amount of CO2e emitted by a facility exceeds its free allowances, it must purchase additional allowances at the auction. Similarly, facilities that emit less than their permitted allowance may sell their unused free allowances at the auction. The MOECC is consulting on a new offset credits system. Offset credits will increase the compliance options for facilities covered by the cap-and-trade program and they will extend the environmental benefits of greenhouse gas (GHG) mitigation. Parties that create projects that reduce or remove GHG and meet the offset eligibility rules (Offset Protocols) will be able to claim an offset credit. One offset credit will be provided to a project that reduces/removes one tonne of CO2. The use of offset credits will offer cap-and-trade program participants flexibility and potentially lower cost options by using offset credits to meet a portion of their compliance obligations. Offset credits are tradeable in the same way that Ontario cap-and-trade emission allowances are tradeable. They do not expire and remain valid until they are surrendered for retirement by a registered participant in the cap-and-trade program. All of the proceeds from Ontario s cap-and-trade system will be allocated to a provincial fund called the Greenhouse Gas Reduction Account and used to fund many of the initiatives under the Ontario Action Plan. The Ontario Five-Year Climate Change Action Plan builds on Ontario s Climate Change Strategy previously released in November 2015, which set the long-term vision for meeting GHG emissions reduction targets. The Ontario Action Plan acknowledges that there is a need to maintain a competitive economy while achieving environmental results. This will be the biggest challenge facing Ontario as it attempts to up the ante in its climate change fight. The Ontario Action Plan outlines other key actions Ontario is proposing to combat climate change. The goal is to use the proceeds from the cap-and-trade system to fund green projects and implement elements of the Ontario Action Plan. The Ontario Action Plan outlines Ontario s intention to take numerous actions to introduce new fiscal measures to benefit individual consumers and businesses, and at the same time move towards lower emission technologies, including: Create a cleaner transportation system Encourage installation/retrofit of clean energy systems Keep electricity rates affordable Establish a green bank to promote the use of energy-efficient technologies Manage the fiscal impact of the cap-and-trade regime Environmental Protection Act Waste Management Ontario has introduced a bill entitled the Waste-Free Ontario Act. The bill introduces many new developments that seek to facilitate waste reduction, increase resource productivity, enable efficient and effective collection and recycling systems, and increase the market value of recovered materials. If passed, the bill would replace the existing waste diversion program operated under the Waste Diversion Act. It will enact the Resource Recovery and Circular Economy Act and the Waste Diversion Transition Act. After the bill is finalized, it will take a number of years to make the transition from the current framework. However, it is important to note that the bill seeks to give producers the full responsibility for the end-of-life management of designated products and packaging. By placing a heavier burden on producers, the province believes that the proposed legislation would foster innovation and encourage the production of more resilient, reusable and recyclable products. Blake, Cassels & Graydon LLP Page 3

9 2.1.3 Green Energy Act Ontario s Environmental Review Tribunal (ERT) has allowed a number of recent wind project Renewable Energy Approval (REA) appeals on the basis of environmental concerns. In doing so, it has made findings on the statutory test of serious and irreversible harm to animal life or the natural environment with respect to species at risk (the little brown bat and Blanding s turtles) that could have significant impacts on future renewable energy projects Great Lakes Protection Act Ontario s Great Lakes Strategy was adopted by the province in the form of the Great Lakes Protection Act. The purpose of this Act is to protect and restore the ecological health of the Great Lakes-St. Lawrence River Basin and create opportunities for individuals and communities to become involved in the protection and restoration of the ecological health of the basin. The Act establishes the Great Lakes Guardians Council whose role is to identify priorities for action to achieve the purposes of the Act, set targets, identify potential funding measures and partnerships as well as develop and implement initiatives and interjurisdictional agreements. 2.2 Canada Climate Change Canada is now a signatory to the Paris Agreement, negotiated at the United Nations Conference of the Parties (COP 21) in December As part of its commitment, Canada confirmed that it will reduce its GHG emissions by 30 per cent below 2005 levels by On October 3, 2016, as part of the debate on a motion to support ratification of the Paris Agreement, Prime Minister Justin Trudeau announced that Canada would implement a minimum price on carbon of C$10/tonne throughout the country beginning in The price would increase by C$10/tonne per annum to C$50/tonne by Although the Paris Agreement is a federal commitment, Canada will be relying on each of the provinces to enact appropriate climate change policies to achieve compliance. The Prime Minister has confirmed that Canada s carbon pricing policy would only apply in those provinces and territories that did not otherwise put a direct price on carbon or establish a cap-and-trade system stringent enough to meet the federal target. It was also announced that the revenues from the carbon pricing will stay with the provinces or territories to be used as they see fit, and this approach will be reviewed again in 2022 to confirm its efficacy and decide on further price increases. Canada also signed a memorandum of understanding on climate change and energy collaboration with Mexico and the United States in February Ontario Environmental Law and Regulation 3.1 Environmental Protection Act The main source of environmental regulation in Ontario is the Environmental Protection Act (EPA). The act is designed to protect and conserve the natural environment and provides for the control of air, water and land pollution. Its basic structure is to prohibit the emission or discharge of a broad range of contaminants that cause or are likely to cause an adverse effect to the natural environment. Prohibited adverse effects include impairment of the quality of the natural environment for any use that can be made of it, harm or material discomfort to persons, the impairment of the safety of persons, injury or damage to property or to plant or animal life, loss of enjoyment of normal use of property and interference with the normal conduct of business. Blake, Cassels & Graydon LLP Page 4

10 Emissions or discharges are permitted in specific circumstances prescribed by the terms of an environmental approval or registration. Numerous regulations have been made under the EPA regulating specific activities or substances. Some of the EPA s more important provisions and regulations are discussed below Environmental Approvals A business must have an environmental approval or registration from the MOECC if it releases pollutants into the air, land or water; or stores, transports or disposes of waste. The environmental approval or registration sets out the legally enforceable rules of operation for these activities that are intended to protect the natural environment. The environmental approval is called an Environmental Compliance Approval (ECA) and is governed by either the EPA or the Ontario Water Resources Act (OWRA). The ECA process is used to regulate highrisk activities. An ECA is able to authorize multiple activities at a single site and a single activity at multiple sites. The EPA regulates activities that discharge a contaminant into the environment other than water. This includes most industrial processes, waste management systems and waste disposal sites. Sewage works are regulated by the OWRA. Sewage is defined in the OWRA to include drainage, storm water, commercial waste and industrial waste; and sewage works are any works for the collection, transmission, treatment and disposal of sewage. ECAs were introduced on October 31, 2011, and replaced the EPA Certificates of Approval and approvals under section 53 of the OWRA. The change to the ECA regime from the previous Certificate of Approval regime is mostly procedural and does not impose new, substantive environmental obligations on applicants. Certificates of Approval and section 53 approvals that were granted prior to October 2011 remain in effect, and existing Certificates of Approval can be amended, suspended or revoked, as though they were an ECA. There is a detailed ECA application process that must be followed. It is important to note that if an application is incomplete, or if the information provided does not meet the prescribed standards, then the MOECC can return it without considering whether to issue or refuse an ECA. The application must contain a detailed project and process description; information regarding the land ownership, use and zoning; a site plan; and, in certain circumstances, a financial assurance calculation. (The purpose of financial assurance is to provide assurance that funds will be available to cover future environmental costs, such as site remediation and maintenance in the event that the party applying for the ECA is unable or unwilling to take such action). The MOECC has increasingly required evidence that the owner or operator of the subject facility has identified the best available pollution control technology that is economically feasible. The ministry will also have regard to concentration limits that have been developed for specified contaminants and is aggressively pushing Ontario industry to continually reduce the levels of contaminants being discharged into the province s air and water. Major facilities are subject to detailed wastewater discharge requirements, contained in both their approvals and industrial-sector regulations. In addition to the ECA regime, the Ontario government has also created the Environmental Activity and Sector Registry (EASR). The EASR is a public, web-based system that allows businesses conducting certain activities to register them with the MOECC, rather than applying for an environmental approval. The EASR is intended for certain prescribed low-risk activities that pose minimal risk to the environment and human health when regulated and required to follow specific rules, or use equipment and processes that are standard to the industry or sector with known environmental impacts. For example, the EASR is required for heating systems, standby power systems and automotive refinishing. No specific approval is required for activities that fall within the EASR. The activity simply needs to be registered with the MOECC and follow eligibility rules and regulations. The activities are, however, subject to inspections. Blake, Cassels & Graydon LLP Page 5

11 A Renewable Energy Approval (REA) is required for most solar, wind or bioenergy projects in Ontario. An REA is obtained from the MOECC. Some classes of small-scale wind and solar and certain bioenergy projects are exempt from the requirement for an REA. For example, most projects less than 10kW do not require an REA. Similarly, water-power facilities that are subject to the Environmental Assessment Act do not require an REA. Certain small-scale renewable-energy projects are eligible for the EASR (such as small-scale solar projects greater than 10kW and up to 500kW) and, as a result, do not require an REA Air Emissions Air emissions are regulated under the EPA and the Air Pollution Local Air Quality Regulation 419/05 (Air Pollution Regulation). This regulation does not, however, deal with discharges of contaminants from motor vehicles or discharges of heat, sound or vibration. There are three approaches to compliance: (1) meet the general air standard, (2) request and meet a site-specific standard, or (3) register and meet the requirements under a sector-based technical standard (if there is one for that sector). 1. Air standards are legal limits for contaminants in air. The Air Pollution Regulation establishes maximum permissible concentrations for over 100 air contaminants that may be discharged. The concentrations of air contaminants at a point of impingement (the point at which a contaminant contacts the ground or a building) may not exceed the standards set out in Schedule 2 of the Air Pollution Regulation. An air dispersion model is a tool used to assess point of impingement concentrations that are then compared to MOECC air standards and guidelines. An ECA may also be required subject to the nature of the discharge and the facility. 2. If a facility is not able to meet a required air standard, then it may be permitted to submit a request for a site-specific standard. Such a standard is an MOECC-approved air concentration for a particular facility. The request can be approved for a period of at least five years and not more than 10 years to ensure there is continual improvement and technical and economic factors are reassessed. 3. A sector-based technical standard is designed for two or more facilities in a sector that are not able to meet an air standard for technical or economic reasons. The technical standard can be an industry-sector standard or an equipment standard for a source of emissions from one or more sectors. On July 27, 2016, the MOECC published the Technical Standards to Manage Air Pollution document, which includes a number of technical standards. This is an evolving area of environmental law. Ontario is in the process of implementing the federal Air Quality Management System (AQMS), which is a Canada-wide air quality management framework developed through the Canadian Council of Ministers of the Environment. The AQMS seeks to achieve continuous improvements to air quality through an all sources approach Waste Management The EPA is the main piece of legislation dealing with waste management. It outlines the requirements to obtain approvals for waste discharges into the environment and approvals for waste management facilities and systems. There are also sections related to specific sources of pollution, including packaging, containers and disposable products. Waste is defined in the EPA as including ashes, garbage, refuse, domestic waste, industrial waste or municipal refuse, and such other materials as are designated in the regulations. This definition is, however, continually evolving as a result of the decisions of the courts. Any business that collects, handles, transports, stores, treats or disposes of waste must obtain an environmental approval from the MOECC. The storage and use of biomass and non-recyclable residual waste has historically been classed as a waste disposal site by the EPA and, therefore, required an ECA Blake, Cassels & Graydon LLP Page 6

12 to operate. However, on May 1, 2015, new regulations came into force that permit an energy-intensive manufacturing facility to submit an alternative low-carbon fuel application to the MOECC that details their use of such fuels. If approved, the MOECC will grant the facility an ECA for the use of alternative lowcarbon fuels, and the facility will be exempt from requiring a waste-disposal site ECA for the use of such fuels. Liquid industrial and hazardous wastes are subject to more rigorous regulation and require special handling. Subject waste is the term used to identify these types of waste that must be registered with the MOECC. They are mainly generated by industrial and manufacturing processes. The generators of such waste must inform the MOECC of who created the waste, where it was generated and the quality, quantity and nature of the waste. Hazardous waste includes certain listed wastes (from industrial processes, waste chemicals and severely toxic wastes), characteristic wastes (corrosive, ignitable, leachate toxic and reactive wastes), pathological wastes, PCB wastes and radioactive wastes. If the liquid industrial or hazardous wastes are stored onsite for more than three months, the MOECC must be notified. An ECA must be obtained from the MOECC by all carriers or receivers of subject waste. All movements of subject waste are tracked with a manifest. The manifest accompanies the waste from its point of origin to its point of disposal, it describes the waste and highlights when the subject waste is transferred between generators, carriers and receivers. A generator or transporter of subject waste must ensure that an approved facility receives the subject waste. The MOECC has taken steps to encourage the reduction and recycling of waste. Waste materials destined for recycling are exempt from some of the structures of the legislation, including the requirement for environmental approval under the EPA. There are also regulations that require industrial and other waste generators to conduct waste audits and meet prescribed waste-reduction targets. The provincial government, under the authority of the Waste Diversion Act, has several stewardship recycling programs aimed at the end use of consumer products. The Blue Box recycling program applies to companies, resident in Ontario, with gross Ontario revenue greater than C$2-million. It targets packaging and printed materials with respect to a variety of consumer products and affects all brand owners, first importers and franchisors of products that generate plastic, paper, glass, metal or textile packaging waste. The program requires such organizations to register with Waste Diversion Ontario or its delegate, Stewardship Ontario, and pay annual fees based upon sales volumes. Similar recycling programs have been extended to municipal hazardous or special waste, electrical and electronic products, used tires, and beverage and alcohol containers Spills and Contaminated Sites Clean-Up Spills are defined in the EPA as a discharge into the natural environment from or out of a structure, vehicle or other container and abnormal in quality or quantity in light of all the circumstances of the discharge. The EPA requires spills to be reported forthwith by the person having control of the pollutant that is spilled and any person who causes or permits a spill of a pollutant. The EPA also requires the owner of the spilled material and the person who had control of the spilled material to promptly clean-up and restore the environment if the spill causes or is likely to cause an adverse effect. The ERT Rocha v. Ontario (Environment and Climate Change) decision will have significant ramifications in terms of the protection offered to mortgagees not in possession of a contaminated property. Section of the EPA affords protection from liability for a range of parties in relation to contaminated land liability. The ERT ruled that action taken by a mortgagee that falls outside of the action listed in section (even if they are not in possession) will not receive the protection from liability provided by that section. Failure to report the spill of a pollutant to the MOECC is an offence. If the spill is not cleaned up by those responsible to undertake the remediation, then the MOECC can order those parties to clean up the site. If Blake, Cassels & Graydon LLP Page 7

13 they fail to undertake the clean-up, then the MOECC can carry out the clean-up and recover the costs from the owner of the pollutant and persons in control of the substances spilled. Persons suffering loss or damage from a spill are entitled to compensation and recent case law has confirmed that section 99 of the EPA (1) does not require a plaintiff to establish a duty of care, foreseeability, intent or fault; and (2) that damages are not limited to the diminution in the value of the plaintiff s property caused by the contamination and the full cost to remediate the property may be recovered. The MOECC can issue orders against and recover costs of the remediation from owners of property, even in circumstances where the owner of the property is not responsible for the contamination. Directors and officers are specifically obligated to exercise reasonable care to prevent their corporations from causing or permitting the discharge of contaminants into the environment. Where land has been contaminated by current or past activities, the MOECC is authorized to issue orders requiring, assessment, containment or remediation. Some orders will require a comprehensive remediation plan, involving expensive studies of the situation prior to the implementation of remediation measures. The MOECC has recently served orders on a range of individuals (including overseas residents) and entities (including professional advisers of parties allegedly responsible for pollution). These orders may be appealed to the Environmental Review Tribunal. Land remediation may also be required as a condition to obtaining land-use approvals from municipal authorities who are responsible for land-use planning and development activities. The municipal authorities will typically have regard to provincial and national soil and groundwater guidelines. The Record of Site Condition (RSC) part of the EPA, Regulation 153/04, and certain related Brownfield legislation, encourage the revitalization of contaminated land. This is encouraged by (1) establishing acceptable soil and groundwater standards, (2) a voluntary remediation certification system involving the filing of an RSC, and (3) allowing lenders, bankruptcy trustees and other fiduciaries to deal with contaminated land, without assuming liability for historical environmental conditions. Landowners who complete an environmental assessment or remediation of a property in accordance with the requirements of the EPA and file an RSC with the MOECC obtain protection from EPA environmental orders with respect to historic contamination. The RSC soil and groundwater standards vary depending upon the nature of the land use and the potability of the groundwater, among other things. The central part of the RSC process is the preparation and filing in an electronic public registry of the RSC certificate. An RSC is completed by both a property owner and a so-called qualified person experienced in environmental site assessment and remediation. Regulation 153/04 specifically defines such persons to ensure that they have minimum qualifications and sets out standards for the conduct of Phase I and II environmental assessments and site-specific risk assessments Enforcement Ontario aggressively enforces its environmental legislation, and the penalties available against those convicted of an offence can be very large. Under the EPA and the OWRA, maximum fines for corporations are C$6-million, for a first offence (C$10-million for subsequent offences), and many offences carry statutory minimum fines as well. Individual may be imprisoned for up to five years. Some offences attract minimum penalties. Administrative penalties are also available in some cases for less serious offences, and the defences available are very limited. The potential liability of directors for environmental offences has gained greater prominence. The EPA states that where a corporation is charged with an environmental offence, any director that was involved in the commission of that offence, whether by direct participation, acquiescence or otherwise, is a party to and can be found guilty of the offence. Under the EPA, a director who is charged with an environmental offence must show that he or she was duly diligent or took all reasonable care to prevent the occurrence of the offence. It may not be enough for a director to claim that he or she did not know of or have the means to verify that the operation was causing or had the potential to cause environmental contamination. Furthermore, the EPA imposes a positive obligation on directors to ensure that their corporation complies with applicable environmental legislation. Directors can also be subject to environmental orders in certain circumstances. Blake, Cassels & Graydon LLP Page 8

14 3.2 Green Energy Act As part of a move to green Ontario s economy, Ontario enacted the Green Energy Act in May 2009 to encourage new investment in renewable-energy sources, such as wind, solar, bioenergy (biomass, biogas and landfill gas) and hydro power. The programs included in the legislation involve financial incentives to renewable-energy developers. Renewable energy is now a key element of Ontario s electricity generation. The province phased out coal-fired power generation in Ontario s Feed-in Tariff (FIT) program was a government process for procuring electricity from renewable sources, with standard program rules, standard contracts and standard pricing for different classes of generation facilities. The FIT program incentivized the development of renewable generation by offering stable prices under long-term contracts (generally 20 years) for energy generated in Ontario from renewable sources. Ontario cancelled the large FIT (generating capacity over 500 kilowatts) part of the program in June 2013, and replaced it with the Large Renewable Procurement (LRP) program in The LRP program was a competitive process for procuring renewable electricity projects larger than 500 kilowatts, and was designed to proceed in multiple phases. Phase one concluded in April 2016 with the execution of approximately 454MW of renewable power contracts. Ontario announced that it was proceeding with phase two of LRP (LRP II) in the summer of However, on September 27, 2016, the Minister of Energy issued a directive suspending all further procurement of renewable generation under LRP and putting an end to the LRP II request for qualifications process. Ontario announced that it suspended the LRP because further procurement of electricity capacity is not needed at this time. Ontario is currently forecast to have a robust supply of electricity for the next decade. Renewable-energy projects may be subject to the following approvals: an REA for wind, solar PV and bioenergy projects, a class environmental assessment (Class EA) for waterpower projects less than 200 MW or an EASR. Other provincial approvals may include Ministry of Natural Resources and Forestry (MNRF), Ministry of Tourism, Culture and Sport (MTCS) and Ministry of Transportation (MTO) requirements, and Ontario Energy Board (OEB) approvals. Municipal building permits, road-use permits and federal requirements may also be required. 3.3 Ontario Water Resources Act Where a facility wishes to discharge sewage (including all forms of wastewater and storm water) to a local water body, the discharge must be subject to an environmental approval granted by the MOECC pursuant to the OWRA. Under the Ontario Water Resources Act (OWRA), no person is permitted to establish or operate a facility or works for the collection, transmission, treatment and disposal of commercial and industrial sewage wastes, among other wastes (sewage works), without first obtaining an ECA. Discharges of liquid wastes into a municipal sanitary sewer are regulated by sewer-use municipal bylaws. In most areas of Ontario, municipal sewer bylaws restrict what may be discharged into local sanitary and storm sewers and, in some cases, require pollution prevention plans. The bylaw may, however, permit the discharge of liquid wastes above the thresholds stated in the bylaw subject to the terms of an agreement or an authorization. The construction of water wells and the use or taking of any surface or groundwater above 50,000 litres a day is also regulated by the OWRA, which requires such takings to be permitted by the MOECC. The MOECC has recently passed a regulation to ease or remove the requirement for permits to take water (PTTW) for certain routine water takings that do not pose a significant environmental risk. The regulation allows certain short-term, non-recurring water-taking activities (including surface water takings for road construction and construction dewatering) to instead be registered on the EASR. Blake, Cassels & Graydon LLP Page 9

15 The OWRA also prohibits any discharge into water that may impair the quality of the water; the person causing or permitting such a discharge is guilty of an offence under the OWRA. Upon conviction for such an offence, the generator/discharger may be fined or imprisoned in accordance with the same penalty structure provided for under the EPA. 3.4 Safe Drinking Water Act The Safe Drinking Water Act (SDWA) governs municipal drinking-water systems, expands on existing policy and practice, and introduces features to protect drinking water in Ontario. The SDWA's purpose is to protect human health through the control and regulation of drinking-water systems and drinking-water testing. The provincial government, through the MOECC, regulates these drinking-water systems to ensure water safety and quality. This regulation includes registering all municipal drinking-water systems; licensing system owners/operators; authorizing operators to run and maintain drinking water systems; and issuing drinking-water works permits to modify, repair or extend drinking-water systems. Under the SDWA, owners and operators must ensure that end of pipe water quality meets prescribed standards; that only trained personnel are used to operate a compliant system; that sampling, testing and monitoring are proficient; and that all reporting obligations regarding any adverse drinking-water-quality test results are complied with. The MOECC must also approve all operational plans from operators of municipal drinking-water systems. Part IV of the SDWA imposes a quality management standard on operators of drinking-water systems, and an accreditation body is designated for the purpose of administering programs to accredit operating authorities. 3.5 Clean Water Act The Clean Water Act (CWA) was enacted in October 2006 to provide comprehensive legislation aimed at ensuring clean and safe water for its citizens. Water sources can be polluted by a variety of sources that seep into the ground and contaminate the water table that can then impact the quality of the drinking water supply. The CWA establishes source water protection areas that will be subject to development plans that will protect drinking-water sources such as groundwater aquifers and surface watersheds. Preparation of the source-protection plans has been undertaken in consultation with Conservation Authorities and overseen by local source-protection committees. The plans guide and restrict development activities within the plan areas much like current provincial and municipal development plans. Municipalities are the primary implementers and enforcers of the source-protection plans. The 22 plans that have now been created cover 95 per cent of the province s population. 3.6 Toxics Reduction Act The goal of the Toxics Reduction Act (TRA) is to protect health and the environment by reducing the use and creation of toxic substances. A facility must undertake manufacturing or mineral-processing activities as well as be required to provide information to the federal National Pollutant Release Inventory (NPRI) or report under Reg. 127/01 in order to be captured by the TRA. Regulated industrial facilities will be required to track and quantify toxics and substances of concern that are used and created. These facilities must meet reporting requirements, and the information provided to the MOECC will be made public. Corporations found to have contravened a provision of the TRA or associated regulations can be found liable, upon first conviction, for a maximum fine of C$50,000 per day or part of a day on which the offence continues, and upon any subsequent conviction, for a maximum fine of C$100,000 per day or part of a day on which the offence continues. Blake, Cassels & Graydon LLP Page 10