INTERNATIONAL

• CEC Orders Factual Record for Second Ontario Logging Submission
  
  FEDERAL LEGISLATION/REGULATORY DEVELOPMENTS
  
• Safety Assessment Standard for Nuclear Power Plants Issued by Canadian Nuclear Safety Commission
• Requirement for Comprehensive Study Under Canadian Environmental Assessment Act for an Off-Shore Exploratory Drilling Project to be Eliminated
• Framework for Regulation Under the Canadian Environmental Assessment Act Being Developed for Business Development Bank of Canada and Farm Credit Canada
  
  ONTARIO REGULATIONS AND POLICY 
• Expert Panel Recommends Changes for Ontario Environmental Assessments
• Ontario Releases Proposed Bio-Diversity Strategy to Protect Network of Natural Life
• Ontario Proposes Revisions to Odour-Based Ambient Air Quality Criteria and Development of an Odour Policy Framework
• Sweeping Changes Proposed for Ontario Air Regulations


QUÉBEC DEVELOPMENTS

• Montréal Unveils Its First Strategic Sustainable Development Plan
• Forest Management in Québec - The Second Step of the Reform


RECENT CASES

• Alberta Court of Appeal Clarifies Sentencing Principles for Environmental Offences
• Ontario Divisional Court Considers Criteria for Issuing MOE Orders


WHAT'S NEW

• Contracting Out Water and Wastewater Services: a Changing Landscape
• Provincial Environmental Law, Regulations and Policy

INTERNATIONAL

CEC ORDERS FACTUAL RECORD FOR SECOND ONTARIO LOGGING SUBMISSION

On April 1st the Council of the North American Commission for Environmental Cooperation (CEC) voted unanimously to instruct that a submission regarding alleged violations of the Migratory Birds Convention Act in regard to clear cut logging in four Ontario forest management units be consolidated with a previous submission of a similar nature submitted in 2002 involving 59 Ontario FMUs. The submissions allege that Canada is failing to enforce effectively section 6(a) of the Migratory Bird Regulations adopted under the Migratory Birds Convention Act 1994 in regard to clear cut logging in central and northern Ontario. Section 6(a) of the MBR makes it an offence to disturb, destroy or take a nest or egg of a migratory bird without a permit.

The 2002 submission was filed by the Canadian Nature Federation, Canadian Parks and Wilderness Society, Federation of Ontario Naturalists and others. They allege that over 85,000 migratory bird nests were destroyed in 2001 in violation of the Act without any enforcement action being taken. In November 2002 the CEC Secretariat recommended preparation of a factual record and in April 2003 the submitters were given 120 days to provide the Secretariat with additional information in support of their allegations. On March 12, 2004 the Council instructed the Secretariat to prepare a factual record regarding enforcement of section 6(a) of the MBR in 49 FMUs for which the submitters were able to obtain additional information.

www.cec.org/news/details/index.cfm?varlan=english&id=2662.

FEDERAL LEGISLATION/REGULATORY DEVELOPMENTS

SAFETY ASSESSMENT STANDARD FOR NUCLEAR POWER PLANTS ISSUED BY CANADIAN NUCLEAR SAFETY COMMISSION

A new regulatory standard, “Probabilistic Safety Assessment for Nuclear Power Plants” was issued in April 2005 by the Canadian Nuclear Safety Commission. The regulatory standard describes the required probabilistic safety assessment for a licensee constructing or operating a nuclear power plant which may be specified by the applicable licence or other legally enforceable instrument.

Regulatory standard S-294 is available on the CSNC Web site:
www.nuclearsafety.gc.ca.

REQUIREMENT FOR COMPREHENSIVE STUDY UNDER CANADIAN ENVIRONMENTAL ASSESSMENT ACT FOR AN OFF-SHORE EXPLORATORY DRILLING PROJECT TO BE ELIMINATED

On the recommendation of the oil and gas industry, and despite a lack of any unanimous recommendation from a multi-stakeholder regulatory advisory committee, the Canadian Environmental Assessment Agency is proposing to change the type of Environmental Assessment of the first exploratory drilling project in an off-shore area from the comprehensive study type to the screening type. This would require the removal of the term “exploratory drilling” in section 15 from the Comprehensive Study List Regulations established under the Canadian Environmental Assessment Act. Notice of the proposed regulation was given in the Canada Gazette, Part I, March 26, 2005.

FRAMEWORK FOR REGULATION UNDER THE CANADIAN ENVIRONMENTAL ASSESSMENT ACT BEING DEVELOPED FOR BUSINESS DEVELOPMENT BANK OF CANADA AND FARM CREDIT CANADA

Effective June 11, 2006 federal parent Crown corporations will be required to comply with CEAA, either by direct compliance or by a modified Environmental Assessment process set out in regulations. On April 20th the Canadian Environmental Assessment Agency announced it was proposing the creation of a regulation specific to two federal parent Crown corporations, the Business Development Bank (BDC) of Canada and Farm Credit Canada (FCC). The “conceptual framework for a regulation” pertaining to the BDC and FCC is available for comment until May 20, 2005.

Contact: al.vachon@CEAA-acee.gc.ca.

ONTARIO REGULATIONS AND POLICY

EXPERT PANEL RECOMMENDS CHANGES FOR ONTARIO ENVIRONMENTAL ASSESSMENTS

A detailed report recommending a comprehensive framework for an improved Ontario Environmental Assessment process was released in April by the Ontario Environment Ministry for public comment. David Estrin, of Gowlings, was one of five expert executive committee panel members invited to make recommendations on EA reform to the Minister of the Environment. Those operating facilities in specific regulated areas were also consulted. The panel was appointed in June 2004 specifically to recommend changes to improve the EA process for waste management, transit and transportation projects and clean energy facilities. In releasing the report Environment Minister Leona Dombrowsky said, “There is unanimous agreement that the EA process is essential to safeguarding the interests of present and future generations of Ontarians. There was also a consensus that the process can be improved. Today, we have an expert opinion on ways of improving the process, which our government can use to plan its reforms.” The report is available for public comment until July 4, 2005.

See http://www.ene.gov.on.ca/envision/news/2005/040402.pdf.

ONTARIO RELEASES PROPOSED BIO-DIVERSITY STRATEGY TO PROTECT NETWORK OF NATURAL LIFE

On April 25, 2005 the Ontario Ministry of Natural Resources released a proposed Ontario Bio-Diversity strategy. The intent is to conserve Ontario's bio-diversity and to provide for the sustainable use of the province's biological resources. The proposed bio-diversity strategy aims to identify, at a strategic level, a series of actions that, taken together, will enable Ontario to achieve its bio-diversity conservation goals: (a) to protect the genetic, species and eco-system diversity of Ontario; and (b) to use and develop the biological assets of Ontario sustainably, and capture benefits from such use for Ontarians.

Some specific implementing recommendations include: promoting the preparation of environmental farm plans and best management practices that contribute to bio-diversity conservation on Ontario farms; promoting the adoption of best practices by major business sectors through the use of ISO 14000 – EMS certifications and through forest certifications; enhancing incentives for land owners to practise resource stewardship and bio-diversity conservation by amending the Ontario Assessment Act and updating regulations under the Managed Forest Tax Incentive Program and Conservation Land Tax Incentive Program.

Other recommendations include establishing an Ontario Bio-Diversity Council to guide implementation of the strategy and integrate bio-diversity conservation into the land use planning by, for example, using the 2005 Provincial Policy Statement under the Planning Act to ensure effective direction that includes consideration of bio-diversity issues. Further recommendations are to review and update Ontario species at risk legislation and to implement the National Accord for the Protection of Species at Risk.

The proposed bio-diversity strategy is available for review at:
www.ene.gov.on.ca/envregistry/024200ex.htm.

ONTARIO PROPOSES REVISIONS TO ODOUR-BASED AMBIENT AIR QUALITY CRITERIA AND DEVELOPMENT OF AN ODOUR POLICY FRAMEWORK

Currently Ontario's Ambient Air Quality Criteria (AAQC) do not address odourous mixtures. Industrial emissions of odourous substances may contain a considerably larger number of individual odourous substances which may not be easily speciated and which may combine to increase odour impacts. The Ontario MOE has determined that AAQCs alone may not therefore be sufficient to deal with the issue of odours.

Ontario is proposing a framework to reconcile existing and proposed AAQCs, allow for the use of predictive odour impacts and direct measurements and be able to deal with the existing situation when odour becomes an issue in order to: (a) help industry plan certificate of approval applications; (b) evaluate control options to deal with adverse effects; and (c) assist the Ministry in dealing with odour complaints.

The Ministry anticipates it will continue to set odour-based AAQCs for substances with low odour thresholds such as sulphur-based compounds. However, for less odourous substances, or mixtures of substances, the framework could set limits for indications of possible odour impacts and provide new tools to assess these impacts. Input from industry, consultants, academia and other stakeholders is being requested. Written submissions may be made until June 4, 2005.

See: www.ene.gov.on.ca/envregistry/024878ep.htm.

SWEEPING CHANGES PROPOSED FOR ONTARIO AIR REGULATIONS

The Ontario Ministry of the Environment recently proposed a new guideline for emissions summary and dispersion modelling. Under this proposal the MOE will phase out the existing Ontario Regulation 346 air dispersion models and replace them with a suite of U.S. EPA air dispersion models. The proposed guideline is intended to provide guidance on the application of the models, the development of emission inventories for use as inputs to the new models and for demonstrating compliance with the MOE's effects-based air standards and guidelines. It is the Ministry's intention that applications for new certificates of approval (Air) for new “greenfield” facilities within certain chemical manufacturing and iron ore mining and smelting as well as petroleum refining and synthetic rubber and resin categories will be required to demonstrate compliance with both new and existing air quality standards.

Also, beginning February 1, 2010, 28 new air standards (14 are for new contaminants added to the regulation and 14 are for more stringent revised standards for contaminants already in the regulation) will become effective for all existing and modified facilities.

Considerable detail on what has been called “sweeping changes” in Ontario Air Regulations can be found at:
www.ene.gov.on.ca/envregistry/024879ep.htm.

Also, a more detailed background guidance document can be found at:
www.ene.gov.on.ca/envision/env_reg/er/documents/2005/PA05E0009.pdf.

QUÉBEC DEVELOPMENTS

MONTRÉAL UNVEILS ITS FIRST STRATEGIC SUSTAINABLE DEVELOPMENT PLAN

In the wake of the proposed Green Plan tabled last autumn by the Québec Minister of Sustainable Development, the Environment and Parks, the Mayor of Montreal, Gérald Tremblay, unveiled in April 2005 the first Montréal Strategic Sustainable Development Plan (the “Plan”). This Plan, pursuant to the Montréal Summit, was developed in co-operation with 49 partners from various fields who are committed to contribute to the success and achievement of the objectives of the Plan. Several public agencies and departments have also confirmed their, commitment to implementing the Plan. While for some actions only the City of Montreal has the resources to implement them, other actions require the intervention of a higher level of government.

The implementation of the Plan is anticipated to occur over the next five years. The starting phase (2005-2006) proposes short-term actions that are associated with the four targeted priorities listed below. However, long-term actions (to be taken by 2009) are also proposed, but their implementation will be detailed at a later date. Moreover, since the Plan is not static, the analysis of its impact may lead to new actions to be taken. This analysis will be ensured by indices and methods to measure actions and environmental conditions, such as the number of days when poor air quality is registered, the quality of drinking water produced annually, the quantity of residual materials that are re-used, recycled or disposed of, etc. Every two years, evaluation reports will be tabled before City Council.

The Plan provides for ten directions that each contain specific objectives and actions to reach them. The starting phase of the plan mainly targets the following four directions: to improve air quality and reduce greenhouse gas emissions; to ensure the quality of residential neighborhoods; to manage resources responsibly and to adopt good sustainable development practices in businesses, institutions and commercial establishments. Although these directions are priorities, the Plan also provides the following directions that should be reached either by short-term or long-term actions: to engage local organizations and residents in the sustainable development of Montreal; to support stakeholders' sustainable development and environmental education and communication efforts; to offer municipal services and environmental regulations to residents, in order to be equal; to improve protection of biodiversity, natural environments and greenspaces; to encourage industrial development that respects sustainable development principles and to consolidate residential and commercial development.

See: www.ville.montreal.qc.ca/developpementdurable.

FOREST MANAGEMENT IN QUÉBEC - THE SECOND STEP OF THE REFORM

On April 14, 2005, a few weeks following the assent of Bill 71 (reported in the March edition of Environment @ Gowlings), Bill 94 was tabled in the National Assembly. This Bill is the realization of the second step of the major forestry reform proposed by the Coulombe Commission (on the study of public forest management in Québec). The final report of the Commission recommended namely that the Government table in the National Assembly, as soon as possible, a bill creating the position of “Chief Forester” of public forests lands, specifying its incumbent's nomination conditions, determining his or her responsibilities, and establishing an institutional framework reflecting independence, neutrality and scientific integrity requirements. The amendments proposed by Bill 94 to the Act respecting the Ministère des Ressources naturelles et de la Faune to create the position of Chief Forester in accordance with the Civil Service Act are intended to meet that recommendation.

The main responsibility of the Chief Forester will be to supervise the operations for calculating annual allowable cuts (AAC) for each forest management unit. He/She will be responsible for determining the forest and ecological data required to make that calculation, and for preparing the forest management manual. The Minister may also entrust the Chief Forester any other forestry mandate. The power provided for in section 35.4 of the Forest Act to determine AAC, by species or group of species, will be exercised by the Chief Forester and the decisions made in that regard will be made public. In light of the Commission's recommendations, the amendments are aimed at the depoliticization and transparency of land-use management and planning. However, the bill does not detail the degree of independence of the Chief Forester from the Minister. On the contrary, the Bill provides that the Chief Forester will hold the position of associate deputy minister. One could question whether or not this is in line with the recommendation of the Coulombe Commission relating to its independence.

The Chief Forester will also advise the Minister on the content of the plans required under the Forest Act or those submitted to the Minister for approval, on policy and planning in forest research and development. The Chief Forester must also draw up and submit to the Minister a five-year review of the state of the Province's public domain forests and the results achieved with respect to sustainable forest development within the meaning of the Forest Act. The Minister shall then table that review, in the National Assembly, for review by the appropriate National Assembly committee.

Moreover, the Chief Forester may require a public body to provide the information and documents necessary for the exercise of his/her functions of office, such as carrying out investigations.

The bill further proposes amendments to the Minister's existing mission so as to facilitate the ecological, integrated and regionalized management of the activities carried on in the Province's public domain forests.

Finally, the bill includes a provision that extends the application of the special rules concerning advance harvesting during the years 2005-2006, 2006-2007 and 2007-2008 that were enacted under the Act to amend the Forest Act and other legislative provisions applicable to forest management activities (Bill 71), to the territory referred to in Chapter 3 of the Agreement Concerning a New Relationship Between le Gouvernement du Québec and the Crees of Québec.

RECENT CASES

ALBERTA COURT OF APPEAL CLARIFIES SENTENCING PRINCIPLES FOR ENVIRONMENTAL OFFENCES

On April 8, 2005, the Alberta Court of Appeal delivered a decision in R. v. Terroco Industries containing a detailed and potentially influential discussion of the principles that ought to guide judges when sentencing environmental offenders.

This case stemmed from two separate but related accidents. A driver working for Terroco Industries mixed acid and bleach in the single tank of his truck. The mixing produced a chlorine gas which escaped from the truck and caused serious lung injuries to another driver who happened to be at the loading site. The gas also caused short-term damage to the flowers and lawn of a neighbouring homeowner. For this accident Terroco was convicted under s. 98(2) of the Alberta Environmental Protection and Enhancement Act (EPEA) of releasing a substance into the environment that causes or may cause a significant adverse effect. After the incident at the loading site the driver proceeded to his destination. During the unloading process, the mixture ate through the truck's pumping mechanism and spilled onto the ground. For this incident Terroco was convicted under s. 19(a) of the Alberta Dangerous Goods Transportation and Handling Act (DGTHA) of transporting dangerous goods without complying with all applicable safety requirements.

At trial, Terroco was fined $50,000 for the EPEA offence and $5,000 for the DGTHA offence. The summary appeals conviction judge raised the fines to $150,000 and $50,000, respectively. The only issue at the Alberta Court of Appeal was whether the summary appeals conviction judge was wrong to increase the sentence.

Ritter J.A. wrote the unanimous decision. He discussed five general sentencing principles: (1) culpability; (2) prior records and past involvement with the authorities; (3) acceptance of responsibility; (4) damage/harm; and (5) deterrence. He suggested that there may be other sentencing principles of relevance to other cases, but that only these five mattered in the case at hand.

“Culpability should be a dominant factor in sentencing for environmental offences,” Ritter J.A. held. “Due diligence in sentencing for environmental offences is to be assessed on a sliding scale: the more diligent the offender, the lower the range of fit sentences; alternatively, the less diligent the offender, the higher the range of fit sentences.”

A prior record or a past warning by the authorities can be an aggravating factor at sentencing, because it suggests the “offender is more concerned about profit than compliance.”

An early guilty plea is a mitigating factor, although insisting on the right to a trial is not an aggravating factor. Genuine remorse may be evidenced by changes to practices and procedures designed to avoid another accident. To count as a mitigating factor, these changes must amount to more than just the precautions that were obviously required before the original accident occurred. Voluntary cleanup can be a mitigating factor if it is done in co-operation with the authorities, for the purpose of preventing future accidents; if it is done to avoid detection, it is an aggravating factor.

Actual harm resulting from the incident will be an aggravating factor, especially if the harm was foreseeable. The more serious the harm, the more it counts as an aggravating factor. Because it is sometimes difficult to identify actual harm from environmental offences, “the absence of ascertainable harm is not a mitigating but merely a neutral factor.” If the site where the offence took place is particularly delicate, that may be an aggravating factor, although if the site is unexceptional, that will not be a mitigating factor.

Judges must also have regard to specific and general deterrence when sentencing environmental offenders. They should ensure that the offender does not gain financially from the breach. When the offender is a corporation, judges should consider its ability to pay: “Individual deterrence is achieved at a much lesser cost when a small corporation of limited means is to be sentenced than when the corporation is large enough that maximum sentences have limited significance.” A fine imposed on a corporation must appear to be “more than a licensing fee for illegal activity or the cost of doing business.” At the same time, “in the majority of cases, the sentence should not result in economic inviability.” In sum, “The penalty must be more than a slap on the wrist but less than a fatal blow.”

Applying these five factors to the facts at hand, Ritter J.A. concluded that the summary conviction appeal judge was correct to increase the fine for the EPEA offence because the trial judge had not given sufficient weight to the actual bodily injury that resulted from the release of the gas. However, the summary conviction appeal judge erred in increasing the fine for the DGTHA offence since the sentence imposed by the trial judge was not “demonstrably unfit.”

This case contains a useful and articulate summary of sentencing factors for environmental offences. As such, it may well have implications extending beyond Alberta's EPEA and DGTHA.

See: http://www.albertacourts.ab.ca/jdb/2003-/ca/criminal/2005/.

ONTARIO DIVISIONAL COURT CONSIDERS CRITERIA FOR ISSUING MOE ORDERS

A person taking responsibility for arranging contamination clean-up, even if they do not carry it out or own or control the property, can still be in charge of a “clean up undertaking” or of waste, thereby making that person a valid subject of an Ontario Ministry of Environment (MOE) order, the Ontario Divisional Court recently determined. The Court also affirmed the it was appropriate for “fairness” to be applied by the Ontario Environmental Review Tribunal (ERT) in setting aside a remediation order issued to a non-polluting residential property owner (Montague) under the Environmental Protection Act (the “EPA”), and that doing so does not constitute a jurisdictional error despite MOE guidelines calling for orders to be issued to innocent purchasers.

Montague had purchased vacant property in 1986, had it rezoned from industrial to residential with the consent of the MOE, and built a house on it. In 1991 prospective purchasers arranged for an environmental site assessment, resulting in the discovery of 80 drums containing harmful liquid chemicals. The prior owner, R.E. Lee Paint Company, was a manufacturer of paints and solvents. When a fire destroyed the paint factory Lee, who was a director and officer of the company, hired contractors to perform the cleanup. Although Lee was aware that drums of waste had been stacked up against the remains of the factory, he did not bury the waste, nor did he know what eventually happened to this waste.

The MOE orders to Montague, the homeowner, as well as to Lee Paint Co. and to Lee, its director, issued under EPA sections 17 (remedial orders), 18 (preventive orders) and 43 (waste removal), required extensive remedial work at the site. On appeal, the ERT revoked the orders against Lee, the company director and also against the homeowner, except as it pertained to providing access to the property and a registration on title. The ERT concluded that the MOE had failed to prove that Lee had any management or control of the corporate entity or over its property at the time of the 1978 fire and further failed to prove he was responsible for the burial of the drums following the fire.

On appeal by the MOE to the Divisional Court, the Court concluded the ERT was wrong in finding a s. 17 order could not be issued to Lee. The Court found the ERT had asked itself the wrong question in solely determining whether Lee caused the drums to be buried. Rather, the Court held the ERT also had to examine whether the director had “permitted” the burial of the waste. Quoting the Supreme Court of Canada's decision in Regina v. Sault Ste. Marie, “The 'permitting' aspect of the offence centers on the defendant's passive lack of interference or, in other words, its failure to prevent an occurrence which it ought to have foreseen.” The Divisional Court ruled that the fact Lee had responsibility for the cleanup of the site, including the 80 drums of waste, yet chose to leave the site unsupervised for two or three days at a time while the cleanup was underway, were factors that should have been considered by the Tribunal.

With respect to the order under s. 18, the ERT had found Lee never had any direct charge or management or control over the company or the property at the time of the fire, despite owning a few shares. The Court, however, found the ERT erred in failing to direct its mind to the proper legal issue and in applying a test for liability which was “far too narrow.” The Court held “liability to an order under s. 18 flows from having had “management or control of an undertaking or property.” The Court found that even if the former director did not have any direct charge, management or control over the paint company, he could have liability if he had management or control of an “undertaking,” that creates risk of contamination, namely the cleanup operation at the site. The Court clarified that the first question in reviewing a s. 18 order is to determine what it is that was being managed or controlled. This requires the Tribunal to determine what undertaking it is that created the risk of discharge.

“The undertaking that presented the risk of discharge in the case at bar was the cleanup of the debris, including the 80 drums of waste. It is noteworthy that the factory was completely destroyed, so that the business of paint and solvent manufacturing was no longer being carried on at these premises after the fire. It would appear that the only undertaking being carried on following the fire was the cleanup operation. Responsibility for that undertaking was, on the facts as found by the Tribunal, given to Lee. While he was not the controlling mind of the company as a whole, it is only necessary that he be in a position of management or control of the undertaking that creates the risk of contamination to attract liability under s. 18. His failure to influence the cleanup crew's conduct was a factor that the ERT should have considered in its decision. This undertaking involved a risk of contaminant discharge into the natural environment, which is sufficient to trigger liability under s. 18.”

As for the homeowner, the Divisional Court acknowledged that issues of fairness should permeate an “owner pays” enforcement mechanism under s. 18. While the MOE had jurisdiction to issue the order to Montague despite her not being responsible for the contamination, the Court found she had “exercised the due diligence of the day” at the time she purchased the contaminated property, as well as taking immediate steps to excavate and store the waste drums after she discovered them. It would be unfair in the circumstances to hold her responsible for the financial burden of the cleanup. In this regard, the Divisional Court held that the ERT was not bound by the MOE Compliance Guideline that would have supported an order against an innocent owner of contaminated property.

See Montague v. Ontario (Ministry of Environment), [2005] O.J, No. 868 at:
http://www.canlii.org/on/cas/onscdc/2005/2005onscdc10064.html.

WHAT'S NEW

CONTRACTING OUT WATER AND WASTEWATER SERVICES: A CHANGING LANDSCAPE

Harry Dahme spoke on “Contracting out Water and Wastewater Services: A Changing Landscape” at the Insight Water and Wastewater conference on May 5, 2005.

PROVINCIAL ENVIRONMENTAL LAW, REGULATIONS AND POLICY

On June 16, 2005, Stacey Ferrara will be speaking on Provincial Environmental Law, Regulations and Policy at EPIC's Understanding Environmental Regulations - Due Diligence program. This 2-day program will be held on June 16 and 17, 2005 at EPIC's Learning Centre in Mississauga. Additional course and registration information is available online at http://www.epic-edu.com/index.html.

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