On December 29, 2009, the Ontario Ministry of the Environment (the “MOE”) filed Ontario Regulation 511/09, introducing important amendments to Ontario Regulation 153/04, the principal regulation which governs the preparation and filing of Records of Site Condition. The MOE takes the position that these changes will facilitate brownfields redevelopment.
The substantive amendments contained in Regulation 511/09 do not come into force immediately. The most significant changes will take effect only on July 1, 2011, and other transition rules apply to various other sections of the Regulation.
The purpose of this bulletin is to summarize some of the most important changes brought about by the Regulation.
1. Revised Soil, Ground Water and Sediment Standards
One of the most important elements of the new regulatory package is the revised set of Standards for Soil, Ground Water and Sediment.
The new Standards (dated July 27, 2009 but released in the first week of January 2010) will not come into effect until July 1, 2011. They will replace the existing Soil, Ground Water and Sediment Standards dated March 9, 2004. Although the existing Standards will remain in effect for approximately 18 months, proponents of ongoing projects should pay close attention to the transitional provisions described in Section 6, below.
The new Standards effect changes in two principal ways: They implement 1) more rigorous standards and 2) new standards where none existed previously. Some highlights include the following:
- Generally more stringent soil and groundwater criteria will take effect for chlorinated solvents; for example, the non-potable groundwater criterion for perchloroethylene will change from 50μg/L to 1.6(17)1 μg/L, and the criterion for trichloroethylene will change from 50 μg/L to 1.6/(17) μg/L;
- Standards for benzene, toluene, ethylene and xylene (BTEX) and petroleum hydrocarbons are also affected; for example, the non-potable groundwater criteria for benzene will be reduced from 1900/(1200) μg/L to 44/(430) μg/L;
- The new Standards introduce for the first time petroleum hydrocarbon criteria (F1-F4) for non-potable groundwater;
- Other new Standards for previously unlisted substances have also been introduced, such as 1,4 dioxane, often found in conjunction with solvents.
Even in cases where there is no intention of filing a RSC, the Standards for Soil, Groundwater and Sediment are often used in aid of interpreting legal reporting obligations, to assess impacts to property values, in negotiating real estate transactions, and in pleading civil claims. The creation of more stringent Standards in some instances may also have the practical effect of forcing some owners or proponents to move to a risk assessment approach because a generic clean up option is no longer considered feasible, either technically or financially.
2. Revised Environmental Site Assessments Requirements
The Regulation revises and restates the minimum requirements for the conduct of Phase I and II Environmental Site Assessments (“ESAs”) in conjunction with preparation of a RSC. Some revisions are intended to reinforce the quality and integrity of ESAs; for example the new provisions respecting Qualified Persons (“QPs”) are intended to eliminate the potential for conflicts of interest in reporting. When a QP (or their employer) holds a direct or indirect interest in a property for which a RSC will be filed, the QP will be prohibited from conducting or supervising the Phase I or Phase II ESA or a risk assessment for that property in support of the RSC, or completing the certifications in the RSC.
The Schedules to the Regulation prescribing the methodology and the content requirements for ESAs and risk assessments have been revised and restated. This includes the prescription of uses for which a Phase II ESA will be mandatory in support of a RSC filing. Section 27 of the existing Regulation 153/04 requires that a Phase II ESA be completed to support a RSC for any property used, in whole or in part, for an industrial use, a garage, a bulk liquid dispensing facility, or for the operation of dry cleaning equipment. Section 32 of the new Regulation supplements the list by requiring a Phase II ESA, “if during a Phase I environmental site assessment of the property, a potentially contaminating activity is identified on, in or under the property”. The concept of a “potentially contaminating activity” is defined through the listing of Column A of Table 2 of Schedule D of the new Regulation, and includes 71 categories of uses. The creation of conceptual site models is also now required in both phases of the ESA.
It should be noted that the Regulation also introduces rules for the use of imported soil on RSC properties. The soil can only be used on properties which have been historically and/or currently used in certain ways; the imported soil must be approved by a Qualified Person as being consistent with the requirements of Schedule E of the Regulation, and the use of this soil is limited to backfilling an excavation or for final grading. The Regulation further prescribes that imported soil cannot be used where the RSC property is currently in use as agricultural, community, institutional, parkland or residential property.
3. Changes to Record of Site Conditions Process
Administratively, the new amendments are intended to create a more transparent RSC submission and filing process. As contemplated by amendments to the Environmental Protection Act which have been awaiting proclamation since 2007, all completed RSCs will be checked by the MOE Director within 30 business days and selected RSCs will go through additional review. Additionally, as indicated above, more precise guidelines have been established with respect to the content of ESAs.
The provisions which permit a vendor of property to rely on a RSC filed by the purchaser have also been revised to take account of the new RSC process whereby the Director must give notice, and reject or acknowledge the RSC.
4. Streamlined Risk Assessment
A new modified generic risk assessment model has been created by MOE to provide an alternative to the existing risk assessment process. This streamlined approach is intended to provide a timelier and more cost-effective option for proponents. The submission and review process for modified generic risk assessments will also come into force on July 1, 2011, but a model of the spreadsheet can be viewed as a Supporting Document to the amendments to Ontario Regulation 153/04 at: http://www.ene.gov.on.ca/envision/land/decomm/condition.htm.
5. Legal Effect of RSC Filing
Existing and filed RSCs will continue to provide owners the same qualified immunity from certain Ministry orders as they always have. One of those express qualifications respecting immunity after filing a RSC relates to off-site migration, and states that the Ministry retains the power to issue an order in respect of a contaminant that was discharged into the natural environment before the certification date and was on, in or under the property as of the certification date where any of the contaminant moved from the property to which the RSC relates to another property. The new Regulation does not provide any further clarification respecting the effect of a RSC from the perspective of civil liability, although such clarification had been sought by stakeholders during early rounds of consultation.
6. Transition Rules
Although the new Standards take effect on July 1, 2011, the transition rules allow a property owner up until January 1, 2013, to submit a RSC based on the existing Standards, provided that the owner follows certain rules including certifying that remediation has begun. In order to take advantage of these transition provisions, the property owner must send a notice to the MOE in an approved form, between July 1, 2010 and December 31, 2010.