Brownfield Development - Featured Articles

Proposed Changes to Ontario's Brownfields Regulation

Gowling Lafleur Henderson LLP

Anticipated amendments to Ontario Regulation 153/04 (the Records of Site Condition Regulation, or the "Regulation") may have a dramatic impact on owners of contaminated property in Ontario and on their ability to redevelop their properties.

Some of the most significant proposed changes are those to the Standards as set out in the Soil, Ground Water and Sediment Standards for Use Under Part XV.1 of the Environmental Protection Act, the requirements for completion of Phase I and II Environmental Site Assessments (ESAs), and the proposed establishment of a Tier 2 Risk Assessment Model.

While there may be general consensus that there is the need to revise and update the Standards to take into account the best information on potential adverse effects, the dramatic reduction in the permitted concentrations for many of the listed contaminants raises a genuine concern that properties which were previously deemed to be "clean", may now be designated as being "contaminated". The absence of an assessment of the number of properties impacted or the potential economical impact of these changes has led to a great deal of concern on the part of potentially affected owners.

Other proposed changes include detailed requirements for the completion of Phase I and II ESAs as well as the regulatory obligation to complete a Phase I Environmental Site Assessment under certain circumstances, such as in the case of a gas station or dry cleaner. If the changes are implemented, the cost of completing Phase I and II ESAs will increase. At the same time however this is off-set by the improvement in the quality of the ESAs and the usefulness of the ESAs. While cost may be a concern, where the ESAs have identified contamination, the ESAs will be far more useful in developing a remedial approach for that contamination.

Currently the Regulation provides for the use of a Risk Assessment in order to derive site-specific standards which may then be used to limit the costs of physical remediation of the property. There are currently concerns about the length of time and the expense associated with the completion of these Risk Assessments. One proposed change to the Regulation involves the use of a Tier 2 Risk Assessment wherein specific limiting factors may be adjusted in order to facilitate the completion of a Risk Assessment. Preliminary testing of the Tier 2 model however suggests that its usefulness for a wide variety of sites may be limited, in which case the great majority of the new sites which will be identified as being contaminated will rely on either physical remediation or a Tier 3 Risk Assessment, with its attendant cost and the even longer period for approval.

Other issues with the proposed changes include the acceptability of transition provisions for those properties currently being remediated or for which Risk Assessments are currently underway, and acceptability of the changes dealing with off-site liability.

The Ministry of Environment (MOE) has not responded publicly to the numerous comments received in the draft amendments to the Regulation. While the MOE has been working with stakeholders on certain aspects of the proposed amendments, the absence of a direct response to the many concerns expressed has led to a great deal of uncertainty as to what the future Regulation will look like. Further, while, according to the MOE, significant changes to the draft Regulation have been made, it is yet uncertain as to what many of those changes are and whether or not any further public comment will be invited on these further amendments to the draft Regulation or whether the Province will simply enact the Regulation.

Uncertainty is a key impediment to the redevelopment of contaminated sites. The absence of an economic evaluation of the impact of the proposed changes to the Regulation, the continued failure on the part of the Province to respond meaningfully to the comments received, and the concern that the revised Regulation may be enacted without further consultation has led to caused considerable uncertainty. While a Brownfield development undoubtedly will continue, it is likely that there could be a very significant detrimental impact on the Brownfield industry if no further consultation takes place and if the proposed Regulation becomes enacted without adequately addressing the concerns as set out above.

Read More Articles from the Brownfield Development Report > > >

Base10 Capital

Rutherford International Executive Search

Firm Capital Non-Bank Lender

R.E. Millward & Associates