Municipal Environmental Liability:

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• Municipal Environmental Liability
• Legislative Changes in 2005
• J. Bruce McMeekinRobin-Lee A. NorrisBryan J.
  Buttigieg February 20, 2006

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Developments in 2005

• Bill 133
• Nutrient Management Act
• Brownfields Legislation
• Clean Water Act (Bill 43)

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BILL 133

• With some exceptions, came into force in June,
  2005.
• Amends the EPA and OWRA

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• Changed the spill reporting requirements
• Provides new sources of funding for
  municipalities to defray costs arising from
  spills responses
• Expanded officers and directors liability
• Introduced new enforcement mechanism,
  Environmental Penalties (EPs) (not yet in force)
• Larger fines/more jail time/mandatory sentencing
  criteria

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Spill Reporting Requirements

• Spill is a discharge of a pollutant into the
  natural environment from or out of a container
  that is abnormal
• Reportable to MOE and any municipality/ regional
  municipality by person in control of pollutant or
  who causes or permits the spill
• Pre Bill 133, only reportable if caused or likely
  to cause adverse effect
• Post Bill 133, adverse effect requirement gone
• All spills reportable unless exempted by O.Reg
  675/98

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Municipal Recovery of Costs Expenses Incurred
Due to Spills

• New s. 100.1 permits a municipality to issue an
  order for its costs and expenses arising from
  preventing, eliminating or ameliorating adverse
  effects
• Issued to the pollutants owner or the person
  having control of the pollutant
• Order can operate as a lien on property
• Can be enforced as a civil judgment in the
  Superior Court

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• Owner/person in control has a right of appeal to
  the ERT
• Complements municipalities existing right of
  recovery through s. 99(2) and 101 of the EPA from
  the Crown
• Funding may arise from operation of EPs

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Directors and Officers Liability

• Pre Bill 133, placed duty on executives to take
  all reasonable steps to prevent pollution arising
  from corporate operations
• Bill 133 has expanded that duty to just about
  every facet of environmental regulation
  approvals, spills reporting, waste management etc.

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• The duty to comply is independent of the
  corporation the mere failure to take reasonable
  steps to ensure corporate compliance is a breach
  and therefore an offence, regardless of whether
  the corporation itself has committed an offence
• Municipality a corporation
• Officers and directors appointed and elected
  officials

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• Akin to (unproclaimed) section 19 of the SDWA
• Bill 133 also reverses the onus and places
  appointed and elected officials in the position,
  if charged, of having to prove their innocence
• Actus reus of the offence is therefore being an
  elected or appointed official with a municipality
  that is regulated by the EPA or OWRA

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Environmental Penalties

• Not yet in force
• New enforcement mechanism, halfway house between
  existing administrative orders and prosecutions
• Will permit MOE to issue orders requiring payment
  of financial penalties if a contravention is
  found during an inspection

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• Absolute liability defence of all reasonable
  care will not exculpate
• Size of penalties will be determined by formulae
  set out in regulations, up to maximum of 10,000
  for each day contravention occurs
• Compliance system/reasonable care a mitigating
  factor on quantum
• Penalties will be placed into a separate account
  within the Consolidated Revenue Fund. May be
  used as a pool for recovery of costs arising from
  spills.

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• No protection from double jeopardy offender can
  be prosecuted even if penalized and penalty paid.
  Payment not admissible as an admission in a
  subsequent prosecution.
• Appeals as of right permitted to ERT on merits
  and quantum
• Standard of proof is less than reasonable doubt
  balance of probabilities
• For some contraventions (e.g. discharges) the
  burden of proof is reversed and placed on the
  industry

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• Failure to pay order can be enforced like a
  civil debt/judgment
• Failure to pay suspension/loss of approval a
  possibility
• Regulations (presently being discussed with
  stakeholders) expected later in 2006 or in 2007
  to bring EPs into force
• MOE has committed itself to applying EPs (by
  regulation) only to direct dischargers/ MISA
  regulated corporations
• Nothing prevents the MOE from the future
  expansion of EPs to other sectors

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INCREASED JAIL FINES
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AGGRAVATING SENTENCING FACTORS

• Adverse effect/water impairment
• Committed intentionally/recklessly
• Increased revenue/decreased costs
• MOE warning ignored
• Attempts to conceal
• Failure to cooperate

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• Failure to promptly mitigate adverse effect
• Failure to reduce risk of future offences
• Prior contraventions (penalties and/or
  convictions)
• Level of fine/jail must reflect number of
  aggravating factors present
• Compliance with order not a mitigating factor

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Municipal Government and the Regulatory Framework
for Land Development in 2006
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Existing and Proposed Legislation

• Municipal Act 2001
• Places to Grow Act 2005 (PGA)
• Planning Act
• Provincial Policy Statement 2005 (PPS)
• Greenbelt Act 2005

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• Niagara Escarpment Planning and Development Act
  (NEPDA)
• Oak Ridges Moraine Conservation Act 2001 (ORMCA)
• Nutrient Management Act 2002 (NMA)
• Building Code Act
• Ontario Water Resources Act (OWRA)

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• Environmental Protection Act
• Aggregate Resources Act
• Clean Water Act 2005 (Proposed)
• Bill 51 Planning and Conservation Land Statute
  Law Amendment Act 2005 (Proposed)

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Navigating Priorities Where Acts Seem to Conflict

• s3Planning Act provides for PPS
• s3(5) shall be consistent with
• s14 PGA
• s14(2) growth plans prevail in the case of
  conflict with
• (c) a policy statement issued under s3 of
  Planning Act, subject to s14(4)

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• s14(4) provides that despite any Act, but subject
  to regulations made under this Act for the
  purpose of clarifying application of this section
  and conflict issues, if there is conflict between
  a direction in a growth plan and another policy
  with respect to the natural environment or human
  health, the one that provides the most protection
  prevails.

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• s14(5) policies and plans to which s14(4) refers
  are
• s3 policy statements Planning Act
• s3 Greenbelt Plan Greenbelt Act 2005
• s3 Niagara Escarpment Plan NEPDA
• s3 Oak Ridges Moraine Conservation Plan ORMCA
• (f) other plans under other Acts or made by
  authorized government officials, agencies,
  ministries

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Bill 51 2005

• Amends the Planning Act
• recognizes as provincial plans all of the plans
  and policies in s14(5) of the PGA and as well
  recognizes growth plans under the PGA as
  provincial plans
• does not specifically recognize nutrient
  management plans under the NMA
• requires that decisions must shall be consistent
  with policy statements and shall conform with
  provincial plans or shall not conflict with them

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Conclusion

• growth plans under PGA seem to take priority over
  PPS
• between growth plans and other plans, the one
  affording the most protection to human health
  and/or the environment prevails
• difference in language between shall conform
  with/shall not conflict with and shall be
  consistent with is a municipalitys worst
  nightmare in determining what standard to apply
• very subjective standard

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Nutrient Management Act 2002 (NMA) Is the
Municipality the Bouncing Ball between OMAFRA and
MOE?
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• NMA passed in 2002
• intended to protect local drinking-water sources
  from intensive agricultural operations by
  providing for the management of materials
  containing nutrients while still providing for a
  sustainable agricultural economy

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• provides for nutrient management plans and
  nutrient management strategies to be prepared and
  filed
• gives municipalities power to control the size
  and location of buildings and structures for
  nutrient management
• sets blanket buffer zones under O.Reg.267/03

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• s61(1) of NMA provides A regulation supercedes a
  by-law of a municipality or a provision in that
  by-law if the by-law provision addresses the same
  subject matter as the regulation.

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Peacock v. Norfolk (County)

• 2004 Ontario decision of the Ontario Superior
  Court of Justice
• dealt with the conflict between a municipal
  zoning by-law establishing sensitivity areas and
  prohibiting construction of manure storage
  facilities in these sensitivity areas based on
  the outcome of detailed studies
• the area created a larger buffer than that
  created under NMA regulation

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• the applicant wanted to build a manure storage
  facility that met the NMA criteria of being
  located 100 m from a municipal well but did not
  meet the buffer provided under the Interim
  Control by-law passed by the Municipality
• the Court ruled that the NMA superceded the
  municipal by-law on the basis of the provision in
  s61(1) of the NMA

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Competing Interests of MOE and OMAFRA

• the Peacock decision means the score between
  OMAFRA and MOE is 1-0
• OMAFRA is proposing amendments to the NMA that
  add some protection for streams but still
  continues with only one standard buffer distance
  from municipal wells, no matter what the soil
  type and ground water conditions
• MOE expects the Clean Water Act 2005 to give real
  legs to the protection of drinking water sources
• there has been nothing introduced yet that will
  harmonize the NMA with the Clean Water Act 2005

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Conclusion

• municipalities will remain a bouncing ball, stuck
  in the middle between the MOE and OMAFA unless
  the two pieces of legislation are harmonized

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Brownfields An Update

• Brownfields are lands on which industrial or
  commercial activity took place in the past and
  that may need to be cleaned up before they can be
  redeveloped 
• http//www.ene.gov.on.ca/land.htmbrownfields
• Most of the new Brownfields Legislation and
  Regulations became law in 2004

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EPA In force as of October 21, 2005

• 168.3.1 
• No change in property use to a more sensitive
  use unless a Record of Site Condition has been
  filed.
• Implications for municipalities
• Ensure that changes to property use confirm with
  this section
• Due Diligence of municipality will require
• Require proponent to submit an RSC for every
  change in property use to a more sensitive use
• Be aware of the unique problems of subdividing a
  property covered by an RSC

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BILL 43 THE CLEAN WATER ACTNew duties and
Responsibilities of the Municipality as Protector
of Water Quality

• Introduced on December 5, 2005
• Public comment period expired February 5, 2006
• Municipality now at the centre of water quality
  regulation
• Stated to be the first barrier in a multi
  barrier system of water protections
• Yet Municipality may have limited control (and
  resources) in developing the rules of the game

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Three Purposes of the Clean Water Act

• Direct local communities to identify any
  activity that could threaten water quality
• Give powers to local municipality to take action
  on both existing and future threats to water
  quality
• Provide a chance for the whole community to
  participate in finding workable effective
  solutions through full and public consultation
• (source MOE Backgrounder Dec 5, 2005)

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Direct local communities to identify any
activity that could threaten water quality

• Ontarios 26 conservation Authorities are
  designated as Source Protection Authorities
  (SPAs)
• SPA is to strike a Drinking Water Source
  Protection Committee (SPC)
• SPC is to
• prepare an Assessment Report
• Identify all watersheds in the area
• Prepare a budget for the watershed
• Identify Vulnerable areas

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Membership of the Source Protection Committee

• Proposed regulation under the Act
• Intended to be multi-stakeholder with
  representation from
• Conservation Authority ?
• Municipality (1/3)
• Local citizens
• First nations
• NGOs
• Industry
• Agriculture
• Public health bodies
• others

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Identifying threats to the Watershed the
Assessment Report

• Contents of the Assessment Report
• Identify All Watersheds within the area
• Prepare a budget
• Identify Vulnerable Areas and threats to
  Drinking Water in those areas

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Four types of Vulnerable Areas

• Groundwater recharge area
• Highly vulnerable aquifer
• Surface water intake protection zone
• Wellhead protection area

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Give powers to local municipality to take action
on both existing and future threats to water
quality

• After submission of the Assessment Report to the
  MOE for approval, the SPC is to create a Source
  Protection Plan
• Purpose of the SPP
• To set out policies to ensure that every existing
  activity identified as a significant drinking
  water threat , ceases to be a significant threat,
  and
• To set out policies to ensure that none of the
  possible future activities identified by the
  assessment report as significant drinking water
  threats ever become significant threats

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Give powers to local municipality to take action
on both existing and future threats to water
quality

• Official Plans and zoning by laws must conform
  with the Source Protection Plan
• In the case of conflict with other provincial
  plans such as the Greenbelt Plan, the most
  protective of the quality and quantity of the
  drinking water will prevail.

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New Enforcement powers given to Municipalities

• Power to designate activities as ones which
  threaten drinking water sources
• Authority to regulate those activities by
  requiring risk Assessments for the activity
• Require permits
• Require development of and compliance with a risk
  management plan
• Restrictions on land use

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Agreement with Province if no Conservation
Authority

• For those parts of the province without a
  Conservation Authority, Province may enter into
  an agreement with municipality to assume the role
  of a conservation authority in generating a
  source protection plan
• Will such a municipality have the necessary
  resources and expertise?

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Municipalities are now at the forefront of Source
Water Protection

• Powers to pass by-laws to develop the permitting
  regime for designated activities
• Power to conduct inspections
• Powers similar to provincial environmental
  officers
• Power to issue enforcement orders
• Planning Act will allow zoning by-laws for areas
  where sensitive ground or surface water features
  exist

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Restrictions on Municipal Powers

• Official Plans must be amended to comply with
  source protection plans
• Can not undertake any work or undertaking that
  would conflict with a source protection plan
• Can not pass any by-law that would conflict with
  the source protection plan

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Status of Bill 43

• Comment period ended on February 5, 2006
• Likely to become law in 2006

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Potential Problems for municipalities

• Source Protection Plan will effect many areas of
  municipal jurisdiction. Land Use Planning is
  subservient to the SPP.
• Not clear how much influence or control
  Municipality will have over content of the SPP
• Plans are meant to be heavily influenced by
  science
• But science not always clear
• Consensus on meaning of the science not always
  possible
• Will municipality have the necessary expertise
  and resources to develop a SPP?

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Potential Problems for municipalities

• Source Protection Plan requires MOE Approval
• What is the basis for MOE Approval
• What if MOE requires changes?
• Is there an appeal of the MOE decision?
• If so likely to the Environmental Review Tribunal
• Limited expertise on Planning implications of its
  decisions

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Potential Problems for Municipalities

• How much uniformity is expected between
  municipalities?
• Will MOE allow varying standards between
  different municipalities?
• How will MOE justify one municipality offering
  lower protection to its drinking water than an
  other?
• But if uniformity across the Province is
  desirable, why was this power given to
  Municipalities?

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• Hard to dispute the need for some form of
  drinking water protection legislation post
  Walkerton
• But Province, which has the technical resources
  and funding for the MOE has not provided any
  tangible legislation
• Instead they have created a regime that requires
  municipalities to follow an as yet unspecified
  Source Water protection legislation in the form
  of Source Protection Plans created by the Source
  Protection Committee (not all elected members)

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Clean Water Act the future

• Stay tuned for more implementation details in the
  regulations
• Municipalities will require significant resources
  to fulfill the duties they have been assigned
• Every new municipal power comes with
• Cost to implement
• Cost to enforce
• Cost to respond to inquiries
• Cost to respond to appeals

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• QUESTIONS