Canada: Torys' Environmental, Health and Safety Bulletin - April to September 2010

Canada: Ontario Ministries developing new rules for offshore wind projects

The Ontario Ministry of the Environment is now considering comments received on its proposed approach to permit offshore wind projects seeking a Renewable Energy Approval (REA) under Ontario's Environmental Protection Act. In general, the proposal, which was published in June, would require proponents to complete certain technical and other assessments specific to offshore wind development, which they then must submit as part of their REA application. Notably, the proposed approach would create exclusion zones in which offshore wind projects would be prohibited, including a 5 km setback from the shoreline. In a separate ongoing process, the Ministry of Natural Resources has begun its own review of how Crown land will be made available for offshore wind projects.

Final MOE and MNR guidance is still forthcoming. For further details, please see Renewable Energy Approval.

Government proposes risk-based environmental approvals process

The Ontario government recently introduced Bill 68, the Open for Business Act, 2010, which would, among other things, create a streamlined, risk-based approach to granting environmental approvals. In particular, it would amend the Environmental Protection Act (EPA) to require an environmental compliance approval instead of a section 9(1) Certificate of Approval (Air and Noise) and a section 27(1) Certificate of Approval (Waste Management System and Waste Disposal Site). However, no environmental compliance approval would be required for certain low-environmentalrisk activities, which would be prescribed by regulation at a later date. Persons engaging in these exempt activities would be required to register them on a new public electronic environmental registry. Failure to comply with the registration process could result in administrative penalties, including potentially substantial fines. The bill also proposes to amend the Ontario Water Resources Act to require an environmental compliance approval like that proposed for the EPA, instead of the existing section 53(1) Certificate of Approval (Industrial Sewage Works).

The bill is currently in debate prior to third reading. For further information about the bill, please see Bill 68.

Ministry of Labour conducts new safety blitz

The Ontario Ministry of Labour has announced that between September 15 and November 15, 2010, it will be conducting inspection blitzes with respect to workplace hazards leading to musculoskeletal disorders (MSDs) – injuries and disorders of muscles, tendons and nerves caused by repetitive work and other factors. In particular, Ministry inspectors plan to focus on hazards that can lead to MSDs, such as tasks that put workers in awkward postures or require repetitive motions, and tasks that require workers to exert force when lifting, pushing or carrying items. Inspectors will also assess whether employers have established training and procedures regarding these tasks. According to the Ministry, the blitz will focus on homebuilding, hospitals and, in the mining sector, hazards involving heavy equipment cabs, roadway conditions and the layout and clearances in operator workstations.

For further information, please see Enforcement Blitz.

Ministry of Labour proposes new and revised occupational health and exposure limits

The Ministry of Labour has begun considering comments received on its proposals to adopt new and revised occupation exposure limits (OELs) for 12 substances. Among other changes, the proposal would add an OEL for citral, withdraw the specific OEL for tantalum (metal and oxide – total dust) and revise the exposure limits or listings for 10 other regulated substances. The Ministry has also proposed withdrawing the Short Term Exposure Limits for 22 substances listed in Ontario Regulation 833, instead regulating short-term exposures through applying excursion limits determined in accordance with the rules set out in that Regulation.

For further information, please see Ontario Proposing Occupational Exposure Limits.

Ontario introduces water opportunities bill

The Ontario government has introduced Bill 72, the Water Opportunities and Water Conservation Act, 2010. Designed to encourage the development of water technologies and services in Ontario, the bill would create a corporation called the Water Technology Acceleration Project to promote the bill's objectives. The bill would also require certain municipalities and other persons to prepare water sustainability plans for municipal water services, wastewater services and stormwater services, and then to submit the plans to the Minister of the Environment. For certain water-related services, the Minister would be authorized to require amendments to these plans to achieve performance indicators and targets, which could vary for different municipal service providers and areas of the province. The bill would also authorize the Minister to make regulations mandating water conservation plans and targets throughout the province.

Bill 72 is currently in committee following second reading. For further information, please see Bill 72.

Canada: Federal

Government amends the environmental assessment regime

In July 2010, the Canadian government amended the Canadian Environmental Assessment Act to streamline the federal environmental assessment process and to provide new authority for the Canadian Environmental Assessment Agency (the Agency), which now assumes responsibility for all comprehensive studies (except for projects regulated by the National Energy Board and the Canadian Nuclear Safety Commission). By consolidating this responsibility under one federal authority, the legislative amendments aim to reduce the time needed to determine whether a comprehensive study is required and the time needed to complete the environmental assessment process. The amendments also authorize the Minister of the Environment to establish the scope of any project that is subject to an environmental assessment – particularly to limit the scope of the project to only "one or more components of that project."

Subsequently, the federal government proposed the Establishing Timelines for Comprehensive Studies Regulations to complement the legislative amendments by imposing mandatory timelines on the Agency in conducting comprehensive studies. Under the proposed Regulations, the Agency would have an initial period of 90 days from the receipt of a project description that complies with the Regulations to determine whether a comprehensive study should be started. If a comprehensive study is initiated, the Agency would be required to complete it within 365 days after formally indicating that a comprehensive study is required. The Agency would be required to report annually on its performance in relation to the Regulations.

For further information, please see Establishing Timelines.

In the Courts in Canada

Class action awarded $36 million in damages

On July 6, 2010, the Ontario Superior Court of Justice found Inco Ltd. liable for $36 million in damages to approximately 7,000 homeowners in the City of Port Colborne. In Smith v. Inco Ltd., the Court found that emissions from Inco's former nickel refinery had reduced the value of nearby properties by contaminating their soil. Inco's Port Colborne refinery had operated from 1918 until 1984, during which time nickel particulate, among other substances, settled in the surrounding soils. Since the 1970s, Ontario's MOE has conducted periodic vegetation and soil testing in the area; however, it was a 1998 soil investigation that identified nickel concentrations in certain Port Colborne soils far in excess of applicable MOE criteria.

Subsequently, as described in Torys' Bulletin, the Ontario Court of Appeal certified a class of affected property owners, who claimed that Inco's conduct had negatively affected the class members' property values. In the latest decision, the Superior Court ruled on the substantive issues. In particular, the Court found Inco liable in private nuisance for creating an unreasonable interference with the use and enjoyment of the class members' land. According to the Court, the nickel particulate had contaminated the class members' soil, which constituted physical damage. This damage was material because the nickel concentrations were high enough to negatively affect property values. The Court also found Inco liable under the common law doctrine of strict liability because in operating the nickel refinery, Inco had undertaken a non-natural use of its land and allowed nickel particulate – "something likely to do mischief" – to escape onto neighbouring properties. However, the Court found Inco not liable for trespass, which requires an intentional and direct interference with another's property. Although Inco had permitted nickel particles to migrate from Inco's property onto the class members' lands, the Court found that this intrusion was not sufficiently direct to uphold a claim in trespass.

To determine the damage award, the Court measured house prices in Port Colborne against those in Welland, a city that the Court found to have comparable demographics and labour force. Using the rate of house price increase in Welland, the Court estimated that the average house in Port Colborne would have been worth approximately $4,514 more without the nickel contamination caused by Inco. Aggregated over 7,965 residential properties, the total loss to the class members was approximately $36 million as of September 2008. The Court then divided the damages among three subclasses based on the proximity of each to the Inco refinery. Notably, the Court declined to award punitive damages, finding that Inco's conduct was not so malicious or oppressive as to offend the court's sense of decency.

For further information, please see Smith v. Inco Ltd.

Supreme Court Rules on federal environmental assessment and treaty rights

On May 14, 2010, the Supreme Court of Canada delivered its decision in the case of Quebec (Attorney General) v. Moses, which involved a planned mining project in an area governed by the James Bay and Northern Quebec Agreement. Local Cree and Inuit communities, the province of Quebec and the federal government entered into this agreement in 1975 to provide a governance framework for economic development, social development and natural resource management in the James Bay region of Quebec. The disputed section of the agreement stated that the determination of whether a provincial or federal assessment was to be conducted for a given project depended on the constitutional jurisdiction within which the project occurred; the agreement also specified that only one environmental assessment would be conducted unless the project fell within both provincial and federal jurisdictions.

According to the agreement, the project was planned for land that was under Quebec's jurisdiction, and all parties agreed. Accordingly the environmental approval process was initiated through a provincial administrator. However, federal officials independently determined that the project would significantly affect local fish habitats, thereby triggering a requirement to obtain approval under the Fisheries Act. Further, the federal officials declared that this approval would not be governed by the agreement, but rather in accordance with the Fisheries Act, which required a study under the Canadian Environmental Assessment Act (CEAA). The project proponents sought declaratory relief in Quebec.

At trial, the Quebec Superior Court held that, under the agreement, only the provincial assessment was required for the project. The Court of Appeal overturned this decision and held that the application of the Fisheries Act triggered federal involvement, but held that the federal review process as set out in the agreement should be used, rather than the CEAA process. The majority of the Supreme Court of Canada held that the agreement contemplated an environmental review process that allowed for both provincial and federal approvals where necessary. The section of the agreement stating that only one environmental assessment ought be conducted merely governed the agreement's internal review process but did not override the application of external laws of general application. The Court held that the federal government did not give up its constitutional jurisdiction over fisheries under the agreement and that the assessment process under the agreement was not inconsistent with that under the Fisheries Act. As a result, the Court concluded that, even if the project was approved under the agreement, the proponent would still require a Fisheries Act authorization, which would first require the proponent to complete a CEAA assessment.

The dissenting opinion of some judges of the Court indicated that the intentions of the parties as set out in the agreement were clear and only one environmental approvals process ought to be undertaken for any project. The minority decision was also critical of the application of the CEAA process since it did not explicitly provide for any participation by aboriginal communities. In addition, the CEAA did not exist at the time the agreement was entered into and could not have been contemplated by the parties.

For further information, please see Quebec (Attorney General) v. Moses.

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