Canada: Tenth Anniversary of Bill 72: Land Protection And Rehabilitation

Last Updated: October 9 2013
Article by Sophie Prégent

The planning of a construction project or start-up of an industrial activity requires prior verification of a number of matters. Despite the introduction, ten years ago this year, of rules in the Environment Quality Act (EQA) governing the protection and rehabilitation of contaminated lands, the physical condition of the project site is often still a neglected issue.

While the question of soil contamination can raise issues of civil relations, such as, for example, civil liability or the warranty of quality (against latent defects), in this article, we will focus exclusively on the obligations that can arise from the EQA.

The purpose of the EQA is environmental protection. This protection is embodied in measures for prior protection, emergency responses and rehabilitation in the EQA. The EQA also imposes certain duties to act on the users of immovables.

POWER TO ISSUE ORDERS

The Minister of Sustainable Development, Environment, Wildlife and Parks ( MSDEWP) has broad powers, including, in particular, the power to order the filing of a rehabilitation plan if he has reason to believe, or ascertains, that contaminants are present on land in a concentration exceeding the limit values prescribed by regulation,1 or that they are likely to affect the environment in general.2

Since 2003, this power has applied to all persons who have had custody of the land, in any capacity whatsoever. Such an order can therefore be imposed on tenants and is not limited only to the owner or "polluter" of the land.

Thus, it is important for any purchaser to be familiar with the history of the land so that it can assess whether there is a risk that this type of situation could arise.

Where such an order has been issued, some means are available for a person to exempt himself from it, in particular, where (i) he was unaware of or had no reason to suspect the condition of the land having regard to the circumstances, practices and the duty of care, or (ii) he was aware of the condition of the premises, but shows that he acted at all times with care and diligence in conformity with the law and, finally, (iii) he shows that the condition of the premises is a result of circumstances exterior to the land and attributable to a third party.

CESSATION OF INDUSTRIAL OR COMMERCIAL ACTIVITY

Where a person permanently ceases carrying on a commercial or industrial activity referred to in schedule III of the Land Protection and Rehabilitation Regulation3 (LPRR), the operator must conduct a characterization study of the land.4 This obligation applies where the activity permanently ceases and it triggers the further obligation to carry out the rehabilitation of the land if the contaminants present in the soil exceed the regulatory concentration limit. This work must be performed in accordance with a rehabilitation plan which is submitted to the MSDEWP and approved by him.

While this obligation to carry out the rehabilitation of the land only applies to the operator of the activity, it creates a restriction on the use of the land which must definitely be taken into account by the purchaser in the context of a transaction. Indeed, the failure by the operator to perform the rehabilitation will have significant consequences for the purchaser, especially if it wishes to change the use of the land.

CHANGE IN USE

Where a person wishes to change the use of land which served as the site of a commercial or industrial activity listed in schedule III of the LPRR, he must conduct a characterization study, unless he already has such a study in hand, and it is still current.5

Obviously, in the context of an acquisition, if this obligation exists, it is advisable for the purchaser to ensure it is satisfied by the vendor, or, at the very least, that the condition of the premises be very clearly disclosed to avoid any unpleasant consequences down the road.

If the characterization study reveals that contaminants are present in amounts exceeding the regulatory limits, a rehabilitation plan will have to be submitted to the MSDEWP for approval, after which the rehabilitation will have to be done before the new use of the land can commence. This work will obviously create delays for the purchaser since the municipality will not issue the necessary permits to proceed with the subdivision or construction until the land has been decontaminated.

In the event that the land has already been decontaminated in accordance with the applicable procedures, it is important for the purchaser to carefully review the rehabilitation plan submitted to the MSDEWP and the various entries made in the land register to determine whether there are any restrictions on the use of the land, or whether any excess contaminants may have been left in the ground with the consent of the MSDEWP.

REGISTRATION REQUIREMENTS

The EQA contains a series of measures requiring the publication of notices in the land register with respect to contaminated lands,6 specifically, notices of contamination, notices of decontamination, and notices of use restriction. In addition, in some circumstances, certain notices must also be given to the local municipality, to the Minister of SDEWP, and even to neighbours.

Clearly, the existence of such notices must be verified when any transaction is being undertaken. However, it is important to remember that the EQA does not regulate all of the situations relating to contaminated lands and, in particular, historic contamination and contamination resulting from activities not covered by the LPRR. The existence or lack of registrations against the land in the land register does not therefore guarantee that the premises are in compliance with the rules of the EQA on the rehabilitation of contaminated soils.

LIMITED APPLICATION

Thus, as far as contaminated soils are concerned, the application of the EQA is limited. For instance, there is no general obligation to perform the rehabilitation of land following the completion of a characterization study done on a voluntary basis. However, the presence of contaminants could trigger a restriction on the use of the land which could prevent the purchaser from being able to use it for the planned activity.7

Accordingly, as a purchaser, it is very important to be well informed of the condition and history of an immovable, and even, most of the time, to obtain an environmental characterization of the subject property. It is a question of exercising the care and diligence of a responsible purchaser.

Foonotes

1 The Land Protection and Rehabilitation Regulation, CQLR, chapter Q-2, r 37.
2 Section 31.43 of the Environment Quality Act, CQLR, chapter Q-2, provides more specifically that this applies to contaminants which are "likely to adversely affect the life, health, safety, welfare or comfort of human beings, other living species or the environment in general, or to be detrimental to property".
3 Supra, note 1. This is a list of most of the activities that are likely to cause soil contamination.
4 See sections 31.51 and following of the EQA.
5 See sections 31.51 and following of the EQA.
6 See sections 31.51 and following of the EQA.
7 For example, a residential development that cannot proceed on land where contaminants exceed the acceptable limits for residential usage.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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