Canada: Ontario “Toxics Reduction Act” To Regulate Use And Creation Of Toxic Substances In Ontario

On June 5, 2009, the Toxics Reduction Act, 2009 (TRA) received Royal Assent. The TRA is intended to reduce the use and creation of toxic substances in Ontario industrial facilities and inform Ontarians about toxic substances. Despite the specific purpose that the TRA is apparently intended to address, the proposed legislation includes a number of broad provisions and enforcement measures that will have sweeping implications for industry and manufacturing across the province. It is also important to note that, despite being directed primarily at "owners and operators" of operations that use toxic substances, the TRA could impose liability on individual employees and agents of a corporation for offences committed by a corporation under the Act, even in circumstances where the corporation itself has not been charged or prosecuted.

Broad Application

The TRA makes provisions for very broad regulation-making powers, including the power to enact regulations to ban and/or regulate the manufacture, sale and distribution of toxic substances. These provisions permit what could be one of the most important (and controversial) parts of the TRA to be implemented entirely by regulation. Depending on how it is exercised, the power to enact additional regulations could significantly expand the application of the TRA beyond the stated purpose of the Act – particularly as it relates to what constitutes a toxic substance. It could also lead to significant duplication of the toxics regime that has long existed under the federal Canadian Environmental Protection Act, 1999 (CEPA).

The potential application of the TRA is further broadened by the lack of any defined test setting out how "toxic substances" will be identified and designated under the Act. Unlike the toxic substance provisions of CEPA (which specifically set out the test that is applied to identify toxic substances), the TRA merely states that toxic substances for the purposes of the TRA will be those substances designated by regulation. This effectively makes it possible for virtually any substance to be designated as being "toxic."

Toxic Substance Reduction Plan And Summary Report

Compliance With Obligation To Prepare A Toxic Substance Reduction Plan

If enacted, the TRA will require owners and operators of facilities in certain industrial sectors that use or create substances prescribed by regulation as "toxic substances" to prepare a toxic substance reduction plan (Reduction Plan). This requirement applies to each substance that is designated as being toxic and that is used in specified circumstances. Such circumstances would include, for example, the use or creation of a toxic substance at a facility in amounts that exceed certain minimum use thresholds.

Significantly, compliance with the TRA will be required for even very small operations; facilities employing as few as 10 employees will be required to comply with the TRA if the facility exceeds the toxic substance minimum use thresholds. Also, although the legislature probably did not intend as much, the absence of a definition for "owner of a facility" could, for example, have broad implications for multi-tenanted industrial complexes where not only each operator/tenant, but also the owner of the property (the landlord), may be required to ensure that a Reduction Plan is prepared under the TRA. While this scenario may be covered by the normal "compliance with laws" clause in commercial/industrial leases, landlords will have to consider whether to specifically address the issue in drafting their leases.

Likewise, it is noteworthy that the TRA does not contain a definition of who constitutes an "operator" for the purposes of compliance with the Act. Although it seems unlikely that the legislature intended the term "operator" to include an employee who runs a facility or who is otherwise involved in the operation of a facility, without a definition this remains a possibility. Individual employees could therefore be obligated to prepare Reduction Plans under the TRA and could further be exposed to liability for environmental penalties resulting from breaches of the TRA.

The lack of clarity around the intended scope and the definitions of "owner" and "operator" is undesirable and creates business uncertainty. The Ministry of Environment (MOE) should remedy this as soon as possible in a guideline or regulation.

Specified Contents Of The Reduction Plan

The TRA specifies the following required elements of a Reduction Plan:

  1. a statement that the owner or operator of the facility intends to reduce the use or creation of the toxic substance at the facility;
  2. the objectives of the Reduction Plan, including any targets for reducing the use or creation of the toxic substance at the facility;
  3. a description of each process at the facility that uses or creates the toxic substance;
  4. a description and analysis of options considered for reducing the use and creation of the toxic substance at the facility; and
  5. a statement identifying which options will be implemented, including a description of any steps that will be taken, a timetable for taking such steps, and estimates of the amounts by which the use, creation and discharge of the toxic substance will be reduced.

Plan Certification Required

The Reduction Plan will also be required to contain a certification by the "highest ranking employee at the facility who has management responsibilities relating to the facility" stating that the employee has read and is familiar with the Reduction Plan and that the Reduction Plan is accurate and complies with the TRA and any associated regulations. A similar certification will also be required from a "qualified person" stating that the person is familiar with the processes at the facility, that the person agrees with the reduction estimates set out in the Reduction Plan, and that the Reduction Plan complies with the TRA and its regulations.

This two-pronged approach to certification is unique. The first certification is familiar (a similar requirement can be found in Ontario's spill prevention plans legislation) and is intended to expose the highest ranking individual at the facility to liability under the TRA. However, the second level of certification by a "qualified person" is a new concept in legislation of this kind. It reflects (to a certain degree) the approach taken in the legislative regime with respect to brownfields in Ontario. In any event, it may require the involvement and use of outside expert consultants. Even if an internal employee is qualified to make the qualified certification, reliance on an outside consultant will be advisable in most circumstances to help protect the "highest ranking employee" from exposure to liability.

Toxic Substance Tracking And Reporting

The owner and operator of a facility will also be required to track and quantify the use of each toxic substance to show, for each process at the facility that uses or creates the toxic substance, how the substance enters the process; whether it is created, destroyed or transformed during the process; how it leaves the process; and what happens to it after it leaves the process. As part of this requirement, the owner and operator will provide reports to the MOE summarizing the results of the tracking and quantification of the toxic substances, and the steps taken toward achieving the objectives of the Reduction Plan (including an assessment of the effectiveness of those steps).

Reductions Need Not Be Achieved And Plan Need Not Be Implemented

One of the prescribed requirements for Reduction Plans is that they must contain a statement that the owner or operator of the facility (as the case may be) intends to reduce the use or creation of the toxic substance at the facility. While the TRA does not explicitly provide that such a statement need not be made, it does provide that if the Reduction Plan does not include such a statement, then reasons must be given. This suggests that the statement does not necessarily have to be made.

Curiously, the TRA provides that the development of the Reduction Plans is mandatory, but it does not specify that they must be implemented or even complied with, or that reductions in the use or creation of toxic substances must be achieved. The discussion paper accompanying the original tabling of the TRA stated that this non-binding approach was based on research of toxic reduction strategies in other jurisdictions. This research indicated that voluntary approaches were generally more successful at achieving reductions than mandatory approaches, since industry is willing to set more aggressive goals in a voluntary system than a mandatory system. If that is the case, it may be asked why, aside from the positive public optics of adopting toxic substances legislation, it is necessary to mandate the development of a Reduction Plan through legislation, particularly where the cost of developing such a plan could be substantial and the Reduction Plan will be required for even small operations.

Public Information

The owner and operator of the facility will be required to create a summary of the Reduction Plan for public dissemination in accordance with regulations that have yet to be developed. The summary will be required to include (among other things) a copy of the objectives of the Reduction Plan and a projection of how effective the Reduction Plan will be in meeting those objectives. In addition, regulations may be enacted requiring certain information contained in the tracking and quantification summary reports to also be made available to the public.

Substance Of Concern Report

In addition to the development of Reduction Plans, the TRA will also require owners and operators of facilities that use or create substances prescribed by regulation as "substances of concern" to prepare reports to the MOE. The MOE has stated that substances of concern will be designated in regulations to include substances that are of concern to human health or the environment but for which there is limited information on use or release in Ontario. Moreover, these would be substances that are not currently tracked through the National Pollutant Release Inventory (NPRI) under CEPA. The TRA sets out the minimum components that will be required in a report on substances of concern and provides for regulation-making authority to detail additional components.

Enforcement Measures

The TRA contains a number of very broad provisions and powers relating to compliance and enforcement that are similar to those found in Ontario's Environmental Protection Act (EPA), one of Ontario's most comprehensive environmental protection statutes. While the TRA's extensive enforcement powers are arguably justifiable for statutes like the EPA, given its broad application, it may be asked why such powers are necessary to achieve the relatively limited goals of the TRA.

The TRA provides for (among other things) the power to designate provincial officers authorized to issue orders and enter and inspect property to ensure compliance with the TRA in circumstances where, for example, the designated officer reasonably believes that a toxic substance or substance of concern is used or created at a facility. During such inspections, provincial officers will be authorized to seize evidence, take samples, conduct tests, require the operation of industrial processes, examine, copy or require the production of documents and make reasonable inquiries of any person. The TRA also provides for a judicial order authorizing entry and inspection of property. Further, the MOE can apply to the court for an order specifying the forfeiture of any "thing" lawfully seized in connection with the commission of an offence under the TRA. Somewhat surprisingly, the broad enforcement measures extend to authorizing the use of tracking devices to monitor and investigate possible offences under the TRA where a justice of the peace has reasonable grounds for believing that an offence has been (or will be) committed.

Administrative Penalties

The TRA authorizes the MOE to issue orders requiring an owner or operator of a facility to pay a penalty for any contravention of the TRA or its regulations. The amount of each penalty will be determined by regulations, but will not exceed $60,000 per contravention. Interestingly, the TRA imposes absolute liability on owners and operators in this regard, removing the defences of due diligence (i.e., the party will be required to pay the penalty even if the party took all reasonable steps to prevent the contravention) and of "mistaken belief of facts that, if true, would render the act innocent."

Provincial Offences

The TRA provides that every person who contravenes any provision of the TRA, or an order made pursuant to the TRA, is guilty of an offence and is liable to a maximum fine for a first offence of not more than $25,000 for each day or part of a day on which the offence occurred or continues to occur. The fine increases to $50,000 per day for subsequent offences. For corporations, the penalty for a first offence is a fine of $50,000 per day and $100,000 per day for subsequent convictions. Notwithstanding these maximum amounts of these fines, the monetary penalties may be increased by an amount equal to the monetary benefit that was acquired as a result of the commission of the offence.

Individual directors, officers, and employees or agents of a corporation can also be convicted for an offence committed by the corporation where there is evidence that they "directed, authorized, assented to, acquiesced in" or otherwise participated in the commission of the offence or, most importantly, failed to "take all reasonable care" to prevent the offence. This is the case even if the corporation has not been prosecuted for the offence. Under the EPA, the duty to take all reasonable care to prevent an offence is imposed on the officers and directors of a corporation but does not extend to individual employees and agents who may have little or no control over the circumstances giving rise to the offence. The TRA may therefore place an unfair burden on individual employees who may face prosecution for an offence committed by the corporation, even if the corporation itself is not being prosecuted.

Other Aspects Of The TRA

The TRA requires the MOE to consult with experts and the public, at least once every five years, about possible changes to the lists of substances that are prescribed as toxic substances and as substances of concern. The MOE will be required to publish lists of substances that are not toxic substances or substances of concern but that are slated for scrutiny by the MOE during the MOE's next consultation.

More importantly, the TRA provides for several regulation-making powers of the Lieutenant Governor in Council that could dramatically expand the application of the TRA to prohibit or regulate the manufacturing, sale or distribution of toxic substances, substances of concern, other substances prescribed by regulation and any thing that contains a toxic substance, substance of concern or other substance prescribed by regulation. One would expect that such a potentially significant power would be the subject of substantive provisions in a separate part of the Act itself. Given that there is no restriction or guidance on how "toxic substances" will be identified and designated under the Act, the implications attached to these regulation-making powers could be significant.

Finally, the legislation implementing the TRA provides for various amendments to other Ontario Acts. Some of these amendments are complementary to the provisions of the TRA while other amendments make housekeeping changes to add relevant statutory references and to adjust French terminology.

Context

Ontario has indicated that it intends to use the TRA to supplement existing federal powers dealing with the regulation of toxic substances and that it will work with the federal government to promote the use of existing federal powers. The new powers in the TRA would be used to protect Ontarians "if and where necessary." However, given that the use of toxic substances is already regulated in Ontario by both the CEPA and (in some cases) municipal toxic substances bylaws, it is not clear why this extra layer of legislation is necessary. It also not clear why the extensive provisions and enforcement measures contemplated in the current version of the TRA are necessary to accomplish the relatively limited purposes of the Act.

Dan Kirby is a partner and Co-Chair in the firm's Environmental Law Group. Jack Coop is a partner in the Litigation Department in the firm's Toronto office. Ian Osellame is an associate in the Litigation Department in the firm's Toronto office.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions