Originally published in Blakes Bulletin on Environmental
Law, July 2009
Many businesses are in the process of restructuring and, in so
doing, they are shutting down and selling operating facilities. You
should be aware that in Quebec, permanent cessation of certain
industrial activities and changing the use of a site where such an
activity has been carried on triggers environmental site assessment
and clean-up obligations.
Site Assessment and Clean-Up Obligations
An environmental site assessment (ESA) must be carried out
within six months of the permanent cessation of subject industrial
activities (listed in a government regulation), a time period which
the government can extend to 18 months if there is a possibility
that activities will resume. The same is true when there is a
proposal to change the use of a site where such an activity has
been carried on at any time in the past. The soil and groundwater
assessment report, certified by a government-accredited expert,
must be forwarded to the Quebec Ministry of Sustainable
Development, Environment and Parks (MSDEP) for review and
If the ESA reveals the presence of contaminants in soil or
groundwater on the site in excess of applicable generic criteria,
the law requires that a clean-up plan be tabled with the MSDEP for
approval. Such a plan may provide for contaminants to be left
onsite in excess of generic criteria, subject to the following
a deed restriction must be published against the property
a risk assessment must be carried out to determine
site-specific risks to human health and the environment; and,
where a change of use is planned, a public meeting must be held
to inform the community about the risk assessment.
Under the law, each municipality in Quebec must keep a list,
available to the public, of all properties subject to an
environmental deed restriction.
Failure to conduct an ESA, produce a clean-up plan or register
an environmental deed restriction (called a "notice of
contamination") can lead to fines: for individuals, ranging
from C$2,000 to C$20,000 for a first offence (C$4,000 to C$40,000
for a repeat offence) and/or a prison term of up to a year; and, in
the case of a corporation, fines ranging from C$6,000 to C$250,000
for a first offence (C$50,000 to C$1-million for a repeat
Since 2003, the MSDEP can issue a clean-up order against any
person or municipality which, even before 2003, contaminated or
allowed the contamination of a site or which, since 2003, has or
has had custody of such a site in any capacity.
Orders may not be issued against persons or municipalities in
the following cases:
the person or municipality establishes that it did not know,
and was not in a position to know, about contamination on the
knowing of the contamination, the person or municipality
establishes that it has acted in compliance with the law, including
the obligation to act with prudence and diligence;
the person or municipality establishes that the contaminants
migrated onto the property from an offsite location and that a
third party is responsible for the contamination.
Five such clean-up orders have been issued by the MSDEP since
Failure to comply with a clean-up order is punishable by the
sanctions mentioned above. Directors and officers of a corporation
who cause the corporation to refuse or to neglect to comply with an
order, or who tolerate such non-compliance, can be held personally
liable and face the same sanctions.
It is up to individual companies to determine whether they carry
on an activity that makes them subject to the ESA and clean-up
obligations provided under Quebec law, as the MSDEP issues no
notices in this regard. It is possible to carry out a transaction
without complying with these obligations. However, this can lead to
charges being laid and does not rule out the possibility that, in
the future, the MSDEP could issue an assessment or clean-up order
against a former owner or occupant of the site. To eliminate this
risk, and to avoid the possibility that failure to comply with the
law causes problems in obtaining financing, it is preferable to
inquire well in advance concerning environmental obligations that
could be triggered by the permanent cessation or a change in the
nature of your operations in Quebec.
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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