Canada: Environmental Law and Construction Projects: Why Should You Care?

The scope of environmental regulation is broad and ever growing. One Ontario Court of Appeal judge famously asked in the midst of a case whether "MOE" stood for "Ministry of Everything?" It should not be surprising, therefore, that environmental law issues permeate almost every aspect of the construction industry. Unfortunately, many in the industry remain blissfully unaware of this until after a problem has arisen, often involving an irate regulator. This article will provide a brief overview of some of the more common areas likely to catch a developer or constructor by surprise; it is by no means meant to be comprehensive.

Background

The starting point in Ontario (other provinces have substantially similar legislation) is the prohibition in section 14 of the Environmental Protection Act, RSO 1990, c E.19 ("EPA") against the "discharge" of a "contaminant" into the "natural environment" by any person who has "charge, management or control" of the contaminant. A "contaminant" means "any solid, liquid, gas, odour, heat, sound, vibration, radiation or combination of any of them resulting directly or indirectly from human activities that causes or may cause an adverse effect," and "adverse effect" means one or more of:

(a) impairment of the quality of the natural environment for any use that can be made of it,

(b) injury or damage to property or to plant or animal life,

(c) harm or material discomfort to any person,

(d) an adverse effect on the health of any person,

(e) impairment of the safety of any person,

(f) rendering any property or plant or animal life unfit for human use,

(g) loss of enjoyment of normal use of property, and

(h) interference with the normal conduct of business.

Scope

How far does this go? Well, in Ontario (Environment) v. Castonguay Blasting Ltd., 2012 ONCA 165, the Ontario Court of Appeal case in which Justice Blair made his comment about the all-encompassing scope of the Ministry, the majority of the Court found that a construction company engaged in rock blasting failed to comply with the EPA when it did not report to the Ministry about fly rock from its rock blasting operation damaging a nearby residence (despite having duly reported the incident to other authorities). "Fly rock" in this context was a "contaminant" that had been discharged into the natural environment and had caused an "adverse effect" thus triggering the duty to report "forthwith" to the Ministry, pursuant to section 15 of the EPA. The Ontario Court of Appeal's decision was upheld by the Supreme Court of Canada in Castonguay Blasting Ltd. v. Ontario (Environment), 2013 SCC 52, wherein Justice Abella summarized for a unanimous court: "when in doubt, report."

Duties under the EPA apply to individual workers with care and control of any material that could be a contaminant, as well as supervisors, owners and even officers and directors.

Other typical construction related contaminants include dust, vibration (such as from drilling or sheet pile installation) and even heat and noise. All these need to be carefully monitored to ensure there is no likelihood of an adverse effect from their entry into the natural environment. Several contractors in recent years have been fined for allowing such discharges to occur.

While the prohibition against spills (governed by Part X of the EPA) is one of the most obvious intersections of environmental law with construction activities, there are also several regulations that could be seen as directly targeting aspects of the industry.

Waste audits, for instance, must be conducted for all large demolition and construction projects. Regulations specify when and how such audits must be done in order to ensure proper identification, separation, handling and disposal of all construction and demolition wastes. A written waste reduction work plan may also be required to establish the manner in which waste generated during the construction project will be reduced, reused and recycled. Ministry inspectors must be provided with a copy of the waste audit or waste reduction work plan on demand and have the power to shut down a project if one is not produced.

Ontario's complex waste management regime also comes into play during the disposal of any contaminated soil that may be encountered during construction. Such soils have to be stored and transported in a prescribed manner and can only be disposed of in designated sites at a higher cost than "clean fill." Contractors or owners who think they have been fortunate to find a hauler who will take the soil off their hands at a price that is too good to be true are routinely unpleasantly surprised to find out they have been the victim of an unscrupulous hauler, leading to significantly higher costs once regulators get involved in trying to remove illegally disposed of material, clean up the "victim" site and move the material to the right place – all at the contractor or owner's expense of course.

New soil management rules are expected to come into effect soon imposing a similar tracking regime for clean soils. Part of the philosophy behind these regulations is to minimize the environmental impact of unnecessary soil movement. However, it will undoubtedly come at the cost of greater regulatory scrutiny of the construction industry.

Owners and developers need to be aware of environmental regulations well before starting construction. The requirement for a record of site condition, whether by the Ministry or a municipality, can add years of delay and, on a large project, can add hundreds of thousands of dollars in extra costs. Early communication with regulators and the municipality, preferably in conjunction with the right professional advisors, will go a long way towards ensuring a well-planned construction schedule that can be followed without unexpected interruptions.

What's next?

While the supposed boom in "LEED" certified buildings never really seems to have amounted to much, there is an increasing awareness in the media of the very significant contribution the "built form" has on environmental emissions and, ultimately, climate change. As this awareness increases, greater scrutiny is expected on building materials and methods, as well as building systems such as HVAC, glass to brick ratios, energy and water efficiency, storm water management, use of impermeable ground surfaces and other features that ultimately impact the natural environment. Industry leaders will do well to anticipate these changes and prepare for them. In all cases, awareness of the intersection of environmental issues with the construction industry will not only result in fewer unpleasant surprises during the life of a project but, perhaps, will also truly result in a better natural environment.

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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