COMPARATIVE GUIDE
11 May 2022

Environment and Climate Regulation Comparative Guide

SL
Siskinds LLP
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Environment and Climate Regulation Comparative Guide for the jurisdiction of Canada, check out our comparative guides section to compare across multiple countries
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1 Legal framework

1.1 Which legislative and regulatory provisions govern environment and climate regulation in your jurisdiction?

The current federal government and most provincial governments entered into the Pan-Canadian Framework on Clean Growth and Climate Change in 2016. Under the framework, all Canadian jurisdictions were obliged to implement carbon pricing mechanisms that are at least as stringent as the national benchmark. In 2018, with the change in provincial government, the Cap and Trade Cancellation Act, 2018 (SO 2018, c 13) was introduced, which repealed the prior government's cap and trade programme. The provincial government subsequently released its Made-In Ontario Environment Plan, which details the province's commitment to reduce the provincial emissions to 30% below 2005 levels by 2030 and fight climate change.

The Environmental Protection Act (RSO 1990, c E 19) and its regulations also outline environment and climate regulation provisions including, for example, the cessation of coal use at generation facilities and prohibitions against ozone-depleting substances.

Federally, the Greenhouse Gas Pollution Pricing Act (SC 2018, c 12) establishes a set of minimum national standards to be applied for carbon pricing in Canada to reduce emissions. Ontario, Alberta and Saskatchewan formally challenged the constitutionality of this legislation; but in 2021 the Supreme Court of Canada upheld the Greenhouse Gas Pollution Pricing Act as being valid.

The Canadian Environmental Protection Act, 1999 (SC 1999, c 33) is also a key piece of legislation in environment and climate regulation.

1.2 Which bilateral and multilateral instruments on environment and climate regulation have effect in your jurisdiction?

The federal government has negotiated bilateral agreements with specific provinces concerning the administration of environmental law regimes. The Canadian Environmental Protection Act, 1999 authorises federal-provincial agreements concerning the administration of the act. Such agreements include, for example:

  • the Canada and Saskatchewan Agreement for the Canadian Environmental Protection Act; and
  • the Canada-Quebec Pulp and Paper Administrative Agreement.

In 1998 the federal, territorial and provincial (except Quebec) governments signed the Harmonization Accord and the Agreement on Internal Trade, which solidified a commitment to environmental protection and management among the provincial, territorial and federal governments.

Canada ratified the Kyoto Protocol in 2002 as a commitment to reduce greenhouse gas emissions. In 2011, the Stephen Harper federal government withdrew from the Kyoto Protocol after Canada failed to meet its goals. In 2015, Canada ratified the Paris Agreement under the United Nations Framework Convention on Climate Change, which required a commitment to reduce greenhouse gas emissions by 30% from 2005 levels by 2030. In 2015, Canada also adopted the United Nations' 2030 Agenda for Sustainable Development. This agenda contained 17 Sustainable Development Goals, including Goal 13: Climate Action.

1.3 Which bodies are responsible for enforcing the applicable laws and regulations? What powers do they have? To what extent do they cooperate? What are the mechanisms for cooperation?

In Ontario, the Ministry of the Environment, Conservation and Parks is responsible for developing, enforcing and providing education and outreach on Ontario's environmental laws (this is similar to the other provinces). At the federal level, Environment and Climate Change Canada secures compliance with federal environmental legislation, including the Canadian Environmental Protection Act, 1999, through two types of activity: promotion and enforcement.

Regulatory bodies at both the provincial and federal level have broad authority to issue control, stop, preventive and remedial orders. At the federal level, environmental legislation – including the Canadian Environmental Protection Act, 1999 – provides for environmental protection compliance orders. In Ontario, administrative penalties are common, as the Environmental Penalties Regulation designates ‘regulated persons' which may be subject to penalty regimes in accordance to specified contraventions.

The powers of Parliament enumerated in Sections 91 and 92(10) of the Constitution Acts, 1867 to 1982 concern matters of national interest. Constitutional authority over the environment is shared between the federal and provincial government based on the enumerated heads of power set out in the Constitution Act. The Supreme Court of Canada has indicated that responsibility for certain environmental issues is not clear, and as such, is to be shared between the various levels of government, including federal, provincial and municipal governments. Given this overlap, cooperation is necessary in enforcing environmental laws. The provincial/municipal environmental laws must be consistent with the laws enacted at the federal level. Similarly, governance of environmental matters at the municipal level must be consistent with the laws enacted at the provincial level.

1.4 What is the regulators' general approach to environment and climate regulation/action?

The general approach of both provincial and federal regulators to environmental and climate regulation is to focus primarily on regulation, impact minimisation and accountability. This is apparent from:

  • the legislation passed;
  • an increase in initiatives that incentivise eco-friendly behaviour; and
  • the enforcement measures enacted at both the provincial and federal levels.

Canada's commitment to the Paris Agreement confirms that Canada is committed to a stronger response to the dangers of climate change and is seeking to achieve this through heightened efforts to hold the increase in the global average temperature, foster climate resilience and reduce greenhouse gas emissions.

2 Environmental protection

2.1 What are the key features of the regulatory regimes that protect the following environmental assets in your jurisdiction? (a) Air; (b) Soil; (c) Fresh water; (d) Sea water; (e) Flora and fauna; and (f) Natural habitats and scenic landscapes.

(a) Air

Prior to discharging any contaminants into the environment, including air, a permit/authorisation is required from the Ministry of Environment, Conservation and Parks to allow for the discharge. These permits are required by the Ontario Environmental Protection Act and associated regulations, and are referred to as ‘environment compliance approvals'.

The Ministry of the Environment, Conservation and Parks, in addition to the applicable statutory requirements and regulations set out in the Ontario Environmental Protection Act, sets Ontario's Ambient Air Quality Criteria. These allow the government to regulate contaminants emitted by various corporations, albeit that they are not legally binding. Canada also has Canadian Ambient Air Quality Standards that outline non-binding objectives developed to ‘set the bar' for air quality actions across the country. The key features of such regulatory regimes are to monitor and assess emissions into the air with the understanding that high concentrations of a contaminant in the air can have adverse effects on human health and the environment.

The Greenhouse Gas Pollution Pricing Act (SC 2018, c 12) and Canada's commitments to international initiatives such as the Paris Agreement reflect the notion that air pollution and greenhouse gas emissions have detrimental impacts on health, environment and climate change. The focus of these regulatory regimes is on regulation, prevention and responsibility in minimising Canada's impact on climate change.

(b) Soil

Prior to discharging any contaminants into the environment, including soil, a permit/authorisation is required from the Ministry of Environment, Conservation and Parks to allow for the discharge. These permits are required by the Ontario Environmental Protection Act and associated regulations, and are referred to as ‘environment compliance approvals'.

The Ministry of the Environment, Conservation and Parks is the regulatory body responsible for protecting Ontario's land and soil. The regulations under the Ontario Environmental Protect Act achieve this goal through regulatory requirements that govern, for example:

  • waste management;
  • illegal dumping;
  • hazardous waste;
  • brownfields and contaminated sites;
  • excess soil; and
  • pesticides.

In December 2019, the Ministry of Environment, Conservation and Parks released a new regulation under the Environmental Protection Act, titled "On-Site and Excess Soil Management", to support improved management of excess construction soil. These changes reduce soil management costs, while protecting human health and the environment.

(c) Fresh water

As one of Ontario's most important resources, fresh water is heavily regulated and protected in the province. These regulatory regimes protect:

  • drinking water;
  • fishing;
  • source water;
  • the Great Lakes and watersheds; and
  • the maintenance of wells on property.

The key features of these regulatory regimes are primarily focused on the protection and conservation of freshwater resources. This is achieved primarily through regular water quality testing, monitoring, reporting and management. Ontario has also deployed independent action plans, strategies and funds targeted at particular lake, river and watershed conservation. Some notable legislation for fresh water includes:

  • the Environmental Protection Act (RSO 1990, c E 19);
  • the Clean Water Act, 2006 (SO 2006, c 22);
  • the Water Resources Act (RSO 1990, c O 40); and
  • the Lakes and Rivers Improvement Act (RSO 1990, c L3).

The federal government has jurisdiction for waters in certain areas such as navigation, fisheries and boundary waters, and shares responsibilities with the provinces in other areas such as agriculture and human health.

(d) Sea water

The federal government assumes jurisdiction over ‘sea' water in Canada, including issues such as:

  • conservation and protection;
  • contamination and discharges;
  • fisheries; and
  • navigation and trade.

The leading legislative authorities in this area include:

  • the Environmental Protection Act, 1999;
  • the Oceans Act; and
  • the Fisheries Act.

The precautionary principle is adopted with respect to the regulation of oceans.

(e) Flora and fauna

Flora and fauna are protected from threats arising due to human activity. Ontario at the provincial level and Canada at the federal level have enacted legislation to protect biodiversity. Natural Resources Canada is responsible for several conservation and restoration projects with respect to flora and fauna. For example, Parks Canada has a Conservation and Restoration Programme that focuses on flora and fauna, among other areas of conservation. The key features of these statutes are protection, conservation and restoration.

(f) Natural habitats and scenic landscapes

Similar to the protection of flora and fauna, Ontario at the provincial level and Canada at the federal level regulate and protect natural habitats and scenic landscapes. Canada's Species at Risk Act and Ontario's Endangered Species Act are intended to preserve and protect certain designated species and their habitats.

Provincial planning legislation and regulations, coupled with the jurisdiction of the various conservation authorities, also act to preserve natural features and scenic landscapes. The key features here are automatic protection and regulation of biodiversity. Canada has implemented several initiatives and programmes aimed at maintaining and restoring natural habitats.

2.2 What are the key features of the regulatory regime that protects against environmental nuisances (eg, noise, odour and light pollution) in your jurisdiction?

To limit environmental nuisances such as noise, odour and light pollution, many industrial and renewable energy sources are regulated provincially. Many of these nuisance sources are defined as ‘contaminants' and as such are regulated under the Ontario Environmental Protection Act and the associated applicable guidelines to limit nuisances in different situations. Many of these nuisances, such as noise and light, are also governed at the municipal level through municipal bylaws.

2.3 What are the consequences of breach of these regulatory regimes?

Like other violations of the Ontario Environmental Protect Act, the consequences include:

  • a warning or directive;
  • prosecution;
  • stop, remedial or control orders;
  • revocation of permits; and
  • other administrative penalties.

3 Climate change/action

3.1 What are the key features of the regulatory regime governing greenhouse gas emissions in your jurisdiction?

Prior to discharging any contaminants into the environment, including air, a permit/authorisation is required from the Ministry of Environment, Conservation and Parks to allow for the discharge. These permits are required by the Ontario Environmental Protection Act and associated regulations, and are referred to as ‘environment compliance approvals'.

Ontario had previously implemented a cap-and-trade system/programme that was subsequently revoked in 2018 with the change in the government. The provincial government subsequently released its Made-In Ontario Environment Plan, which details a commitment to reduce provincial emissions to 30% below 2005 levels by 2030. The plan's key features include:

  • protecting air, land and water;
  • reducing litter and waste;
  • lowering greenhouse gas emissions; and
  • helping communities to prepare for climate change.

The Ministry of the Environment, Conservation and Parks also sets Ontario's Ambient Air Quality Criteria. These allow the government to generally regulate contaminants emitted by big polluters, although they are not legally binding.

At the federal level, the Greenhouse Gas Pollution Pricing Act (SC 2018, c 12) establishes a set of minimum national standard for carbon pricing in Canada to reduce emissions. The provinces of Ontario, Alberta and Saskatchewan formally challenged the constitutionality of this legislation, but in 2021 the Supreme Court of Canada upheld the act as valid. The Greenhouse Gas Pollution Pricing Act fulfils Canada's commitment to ensure there is a pricing mechanism on greenhouse gas emissions across the country. The act also implements a federal carbon pollution pricing system that applies as a backstop, minimum required standard that must be met in those provinces and territories that do not have a carbon pricing system of their own, or that have a system that fails to meet the federally established minimum standard. The federal requirement consists of two sections:

  • a charge on fossil fuels such as gasoline and natural gas – the fuel charge; and
  • a regulatory trading system for industry – the Output-Based Pricing System.

Canada also has Canadian Ambient Air Quality Standards which outline non-binding objectives developed to ‘set the bar' for air quality actions across the country.

3.2 What emissions trading regimes are operational in your jurisdiction and what are their key features?

The province of Ontario revoked its cap-and-trade programme in 2018. Effective 5 February 2021, Ontario ended the nitrogen oxide and sulphur dioxide emissions trading programme, stating that it is no longer an effective tool to address emissions of these contaminants from regulated sectors in its current form.

Under the Greenhouse Gas Pollution Pricing Act (SC 2018, c 12), provinces and territories without systems in place for pricing carbon must implement a programme that meets the minimum federal benchmark. Ontario has proposed a provincial output-based pricing system; but as of October 2021, the current government will not be reviving a cap and trade system.

3.3 How prominently does renewable energy feature in the energy mix in your jurisdiction? What regulations and other measures have been put in place to promote the use of renewable energy?

Renewable and green energy was a significant focus of the Ontario government several years ago, with wind-powered energy increasing dramatically and Ontario being one of the largest producers of hydroelectricity in the world. In 2019, the Green Energy Act, 2009 was repealed. The 2018 Made-in-Ontario Environment Plan discusses renewable energy, but fails to specifically address or outline the proposed new initiatives and/or programmes to be put in place.

The federal government offers various renewable energy programmes and incentives for renewable energy. These include, for example:

  • grants and funding;
  • the Greener Homes programme;
  • the Green Infrastructure Phase II Plan;
  • the Energy Innovation Programme; and
  • the Clean Growth in Natural Resource Sectors Programme.

Across Canada, renewable energy has consistently factored into the energy mix considerably.

Regulations and measures that restrict non-renewable energy sources make it difficult on industries and encourage a transition to more sustainable energy use. For example, the phase-out of coal in Ontario was a vast initiative and push towards greener energy.

3.4 What regulations and other measures have been put in place to promote greater energy efficiency in your jurisdiction?

Both the federal and provincial governments have introduced regulations and measures to promote greater energy efficiency. Ontario Regulation 509/18: Energy and Water Efficiency – Appliances and Products under the Electricity Act, 1998 details several prescribed energy standards or requirements for household and commercial energy-using products.

There are also numerous measures such as programmes, incentives and funding to encourage energy efficiency. For example, in 2019 the federal government introduced the Energy Savings Rebate Programme. Through this programme, a total of C$200 million in support over two years was pledged to Ontario retailers to offer up to 25% off the purchase price of specific energy-saving products. According to the minister of environment and climate change (federal level), these products can help Ontarians reduce their energy use by up to 60% more than using the standard models.

3.5 What other initiatives have been rolled out in your jurisdiction to combat climate change and its effects? How are those effects typically manifesting in your jurisdiction at the present time?

See question 3.4. The Made-in-Ontario Environment Plan details some initiatives and goals that are used to combat climate change. The federal government has also undertaken several initiatives including its commitment to the Paris Agreement. Unfortunately, progress has been minimal and climate change is persisting, or even worsening, as a problem of concern.

3.6 What impact is Covid-19 likely to have on climate action in your jurisdiction?

Since the outbreak of the COVID-19 pandemic, there have been reports of localised improvements in air quality due to reductions in economic activity and vehicular traffic from efforts to control the pandemic. Importantly, COVID-19 had a global impact, which meant that greenhouse gas emissions and air pollution decreased not only in Ontario and Canada overall, but universally across the world. However, while the pandemic allowed for temporary cuts in emissions, past instances of economic crisis resulting in emission declines are often unfortunately followed by a rapid upsurge. Unless there is political commitment and dedication to fighting climate action and continuing this course, any potential benefit from the reduction in emissions during the period of COVID-19 will be futile.

COVID-19 had a serious impact on environmental matters, including permits, compliance measures, court and tribunal proceedings in Ontario. In 2020, limitation periods and procedural time periods were suspended for several months. This delayed many court and tribunal proceedings relating to environmental litigation and prosecutions.

Ontario's COVID-19 Recovery Bill 197 amended over 20 provincial statutes. It streamlined and removed crucial parts of the Environmental Assessment Act and the Planning Act, allowing infrastructure projects to move forward without the same level of review and/or scrutiny. Ontario Regulation 115/20 under the Environmental Bill of Rights, 1993 (EBR) temporarily exempted ministers from complying with the posting requirements set out Part II of the Environmental Bill of Rights, being the public consultation requirements, for proposals for acts, policies, regulations and instruments (which include permits and environment compliance approvals). Bill 197 was challenged by numerous entities, which ended with the Divisional Court finding that the Ontario government had violated Ontario's Environmental Bill of Rights when it failed to consult the public before making several of the changes to the consultation requirements set out in the various acts.

4 Environmental permits and approvals

4.1 What environmental permits and approvals are required in your jurisdiction, and when are these typically required?

Environmental permits or approvals are required for a broad range of activities, including any activity that may result in the discharge of contaminants into the environment (ie, air, land or water), as well as storage, transportation and disposal of waste. Where environmental permits are required, they are considered to be applicable in law as set out in the Building Code Act, and as required by the Ontario Environmental Protection Act and the Ontario Environmental Assessment Act.

4.2 What is the process for obtaining environmental permits and approvals? If a permit or approval is refused, can the decision be appealed?

The process for obtaining environmental permits and approvals often involves submitting plans, studies and consultant's reports in support of an application to the regulatory body issuing the permit/approval. As part of the permit/approval process, the applicant must:

  • pay a fee;
  • confirm compliance with all necessary standards; and
  • set out any proposed mitigation measures.

For example, a corporation that emits and discharges material into the air, soil or water (eg, noise, odour, waste, permits to take water, stormwater management and sewage) must apply for a provincial environmental compliance approval. Under the applicable law (the Ontario Environmental Protection Act), the corporation must meet the requirements/standards set out in the environmental compliance approval.

Most environmental statutes provide for a statutory right to appeal a decision on, or a condition of, the permit/approval before a stipulated tribunal, board, court or government agency. Leave to appeal may be required if specified in the applicable statute.

4.3 What is the duration of environmental permits and approvals?

The duration of environmental permits and approvals depends on the type of permit/approval and the regulator. For example, in Ontario, environmental compliance approvals are often not time limited, but must be updated upon any change in the corporation's operation if not captured by the permit/approval. However, at the federal level, under Section 190 of the Canadian Environmental Protection Act, 1999, permits of equivalent levels of environmental safety expire after three years.

4.4 What, if any, requirements and restrictions apply to the transfer of environmental permits and approvals?

If there are restrictions or requirements for the transfer of a permit/approval, the regulatory body and legislation will outline such stipulations and requirements in the actual permit/approval. Some permits may be transferred by providing notice to the regulator, but in some circumstances the regulator's consent may be required. Certain permits are non-transferable, such as a permit to take water issued under Ontario Regulation 387/04.

4.5 What ongoing rights and obligations apply to the holder of an environmental permit or approval?

Several rights and obligations apply to the holder of an environmental permit or approval. Primarily, permit or approval holders are obliged to comply with the requirements and parameters set out in the

permit/approval, including any ongoing reporting, assessment and monitoring requirements. Permit/approval holders have the right to conduct any action or discharges in accordance with the permit/approval that would ordinarily, without the permit/approval, contravene the applicable environmental legislation or regulations. They have the rights set out in their approval/permit until such permit/approval expires or is amended, revoked or cancelled.

4.6 What are the consequences of breach of an environmental approval or permit?

Environmental regulators have a broad range of inspection and enforcement powers, as well as discretion as to the type of enforcement measure necessary when an approval or permit is breached. Common consequences include:

  • a warning or directive to comply;
  • prosecution;
  • stop or control orders;
  • revocation of permits; and/or
  • other administrative penalties.

5 Waste management

5.1 How is ‘waste' defined and regulated in your jurisdiction? Does the regime vary depending on the type of waste involved?

The federal government regulates waste management on federal lands and Indigenous lands, and the import and export of hazardous waste. All other waste is defined and regulated through Ontario legislation and the applicable regulations. The definitions tend to be broad, but are generally divided between hazardous and non-hazardous waste. Hazardous waste includes, for example:

  • manufacturing materials;
  • biomedical waste;
  • waste solvents;
  • pesticides;
  • polychlorinated biphenyls;
  • industrial lubricants and oils containing heavy metals;
  • perchloroethylene waste; and
  • batteries.

Non-hazardous waste includes, for example:

  • printed paper and packaging;
  • organic food and yard waste;
  • tyres; and
  • cement, metals and glass from construction/demolition.

Given the two different classifications of waste, the regulations also differ. The regulation of hazardous waste materials is more stringent than that of non-hazardous materials.

Ontario Regulation 347 is part of the Ontario Environmental Protection Act and focuses on waste management as a means of protecting public health and safety by tracking the disposal of hazardous and non-hazardous waste. It defines numerous categories of waste, such as:

  • hauled liquid industrial waste;
  • hauled sewage;
  • agricultural waste;
  • end-of-life vehicle waste;
  • domestic waste;
  • corrosive waste;
  • common mercury waste;
  • battery waste;
  • commercial waste;
  • reactive waste;
  • leachate toxic waste;
  • ignitable waste;
  • corrosive waste;
  • asbestos waste; and
  • aqueous waste.

The Ministry of Environment, Conservation and Parks also regulates the storage, transfer, management and transportation of waste under the Ontario Environmental Protection Act.

5.2 What key rights and obligations apply to waste operators in your jurisdiction? What are the consequences of breach?

In Ontario, Sections 25–47 of the Ontario Environmental Protection Act and Ontario Regulation 347 set outs the obligations, rights and prohibitions regarding waste management, transportation and storage. The consequences of breaching these obligations include the Ontario Environmental Protection Act enforcement measures, such as:

  • a warning or directive to comply;
  • prosecution;
  • stop or control orders;
  • revocation of permits; and
  • other administrative penalties.

5.3 Are any producer responsibility regimes applicable in your jurisdiction?

In October 2020, the Ontario government announced that it was changing its waste management programme under its Made-in-Ontario Environment Plan. The government published its proposal for the new regime and draft regulations under the Resource Recovery and Circular Economy Act, 2016, which alters the current Blue Box Programme, making it the responsibility of municipal governments to move to an extended producer responsibility model. The finalised blue box regulation will begin the transition to a producer responsibility regime on 1 July 2023. As of 31 December 2025, producers will be fully responsible for providing blue box services across Ontario.

Ontario is also transitioning the current Municipal Hazardous or Special Waste Programme to a producer responsibility model. Beginning 1 October 2021, the new Hazardous and Special Products Regulation applies to producers of products such as:

  • paints;
  • solvents;
  • pesticides;
  • oil filters;
  • antifreeze;
  • oil containers;
  • pressurised containers;
  • mercury-containing devices; and
  • fertilisers.

This will replace the existing municipal hazardous and special products programme, which ended on 30 September 2021.

Aside from these two programmes, Ontario has various other diversion programmes hold producers responsible for the waste generated from their products and packaging, including:

  • tyre collection and recovery requirements;
  • waste electrical and electronic equipment requirements;
  • battery collection and recovery requirements; and
  • the Ontario Deposit Return Programme.

6 Hazardous substances

6.1 What are the key features of the regulatory regime governing hazardous activities and substances in your jurisdiction?

Hazardous activities and substances in Ontario and Canada are generally considered to be those that have greater potential to cause adverse environmental effects and contamination, including:

  • mining;
  • nuclear energy; and
  • industries that release contaminants into the natural environment or deal with hazardous waste.

Canada's Environment and Natural Resources assumes control over federal contaminated sites that were once operating hazardous activities. Certain regulatory measures have been put in place to increase awareness and prevent future contamination, including:

  • the Canadian Environmental Protection Act;
  • the Fisheries Act;
  • the Canadian Environmental Assessment Act;
  • the Nuclear Safety and Control Act; and
  • the Mine Site Reclamation Policy.

Ontario has a similar governance regime over hazardous activities and substances in the Environmental Protection Act, including a brownfields redevelopment programme. The approach by both the federal and provincial government is to remediate brownfields while ensuring environment protection and prevention of future issues associated with hazardous activities and substances.

6.2 What key rights and obligations apply to operators of hazardous sites in your jurisdiction?

In Ontario and Canada overall, operators of hazardous sites face stricter regulations and governance in their operations. These requirements include, for example:

  • more stringent reporting requirements;
  • conditions of certain approvals and permits; and
  • greater scrutiny to ensure compliance with environmental standards.

6.3 What reporting requirements apply to environmental accidents in your jurisdiction?

In Ontario, under the Ontario Environmental Protection Act, a spill – which is broadly defined to include environmental accidents – must be reported forthwith to the Ministry of Environment, Conservation and Parks, the municipality and affected persons. Failure to report can result in prosecution and fines being imposed by the ministry.

6.4 What is the process for investigating environmental accidents in your jurisdiction?

There is a multi-level investigation process for environmental accidents. Under the Ontario Environmental Protection Act, the Ministry of Environment, Conservation and Parks, through its investigators, is responsible for investigating environmental accidents. The director may request a municipality to provide a report of any investigation of a contaminant in its jurisdiction that is present or has been discharged.

6.5 What are the potential consequences of breach of the regulatory regime governing hazardous activities and substances – both for operators themselves and for directors, managers and employees?

The potential consequences for breach of the regulatory regime include:

  • a warning or directive to comply;
  • prosecution;
  • stop or control orders;
  • revocation of permits; and/or
  • other administrative penalties.

Personal liability can be imposed on directors and officers of corporations under federal and provincial legislation. These include former directors and officers, even if they were not directors and officers at the time of the contaminating events. Directors and officers can be held personally liable for remediation costs or preventative orders.

7 Contaminated land

7.1 What are the key features of the regulatory regime governing contaminated land in your jurisdiction?

The Ministry of Environment, Conservation and Parks has a brownfield regime which provides that anyone that develops or changes the use of land to a more sensitive use (eg, commercial to residential) must first meet certain standards and obtain a record of site condition (RSC). These requirements are set out in Ontario Regulation 153/04. The Ontario Environmental Protection Act details certain prohibitions and requirements regarding contaminated land. In addition, several municipalities have imposed their own rules through the enactment of bylaws, separate from applicable provincial standards. The key features of this regime are protection and remediation. The requirements under the Ontario Environmental Protection Act are also considered to be applicable law under the provisions of the Ontario Building Code Act that must be met prior to issuing any permits.

Canada's Federal Contaminated Sites Action Plan addresses the management of contaminated sites under federal jurisdiction. The objective is to assess the risks of health and the environment of each site, and to allocate resources within federal custodians to deal with the highest priority contaminated sites. The key features of the regulatory regime are management and remediation.

7.2 Who bears the liability for the clean-up of contaminated land? Can such liability be excluded or subcontracted/delegated?

Under Sections 17 and 18 of Ontario's Environmental Protection Act (RSO 1990, c E 19), current and former owners or occupiers of contaminated land bear the liability for remediation and its associated costs. Other parties can also be held liable if they own, manage or control a contaminant that adversely affected the land.

There are no limits on regulatory liability, but limited protection may be available via privately negotiated and agreed upon contractual indemnities and releases where the buyer assumes liability for knowingly purchasing contaminated land. Liability may also be limited, in some circumstances, from regulatory prosecution if an RSC is prepared and placed on the Environmental Registry. An RSC sets out the environmental condition of a property at a particular point in time, based on environmental site assessments (Phase I and II) conducted by a qualified person (as defined by the Ontario Environmental Protection Act). However, this does not protect past, current or future parties from criminal or civil liability resulting from contamination of the property.

7.3 How is liability determined in cases where multiple parties have contributed to the contamination?

Under the Environmental Protection Act (RSO 1990, c E 19), where multiple parties may have contributed to the contamination, they can be jointly and severally held responsible for remediation. Any of the parties may then turn to the other liable parties through a civil claim to recover any amount exceeding its contribution to the contamination.

7.4 Can individuals bring proceedings against polluters, landowners and/or occupiers where they have been affected by contamination? If so, which court/tribunal is competent to deal with such proceedings?

In Ontario, individuals can bring civil proceedings against polluters, landowners and/or occupiers if affected by contamination. These claims can be brought before the courts based on claims of nuisance, negligence or a statutory violation of Section 99 of the Ontario Environmental Protection Act. Section 99 provides that individuals may seek compensation from the polluter for contamination and spills. The causes of action are often:

  • nuisance;
  • trespass;
  • negligence;
  • breach of statutory duty; and
  • strict liability.

Such actions are often commenced in the Ontario Superior Court of Justice, but tribunals and boards may hear statutory causes of actions under Section 99 in certain specified circumstances.

8 Reporting, auditing and disclosure

8.1 Are any public registers of environmental information maintained in your jurisdiction? If so, what are they, who can access them and how? What possibilities exist for third parties to access environmental information and what is the process for doing so?

The Environmental Registry of Ontario invites the public to comment on action being taken that could affect the environment. All instruments, such as permits and approvals, are posted to this registry. Any member of the public may access the registry via the Ontario government website. Comments may be submitted online or by mail; or if the office is contacted, in-person arrangements can be made. Applications under the ECA must be posted for a minimum of 30 days, but often 45 days is required.

The federal government also maintains a Canadian Environmental Protection Act Registry that allows the public to find documents relating to the administration of the Canadian Environmental Protection Act, 1999. These include notices, orders, permits, public consultations and so on.

8.2 What environmental reporting requirements apply to companies in your jurisdiction?

There are many reporting requirements for companies in Ontario and Canada to ensure compliance with permits, approvals and legislation generally. Some are more stringent than others. For example, under Ontario Regulation 387/04 – Water Taking and Transfer, companies must collect and record volumes of water taken on a daily basis and submit the records annually. All persons and companies are obliged to report environmental spills, contaminations and accidents to their local municipality and regulatory body.

8.3 Are companies in your jurisdiction subject to environmental audit requirements?

Environment Canada recognises the power and effectiveness of environmental audits as a management tool for companies and government agencies, and intends to promote their use by industry and others. Voluntary audits are recommended to ensure ongoing compliance with provincial and federal regulations. Initial audits are often completed when applying for a permit or approval. Environmental audit reports may be required when enforcement officers have reasonable grounds to believe that:

  • an offence has been committed;
  • the audit's findings will be:
    • relevant to the particular violation;
    • necessary to its investigation; and
    • required as evidence; and
  • the information being sought through the audit cannot be obtained from other sources through the exercise of the enforcement officer's powers.

Annual audits may be used by a corporation in the event of a prosecution to support a defence of due diligence.

8.4 When and how must environmental issues be disclosed (eg, in the event of the potential sale of land or a merger or acquisition)?

There is no legal requirement to disclose environmental information to buyers, other than an individual's obligation to report a spill under the provisions of the Ontario Environmental Protection Act. Buyers or parties involved in potentially acquiring land must conduct the necessary due diligence prior to the conclusion of a transaction. This is often done via environmental site assessments and investigations. If the seller is aware of a contamination or environmental issue, it cannot misrepresent the condition of the property, particularly on documents such as the property information statement. Further, the seller cannot deceive or hide latent defects. Nonetheless, in Ontario, previous owners can be held liable for environmental issues and remediation after the sale, so they do not always escape liability if such issues are not disclosed.

9 Tax

9.1 What environmental and climate taxes are applicable in your jurisdiction?

The federal Greenhouse Gas Pollution Pricing Act (SC 2018, c 12) has made it mandatory for provinces and territories either to adopt the federal carbon tax or to create a system that aligns with the federal benchmark of a 30% reduction below 2005 levels of emissions. Ontario has proposed a provincial output-based pricing system that aligns with the federal benchmark, which will be implemented in 2022, and is thus transitioning away from the current federal fuel charge.

9.2 Are any exemptions or incentives available?

There are exemptions for fuel that is imported, delivered or sold in small quantities. Under the federal Greenhouse Gas Pollution Pricing Act, corporations can apply for an exemption certificate that would allow them to accept the delivery of fuel without the application of the fuel charge at that time. When Ontario's provincial system is implemented, Ontario will be exempt from the federal fuel charge. Ontario has committed to supporting the ability of registered facilities under the federal exemption certificates, to maintain their exemptions.

The Canadian government makes clean energy projects – such as solar energy, wind energy and energy from waste – more fiscally attractive for industry by providing business income tax incentives. For example, under Classes 43.1 and 43.2 in Schedule II of the Income Tax Regulations, certain capital costs of systems that produce energy by using renewable energy sources or fuels from waste, or that conserve energy by using fuel more efficiently, are eligible for accelerated capital cost allowance. The federal government also offers funding and grants for environmental programmes.

9.3 What strategies might parties consider to mitigate their environmental and climate tax liabilities?

The best strategy that companies can use to mitigate the costs of environmental and climate tax liabilities is to reduce their emissions and fuel usage. Given the Greenhouse Gas Pollution Pricing Act and the provincial system to be inputted, lower emissions mean lower costs.

10 Insurance

10.1 What types of environmental insurance arrangements are put in place in your jurisdiction? Is there any mandatory environmental insurance in your jurisdiction? How sophisticated is the environmental insurance market? What, if anything, is excluded from insurance cover?

Many insurance companies offer separate environmental insurance, as commercial general liability polices often have an absolute pollution exclusion clause. The types of environmental insurance coverage include:

  • accidental/sudden pollution events (eg, a pipeline rupture);
  • broad-form pollution (contamination that occurs over time);
  • site pollution (caused by either on-site or external sources); and
  • third-party coverage (protection against water, air or land contamination resulting from hazardous materials released from the site).

Insurance coverage will often cover expenses such as legal costs and remediation efforts. However, such insurance policies rarely cover unknown environmental conditions.

Environmental insurance is not mandatory in Canada. In recent years, environmental insurance has become more common and in certain circumstances it is considered a best practice. More brokers offer comprehensive insurance for environmental liability and more companies are opting for insurance given the risks and consequences associated with environmental incidents. What the insurance policy covers can differ in each company's circumstances; however, criminal or administrative actions are generally excluded from insurance coverage.

10.2 What are the ‘green finance' arrangements in your jurisdiction? To whom do they apply? What, if any, obligations do they impose? Who is responsible for monitoring, enforcing and reviewing such arrangements in your jurisdiction?

Ontario is currently a large issuer of Canadian dollar green bonds, with 10 green issues totalling C$10.75 billion, of which C$10.25 billion is currently outstanding.

Ontario's green bonds capitalise on the province's ability to raise funds at low interest rates and serve as an important tool to help finance public transit initiatives, extreme- weather resistant infrastructure and energy efficiency and conservation projects. Eligible projects are selected on behalf of the province by staff of the Ontario Financing Authority (OFA) on the advice of the province's Green Bond Advisory Panel, which screens and evaluates projects. It is comprised of staff from various ministries and agencies, including the Ministry of the Environment, Conservation Parks and the OFA. An assurance audit by the auditor general of Ontario verifies the amounts used for selected projects and the balance of proceeds remaining. Project updates and status reports are required for eligible projects.

11 Disputes

11.1 In which forums are environmental and climate change disputes heard in your jurisdiction?

Environmental and climate change disputes are often heard before the Environmental Review Tribunal (ERT), the Conservation Authority Board or the Ontario Land Tribunal (OLT) with statutory authority. These environmental forums are often specialised in handling such disputes.

Previously, the ERT heard most disputes under various environmental acts and regulations. The Ontario Land Tribunal Act, 2021 was recently proclaimed creating the OLT, which has assumed the role and jurisdiction of the ERT. The OLT has review powers. Appeals from the OLT then go before the Divisional Court. Some environmental disputes are heard before the Ontario Superior Court of Canada as they pertain to civil proceedings. Environmental matters are often quasi-judicial, meaning that administrative penalties and contraventions are before the Provincial Offences Court. Disputes under federal legislation are heard by the appropriate federal tribunals or courts.

11.2 What issues do such disputes involve?

Environmental matters before the OLT typically relate to appeals of decisions of the director of the Ministry of the Environment, Conservation and Parks to issue, alter, revoke, cancel or close an order, approval, licence, permit, registration or account under:

  • the Clean Water Act, 2006;
  • the Ontario Environmental Protection Act;
  • the Nutrient Management Act, 2002;
  • the Ontario Water Resources Act;
  • the Pesticides Act;
  • the Resource Recovery and Circular Economy Act, 2016;
  • the Safe Drinking Water Act, 2002;
  • the Toxics Reduction Act, 2009; or
  • the Waste Diversion Transition Act, 2016.

Disputes also often involve challenging administrative penalties associated with the aforementioned matters. Disputes before the courts often involve civil liabilities for pollution, spills and so on.

11.3 What defences and indemnities are available, both for corporates and for individuals?

Corporations can draft indemnities in certain circumstances in order to limit potential liability for environmental risks. Environmental offences in Canada are considered to be strict liability offences (unless a contrary intent is clearly expressed in the statute). This means that the defences of due diligence and/or mistake of fact is available. To establish due diligence, a defendant must prove, on a balance of probabilities, that it:

  • took all reasonable care in the circumstances to prevent the events giving rise to the offence; or
  • had a reasonable belief in a mistaken set of facts which, if true, would have rendered the act or omission innocent.

However, in cases where absolute liability is the standard, there is no such defence. Absolute liability offences are rare in Ontario/Canada.

11.4 How are environmental disputes resolved?

Disputes can be resolved by engaging in litigation before a board, court or tribunal, or through alternative dispute resolution techniques. Mediation is heavily emphasised in the environmental assessment process, although it is voluntary. The new OLT has been credited as having a renewed focus on mediation, although it will not draft minutes of settlement or provide a binding order. The Provincial Offences Court hears environmental regulatory offences.

11.5 Have there been any recent cases of note?

The Supreme Court of Canada's 2021 decision in References re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11 to uphold the federal Greenhouse Gas Pricing Pollution Act may have a significant effect on future trends, and on the authority of the federal government to regulate in the environmental area and impose obligations on the provinces. This decision confirms that greenhouse gas emissions are a national concern that knows no boundaries. Parliament has the authority to address this issue by applying a price on carbon pollution in jurisdictions that do not have their own system and by requiring those that do to meet minimum national stringency standards.

Another recent case to note is Ontario (Natural Resources and Forestry) v South Bruce Peninsula (Town), 2021 ONCA 332, where leave to appeal was granted. The appeal will hear two important issues:

  • the test governing the admissibility of expert evidence in regulatory offence prosecutions; and
  • what constitutes ‘damage' under the Endangered Species Act.

Another case of note is a September 2021 decision that the Ontario government violated the Environmental Bill of Rights when it passed Bill 197 without proper public consultation. Bill 197 was enacted during the COVID-19 pandemic and amended dozens of environmental statutes. The court held that the minister of municipal affairs and housing acted "unreasonably and unlawfully" in failing to consult with the public on changes to the Planning Act regarding minister's zoning orders.

12 Trends and predictions

12.1 How would you describe the current environment and climate change landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

Environmental and climate change trends change quickly and frequently in Ontario, often as a result of changes in government. The current government has repealed various environmental acts, regulations and initiatives, and has introduced its own acts, regulations and incentives. In the next 12 months, it is likely there will be a focus on Ontario's new greenhouse gas emissions system, given that the Supreme Court of Canada has upheld the Greenhouse Gas Pollution Pricing Act. The shift to extended producer responsibility as it relates to waste collection will also have a significant impact and involve the transition of municipal responsibility for recycling to producer responsibility. Doug Ford's Made-in-Ontario Environment Plan details different strategies and focuses on environmental issues; but the next 12 months will likely reveal what comes to fruition and what falls by the wayside. In addition, with a provincial election on the horizon, it is likely that environmental issues will be discussed.

13 Tips and traps

13.1 What are your top tips for smooth environmental and climate change compliance in your jurisdiction and what potential sticking points would you highlight?

It is important to know the legislation and regulatory regimes – at the federal, provincial and municipal levels – that govern your corporation and industry to ensure compliance and avoid regulatory prosecution. It is important to understand all reporting, permits or approvals, registration and prohibitions surrounding the industry or activities. Protections such as insurance and indemnifications should be considered. Finally, environmental enforcement and compliance measures have increased in recent years and are only becoming stricter, including enhanced enforcement measures. Both the federal and provincial governments have become more aggressive in prosecuting environmental offences and the penalties have continued to increase. Recent court decisions indicate that the trend is away from leniency, so ensuring compliance is imperative moving forward.

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.

COMPARATIVE GUIDE
11 May 2022

Environment and Climate Regulation Comparative Guide

Canada Environment
Contributor
Since 1937, Siskinds has been that firm of specialists serving individuals, families and businesses in southwestern Ontario and Canada from our offices in London, Sarnia and Quebec City. We’ve grown as the world around us has evolved. Today, we are a team of over 230 lawyers and support staff covering personal, business, personal injury and class action law and over 25 specialized practice areas.
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