Environmental Liability – New Protection

Under Ontario’s Environmental Protection Act, current and former owners of contaminated land may be held responsible for environmental impacts and remediation costs. Both current owners wanting to sell the land and prospective purchasers must be concerned about trying to limit their future liability. As a result of amendments to the Environmental Protection Act scheduled to come into force October 1, 2004, such persons may now obtain at least limited protection from future liability by filing a Record of Site Condition (RSC) in the new Environmental Site Registry.

These amendments and related regulations give effect to provisions of legislation enacted in 2001 known as the Brownfields Legislation which is intended “to encourage the revitalization of contaminated land”. The RSC is a certification by a qualified consultant that the necessary environmental site assessment of the property has been completed and that the property complies with contaminant levels prescribed by regulation or as specified in a risk assessment accepted by the Ministry of the Environment. Upon filing, the person who filed the RSC or subsequent owner of the property is protected from issue by the Ministry of certain administrative orders under the Act which might otherwise be issued to control, stop or remediate the effects of prior contamination. However, this limited protection does not apply to off-site contamination or in the event of an emergency resulting from the prior contamination which endangers the health or safety of any person.

The RSC must specify the type of property use for which the record is filed and the new amendments will prohibit certain changes of use of the property, or construction of a building to be used in connection with a change of use, unless a Record of Site Condition has been filed and the use specified is the new proposed use of the property. Of particular interest to farmers, this prohibition on change of property use unless an RSC has been filed applies specifically to a proposed change in use from industrial, commercial or community use to agricultural use. Compliance with these provisions will be necessary before issue of a building permit in connection with the new proposed use.

The limited protection from future liability afforded by this legislation and related regulations applies to the person who filed the RSC, subsequent owners, and persons who were in occupation or had charge, management or control of the property after filing of the RSC. In addition, a person selling the property pursuant to an Agreement of Purchase and Sale which includes provision for filing by the purchaser of an RSC will obtain this statutory protection upon the filing of the RSC by the purchaser in accordance with the agreement. However, the RSC does not protect past, current or future owners from criminal or civil liability resulting from contamination of the property.

Owners and prospective purchasers of contaminated property should be aware of these new provisions. Although subject to significant limitations, these new provisions offer at least some limitation with respect to future environmental liability.

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