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In accordance with the division of legislative authority laid down in the Canadian Constitution, contaminated sites fall mainly under provincial jurisdiction. Only federal sites are subject to federal legislation. The law applicable to contaminated sites is very complex. Some elements are part of customary law, while others are come from statute law. Contaminated sites may be subject to legislation specifically dealing with contaminated sites or with environmental protection in general, or legislation governing particular areas such as petroleum products, mining sites and hazardous wastes. Several provinces have recently passed new legislation to respond more adequately to this growing problem.
Also, in response to a mandate announced by the Minister of Finance in his December 2001 budget, the National Round Table on the Environment and the Economy (NRTEE) launched an initiative to promote the transformation of urban contaminated sites into centres for community activities. The program will develop a national strategy integrating measures from federal, provincial and municipal authorities and from the private sector to facility the rehabilitation of urban contaminated sites in Canada. The recommendation contained in the strategy will deal with the main obstacles to rehabilitation, especially the legal uncertainty surrounding questions of environmental responsibility, a lack of financing, and the poor understanding of this question by stakeholders. The strategy should be disseminated in 2003
With a few exceptions, the laws on contaminated land define the expression "contaminated site" in very broad terms. The level of contamination permitted by the various statutes varies in accordance with the anticipated use of the site (residential, recreational or industrial). Zoning, current use, neighbors, potential receptors of the contamination (such as creeks and schoolyards), as well as the background concentration of the particular material in the geographic area, the nature of the material and the likelihood that exposure to the contaminant will occur, are typically all determining factors in establishing whether or not a site is contaminated. Most provinces have either established their own criteria for determining whether property is contaminated or have adopted criteria from other jurisdictions. These criteria are usually included not in legislation but in guidelines. Since they are not binding, they create some uncertainty but also allow flexibility when assessing a particular property.
Most if not all provinces have compiled an inventory of contaminated sites on their territories. At the federal level, only the Department of National Defence maintains a database of contaminated sites under its control (see Chapter 23: Military or Federal Facilities ). The sites are normally listed using the national classification system developed by the Canadian Council of Ministers of the Environment (CCME) , which was designed to identify sites requiring priority action, based on an initial evaluation of their potential or actual negative impacts on public health and the environment. An order of priority is then determined for remedial action.
Provincial authorities can issue orders requiring cleanup of contaminated sites under provincial legislation. In certain cases, cleanup orders can also be issued under federal legislation such as the Canadian Environmental Protection Act (CEPA) or the Fisheries Act.
For most of the provinces, the first step in the cleanup process is to designate a site as "contaminated." The second step is to notify the persons responsible for the site. The third step is the negotiation of a voluntary remediation plan. If negotiation fails, provincial governments have the power to issue either a remedial order or, in some cases, a preventive order. As a general rule, the standards applicable to cleanup of a site are based on the use to which the site will be put subsequently (residential, commercial or agricultural). The extent of cleanup can be determined on the basis of numerical standards or risk-based standards. The method based on numerical standards assumes elimination or removal of the contaminants, either completely or at least to a certain legally prescribed level of contamination, depending on the future use of the site. This process does not cover specific sites that contain quantities or concentrations of contaminants beyond which the individual location is deemed contaminated according to the legislation, but may not present any health or environmental risk. Experience has shown that a carefully planned approach, incorporating accurate, specific scientific data, will usually result in the government approving a rational and effective cleanup method.
In some provinces, a site can receive a certificate of compliance once it has been remediated. Some provincial legislation contains provisions under which a requirement for further cleanup may be imposed on an owner even if the site was remediated in the past according to the standard applicable at that time.
A major federal-provincial program to clean up abandoned contaminated sites ended on 31 March 1996. The federal government invested CND$200 million in this six-year program for the cleanup of hazardous waste-contaminated sites and CND$50 million for technology development. Forty-six sites were remediated under the program. Notwithstanding the termination of this program, a number of governments have continued to invest funds (e.g. $1.4 million by Québec in 1996-1997) for diagnosis, cleanup and environmental monitoring of abandoned contaminated sites. Other provincial governments have renegotiated comparable cost-sharing agreements with the federal level for the cleanup of abandoned sites. There are also partnership agreements between provincial governments and municipalities for the management of abandoned contaminated sites (for example between the Government of Québec, Montréal and Québec City). In addition, the first municipal environmental trust with the necessary powers and financial resources to promote reuse of contaminated sites for non-industrial purposes was set up in Québec in April 1998.
In Canada, the approach to contaminated sites is to use every possible means to ensure that taxpayers do not have to pay for the cleanup of contaminated sites. That is why the various statutes define the "person liable" for the contamination of a site in very broad terms. If a government cleans up a contaminated site for safety reasons, it can recover the cleanup costs from any person who has failed to comply with an order. To recover the remediation costs, some governments can also sell the property or register a lien against the land.
Legislative provisions concerning liability differ from province to province. Generally speaking, provincial legislatures have passed legislation designed to afford their governments the greatest possible latitude in identifying persons who may be held liable for the contamination of a site. A person will be held liable if it can be shown that the person permitted the contamination, or owns, was responsible for or controlled the contaminant.
Since it is difficult for the courts to adjudicate among these categories of persons, a number of provinces have felt the need to make their liability systems more specific. Under recent legislation, for example, a government can issue a prevention or decontamination order to the person responsible for the contaminant, or to the site owner or former owner, the person that caused or contributed to the contamination, the administrator, receiver or trustee, and to the principal and agent of the foregoing persons. Before issuing an order, the government must consider whether the person exercised due diligence, whether there was compliance with the industrial and legal standards existing at the time, whether the person exacerbated the situation, what type of action the person took on becoming aware of the contamination, and any other factor deemed relevant by the government. Some provinces have even explicitly included secured creditors and their agents among persons potentially liable. The legislation, which is clearly based on the approach adopted in the United States, sets forth the necessary conditions or factors to be considered to establish the existence of environmental liability on the part of the above-mentioned persons.
This type of legislation and recent case law in Ontario fully accord with the latest recommendations of the Council of Canadian Ministers of the Environment (CCME), which has recommended that the polluter pays principle must apply, but that certain concepts associated with weighing and equity must be considered when establishing environmental liability. In fact, several legislative provisions exempt from liability certain persons who otherwise would have been responsible for remediation (however, the burden of proof falls to the defendant). The extent of these exemptions varies among the provinces. Examples are: act of God; act of war; acts of third parties; innocent purchaser; owner prior to contamination; certain generators and transporters; involuntary acquisition of ownership by government body; advice and assistance; contamination caused by migration of contaminants; natural concentrations; roads and rights of way; persons holding certificates of compliance; persons designated in the legislation as not responsible for remediation. It should be noted that under the federal Bankruptcy and Insolvency Act, the trustee and the receiver are normally relieved of any environmental liability, notwithstanding the provisions of other federal or provincial environmental legislation. Furthermore, in some provinces including Ontario, a standard agreement has been negotiated between governments and lenders which allows creditors to conduct environmental assessments, deal with health and safety issues and prepare a property for resale without assuming legal liability for the property.
Where more than one person is liable, they are in general jointly and severally liable. Each liable party can be billed for the entire cost of the actions contemplated in the order. The parties must then agree among themselves or seek a civil remedy in order to determine their respective financial liability. However recent legislation has usually included a method of assigning liability that may cap the liability of some parties at the value of the assets they administer, or directly determine the financial contribution of each party.
In addition, with the exception of some provinces, provincial governments offer persons found liable the option of signing agreements limiting their liability, in exchange for a clear and specific commitment to undertake the necessary work.
In the absence of statutory requirements concerning disclosure of relevant information, the general rules of customary law apply. The rules relating to transfer of property are similar under the common law and the civil law. In principle, purchasers must protect their own interests. However, if a property has a hidden defect, such as contamination, the vendor could be liable to reimburse a portion of the sale price or to retake possession of the property and reimburse the sale price if the contract does not limit the legal guarantee on hidden defects. If the vendor was aware of the defect, he could also be liable to pay damages and interest to the purchaser. This rule will not apply in cases where the parties have agreed pursuant to the contract that the property will be accepted by the purchaser in whatever state it is in at the time of sale. Where there is a hidden environmental or other defect, the courts tend to ensure that the purchaser is protected. Also, where the contamination problem is apparent and detectable through a simple inspection, a purchaser who has not demonstrated prudence and due diligence at the time of the transaction may not be protected against potential harm.
Typically, the parties to a sale transaction involving commercial or industrial property will obtain an environmental site assessment (ESA) of the property, which will form the basis of the allocation of liabilities between them in the event of a conflict. Under certain environmental legislation, the vendor must provide the purchaser with a site profile.
As described in Chapter 5, Environmental Information, and Chapter 14, Environmental Emergencies, situations may arise where the risk associated with a contaminated site requires public reporting of the problem. Public notification requirements are frequently found in the environmental legislation of each province. In Ontario, the application to the government to remediate property is made public in a registry, thus giving the public an opportunity to comment. Under some provincial legislation, any information such as approvals, orders, legal actions, liens placed on property, notices of designation of contaminated sites and so forth are included in a registry. In British Columbia, the government has power to order a person liable for the contamination of a site to provide for public consultation or review of the remediation process, at that person's cost. Some freedom of information statutes also require disclosure of any information regarding a risk of harm to the environment or the health and safety of the public.