environmental law seminar - borden ladner...

Borden Ladner Gervais LLPLawyers • Patent & Trade-Mark Agents

1200 Waterfront Centre200 Burrard Street, P.O. Box 48600Vancouver, B.C., Canada V7X 1T2

tel: (604) 687-5744 fax: (604) 687-1415www.blgcanada.com

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Borden Ladner Gervais LLP is an Ontario Limited Liability Partnership

ENVIRONMENTAL LAW SEMINAR

SEMINAR MATERIALS

June 1, 2005

www.blgcanada.com

Table of Contents

BLG Firm Profile 1

Environmental Law Group Profile 2

Recent Developments on Contaminated Sites – Their Impact on Your Business Mary Jo Campbell, BLG 3

Kyoto Update and Greater Vancouver Regional District Air Quality Initiatives Jock Finlayson, Business Council of BC 4

An Overview of Recent Federal and Provincial Environmental Legislative and Regulatory Developments Deborah H. Overholt, BLG 5

Reaching Across Barricades: the Role of Public Affairs in the Defence of Environmental Claims Doug Horswill, Teck Cominco Metals Ltd. 6

Litigation Update: Where Are We Now? Graham Walker and Rick Williams, BLG 7

Environmental Law Group Member Biographies 8 Mary Jo Campbell M. Scott Kerwin William K. McNaughton Jason Z. Murray Deborah H. Overholt Douglas R. Sanders, P.Eng. Tracey L. Sandgathe G. Ross Switzer Graham Walker Carleigh A. Whitman Rick Williams

Guest Speaker’s Bios 9 Jock Finlayson, Business Council of BC Doug Horswill, Teck Cominco Metals Ltd

Additional Copies 10

http://www.blgcanada.com/practice/detail.asp?PAKey=30

http://www.blgcanada.com/professionals/bio.asp?lkey=219











Borden Ladner Gervais LLP Firm Profile

Borden Ladner Gervais LLP offers clients the services of a fully integrated national network of seasoned legal talent. The firm's track record is based on the expertise and commitment of more than 650 lawyers, intellectual property agents, and other professionals.

Working as a team, we represent a variety of regional, national, and multi-national corporations in a number of business sectors. We also represent public institutions such as colleges, universities, educational authorities, governments, governmental agencies, hospitals, and other health care facilities. In addition, business, trade, and charitable groups are among our clients.

At Borden Ladner Gervais, our clients have choice. They can engage a particular lawyer offering particular expertise or, for more complex transactions requiring a number of individuals or crossing several practice areas, they can engage a team of lawyers. While it may sound costly, this approach actually is sensitive to time and cost because it quickly and readily matches specific skills and experience with specific client needs.

To meet these needs, our team pushes boundaries and seeks innovative approaches. With leading work in emerging fields and a keen focus on evolving business priorities, we help clients master a rapidly changing world.

Accordingly, Borden Ladner Gervais is committed to the use of advanced technology. All members of the firm are linked by a network, which supports an array of information and project management software. The firm encourages and maintains direct electronic connections with its clients, ensuring our interactions are efficient and cost-effective.

We are in the business of finding the right answers. Daily, our Canadian and international clients make decisions based upon what we deliver: superior advice, strategic perspectives, and innovative business approaches - in the right place and at the right time. They value our dynamic, responsive partnerships based on personal relationships.

Clients also value our firm's national and international scope. More than 20 languages are spoken at our firm, and our experience is global in nature. We have acted in the resolution of international litigation and trade disputes; in international banking transactions (including sovereign risk lending); international insolvencies, liquidations and restructurings; international joint ventures, reorganizations and acquisitions; and international communications networks and contracts of many kinds.

At Borden Ladner Gervais, we are committed to teamwork, innovation, proactive strategies, and personal client service - all supported by advanced technology and delivered within a global context.


Areas of Practice

Borden Ladner Gervais LLP serves its clients in all areas of a modern law practice. In addition, we offer the following specialized services:

Aboriginal Law Administrative, Regulatory

and Public Law Advertising and Sponsorship Appeal and Review Asia Pacific Group Aviation Banking Litigation Biotech and Pharmaceutical Broker Liability and

Compliance Business Advisory Group Business Immigration Class Actions Commercial Arbitration and

Alternative Dispute Resolution Commercial Lending Commercial Litigation Commercial Real Estate Commodity Tax Communications Law Competition and Marketing

Law Constitutional Law Construction and Engineering Construction, Surety, Fidelity

and Fraud Corporate Finance Corporate Governance Corporate Tax Defamation, Trade Libel and

Media Law Directors' and Officers’

Liability Education Law Electricity Markets Entertainment Law

Environmental Law Estate and Family Law

Litigation Expropriation Law Federal Court Financial Services Financial Services Regulatory

Group Forestry Law Franchise and Distribution

Law Fraud Law General Property and

Casualty Claims Government Relations Health Care Institutions and

Services (non-litigious) Health Law Hotel and Hospitality Information Technology Insolvency and Restructuring Insurance and Tort Liability Intellectual Property Agency Intellectual Property and

Technology Intellectual Property Litigation International Group International Infrastructure

Projects International Tax Law International Trade Law Investment Management Japan Group Labour and Employment Life and Disability Insurance Marine


Areas of Practice (cont’d) Medical Liability and Health

Law Litigation Mergers and Acquisitions Municipal, Government and

Police Liability Municipal Law Not-for-Profit Oil and Gas Pensions Personal Injury and Accident Personal Tax and Estate

Planning Privacy and Access to

Information Private Company Product Liability

Professional (non-medical) Liability

Regulatory Law Securities and Capital

Markets Securities and Shareholders

Litigation Structured Finance and

Leasing Tax Tax Litigation Venture Capital Wealth Management

Firm History

Five firms, recognized in their communities for outstanding success and service, founded Borden Ladner Gervais. They were Howard, Mackie (Calgary), McMaster Gervais (Montréal), Scott & Aylen (Ottawa), Borden & Elliot (Toronto), and Ladner Downs (Vancouver).

Today, we are Borden Ladner Gervais LLP, one of Canada's largest and most respected national law firms. We are committed to the same tradition of excellence established by our founders.

Borden Ladner Gervais LLP – Calgary

The Calgary office began as Howard, Mackie, founded in 1888. As one of the largest legal firms in Western Canada, it has been closely associated with the growth of Calgary as an international business centre. Today, the firm plays a role in transactions generated by the city's dynamic business community on the local, national, continental, and global levels.

Borden Ladner Gervais LLP – Montréal

Our Montréal office incorporates the oldest continuous legal practice in Canada, founded in 1823. Today's fully bilingual office resulted from the 1998 merger of McMaster Meighen and Mackenzie Gervais. Together, their


Firm History (cont’d)

history is interwoven with the maritime, industrial, financial, and economic development of Montréal, Québec and Canada. In the 19th century, the firm's lawyers helped bring about the formation of Canada's railways.

Borden Ladner Gervais LLP - Ottawa

The Ottawa firm of Scott & Aylen was founded in 1952, and merged with Borden & Elliot in 1999 to form Borden Ladner Gervais - Ottawa. Our Ottawa office is fully bilingual and one of the largest in the nation's capital. Borden Ladner Gervais - Ottawa pioneered a multi-disciplinary approach that puts lawyers together with patent and trade-mark agents under one roof. Borden Ladner Gervais - Ottawa ensures a full suite of legal and intellectual property services to clients in Canada and beyond.

Borden Ladner Gervais LLP - Toronto

The Toronto firm was founded as Borden & Elliot in 1936. It is one of Canada's most prominent full-service law offices, with one of the largest litigation practices in the country.

Borden Ladner Gervais LLP - Vancouver

The Vancouver firm of Ladner Downs was founded in 1911. Today, as Borden Ladner Gervais - Vancouver, we are present in significant transactions in every area of British Columbia and in every major sector of its economy. Borden Ladner Gervais - Vancouver is one of the pre-eminent law offices of Western Canada.

Our offices have a collective depth of experience that cannot be bought or assembled from scratch. This depth of wisdom is what clients look to when evaluating their potential for success. Ours is a track record that extends right across Canada, into the United States, and overseas.

For further information on our firm and our services, please visit our website at www.blgcanada.com.

Lawyers • Patent & Trade-mark Agents

Recent Developments in Contaminated Sites Law – The Impact

on Your Business

June 1, 2005

Mary Jo Campbell

(604) 640-4105

[email protected]

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Environmental Management Act

In force July 8, 2004 along with certain sections of Environmental Management Amendment Act, 2004(Bill 13)

Principal ChangesAmendment of definition of “contaminated site” based on contaminants exceeding prescribed numeric or risk-based standardsElimination of conditional certificates of compliance such that only certificates of compliance (with or without conditions). Review certificates with careNo regulatory reopener on change in standards

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Environmental Management Act (cont’d)

Principal Changes (cont’d)Continued expansion of role of “approved professionals” on Roster in recommending MWLAP issuance of approvals in principle (“AIPs”) and certificates of compliance. Purchasers and lenders should consider independent review of certificates/approvals with supporting reports. Only as good as the consultantMinister of MWLAP may issue regulations. Plus the director of MWLAP may issue interim standards valid for one year. Provides increased flexibility to MWLAP, but no grandfathering for remedial work currently under way

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Environmental Management Act (cont’d)

Principal Changes (cont’d)Termination of AIPs and certificates where terms not complied with or fees outstanding

Site ProfilesMWLAP expects to release revised proposal for public comment over Summer, with changes targeted for Fall 2005

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Contaminated Sites Regulation

Amended July 8, 2004Mainly housekeeping changes to reflect terms and new section numbers of EMASediment standards – Schedule 9Nonscheduled toxic substances – Schedule 10Number of minor standard changes since July 8/04. Monitor. Expect to occur frequently, with no grandfathering

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Hazardous Waste Regulation (formerlySpecial Waste Regulation)

May 14/04 – Housekeeping changes to reflect federal Transportation of Dangerous Goods RegulationsJuly 8/04 – Re-named Hazardous Waste RegulationTogether with EMA, eliminates permits for storage, treatment and recycling of hazardous waste provided the Regulation is complied with2 year window to obtain order grandfathering existing permits

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Protocol 6

Must use approved professionals on RosterNo MWLAP or external review since November 2004Expanded to include remediation of part of site, remediation up to 5 years in length and application of certain background standardsApproved professional not permitted to approve risk assessments

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Approved Professionals (or LEPs)

New licenced environmental professional (“LEP”) system targeted to commence April 1, 2006Roster Steering Committee (“RSC”) recommendations for LEP system:1. Two types of LEPs (numeric and risk assessment specialists)2. Two types of review (self-review on lesser risk sites and

review of others’ work on higher risk sites)3. Performance assessment (audits) by RSC and MWLAP 4. Outstanding liability issues

Current significant bottleneck is risk assessment certificates. MWLAP indicates 4 to 6 months but many certificates taking more than 1 year

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Science Advisory Board

Revised proposal for screening level risk assessment 1 (“SRA 1”) expected for public comment Summer 2005Initial proposal for SRA 2 expected August 31, 2005Generic standards review – federal CCME deterrent

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Outstanding Policy Initiatives

High risk sitesLand Remediation FundReview of liability schemeAlternate dispute resolution mechanismsProvincial election is behind us. Extent of future changes will be affected by approach of new Minister

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Polluter Pays – Supreme Court of Canada

Upholding and broadly interpreting environmental legislation

BC HydroA responsible person for 9250 Oak Street, VancouverSubject to liability of one of its amalgamating companies, BC Electric Company despite special amalgamation legislationBC Electric supplier of coal tar from 1920 to 1957. Amalgamation 1965

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Polluter Pays – Supreme Court of Canada (cont’d)

Imperial Oil v. Quebec (Minister of Environment)Remediation order naming Imperial Oil valid despite sale, govt certified remediation and development of site by developerImperial Oil operations 1920 to 1973. Sale 1987. Order 1994

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Remediation Cost Recovery Actions

Workshop Holdings and CN v. ABC RecyclingSubsequent speaker will address what constitutes reasonable remediation costs and CN caseWorkshop Case:

1. Brass Foundry 1924 to 1941. Father of plaintiff landowner purchased site 1960. Remediation 1998

2. Remediation cost recovery not barred by 30 year ultimate limitation period. New civil cause of action arose in 1993 withnew environmental legislation

3. Broad interpretation of innocent purchaser exemption despite length of ownership and intervening uses

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Innocent Owners – Limited Options

2 BC EAB cases – Super Save case (BC Hydro, Rock Bay, Victoria) and Squamish Terminals case (by oldSquamish chlor-alkali plant). Multi-million $ cleanupsNeighbours do not have standing to challenge AIP. No evidence prejudicially affected by what in AIPs or remediation planMWLAP has discretion but not obligated to include conditions regarding off-site impacts. Legislative objective expeditious remediation of contaminated sitesAlternative avenues of recourse:

1. Remediate and sue for cleanup costs2. MWLAP right to require further remediation3. Negotiation of coordinated remediation

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Practical Options for Innocent Neighbours

Raise issues early with polluter, rostered professional, MWLAP, municipality and DFOActively respond to communicationsInsist on right to notice of migrating contamination under CSR. An offence not to provide noticeTrigger an audit of professionalCommon law damages (consequential damages for economic loss and diminution in value of property)Encourage MWLAP orderPractical incentive on polluter to deal with off-sites to avoid remediating twice and re-contamination of its site following cleanup

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Other Cases

Imperial Oil Limited v. City of Vancouver – City of Vancouver has no authority to require off-site soil remediation agreements as a condition of development permitsAppeal set for June 2005City still requiring on rezonings and subdivisions

Lawyers • Patent & Trade-mark Agents

Thank You!

Borden Ladner Gervais LLPLawyers • Patent & Trade-mark Agents



Recent Developments in Contaminated Sites Law – The Impact on Your Business Recent Developments in Contaminated Sites Law – The Impact on Your Business

Mary Jo Campbell Mary Jo Campbell

June 1, 2005June 1, 2005

I INTRODUCTION I INTRODUCTION

In 2004, the provincial government implemented many of its initiatives announced in

2003. This paper will review legislation and policy initiatives dealing with contaminated

sites brought into force over the last year since our last client seminar in May 2004.

Cases of interest over the last year will also be described. The impact of these

developments on business will be highlighted.

In 2004, the provincial government implemented many of its initiatives announced in

2003. This paper will review legislation and policy initiatives dealing with contaminated

sites brought into force over the last year since our last client seminar in May 2004.

Cases of interest over the last year will also be described. The impact of these

developments on business will be highlighted.

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II OVERVIEW OF CURRENT LEGISLATIVE INITIATIVES II OVERVIEW OF CURRENT LEGISLATIVE INITIATIVES

2.1 B.C. Environmental Management Act 2.1 B.C. Environmental Management Act

The B.C. Environmental Management Act, S.B.C. 2003, c. 53 (“EMA”) was brought into

force on July 8, 2004, together with certain provisions of the Environmental Management

Amendment Act, 2004, S.B.C. 2004, c. 18 (“Bill 13”). EMA repealed both the B.C.

Waste Management Act (“WMA”) and the B.C. Environment Management Act, although

Part 4 of EMA is, with certain limited exceptions, substantially the same as former Part 4

of WMA.

The B.C. Environmental Management Act, S.B.C. 2003, c. 53 (“EMA”) was brought into

force on July 8, 2004, together with certain provisions of the Environmental Management

Amendment Act, 2004, S.B.C. 2004, c. 18 (“Bill 13”). EMA repealed both the B.C.

Waste Management Act (“WMA”) and the B.C. Environment Management Act, although

Part 4 of EMA is, with certain limited exceptions, substantially the same as former Part 4

of WMA.

The principal contaminated site amendments contained in EMA, as amended by Bill 13,

which were brought into force on July 8, 2004 are as follows:

The principal contaminated site amendments contained in EMA, as amended by Bill 13,

which were brought into force on July 8, 2004 are as follows:

(a) the definition of contaminated site in Part 4 of EMA has been amended to include

the concept of concentrations of contaminants exceeding risk-based or

(a) the definition of contaminated site in Part 4 of EMA has been amended to include

the concept of concentrations of contaminants exceeding risk-based or numerical

criteria. The intention is to permit greater flexibility on remediation requirements

for sites which exceed numerical criteria but meet risk-based standards and do

not pose an unacceptable risk to human health or the environment. This

amendment will not have a practical impact until the B.C. Ministry of Water, Land


Recent Developments in Contaminated Sites Law – The Impact on Your Business By Mary Jo Campbell

2 Borden Ladner Gervais LLP

Lawyers • Patent & Trade-mark Agents www.blgcanada.com

& Air Protection (“MWLAP”), together with the Science Advisory Board, complete

the requirements for a streamlined risk assessment in the form of screening level

risk assessments (“SRA”), which are further described in section 3.2 below, and

until approved professionals on MWLAP’s roster can recommend approvals and

certificates based on them. These changes are urgently needed as a current

significant source of delay is the time required by MWLAP to review and approve

approvals and certificates for risk-based remediations. Rostered professionals

are not yet allowed to do so. Although MWLAP states the timeframe is 4 to 6

months, many certificates have taken over one year to obtain;

(b) EMA eliminates conditional certificates of compliance and simply refers to

certificates of compliance which may or may not have conditions regarding

management of any remaining contamination at the site. Again, the intention of

the government is to encourage the use of the risk-based approach to site

remediation. Lenders and purchasers should carefully review certificates of

compliance to ensure any conditions in the certificate are satisfactory to them,

particularly with respect to remaining contamination and any assumptions as to

use of the property;

(c) EMA no longer provides MWLAP with the right to take further action based

merely on a change in standards. This amendment removes an arbitrary source

of uncertainty in the finality of site remediation. However, the impact of this

amendment is limited as MWLAP will have the right to take further action if

information becomes available about “a contaminating substance at the site that

leads to a reasonable inference that the site poses a threat to human health or

the environment”;

(d) additional amendments in EMA continue to expand the role of “approved

professionals” on MWLAP’s roster in the investigation and remediation of sites.

This continues to streamline the time and cost in obtaining approvals in principle

(“AIP”) (i.e. an approval of a remediation plan) and certificates of compliance,

among other things. Generally, the quality of approved professionals on the

roster has been good to date. However, purchasers and lenders should always




consider having the certificate or approval, together with supporting reports,

independently reviewed as the certificate or approval will only be as good as the

underlying consultant’s reports;

(e) EMA contains provisions whereby the Minister of MWLAP, instead of the

Lieutenant Governor in Council, may make regulations on a variety of matters,

including setting standards and requirements for issuance of AIPs and

certificates of compliance. The director of MWLAP is also given the authority to

make regulations prescribing substances and risk-based or numerical standards

for the purpose of the definition of contaminated site. Such interim standards are

valid for one year and in the event of a conflict between a director’s interim

standard and a Minister’s standard, the director’s interim standard will govern.

The director is also given the authority to establish protocols on a variety of

matters. Although these expedited processes will provide flexibility to MWLAP,

there is no grandfathering for remediation work undertaken prior to any new

regulation or protocol. If these powers are not exercised judiciously, they may

result in uncertainty and unfair treatment for those in the process of carrying out

a remediation project;

(f) section 53(5) of EMA provides that a director of MWLAP may rescind an AIP or a

certificate of compliance if any fees are outstanding or if the conditions imposed

on the approval or certificate are not complied with. This is a new provision and

can result in an existing certificate being rescinded or terminated. In light of this

new provision, it is prudent for purchasers and lenders to obtain a representation

from the vendor or the borrower, as the case may be, that the terms and

conditions of the subject AIP or certificate of compliance are in good standing

and have been complied with and that all fees payable under Part 4 of EMA or

the regulations have been paid in full.

A number of provisions contained in Bill 13 have not yet been brought into force,

including the provisions creating the land remediation fund, providing the framework for

MWLAP to amend site profile requirements by way of regulation, providing for

procedures for contaminated site determinations to be set forth in a regulation and




creating a document entitled “Summary of Site Condition” to be signed by approved

professionals and on which MWLAP may rely in signing certificates or other such

documents. We understand that amending the site profile requirements are a priority for

MWLAP as there is insufficient staff to review the volume of site profiles received and to

make decisions on them. MWLAP anticipates issuing shortly another paper outlining its

revised proposal on this topic and providing for public comment over the Summer, with

MWLAP targeting to effect the changes in the Fall 2005. Finalizing the form of summary

of site condition is also a priority for MWLAP to enhance consistency in form in approved

professionals’ recommendations to MWLAP.

2.2 Contaminated Sites Regulation

The Contaminated Sites Regulation (“CSR”), B.C. Reg. 375/96, was amended effective

July 8, 2004 by B.C. Regs. 322 and 324/2004. The modifications were essentially

housekeeping in nature to reflect terminology and section changes in EMA. Additional

changes included the addition of the sediment criteria as Schedule 9 and generic

numerical soil and water standards for what were previously nonscheduled toxic

substances as Schedule 10. The modifications also reflect the use of the term

hazardous waste in lieu of special waste given the modification of the Special Waste

Regulation also effective July 8, 2004, further described below. Additional minor

modifications of the CSR include B.C. Reg. 346/2004 (correcting a typographical error in

the fee for allocation panels), B.C. Reg. 405/2004 (correcting the generic numerical

water standard for aquatic life for calcium), B.C. Reg. 464/2004 (making 2 minor

amendments to clauses relating to MWLAP fees) and Ministerial order M57 (amending

the generic numerical water standard for aquatic life for cobalt).

2.3 Hazardous Waste Regulation

The B.C. Special Waste Regulation was amended twice in 2004. The first modification

was contained in B.C. Reg. 214/2004 effective May 14, 2004. It consisted mostly of

housekeeping and consequential changes to the Regulation to incorporate prior changes

to the federal Transportation of Dangerous Goods Regulations and the Inter-Provincial

Movement of Hazardous Waste Regulations under the Canadian Environmental

Protection Act. The second modification was effected by B.C. Reg. 319/2004 effective




July 8, 2004. That modification re-named the Regulation, the Hazardous Waste

Regulation. Additional changes include the elimination of permitting for the storage,

treatment and recycling of hazardous waste provided the provisions of the Regulation

are complied with and adding the right of the director of MWLAP to require financial

security for hazardous waste storage facilities. Most secure landfills will, however,

continue to require permits. Given the complexity of certain existing hazardous waste

permits, the Regulation contains a new transitional provision in Section 54 whereby until

July 7, 2006, a director of MWLAP may order a specific permit authorizing the storage,

treatment, disposal or recycling of hazardous waste to remain valid and in force. Permit

holders should ensure that they take advantage of this window of opportunity where

appropriate. A comprehensive definition for “biomedical waste” has also been added to

the Regulation. A final phase of amendment of this Regulation is expected, but not until

late 2005 or early 2006.

2.4 Amended Protocol 6 – Eligibility of Applications for Review by Approved Professionals

The noted protocol was amended July 28, 2004 to further expand the reviews that can

be undertaken by approved professionals on MWLAP’s roster. The amendments also

permit Protocol 6 to be used for approvals or certificates on part of a contaminated site,

where remediation to numerical standards will be completed within five years of

issuance of an AIP and where local background soil concentrations adopted from

regional background soil quality estimates in Table 1 of Protocol 4 are used.

Since November 1, 2004, all applications for low to moderate risk sites must be

submitted as roster submissions by approved professionals based on MWLAP policy.

MWLAP review or external contract review is no longer available for such applications.

2.5 Ground Water Protection Regulation

The Ground Water Protection Regulation, B.C. Reg. 299/2004, was enacted under the

B.C. Water Act as one component of the Action Plan for Safe Drinking Water. The

Regulation came into force November 1, 2004. Initially, only the requirement for

registration of qualified drillers and installers was in force. However, the sections of the

Regulation dealing with groundwater protection, including requirements relating to




drilling, sealing, maintaining and closing wells, come into force November 1, 2005. The

Regulation applies not only to water supply wells, but also to groundwater monitoring

wells, remediation wells and geotechnical wells. Landowners, purchasers and

environmental consultants, among others, should ensure that the provisions of this

Regulation will be met commencing November 1, 2005 by vendors, contractors or

consultants responsible for installing, maintaining and decommissioning wells.

III OTHER POLICY INITIATIVES

3.1 Approved Professionals

The Roster Steering Committee (“RSC”) was requested approximately two years ago by

MWLAP to assist in developing the framework and tools for a system of licensed

environmental professionals (“LEPs”) to replace the existing roster of approved

professionals. The LEP subcommittee of the RSC submitted to MWLAP its report entitled

“British Columbia’s New Licensed Environmental Professional Framework” dated

December 15, 2004 which sets out the proposed framework for the new LEP system. The

anticipated commencement date for the system is April 1, 2006. The report proposes two

types of LEPs, the first being a numeric specialist and the second being a risk assessment

specialist. The report also contemplates two types of LEP review. Firstly, self-review

would be permitted on lesser risk sites. That would entail the same approved professional

performing the investigative and remedial work and also recommending to MWLAP

issuance of the approval or certificate. The second type of review is called “review of

others’ work” which would entail a peer review by a second approved professional on

higher risk sites. The proposed LEP Board would have primary responsibility for

performance assessments based on the audit of 1 in 10 reviews. MWLAP may also retain

the right to audit those performance assessments. The Committee is still reviewing how to

limit LEPs’ liability exposure to third parties arising, in particular, from the preparation of

summaries of site condition in support of regulatory sign-offs. Additional information may

be found at http://www.apeg.bc.ca/aboutus/cs/contam-sites.html.

3.2 Science Advisory Board

The Science Advisory Board was created by MWLAP in 2003. It has been developing

the requirements for SRAs (i.e. screening level risk assessments). A copy of the final

http://www.apeg.bc.ca/aboutus/cs/contam-sites.html




draft Screening Risk Assessment – Level 1 (SRA1) Guidance dated June 2, 2004, may

be found at http://www.sabcs.chem.uvic.ca/docs.aspx. It constitutes the first of four

levels of risk assessment being SRA1, SRA2, detailed risk assessment 1 and detailed

risk assessment 2. The SRA1 report sets out the proposed process to identify sites

which pose no unacceptable risk despite exceeding generic and matrix numerical

standards. The purpose is to determine whether there are any exposure pathways for

human and/or ecological receptors. If there are such pathways, further evaluation is

required. The SRA1 analysis will only be performed after completion of a preliminary

site investigation and detailed site investigation. It is expected that less than 10% of

sites will meet an SRA1 level. MWLAP has commented on the draft SRA1 Guidance

and expects a revised document to be made available for public comment over this

Summer. The Board’s proposal for SRA2s has not yet been posted to its website but is

expected to be issued by August 31, 2005. MWLAP also anticipates a review of the

numerical standards given the SRA analysis to ensure the numerical standards properly

reflect risk to human health and the environment. However, as CCME (the Canadian

Council of Ministers of the Environment) still uses the existing conventional numerical

standards, there will be resistance to material changes in standards given

federal-provincial harmonization objectives.

3.3 Other Policy Initiatives

MWLAP has not taken any further steps to implement previously announced policy

initiatives relating to the following:

(a) the identification and process applicable to high risk sites;

(b) the obligation to provide notice on commencement of site investigations;

(c) grandfathering in respect of a change in numerical standards during the

course of remediation;

(d) amendments to the liability provisions of EMA. It is hoped that this will be

addressed now that the election has passed. As CCME supports the

existing principles of liability under EMA, there will be resistance to

http://www.sabcs.chem.uvic.ca/docs.aspx




material changes in those principles given federal-provincial

harmonization objectives. However, MWLAP will likely give some

consideration to the topic and may clarify application of limitation periods

so as to provide better guidance on the timeframe for termination of

liability; and

(e) MWLAP is also conducting research into alternative dispute resolution

mechanisms for contaminated sites litigation, which could include

mandatory mediation or arbitration, among other things.

Please see my paper, “Recent and Proposed Changes to B.C. Contaminated Site

Regime” from our client seminar of May 5, 2004 for a detailed description of these and

other policy proposals being considered by MWLAP but which have not yet been

included in legislation or brought into force.

IV IMPACT OF RECENT CASES

4.1 B.C. Hydro Liable Following Amalgamation

In North Fraser Harbour Commission v. Environmental Appeal Board (January 20,

2005), the Supreme Court of Canada held BC Hydro liable for the pre-amalgamation

actions of British Columbia Electric Company. It was found to be a properly responsible

person under EMA to clean up the 9250 Oak Street site in Vancouver to which BC

Electric had transported coal tar for many years. The Court found that BC Hydro

possessed all of the assets and was subject to all of the liabilities of the amalgamating

entities as in a normal amalgamation despite the wording of the specific amalgamation

statute used to create BC Hydro. This is yet another decision of the Supreme Court of

Canada upholding and broadly interpreting environmental protection legislation. This

case will assist in resolving responsibility for remediation of other former BC Electric

sites, which BC Hydro had refused to remediate pending conclusion of this case.

4.2 Supreme Court Reinforces Polluter-Pay Principle

In October 2003, the Supreme Court of Canada also reinforced the polluter-pay principle

in Imperial Oil Ltd. v. Quebec (Minister of Environment), [2003] S.C.J. No. 59. Imperial




Oil operated a petroleum products depot from 1920 to 1973 on the subject land.

Following the sale of the land in 1987, the developer remediated the site, obtained

Ministry certification and developed the site into a residential neighbourhood. In 1994,

contamination concerns arose and the Quebec Minister of Environment issued an order

requiring Imperial Oil to take remedial measures in respect of the site. Imperial Oil

refused to comply with the order on the basis that the Minister was in a conflict of

interest as a result of having supervised earlier cleanup efforts at the site and being

named in a number of lawsuits by subsequent purchasers. The Court found that the

Minister had the authority to issue the order. Although the case dealt primarily with the

question of procedural fairness, it is seen as an endorsement of the polluter-pay

principle despite the sale of the property and the intervening activities of the developer.

4.3 Remediation Cost Recovery Not Barred by Ultimate 30 Year Limitation Period

The case Workshop Holdings Limited v. CAE Machinery Ltd., 2005 BCSC 631 (BC

Supreme Court) involved a remediation cost recovery action by a landowner against a

company that operated a brass foundry from 1924 to 1941 at 1216 – 1224 West Pender

Street, Vancouver, B.C. Mr. Klokstad, the father of the president of the plaintiff

landowner, originally acquired the property in 1960. The plaintiff, Workshop Holdings,

discovered the copper and zinc contamination when it began developing the property in

1997. Workshop obtained an AIP for its remediation plan in January 1998 and

completed the remediation and obtained a certificate of compliance in July 1998.

The Court concluded that the site was a contaminated site based on the environmental

consultant’s report. More significantly, the Court decided that the action was not barred

by the 30 year ultimate limitation period under the BC Limitation Act. It concluded that

the remediation cost recovery action under EMA was a new civil cause of action which

did not arise until 1993 when the current legislative scheme first created liability for a

contaminated site.

The Court also concluded that Mr. Klokstad was not a responsible person based on the

innocent purchaser exemption in what is now section 46(1)(d) of EMA. The Court found

that there was no evidence to suggest that the contamination would have been obvious

to a purchaser of the property in 1960 and that in the Court’s view, knowledge of the




prior use of the property as a foundry does not itself establish knowledge that the site

was contaminated. The Court also found that Mr. Klokstad did not cause or contribute to

the contamination of the property by relocating the existing contaminated soil on the site

when he built a warehouse on the site. As there was no evidence of any other

occupants who produced goods, which would result in copper and zinc contamination,

the Court found that there were no other responsible persons.

The Court also reviewed the various types of remediation costs claimed to determine if

they were reasonably incurred and in doing so, deleted costs relating to contaminants

caused by others on the site and costs relating to demolition materials from the

warehouse building built by Mr. Klokstad in 1964 long after the defendant vacated the

site. The Court also found that it was reasonable to obtain an AIP, rather then simply

independently remediating. Workshop recovered $105,506.14 of the originally claimed

remediation costs of $116,480.

This case is of particular interest given its conclusion that the 30 year ultimate limitation

period is not applicable to a remediation cost recovery action under EMA (or its

predecessor, WMA) which limitation would only commence running in 1993 when the

statute first created liability for a contaminated site. This finding has provided greater

certainty on the application of this limitation period to remediation cost recovery claims.

This case also supports the right of recovery of a landowner against the original polluter

notwithstanding the length of ownership of the landowner and intervening use of the

property. This case also more broadly interprets the innocent purchaser exemption than

was generally expected.

4.4 Scope of Recoverable Remediation Costs

In the case Canadian National Railway Company et al v. A.B.C. Recycling Ltd., 2005

BCSC 647, the BC Supreme Court considered the right of a property owner to recover

its remediation costs from a neighbouring property owner under the remediation cost

recovery provisions of WMA (now EMA). The Court concluded that a two step approach

must be followed to determine whether remediation costs were reasonably incurred as

required under the Act. Firstly, the Court must determine whether the plaintiff acted

reasonably with respect to remediation of the contamination and then determine whether




the costs themselves were objectively reasonable. Most importantly, the Court

concluded that legal costs were recoverable on a solicitor-client basis (and not on the

much lower tariff basis) as part of the costs of remediation which are recoverable under

the Act. However, the legal costs must be reasonable to be recoverable. The Court

concluded that this approach to recovery of legal costs on a solicitor-client basis was

more consistent with the underlying principles of the Act – “polluter-pay, prevention of

pollution and deterrence, and speedy remediation of contaminated sites.” CN was

awarded $322,288.60 of the $340,998.13 claimed, plus its reasonable legal costs

actually incurred.

4.5 Neighbours’ Inability to Challenge Ministry Approval of Remediation Plan

4.5.1 Super Save Case

In the decision 427958 B.C. Ltd. (dba the Super Save Group of Companies) v. BC Hydro

and Power Authority, (Appeal No. 2004-WAS-007(a), November 2, 2004), the BC

Environmental Appeal Board (“EAB”) held that Super Save had no standing to appeal

the decision of MWLAP to issue an AIP to BC Hydro as it was not a “person aggrieved”

under Section 100(1) of EMA (formerly Section 44(1) of WMA). MWLAP issued an AIP

in April 2004 to BC Hydro in respect of the remediation of a contaminated site located on

Rock Bay, Victoria, adjacent to property owned by the federal government and

administered by Transport Canada. BC Hydro property and adjacent lands were

contaminated with coal tar and other contaminants, including as a result of the operation

of a coal gas manufacturing plant from 1862 to the late 1940’s. The AIP applied only to

the BC Hydro property and not any off-site impacts. The remedial action plan was

developed jointly by BC Hydro and Transport Canada who had been working together

since 1996 on the remediation strategy. The estimated cost of the remedial plan under

the AIP was $30,500,000. Super Save owns lands adjacent to the BC Hydro property,

which lands are also contaminated. Super Save opposed issuance of the AIP on the

basis MWLAP failed to ensure adequate investigation of off-site impacts of the

remediation plan and that MWLAP did not provide sufficient notice to neighbours or

permit neighbours sufficient opportunity to provide input on the application.




The EAB concluded that Super Save is not a “person aggrieved” by the decision to issue

the AIP and therefore has no standing to challenge the AIP. Although MWLAP has the

discretion to include conditions in an AIP, there is no express statutory requirement or

obligation for MWLAP to include conditions that are beyond the scope of the remediation

plan, such as the remediation of adjacent contaminated properties. The EAB concluded

that Super Save is not aggrieved by anything that is in the AIP or remediation plan which

will assist in remediating a source of contamination on the adjacent BC Hydro site.

Super Save did not provide evidence that it would be prejudicially affected by anything in

the AIP. In addition, the legislation specifically permits MWLAP to issue an AIP for part

of a contaminated site so that the AIP cannot be challenged on the basis it did not relate

to the whole contaminated site. The EAB also noted that the power to issue an AIP

must be considered in light of the objectives of the legislation, which include the

expeditious remediation of contaminated sites. The EAB stated that MWLAP’s role is as

follows:

“… to review the remediation proposal and decide whether it should be

implemented, bearing in mind that the proposal should be consistent with

the purposes of Part 4 of the Act, including the protection of the

environment and human health, as well as the expeditious remediation of

contaminated sites. In cases such as this, where the AIP endorses a

remediation plan that is the product of years of negotiations with

government and amongst the owners of contaminated lands, appeals by

persons who are not subject to the AIP or are not party to the remediation

proposal may unreasonably delay the remediation of contaminated sites,

and may discourage private parties from negotiating ways to remediate

contaminated sites. Legitimate AIPs should not be frustrated by persons

who have grievances that go beyond the terms and requirements of the

AIP.”

The EAB also noted that there are other avenues of recourse for protection of

neighbours. Firstly, Super Save may remediate its property and sue BC Hydro for

recovery of its reasonably incurred remediation costs under EMA. In addition, should

circumstances change or new information arise, MWLAP has the discretion to require




additional remedial action to address contamination. Finally, nothing in the AIP

precludes BC Hydro, Transport Canada, Super Save and other interested parties from

negotiating ways to co-ordinate the remediation of their respective properties.

4.5.2 Squamish Terminals Case

The EAB decided a similar case on March 22, 2005, Squamish Terminals Ltd. v. Director

of Waste Management (Appeal No. 2004-EMA-002(a)). In this case, Squamish

Terminals challenged the MWLAP decision to issue an AIP to the District of Squamish

for the site on which Nexen Inc. (formerly known as Canadian Occidental Petroleum

Ltd.) and others operated a chlor-alkali plant from 1964 to 1991. The contamination

from the plant has been the subject of a remediation order since 1999. The AIP related

to a remediation plan for the land on which the plant was located, excluding adjacent

properties and waterbodies which were also the subject of the remediation order.

Squamish Terminals owns a nearby deep-sea terminal and had been on MWLAP’s list of

stakeholders for distribution of information regarding the remediation under the

remediation order.

The EAB found that there was no compelling reason to deviate from the approach taken

in the Super Save case above. The EAB concluded that the appropriate test to be

applied to determine whether a person is “aggrieved” for the purpose of having standing

to challenge an AIP is whether the person has disclosed sufficient evidence to allow

EAB to reasonably conclude that it has a genuine grievance because an order has been

made which prejudicially affects its interests. The EAB also indicated that it must

consider whether the appeal will frustrate the goals of the legislation. The EAB followed

the reasoning in the Super Save case, above, and concluded that there was no evidence

to suggest that the AIP or the remediation plan would cause additional costs to

Squamish Terminals or would cause the contamination to migrate and adversely affect

Squamish Terminals. The EAB pointed out that the prejudice claimed by Squamish

Terminals related primarily to what was not contained in the AIP, including safeguards to

ensure adjacent properties were properly remediated and not the source of future

problems, measures to address air quality monitoring and other monitoring measures.

The EAB concluded that Squamish Terminals had not demonstrated that there was




anything in the AIP that would prejudicially affect Squamish Terminals. It therefore

found that Squamish Terminals did not have standing to challenge issuance of the AIP.

4.5.3 Practical Impact

These cases will adversely affect the options available to innocent neighbours to require

polluting parties to remediate migrating contamination. In the early years following

enactment of the contaminated site provisions in WMA in 1997, MWLAP would not

generally issue AIPs or certificates of compliance for a contaminated site unless the

contaminated parcel of land was remediated together with any related off-site

contamination. The definition of “contaminated site” is not limited to legal boundaries,

but rather relates to the area of the land that contains contamination (including both on-

site and off-site). MWLAP would only issue AIPs or certificates on part of a site

sparingly and only if all contamination emanating from the subject part of the site was

remediated. These cases evidence formal recognition that expeditious remediation of

contaminated sites or parts of such sites is paramount and should not be delayed

through disputes with neighbours unless those neighbours can prove that the

requirements in the AIP or the remediation plan prejudicially affect their interests on their

own site. That is a difficult test to meet as most remediations will reduce contamination,

including migrating contamination, and therefore benefit neighbours. Except in limited

circumstances where a neighbour is prejudicially affected by the contents of an AIP or

remediation plan, neighbours will need to consider the following avenues of action:

(a) raise issues of concern with the polluting owner, its approved professional under

the roster, MWLAP and the municipality as early as possible in the approval and

remediation process;

(b) actively respond to any communications with governmental authorities and

others regarding the investigation or remediation of nearby sites;

(c) insist on your rights to notice of migrating contamination under sections 57 and

60.1 of the CSR. It is an offence for the polluter not to provide such notices;




(d) consider taking steps to trigger an audit of the polluter’s approved professional

under the roster through MWLAP and the Roster Steering Committee;

(e) itself perform the remediation and pursue the polluter for its reasonably incurred

remediation costs together with any common law damages, including damages

for diminution in value of the property (i.e., stigma damages). The Ontario Court

of Appeal case, Tridan Developments Ltd. v. Shell Canada Products Ltd. (2002)

57 O.R. (3d) 503, may be of assistance as it concluded that a neighbour affected

by migrating contamination was entitled to remediation to a pristine state.

However, it is possible, that that case will be interpreted narrowly as the cost to

remediate to pristine standards was not significantly more than the cost of

meeting Ministry standards of remediation. The Canadian Turbo case, below,

will similarly be of assistance; and

(f) take steps to encourage MWLAP to issue a remediation order. However unless

there is harm to fish, fish habitat, human health or an issue of public interest,

MWLAP will be reluctant to become involved in a private dispute.

In the event of remediation, neighbours should seek to obtain a separate certificate of

compliance for their lands given section 53(5) of EMA which, permits MWLAP to rescind

an AIP or certificate of compliance if the conditions contained therein are not complied

with. However, to obtain a separate AIP or certificate, MWLAP will require separate

environmental reports and separate submission fees, which will increase the cost, but

are wise in the long-term given the implications of section 53(5) of EMA. Note that both

the Super Save and Squamish Terminals cases involved large, expensive, contentious

remediations. It is possible that on simpler less contentious sites, neighbours will at a

practical level have more influence on the scope of remediation.

The polluter will also generally have an incentive to deal with off-site contamination at

the same time as on-site contamination to avoid the cost of having to remediate the

same location twice and to minimize the risk of recontamination of its site through

migration of off-site contamination back into its site.




4.6 Consequential Losses Recoverable

In 2004, the Alberta Court of Queen’s Bench in 618369 Alberta Ltd. v. Canadian Turbo

(1993) Inc., (2004) ABQB 283, extended the scope of damages recoverable on a

contaminated site to the consequential economic losses of an innocent owner of

contaminated property.

618369 Alberta Ltd. was in the business of the retail and wholesale distribution of

exercise equipment. Its building was located next to a gas station owned by Shell

Canada and formerly by Canadian Turbo. Shell’s gas tanks had leaked and

contamination had migrated to the 618369 property. Shell took responsibility for the

contamination and, since July 1999, it had been remediating the site and had paid for all

costs of remediation.

618369 was trying to expand its business but lenders were not prepared to accept the

land as security and potential purchasers were unable to obtain financing. It brought a

common law claim (in nuisance, trespass and negligence), not for the costs of

remediation which Shell was paying, but for the other economic impacts on its land and

business, in particular its loss of profit due to the inability to sell its land and move, or

alternatively its inability to use the land as collateral to finance business expansion.

618369 also claimed devaluation of the property despite Shell’s remediation.

Although the Court expressly stated that this was not a case of “stigma” damages, it

nonetheless awarded $20,000 for diminution in the value of the site. The Court

concluded, despite remediation efforts, that it was likely some contamination remained at

the lands.

The Court also accepted that 618369 could claim for the loss of use of the site when it

was not available as security for financing. However, 618369 failed to prove it had

suffered any loss from its inability to finance. At the same time, the Court found 618369

had intended to move, but was unable to sell the property because of the contamination,

and lost profits as a result. Based on expert business valuation evidence, the Court

awarded $74,000.




Finally, the Court accepted that 618369 had incurred legal costs to deal with the

remediation and the negotiations to sell the site in order to mitigate its damages. These

were legal costs separate from its litigation costs and qualified as damages incurred as a

result of the contamination. The Court awarded a further $8,400. The Court rejected the

claim for lost productivity as there was no evidence that 618369 had required additional

staff or resources to replace the time spent by its management in dealing with the

contamination.

This case illustrates that property owners, who suffer from contamination which they

have not caused, should carefully consider and document all business impacts arising

from the contamination and include a common law claim for these damages. The

statutory cost recovery action in British Columbia’s EMA would not cover these damages

as it is restricted to remediation costs.

The threat of consequential damages and damages for diminution in value of a property

creates a material incentive to resolve a dispute given the potential for significant

damages depending on the property and the affected business.

4.7 Limitation on City of Vancouver’s Conditions for Development Permits

In the case, Imperial Oil Limited v. City of Vancouver, 2005 BCSC 387, Imperial Oil

successfully challenged the authority of the City of Vancouver to require an off-site soils

agreement dealing with remediation of contamination in City streets, as a condition of a

development permit for a site at the corner of Fraser Street and East 25th Avenue in

Vancouver. The Court issued a mandamus order requiring the City to issue the

development permit. It concluded that the Vancouver Charter (section 565A(b)) only

conferred on the City a power to impose conditions on issuance of a development permit

related to the development in question and not off-site environmental contamination and

associated liabilities unrelated to the development for which the permit was sought. The

power in relation to development permits must be exercised by the City only for reasons

connected to the appropriateness and impact of the proposed development. The

general authority to provide good rule and government of the City in section 189 of the

Vancouver Charter also does not confer the necessary authority on the City.




These off-site soils agreements have long been criticized by the development industry

as excessive and unfair. It was perceived that the City was using its regulatory approval

powers to resolve civil disputes on more favourable terms. The agreements were long,

complicated and time-consuming to negotiate with the City, often resulting in months of

delay in obtaining remediation approvals over and above those obtained from MWLAP

under EMA. It is hoped that the City will eliminate the requirement for these agreements

as a condition of development permits or other development approvals.

The City is however appealing this decision. The appeal is scheduled for June 2005. In

the meantime, the City is reviewing each development on a case-by-case basis to

determine if an on-site soils agreement and/or an adapted off-site soils agreement is

required as a condition of a development permit. In addition, the City does not view the

case as limiting its broader statutory discretion in rezonings or subdivisions and

continues to require such agreements in those circumstances.

V CONCLUSION

Despite the plethora of policy initiatives announced by MWLAP in 2003, only limited

legislative changes occurred during the last year. Although EMA only contains modest

changes to the contaminated site provisions of WMA, the legislation does create the

framework for future changes, which MWLAP intends to make. Progress has been

made on developing the guidance for screening level risk assessments and in the

development of the licensed environmental professionals system. It is hoped that these

will be brought to a conclusion expeditiously and hopefully by the Fall of 2005 and April

2006, respectively. Case law continues to support the broad and liberal interpretation of

environmental protection legislation, recourse against polluters and the recovery of

reasonably incurred cleanup costs. Innocent neighbours have had their practical

avenues of recourse limited in respect of challenging the issuance of AIPs where the

contents of AIPs do not prejudicially affect their interests. Cases should continue to be

monitored for clarifications and refinements in the application of the contaminated site

provisions of EMA. With the provincial election behind us, more legislative changes and

policy initiatives are expected, particularly if the new Minister of MWLAP is dynamic and

supportive of change. The most likely developments will in our view relate to expanding


19

risk-based remediation through screening level risk assessments, expanding the

approved professionals’ role in risk-based remediation, setting up the licensed

environmental professional system and streamlining the site profile process. The

development of alternative dispute resolution processes is also possible, particularly if

recourse is limited at a practical level on larger remediations for innocent neighbours

affected by migrating contamination.

Borden Ladner Gervais LLP Lawyers • Patent & Trade-mark Agents

www.blgcanada.com Document: 2113266:01

Air Issues: An Update on Canadian Climate Change Policy and GVRD Developmentspresented to:Borden Ladner Gervais Environmental Seminar

June 1, 2005Vancouver, BC

Jock FinlaysonExecutive Vice PresidentBusiness Council of British [email protected]

mailto:[email protected]

Climate Change Policy Developments

550

600

650

700

750

800

850

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

mT

CO

2e

Kyoto Target 560 mT

810 mT

Other policies & programs

Large Emitter targets

830+ mT

Gov’t projection in 2001

for 2000 to 2010

699

725 731

Recent Revision ofTrend in Emissions

?

Canada’s Kyoto Gap and Federal ProgramsCanada’s Kyoto Gap and Federal Programs

Plan Purports to Meet Kyoto TargetPlan Purports to Meet Kyoto TargetPlan Element Reduction from BAU mT

Climate Fund 75 – 115Partnership Fund 55 – 85

LFE targets36

(45 - 9 for Tech Credits)Auto agreement 5.3Renewables (May need more $) 151-tonne challenge 5Greener government 1Other programs 45Sinks under business as usual 0 - 20Total 237.3 – 327.3

Federal Climate Change Plan: GeneralFederal Climate Change Plan: General• Compared to the preceding (2002) plan, there is less

focus on short-term targets and quick GHG reductions

• Climate Fund will allow federal government to buy domestic and foreign reductions. Partnership Fund created to promote reductions jointly with the provinces

• Large Final Emitter targets, plus auto sector agreement

• Various other programs, e.g.: One-tonne challenge, increased support for renewable energy, ‘greening government’, carbon sinks, R&D expenditures

• Unrealistic estimates of what can be achieved» the new plan is likely to leave a residual gap of around

150 mT per year by end of the 2008-10 period

Federal Climate Change SpendingFederal Climate Change Spending• A minimum of $10 billion, possibly much more, over next several

years on climate change related initiatives. Selected elements:» Climate Fund – a ‘minimum of $1 billion’ to support

projects/actions that reduce domestic GHGs» Partnership Fund -- $2-3 billion for joint projects with provinces to

reduce emissions. Focus on technological advances and infrastructure investments. Requires MOUs with provinces

» Greenhouse Gas Technology Investment Fund – large final emitters can invest in this to help offset part of their emission reduction obligations (up to total of 9 Mt.). Should not involve a drain on the public purse

» Budget 2005 allocates more than $700 million over several years for housing retrofits plus support for wind power, small hydro, biomass, landfill gas, and other renewable energy

» An unknown amount to make up Canada’s GHG reduction “deficit” under Kyoto by purchasing credits on foreign carbon exchanges – at least $1 billion, probably much more

Climate Change Plan: LFEsClimate Change Plan: LFEs• No credit for early action. But lower targets vs 2002 plan• Previous $15 per tonne price cap commitment will be

honoured (pp. 40-42) – but for how many years?• LFE targets – overall reduction of 45 mT from revised

business as usual projection, of which LFEs can get credit for up to 9 mT for contributions to Technology Investment Fund. Regulation under CEPA. Other points:» 15% on other covered emissions, but no more than

12% overall» no reduction on fixed process emissions» flexibility re: compliance options» best available technology economically achievable

(BATEA) targets for new facilities – but who will determine what qualifies as BATEA?

LFE ImplementationLFE Implementation• ‘Working assumption’ is regulation under CEPA Part 5

» will consult on how CEPA can be used

» objective to draft regulations by end of 2005

• Equivalency agreements with provinces that want them, Ottawa hopes to co-opt provinces and offload regulatory responsibility (but will retain control over LFE targets)

• Alberta working in parallel on its own regulations

• BC still pondering. Other provinces?

• Uncertainty re final LFE implementation details due to unsettled political situation in Ottawa

Project Green Project Green -- IncentivesIncentivesTax incentives …• CCA rate climbs to 50% from 30% for investments in

“highly efficient” co-generation equipment and renewable generation equipment in class 43.1 of Income Tax Act(e.g., wind turbines, 50 MW or less hydro facilities, solar heating equipment)

• Class 43.1 to be extended to cover heat distribution assets of energy systems (e.g., pipelines), where the heat energy is produced with eligible co-gen equipment

• Qualifying start-up costs of projects using selected energy efficient technologies to be eligible for immediate write-off as Canadian Renewable and Conservation Expenses (can also be flowed through to investors as part of flow-through share subscription)

Project Green Project Green -- IncentivesIncentivesRenewable incentives …• Increased funding for 2001 Wind Power Production

Incentive and for Renewable Power Production Incentive (latter applies to small hydro, biomass, tidal power, etc.).

• Budget 2005 commits $920 million over 15 years (!) for wind power incentives. Incentive payment of 1 cent per kw hour of production for first 10 years of operation for eligible projects commenced before 2010

• For other renewable power production, Budget 2005 commits $886 million over 15 years (!). Payment of 1 cent per kw hour of production for first 10 years of operation for projects commissioned between March 31, 2006 and April 1, 2011

Climate Change Plan: What Lies AheadClimate Change Plan: What Lies Ahead• Conclude implementation details re: GHG emission

reductions by LFEs

• Clarify nature of provinces’ role and participation. Ottawa is seeking MOUs with provinces and has $ to offer

• Prepare for upcoming international meetings -- July 2005 G8 and December 2005 COP 11

• Monitor progress on moving toward Project Green targets for LFEs and other Plan elements

• Determine Canadian targets and policy options post 2012

BC Climate Change Plan BC Climate Change Plan –– Key ThemesKey Themes• Released in December 2004. Accepts general view that

human-induced climate change is occurring• Does not propose a specific provincial GHG emissions

reduction target, nor significant new regulations, taxes or fees

• But the Plan does pledge to retain BC’s status as Canada’s third lowest per capita GHG emitter

• Risk management focus – work to reduce emissions but also need to adapt to climate change impacts

• Emphasizes cooperation/collaboration with Ottawa to minimize regulatory complexity, support economic revitalization, protect BC’s interests, and ensure fair treatment of the province

• Asserts BC ownership of carbon sinks

BC Climate Change Plan BC Climate Change Plan ---- ActionsActions• 40 specific actions – some already under way, others planned

• Actions grouped under several headings:» Sustainable energy production/efficient use (e.g.,

implement 2002 BC Energy Plan; develop strategies for hydrogen and fuel cells and alternative energy)

» Efficient infrastructure – transportation, buildings + communities (e.g., incorporate climate change into transportation planning and investments; update minimum energy efficiency standards for equipment)

» Sustainable forest and carbon sink management (e.g., pine beetle mitigation; reduce agriculture emissions by 8%)

» Water management (e.g., implement Drought Action Plan)» Government leadership and outreach (e.g., retrofit

provincial buildings; use cleaner fuels in gov’t vehicles)

GVRD Air Quality Management Plan Update

GVRD Air Regulation GVRD Air Regulation ---- BackgroundBackground• Authority to manage air quality and pollution delegated to

GVRD by the BC government» GVRD the only region in the province with such

authority (some other regions want the same)

• GVRD adopted the first Air Quality Management Plan (AQMP) in 1994

• Main focus of first AQMP was common local air contaminants and other air pollutants (not greenhouse gas emissions)» nitrogen oxides, volatile organic compounds, sulphur

oxides, inhalable fine particulate matter (PM10), fine particulate matter (PM2.5), carbon monoxide

Revised Air Quality Management PlanRevised Air Quality Management Plan• In July 2001, GVRD Board instructed staff to review the

AQMP “within the context of social, economic and environmental sustainability as a fundamental objective”

• Determined that the 1994 Plan required updating to:» incorporate sustainability principles» take into account new science on air quality and health» modernize ambient air quality objectives» consider updated emissions forecasts» revise priority actions» “reflect increased concern about climate change”

• Two workshops held in Spring 2004

• Feb 2005, GVRD released “Greater Vancouver’s Air Strategy: Proposals for the Air Quality Management Plan”

Air Quality in the Region is Good Air Quality in the Region is Good and Getting Betterand Getting Better

• Studies of metropolitan areas reveal that Greater Vancouver has among the best overall air quality of any urban region in Canada/US

• One recent study found that Greater Vancouver enjoys the cleanest particulate ambient air quality among 90 North American cities (Vedal et al., Environmental Health Perspectives, January 2003)

• Most indicators of local/regional air quality have improved appreciably over time

Air Quality in the Region is Good Air Quality in the Region is Good and Getting Betterand Getting Better

• Dr. John Blatherwick, Chief Medical Officer, Vancouver-Coastal Health Region:

“At every opportunity I get, I explain that we have outstanding air quality in the Lower Mainland and are in no danger of becoming ‘another Los Angeles’.”

• Unfortunately, this positive picture and message tends to be downplayed by the GVRD

Source: Estimates derived from GVRD 2003 Sustainability Report.

Emissions of common air contaminants and smog-forming pollutants have fallen in the region since the mid 1980sApproximate 38% decrease in overall air emissions from 1985 to 2000Note: only a single “air quality advisory” was issued by the GVRD in 2003

Regional Air Emissions Trends, 1985Regional Air Emissions Trends, 1985--20032003

0100,000200,000300,000400,000500,000600,000700,000800,000900,000

1985 1990 1995 2000 2003

Common air contaminants

Smog-forming pollutants

metric tonnes

GVRD Air Quality ForecastGVRD Air Quality Forecast• GVRD predicts local air quality will deteriorate because of

growth in population and vehicles, rising marine emissions, and other factors. Draft AQMP forecasts increased emissions of SOX, PM10, PM2.5, diesel PM, ammonia, and greenhouse gases (p. 11)

• But there are reasons to anticipate further improvements in air quality…

» improvements in fuel quality, e.g. low sulphur diesel» advances in auto technology and fuel efficiency» initiatives to control marine emissions» lifecycle replacement of vehicles, stationary equipment

(boilers/heaters), and other elements of the region’s industrial/commercial capital stock

• Goal 1: Minimize the Risk to Public Health from Air Pollution» Reduce regional ambient levels of PM10, PM2.5 and

ground level ozone» Reduce emissions of PM10, PM2.5 and ozone

precursors» “Improve local air quality”

• Goal 2: Improve Visibility» Reduce regional ambient PM2.5 levels» Reduce emissions of PM2.5 and its precursors

• Goal 3: Minimize GVRD’s Contribution to Climate Change» Reduce regional greenhouse gas emissions

GVRD Proposed Clean Air Strategy: GVRD Proposed Clean Air Strategy: Goals and Directions for ActionGoals and Directions for Action

Ambient Air StandardsAmbient Air Standards• Federal and Provincial Environment Ministers have

recommended Canada Wide Standards (CWS) for ambient air quality. GVRD meets CWS standards today

• Draft AQMP proposes ambient air standards that are more stringent than CWS

• Adoption of these very strict standards will lead to undue public alarm regarding air quality and potentially unnecessary stack emission standards

• Standards applied in Whatcom county are significantly less restrictive than GVRD recommended standards

• Adopting more stringent local ambient standards will likely improve air quality by exporting GVRD facilities/jobs to other parts of the airshed

Problems with AQMP ProcessProblems with AQMP Process• Inconsistent with GVRD’s purported commitment to ‘sustainable

development’ because of failure to incorporate economic, competitiveness, and social considerations» AQMP is actually a classic example of “silo” policy-making» this reflects, in part, lack of GVRD mandate to address economic

and business issues• Reliance on worst-case forecasts of future emissions• Propensity to selectively cherry-pick ambient standards/objectives,

without accounting for context or asking whether other jurisdictions have attained their own standards» why should ‘good air’ be defined as one thing in GVRD and

something different in adjacent regions or the rest of BC?• Concern that GVRD approach to ‘continuous improvement’ will not take

account of the capital planning cycle for industrial and commercial facilities

• Because it is a long-term global issue and is being dealt with by senior levels of government, GVRD should not focus on climate change orseek to regulate industrial/transportation emissions of GHGs

Appendix

Source: Natural Resources Canada. Note: Total B.C. emissions 67.5 million tonnes CO2 equivalent

Distribution of BC Greenhouse Gas Distribution of BC Greenhouse Gas Emissions, 2002Emissions, 2002

Agriculture, Waste &

Other13%

Transport36%

Other Industry

19%

Fossil Fuel Production & Pipelines

17%

Electricity2%

Residential & Commercial

13%

Source: Natural Resources Canada.

Greenhouse Gas Emissions Per Capita, Greenhouse Gas Emissions Per Capita, 20022002

0

20

40

60

80

BC AB SK MN ON PQ ATL PEI

tonnes CO2e per person

Source: Statistics Canada, May 2004.

Vancouver CMA ranks last among major Canadian urban areas in the growth of average employment incomes. One factor behind this poor performance is the loss of significant numbers of relatively high-paying jobs in manufacturing and other industry sectors.

Preliminary data for 2003 (released last week) shows that the Vancouver region’s poor relative and absolute performance continues.

Greater Vancouver Greater Vancouver –– A Very Weak A Very Weak Performer on Growth of IncomesPerformer on Growth of Incomes

-4%-2%0%2%4%6%8%

10%12%

Can

ada

Edm

onto

n

Otta

wa-

Hul

l

Cal

gary

Que

bec

City

Hal

ifax

Mon

trea

l

Win

nipe

g

Sask

atoo

n

Ham

ilton

Toro

nto

Lond

on

Vict

oria

Vanc

ouve

r

Change in Median Real Employment Income, 1997-2002Major Census Metropolitan Areas

Source: GVRD Draft Clean Air Strategy, February 4, 2005.

GVRD Management Levels and Proposed GVRD Ambient GVRD Management Levels and Proposed GVRD Ambient Air Quality Objectives (AQOs)Air Quality Objectives (AQOs)

Air Contaminant

Averaging Time Units

Current GVRD Mgmt Levels

Proposed GVRD Air

Quality Objectives

Does Greater Vancouver

meet this new AQO at the

regional level?1-hour ug/m3 35,000 30,000 YES8-hour ug/m3 15,000 10,000 YES1-hour ug/m3 400 200 YESAnnual ug/m3 100 40 NO1-hour ug/m3 900 450 NO24-hour ug/m3 300 125 YESAnnual ug/m3 60 30 YES1-hour ug/m3 160 160 NO8-hour ug/m3 126 NO24-hour ug/m3 50 50 NOAnnual ug/m3 30 20 YES24-hour ug/m3 25 NOAnnual ug/m3 12 YES

Fine particulate matter (PM2.5)

Inhalable particulate matter (PM10)

Ozone

Sulphur dioxide

Nitrogen dioxide

Carbon monoxide

Source: GVRD Draft Clean Air Strategy, February 4, 2005.

CanadaCanada--Wide Standards for Particulate Matter and OzoneWide Standards for Particulate Matter and Ozone

Air Contaminant Ozone Fine particulate matter (PM2.5)

Averaging Time 8-hour 24-hourUnits ug/m3 ug/m3

Canada-wide Standard 126 30

Achievement

Achievement by 2010, based on the 4th

highest measurement annually, averaged over 3 consecutive

years

Achievement by 2010, based on the 98th

percentile ambient measurement annually,

averaged over 3 consecutive years

Does Greater Vancouver meet this CWS?

YES YES

Law

yers

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tent

and

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de-m

ark

Agen

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Deborah H. OverholtBorden Ladner Gervais, LLP

June 1, 2005

RECENT PROVINCIAL AND FEDERAL

LEGISLATIVE AND REGULATORY DEVELOPMENTS

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2

OVERVIEW

PROVINCIALImplementation of previous initiatives

No major new initiatives

FEDERALSARA

Climate Change initiatives

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yers

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3

PROVINCIAL DEVELOPMENTS

EMAWDR Codes – slow progress

Planned Codes – 2005/2006Industrial non-hazardous landfillsVehicle dismantling and recyclingConcrete and concrete productsPrimary wood manufacturingSoil enhancement using compost

WDR Fees

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yers

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tent

and

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Agen

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4


Fish Protection Act/Riparian Areas Regulation

No local government approval of development in riparian assessment area without QEP assessment

Lower Mainland (excluding City of Vancouver), East Coast Vancouver Island, Southern Interior

Residential, commercial, industrial activities

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5


Not agricultural, institutional, mining, forestry-related, hydroelectric

Riparian assessment area = 30 m. from high water mark of stream or top of ravine bank depending on width

QEP assessmentNo HADDNo HADD if protect SPEA Fisheries Act 35(2) authorization

More stringent local bylaws allowed

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yers

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6


Wildlife Amendment ActMirror SARA provisionsPrevent federal encroachment Not in force

MWLAP Compliance and Enforcement Policy

Reduce regional differences Ensure best enforcement tool

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7

FEDERAL DEVELOPMENTS

SARARemainder in force June 2004 Canada/B.C. Agreement

CEPA GHG reporting Substance regulation 5 year review

Fines and PenaltiesNot deductible


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THANK YOU!




C

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É


RECENT PROVINCIAL AND FEDERAL ENVIRONMENTAL REGULATORY DEVELOPMENTS

Deborah H. Overholt June 1, 2005

A. INTRODUCTION

British Columbia’s environmental agenda for the past 12 months has largely focussed on

implementing legislative and regulatory changes announced in 2003, including bringing the new

Environmental Management Act into force. Implementation of these previous initiatives has

resulted in a significant change in the approach to environmental regulation in British Columbia

involving a move towards results-based regulation and an increasing reliance by the Ministry of

Water, Land and Air Protection (“MWLAP”) on qualified professionals to ensure that activities

achieve the results indicated under applicable legislation and regulations. There have been no

new large provincial legislative initiatives since June 1, 2004. This is not surprising in light of the

provincial election in May 2005. It is likely that the next 12 to 24 months will be another period

of increased activity with respect to provincial environmental regulatory developments.

On the federal side, the remaining provisions of the Species at Risk Act came into force on

June 1, 2004. The federal government has designated a significant number of species under

SARA in recent months. The federal government also commenced its five- year review of the

Canadian Environmental Protection Act. However, the most significant developments arose as

a result of the ratification by Russia in November 2004 of the Kyoto Protocol. The Kyoto

Protocol came into effect in February 2005. In response, the federal government announced a

number of climate change related initiatives in the recent federal budget and issued a new

climate change action plan in April 2005. Further legislative and regulatory developments are

expected at the federal level in the next 12 months in response to the Kyoto Protocol.

This paper reviews significant legislative and regulatory developments at the federal and

provincial level since June 1, 2004. It does not address climate change or contaminated site

issues as those issues are addressed in other papers in these materials.

Recent Provincial and Federal Environmental By Deborah H. Overholt



B. PROVINCIAL DEVELOPMENTS

1. Environmental Management Act

The Environmental Management Act, S.B.C. 2003, c. 53 (“EMA”), which received Royal Assent

on October 23, 2003, came into force on July 8, 2004 pursuant to B.C. Reg. 317/2004 (and

related regulations). EMA repealed both the Waste Management Act, R.S.B.C. 1996, c. 482,

and the Environment Management Act, R.S.B.C. 1996, c. 118, and combined both statutes into

one integrated piece of legislation.

2. EMA Amendments

EMA was amended in 2004 by the Environmental Management Amendment Act, 2004, S.B.C.

2004, c. 18 (“Amendment Act”). The Amendment Act was given Royal Assent on April 28,

2004, but only certain sections of the legislation were brought into force on July 8, 2004 with

EMA (B.C. Reg. 317/2004) including powers for: the Minister to grant a variance from the

requirements of a code of practice, a director to establish procedures for site security and

protocols for developing sediment criteria and specifying activities that may or must be

performed by approved professionals, and powers for a director, on an interim basis, to make

regulations for the purpose of the definition of “contaminated site”. In October 2004, a section of

the Amendment Act was brought into force authorizing Cabinet to make regulations imposing

monitoring and reporting requirements, including requirements for the publication of information

in relation to waste and places and things that the Minister considers may be affected by the

handling, treatment, transportation, discharge or storage of waste.

Most of the sections of the Amendment Act directed at the contaminated site provisions in EMA,

are not yet in force. These include changes to the definition of “contaminated site”, changes

dealing with site profiles, creation of a Land Remediation Fund and a number of other changes

related to the system for Licensed Environmental Professionals MWLAP is still developing.

The Water, Land and Air Protection Statutes Amendment Act, 2004, S.B.C. 2004, c. 30, made

amendments to a number of environmentally related statutes including EMA effective July 8,

2004. These changes affected the definition and powers of a conservation officer in carrying

out enforcement measures. They also changed the limitation period for offences under EMA




from two years after the information first came to the knowledge of a director, to either three

years after the date the incident arose or 18 months after the date the facts became known to

the Minister (in practical terms this means knowledge of the Ministry) where a certificate to that

effect is filed. Similar changes in limitation periods were made to the Ecological Reserve Act,

Integrated Pest Management Act, Park Act and Wildlife Act.

3. EMA - Waste Discharge Regulation

General Scheme: The Waste Discharge Regulation, B.C. Reg. 320/2004 (“WDR”), came into

effect on July 8, 2004 as a key component to bringing EMA into force. The old Waste

Management Act prohibited any introduction of waste, whether or not it caused “pollution” (a

significant impact on the environment), in the course of conducting an industry, trade or

business, unless a permit or other authorization was obtained. The EMA prohibition on the

introduction of waste is applicable only to prescribed industries and activities.

The prescribed industries, trades, businesses, operations and activities are set out in the WDR.

Activities or industries not listed in the WDR do not require either a permit or other form of

authorization, such as a code of practice, to discharge waste. However, such industries and

activities remain subject to the general prohibition against causing “pollution”. Schedule 1 to the

WDR lists those industries and activities that require a permit or other form of authorization such

as compliance with a regulation in order to discharge waste. Schedule 2 to the WDR lists those

businesses and activities MWLAP has indicated will eventually be the subject of codes of

practice. Until such time as a code of practice is developed, the operations and activities listed

in Schedule 2 to the WDR require a permit or compliance with a regulation to discharge waste.

Once a code of practice is developed, a permit is no longer required for the discharge of waste,

provided that the discharge complies with the applicable code.

Status of Codes: To date, MWLAP has issued only one new code of practice since EMA and

the WDR came into force. MWLAP recently released a Code of Practice for the Discharge of

Produced Water from Coalbed Gas Operations which will come into effect on July 1, 2005.

Under the Code, produced water from coalbed gas operations is prescribed as a waste for the

purposes of EMA. The Code authorizes the discharge of produced water to perennial streams,

seasonal streams or to the ground by percolation provided that a number of measures set out in




the Code are complied with, including a requirement for a qualified professional to carry out a

receiving environment baseline monitoring program for at least one year prior to

commencement of the proposed discharge. The discharge must be registered with MWLAP. A

qualified professional must design a program of ongoing analysis prior to commencing a

discharge and the party undertaking the discharge must ensure that that ongoing monitoring

program is carried out by and under the supervision of a qualified professional and that an

annual report of the monitoring results is prepared and available for inspection by MWLAP on

request. If the monitoring results exceed specified triggers, or if any other significant risk is

identified, there is a requirement to report immediately to the director.

MWLAP has indicated that in the upcoming year they intend to develop five codes under EMA

including a code of practice for industrial non-hazardous landfills including wood waste landfills,

a code of practice for vehicle dismantling and recycling, and codes of practice for the concrete

and concrete products industry, the primary wood manufacturing industry and soil enhancement

using compost materials.

Substitutions: Although codes of practice are meant to apply equally to all participants in an

industry or activity province-wide, a degree of flexibility has been built into the WDR with the

concept of “substituted requirements”. These allow the Minister or director to substitute an

alternate requirement for a requirement of a code of practice if they consider it necessary to

protect the public or the environment, if the intent of the code of practice is met by the

substitution. Substitutions may be made on the initiative of the Minister or director, or upon

application by a person required to comply with a code of practice.

Notice of a substitution application must be given to the public, and the applicant may be

directed to serve a copy of the application on any person who, in the director’s opinion, may be

adversely affected by an environmental impact of the proposed substituted requirement. (Note

that this requirement has been limited since the original drafts of the WDR which referred simply

to a person adversely affected by the proposed substitution). A substitution decision is subject

to appeal to the Environmental Appeal Board.




Transition Issues: Once a code of practice is in place, a current permit holder may retain the

permit until the permit is amended. Minor permit amendments can be made without a

requirement to abandon the permit. The director does not have any jurisdiction in this regard.

Therefore, as long a major permit amendment is not required, a business can retain its current

permit. However, if there is a code in place and a major amendment is required, the permit

holder will be required to surrender the permit and move to the code of practice. The primary

factor for determining if an amendment is considered major is an increase of more than 10% in

the authorized quantity of the discharge.

When moving from a permit to a code of practice, substitutions may be required to “personalize”

the code in order for the business or activity to continue operating as it did under its permit.

That substitution decision is subject to appeal. This raises concern about the ease of

transitioning from existing permits to a code of practice. MWLAP is aware of this issue and has

indicated that they will consider this issue in developing the various codes.

Fees: In October 2004, BC Reg. 464/2000 amended section 9 of the WDR dealing with the

calculation of fees under a code of practice. Prior to the amendment, the WDR provided that

fees would be calculated based on the maximum quantity of the discharge authorized under the

code. This would have the effect of increasing fees significantly for many operations. The

October 2004 amendments provide that the calculation of fees will be based on the maximum

quantity of the discharge specified in the registration under the Code. This aligns with the

current method of calculating permit fees.

Current Impacts: In light of the scope of the industries and activities listed in the Schedules to

the WDR and the relatively slow pace of development of codes of practice, the impact of the

changed permitting scheme under EMA is currently fairly small. However, as more codes are

developed fewer permits will be required in future.

An issue MWLAP is currently considering is the impact of the government’s aboriginal

consultation obligations on the move to codes of practice. In the situation where a permit

application is filed, the triggering of the consultation obligation and the impact of that obligation

on the proposed activity is clear. Where MWLAP no longer has a permitting function and the




activity can proceed in the absence of a permit with only a requirement to register under a code

of practice, the method of addressing the consultation obligation is not as clear.

4. EMA - Hazardous Waste Regulation

There have been two recent sets of amendments to the Hazardous Waste Regulation under

EMA. The first set of amendments (B.C. Reg. 214/2004), effective May 14, 2004, consisted

mostly of housekeeping and consequential changes to the Regulation to incorporate prior

changes to the federal Transportation of Dangerous Goods Act and Regulations and the

introduction of the Interprovincial Movement of Hazardous Waste Regulation under the

Canadian Environmental Protection Act. Among other things, the May 2004 amendments

designated as hazardous waste the 99 waste types listed in the former federal Transportation of

Dangerous Goods Regulations (“TDGR”), but removed from the listings in the current TDGR.

These waste types are now subject to classification under the federal TDGR based on analysis.

The amendments to the Hazardous Waste Regulation define such waste types as hazardous

waste without the requirement for further analysis. The definition of “leachable toxic waste” was

also amended to adopt the TCLP test instead of the previous modified leachate extraction

procedure. The modified leachate extraction procedure is still used for determining whether a

hazardous waste can be disposed of in a landfill or long-term storage facility.

The second set of amendments was made effective July 8, 2004 pursuant to BC Reg. 319/2004

in conjunction with EMA coming into force. The Regulation was renamed the Hazardous Waste

Regulation and the changes in EMA were incorporated pursuant to which permits for storing,

treating and recycling hazardous waste are no longer required, provided that the requirements

of the Hazardous Waste Regulation are complied with. Most existing hazardous waste permits

are expected to eventually be cancelled; however, the July 2004 amendments added a

requirement for secure landfills to have a permit, a requirement to obtain the director’s approval

prior to construction or operation of a hazardous waste facility (other than those that are

exempt) and a transition provision to allow a director to specify certain hazardous waste permits

that need to remain in force until further amendments to the Hazardous Waste Regulation have

been completed. The July 2004 amendments also included authority for the director to require




the posting of financial security for short term and long term storage of hazardous waste. The

availability of the temporary storage exception to the Regulation was restricted.

MWLAP has indicated that a comprehensive review of the Hazardous Waste Regulation will

take place in the near future. However, this is not expected until late 2005 or early 2006.

5. EMA - Recycling Regulation

Effective October 7, 2004, the Beverage Container Stewardship Program Regulation and the

Post-Consumer Residual Stewardship Program Regulation were repealed and replaced by the

Recycling Regulation (B.C. Reg. 449/2004). The Recycling Regulation requires producers of

products (defined to include persons who import products that are subject to the Regulation into

B.C. for sale or distribution) that are sold in British Columbia to develop and comply with

approved product stewardship plans (mandatory for beverage containers) or, alternatively, to

meet the product stewardship program requirements set out in the Regulation if no alternate

product stewardship plan is developed and approved. The Regulation applies to products within

the following product categories: beverage containers, solvent and flammable liquids,

pesticides, gasoline, pharmaceutical products, lubricating oil products, empty oil containers, oil

filters and paint.

6. Integrated Pest Management Act

The Integrated Pest Management Act, S.B.C. 2003, c. 58 (the “IPM Act”) which received Royal

Assent on October 23, 2003 was brought into effect on December 31, 2004 pursuant to B.C.

Reg. 599/2004. The Integrated Pest Management Regulation, B.C. Reg. 604/2004 (the “IPM Regulation”) also came into effect on December 31, 2004. Under the IPM Act, a person must

not use, handle, release, transport, store, dispose of or sell a pesticide in a manner that causes

or is likely to cause an unreasonable adverse effect or in any manner other than in accordance

with the IPM Act and associated regulations.

The IPM Act and IPM Regulation establish classes of pesticides and set out the requirements

for licences, certification, permits and pesticide use notices for each class of pesticide. The

classifications are based on the Federal Pest Control Products Act.




A permit is required for all uses of certain types of pesticide products, for certain uses of

pesticide products such as aerial applications over urban or residential areas and to allow for

deviations from standards and requirements set out in the IPM Regulation.

A pest management plan must be prepared and a pesticide use notice confirmation must be

received before a person can proceed with certain specified pesticide uses including:

• management of vegetation on specified rights of way (e.g. railways, highways and public utilities) on public or private land and on specified industrial sites (e.g. landfills, dams, dykes, and airports) on public land, where more than 20 hectares per year is treated by a land manager;

• management of forest pests on more than 20 hectares per year of public land used for forestry;

• management of noxious weeds or invasive plants on more than 50 hectares per year of public land; and

• management of mosquitoes with a bacterial pesticide on more than one hectare per year of a water body and any other mosquito control of any size on public land.

A pesticide management plan must include integrated pest management considerations. The

IPM Act defines integrated pest management as a process for managing pest populations that

includes the following elements:

(a) planning and managing ecosystems to prevent organisms from becoming pests;

(b) identifying pest problems and potential pest problems;

(c) monitoring populations of pests and beneficial organisms, damage caused by pests and environmental conditions;

(d) using injury thresholds in making treatment decisions;

(e) suppressing pest populations to acceptable levels using strategies based on considerations of:

• biological, physical, cultural, mechanical, behavioural, and chemical controls in appropriate combinations, and

• environmental and human health protection; and




(f) evaluating the effectiveness of pest management treatments.

Development of a pest management plan must include public consultation. In addition,

the IPM Regulation sets out public notification requirements prior to pesticide use.

Notification requirements may include posted notices, newspaper and/or radio broadcast

notices and direct notification of individuals.

7. Drinking Water Protection Act, Water Act and Groundwater Protection Regulation

The Drinking Water Protection Act, S.B.C. 2001, c. 9 came into force on May 16, 2003.

However, certain amendments to the Water Act, R.S.B.C. 1996, c.483 contained in the Drinking

Water Protection Act did not come into force at that time, pending development of regulations.

Most of the Water Act changes contained in the Drinking Water Protection Act were brought into

force effective November 1, 2004 pursuant to B.C. Reg. 299/2004 (issued on June 30, 2004)

which also introduced the Groundwater Protection Regulation (“GWPR”).

The new Part V of the Water Act and the accompanying GWPR establish standards to ensure

wells are properly drilled, sealed, maintained and closed. The new scheme does not introduce

a licensing system or fees for groundwater extraction.

Part V of the Water Act requires that all wells, subject to some exceptions, must be installed

either by a qualified well driller or under the direct supervision of a qualified well driller or a

qualified professional who has competency in the field of hydrogeology or geotechnical

engineering. Persons who install a well must maintain a daily log and file a report in accordance

with applicable regulations. Samples must be taken from all wells and analyzed in accordance

with applicable regulations. If the groundwater in the well is to be used for domestic purposes,

the sampling and analysis must comply with the requirements of the Drinking Water Protection

Act. Well identification plates must be attached to a well or wellhead in accordance with

applicable regulations. Wells that are not in use must be closed and all wells must have secure

well caps or well covers and must be operated in accordance with applicable regulations. The

Water Act prohibits operation of a well in a manner that causes or will likely cause intrusion of

contaminated groundwater into an aquifer or any other well in the area where that intrusion

would have a significant adverse impact on the quality of the groundwater in the aquifer or the




existing uses made of the groundwater from any well that draws from the aquifer. The

introduction of certain substances into a well is prohibited. An engineer can order measures to

remove those substances from a well and such orders can be issued against the owner of the

well or the owner of the property on which the well is located. Many of the requirements are not

applicable to wells drilled to investigate or remediate groundwater contamination.

The GWPR sets out detailed requirements for the construction and operations of wells including

requirements for installation of effective surface seals around wells, securely capping and flood-

proofing wells and permanently closing unused wells to protect groundwater quality. The

GWPR establishes the qualifications for well drillers and well pump installers and provides for a

provincial registry for those possessing the qualifications. The GWPR applies to water supply

wells (i.e. domestic wells and non-domestic wells such as irrigation wells), groundwater

monitoring wells, recharge and injection wells, dewatering or drainage wells, remediation wells

and geotechnical wells. The GWPR does not apply to geothermal wells, oil and gas wells or

wells used for coalbed methane extraction.

The registration and qualification sections of the GWPR for drillers and well pump installers

came into force on November 1, 2004. The remainder of the GWPR, including the Code of

Practice for Construction, Testing, Maintenance, Alteration and Closure of Wells attached to the

GWPR, comes into force on November 1, 2005. Under the GWPR qualified professionals

(professional engineers and professional geoscientists with competency in hydrogeology or

geotechnical engineering) may approve alternative specifications where it is not feasible to

comply with the specifications set out in the Code.

8. Fish Protection Act – Riparian Areas Regulation

The Fish Protection Act, S.B.C. 1997, c. 21, authorizes Cabinet to establish policy directives

regarding the protection and enhancement of riparian areas that may be subject to residential,

commercial or industrial development. If such a directive is issued, a local government must

include in its zoning and rural land use bylaws riparian area protection provisions in accordance

with the directive or ensure that its bylaws and permits under Part 26 of the Local Government

Act or Part XXVII of the Vancouver Charter provide an equivalent level of protection. There is




no restriction on local governments establishing more onerous requirements than those set out

in a Cabinet directive.

On July 17, 2004, the Riparian Areas Regulation (B.C. Reg. 376/2004) (“RAR”) was introduced

pursuant to section 12 of the Fish Protection Act. The RAR repealed the former Streamside

Protection Regulation. The RAR came into effect on March 31, 2005, although many

municipalities have been granted an extension to June 30, 2005 (pursuant to a Ministerial Order

issued on March 31, 2005) to review and if necessary amend their bylaws to meet the

requirements of the RAR. Local governments that established streamside protection and

enhancement areas under the former Streamside Protection Regulation are deemed to have

met the requirements under the RAR.

Prohibition: Those local governments subject to the RAR are prohibited from approving or

allowing development to proceed in a riparian assessment area unless the development

proceeds in accordance with the requirements set out in the RAR.

Application: The RAR applies to the same geographic areas as the former Streamside

Protection Regulation: the Lower Mainland, the East Coast of Vancouver Island and the

Southern Interior.1

The RAR applies to residential, commercial and industrial activities or ancillary activities as

regulated by Part 26 of the Local Government Act and listed in the definition of "development"

found in section 1(1) of the RAR as follows:

• removal, alteration, disruption or destruction of vegetation;

• disturbance of soils;

• construction or erection of buildings and structures;

• creation of non-structural impervious or semi-impervious surfaces;

______________________ 1 More particularly the following regional districts and all municipalities within them: Capital, Central Okanogan,

Columbia-Shuswap, Comox-Strathcona, Cowichan Valley, Fraser Valley, Greater Vancouver (except the City of Vancouver), Nanaimo, North Okanogan, Okanogan-Similkameen, Powell River, Squamish-Lillooet, Sunshine Coast, Thompson-Nicola and the trust area under the Islands Trust Act, R.S.B.C. 1996, c.239.




• flood protection works;

• construction of roads, trails, docks, wharves and bridges;

• provision and maintenance of sewer and water services;

• development of drainage systems;

• development of utility corridors; and

• subdivision, as defined by section 872 of the Local Government Act.

The RAR does not apply to agricultural, mining, hydroelectric or forestry-related uses or

institutional development.

The RAR applies to development in the "riparian assessment area" adjacent to "streams". The

definition of "stream" in section 1(1) of the Regulation is slightly more restrictive than the

definition of "stream" in the Water Act and includes: a watercourse (whether it usually contains

water or not); a pond, lake, river, creek or brook; and a ditch, spring or wetland that is connected

by surface flow to a watercourse, pond, lake, river, creek or brook that provides fish habitat.

The RAR does not apply to marine or estuarine shorelines.

The "riparian assessment area" for a "stream" is:

• the 30 m strip on both sides of the stream, measured from the high water mark;

• for a ravine less than 60 m wide, a strip on both sides of the stream, measured from the high water mark to a point that is 30 m beyond the top of the ravine bank; and

• for a ravine 60 m wide or greater, a strip on both sides of the stream, measured from the high water mark to a point that is 10 m beyond the top of the ravine bank.

The RAR does not apply to in-stream works. These works are governed by section 9 of the

provincial Water Act and section 35(2) of the federal Fisheries Act.

Authority to Proceed: Section 4(2) of the Regulation provides that the local government may

allow development to proceed in the riparian assessment area if either of the following

conditions are met:




(1) Qualified Environmental Professional (“QEP”) Assessment: (a) a QEP carries out an assessment and: (i) certifies that they are qualified to conduct the assessment; (ii) certifies that the assessment methods set out in the schedule to the RAR have been followed; and (iii) provides their opinion that there will be no harmful alteration, destruction or disruption ("HADD") of the natural features, functions and conditions that support fish life processes in the riparian assessment area, or that there will be no HADD as long as the streamside protection and enhancement area (“SPEA”) identified in the report is protected from development and the measures identified in the report are taken to protect the SPEA; and (b) the local government is notified by MWLAP that MWLAP and DFO have been notified of the development proposal, and have been provided with a copy of the assessment report prepared by the QEP that meets conditions (i)-(iii); or

(2) DFO Authorization: if HADD cannot be avoided, an authorization is obtained for the development from the federal Department of Fisheries and Oceans (“DFO”) under section 35(2) of the federal Fisheries Act. The “Riparian Areas Regulation Implementation Guidebook” issued by MWLAP indicates that a section 35(2) authorization will only be issued if the applicant can demonstrate that compliance with the SPEA recommended by the QEP will cause undue hardship and the local government issues a letter of support for the application

QEPs: Pursuant to the definition contained in section 1 of the RAR, a QEP is an applied

scientist or technologist, acting alone or together with another QEP. He or she must be

registered and in good standing in British Columbia with an "appropriate professional

organization constituted under an Act", acting under that association's code of ethics and

subject to disciplinary action by that association. According to MWLAP, the applicable

professionals are professional biologists, geoscientists, foresters and agrologists. To be able to

certify that they are qualified to conduct the assessment methodology, the individual's area of

expertise must be recognized in the assessment methods as one that is acceptable for the

purpose of providing all or part of an assessment report in respect of the particular development

proposal that is being assessed. The individual is considered a QEP only for that portion of the

assessment that is within their area of expertise, as identified in the assessment methodology.

Assessment Options: The Schedule to the RAR provides two assessment options. A simple

assessment determines a SPEA width as set out in the Schedule to the RAR based on whether

or not the stream is fish-bearing, the nature of the stream flows and the status of streamside

vegetation. If the proposed development encroaches within the SPEAs determined based on a

simple assessment, a more detailed assessment will be required to determine a SPEA width




based on a site-specific assessment of the features, functions and conditions of the riparian

area.

Cooperation Agreement: MWLAP, DFO and the Union of B.C. Municipalities have negotiated a

Cooperation Agreement setting out the roles of the three entities with respect to implementation

of the RAR. The Agreement has not yet been signed but has been sent to senior levels of

government for final approval. The Implementation Guidebook states that it is the opinion of

DFO that if a person fully implements the recommendations provided by a QEP following the

RAR assessment methodology and related measures, no HADD will result due to removal of

riparian vegetation and no section 35(2) authorization will be required with respect to the

removal of such vegetation.

9. Wildlife Act

The Wildlife Amendment Act, 2004, S.B.C. 2004, c. 56 will introduce new powers into the

Wildlife Act, R.S.B.C. 1996, c. 488, to protect endangered species. The Amendment Act

received Royal Assent on May 20, 2004 but is not yet in force. The amendments add a

prohibition in the Wildlife Act against harming, killing, harassing, capturing or taking an individual

of a species at risk or damaging or destroying the residence of a species at risk except pursuant

to an authorization. A permit to do any of the foregoing can only be issued if all reasonable

options were considered and the activity authorized is the option that will have the least impact

on the species at risk and the activity will not jeopardize the survival or recovery of the species.

No compensation is payable for any reduction in land value resulting from compliance with the

prohibitions.

These provincial provisions mirror the federal Species at Risk Act to enable the Province to

respond if the federal government attempts to impose the federal statute on provincial lands on

the basis that there is no equivalent provincial legislation.

10. Forest and Range Practices Act – Identified Wildlife Management Strategy (“IWMS”)

The Province released the IWMS, Version 2004 in June 2004. The new version contains an

updated list of wildlife subject to the strategy and updated procedures for implementing the




IWMS. The accompanying “Procedures for Managing Identified Wildlife” describe procedures

for establishing, modifying and rescinding wildlife habitat areas. The term “identified wildlife”

refers to those species at risk and regionally important wildlife that the Minister of Water, Land

and Air Protection designates as requiring special management attention under the Forest and

Range Practices Act. On May 3, 2004 the Minister established a list of species at risk that may

be affected by forest or range management on Crown land. The province is currently looking at

non-COSEWIC listed provincial red and blue listed species to determine whether any such

species should be designated for purposes of the IWMS.

11. Compliance and Enforcement Policy

MWLAP is in the process of developing a new compliance and enforcement policy. The

objectives of the new policy are to ensure that alternative compliance measures are considered

before charges or other formal enforcement steps are undertaken and to ensure that decisions

with respect to investigations and enforcement mechanisms are consistent in all regions in the

province. The draft policy establishes a non-compliance decision matrix which is driven by the

severity of the environmental occurrence and the compliance history and willingness and

capacity to comply of the person involved in the incident. A recommendation to commence an

investigation and any recommendation for action following an investigation will be reviewed by a

regional management compliance team.

12. BC/Alberta MOU on Environmental Cooperation and Harmonization

In April 2004 the Alberta Minister of Environment and MWLAP signed a five year memorandum

of understanding (“MOU”) to develop and implement collaborative strategic approaches to

common areas of environmental management including regulatory harmonization. Objectives of

the MOU include creating seamless situations for companies doing business in both BC and

Alberta; promoting efficiencies and reducing the cost of delivering services; and jointly engaging

the federal government to reduce overlap and duplication in key areas of environmental

management and regulation.




Since signing the MOU a number of harmonization initiatives have been completed including the

establishment of common standards for characterizing hazardous waste (toxic leachate

characteristic protocol) and execution of a bilateral negotiations MOU for water management.

BCWLAP and Alberta Environment have agreed to work together in a number of areas in

2005/06 including development of a code of practice for sawmills and climate change strategies,

action plans and adaptation activities. A number of additional harmonization opportunities have

been identified for completion in the remaining term of the MOU including developing a common

strategy for the use of qualified professionals in regulation, establishing common requirements

for hazardous waste, working collaboratively on product stewardship and collaborating during

the development of the EMA codes of practice.

C. FEDERAL DEVELOPMENTS

1. Endangered Species

In force: The remaining provisions of the Species at Risk Act, S.C. 2002, c. 29 (“SARA”) came

into force on June 1, 2004. SARA aims to prevent species from becoming extinct and to

provide for the recovery of species that are at risk as a result of human activity. The provisions

which came into force in 2004 include the prohibition against causing harm to a species listed

as locally extinct, endangered or threatened and the prohibition against damaging or destroying

the residences or the critical habitat of listed species.

Listed Species: The list of species at risk currently consists of over 300 species with a further

43 species recommended in May 2005 for addition to the list.

Application: SARA applies directly to land that belongs to the federal Crown, Indian reserves

and land that the federal Crown has the power to dispose of. The power to protect critical

habitat on provincial Crown and private lands can only be invoked in limited circumstances

where the federal Cabinet determines that its use is necessary because efforts by the affected

province and/or private landowner are determined to be insufficient. The federal government

has indicated that this power is likely to be used more often in provinces without endangered

species legislation. As discussed above, in British Columbia, provisions to amend the Wildlife




Act, largely to mirror the SARA provisions, were passed in 2004 but have not yet been brought

into force.

While the direct application of SARA is limited as discussed above, SARA also amended the

Canadian Environmental Assessment Act (“CEAA”) so that all environmental assessments

under CEAA must include consideration of any changes a project may cause to a listed wildlife

species, its critical habitat or the residences of such species. Many projects largely within

provincial jurisdiction trigger CEAA by virtue of a requirement to obtain a federal permit or

approval. As a result, the federal government through the environmental assessment process

has significant oversight of endangered species including those endangered species that are

otherwise provincially managed.

Compensation: Although all of the provisions of SARA are now in force, the statute requires

that compensation be dealt with by regulations. To date no compensation regulations have

been issued under SARA and accordingly, at least for the moment, compensation is not

available.

Federal/Provincial Cooperation: Canada and British Columbia recently signed a bilateral

agreement on species at risk. The purpose of the agreement is stated to be the creation of “an

administrative framework, within which the parties can cooperatively exercise their respective

powers and duties to ensure a coordinated and focused approach to the delivery of species at

risk protection and recovery through legislation, policies and operational procedures in British

Columbia.” The agreement sets out a number of principles which will guide the interpretation

and implementation of the agreement. Of significance are the number of references to social

and economic considerations. For example, section 23 of the agreement states that “species at

risk protection and recovery in British Columbia will be designed and delivered in a manner

tailored to address the ecological, social and economic circumstances of the Province.” Section

11.4 of the agreement provides that the parties will ensure that the evaluation of socio-economic

costs and benefits are an integral part of the development of action plans.

Prior to a federal Cabinet decision on a routine listing of a species, the federal Minister of

Environment is required to consult with and seek the views and input of provincial Ministries on




the implications of that decision including socio-economic considerations. The federal Minister

of the Environment is required to advise the Province of the listing decision and the rationale for

that decision.

The agreement also sets out measures to ensure that potential impacts on species at risk are

addressed through a single environmental assessment process. If a project subject to

assessment under federal legislation may result in potential adverse effects on a wildlife species

or its critical habitat listed under SARA, the Province will take the lead in addressing the

potential impacts of the project if the affected species is provincially managed. If the species is

federally managed, the federal government will take the lead in assessing the potential impacts

of the project on the affected species.

The parties agree to share information and may collaborate on the issuance of certain permits.

The parties agree to examine the merits of cross-designation of officers for enforcement of

respective species at risk legislation. The agreement also provides for data sharing. The

agreement has a term of 10 years but the parties agree to review the effectiveness of the

agreement five years after signing.

2. Bill C-15 – Amendments to Migratory Birds Convention Act and Canadian Environmental Protection Act

Bill C- 15 received Royal Assent on May 19, 2005. It amends the Migratory Birds Convention

Act to extend the application of that legislation to Canada’s exclusive economic zone,

strengthen the prohibition on the deposit of substances harmful to migratory birds in waters or

areas frequented by migratory birds (similar to the prohibition in section 36(3) of the Fisheries

Act with respect to the deposit of deleterious substances in waters frequented by fish), and to

increase fines and penalties, including the establishment of minimum penalties for vessels

5,000 tonnes deadweight or over. The amendments include whistleblower protection for

employees and independent contractors, create a positive duty on every master, chief engineer,

owner and operator of a vessel and on directors and officers to take reasonable care to ensure

compliance with the legislation and add creative sentencing provisions including the ability for a

court to order an offender to conduct an environmental audit and to remedy deficiencies

identified by the audit.




Bill C-15 also amends the Canadian Environmental Protection Act (“CEPA”) to include a

prohibition against the disposal and incineration of substances at sea by ships, to expand

enforcement powers under CEPA to include an ability to direct ships that are in contravention of

CEPA, to create duties on ship’s masters, chief engineers, owners and operators similar to

those included in the amendments to the Migratory Birds Convention Act and to expand the

jurisdiction of the courts to include Canada’s exclusive economic zone.

3. CEPA – Climate Change Issues

In March 2005 a notice was issued pursuant to CEPA (Canada Gazette, Part 1, Vol. 139, No.

11, March 12, 2005) requiring persons who operate facilities that emit, in calendar year 2005,

100 thousand metric tons of carbon dioxide equivalent or more of GHGs to report the

information specified in the notice to the federal Minister of Environment by June 1, 2006. The

notice indicates that the federal government intends to publish the reported information.

Bill C-43, the legislation to implement the recent federal budget, contains proposed

amendments to CEPA which set the stage for the regulation of GHGs under CEPA.

Specifically, the amendments delete all references to “toxic” substances in CEPA and amend

CEPA to refer only to substances that meet the criteria in CEPA and are listed in Schedule 1 to

CEPA.

4. CEPA Review

The five year review of CEPA has commenced. On April 5, 2005 the Standing Committee on

Environment and Sustainable Development was given responsibility for leading the review

process. A number of public workshops were held in the winter in preparation for the review

and a report on the results of those workshops was released on May 5, 2005.

According to the report on the workshops, most stakeholders indicated that major changes to

CEPA are not required at this time. However, there was almost universal agreement that the

NPRI reporting provisions are too complex. Many stakeholders also expressed the view that

the review period for the legislation should be extended from the current five year requirement

to seven to ten years.




Amendments to CEPA are not expected to be passed until 2008.

5. Transportation of Dangerous Goods Act Review

The Transportation of Dangerous Goods Act, 1992 is currently undergoing review. The review

commenced shortly after the September 11 attacks with a principal focus on security issues.

However, the review was subsequently expanded. Public consultation meetings were held in

2004. The government’s timetable suggests that amending legislation could be tabled in the fall

of 2005 with the proposed amendments coming into force in 2006. Potential amendments

include a requirement for approved security plans for all dangerous goods that require

emergency response assistance plans, immediate reporting of security breach, security

awareness training for employees and security clearance certificates of anyone handling

dangerous goods.

6. Fines and Penalties

On May 13, 2005, the Budget Implementation Act, 2004, No. 2, S.C. 2004, c. 19 received Royal

Assent. Section 16(1) of the Act amends the Income Tax Act to prohibit the deduction of fines

and penalties, other than prescribed fines and penalties, imposed after March 22, 2004.

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LITIGATION UPDATE:WHERE ARE WE NOW?

Graham Walker and Rick WilliamsBorden Ladner Gervais, LLP

June 1, 2005

VAN01: 2114645: v1

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Topics

Recent Cost Recovery ActionsChanges to Procedure in the Rules of CourtCompensation for Environmental Damage / HarmUpdate on Enforcement Cases

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Contaminated Sites Update: Cost Recovery Actions

Procedure under WMA / EMA settledAssessment of “reasonably incurred costs of remediation” previously unresolvedTwo recent decisions of BCSC provide direction

CN v. ABC Recycling (April 29, 2005)Workshop Holdings v. CAE (April 28, 2005)

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Workshop Holdings v. CAE

Resolved important procedural issuesFacts

Workshop sought to develop commercial property in Vancouverdiscovered copper and zinc contamination in the soilproperty historically operated by CAE as a brass foundryapplication for AIP from Ministrycompletion of remediation and commencement of litigation

Summary trial (at long last)

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Workshop Holdings v. CAE (cont’d)

Three key points:reasonable to remediate to developexercising business judgment will not be penalized30 year ultimate limitation period (if it applies) does not run until 1993 (?) at the earliest

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CN v. ABC Recycling

Most significant caseFacts

CN owned an 80 acre parcel in BurnabyABC was a neighbour at Area VABC operated a scrap metal recycling business on its propertyABC’s operations had trespassed onto CN’s property causing contamination of CN’s landsin 1999 and 2000, ABC voluntarily removed the trespassin 2000 CN decided to sell its landsCN undertook an environmental investigation which disclosed additional contamination

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CN v. ABC Recycling (cont’d)

CN worked with ABC to develop a remediation approach for the propertyCN required a COC from the Ministryremediation commenced but problems ensuedCN took over the remediation projectCN demanded that ABC compensate it for its cost of remediationlitigation was commenced to recover CN’s costs of remediation

Issueswere CN’s costs of remediation reasonably incurred?was CN entitled to recover its legal fees on an indemnity basis?

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Key points in decision:two-step approach to determine whether costs of remediation are reasonably incurred

did plaintiff act reasonably?are the costs objectively reasonable?

all circumstances are relevantburden of proof on the plaintiffexpert evidence is not requiredplaintiffs are entitled to adopt a “careful, cautious approach” in remediating contamination reasonable legal costs are recoverable on an indemnity basis

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Result and Conclusiona framework now exists to determine whether costs of remediation are the principal of polluter pays is enshrined in our legislationreasonably incurredthe barrier for smaller claims may be removedcost recovery actions are an effective and practical means of recovering costs of remediationplaintiffs must carefully consider proceeding through trial [apportionment of liability; settlement offers]defendants must consider meaningful offers to settle at an early stage

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Civil Litigation Changes

Civil Rule changes effective September 1, 2005

Small claims monetary jurisdiction will be raised from $10,000 to $25,000

A new simplified procedure will be introduced for most Supreme Court actions of $100,000 and less

Purpose is to “streamline procedures and reduce the cost and time required to take these cases to trial”

While the increase in small claims jurisdiction will take effect province wide, the new simplified procedure will be introduced as a two year pilot project in four supreme court registries (Vancouver, Victoria, Prince George and Nelson).

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Civil Litigation Changes (cont’d)

Highlights:limited discovery processearly exchange of witness lists and summaries of evidencerestrictions on interlocutory applicationsno jury trialsmandatory trial management conference

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Civil Litigation Changes (cont’d)

Issues of interest to contaminated sites litigation:

Use of jointly instructed experts:parties can agree or court can ordereach party provides instructions to the expertcosts are shared between the parties

Will the new procedure apply to contaminated sites cases given the CN v. ABC decision

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Compensation for Environmental Damage / Harm

Supreme Court of Canada Decision in British Columbia v. Canadian Forest Products Ltd.

Crown sought monetary compensation for environmental damage to public land

Facts:Forest fire 1992 damaged almost 1,500 hectares of forestFire was caused mainly by Canfor’s failure to ensure that a controlled burn had been properly extinguishedIncluded in the burn area were non-harvestable trees that the Crown had set aside for environmental reasons in sensitive areas

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Compensation for Environmental Damage / Harm (cont’d)

Findings:The Supreme Court of Canada refused to award the Crown monetary damages for environmental loss:

the Crown’s pleadings were insufficientthe Crown failed to lead any evidence to allow the trial judge to quantify an ecological or environmental loss

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Compensation for Environmental Damage / Harm (cont’d)

Significance:Leaves the door open for future claims provided the pleadings and evidence are sufficientScope of decision is quite broad. Arguably it captures all operations or activities that adversely affect Crown land

Examples:Oil spills and other damage to the marine environmentTrain wreckages and derailments resulting in damage to the environment (i.e. chlorine gas)

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Recent Environmental Prosecutions

The past year saw a continued decrease in the number of reported decisions on environmental prosecutions.

R. v. Canadian National RailwayDue diligence is alive and well

R. v. SappWhen investigators stop by it’s best to keep quiet

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THANK YOU




LITIGATION UPDATE: WHERE ARE WE NOW?

By Graham Walker and Rick Williams

June 1, 2005

INTRODUCTION

This past year, we have seen significant developments in the law through environmental

litigation. The most significant development deals with cost recovery actions with respect to

contaminated sites. Two recent decisions confirm that this action is an effective and practical

means of recovering costs of remediation. We begin the paper with some background on the

issue and a discussion of these two cases. We also discuss a recent Supreme Court of Canada

decision that weighs in on the issue of compensation for environmental damage and provide a

discussion of some interesting and recent environmental regulatory enforcement cases. Also,

we discuss a new Rule meant to expedite claims of less than $100,000 that will impact

contaminated sites litigation.

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CONTAMINATED SITES UPDATE: COST RECOVERY ACTIONS

Background

In 1993, the British Columbia legislature introduced a statutory scheme to encourage

identification and remediation of contaminated sites culminating in the proclamation of Part 4 of

the Waste Management Act in April 1997. The purpose of the WMA is to promote the

expeditious remediation of contaminated sites. The principle underlying Part 4 of the WMA is

that of polluter pays; that is the financial burden of cleaning up contamination is allocated to

those responsible for or those who benefit from the contamination and incidental activities. In

the summer of 2004, the legislature consolidated the provisions of the WMA and other

legislation in the new Environmental Management Act.

A key feature of the statutory scheme is the private cost recovery action with respect to

remediating contaminated sites. A person who incurs costs in carrying out remediation at a

contaminated site may pursue in court their reasonably incurred costs of remediation from those


Litigation Update: Where Are We Now? By Graham Walker and Rick Williams



responsible. Until recently there has been no guidance from the courts to assist parties in

assessing how courts will determine whether costs of remediation are reasonable or whether a

plaintiff is entitled to their actually incurred legal costs. Two key decisions released in April

(CN v. ABC and Workshop Holdings v. CAE) provide some direction. We summarize these

cases below and discuss briefly a third case that may provide some guidance in the future.

Recent Cost Recovery Cases

1. Canadian National Railway Company v. ABC Recycling Ltd., 2005 BCSC 647

On April 29 the Supreme Court of British Columbia released its 68-page decision in CN v. ABC.

The authors represented CN. The decision resolves a number of important issues concerning

cost recovery actions. Before addressing these issues, we present a brief overview of the facts.

Factual Context

CN was the owner of an approximately 80-acre parcel located on the north bank of the Fraser

River in Burnaby, British Columbia. ABC was a neighbouring property owner and operated a

scrap metal and auto wrecking business. As early as 1997 ABC’s operations had encroached

onto CN’s property and caused contamination of CN’s lands including metals, hydrocarbons and

PCB’s. In 1999 and 2000, ABC purported to remove its product from the CN lands and

conducted an excavation of the affected soils. In 2000, CN conducted further investigation, as

part of its efforts to obtain a certificate of compliance from the Ministry of Water, Land and Air

Protection in support of its business plan to subdivide and sell its property. This investigation

and analysis revealed that CN’s property was still contaminated.

CN and ABC entered into somewhat of a unique agreement to undertake the remediation,

whereby ABC would act as excavation contractor and CN’s environmental consultant would

oversee the process and take confirmatory samples. Following the remediation of the

contamination and the issuance of a Conditional Certificate of Compliance, CN sought recovery

of its costs of remediation from ABC. ABC refused to pay and the litigation was commenced by

CN.




ABC admitted that the CN property was a “contaminated site”, that ABC was a “responsible

person”, that ABC caused the contamination, and that CN incurred “costs of remediation”. The

issues presented at trial were whether CN’s “costs of remediation” were “reasonably incurred”

and whether CN was entitled to recovery of its legal costs on an indemnity basis or a tariff basis

as set out in the Rules of Court.

Court’s Legal Costs Findings

With respect to the legal costs issue, CN sought to recover its actual legal costs associated with

seeking contribution from ABC. A significant portion of a plaintiff’s costs in any legal proceeding

is its legal costs. In a typical legal proceeding, the successful litigant is entitled to recover its

legal costs in accordance with a tariff contained in the Rules of Court (usually only 20% to 30%

of the legal costs actually incurred). A key finding in the CN decision is that a plaintiff who

incurs costs of remediation can recover all of its reasonable legal costs actually incurred in

seeking contribution from those responsible.

The significance of this decision cannot be overstated. Often, the spectre of legal costs act as a

barrier to a plaintiff wishing to pursue a claim for damages in court, particularly when the amount

of money involved is relatively small. The CN decision removes this barrier; those innocent

parties who incur costs remediating a contaminated site and are successful against actual

responsible parties will enjoy more than just a pyrrhic victory.

Court’s Approach to Determining Reasonably Incurred Costs

The legal costs, like all the costs of remediation, must be reasonably incurred. The CN decision

establishes the following factors a Court will consider in determining what are reasonably

incurred costs of remediation:

1. A Court will employ a two-step approach to determine whether costs are reasonably incurred. First, the Court will examine whether the plaintiff acted reasonably in remediating the contamination. Second, the Court will examine whether the costs are themselves objectively reasonable. The Court will look at various particular items of cost or expense incurred by the plaintiff to determine whether they are reasonable.

2. All of the circumstances of the case are relevant. The plaintiff can put forward evidence of costs not claimed in order to show that the costs claimed are




reasonable. Thus, the Court will look to what the plaintiff expended globally on remediating a contaminated site in order to determine whether the costs claimed are reasonable.

3. The burden is on the plaintiff to show that the plaintiff incurred reasonable costs. It is not enough to show that the plaintiff incurred costs and expect the defendant to show that the costs were unreasonable.

4. It is not necessary for the plaintiff to call expert evidence to prove that the costs incurred are reasonable. This can save parties the extra cost of hiring an expert in cases of minor contamination that proceed to trial.

5. Plaintiffs are entitled to adopt a careful, cautious approach in remediating contamination particularly when such an approach is the foundation of a successful application for compliance to the appropriate government ministry.

Result and Conclusion

In the result, CN recovered approximately 95% of its costs claimed from ABC as costs

reasonably incurred as well as its reasonable legal fees actually incurred through trial. The CN

decision establishes that a plaintiff can recover legal costs actually incurred in seeking

contribution from those responsible and provides a framework for determining whether the

plaintiff’s costs were reasonably incurred. The decision enshrines the principle of polluter pays.

The decision also ensures that a cost recovery action is an effective and practical means of

recovering costs of remediating a contaminated site.

2. Workshop Holdings Ltd. v. CAE Machinery Ltd., 2005 BCSC 631

Those who have followed the developments in contaminated sites litigation will be familiar with

the Workshop case. The parties have been before the courts on several occasions. Workshop

previously brought a cost recovery action under Rule 18A summary trial procedure because the

Court determined that the Act required the plaintiff to first obtain from the Regional Waste

Manager a determination that the site was a contaminated site. Workshop appealed that

decision to the Court of Appeal of British Columbia and the Court allowed the appeal holding

that Workshop could bring a cost recovery action without a final determination of contamination

by the Manager. The plaintiff persisted in its efforts and proceeded to another summary trial.




The Workshop Holdings decision, released on April 28, 2005, provides some guidance to

remediators with respect to cost recovery actions and remediating contaminated sites.

Workshop owned property in Vancouver that it intended to develop commercially. In the

process of developing its property Workshop discovered copper and zinc contamination in the

soil. CAE had in the past operated a brass foundry on the property. Workshop retained an

environmental consultant and applied for an approval in principle from the Ministry. Following

completion of remediation, it commenced an action against CAE to recover its reasonable costs

of remediation.

The trial lasted one and a half days. At trial, the Court found CAE responsible and awarded

Workshop $105,500 of the $116,000 it had sought to recover, deducting only amounts for an

unrelated removal of a storage tank and sump pump and for soil that the Court determined

Workshop had to remove in any event. In the process of doing so, the Court rejected a number

of CAE’s arguments:

1. CAE argued that the costs incurred were unreasonable because only Workshop’s development of the property made the remediation necessary. The Court did not accept this argument and held that the WMA is designed to ensure that polluters pay the costs of remediation when the property is subsequently developed for other uses.

2. CAE argued that Workshop did not need the AIP but could have proceeded by way of independent remediation at a reduced cost. The Court found that Workshop had sound business reasons for proceeding in the manner that it did. Provided the course undertaken was reasonable, Workshop was not obliged to proceed with a particular course of remediation simply because it was the most cost-effective.

3. CAE argued that Workshop’s claim was barred by the 30-year ultimate limitation period. While not deciding whether the ultimate limitation period applied to cost recovery actions, the Court held it could not apply in this case because the legislative scheme was first created in 1993. As such, the cause of action arose less than 30 years before Workshop made the claim.

To summarize, three key points come out of the Workshop decision. First, it is reasonable for a

landowner to remediate property in order to develop it. Second, the Court will not penalize an

owner for exercising business judgment in remediating property provided the owner’s actions

and decisions are reasonable. Finally, the Court confirmed that if the 30-year ultimate limitation




period applies to cost recovery actions, the clock does not start running until 1993 at the

earliest.

3. Michael Traylor & Co. v. Woolford, 2005 BCSC 265

This case involved the sale of a commercial building in Richmond. The buyer realized after the

sale that soil under the building was contaminated. The buyer had to clean up the site before

selling the property. The cost of removing and treating the soil was approximately $450,000.

The case proceeded to a Rule 18A summary trial. The Court determined that the case was not

appropriate for summary trial and must proceed to a full trial. The Court gave four reasons for

its decision:

1. The amount of money involved was relatively large (approximately $450,000);

2. The Court needed to assess the plaintiff’s credibility;

3. The Court needed to examine the facts carefully given the complex liability provisions in the Waste Management Act; and

4. There were many parties in the action.

We will monitor this case as it proceeds.

CONTAMINATED SITES: CHANGES TO PROCEDURE IN THE RULES OF COURT

Upcoming procedural changes may impact on future contaminated sites litigation. It has been

more than eight years since the Canadian Bar Association released its “Systems of Civil Justice

Task Force Report”. The Report identified issues of delay, cost and complexity throughout the

Canadian civil justice system and other common law countries, and called for sweeping

changes to improve the average citizen’s access to the courts and to alleviate these problems.

In particular, the Report recognized that the complexity of litigation has increased dramatically

over the past few decades, attributable largely to the ever-expanding amount of reported case

law and an explosion of new legislation. The direct correlation is an increase in costs to clients,

many of whom can no longer afford the assistance of counsel in pursuing or defending a

Supreme Court action.




On March 31, 2005, in recognition of these problems, British Columbia’s Attorney General

announced two significant changes to the rules that govern civil litigation in British Columbia.

The changes, which take effect on September 1, 2005, are part of an initiative to make the

Court process “easier, faster and more affordable for all British Columbians seeking justice”.

The first change is an increase to the Provincial Court monetary limits from $10,000 to $25,000.

The second, and more dramatic change, is an amendment to the Rules of Court to introduce a

mandatory “expedited” procedure for most claims of $100,000 or less: Rule 68 will be

introduced as a two-year pilot project in four Supreme Court registries, including Vancouver,

Victoria, Prince George and Nelson.

In a nutshell, Rule 68 will eliminate or restrict many interlocutory procedures, including discovery

processes, and require the parties to consider the strength and weaknesses of their claim or

defence at an early stage of the process. BC is following the lead of many other jurisdictions

that have already enacted similar procedures to Rule 68, including Alberta, Ontario, Manitoba,

the Federal Court of Canada and many US States.

The overriding theme of Rule 68 is proportionality – what is reasonable in the circumstances

given the amount that is at issue. Some of the highlights of Rule 68 include: the elimination of

jury trials; a narrowing of the scope of document discovery (from potential relevance to

materiality); the elimination of the use of interrogatories and pre-trial examinations of witnesses;

a requirement to exchange witness lists and summaries of the witnesses evidence at a very

early stage (60 days after the close of pleadings); a restriction on calling any witnesses not on

the list and/or whose evidence has not been summarized; the elimination of oral discovery

(subject to leave or consent); a limit of one expert per party (subject to certain exceptions and

Court order); the ability of the Court to require a jointly instructed expert; a restriction on the

timing of interlocutory applications; mandatory trial management conferences; and the

exchange of detailed briefs prior to trial.

There are three particular points to keep in mind that are relevant to contaminated sites cost

recovery actions. First, and this may be true of many actions, the process is likely to lead to

more settlements. The exchange between the parties of summaries of the evidence and of

detailed trial briefs at least three weeks before trial means that the parties should have a good




idea of the strengths and weaknesses of the case. With all the information available well before

trial, the parties will be in a position to exchange sensible offers of settlement.

Second, the Court can order that a jointly instructed expert give evidence on any one or more

issues. If the parties cannot agree on who will be the joint expert, the Court may choose. Of

course, parties in a cost recovery action utilize experts to establish various facts including

contamination at sites, sources of contamination and the reasonableness of costs. If the Court

orders the use of one joint expert between the parties, that expert’s testimony will likely carry the

day at trial. This is another factor that will likely lead to settlement.

Finally there is the issue of legal costs. In a usual action under this rule, the portion of legal

costs a successful party recovers is not included in the $100,000 limit. However, since the

CN v. ABC decision, a party initiating a cost recovery action can recover its reasonable legal

costs actually incurred. These legal costs are defined as part of the costs of remediation just as

much as the costs associated with removing the contamination from a site are costs of

remediation. In many instances, legal costs will account for a significant proportion of the costs

of remediation that a plaintiff is seeking. For obvious reasons these costs cannot be accurately

quantified at the time the parties commence litigation. It is unclear what will happen if a party

has a claim for recovery of $60,000 as costs of remediation plus its legal costs. The new Rule

is mandatory for claims under $100,000. We expect a plaintiff will commence an action under

the new Rule and the plaintiff will have to inform the Court at an early stage (perhaps at the

Case Management Conference) that the plaintiff will seek a greater amount at trial.

Rule 68 is an ambitious attempt to address the issues plaguing the court system. While the new

procedure may not, in and of itself, be a complete solution to the problems of delay and costs, it

is nevertheless a step in the right direction and is evidence of the government’s recognition of

those problems and a willingness to try and resolve them. Time will tell whether Rule 68 will be

an effective means for litigants to obtain a cost effective and timely resolution of modest claims

or whether it will simply add to the overall complexity of the process.




COMPENSATION FOR ENVIRONMENTAL DAMAGE/HARM

Besides significant developments in the area of contaminated sites, the past year also saw

significant development in the area of compensation for environmental damage. The Supreme

Court of Canada’s decision in British Columbia v. Canadian Forest Products Ltd., [2004] 2

S.C.R. 74 addresses the Crown’s ability to obtain monetary compensation for environmental

damage to public land. Much of the decision relates to valuation and the peculiar regulatory

circumstances existing in 1992. Therefore, we restrict this summary to the Court’s discussion of

the Crown’s right to compensation for ecological or environmental damage.

Following a forest fire in 1992, which damaged almost 1,500 hectares of forest in the Stone

Creek area in the interior of British Columbia, the provincial Crown commenced an action

against Canadian Forest Products Ltd. (“Canfor”) for damages, including compensation for the

loss of non-harvestable trees the Crown had set aside for environmental reasons in sensitive

areas. The fire had been caused by Canfor’s failure to ensure that a controlled burn had been

properly extinguished.

The Crown originally sued in its capacity as landowner of the Crown forests. At the Supreme

Court of Canada, they sought compensation both as landowner and in a representative capacity

for environmental losses suffered by the public generally. Apart from the stumpage, the

Crown’s claim was limited to diminution of the value of timber. Thus, the majority of the Court

denied the Crown damages for the loss of the non-harvestable trees.

The Supreme Court of Canada refused to award the Crown monetary damages for

environmental loss for two reasons. First, since the Crown framed its case in a narrow,

commercial sense, the Court proceeded on the basis that the Crown’s entitlement in this

particular case was limited to entitlement in the role of landowner of a tract of forest. Second,

while the damages had both a commercial and an environmental component, the Court held

that the Crown had failed to lead any evidence at trial to allow the trial judge to quantify an

ecological or environmental loss.

The Court noted that there is no current legislation in British Columbia that allows for the

recovery of compensation for environmental damages, but indicated that there is nothing

preventing the development of the common law, if done in a “principled and incremental fashion,




to assist in the realization of the fundamental value of environmental protection.” While leaving

the door open the Court held it must proceed cautiously and the pleadings and evidence here

did not support the claim.

The decision raises issues for those responsible for forest fires. In effect, the scope of the

decision is likely much broader. Arguably, it captures all operations or activities that adversely

affect Crown land. The majority noted that there is no legal barrier to the Crown suing to

recover damages to the environment on account of public nuisance, negligence or other torts.

However, other than a private citizen with a special interest, it is questionable whether anyone

but the State can be considered the proper party to sue for such damages.

UPDATE ON ENFORCEMENT CASES – PROVINCIAL AND FEDERAL

The past year saw a continued decrease in the number of reported decisions on environmental

prosecutions. Generally, the number of provincial charges has decreased while the number of

federal charges has maintained in rate. Some decisions of note are summarized below.

R. v. Snowline Enterprises Ltd., 2004 BCPC 244

This was a prosecution under the B.C. Waste Management Act (now the Environmental

Management Act). The accused pleaded guilty to breaching s. 8(1) of the WMA for storing

more than the allowed amount of bunker oil waste from cruise ships. The defendants claimed

there was no intentional disregard of environmental safety. The Court fined the defendants

$1,000 and ordered them to pay another $14,000 to the Habitat Conservation Fund.

R. v. Canadian Tire Corp., [2004] O.J. No. 3129 (Sup. Ct. J.)

This was an appeal from a conviction for violating a regulation under the Canadian

Environmental Protection Act. Canadian Tire had imported bar fridges from China. The fridges

contained freon (a CFC). The trial Court found Canadian Tire guilty of importing products into

Canada containing freon contrary to s. 18(1) of the Ozone Depleting Substance Regulation

1998. The trial judge did not accept Canadian Tire’s due diligence defence that it relied on what

it believed to be a reputable foreign supplier complying with Canadian Tire’s purported notice to

the supplier that they ship CFC-free fridges only. The trial judge fined Canadian Tire $25,000.




On appeal (and cross-appeal by the Crown), the Court upheld the conviction and increased the

fine to $75,000.

R. v. Kingston (City) (2004), 240 D.L.R. (4th) 734 (Ont. C.A.)

This was an appeal by the Crown and a private citizen after prosecuting the city under the

Fisheries Act. The city built a golf course on top of an old dump site. Leachate from the site

was flowing into the river but the city ignored the problem. The trial judge found the defendants

guilty of depositing deleterious substances into waters frequented by fish contrary to s. 36(3) of

the Fisheries Act on seven of the eight counts brought by the Crown and the private citizen. On

appeal to the Superior Court, the appeal judge acquitted the defendants because the trial judge

applied the wrong legal test. The appeal judge held that since the particular leachate was not

inherently toxic, then the Court, in determining whether the substance was deleterious, had to

consider the concentration of the substance in the water and the duration of the discharge. The

Court of Appeal allowed the Crown’s appeal and restored two of the convictions. The Court

held that the Crown need only prove that the substance added to the water, prior to any dilution,

was deleterious and not whether the waters became deleterious. Although this decision is

significant for Ontario, it is less significant for British Columbia since British Columbia Courts

were applying this test prior to Kingston.

R. v. Canadian National Railway, 2004 BCSC 727

This was an appeal by the Crown on an unsuccessful Fisheries Act prosecution. Crew working

for the Canadian National Railway (CNR) dismantled two beaver dams on a creek running

alongside CNR tracks. The removal immediately decreased the water level and had wide

ranging and harmful effects contrary to s. 35(1) of the Fisheries Act. The trial Court acquitted

CNR after it raised a due diligence defence. On appeal, the Court dismissed the Crown’s

appeal. The Court noted that the trial judge had found that the CNR crew was trained in the

“slow release method” and that this method was a reasonable response to meet the needs of

transportation safety and to prevent unnecessary harm to the environment. The CNR staff also

held a reasonable and honest belief that that DFO had approved the dam takedowns (and if this

were true would have rendered CNR innocent) thus meeting the due diligence defence.




R. v. Gemtec Ltd., 2004 NBQB 371

This was an appeal by the Crown from an acquittal in a prosecution under the Fisheries Act.

Gemtec was involved in closing down a landfill for the City of Moncton. Leachate was escaping

from the landfill and entering water systems with fish contrary to s. 36(3) of the Fisheries Act. At

the end of the Crown’s case, the defence brought a non-suit motion. The trial Court granted the

non-suit motion because the Crown failed to provide a Minister’s certificate extending the time

for the Crown to launch a prosecution beyond the two-year limitation period for summary

offences.

On appeal, the Court allowed the appeal, set aside the verdict, and ordered a new trial. The

Court held that since the leachate continued to seep, it was a continuing offence. Any day over

the total period of time where the leachate is seeping could constitute an offence. The Crown

can prosecute a continuing offence even when a portion of the offence is committed outside the

limitation period. Since some of the dates of the offence were within the two-year limitation

period, the Crown could proceed with charges for those dates.

R. v. Goodman, 2005 BCPC 83

This was a prosecution under the Fisheries Act. The accused were charged with harming,

altering, disrupting or destroying fish habitat and with depositing a deleterious substance in

water frequented by fish contrary to s. 35(1) of the Fisheries Act. The accused used a tugboat

to remove silt build-up by using the revolution of a propeller and allowing the resulting current to

dislodge the silt into the downstream flow of water (also known as prop wash dredging). In spite

of the possibility that both large and small scale dredging is widespread, the Court found the

accused guilty.

R. v. Sapp, 2004 BCPC 442; 2005 BCPC 166

This was a prosecution under the Fisheries Act and the B.C. Water Act. The defendant was

charged with harmful alteration, disruption or destruction of fish habitat contrary to s. 35(1) of

the Fisheries Act as well as with unlawfully making changes in and about a stream contrary to

s. 41(1)(s) of the Water Act. In 1999, Big Creek overflowed its banks onto the surrounding land.

The defendant, in an attempt to contain the flooding, created berms along the creek using


13

primarily streambed gravel and vegetation. The defendant could have lawfully created the

berms on an emergency basis if he obtained the requisite approvals in advance. Unfortunately

for Mr. Sapp two fisheries officers were in the area to investigate other unrelated activities and

stopped by his ranch to ask for directions. Mr. Sapp and the officers got into a casual

conversation about the recent flooding and during this discussion Mr. Sapp told the officers

about how he took a bulldozer out into the creek to create the berms. The officers undertook an

investigation and charges were laid. At trial the defendant argued that the Crown had to prove

that the area in question was a “fishery” and not merely fish habitat. The defendant also argued

that the particular provision of the Fisheries Act was void as it was overly vague. The Court

rejected these arguments and found the defendant guilty. At a later sentencing hearing, the

Court fined the defendant $4,000 and ordered him to pay $40,000 to a habitat conservation trust

fund account. The Court allowed the defendant three years to make the payments given his

financial situation.

R. v. B.C.L. Construction Ltd., [2004] N.J. No. 248 (Prov. Ct.) (QL)

This was a prosecution under the Fisheries Act. A construction company while building

subdivisions deposited silt in a stream and was charged with depositing a deleterious substance

that altered a fish habitat contrary to s. 35(1) of the Fisheries Act. The Court found the company

not guilty because they exercised reasonable measures in order to prevent the occurrence of

the offence (due diligence) by installing silt fences, interceptor ditches and a settling pond.

Document: 2104720:10 Borden Ladner Gervais LLP


2005 07 25

JOCK A. FINLAYSON Jock Finlayson is Executive Vice President of Policy at the Business Council of British Columbia. The Business Council is a leading industry association representing approximately 200 large and mid-sized companies, drawn from all major sectors of the B.C. economy. Its corporate members and affiliated associations together account for one-quarter of all jobs in British Columbia. Mr. Finlayson directs the Business Council’s policy development and research on economic, fiscal, tax, regulatory, energy, and environmental issues of interest to the province’s business community. He also plays a key role in the Council’s activities in the areas of membership services, project development and management, media relations, and relationships with external organizations. Mr. Finlayson is a member of several advisory bodies established by the B.C. government, including the Economic Forecast Council to the Minister of Finance and the Degree Quality Assessment Board established by the Minister of Advanced Education. He serves on both the Expert Advisory Panel to the B.C. Progress Board and on the UBC President’s Community Advisory Council. A B.C. native, he returned to Vancouver in early 1994 after more than a dozen years in Ontario and the United States. During this period, he worked as a Senior Policy Analyst and then Vice President with the Business Council on National Issues (now the Canadian Council of Chief Executives) in Ottawa; served as a Senior Analyst with the Environics Research Group, a market research and public opinion polling firm based in Toronto; and gained experience with two Canadian consulting firms. . Mr. Finlayson is the author/co-author of two books and more than 30 published articles and book chapters. A frequent commentator on economic and other public affairs issues, he contributes a monthly column to Business-In-Vancouver, writes periodically for the Vancouver Sun and the Financial Post, and is a regular guest on several radio programs, including CBC Radio’s “B.C. Almanac”. Mr. Finlayson holds a Master’s degree from Yale University and undergraduate and M.A. degrees from UBC, as well as a Post-graduate Diploma in Economics from the University of London (U.K.) He is the Past President of both the Association of Professional Economists of B.C. and the Ottawa Economics Association.

Doug Horswill - BIO Doug Horswill is Senior Vice-President, Environment and Corporate Affairs at Teck Cominco Limited. Prior positions include Deputy Minister of Finance and Corporate Relations and Deputy Minister of Energy, Mines and Petroleum Resources in the Government of British Columbia. Before entering government he was employed at Utah International (BHP) and at INCO. Doug earned a Bachelor of Applied Science degree in Mineral Engineering, and a Master of Arts degree in Economics at the University of BC. He is Chairman of the Management Committee of the Red Dog Mine. He is a past chair of the Mining Association of BC; a Director and member of the Executive Committee of both the Mining Association of Canada and the Business Council for British Columbia; and Chair of the International Zinc Association Environmental Committee.

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