Ministry of the Environment Announces Framework for Major Overhaul of Ontario’s Environmental Approvals

April 1, 2010 | Bryan J. Buttigieg

In March of 2010 Ontario’s Ministry of Environment issued a document titled “Modernization of Approvals – Proposed Legislative Framework for Modernizing Environmental Approvals”. Posted on the environmental registry, the document outlines a proposal for a major overhaul of Ontario’s environmental approvals process – a process which, with only a few changes, has been in place for almost 40 years. The MOE has stated that it expects to begin introducing changes to the approvals system by September 2012.

Background

The current process, involving “certificates of approval” for air and land (issued under the Environmental Protection Act) and water (under the Ontario Water Resources Act) dates back to the 1970’s. One of its major drawbacks is its inflexibility – all activities must go through the same approvals process regardless of uniqueness, complexity or the potential harm the activity may represent.  Approvals once issued, tend to stay in place for years unless the approval holder seeks an amendment. One effect is that the same activity conducted by two identical businesses may be controlled by two very different sets of conditions simply because the certificates were obtained years apart or issued by different reviewers.

The Proposed Modernized Approvals Process

The MOE describes the “most notable” aspects of the proposed process as:

  • A new, simplified process for activities that could be characterised as low risk, less complex or have standard requirements;
  • Provisions for single-site, multi-media (ie air, land and water combined) permits or single, multi-site approvals;
  • Service delivery standards and on-line access and tools; and
  • Improved public transparency.

A Two Path Approval Process: The Registry and New Certificates of Approval

The proposed approvals system would have two paths. A Registry would be created by the enabling legislation and selected activities would be registered with the MOE, provided they meet specified eligibility requirements. Rules of operation for the facility would be established by regulation. Compliance would be determined by an auditing process conducted by the MOE. The intent appears to be to include many common activities within this process.  This will increase uniformity of compliance obligations and should simplify the process for obtaining “routine” approvals.

Activities that would not qualify for the Registry would be subjected to an approvals process, somewhat similar to what is in place today. This would involve detailed technical review by the MOE. The main difference to the current system would be that one approval would be issued to cover all activities on site regardless of whether air, land or water was potentially affected. Similar “system-wide” approvals could be issued to an owner having multiple sites engaged in similar activities.

All activities in the Province would eventually be subject to the new system.

Implications of the Proposed Changes

A key difference from the current system is that unique permitting legislation will be created as opposed to having the approvals process embedded within specific statutes such as the EPA or the OWRA. This should allow for greater legislative and regulatory flexibility and may result in more frequent changes to the permitting system than has been seen under the current system.

While obtaining one permit for an entire site has great apparent benefits at the time of the original application, the system may in fact become more cumbersome and less flexible once the approved activities go into operation. One concern might be that once a “site-wide” or “system-wide” permit is in place, any change to any part of that permit, may trigger a review of the entire permit and all activities it covers. In contrast, under the current system of individual permits, there is virtually no risk that an application to amend a CofA for a waste water treatment plant will trigger a review of conditions for a certificate of approval issued for say, air emissions under s.8 of the EPA.  The new system may make obtaining amendments to permits more expensive, more time consuming and more fraught with uncertainty than the present system unless explicit provisions are put in place limiting the scope of review to the subject matter of a proposed change.

Recognising some of this problem, the MOE is proposing to allow “operational flexibility” under the new permits similar to what is now granted under comprehensive Certificates of Approval. The challenge will be to create a system that allows enough flexibility to avoid creating a cumbersome amendment system without removing all regulatory scrutiny of material changes in operations.

Activities allowed under the new Registry system would also have to live with a certain element of uncertainty, since any change to the regulation governing registered activities might require all activities “re-register” in order to remain compliant. This could make it very expensive for industry to remain in compliance if there are frequent or unexpected changes to the regulation. Under the current system, the holder of a certificate is in control of when to make changes to their permit. The new registry system will grant an equal control to the regulator and allow the regulator greater ability to ensure that the rules do not become out of date.

Current CofA’s to Become Obsolete

It is proposed that all activities would have to comply with the new system. The net result is that by the time the new legislation has taken full effect, all current CofA’s would become obsolete and every one would have been replaced by a new approval with new conditions of operation either as dictated by the Registry regulation or by the conditions of a new Site or System-Wide CofA. This will allow the MOE an opportunity to look at older (sometimes referred to as “grandfathered”) CofA’s and bring them into compliance with modern standards. Industry that has counted on so-called “grandfathered” operations will need to begin planning now for the possibility that their current activities may no longer be permissible after as early as September 2012 (the date the MOE wants to begin introducing the new system).

Finally, unlike current approvals, and presumably to avoid the problems caused by the current system of old, unchanged CofA’s, the MOE has stated that new CofA’s will likely have a “sunset clause” that will require regulatory review after say 10 or 15 years. The MOE is also proposing that the legislation grant it the “explicit” power to revoke approvals based on a history of poor compliance.

Conclusion

Experience with the Record of Site Condition regulatory process has shown that legislative changes in the environmental area can be fraught with controversy. Consultation from this early a stage is laudable. Of course, the most meaningful consultation will still only be possible once the actual legislative and regulatory drafts are available. Ample time will need to be provided for review and comment if there is to be widespread acceptance of such dramatic changes to a system that has been in place for so long.

The challenge, as with any legislation that claims to be more “modern” and “flexible”, is that it will need to be seen by business as being responsive to their needs, allowing investments to proceed in a timely and efficient manner and providing the stability and certainty of operation needed to make long term investments in the province. At the same time, the legislation will have to maintain the confidence of interest groups that “modernizing”, “flexibility” and “service delivery guarantees” are not euphemisms for doing away with environmental controls, protections and meaningful public consultation.

Public comment on the framework document is invited until April 16, 2010.

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