Environmental Site Assessments - The 2011 New Rules

By: Morris Sosnovitch

Effective July 1, 2011, there were changes made to regulations under the Environmental Protection Act (the "Act") of Ontario which will affect the way Environmental Site Assessments ("ESA") and Records of Site Conditions ("RSC") are done.  Property owners, landlords, buyers, developers, lenders, and property managers should all be aware of the new regime.

In December 2009 extensive amendments were passed to the 2004 regulations to the Act (153/04) which address the following main areas:

  1. New methodology for performing ESAs for both Phase One and Phase Two;
  2. Amendments to the way that RSCs are to be submitted and filed;
  3. Strengthening the standards for contamination;  and
  4. The introduction of a streamlined risk assessment procedure.

These amendments came in to force in 2011 in Regulation 511.

In short, the changes as concern builder's and developers in Ontario, will result in additional costs for performing ESAs and potential delays in the event that remediation or an RSC is required.  In a nutshell, these are some of the pertinent changes:

(a)            Phase One ESA Changes

  • more detailed procedural requirements for the qualified professional (QP) to follow in preparation of a Phase One ESA
  • mandatory data bases to be checked
  • minimum 250 metre radius from the subject property to be checked
  • requirements for persons to be interviewed, activities to be undertaken, the reporting format and attachments all to be standardized
  • the requirements to produce a conceptual site model

(b)           Phase Two ESA Changes

  • definition of prior uses where a Phase Two ESA will be mandatory
  • more detailed procedural requirements for the qualified professional (QP) to follow
  • standardized and required sampling and new standards for quality assurance and quality control
  • enhanced requirements for reporting
  • production of a conceptual site model
  • updated standards for the table criteria for 120 chemicals including addition of six additional contaminants

(c)            Records of Site Condition

  • changes to make the RSC submission process "clear and transparent"
  • defined time lines for RSC submission process
  • prescribed mandatory requirements
  • soils quality standards in any soils that are brought onto a RSC property

What Does This All Mean?

One thing that is clear is satisfying the new regulatory environment will involve additional cost and time.

An example of the extended time frame which landowners may run into if they are required to provide an RSC is if there is a requirement for ground water monitoring as a result of an ESA. The RSC will not be able to be filed for two years after the testing wells are put onto a site. Therefore if the production and filing of a RSC is a requirement, either of an agreement of purchase and sale, by a government or by a lender, the additional time frame to finalize an RSC has to be taken into consideration. Caution therefore has to be taken whenever an RSC is in question, and especially in situations where an RSC may not be a mandatory regulatory requirement, such as when there is no planned change in use. 

The first question is "does a developer have to comply with this new regime?" Regulation 511 requirements for the Phase One and Phase Two ESAs are geared to properties which will require a RSC. Properties which require an RSC, commonly known as Brownfields, are those for which there will be a change of use from a less strict environment, such as commercial or industrial uses, to more sensitive environments, such as residential, parklands or institutional educational uses. In these cases there will be no choice but to go through the procedure mandated in order to obtain an RSC for the purpose of developing the site.

In other cases an RSC may not be necessary to comply with the Act, but may nonetheless be required in order to satisfy requirements of a governmental authority which is taking title to part of the land as part of a development process or which may be mandated by lenders who may want the additional protection, limited as it may be, of an RSC.

For these properties there are possible alternatives to the Regulation 511 process and this may be something which can be negotiated. For example, lenders may be convinced to accept reports on an environmental assessment done to the current 2004 standard or to the Canadian Standards Association 768 standard which is less stringent then the new Regulation 511 standards.

The other factor which owners need to take into consideration is the additional cost to produce an ESA, complaint with Regulation 511, even a Phase One ESA. In discussions with an engineer the cost of a Phase One ESA can easily be twice as much as it currently costs as a result of the additional due diligence and other requirements which a QP has to satisfy.

Is There Any Good News?

There is some potential good news for developers in that:

  1. The criteria to be followed is more objective, which is intended to level the playing field and to allow less discretion among different QPs.
  2. The Ministry is committed to becoming more predictable in its handling of RSCs and have a requirement to acknowledge an RSC which has been filed within thirty (30) days.
  3. There is a new streamlined risk assessment process which may expedite and allow for alternative standards for higher risks sites allowing them to be developed.
  4. Some increased liability protection from regulatory prosecution if there is off site contamination after an RSC is filed, however, this does not affect civil liability which is still a concern.
Be Aware


In conclusion, commercial and industrial property owners, developers, lenders and managers should be aware of the new requirements and should enter into early discussions with their environmental consultants as to what they really need to achieve, the extent of due diligence necessary to be undertaken, the purpose of the retainer, how much time is available to do due diligence or site assessments, and, of course, the cost. 

It will be important in structuring timelines in agreements, including mortgage commitments, to consider if any of the parties need a Phase One and/or Phase Two ESA which complies with the new Regulation 511 and discussion should be had with the engineer as to any expanded time frames required to complete the same, especially if a RSC is needed.

For further information, please contact John Singer by phone at (416) 364-4400 or by email at jsinger@businesslawyers.com.    

This article is meant as a general guide and is not meant to be legal  advice nor a definitive analysis of the law. Readers should discuss their situation with their professional advisors. While reasonable efforts are made to ensure the accuracy of the information, the information contained herein does not replace the need for legal advice which is specific to your situation. 

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