I recently had a chance to sit down with Dianne Saxe, a top environmental lawyer in Toronto to discuss the proposed changes to the approvals system in Ontario. Here is our video, take a look at the links and transcript below for full details, and don’t forget to visit her great blog here.
1. Tell us about Ontario’s “Proposed Framework for Modernizing Environmental Approvals”. What’s the intent behind it?
2. Practically, what will it mean for businesses? How do you expect the proposed framework to change the rules for businesses required to get permits?
3. Can we expect that business will have to renew their approvals more regularly for high risk activities? How is that any different than from the way things are being run today?
4. You noted on your blog that the MOE is proposing changes that would allow it to hold parent companies responsible for cleanup and costs of their subsidiaries where financial assurance was absent or inadequate. Is this feasible?
Here is some background info, which I would read if you haven’t already:
Jonathan Brun: Today I am with Dianne Saxe, a top environmental lawyer based in Toronto and we’re going to be discussing the proposed framework for modernizing the approvals system in Ontario, so Dianne, I was hoping you could give us a really quick overview of your firm and what you work in.
Dianne Saxe: Thank you Jonathan. We’re a small environmental law firm in Ontario, in Toronto as you said. I’m an environmental law specialist and I’ve been an energy and environmental lawyer for more than 30 years. Half of that for government, and half for private practice. I’ve dealt with approvals on both sides of the government fence over that period of time and if anyone wants more details about us, they’re on our web site at envirolaw.com.
Jonathan Brun: That’s right, yeah. You have, I’d say, the top environmental law blog in the country, easily, so it’s definitely worth a look for everybody watching the video.
Dianne Saxe: Thank you.
Jonathan Brun: So, I guess we’ll dive right into the questions, and the first one would be – If you could quickly tell us about Ontario’s proposed framework for modernizing environmental approvals. What’s the intent behind it? What’s the government trying to accomplish with this proposed framework?
Dianne Saxe: The key thing to try to understand about the approvals framework is that it hasn’t changed much in 40 years, and in that time everything else has changed. In 1971 when the Ministry of the Environment first began issuing approvals, basically, no one in private industry knew or cared anything about environmental protection. That wasn’t their job, so the only people who had expertise on pollution control, and particularly air pollution control, which is what a lot of this is about, were in the Ministry of the Environment. And so, the law was set up to say that no one could do anything having to do with pollution without a Ministry permit, and the Ministry people checked all the engineering because other people didn’t know very much. That’s 40 years ago. It hasn’t been like that for a long time. So, for at least 20 years, those of us who work in the field have known we need to change the system. It is not time effective. It’s not cost effective. It hinders innovation. It makes it hard to be an innovative company in Ontario. The current approval system is a huge economic and environmental drag. It needs to be changed, and the key things that are changing in the new system are to distinguish between low risk and high risk activities. The Ministry issues about 6,000 approvals a year, and the statistics vary, but about half of them don’t require Ministry engineering. The 37th time somebody applies for a paint booth, the Ministry already knows the rules they’re going to put on somebody who wants to put in a new paint booth, so they’re just going to publish them. You want to build a paint booth, you have to do these things, same as everybody else who wants to build a paint booth. So, the application process is going to be very short. If you comply with the requirements, you have your approval the day you file your application.
Jonathan Brun: Oh, ok.
Dianne Saxe: Now, on the other hand, to make sure people take these rules seriously and have to comply with them, one of the changes is going to be something called the “Accountable Person.”
Jonathan Brun: Ok.
Dianne Saxe: So, up until now, the emphasis has been on what’s called the “Qualified Person,” which is your consultant, having to certify various things. But now, the senior person in the company is going to be the Accountable Person, and they are going to have to certify every year that the company is complying with its permit.
Jonathan Brun: Ok, will they be more liable under the proposed system then they are currently today?
Dianne Saxe: Yes, that’s the point.
Jonathan Brun: Uh huh.
Dianne Saxe: The plant manager/the senior person is going to be personally accountable because they’re going to have to sign this certificate and send it to the government, and if you provide false information to the government, that’s a very serious offense. You can go to jail for it. So, the senior individual is going to have a more personal interest in whether the permit is being complied with.
Jonathan Brun: Does the framework also require companies to renew their permits more frequently? I’m talking about the high risk items, not so much the generic ones that will be dealt with by more [INAUDIBLE], but the high risk ones. Will the permits be required to be renewed more frequently, or is the time not really a factor in the proposed framework?
Dianne Saxe: No, you’re absolutely right. One of the proposals is that permits should be renewed more frequently. Now, this is back to the future again: In 1971, when the Ministry first started issuing permits, their idea was that they should reissue permits on a frequent basis to make sure people were up to date, and they just couldn’t do it. They didn’t have the staff, they didn’t have the resources, and they stopped doing it. So, even today you’ll find people who are still operating under old permits. So, yes, one of the ideas is that by reducing the number of permits they issue, they can go back to requiring regular updates, and even if the government isn’t requiring the regular updates, the Accountable Person is going to have to file something every year saying “Yes, we are in compliance.”
Jonathan Brun: Is there a plan in the framework to make the request more digital and less paper-based to allow them to allocate more resources to renewing the permits more frequently and to increase liability? Are they planning to really go 100% digital?
Dianne Saxe: That’s the plan. Now, we’re not supposed to say “e-health” [INAUDIBLE] that we’re thinking about this. It’s some of the same problems and there is some/all of the same reasons. Yes, it has to be digital. Everyone will be able to see everyone’s certificate of approval which has never happened before.
Jonathan Brun: It remains to be seen if the government can pull it off, but I mean it would be fantastic and I think it would set a president for other jurisdictions in Canada to follow suit because it would certainly be great to see this across the country.
Dianne Saxe: Absolutely. Now, one other thing that’s being done in the approval system that’s important is the question of financial assurance. Financial assurance is money that a company puts up during its operations to guarantee that there’s money available for clean up if there’s a problem, either at the end of their life or if there is an accident. We’ve had this system for decades and it has never worked very well. In fact, the Ministry of the Environment admitted a few months ago in a hearing that of the 30 times in their entire existence where they’ve called on financial assurance, never once did they have it. (laughter) Sometimes they’re off by $60,000,000. So, that ends up coming out of the taxpayer or it ends up with things not getting cleaned up. So, they have admitted, or they were forced to admit in this hearing, that they need to fix this and they have signaled in the approvals reform process that they’re going to fix it, and by fixing it, that means there’s going to be more financial assurance required, but they may also be a little more flexible on how you can provide it. Final piece of this is the question of “What if the company goes bust and hasn’t left enough financial assurance?” which has happened quite often, the [INAUDIBLE] chemical case being the one where they were $60,000,000 off. But, the Ministry is now proposing is that parent companies will be liable if a subsidiary goes bust without having provided sufficient financial assurance.
Jonathan Brun: The framework is open for comments until April 16th and we mentioned earlier that they’re hoping to get the whole system in place in the next two and a half years, so do you have any sense of their timeline over the next 6 to 8 months in terms of implementing some of their proposed changes?
Dianne Saxe: I think they’re going to be very aggressive. To get all this done in the time provided is a sprint that starts now. The Ministry has promised that we’re going to start seeing certificates of approval online this month, and more and more signs of electronic transparency in the near future. So, whether we’re going to actually have legislation passed this fall, I don’t know, but I don’t think they’re going to get everything in place by 2012 unless they start moving with legislation quite quickly.
Jonathan Brun: Ok, great. Well, I think that pretty much sums up the main issues dealing with the proposed changes to the approval system in Ontario. I was wondering if you had any additional comments on the proposed framework or anything else going on. Ontario is by far the most aggressive in terms of new environmental legislation. So, we could talk for hours, but I was wondering if you had any other comments about the Ontario environmental legislative scene?
Dianne Saxe: Well, the bottom line of the approvals change is that it’s very important. We need it badly. The transition’s going to be tough, but we should be better off at the other side.
Jonathan Brun: Great. Well, thank you Dianne. I’ve been speaking with Dianne Saxe, who is a top environmental lawyer based in Toronto. Definitely check out her blog at envirolaw.com, and we hope to be able to follow this and other environmental changes in Ontario with you on an ongoing basis. It’s been a real pleasure, and thanks for taking the time to speak with us today.
Dianne Saxe: Oh, my pleasure. Thank you, Jonathan.
Jonathan Brun: Take care.