IMPROVING ONTARIO’S CONTAMINATED SITE REMEDIATION SYSTEM

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FRONTIER CENTRE FOR PUBLIC POLICYIMPROVING ONTARIO’SCONTAMINATED SITEREMEDIATION SYSTEMBY ROSS McKITRICK andABDULRAHMAN KHOGALIand ELMIRA ALIAKBARIJANUARY 2017FRONTIERCENTREFOR PUBLIC POLICYIdeas that change your world / www.fcpp.org1

FRONTIER CENTRE FOR PUBLIC POLICYPOSITIONONLYROSS McKITRICKProfessor of Economics, University of GuelphRoss McKitrick is a Professor of Economics at the University of Guelph where he specializesin environment, energy and climate policy. He has published widely on the economics ofpollution, climate change and public policy. His book Economic Analysis of EnvironmentalPolicy was published by the University of Toronto Press in 2010. His background in appliedstatistics has also led him to collaborative work across a wide range of topics in the physicalsciences including paleoclimate reconstruction, malaria transmission, surface temperaturemeasurement and climate model evaluation. Professor McKitrick has made many invitedacademic presentations around the world, and has testified before the US Congress andcommittees of the Canadian House of Commons and Senate.ABDULRAHMAN KHOGALIGraduate Student Intern, Frontier Centre for Public PolicyHe is a consultant with experience in hazardous materials management and subsurface soil andgroundwater investigations. He has a B.Sc. in Biopharmaceutical Science from the Universityof Ottawa and an M.Env.Sc. from the University of Toronto.ELMIRA ALIAKBARIPost-Doctoral Research Assistant, University of GuelphShe received her PhD in Economics from the University of Guelph in 2016 and her B.S. inEconomics (2003) and an M.A. in Economics (2007) from the University of Tehran in Iran. Sheis a Senior Economist with the Fraser Institute.FRONTIERCENTREFOR PUBLIC POLICY203-2727 Portage Avenue, Winnipeg, Manitoba Canada R3J 0R2Tel: 204-957-1567Email: manitoba@fcpp.orgThe Frontier Centre for Public Policy is an independent, non-profit organization that undertakes research and educationin support of economic growth and social outcomes that will enhance the quality of life in our communities. Through avariety of publications and public forums, the Centre explores policy innovations required to make the prairies regiona winner in the open economy. It also provides new insights into solving important issues facing our cities, towns andprovinces. These include improving the performance of public expenditures in important areas such as local government,education, health and social policy. The author of this study has worked independently and the opinions expressed aretherefore their own, and do not necessarily reflect the opinions of the board of the Frontier Centre for Public Policy.Copyright MMXVII by the Frontier Centre for Public Policy.Date of First Issue: January 2017.Reproduced here with permission of the author. Any errors or omissions and the accuracyand completeness of this paper remain the responsibility of the author.ISSN 1491-78Ideas that change your worldwww.fcpp.org2

FRONTIER CENTRE FOR PUBLIC POLICYTABLE OF CONTENTSExecutive Summary.4Introduction and Purpose of This Study.6Background.7Interviews with pendix. 19Bibliography.21Endnotes.213

FRONTIER CENTRE FOR PUBLIC POLICYEXECUTIVE SUMMARY“Brownfields,” or building sites contaminated by past users, need to undergo some levelof remediation prior to their redevelopment. Ontario’s brownfield remediation rulesunderwent a major revision in 2011. The new rules are much more standardized andprescriptive than they were before. While this has, theoretically, removed much of theuncertainty about what is required for an environmental assessment and site clean-up, thenew rules are also slowing down approvals for construction projects. Some professionalsin the property remediation and development field have expressed concerns that projectsare being put at risk due to unnecessary costs and delays, which create a bottleneck foreconomic development. They also say urban sprawl is being encouraged because it iscostlier to remediate previously-developed urban lands than it is to build on land that hasnever been developed.The authors interviewed 10 experienced insiders in the field of Ontario site remediationand risk assessment to get their frank, unbiased assessments of the Ontario brownfieldregulations. While the experts agree the rules have removed much of the guesswork aroundmeeting cleanup standards, and have clarified who is qualified to do the work, the ruleshave also created new problems that need to be addressed. Specifically, the intervieweeshighlighted bottlenecks and delays in the Ontario Ministry of the Environment and ClimateChange, poor communication between the ministry and practitioners in the field, and aninconsistent application of the rules.This paper summarizes the findings of the field interviews, then presents a set of policyrecommendations aimed at speeding up the site assessment and remediation processeswithout compromising environmental quality. The recommendations are:1. The ministry should publish a gazette of all current rules and expectations, and putupdates out at regular intervals.2. The ministry should establish an option for conferencing with a consultant prior to himor her undertaking a Risk Assessment.3. The ministry should move to a double-blind peer review system for RAs.4. The ministry should allow Qualified Persons to determine delineation parameters.5. The ministry should not permit municipalities to demand redundant Records of SiteConditions.6. The ministry should make provisions for developers to commit to risk managementsteps at an early stage, then conduct site assessments and RAs contingent on theimplementation of the risk management methods.7. The ministry should move to a self-reporting — random audit model for acceptance ofrisk assessments, as is currently done for records of site condition.This paper explains each of these proposals and provides a rationale.4

FRONTIER CENTRE FOR PUBLIC POLICYLIST OF ACRONYMSAPEC – Area of Potential Environmental ConcernCPU – Certificate of Property UseESA – Environmental Site AssessmentGTA – Greater Toronto AreaMOECC – Ministry of the Environment and Climate ChangeMUST – Management of Underground Storage TanksO. Reg. 153/04 – Ontario Regulation 153 (2004)O. Reg. 511/09 – Ontario Regulation 511/09 (2011)QP – Qualified PersonRA – Risk AssessmentDISCLAIMERRSC – Record of Site ConditionThe views expressed in the reportare those of the authors alone andshould not be imputed to any of theparticipants in the study.SCS – Site Condition StandardsSRRA – Self-Reporting — Random AuditACKNOWLEDGMENTSIndividuals with the following credentials were interviewed during the preparation of this report: Senior risk assessor Professional engineer Risk assessor Vice president, planning, operations Senior toxicologist Environmental lawyer Senior consultant/project manager Professional geoscientist (2) Senior engineerThe authors kept all names confidential in order to encourage frank expressions of opinion, and to emphasize thatthey alone are responsible for its contents.The authors wish to thank Madeleine McKitrick for assistance in researching and preparing the draft.5

FRONTIER CENTRE FOR PUBLIC POLICYINTRODUCTION AND PURPOSE OFTHIS STUDYIn general, the interviewees agreed on some definitestrengths of the current system, as well as growingweaknesses and problems. Compared to the previoussystem, O.Reg. 153/04 is clear about what consultantsmust do to analyze the condition of a site andremediate it to an acceptable level. The rules alsoclarify who is a Qualified Person—namely someonewho is authorized to serve as signatory and supervisorfor site analyses and remediation. These changes putan end to a “wild west” situation, as one intervieweedescribed it, with few standards, many consultants withunclear qualifications, and in some cases, commercialinvolvement with the land that placed them in a conflictof interest.Provincial land remediation rules encourage thecleanup of sites that may have been contaminated bypast activity. They can be an effective way of protectinghuman and environmental health, but they can alsoaffect construction costs and the speed with which newprojects proceed. These rules can also accelerate urbansprawl by incentivizing rural greenfield developmentover the rehabilitation of old urban sites.Ontario’s site remediation rules (O.Reg. 153/04,modified by O.Reg. 511/09) were introduced in 2004and amended in 2011. The province’s experience overthe past five years provides an opportunity to evaluatethe pros and cons of a revised system. In the fall of2015 one of the authors of this paper (McKitrick) wasapproached by a professional working in the field ofsite remediation. This person was concerned that thesystem was getting increasingly slow and costly, andthat this was weakening the economy by slowing thepace of construction and development. The authorsdecided to analyze the structure of the policy and itsimpacts by interviewing people working in the fieldand summarizing their views in a report. The authorsdid not seek any external funding from any individual,corporation or government agency connected with theconstruction or remediation industries.The current system, however, is becoming too costlyand slow, the interviewees said. Approvals from theMinistry of the Environment and Climate Change aretaking longer than prescribed, leading to costly delaysin construction and mounting frustration. Consultantsreport inferior communication with the MOECC, andsome current practices that cause unnecessary delaysin an already lengthy process. The increasing cost ofobtaining development approvals for remediated sitesis leading to an increased preference for greenfielddevelopment over brownfield remediation andmanagement, especially in areas outside the GeneralToronto Area. Developers are opting for dig-anddump or site-capping solutions when undertakingremediation This may resolve the human exposure riskbut is not a good solution for the natural environmentand ecological receptors like plants and animals. Theadditional costs of the system are not translating intocommensurate benefits for people or the environment.The authors approached about two dozen individualsto request interviews. Ten of them accepted theopportunity. Each interview was structured around acommon set of questions. The interviews took placein the first half of 2016. Some interviewees receivedthe first draft and provided comments. The authorsare grateful for the professional input and advice theyreceived throughout the project. The views expressedherein, and all errors and omissions, are solely theresponsibility of the authors.This study explains how the Ontario site remediationrules work, and will report what professionals workingin the field have to say about it. The authors will presentan analysis of the economic incentives created by thesystem and will suggest reforms that could reducecosts and speed up approvals without compromisingthe goals of the legislation.6

FRONTIER CENTRE FOR PUBLIC POLICYBACKGROUNDThe developer may file an RSC based on a Phase OneESA, but in many cases the information collected duringthe Phase One investigation indicates a Phase Two ESAis warranted. This is an intrusive investigation whichcan include sampling, testing of soil and air (mostcommonly soil vapour or volatile organic compounds),sediment, groundwater, or surface water to determinethe extent of contamination.Ontario’s Current BrownfieldsLegislationSuppose a developer acquires a site with a history ofprevious industrial or commercial activity, and wantsto change the land use designation to a new formof activity, such as a residential development. Thisrequires filing a Record of Site Condition with theMOECC. This is a lengthy and detailed inventory of thenature of potential or actual chemical contaminationat a site. There are many circumstances in which filingan acceptable RSC is necessary for a developmentproject to proceed. Getting to that stage will require atleast one Environmental Site Assessment and possiblya Risk Assessment. Once an RA and its associated riskmanagement measures are approved a Certificate ofProperty Use must be drafted by an MOECC-affiliateddistrict engineer. The process is described in Figure 1.The regulation prescribes detailed Site ConditionStandards for chemical parameters of concern, andthe developer must bring the contaminants to withinthese standards. In O. Reg. 153/04, in order to file anRSC, developers must pursue a Phase Two ESA if thefirst phase reveals a potential for contamination. TheQP, whom the developer retains to investigate thesite of interest, must supervise the undertaking. Theregulation automatically requires a Phase Two ESAunder a few notable conditions, such as if the propertyhas ever been used as a garage, a hazardous materialssite, a bulk liquid dispensing facility (such as a gasolinestation), or for the operation of dry cleaning equipment.In a Phase Two ESA, the developer generally installsboreholes through which the soil can be sampled.Groundwater contamination can be delineated by theinstallation of monitoring wells. The landowner usuallyinstalls monitoring wells in an existing borehole andmay penetrate the ground deeper than boreholesto access the underlying groundwater table. The QPdetermines borehole and monitoring well locationsduring the Phase Two ESA planning phase and theseare subject to change and updates throughout theprocess. According to O. Reg. 153/04, a minimum ofthree boreholes are required at any site to determinewater flow direction and to sufficiently sample thecontamination. In practice, developers usually installmany more boreholes and monitoring wells to fullydelineate the on-site contamination. There are also avariety of other sampling techniques to assess air, water,soil, sediment, and general environmental quality,including air sampling using a variety of instrumentsand soil and sediment sampling using analyticalchemistry systems.Phase One and Phase TwoEnvironmental Site AssessmentFiling an RSC requires an ESA. The first step in thisprocess is called a Phase One ESA. This investigationuncovers any evidence of potentially contaminatingactivities, or any Areas of Potential EnvironmentalConcern at the site. The law1 (Schedule D Table 2) lists59 potentially contaminating activities. Phase One ESAsare non-intrusive and rely on historical information,aerial photographs, information on neighbouring sites,consideration of whether the site is an area of naturalsignificance, interviews with site representatives,topographic maps, water well records, and a review ofpast activity on the site. On the basis of this information,consultants determine whether a more detailed (PhaseTwo) ESA is needed. Generally, when filing an RSC fora more sensitive category of land use--in other words,a usage that might involve greater human exposureto contaminants in the ground--Phase Two ESAs arealmost always required. The law obliges QPs to reviewall relevant information and issue a professionaljudgment on how to proceed with a contaminated site.Through the installation of these boreholes andmonitoring wells, the location and concentration7

FRONTIER CENTRE FOR PUBLIC POLICYof contaminants in the land or water at a site arefully delineated and the geological/ hydrogeologicalconditions of the site are defined. Once developerscompile this information remediation options can beproposed to address the environmental contamination.A QP conducts or supervises the entire investigationand is responsible for ensuring that everything is donein accordance with the regulations.of addendums to the original RA.While the RA option has the potential to reducecompliance costs, in practice it has become a bottleneckand a source of widespread frustration. Intervieweesreport that the ministry has approved very few Tier 2RAs while the Tier 3 process is taking much longer thanpromised, largely because so many revisions are beingrequested and the expectations from the ministry arebeing poorly communicated. This paper will focus onthese issues in the next section.Remediation and Risk Assessment“It’s 16 weeks each time you submit anaddendum in response to the comments onthe previous round. A lot of the problem isthat during the review/edit time, the MOECCchanges their expectations and during thenext round of review, new comments areadded for things that previously met theirexpectations.”Based on the outcome of the Phase Two ESA, thedeveloper decides whether to proceed to remediation.The developer can undertake a site cleanup that willmeet the standards set out in the legislation. However,if the developer deems this too costly, another option isto apply for site-specific adjustments to the standardsunder a process known as Risk Assessment, whichextends the analysis to a determination of the likelyactual exposure to sensitive receptors.2 This optionmay be suitable if, for instance, the contamination onlyaffects a small part of the site away from where thenew use is proposed.- Interviewee“One of the new features was thestreamlined Tier 2 risk assessment. That hascrashed and burned. It’s a complete failure,because with very, very few exceptions,there has not been a single Tier 2 RAsubmission that has been accepted by theministry.”A RA can take one of two forms, respectively, a Tier 2 ora Tier 3.3 A Tier 2 RA means the developer must collectextensive data through intrusive sampling, which theythen feed into a ministry-approved computationalmodel along with a description of the risk managementmethods proposed. This yields a set of site-specificstandards that are based on generic standards andadjusted for the influence of the proposed riskmanagement measures. A Tier 3 RA incorporates thisprocess and adds other elements. Tier 3 RAs alsorequire data on exposure pathways that might notbe included in the Tier 2 model, and involve a moredetailed undertaking. Similarly, its output is a set ofsite-specific standards based on generic standards thathave been adjusted for risk management methodsand site characteristics.4 The Ontario government hadtraditionally promised that a Tier 2 RA will be reviewedby the ministry within eight weeks and a Tier 3 RAwithin 16–22 weeks, as the latter involves the use ofoutside consultants). The review will result in either theapproval of the RA and the risk management plan, or arequirement for further analysis and review in the form- IntervieweeRemediation or sprawl?The intent of the regulation, and eventual goal of theprocess, is the filing of an RSC so that a brownfieldsite can be developed. However, the other possibility isthat developers abandon, rather than develop the sitewhen they realize how much money and time must bespent to remediate the land. A developer in Ontarioalways has the option of looking for a site elsewhere,especially agricultural land adjacent to subur

5 FRONTIER CENTRE FOR PUBLIC POLIC LIST OF ACRONYMS APEC – Area of Potential Environmental Concern CPU – Certificate of Property Use ESA – Environmental Site Assessment GTA – Greater Toronto Area MOECC – Ministry of the Environment and Climate Change MUST – Management of Underground Storage Tanks O. Reg. 153/04 – Ontario Regulation 153 (2004) O. Reg. 511/09 – Ontario Regulation .

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