Ontario’s Open for Business Act: Modernizing Approvals and Other Changes to the Environmental Protection Act

Environmental, Energy and Resources Law

December 08, 2010

Having received Royal Assent October 25, 2010, the Open for Business Act (the "Act") makes several amendments to the Environmental Protection Act (the "EPA"), the Ontario Water Resources Act (the "OWRA"), the Environmental Assessment Act (the "EAA"), the Safe Drinking Water Act, 2002 (the "SDWA"), and the Toxics Reduction Act 2009 (the "TRA"). It also repealed the Waste Management Act, 1992 and the Waterfront Regeneration Trust Agency Act, 1992.

One of the main goals of the Act is to streamline the environmental approvals process in order to make it easier for businesses to navigate the regulatory framework, while using a risk-based approach in assessing projects for approval in order to meet an environmental protection mandate. The basic prohibitions against doing certain activities without an approval found in sections 9 and 27 of the EPA and section 53 of the OWRA remain, but there are changes to the approvals application, registration, assessment and enforcement processes.

Two-Track Approach to Approvals

The new system, which is not yet in place and unlikely to be fully implemented before September 2012, is based upon a two-track approach to approvals. Those engaged in "lower-risk' activities are required to register and are subject to operating requirements laid out in regulation, but not required to undergo an individual assessment, while higher-risk activities will have to garner an Environmental Compliance Approval (an "ECA") through a project-specific assessment.

The rationale for the "registration" system as a counterpart to the ECA process is that many businesses undertake relatively uniform, low-risk, non-complex activites and it makes poor business sense to require them to undergo a unique assessment for every undertaking. Under the new regime, the Ministry of Environment ("MOE") can develop uniform terms and conditions for specific types of operations and then allow businesses to declare themselves to the MOE through "registration" and be bound by the applicable set of terms and conditions set out for their sector in regulation. It has yet to be determined what specific sectors or activities will qualify for the Registry. Draft regulations are expected in the coming weeks, at which point there will be a period for public comment. The MOE is hopeful that the Registry will be administered online and that it will be publically available. Although the right to contest "unreasonable' Director's decisions under the Environmental Bill of Rights will not apply to undertakings subject to "registration", the public will, however, be able to petition the MOE to have certain operations moved into the ECA process.

Those undertaking more complex or higher-risk activities must seek an ECA in order to operate. The EPA requires that all applications be complete and submitted in accordance with regulatory requirements. As with the "registration" regulations, the draft ECA regulations have yet to be released for comment.

Director's Powers

The Director has wide powers in considering applications for ECAs and may refuse them, require additional information to be provided, and require consultations with specified persons or groups. If the decision is made to issue the ECA, the Director may limit it to specific activities, impose terms or conditions, or incorporate other ECAs. Furthermore, the Director may consider compliance history and decide to suspend, revoke or refuse to issue an ECA based on the past conduct of the applicant. The ECA process also incorporates the idea of "operational flexibility' from the Comprehensive Approvals (Air) regime, to allow businesses to make minor modifications to their operations without requiring a new ECA. On his or her own initiative the Director may alter or revoke terms or conditions, impose new terms or conditions, or suspend or revoke the entire ECA.

Furthermore, the Director may also require a hearing by the Environmental Review Tribunal (the "ERT") on all or part of the application instead of deciding him or herself. If an ERT hearing is ordered, the Minister is required to implement the decision of the ERT on the application, although it may be appealed. This is one of a number of changes to the role of the ERT in the environmental approvals process. There are no longer any mandatory hearings before the ERT for certain activities or applications, but hearings are now available for "section 9" activities, which deal with structures responsible for the discharging of contaminants.

Other Changes

Provincial Officers acting under the EPA and OWRA now have the authority to require a response to reasonable inquires made over the phone or by other means of communication. This means that provincial officers no longer have to attend at a property in order to collect basic information regarding whether or not a site is in compliance with applicable environmental laws. These new provisions are in effect now. Furthermore, Provincial Officers will eventually be able to issue Provincial Officer Notices, which are written notices stating that the Officer believes the individual or business that is subject to "registration" to be acting in contravention of a Registry regulation and requiring certain prescribed actions on the part of the individual within a specific period.

The Act also introduces Administrative Penalties as a new tool for compliance enforcement. The provisions dealing with Administrative Penalties are not yet in effect. Unlike Environmental Penalties, which only apply to specific sectors at present, Administrative Penalties can be laid against any business that fails to apply for review, register an activity, maintain and update a registration or carry out measures set out in a Provincial Officer's Notice. They can also be used to prevent businesses "from deriving, directly or indirectly, any economic benefit as a result of" any of these actions. Administrative Penalties are considered absolutely liability offences, meaning the only question is whether or not the party did in fact violate the EPA, regardless of intention or due diligence. Penalties may only be issued within a year of the impugned act coming to the attention of the Provincial Officer or Director. Those subject to a penalty under the EPA may appeal a decision of a Provincial Officer to the Director. Significantly, if one pays the penalty and rectifies the matter giving rise to the penalty, they cannot be convicted of the offence, unlike the Environmental Penalty regime.

An updated version of the EPA, showing both provisions that are currently in force and those that will come into force at a later date, can be viewed here.