Imagine a large ocean-going ship that must change speed and direction to get through a narrow channel. The captain can issue the orders, but it takes time for the heavy ship to respond. The captain must anticipate and plan for the course correction to keep the ship from running aground.
Navigating regulatory changes is like navigating uncharted waters, particularly for those in the construction sector, due to the multi-year nature of many projects. The reality of a new regulatory environment must be anticipated and planned for, even before the full impact of the change and the practical implications that accompany it are fully understood. Decisions made today may carry consequences years from now, as the changes take effect.
Consider Ontario’s new legislation governing “Excess Soil” – generally, soil removed from construction sites – Ontario Regulation 406/19 (O.Reg. 406/19). Originally proposed to be implemented on July 1, 2020, the legislation was subsequently delayed and comes into effect on January 1, 2021. However, like a large ship that is starting to alter direction, the requirements have already started being applied to projects in advance of the legislated requirement. This article looks at three Excess Soil management projects conduced in 2020 against the backdrop of O.Reg. 406/19.
Case Study 1: Familiar Waters
Early in 2020 we were working with the owner of a development property, supporting compliance with the existing Record of Site Condition Regulation, Ontario Regulation 153/04 (O.Reg. 153/04). Our team had carried out the work needed for a Record of Site Condition (RSC), which sets out the environmental condition of a property at a particular point in time (the “certification date”). However, it was then determined there was a need to immediately import 30,000 cubic metres of soil to the development property. The tricky part: the RSC submission was still under review by the Ministry of Environment, Conservation and Parks (MECP), and one or more rounds of revision and resubmission are typically required prior to final acceptance and acknowledgement of the RSC by the MECP. Final acceptance of the RSC was required for the development to proceed to construction.
In the current (i.e., pre-O.Reg. 406/19) environment, importing soil to an RSC property is the one scenario where provincial regulation applies, as O.Reg. 153/04 contains specific sampling requirements for soil to be imported to an RSC property. We advised the client that since the certification date used to prepare the RSC pre-dated the proposed soil import, it would not “invalidate” the RSC. However, should MECP require revisions to the RSC that impacted the certification date, the imported fill could delay RSC acknowledgement by the MECP. RSC aside, the client needed some sampling and analysis to provide assurance that the environmental quality of the imported soil was suitable for use at the RSC property. To mitigate the risk of delay, we proposed a sampling and analysis program for the soil in accordance with O. Reg. 153/04.
There is a critical difference between the existing O.Reg. 153/04 requirements for Excess Soil and the pending framework under O.Reg. 406/19. Where the new Excess Soil regulation focuses primarily on the responsibilities of the generator (i.e., the source site), the RSC regulation focuses solely on the receiving site, i.e., the RSC property. In this case, the proposed source site would be exporting fill to several different receiving sites.
Absent the generator responsibilities that would be imposed under the still pending O.Reg. 406/19, the source site had limited documentation regarding the exported soil quality, and any evaluation of the soil quality was being driven by the receivers. And given that they would be exporting to multiple locations, we needed to work with the Contractor at the source site to “designate” the area of their property from which our Client’s 30,000 m3 would be generated, so that we could focus our sampling program there.
Not an insignificant task when the Contractor was managing a fluid soil export operation generating hundreds of loads per day, on a schedule that was in no way tied to our Client’s window to analyze and ultimately receive the soil. The alternative was to analyze the soil as it was received at our Client’s site; however, since it was being immediately placed and compacted as engineered fill, receiving a “bad” test result after it was placed would have meant disruptive re-work.
Ultimately, with the aid of our Client and their civil consultant, we were successful in working with the Contractor to delineate, analyze, and ultimately facilitate the import of the soil to our Client’s property (and they did subsequently get their RSC!).
Although this work was done under the existing RSC regulation, it helps to illustrate the shift in focus from the receiving site to the generator site and provides an example of the issues that the industry (and generating sites in particular) will need to consider under O. Reg. 406/19.
Case Study 2: Shifting Tides
In our second example, we were retained by a developer, but also found ourselves working with the municipality because the entities had a mutual interest: the developer had Excess Soil; and the municipality needed soil for construction of a nearby park.
In early June 2020 the developer asked us to prepare a sampling and analysis plan to support the transfer of soil from their property to the proposed municipal park. They advised that the park would also be importing additional material from a third-party source, and the municipality had suggested that Golder evaluate that material as well. Golder prepared a proposal to characterize and manage the soil from both sources in compliance with O.Reg. 406/19, which at the time was expected to come into force on July 1, 2020 (prior to the soil movement occurring).
Within days of issuing our proposal, MECP announced that the implementation date for O.Reg. 406/19 was being pushed back to January 1, 2021 due to the challenges posed by the COVID-19 pandemic. With the revised timeline, the two parties were no longer legally required to meet the requirements of the new regulation. At their request, we prepared a revised proposal for a baseline, due diligence level sampling and analysis program that was more in tune with the previous industry standard, and which could be done at lower cost.
Ultimately, the municipality and our Client completed the sampling and analysis program in accordance with the requirements of O.Reg. 406/19. Even though the fill movement would be completed well before the regulation’s revised implementation date, the stakeholders believed that the publication of the new Excess Soil regulation had already, in effect, set a new standard of care. More specifically, the municipality, as both the receiver and a public body, was conscious of any perceived deviation from that standard, and proactive compliance with the new regulation was seen as mitigating potential future liability.
Case Study 3: Charting a New Course
In this third case, a developer who owned both the source site and the receiving site needed to move about 130,000 m3 of soil between them. The intention was to complete the fill movement program prior to the O.Reg. 406/19 implementation date of January 1, 2021. Further, it was expected that the receiving site would require an RSC in the future (likely 2021). The developer had been advised by another consulting firm to assess the soil in accordance with the provisions of O.Reg. 153/04, which would have meant collecting and analyzing about 500 samples.
They asked Golder to assess the situation, and in our opinion, they had three options:
1. Go with the O.Reg. 153/04 standard: Option 1 was to follow the other consultant’s advice and prepare a sampling and analysis program consistent with O.Reg. 153/04. As noted above, this would involve collecting ~500 samples. However, when the time came to prepare the RSC, the imported fill would not require further action. This option was the highest cost, but also the least risk.
2. Address the fill import through the Phase Two ESA: The second option considered was to complete only limited analysis of the soil prior to import (just enough to demonstrate, from a due diligence point of view, that the risks of doing so were minor). This meant accepting that when it came time to do the Record of Site Condition for the receiving site, the imported soil would be flagged as a “potentially contaminating activity” and a Phase Two Environmental Site Assessment (“ESA”) of the site would be required before a RSC could be filed. We cautioned that if the Phase Two ESA sampling and analysis program for the soil discovered any exceedances of the applicable site condition standards for the soil quality, remediating those impacts after import and placement could be costly and, to some degree, impractical. We also noted that the local municipal government may require a higher level of soil quality characterization to satisfy their permitting requirements. This option offered the benefit of significantly reduced cost, but higher risk.
3. Sample in accordance with O.Reg. 406/19: Although the new regulation would not yet be in effect when this project was ongoing, the third option presented was to characterize the Excess Soil in accordance with the pending O.Reg. 406/19. This would require significantly fewer samples and analyses – approximately 180 versus 500 – resulting in a material reduction in cost.
A key consideration in this approach was the fact that on January 1, 2021 amendments to the portions of O.Reg. 153/04 dealing with the importation of Excess Soil were also coming into effect. These amendments indicated that the imported soil characterization requirements in the RSC Regulation can be considered to have been satisfied if a sampling and analysis plan prepared according to O.Reg. 406/19 has been carried out.
Unfortunately, at the present time there remains some uncertainty as to precisely how the intersection between the two Regulations will function in practice (MECP has indicated that additional guidance is in the works but is not likely to be available until early 2021). However, in our view the risk was manageable, as Option 2 (addressing the issue in the Phase Two ESA) would still be available if required. Further, the O.Reg. 406/19 sampling and soil tracking process requirements would provide a high level of confidence for the Qualified Person completing the RSC and should minimize any additional effort required.
After considering the relative pros and cons, the developer chose the third option, and retained Golder to conduct the source site sampling and analysis program, prepare the fill management plan, and track the fill movement.
So – What have we learned?
O.Reg. 406/19 represents a material shift in how Excess Soil is to be assessed, managed, and utilized in Ontario. Recognizing the lead time required for planning major construction projects, MECP has staggered the implementation dates for various aspects of the Regulation. However, each of those implementation stages will require stakeholders to plan so they can navigate these new waters as smoothly as possible. We are now in that first phase of transition, and the projects above illustrate some of the challenges involved in anticipating how what has been drafted on paper will translate to real projects on the ground.
With the arrival of the first implementation date for O.Reg. 406/19, it is certainly an interesting time (and in some cases a challenging one!) for those active in this industry. It’s clear that just as it takes a large ship time to execute course and speed changes, it will take time to shift over to the new regulatory environment. Planning is key to smooth sailing (and avoiding icebergs). And if it feels sometimes like you may be drifting uncomfortably close to the edge of the map, choose a good navigator to help you plot your course!
O. Reg 406/19 is a fast-changing picture, with the MECP responding to requests for information, and revising regulations. Subscribe to Golder updates on this topic here.
Ryan J. Smith, P.Eng., is a professional engineer with over 20 years of experience, and an Associate of the firm. Over the course of his career Ryan has managed hundreds of environmental site assessments, remediation projects, risk assessments and other environmental management programs, serving a diverse range of sectors but with a particular focus on real estate and land development. Trusted by clients for strategic and practical advice, Ryan is also recognized for his expertise on Ontario Regulation 153/04 and is the Qualified Person of record for dozens of successful Records of Site Condition. He is now bringing that expertise to the area of Excess Soil and the implementation of O.Reg. 406/19.
