Episode 2: Construction dirt – Where does it go and who regulates it

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Transcript:

Tammy: Hi everyone. My name is Tammy Farber. I’m a lawyer at Miller Thomson. I’m here with my long-time friend and colleague John Tidball, an environmental lawyer and practised at the bar for quite a long time. John, you’ve been an environmental lawyer for how long?
John:37 years Tammy.
Tammy: On the verge of retirement.
John: On the verge of retirement … eight weeks away I think.
Tammy: Alright. Well we may have another podcast in works to talk about your experiences in environmental law over the years but today we’re here to talk about excess soils and mainly from construction projects. John, has your practice involved excess soils and construction project waste?
John: It has actually. Over the years I’ve always dealt … a great deal of my practice on matters involving waste. Nobody ever thought about dirt from construction or anywhere else as waste but it has come up from time to time. We also deal a lot in our practice with contaminated sites which really deals a lot with contaminated soil and the two have kind of come together happily or unhappily recently with regulatory reform that’s been initiated by the Ontario government.
Tammy: And when you talk about regulatory reform just give us a little of a background … what happens to construction site waste now?
John: Apparently there’s about 25 million cubic metres of excess soil produced every year in Ontario that has to find another home. People don’t think about that although when you’re … when you’re living in your neighbourhood and there’s a construction project at the corner and you see the lineup of dump trucks as I have been recently at a site down at my corner you may ask yourself where does that stuff go and historically it went a lot of different places.
In Toronto it used to go into Lake Ontario and what is now called the Leslie Street Spit. That practice was stopped many many years ago and then it started to go up into old pits and quarries north of the city. That’s kind of where it’s always gone. Toronto right now is experiencing a significant construction boom as are many other places across Canada, notably Montreal and Vancouver. The same issues arise … the dirt has to go somewhere and especially in an urban area there’s really no place to put it on the site of the construction project.
Tammy: Is this an environmental issue? A planning issue? Or a combination?
John: It’s actually a combination issue. I deal mostly with the environmental aspects of it and the environmental aspects really if you think about it are what is in that soil and is it going to cause an impact where it goes somewhere else. So if you look at downtown Toronto for example … take a condominium project down on Queen’s Quay … so it’s down by Lake Ontario. Not unusual to have a hole that will accommodate four, five, six storeys of parking underground, a very large excavation and if you’re down in that area of the City of Toronto what we know for sure is that that used to be part of Lake Ontario and so the top, I’m not sure, 20 feet or something will be soil that came from somewhere else 100, 200 years ago.
Tammy: During the industrial operations no doubt.
John: During industrial operations and it’s not unusual to see layers of ash and all sorts of things so that’s sort of an extreme example that anywhere in Ontario where you have urbanization and urbanization of former industrial lands it can be particularly critical because you’re going to have … you can have all sorts of contaminants in soil that nobody even thinks about and for years we just transport it and put it somewhere and the thrust of what everybody’s talking about right now is trying to deal with that because nobody … I won’t say that nobody knows what’s in it … it’s just historically what used to happen is a few samples would be taken, it would be demonstrated from those samples that it was relatively clean and whatever that means, and then it would simply be taken to a disposal site somewhere.
Tammy: And that’s because disposal sites really can accept the waste or the soil stream with some contaminants in it as long as it’s not hazardous?
John: No it’s not even that. It’s more fundamental than that. Until now we’ve never thought of excess soil as waste at all. Waste is a defined term under the Environmental Protection Act in Ontario and we just never thought about it that way and, in fact, there is an exemption in a regulation for something called inert fill and excess soil has always been thought to be inert fill. The definition of inert fill isn’t very helpful and nobody’s really thought about it and we’ve been in a period of transition, I would say for at least 10 years, where the regulatory authority, which in Ontario is now the Ministry of Environment, Conservation and Parks, approaches this differently depending on what district office you’re in and so there’s been a great deal of uncertainty in the construction sector for a long time now and a growing sense of unease in places where this dirt ends up going.
Tammy: So I take it that after 10 years of some discussion or so we’re now experiencing a regulatory change. And tell us … so what is a regulatory change that’s now coming into force?
John: Okay. So … Ontario is the first jurisdiction in the country to attempt this. I expect other jurisdictions to follow, probably Quebec, I’m not sure about the western provinces. I think anywhere where you see a construction boom people are going to be looking at this.
What Ontario has decided is it’s created a new regulation which is called the Onsite and Excess Soil Regulation. The regulation was finally adopted right at the end of 2019. It will start to come into force July 1st of this year and then it’s sort of phased in and we’ll talk about that in a second but it’s sort of phased in over a two to three year period to allow industry to kind of respond to it. So we’ve got a new regulation. Everybody’s looking at it. It’s been in the works for some time. The government started down this track in 2013 under pressure from … really under pressure from rural municipalities and citizens’ groups who were very concerned about large amounts of soil being deposited in old pits and other places in Toronto, particularly outside of Toronto, so in the rural parts of the GTA and beyond. So that’s what we’ve done and that’s where we’re headed.
Tammy: So who is affected by this regulation?
John: It’s really going to affect the construction industry. So here’s what’s going to happen. Starting July 1st there’s going to be a requirement to deal with excess soil as waste and that’s a defined term under the Environmental Protection Act unless certain things happen. And that’s the way that … it’s a bit complicated the way they’ve done it but they’ve kind of done it like that for a good reason.
So what’ll happen is any excess soil, even if it’s as clean as soil in your backyard, any excess soil will be designated as a waste unless it goes somewhere and to a destination and the destination is some kind of a filling operation for which there’s a beneficial purpose. And that’s critically important actually because the beneficial purpose test will really change the marketplace because at the moment what we have is a large number, well less than we used to, but the number of fill sites located kind of on the outer boundaries of the GTA and beyond, that they may or may not … there may or may not be a beneficial purpose for the filling.
The purpose of the filling may be just to operate a commercial fill site to make money. And so that’s going to change a lot of things and so what’s going to happen is that the government has adopted a new set of standards … we’ve always had a set of standards that deal with contaminated sites because for many years, this kind of goes back into the 1990s, but for many years there was a demand from … I would say demand from everywhere … the construction industry, the development industry, citizens’ groups, industries, everybody … anybody who had to deal with land to get a sense of what constitutes clean. So if I agree with you that I’m going to buy your property and you’re going to clean it up before I buy it, what does it mean to say you’re going to clean it up?
And so the government a long time ago adopted a set of standards which we call the Site Condition Standards. In the early years of dealing with excess fill and I’ve been dealing with this now for about the last 10 years on an almost full-time basis, in the early years we have always used those standards but what the government has done with the new regulation is they’ve created a new set of standards that actually tend to be a little more stringent and there’s a reason for that. That takes a long explanation but its basically because the first set of standards were really never intended for a site that was intended to take a lot of imported soil. And so they’ve sort of redone their risk models and come up with a slightly more stringent set of standards.
It’s kind of all over the map and it’s … you know you have to compare them to see but what will happen is starting July 1st is that any excess soil from say a construction project in downtown Toronto, as long as it meets a threshold and I think the threshold’s 10,000 cubic metres or something like that, which isn’t a large hole, will have to go to what they’re now calling a reuse site for a beneficial purpose and it will have to meet these new standards in order to be deposited at that site.
The one caveat is that if the reuse site, as they’re now calling it and everybody else has always called a fill site, if the reuse site is subject to another permitting process and that’s traditionally done by municipalities under the Municipal Act who will issue something now that’s more typically called a site alteration permit, if it’s subject to that the new standards become kind of … they’re kind of like a backstop. The municipality may have different standards although under the regulation they can’t be more stringent but they could be less stringent. Now I don’t know that anybody’s going to do that and I don’t think anybody’s thought it through but that’s kind of where we’re going so as of July 1st that’s what’s going to have to happen. That’s going to change a lot of things in the industry. So that’s the first step in all of this. The second step is a little more, it’s a bit more complicated and it’s going to add a whole layer of bureaucracy on top of all of this.
Tammy: Just before you get to the second step let me ask you … so is a beneficial use equivalent to a financial gain purpose? Can you just have reuse for financial gain?
John: No, it can’t be just that. It has to be some kind of a redevelopment going on. Traditionally … it’s very interesting in the province and there’s three or four of these around, there has been a real focus on sites that are being used to redevelop airfields and the reason for that is constitutional because aeronautics is a matter of federal jurisdiction and there have been many cases of sites that are kind of relying on the fact that they’re federally regulated and so municipalities can’t regulate them.
There have been a series of cases that have sort of decided that issue and now those sites are getting … they are operating for the most part under fill permits. I’m not sure what the other kinds of beneficial reuse might be but if you think about it I think it’s obvious that if I have a pit and there are very large pits you know outside of … on the outer edges of the GTA, if I have a pit and I have a rehabilitation obligation under my quarry licence then I have to rehabilitate.
Now it’s interesting because I don’t have to fill up the pit again in order to rehabilitate. All that the Ministry of Natural Resources and Forestry requires is that essentially it’s more of a safety thing. I can’t have a vertical wall where you know someone might fall over and you know kill themselves 10 years from now and so they have to create some minimum slope so that there’s no vertical faces.
But I think it’s probably a beneficial reuse if a municipality, for example, were to say, as some have, Richard Stovall (sp?) is a good example, have as a policy said we’d like to fill up these sites and we’d like to revert them to agricultural use which is what they were in the first place. And so if you think about it, that’s a very happy marriage of two serious problems. I have a lot of dirt over here that I have to get rid of and I have big holes over there that it would be in everybody’s best interest to fill up and restore to the way it was before the hole was dug. And so that will work and I think that … I think everybody accepts that that’s a beneficial reuse although it’s an interesting question and we’ll see what happens.
Tammy: So I want to come back to something else before you get to the sort of the next stage which is when you talk about the existing regime for the movement and/or remediation of contaminated soil in redevelopment sites and this new excess soil regime. So how are they going to work together?
John: Well we were wondering about that when it first came out but it is now clear to me that both regimes will apply and so what you’ll end up with is if I have a contaminated site, so you think about this, I’ve got a site somewhere and I know that I need to excavate the site and over on one side of the site I know there was some kind of an activity – typically you know there was underground storage tank that leaked some kind of petroleum product, something like that, so I know I’ve got contaminated soil on that side of the site.
What I will have to do is I will still be subject to dealing with that in the way I always did except I’m going to have added on top of this a whole set of requirements for sampling because part of the regime, part of the new regime, just on excess soil, clean or otherwise, in order to support depositing that soil at a reuse site somewhere and justify that it meets these new standards there’s a whole new protocol of minimum sampling requirements. So you will recall I said a few minutes ago traditionally we have, you know, a couple of samples from a site … now there will be a need for a large site for hundreds of samples, it’s all based on volume and so even if my site is contaminated bizarrely you now have a situation where I might have to take more samples if the site’s clean which doesn’t make any sense right?
So what I think – this is going to play out in the following way … I think if I have a site that I’m … I know I’m subject to the new excess soil rules, but I’m also subject to dealing with contaminated soil, what I think will happen is I will end up doing the minimum amount of characterization that I have to do and then I will get rid of the excess soil … I’m sorry … I’ll get rid of the contaminated excess soil somewhere appropriate. Sometimes that’s landfill, more frequently these days it might be a soil treatment site, and that’s the way that will go but I will still have to deal with everything under the new reg because it really doesn’t distinguish between clean and not clean soil.
Tammy: Do we have any idea what kind of costs this will lead to in terms of developers or those in the real estate industry that are dealing with contaminated soil?
John: I think it will increase, I don’t know what, I couldn’t comment?[17:34] on the quantum but it will certainly increase the sampling and analytical costs and will probably create some buried costs in terms of delays because there is a tendency in the industry … the way the industry works is some … I have … I’m the owner of a site or I’m the developer of a site and I have a … the first job in developing this site is to excavate a very large hole and then they start to build things in it.
Typically the excavation contract is let all at once somebody else gets a hold of it and they just deal with it and typically the owners don’t care about it. Now the owners actually are going to have obligations under the new regulation … they’re actually going to be on the hook for these obligations and so you can’t … it’s not going to be as easy as just saying I don’t have to think about this anymore. I’m gonna … I can just contract it out. You really can’t do it. It’s going to imply more sampling upfront I think. It’s theoretically possible to excavate the hole, put the stockpile, put it over here in a stockpile, then sample it but in an urban … and there is provision for that in the regulation except that in urban environment there … you don’t have a space over there for the stockpile. We see that out in the outer edges of the GTA where there is that kind of space and that’s why if you’re looking at development projects say out in Markham or Vaughan or Brampton what you’ll see often is you’ll see a big pile of dirt because the dirt goes over there and they can take advantage of that but in places like downtown Toronto it’s impossible.
So I think there’s going to be additional sampling costs and probably some additional delay costs. Having said that I think a lot of the large developers are already doing this. And I think … the draft regulation has been around for a couple of years. The government has actually … this was actually an invention of the previous Liberal government and was revived by the current government sort of towards the end of their first year in office. And it’s changed a little bit but not measurably.
Developers have had notice of this for a long time and a lot of them are … I’m advised a lot of them are sort of currently using this type of protocol anyway because they have a very long timeframe and they have to think ahead on these things. And it makes sense. From a due diligence point of view it makes perfect sense. No developer of a site in downtown Toronto wants to be the subject of a claim five years from now that you’re contaminating groundwater in a rural municipality somewhere.
Tammy: And that’s been the case I think with the various U.S. municipalities kind of following the waste stream to waste disposal sites or other fill sites for a long time so we’re sort of seeing the trickle down effect in Canada or at least in Ontario right now. Okay, so we talked about July 1st and what’s happening. So what is the next phase after that?
John: So the next phase is really interesting and it’s a further 18 months beyond July 1st so January 1, 2022 there will be a new requirement that will impose … it’s essentially a paperwork and tracking requirement. And so what will happen is that there will be a requirement for the construction site … the site where the fill is coming from. There will be a requirement to retain a qualified person which you pretty much have to do now anyway or you will on July 1st but the qualified person will have to prepare a series of reports … a report on characterizing the site, a report on characterizing the quality of the soil at the site and a report basically identifying where it’s going to go and doing all of that. Those reports will all have to get filed on a … it’s actually not a new registry.
We have, if you’re anyone whose familiar with this, will know we have what’s now called the Environmental Site Registry. They apparently need, I think they need a couple years to build the new registry but it’s going to be within the framework of the current environmental site registry apparently so I am envisioning probably a kind of sub-site or something like that. All of that stuff will have to be posted online. It will be publicly accessible which is a brave new world where anybody can see what is at … what the soil looks like at a given site and where it’s proposed to go.
There will also be a requirement at the other end for the reuse site as it’s now going to be called to have a qualified person or a QP do the same thing and record things in the same registry. And there will be a requirement for there to be a tracking system in between. And people wonder about that and it’s kind of an interesting concept and I’ve been involved with this before because I’ve had very well-meaning clients who never thought about the issue before. When somebody says to them “Well how do you know that if a truck left this site it went to where you think it went?” and the answer is “Well because I paid him to do that.” But nobody really … you know it’s hard to know unless you have a system of tracking. On paper it will be possible for that tracking system to be a paperwork system and there are various types of those around now. In reality, and I think as everybody knows, we’re going to go to an electronic tracking, probably GPS based. There are several companies in Ontario that are using that right now. The government of Quebec has recently created a new regulation that will require electronic tracking. They are very specific about it. It has to be electronic. So that’s very … that’s a very very big change in the industry that’s going to come along in the next couple of years. So that’s January 1st of 2022.
The final piece of the puzzle is January 1st 2023 there will be a ban on the disposal of clean fill at landfills. That’s not really … it’s not going to be much of an issue I don’t think in Toronto because it’s probably not cost-effective to take clean soil to the landfills here anyway. It will be an issue for small projects in areas outside Toronto where sometimes the lowest cost alternative is … even though the soil is clean, the easiest thing to do is just take it to the landfill.
Tammy: Is that because of the trucking distances?
John: Yeah, it’s trucking distances. Yeah, it’s mainly trucking distances. And it may be the cost of the landfill. So I don’t know whether that’s going to have a big impact or not. That was the one significant change that the current government made to the former government’s proposal. Anyway, it’s a few years off now. It’s almost three years away and we’ll see how that will play out. I don’t know what’s going to happen with that.
Tammy: So some final thoughts on this new regulation and I’m going to ask you to sort of wear a couple of different hats to answer this but from the environmental perspective … the change … not good change?
John: I think it’s a very good change actually. You know personally I think there has been a lot of perhaps misunderstanding over the years about the quality of this soil and I think what’s really happened is that nobody really thought about it. And its interesting, this issue all came up more as a result of truck traffic honestly. When large sites ship soil it can involve hundreds and hundreds of trucks a day and if they’re all going to a small rural site on a gravel side road somewhere you can imagine what that means to people who live on the road. And all of this kind of started with those kind of concerns and then quickly branched into “Well what’s in that stuff anyway?” and I think the reality is and I don’t think anybody knows and I don’t think anybody’s trying to scare anybody to say that you know all of these fill sites that were created in the last three or four decades are all contaminated because they’re probably not but we’ve never thought about it and now we’re starting to think about it. So I think environmentally it’s a very good thing.
Tammy: The construction industry hat … good? Not good?
John: I think it depends who you are in the construction industry. I think for large players in the industry it’s a good thing. It provides certainty. The problem we’ve had over the last, I’m going to say 10 or 15 years, is you just never knew where things were going to go if you were involved in a large … especially in a large project. And you could make arrangements for filling at a particular location … then all of a sudden it wouldn’t be available and then there would be concerns about quality and all sorts of things. So I think to the extent that this provides certainty I think it’s a good thing for the construction industry. I appreciate that for some perhaps smaller players in the construction industry the regulatory burden is going to be significant.
Tammy: John, I’d like to thank you for sharing your thoughts on this new regulation and the movement of excess soil from construction sites in Ontario and hope to hear from you again. Thanks again.
John:Thanks Tammy.

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