Environmental, Health and Safety Update

Ontario

Former officers and directors agree to pay $4.75 million

In connection with the settlement of an environmental order, 12 former officers and directors of Northstar Aerospace (Canada) Inc. (Northstar Canada) and its U.S. parent corporation, Northstar Aerospace Inc. (Northstar Parent), agreed to pay $4.75 million to the Ontario Ministry of the Environment (MOE). Pursuant to the minutes of settlement, these funds are to be held and used by the MOE to assess and remediate contamination at and from Northstar Canada’s manufacturing site in Cambridge, Ontario.

From 2004 to 2012, Northstar Canada voluntarily conducted investigations regarding the contamination and managed the contamination, including remediating some of the contamination. However, in early 2012, the MOE became concerned about Northstar Canada’s financial situation and issued two orders against Northstar Canada and Northstar Parent, requiring them to continue to implement the monitoring and remedial plan and to provide a financial assurance in the amount of $10,352,906 to the MOE on June 6, 2012. About a week later, the companies obtained protection from their creditors under the Companies’ Creditors Arrangement Act. On that day, the directors of the companies resigned, while two officers of the companies remained in their positions until the companies’ assets were sold. On July 24, 2012, the Court approved the sale of the companies’ assets—excluding the Cambridge site—and ruled that the companies did not need to comply with the MOE’s remedial order (although the companies did comply with it until the sale closed). The MOE challenged the sale through a motion, but it was dismissed by the Court.

After the sale, the companies ceased the remediation work at the site and the affected nearby houses, work that the MOE took over in August 2012. After the stay period (preventing claims against the officers and directors) expired, the MOE issued an order to 13 former officers and directors of the companies to conduct the work that the companies had been previously ordered to conduct. The bases for the order was that these officers and directors had permitted a discharge of a contaminant into the environment and had been responsible for the management and control of the site and the site’s remediation systems. The officers and directors asserted, among other things, that they had not held their roles at the time of the discharge. The officers and directors were unsuccessful in having the Environmental Review Tribunal (ERT) stay the order, and as a result, had to pay for the ordered work (which apparently cost more than $100,000 per month) while they appealed the order. In addition, even if the officers and directors had successfully appealed the order before the ERT, it seems unlikely that they would have recovered the funds for the remediation work for which they had already paid.

In this context, 12 of the former officers and directors agreed to pay $4.75 million in return for the MOE to release them from the order and any administrative or civil action that could be brought by the MOE against them. On October 31, 2013, the ERT conditionally approved this settlement and, on December 2, 2013, the ERT confirmed that the conditions had been met and accepted the settlement.

Ministry of the Environment releases new noise guideline

The MOE recently released a new noise guideline entitled "NPC-300: Environmental Noise Guideline, Stationary and Transportation Sources – Approval and Planning" (the Guideline). The Guideline applies to stationary noise emissions sources, including certain industrial facilities, and to transportation noise emissions sources such as certain road, rail and traffic sources. The MOE will be applying the Guideline when issuing Environmental Compliance Approvals, as applicable, to the covered stationary and transportation noise sources. In particular, the Guideline will be used to establish the applicable noise level limits for these sources. The Guideline replaces four previous guidelines, including "NPC-205: Sound Level Limits for Stationary Sources in Class 1 and 2 Areas (Urban)" and "NPC-232: Sound Level Limits for Stationary Sources in Class 3 Areas (Rural)".

Canada

Fisheries Act amendments to take effect

On November 25, 2013, amendments to the Fisheries Act (the Act), which were originally passed as part of a federal budget bill in 2012,came into effect. Among other things, the amendments narrowed section 35(1) of the Act (which previously prohibited any work or activity that results in the harmful alteration, disruption or destruction (HADD) of fish habitat) by replacing it with a new provision that prohibits the carrying out of any work, undertaking or activity that results in serious harm to fish that are part of a commercial, recreational or Aboriginal fishery, or to fish that support such a fishery. The term "serious harm to fish" is defined as "the death of fish or any permanent alteration to, or destruction of, fish habitat". Given that the amendments narrow the prohibition in section 35(1) of the Act, persons who had previously obtained a license from Fisheries and Oceans Canada for activities that would result in the HADD of fish habitat may request a review of their existing licenses by February 24, 2014 to confirm whether they should be amended, cancelled or remain unchanged.

Environmental Assessment Regulations Revised

Environment Canada recently issued amendments to the Regulations Designating Physical Activities, which list certain projects that may require a federal environmental assessment under the Canadian Environmental Assessment Act, 2012 (CEAA 2012). The amendments, among other things, designate certain new projects as subject to CEAA 2012, such as certain projects involving the drilling, testing and abandonment of offshore exploratory wells. The amendments also revise the existing designations for certain other projects, including the designation of pipeline projects regulated by the National Energy Board (NEB) such that all pipeline projects requiring certificate approval from the NEB will be subject to CEAA 2012.

For more information, please see Environment Canada’s website.

Annual Greenhouse Gas Reporting Requirements Released

Environment Canada recently released its notice under the Canadian Environmental Protection Act, 1999 regarding the reporting of greenhouses gases (GHGs) for 2013. All persons who operate a facility that emits 50,000 tonnes of carbon dioxide equivalent or more of the enumerated GHGs (which include carbon dioxide, methane, nitrous oxide, and a variety of hydrofluorocarbons and perfluorocarbons) are subject to mandatory reporting requirements as set out in the notice. The required information must be provided to the Minister of the Environment through Environment Canada’s Single Window system no later than June 1, 2014.

For more information, please see the Canada Gazette.

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