Environmental Review Tribunal
Tribunal de l’environnement
ISSUE DATE:
September 03, 2019
CASE NO.:
11-214
PROCEEDING COMMENCED UNDER section 140(1) of the Environmental Protection Act, R.S.O. 1990, c. E.19, as amended
Appellant:
See Appendix 1 - Appellant List
Respondent:
Director, Ministry of the Environment, Conservation and Parks
Subject of appeal:
Order to submit and implement a closure plan for the Waste Disposal Site, to submit and implement a decommissioning plan for the Sewage Works and to provide financial assurance equal to the written estimate of costs
Reference No.:
6653-8MSHMJ
Property Address/Description:
550 Shipyard Road
Municipality:
City of Thunder Bay
Upper Tier:
District of Thunder Bay
ERT Case No.:
11-214
ERT Case Name:
Cascades Fine Papers Group Inc. v. Ontario (Environment, Conservation and Parks)
Heard:
June 17, 2019 by telephone conference call and in writing
APPEARANCES:
Parties
Counsel
Andrew Sinclair
Shelley Quinte
Cascades Fine Papers Group Inc. and Cascades Inc.
Lana J. Finney
Ministry of the Environment, Conservation and Parks
Nicholas Adamson
DECISION DELIVERED BY MARLENE CASHIN
REASONS
Background
1This decision concerns appeals of Director’s Order No. 6653-8MSHMJ (“DO”) issued by Trina Rawn, Director, Ministry of the Environment (“MOE”, now Ministry of the Environment, Conservation and Parks) on November 15, 2011. The appeals arose out of outstanding environmental issues remaining at an old paper mill facility (“Mill”) located adjacent to the north shore of Lake Superior at a property municipally known as 550 Shipyard Road (“Site”) in the City of Thunder Bay.
2The Mill, which first began operations in 1918 and has had a succession of owners and operators since then, has been sitting idle since July 2008 when it was shut down by its then owner, Thunder Bay Fine Papers Inc. (“TBFP”). The Site includes a waste disposal site (“WDS”) and a wastewater lagoon (“Lagoon”) created in the 1960s to contain and treat effluent from the plant treatment processes. The Lagoon, referred to also as an industrial sewage works, is situated in Lake Superior on two water lots totaling 23 acres (8.4 hectares) which are owned by the federal Crown.
3The Appellant, Cascades Fine Papers Group Inc. (“CFPG”) acquired the Site in 1997. In 2000, CFPG became a wholly owned subsidiary of the Appellant, Cascades Inc. (“CI”). The Site was subsequently acquired by TBFP in 2007, but the following year it was placed into receivership after re-starting operations for a period lasting only a few months. The Appellant, Andre Nicol was the president of TBFP at that time, and the Appellant, John A. Hitchman was its chief operation officer. In 2009, the Site was acquired by the Appellant, Superior Fine Papers Inc. (“SFP”) from the receiver appointed for TBFP. At that time the Appellant, Andrew Sinclair was SFP’s president.
4The DO has also been referred to by the parties as the Decommissioning Order to distinguish it from several other orders which have been issued over the years with respect to this facility. The DO named eight orderees of which six appealed to the Tribunal. Those who did not appeal are TBFP and Cascades Fine Papers Group Thunder Bay Inc., a corporation that owned the Site at one time but was subsequently dissolved in 2008.
5The DO required, among other things, decommissioning of the WDS and sewage works (Lagoon), and posting of financial assurance (“FA”) to ensure full compliance. In an order dated February 15, 2012, then Vice-Chair Dirk VanderBent granted on consent a stay of the DO as against CFPG and CI. A preliminary hearing was convened on April 11, 2012, at which time Tribunal-assisted mediation was requested by the parties and granted. This was confirmed in an order issued by Mr. VanderBent on May 11, 2012.
6Alan D. Levy was appointed as mediator, and in that capacity conducted a series of meetings conducted by telephone conference call (“TCC”) and a single in-person meeting in Thunder Bay on June 19, 2012. By that point, Desmond Joseph had taken control as new principal of and investor in SFP. Messrs. Nicol and Hitchman did not participate in any TCCs conducted after the in-person meeting. Mr. Hitchman died in June 2015. All TCCs were attended by counsel and some were also attended by the Director and/or other MOE staff.
7The mediation process led to the development of a settlement between SFP and the Director. A hearing was subsequently conducted before Member Levy on April 23, 2013 via TCC to receive submissions from the parties with respect to the proposed agreement documented in Minutes of Settlement (“MOS”), dated April 9, 2013, entered into by the Director and SFP, and to determine whether it should be approved by the Tribunal.
8All parties in attendance at the April 23, 2013 hearing indicated their approval of the resolution set out in the MOS. They also approved a draft order or disposition which was submitted to the Tribunal after the TCC by Nicholas Adamson, counsel for the Director. Member Levy issued an order on May 2, 2013, pursuant to Rule 201 of the Tribunal’s Rules of Practice (“Rules”), conditionally approving the settlement pending the carrying out of additional steps contemplated by the MOS.
9The terms of the settlement plan included, among other things, the following steps, as described by Member Levy in his May 2, 2013 order:
1 SFP agreed to undertake additional work at the Site beyond that required by the DO.
2 The steps listed in Schedule A, entitled Chemical Removal, were to be completed by September 30, 2013, at a cost of $129,000.
3 Schedule B provided for decommissioning of the sewage works (Lagoon) by December 1, 2013, at a cost of $1,663,850. The sludge dredged from the Lagoon was to be deposited in the WDS before it was finally closed and decommissioned.
4 Schedule C provided for decommissioning and closure of the WDS by December 31, 2013, at a cost of $858,143.20.
5 Payment to the MOE of $2,324,653.98 plus interest by June 30, 2013, was to be made by SFP’s lender on account of FA, to ensure completion of the work listed in Schedules A, B and C.
6 To assist SFP to secure financing for the FA, the provincial Ministry of Finance (“MOF”) would be asked to release and assign to SFP’s lender the security interest the Province holds in various promissory notes, assets and property of SFP. The MOF had previously made substantial payments to cover SFP’s default on promissory notes dealing with the purchase of the Site ($1.7 million) and repayment of a tax refund due to TBFP ($264,144.16).
7 SFP would finance all or part of the up-front costs of decommissioning and remediation by selling the Site’s remaining assets such as equipment and other resources.
8 The Mill would be demolished and dismantled as part of the effort to reclaim assets at the Site.
9 After payment of FA to MOE, the Tribunal would direct that the DO be amended in accordance with the Minutes of Settlement.
10The appeal of SFP would then be dismissed.
11The appeals of the other Appellants would be adjourned until all of the work required by the amended DO had been completed sometime in early 2014.
12At that stage, the Director would withdraw the amended DO with respect to those Appellants and their appeals would be dismissed.
10The MOF subsequently approved the settlement and $2,359,431.58 was received by the MOE. The matter was adjourned, and by August 2013, the Tribunal was advised that financing had been secured through SFP’s lender, Reliance Holdings Limited, and the transfer or assignment of the Province’s security interest had been completed and registered. In accordance with the MOS and with the parties’ knowledge, Member Levy’s second order was issued on September 23, 2013. It confirmed that:
the DO would be amended in accordance with the MOS;
funds paid as FA to MOE would be held to ensure the performance of the work in Schedules A, B and C; and
SFP’s appeal was dismissed.
11On April 18, 2017 Member Levy, for the Tribunal, issued an order which summarized the progress of this matter through the series of TCCs and consent adjournments that occurred since the issuance of his September 23, 2013 order, Cascades Fine Papers Group Inc v Ontario (Ministry of the Environment), [2013] O.E.R.T.D. No 27. For more information about the appeals see Cascades Fine Papers Group Inc v Ontario (Ministry of the Environment and Climate Change), [2017] O.E.R.T.D. No 20 11-214 dated April 18, 2017. Since that date, numerous additional TCCs and consent adjournments have taken place.
12On June 17, 2019 the Tribunal held another TCC, at which time counsel for the Director informed the Tribunal that the Director intended to seek the Tribunal’s consideration of a proposal to revoke the DO as against the remaining Appellants, and would be making submissions to that effect in the near future. On July 16, 2019, Mr. Adamson provided the Director’s submissions. Ms. Finney for Cascades Fine Papers Group Inc. and Cascades Inc. (collectively, “Cascades”) also provided submissions supporting the revocation of the DO.
Relevant Legislation and Rules
13Section 3.(1) of the Environmental Protection Act (“EPA”) states:
- (1) The purpose of this Act is to provide for the protection and conservation of the natural environment.
14Rule 202 of the Tribunal states:
- Where a Director, Risk Management Inspector or Official, Authority or a municipality proposes to revoke a decision that is the subject of an appeal, the Tribunal shall consider whether the proposed revocation is consistent with the purpose and provisions of the relevant legislation and whether the proposed revocation is in the public interest. The Tribunal shall also consider the interests of Parties, Participants and Presenters. After the consideration of the above factors, the Tribunal may decide to continue with the Hearing or issue a decision dismissing the proceeding.
Issue
15The issue is whether the Tribunal should accept the proposed revocation of the Director’s Order as being consistent with the purpose and provisions of the EPA, and in the public interest.
Discussion, Analysis and Findings
16Pursuant to Rule 202 of the Tribunal’s Rules, a proposed revocation of a decision that is the subject of an appeal must be presented to the Tribunal for review.
17The Director proposes to revoke DO No. 6653-8MSHMJ, issued November 15, 2011, as against Cascades Fine Papers Group (Case No. 11-214), Cascades Inc. (Case No. 11-215), Andrew Sinclair (Case No. 11-216), Andre Nicol (Case No. 11-222) and John Hitchman (Case No.11-223). The proposal is to revoke the DO, but without prejudice to the ability of the Ministry of the Environment, Conservation and Parks (“MECP”) to issue a further order or orders should circumstances require.
18The Director informed the Tribunal that the basis for revoking the Director’s Order as against Mr. Hitchman is presumably uncontroversial, that being; “Mr. Hitchman passed away on June 9, 2015”.
19There have been no objections from the parties to the proposed revocation of the Director’s Order and there are no participants or presenters in this proceeding. Therefore, the issue that remains to be decided under Rule 202 is to determine whether the proposed revocation is consistent with the purpose and the provisions of the relevant legislation, namely the EPA, and is in the public interest.
20Submissions, providing the reasoning behind the proposal to revoke the Director’s Order as against the remaining Appellants, were set out by counsel for the Director, Nicholas Adamson, as follows:
Superior Fine Papers Inc.’s appeal of the Director’s Order (Case No. 11-217) was previously settled. The Tribunal endorsed the settlement in a decision and order issued on September 23, 2013. As a result of that settlement, the Director’s Order was amended as it applies to Superior Fine Papers Inc. (“SFP”) and SFP’s appeal of the Director’s Order was dismissed. The amended Director’s Order issued to SFP remains in effect and the Director is not planning to revoke it.
The Director’s Order, as issued to SFP in its amended form, requires three broad categories of environmental work to be done:
removal of all chemicals and waste chemicals from the site;
decommissioning of the sewage works in accordance with a plan that had been prepared by True Grit in 2012; and
decommissioning and closure of the waste disposal site in accordance with a plan that had been prepared by True Grit in 2012.
As part of the settlement of its appeal, SFP posted $2,359,431.58 in cash as financial assurance to be held as a guarantee that the work required by the amended Director’s Order would be done.
Since the settlement of SFP’s appeal, the remaining appeals by Cascades Fine Papers Group, Cascades Inc., Andrew Sinclair, Andre Nicol and John Hitchman have been held in abeyance with the expectation that SFP would complete all of the environmental work required by the Director’s Order, thereby rendering the order redundant as it applies to the remaining appellants. SFP has carried out the majority of both the decommissioning of the lagoon system and the removal of chemicals. However, SFP’s progress has stalled for some time. Further, SFP was recently purchased by a new owner that is exploring different options for the property, including the possibility of keeping the waste disposal site open for a period of time to use it for research and educational purposes in partnership with Lakehead University. MECP is open to this idea, but has asked for more detailed information regarding the proposal. MECP has also requested that SFP conduct required groundwater monitoring to ensure that the waste disposal site is not having any adverse impacts. This work is scheduled to be completed this year. MECP has also reminded SFP of its obligations under the Director’s Order.
MECP continues to hold, in cash, sufficient financial assurance to address the remaining work required by the amended Director’s Order. MECP continues to hold the full amount posted as financial assurance for closure and monitoring of the waste disposal site ($858,143.20 at the time the financial assurance was posted in 2013). MECP also continues to hold $155,220 (exclusive of interest) of financial assurance for the remaining chemical removal and sewage works decommissioning work. The total amount of financial assurance being held by MECP for the remaining work is approximately $1,055,160.37 (this amount includes accumulated interest).
In the circumstances, the Director is of the view that there is little value in continuing to hold the remaining appeals in abeyance. It makes more sense to withdraw the order as against the remaining appellants, but without prejudice to MECP’s ability to issue further orders should the circumstances require. The Director is of the view that this proposal is in the public interest.
21In response to the request of the Tribunal, on July 16, 2019, that any party, participant or presenter notify the Tribunal if they had objections to the proposed revocation, Lana Finney, counsel for Cascades provided the following submissions:
Cascades submits that the revocation of the Order is consistent with the purpose and provisions of the Environmental Protection Act and in the public interest because: (a) it has been almost 8 years since the Order was issued and the appeals have not been heard; (b) the revocation is without prejudice to the MECP’s ability to issue a new order, provided it has the jurisdiction to do so; (c) most of the work of the Order has been completed; and (d) the MECP holds financial assurance, which it says is sufficient to address the remaining work required by the amended Director’s Order, as detailed in Mr. Adamson’s email of July 16, 2019.
For the foregoing reasons, Cascades submits that the Tribunal issue a decision accepting the Director’s without prejudice revocation and dismissing the proceeding, recognizing that if a new order is issued, the orderees would retain their rights of appeal despite the fact that these appeals, which are the subject of this proceeding, have been dismissed.
22No other responses or objections were received.
23The Tribunal is satisfied, based on the submissions of the parties, that the proposed revocation of the Director’s Order as regards to Mr. Hitchman is appropriate, since he passed away in June 2015. The Tribunal finds as well, that the revocation of the Director’s Order as regards to the other remaining Appellants is appropriate given that: SFP has carried out the majority of both the decommissioning of the Lagoon system and the removal of chemicals; the MECP is requiring groundwater monitoring to be completed this year to ensure that the waste disposal site is not having any adverse impacts; and the MECP is holding approximately $1,055,160.37 of financial assurance funds for the completion of the remaining environmental work. As well, the Director has indicated that a new order or orders could be issued if necessary.
24The Tribunal agrees with the Director’s position that there is little value in continuing to hold the remaining appeals in abeyance, and therefore finds that the proposed revocation of the Director’s Order is consistent with the purpose and provisions of the EPA and in the public interest, and that a hearing with respect to the Director’s Order is not required.
DECISION
25The Tribunal accepts the Director’s proposal and the parties’ agreement to the revocation of the Director’s Order. The Director is directed to revoke Director’s Order No. 6653-8MSHMJ, issued November 15, 2011 as against Cascades Fine Papers Group (Case No. 11-214), Cascades Inc. (Case No. 11-215), Andrew Sinclair (Case No. 11-216), Andre Nicol (Case No. 11-222) and John Hitchman (Case No.11-223).
26In accordance with Rule 202, the proceeding is dismissed.
Director Directed to Revoke Order
Proceeding Dismissed
“Marlene Cashin”
MARLENE CASHIN
MEMBER
Appendix 1 – Appellant List
If there is an attachment referred to in this document,
please visit www.elto.gov.on.ca to view the attachment in PDF format.
Environmental Review Tribunal
A constituent tribunal of Tribunals Ontario - Environment and Land Division
Website: www.elto.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248
Appendix 1
Appellant List
Appellant Name
File No.
Cascades Fine Papers Group Inc.
11-214
Cascades Inc.
11-215
Andrew Sinclair
11-216
Superior Fine Papers Inc.
11-217 (Closed)
Andre Nicol
11-222
John A. Hitchman
11-223