“Weakened Environmental Rules,” COVID, and a Strengthening Economy

Posted by on Apr 6, 2021 in Blog | 0 comments

2020 was a year like no other. COVID lead to changes in just about every aspect of our lives, including how regulators enforced environmental rules. Not that enforcement is currently on holiday, we do expect more attention on environmental matters as the economy recovers.

“Weakened Environmental Rules”

A recent study from the University of Calgary looked at “weakened environmental rules” under the pandemic. The author noted that “across Canada, the most common moves were to defer fees or extend timelines for reporting requirements. Few governments offered any specific rationale other than the extraordinary conditions of the pandemic.”

This relaxing of the environmental enforcement was not unique to Canada. As one of my colleagues in the US office noted in an August 2020 blog, “the United States Environmental Protection Agency (USEPA) issued a memo (on March 26, 2020) that stated, in part, ‘The EPA will exercise the enforcement discretion…for noncompliance covered by this temporary policy and resulting from the COVID-19 pandemic…’” That policy ended on August 31, 2020.

The author notes that Alberta was the most active province in COVID environmental rule changes. Of the 143 rules that were adjusted during the Pandemic Canada-wide, 54 were in Alberta. Of course, Alberta manages the third largest oil reserves in the world so they are likely to be more regulated. Alberta’s suspension of rules ended last summer as well.

Accelerating Economy

But our economy is expected to get much stronger in 2021. As recently noted by the Conference Board of Canada, “…the rollout of vaccines, which got off to a sluggish start, has ramped up recently, and most Canadians should be fully vaccinated by this autumn. This will lead to a reopening of the economy and, consequently, real GDP should accelerate at a rapid pace in the second half of this year (emphasis added).”

While global emissions fell in 2020 due to COVID, as we move to a post-COVID economy, expect emissions and perhaps enforcement to be closer to long-term averages.

While the two environmental enforcement updates below are from incidents in years past, the settlements occurred recently (March 2021) and both are significant in their financial settlements.

Extraction of natural resources

As we move toward a post-COVID economy, will we see a greater focus on enforcement of environmental regulations (Photo by Dominik Vanyi on Unsplash)?

Alberta Energy Companies Pay $1.5 Million

According to the press release from Environment and Climate Change Canada, “On March 18, 2021, Gibson Energy ULC and GEP ULC (operating in partnership as Gibson Energy Partnership) were sentenced in the Provincial Court of Alberta and ordered to pay a total fine of $1.5 million. The companies were found guilty of two counts of violating the Fisheries Act. The fine will be directed to the Government of Canada’s Environmental Damages Fund. In addition to the fine, the companies will be ordered to make a presentation to industry within Strathcona County about the danger of chlorinated water.”

The actual incident occurred between March 4 and 6, 2014, when employees discovered a leak from the fire suppression system, located at the Gibson Edmonton Terminal. During the three days, chlorinated water entered an unnamed creek. This creek eventually flows to the North Saskatchewan River. “Analysis of the water at the release site and where it entered the North Saskatchewan River determined the levels of chlorine to be deleterious, or harmful, to fish.”

Resource Company Pays $60 Million

On March 26, 2021, Teck Coal Limited was ordered to pay a total of $60 million in fines and monetary court orders after a guilty plea was entered “on two counts of unlawfully depositing a deleterious substance into water frequented by fish, contrary to s. 36(3) of the Fisheries Act. In addition to the penalty, the company must also comply with a Fisheries Act Direction (Government of Canada).”

At issue was Teck Coal Limited’s deposits of waste rock from the company’s operations that had leached “deleterious substances, selenium and calcite, into the upper Fording River and its tributaries.” The $60 million fine was the largest ever under the Fisheries Act.

The Press Release from the Canadian Government states, “Of the penalty, $58 million will be directed to the Government of Canada’s Environmental Damages Fund and will be used to support projects that benefit Canada’s natural environment. The remaining $2 million are fines which will be directed to the Receiver General.”

Open Letter from Teck Resources

Don Lindsay President and CEO of Teck Resources Limited stated in an open letter

“We sincerely apologize and take responsibility for the impacts of these discharges. Everyone at Teck is committed to responsible mining that protects the environment. Which is why, over the nine years since, we have worked hard to solve this challenge and ensure the watershed is sustained for the long term.”

“In 2013, under direction from the Government of B.C. and in consultation with the Ktunaxa Nation, scientists, and local communities, we developed the Elk Valley Water Quality Plan.”

“We’ve invested about $1 billion so far to implement the plan and have constructed cutting-edge water treatment facilities that are successfully removing selenium and calcite from local waterways. We’ve undertaken a monitoring program that is tracking water quality and aquatic health in the Elk Valley and we are sharing the results with government, Indigenous Nations and the public.”

As more Canadians are receiving vaccinations and our economy continues to recover, (we hope both trends continue) we expect regulators to take a closer look at environmental monitoring/permitting and protection of the environment. If you need assistance with an environmental issue, feel free to contact me at 519-948-7300, Ext. 114.

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