The frequently asked questions (FAQs) listed here are meant to provide organizations with basic information about Environmental Site Assessments, Brownfields site contamination and cleanup standards by various environmental regulatory authorities

1) What is a Phase 1 Environmental Site Assessment?

Most stakeholders involved in real estate transactions are familiar with a Phase 1 Environmental Site Assessment (ESA), a study routinely undertaken as due diligence associated with property transfer, financing or development.  In Canada, Phase 1 ESA’s are usually conducted in accordance with the Canadian Standards Association (CSA) Z-768-01 environmental protocol or the Canada Mortgage and Housing Corporation (CMHC) environmental site investigation procedures for mortgage loan insurance.

Briefly, a Phase 1 ESA is a documentary review of a property’s historical land uses and a visual inspection of the premises to identify any actual or potential sources of environmental contamination. A Phase I ESA does not include sampling or testing of soil, groundwater, or building materials. Such analyses are conducted in a Phase 2 ESA.

2) What is a Phase 2 Environmental Site Assessment?

A Phase 2 ESA is a more intrusive form of investigation, as it involves the sampling and analyses of soils and groundwater. This type of investigation is undertaken as a follow-up study when a Phase 1 ESA reveals actual or potential sources of contamination.  Soil and groundwater samples are obtained via drilled boreholes or test pits, and the scope of work can range in size from a couple of holes advanced around an underground storage tank (UST), to several dozen holes as a result of an extensive investigation in order to determine the extent of already confirmed soil or groundwater contamination.

Statistically, fewer than 30% of Canadian properties have historically revealed potential problems that would warrant further investigation.  However, for those properties that do, investment in a Phase 2 ESA is well worth the cost incurred, for it could reveal important information about the environmental health of a site, which could directly affect the market price of a property!

In the case of work being performed for due diligence and pre-purchase purposes, a Phase 2 ESA will also indicate if a site is nothing more than an environmental liability, should it be found to contain contaminated soils or groundwater requiring what can result in an expensive clean-up operation.

3) Which properties would warrant a Phase 2 ESA?

Obvious examples include sites with underground storage tanks (USTs), such as gasoline service stations, apartment building properties or automotive services garages; filling or dumping sites; sites used by degreasing operations or dry cleaning facilities; and waste management facilities or transfer stations.

Others include sites with heavy industrial uses such as engineering works, smelters, gas works, power stations, petroleum storage and distribution sites, chemical manufacturers, the rubber industry, textiles, printing works, and waste incineration.  In fact, according to Ontario Regulation 153/04 of Environmental Protection Act (EPA), there are now 69 activities that are recognized as being potentially-contaminating activities.

If any of these activities have occurred on or near the property in question, a Phase 2 ESA recommendation would be highly likely.

4) Why would you conduct a Phase 2 ESA?

As a Realtor or Vendor of a property, it behooves you to know if your site is contaminated, so that you have a chance to cleanup the contamination prior to putting the property up for sale. As a prospective Purchaser, you want assurances that the property has clear title prior to doing the deal, to preserve its market value.  A Phase 2 ESA being conducted for pre-purchase purposes will also indicate if a site is nothing more than an environmental liability, should it be found to contain contaminated soils or groundwater requiring what can result in an expensive clean-up operation.

As a property Developer, you could be looking at re-zoning the property for a higher use (e.g. commercial to residential), and want to ensure compliance with provincial standards for a specific use to facilitate a building permit application. As a Mortgage Lender, you obviously want your collateral to hold its value.

5) Who should be engaged to conduct a Phase 2 ESA?

Generally, any Environmental Consultant with a geosciences background can conduct a Phase 2 ESA. However, you would be well advised to use a licensed professional, such as an Engineer or Hydrogeologist, as your Assessor.

Such persons are obliged by legislation to maintain a duty of care and to follow established protocols, such as the Canadian Standards Association (CSA) protocol Z769-00 Phase II Environmental Site Assessment (CSA, March 2000). As an added bonus, most Assessors carry professional liability insurance that can cover inadvertent errors and omissions.

What government regulations currently apply to ESAs in Ontario?

In July 2011, the Ontario Ministry of the Environment promulgated amended Regulation 153/04 – Records of Site Condition, Part XV.1 of the Environmental Protection Act (O. Reg. 153/04, as amended by O. Reg. 511/09, O.Reg.179/11 and O. Reg. 269/11).

Under this regulation, a stricter framework for conducting Phase 1 Environmental Site Assessments was created. This framework is mandatory for an ESA being conducted to support the filing of a Record of Site Condition. The new regulation uses the term “Phase One Environmental Site Assessment”, as opposed to the conventional term “Phase I Environmental Site Assessment”, to distinguish the more rigorous study from a conventional CSA-style Phase I Environmental Site Assessment. Similarly, the term “Phase Two Environmental Site Assessment” is used for a study done per amended O. Reg. 153/04 , as opposed to a CSA-style “Phase II Environmental Site Assessment”.

6) What if contamination is identified on my property?

As an Owner, you can choose to go no further at this point. However, to meet a condition of property transfer, financing or development, further action would likely be necessary. In such cases, follow-up studies can be undertaken to confirm and delineate the nature and extent of the contamination. Practical and cost-effective response actions can then be selected for cleanup or on-site management of the contamination.

7) As a consultant, are you obligated to report to the MOE if you find contamination at my site?

Normally, findings of contamination are kept confidential under a privileged Consultant-Client relationship, and your professional is not obliged act as a “whistle blower” to any authority, except in cases of imminent danger to public health and safety, such as a noxious release into the atmosphere, or a toxin into a water supply aquifer.

8) What are the potential dangers to human health from contaminated land?

Possible risks to human health include eating food plants that have grown in contaminated soil, ingesting or inhaling contaminants (for example, breathing in dust, or drinking contaminated water), and skin contact with contaminated soil.

9) What are the potential dangers to the environment from contaminated land?

Some possible effects are the pollution of rivers and water courses, odour, poor soil quality which then inhibits plant growth, and discolouration of buildings.  There are also economic factors such as a drop in land value, and delays in selling or developing land.

10) What site cleanup standards are used by your industry?

Cleanup standards are developed by various environmental regulatory authorities, and are usually based on protection of the human health and the environment.

Ontario has one of the most conservative sets of site cleanup guidelines in Canada.  For instance, for soils and groundwater, we have the Ministry of the Environment (MOE) Soil, Groundwater and Sediment Standards for Use Under Part XV.1 of the Environmental Protection Act (EPA) (July 27, 2009), which specifies acceptable limits on contaminants at agricultural/residential sites and commercial/industrial sites and considers whether the project area uses well water as a potable supply or not.

11) What is a Site Risk Assessment?

A Site Risk Assessment (SRA) is a study that offers an alternative to site cleanup, which can sometimes be illusive or cost prohibitive to achieve.

The process is recognized by the MOE site cleanup guideline and considers the real risks to human health or the environment from evaluation of the contaminant toxicology, site characteristics, and the pathways of exposure to humans or the environment.  For instance, for a Brownfield, if a contaminant lies in the groundwater at significant depth below grade, and is contained under a concrete floor slab or a paved parking lot, an SRA would likely have a favourable outcome.

This approach, although time consuming, would cost some 50 to 70% less than a conventional remedial alternative.

12) What is a Brownfield site?

A Brownfield is a site contaminated with a “hazardous substance,” in concentrations which exceed applicable cleanup standards.  Such materials include substances that are toxic, ignitable, corrosive, reactive or toxic as defined under the Environmental   Protection Act.  According to the United States Environmental Protection Agency, for a site to be considered a Brownfield, it must meet three criteria:

  1. It is an underutilized commercial or industrial site,
  2. It has redevelopment potential, and
  3. The site’s redevelopment potential is complicated by known or perceived contamination with a hazardous substance.

13) What are the benefits of developing a Brownfield site?

Brownfields redevelopment benefits the community by reducing environmental hazards, creating new business opportunities and restoring blighted areas to productive use.  Brownfields may be located near potential markets and labor, and their redevelopment may be less expensive than developing previously undeveloped land because roads and infrastructure are already in place.

14) What is a Record of Site Condition?

A Record of Site Condition (RSC) is an official document filed with the Ontario Ministry of the Environment (MOE) that confirms that the soils and groundwater (and any sediment) on a property have been shown to meet the applicable site condition assessment or cleanup standards at the time of testing.

An RSC is completed by an MOE-recognized Qualified Person (QP) on behalf of the Owner and, once acknowledged by the MOE, becomes publicly available on the Environmental Bill of Rights (EBR) Registry.  An RSC is required by municipalities for various development application purposes, such as rezoning, site plan control, and building permit issuance.

Environmental FAQ