What’s on your ESA Menu?

I recently had a potential client request a quote for an “Environmental Review” for a property purchase that was due to close in a few days. They didn’t know exactly what they needed, and only just realized that they needed to satisfy a condition of their purchase agreement that was included by their realtor. Unfortunately this can be a common occurrence for less experienced buyers of commercial, industrial and some residential properties. I took time to explain the different formats of ‘reviews’ to consider, based on their objectives of completing pre-purchase environmental due diligence, specifically a Phase I Environmental Site assessment (ESA). Most environmental consultants should fully understand the variety of ESA that are conducted across Canada, but for those stakeholders that are unfamiliar with the process, here are some of the basic formats to consider.

Geographical Location
Across most of Canada, the accepted format for conducting Phase I ESA is the Canadian Standards Association – CSA Standard Z768-01 (re-affirmed 2022). While there are regional differences, a properly conducted CSA-format ESA should satisfy most purchasers and lenders for due diligence purposes. There are some minor technical differences in several provinces, and in Ontario there is another type of ESA format that may be required (more on that below). Examples of some of the provincial variances include: mandated records search distances (AB and BC); specific mandated records review (AB, BC, ON, QC, NB), differences in terminology (in BC a Phase I ESA is referred to as a Stage I PSI, or Preliminary Site Investigation – and BC also has additional reporting requirements for certain property transactions); and specified professional or licensing qualifications in some cases when regulatory reporting is required (AB, QC, ON). Stakeholders and practitioners should be fully aware of all local and/or regulatory requirements before commencing any ESA.

Oil and Gas Sites
In our oil-producing provinces (AB, BC SK) there are specific regulatory requirements for conducting Phase I ESA on Upstream Oil and Gas Sites (including: proposed and producing oil and gas well sites, drilled or abandoned wells, disposal wells, battery sites, pipelines, associated facilities, and oil sands & heavy oil processing). Although based on the CSA Standard, there are several key differences in conducting a Phase I ESA for an Oil and Gas property, including: mandated research items and Freedom-of-Information searches, reporting obligations, and specific licensing requirements for professional sign-off. Local knowledge, experience and familiarity with specific provincial regulations is vital for Oil & Gas ESA practitioners.

It's Different in Ontario (or it can be)…
In Ontario, there is another layer of complexity to consider. When a property is proposed to be redeveloped to a more sensitive land use (e.g. industrial to commercial, industrial/commercial to residential, etc.) a Record of Site Condition is required to be submitted for acknowledgement to the provincial environment ministry. A record of Site Condition (RSC) can also sometimes be required by a local municipality as part of their approvals process, even when there is no change to a more sensitive land use. In these cases, a different type of ESA, is needed, specifically a Phase One ESA (not a Phase I ESA), conducted in strict accordance with Ontario Regulation 153/04, as amended (also known as the ‘Brownfields’ or ‘MOE’ guidelines). This ESA format is very strictly regulated and is quite different than the CSA Standard. Key differences include: specific terminology and wording; mandatory report formats; mandated records review and search distances; defined contaminating activities and areas of environmental concern; specific and mandated triggers for further investigation (i.e. Phase Two ESA); and requirements for work to be completed and signed off by a “Qualified Person” or QP (specifically limited to Professional Engineers and Geoscientists licensed and insured to practice in Ontario). Due the very stringent requirements of the governing legislation, there can sometimes be less room for professional judgement when it comes to recommendations for, or against further site investigation. The RSC format ESA does not include the assessment of potentially hazardous materials such as Asbestos, Lead or other ‘Special Attention Items” normally included in a CSA format ESA. The RSC compliant report generally costs more (sometimes a lot more) and takes longer to complete than a comparable CSA format report, and you still have to complete and submit the actual RSC along with the extra work, time-frame, documentation, costs and obligations that entails. Because of this, it is extremely important to determine whether an RSC is needed before scoping and costing any ESA in Ontario.

Bill Leedham, P. Geo., CESA
Bill is the Head Instructor and Course Developer for the Associated Environmental Site Assessors of Canada (www.aesac.ca); and the founder and President of Down 2 Earth Environmental Services Inc. You can contact Bill at info@down2earthenvironmental.ca