Modernization of MOE’s Approvals Framework
The Ministry of the Environment’s (MOE’s) core responsibility is protecting the air, land and water in Ontario to ensure healthy communities and long-term ecological sustainability. As one of the key tools for administering this responsibility, the ministry issues Certificates of Approval (Cs of A) to regulate activities that may have an impact on the environment. However, for many years, MOE has struggled to handle the overwhelming volume of applications for Cs of A that are submitted.
To address this challenge, MOE proposed a new framework for its approvals process in March 2010. This modernized approvals process was formally adopted in October 2010 through the province’s Open for Business Act, 2010, an omnibus bill that included amendments to the Environmental Protection Act (EPA) and the Ontario Water Resources Act (OWRA). Most of these amendments came into force on October 31, 2011.
MOE’s Current Approvals Framework
Under MOE’s existing approvals framework, proponents of certain activities must apply to MOE for a C of A prior to establishing, operating or altering their operations. Activities subject to a C of A include: landfills; incinerators; waste collection, hauling and processing facilities; operations and equipment that emit contaminants into the air; and sewage works that collect, treat or discharge wastewater.
MOE reviews each application and, if satisfied that the activity complies with all environmental laws and will not adversely affect the environment, issues a C of A. MOE may impose a broad range of conditions in the C of A (governing design, operation, maintenance, monitoring, reporting, emission limits, etc.) to minimize potential adverse effects from the activity. Proponents are legally required to comply with all conditions in their C of A.
Application Backlogs and Processing Delays
MOE receives about 6,500 applications for new or amended Cs of A each year. MOE’s inability to quickly process this large volume of applications has resulted in major backlogs and unacceptably long processing timelines. While MOE has introduced several measures over the past decade to reduce delays and eliminate the backlog, the Auditor General of Ontario noted in 2010 that proponents still face long wait times for approvals, often close to a year.
Outdated Certificates of Approval
MOE has issued an estimated 250,000 Cs of A since the ministry was first established 40 years ago. While about one-fifth of these approvals may relate to facilities no longer operating, and others have been issued or amended more recently, a significant number of Ontario facilities continue to operate under the authority of approvals issued long ago. Some of these Cs of A date back to the 1970s, when approvals contained no conditions at all. Many others, from the 1980s and 1990s, contain minimal conditions that reflect outdated environmental standards. These older Cs of A, which lack expiry dates, allow proponents to continue operating indefinitely with little incentive to improve operations in accordance with new environmental knowledge or technological advancements.
MOE has long identified the need for a systematic review of older Cs of A, estimating that roughly 50,000-70,000 approvals require updating. However, this presents a huge resource challenge for the ministry. Over the past couple of years, MOE has made some limited headway in updating approvals, but these efforts only scratch the surface of the overall work required.
Facilities Operating without Approvals
Presenting an additional challenge, MOE has estimated that up to 40 per cent of all Ontario facilities (mostly small businesses) may be operating without any environmental approvals at all.
MOE’s Modernized Approvals Framework
MOE’s modernized approvals framework replaces the current approvals process with the following two-path process:
- a simplified Registration Process for activities that are “lower-risk, standard or less complex;” and
- continuation of the Approvals Process for all other activities.
Registration Process
The new registration process is akin to a “permit-by-rule” system. MOE will establish an online “Environmental Activity and Sector Registry,” and Cabinet may prescribe activities that are subject to registration, as well as prescribe criteria for registering and ongoing requirements for registered activities (e.g., operating, maintenance, monitoring and reporting requirements). Every person engaging in a prescribed activity will be required to register their activity by the date specified in the regulation, and existing Cs of A for prescribed activities will cease to be valid.
Upon meeting all of the requirements for registration (i.e., declaring that the facility meets the eligibility requirements, paying the required fee, and providing financial assurance where required), the registrant will receive immediate confirmation of the registration, allowing the person to engage in the activity. There will be no ministry review of the individual activities.
| Prescribing Activities |
|---|
MOE has committed to implementing a thorough, multi-stage consultation process for developing the regulations to implement the modernized approvals framework. In keeping with this commitment, in January 2011, MOE used the Environmental Registry to begin consultation on the first group of proposed activities to be prescribed under the registration process:
In April 2011, based on the public comments received, MOE decided to proceed with prescribing these proposed activities, except for the printing sector (which will undergo further analysis), and began a second round of consultation on the draft regulation to prescribe these activities. On June 14, 2011, O. Reg. 245/11 was filed, prescribing these activities. |
Environmental Compliance Approvals
For all activities that do not fall within the registration process, proponents will continue to be required, as before, to obtain an approval from MOE. However, “Certificates of Approval” have been renamed “Environmental Compliance Approvals.” Environmental Compliance Approvals are essentially the same as Cs of A, with some new provisions.
Operational flexibility: MOE now has explicit authority to build operational flexibility into approvals, which will allow proponents to make specified changes to their operations without requiring an amendment to their approval. In practice, MOE has already begun to do this.
Site-wide approvals: MOE may issue site-wide approvals, which would encompass all of a facility’s activities and emissions from all media (air, waste and wastewater) and emission sources.
Multi-site approvals: MOE may issue multi-site approvals, which would cover all media and associated emissions from multiple sites, provided that the proponent is operating the same activity, with similar emissions and similar requirements, at all sites.
System-wide approvals: MOE may issue system-wide approvals, which would cover all media and associated emissions for an entire inter-connected sewage or waste management system.
Implications of the Decision
Lightening the Load for Business and Ministry
One of the stated goals of the modernization agenda is to improve service delivery to business, making Ontario “more attractive for business development.” Although not explicitly stated, another fundamental goal of the modernization agenda is to reduce pressure on ministry approvals staff by decreasing the number of applications subject to MOE review.
The new registration process has the potential to dramatically reduce administrative burdens for both business and MOE. Registration will provide a much simpler, faster and more certain process by: establishing consistent regulatory standards for each activity; establishing requirements that are proportionate to the risk and complexity of the activity; and enabling registrants to immediately begin operating once all requirements are met.
In addition, the issuance of site-wide, multi-site and system-wide approvals (rather than individual approvals for all media, emission sources, activities and sites), as well as the inclusion of operational flexibility in more approvals, should further reduce the number of applications that must be submitted by businesses and reviewed by MOE. Combined, these measures should help reduce backlogs and processing times for the remaining approvals.
Focusing Ministry Resources on Higher-Priority Activities
Under the current framework, all activities go through the same general approval process regardless of the complexity and potential risk posed by the activity. MOE has suggested that this “one-size-fits-all” approach, which requires staff to spend time reviewing and approving straight-forward, low-risk activities, is not the best use of the ministry’s limited staff resources.
The new risk-based framework enables MOE to apply different tools to different activities, allocating its resources in a manner that achieves the greatest benefit. Under the new framework, MOE will focus staff resources on reviewing applications for facilities and activities that pose a greater risk to the environment and human health.
The new registration process also has the potential to create efficiencies and better focus ministry resources. For relatively simple, low-risk activities, MOE can develop a single set of requirements that are designed to be protective of the environment and human health, rather than creating individual requirements for each approval.
Regulations will Dictate Level of Environmental Protection
The second stated goal of the modernized framework is “maintaining and, where possible, enhancing protection of the environment and human health.” Whether this goal will be met depends largely on how the registration process is implemented.
While MOE has stated that only “lower-risk, standard, well-understood or relatively less-complex” activities will be prescribed, the EPA and OWRA provide no direction or criteria as to which activities can or should be prescribed. As such, there is considerable flexibility (and uncertainty) as to how liberally the registration process will be applied.
Similarly, the legislation is completely silent as to what (if any) conditions and operating requirements Cabinet should prescribe. The actual scope and content of the regulatory provisions will greatly determine the extent to which the registration process protects the environment. Potentially, the registration process could actually raise the minimum bar in some cases, as well as level the playing field for registered businesses engaging in a prescribed activity.
Increasing Transparency; Decreasing Consultation and Appeal Rights
The third and final stated goal of the modernized approvals framework is to “improve public transparency and availability of information.” To this end, MOE has uploaded over 45,000 Cs of A to a publicly accessible and searchable electronic library, and intends to post all future approvals and registrations. These new online databases provide important tools for improving transparency and public access to both registrations and approvals.
While individual registrations will be publicly available, they will not be subject to the public consultation and third-party appeal rights that currently apply to most Cs of A. This loss of consultation and appeal rights, however, will be somewhat offset by the opportunity to comment on the generic requirements for prescribed activities to be set out in regulation (see box on prescribing activities).
Establishing a Framework for Updating Approvals
New provisions added to the EPA authorize MOE to develop a regulation that would require all approval holders within a sector to apply for a review of their existing Cs of A by a specified date. MOE would then review and replace the Cs of A with an updated Environmental Compliance Approval. Updating the tens of thousands of outdated Cs of A would ensure consistency with today’s environmental standards, as well as create a more level playing field for all businesses engaging in the same activity. However, MOE has suggested that such sector-bysector updates could take up to 15 years to complete.
Another new provision in the EPA authorizes MOE to impose renewal dates in all approvals. While MOE already had broad discretion to impose any terms in an approval, this explicit authority could potentially impel MOE to implement a process for regular review of approvals.
Engaging Non-Compliant Businesses
MOE believes that the difficulty in obtaining a C of A under the current process may be one reason that many facilities are operating illegally without any approval at all. MOE hopes that the simpler registration process may entice some of the non-compliant facilities to register. Bringing even a fraction of the unregulated facilities into the regulated system could increase environmental protection.
Making the Case for a Stronger Inspection Program
A sound inspection program is essential for ensuring that environmental laws, regulations and instruments are being followed. For both the registration and approvals programs to be effective, facilities must know that there is a reasonable prospect of inspection and enforcement. However, MOE only inspects about 5 per cent of all regulated facilities (not even including those facilities operating without approvals) each year, meaning that regulated facilities can go, on average, twenty years between inspections.
The nature of the registration system calls for a stronger, more visible MOE inspection program. The reliance on proponents to self-assess the suitability of their activities and monitor their own compliance with the regulatory requirements demands a higher level of ministry oversight. Yet MOE has not produced any procedures for fulfilling this new inspection responsibility, nor even identified which ministry branch will be responsible for this task, or how it will be funded.
Neglecting Cumulative Effects
The modernization of approvals process did not address cumulative effects. MOE has stated that it is developing a process for considering cumulative effects in its approvals process, but did not address this issue within the modernization agenda. Notwithstanding MOE’s ongoing efforts, the absence of an individual review of each activity under the registration process makes it unlikely that the registration process will include consideration of cumulative effects. Even “low-risk” activities produce environmental impacts, and the cumulative effect of several low-risk facilities located closely together (as they commonly are) on the environment and human health can be significant.
Public Participation & EBR Process
During public consultation on this proposal, MOE received 54 comments, primarily from industrial, environmental and municipal commenters.
Environmental groups were vehemently opposed to the proposal. They stated that the establishment of a registration process to reduce staff workload was not an appropriate solution to MOE’s approvals problems, and that these reforms would weaken one of the ministry’s core functions, seriously reduce environmental protection, and erode the public’s ability to participate in environmental decision making.
Conversely, industry and municipal commenters supported the general modernization framework. Many of these commenters cited experiences with exceedingly long and costly application processes, even for simple, low-risk activities, or for approval to install pollution control equipment that would benefit the environment. As such, these commenters strongly supported MOE’s efforts to simplify and improve the efficiency of the approvals process.
ECO Comment
After a decade of work and multiple attempts to revise its approvals process, the ECO believes that MOE has ultimately developed a reasonable modernized framework.
The unfortunate reality is that MOE is unable to meet the demands of the current approvals process. The need to reduce its approval burden appears to be the primary motivation behind the modernization project, although MOE was less than transparent about this purpose. Viewed in this context, it is clear that part of the solution to MOE’s approvals challenges must be allocating greater resources to the ministry to ensure that it has the capacity to process and update all approvals. The ECO continues to urge the government to provide additional resources to MOE to enable the ministry to appropriately administer its core responsibilities (see Part 5.1 of this Annual Report).
However, even if allotted far greater resources, the ECO believes that there would still be a need for MOE to revise its approvals program to operate more effectively. There will always be competing demands for staff and financial resources, and choices need to be made as to how to allocate ministry resources most efficiently. The modernized framework appears to do just that.
The modernized framework should enable MOE to more effectively focus staff resources on reviewing those facilities and activities that are novel, complex and/or pose a higher risk to human health and the environment. The anticipated reduction in applications should also enable MOE to reallocate staff resources to undertake much-needed reviews of outdated approvals. In addition, the new registration process could potentially improve efficiencies and environmental protection by enabling the ministry to: establish a single set of up-to-date environmental standards for all activities in a sector; and update those operating requirements through a single, periodic regulatory amendment, rather than numerous amendments to individual Cs of A.
However, there is no certainty that these potential benefits will be realized. The legislative amendments conspicuously lack the mandatory provisions necessary to achieve these objectives, such as provisions that would:
- require MOE to review all transitioned approvals by a certain date;
- require MOE to include expiry dates in all new approvals;
- require the regulations for prescribed activities to include operating, monitoring and reporting conditions; and
- require MOE to regularly update the regulations for prescribed activities.
While MOE has signalled an intention to do all of these things, there is no certainty that they will be done. The ECO urges MOE to use its full discretionary authority to implement each of these elements of the new framework.
The ECO also has serious concerns that the EPA and OWRA amendments have not provided any parameters to define which activities may fall within the registration process. Given the reduced oversight of registered activities, the ECO strongly urges MOE to apply the registration process judiciously to activities that are truly low risk. Furthermore, it is critical that the new regulations exclude individual activities or facilities that are not suitable for registration due to any special circumstances (e.g., unique features, sensitive local conditions, history of non-compliance, etc.), and that the regulations include rigorous operating requirements that are at least as protective as those currently found in the most stringent corresponding Cs of A.
Furthermore, the new registration process must be accompanied by a much stronger inspection program to ensure that registrants comply with all regulatory requirements. MOE has provided no commitment to increase its inspection presence. The ECO urges MOE to develop a detailed compliance and enforcement strategy specific to the registration process and to allocate additional staff and other resources to ensure sufficient ministry oversight of all registrants.
Lastly, the ECO notes that MOE’s modernized process provides some important improvements in terms of transparency and access to information. Difficulty accessing approvals-related information has been a longstanding concern of both the public and this office. Accordingly, the ECO lauds the ministry on its new publicly accessible approvals database. However, the new registration process represents a step backward in terms of public participation. The absence of any opportunity for public involvement in individual registrations provides yet one more reason why MOE – on behalf of the public – must very strictly administer and enforce the requirements under the registration process.
| Recommendation 9:
The ECO recommends that MOE review and revise its inspection planning program and its Compliance Policy: Applying Abatement and Enforcement Tools (Policy F-2) to include an effective compliance and enforcement strategy specific to the registration process. |
For a more detailed review of this decision, see Section 4.6 of the Supplement to this Annual Report. For ministry comments, please see Appendix C.
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| This is an article from the 2010/11 Annual Report to the Legislature from the Environmental Commissioner of Ontario. |
Citing This Article:
Environmental Commissioner of Ontario. 2011. "Modernization of MOE’s Approvals Framework." Engaging Solutions, ECO Annual Report, 2010/11. Toronto: The Queen's Printer for Ontario. 85-91.
