On June 1, 2015, The Environmental Management and Protection Act, 2010 (“EMPA 2010”) will repeal and replace The Environmental Management and Protection Act, 2002 (“EMPA 2002”) and other Acts.  The coming into force of EMPA 2010, together with the implementation of The Saskatchewan Environmental Code, represents a shift in Saskatchewan’s environmental regulation.  Certain parts of EMPA 2010 will impact on parties to construction projects, purchase and sale transactions and lease transactions.  The reform gives rise to many potential pitfalls that land owners, developers, construction contractors and subcontractors, real estate agents, sellers, buyers, lessors and lessees should be alerted to.  Are you ready? Summary Highlights of EMPA 2010: 1.  A New Duty to Report a Discovery

• Section 9(2) of EMPA 2010 requires that every person who owns or occupies land on which a substance is discovered that may cause or is causing an adverse effect shall report the discovery to the Saskatchewan Ministry of Environment.  Similarly, section 9(3) of EMPA 2010 requires every person, who while conducting work, discovers a substance that may cause or is causing an adverse effect shall report the discovery to the Saskatchewan Ministry of Environment.
• By Section 10 of EMPA 2010, the person who caused the discharge in contravention of EMPA 2010 and the owner or occupier of land in respect of which a Section 9 report has been made are required, as soon as possible, to take all reasonable emergency measure consistent with public safety to repair and remedy undue risk; or reduce or mitigate danger to life, health, property or the environmental that results or may reasonably be expected to result from the discharge of the substance.

Sections 9(2) and 9(3) expand the scope of those persons who are under a duty to report which was previously limited to those responsible for the discharge.  This new duty to report a discovery will impact on how parties to construction projects, purchase and sale transactions and lease transactions enter into agreements, undertake projects and complete due diligence.  Owners, in particular, will need to be cautious in their approach to development and due diligence. The term “persons, who while conducting work” may be so broad as to include: commercial developers, construction contractors and subcontractors, real estate agents, environmental engineers and consultants and more. 2.  A New Requirement to Report on Environmentally Impacted Sites

• Section 11 grants the Saskatchewan Ministry of Environment broad power to require an owner or occupier of land to provide to the Ministry a written report containing (among other things) all sites owned or occupied that contain or may contain a substance that may cause or is causing an adverse effect.

Given the potential liabilities following such reporting, owners and occupiers are urged to contact their professional advisors if they receive a written direction from the Saskatchewan Ministry of Environment. 3.  A New Environmentally Impacted Sites Regime (replacing the former contaminated sites regime under EMPA 2002)

• The Saskatchewan Ministry of Environment can require a person who is or may be a “person responsible” (within its meaning in EMPA 2010) to conduct a site assessment if the Minister reasonably believes that a site may be an environmentally impacted site.

Given the time and costs associated with a site assessment and potential liabilities following such site assessment, such persons are urged to contact their professional advisors if they receive a written direction from the Saskatchewan Ministry of Environment. 4.  New Provisions Allowing for the Contractual Transfer of Environmental Liability

• Where a site has not yet be determined to be an environmental impacted site, section 12(2)(h) allows parties to contractually transfer liability for the discharge or presence of a substance or the obligation to mitigate, remedy or reclaim the adverse effects caused or contributed by the discharge or presence of the substance the obligations of a person responsible under EMPA 2010.
• Where a site has be determined to be an environmental impacted site, sections 12(2)(i) and 19 allow parties to transfer the responsibility for an environmentally impacted site.

The ability to contractually transfer environmental risk will create commercial certainty in purchase and sale transactions and lease transactions.  Whether or not the agreement is to transfer environmental risk, any such party is urged to contact their professional advisors to ensure that risk is properly priced and allocated and the transaction is properly documented. 5.  The Establishment of a New Environmentally Impacted Sites Registry

• EMPA 2010 provides for the establishment of a new environmentally impacted sites registry which will contain (1) notice of site conditions, (2) corrective action plans, (3) site assessments, (4) environmental protection orders and (5) other prescribed documents, all available for public review.

The new registry allows for increased transparency for environmentally impacted sites.  Buyers, lessees and the public will now be better equipped to review environmental risk. About the author: Christopher J. Masich is an associate in the Saskatoon McKercher LLP office and maintains a Corporate and Commercial Law practice with particular emphasis in the areas of Corporate Finance, Commercial Real Estate, Environment, Agriculture and Agribusiness. About McKercher LLP: McKercher LLP is one of Saskatchewan’s oldest, largest law firms with offices in Saskatoon and Regina. Our deep roots and client-first philosophy have made us a top ranked firm by Canadian Lawyer magazine (2011, 2013). Expertise, experience and capacity provide innovative solutions for our clients’ diverse legal issues and complex business transactions. McKercher LLP’s Real Estate & Land Development and Construction & Infrastructure Law teams have experience in major commercial real estate projects across western Canada and protect clients through every step of the construction process.  We have assisted commercial, government, corporate and individual clients with complex real estate transactions.  With respect to construction and infrastructure, we have acted for owners, developers, engineers, architects, contractors, manufacturers and suppliers, property managers, financial institutions and their insurers. This update is for information purposes only and should not be taken as legal opinions on any specific facts or circumstances.  Counsel should be consulted concerning your own situation and any specific legal questions you may have.