Environmental liability

Environmental liability is the exposure a person has under environmental law for contamination on a site. If a business handles fuel or chemicals, or owns its land, a buyer can ask about the site’s past. See what environmental liabilities come with buying a business.

How two statutes reach owners

Under Alberta’s Environmental Protection and Enhancement Act, the Director may issue an environmental protection order to a person responsible for a designated contaminated site (s. 129(1)), a term the Act defines to include the owner and a previous owner who owned the site when the substance was there, subject to listed exclusions, such as a person who only investigates or tests the land. In deciding whether to order a particular person, the Director must consider listed factors where the information is available, including whether an owner knew or ought reasonably to have known of the substance when becoming owner, and whether the owner exercised due diligence in ascertaining its presence (s. 129(2)). Where waste has been deposited on land or in a building not approved as a waste disposal site (or with no registration under Part II.2 in effect), Ontario’s Environmental Protection Act lets the Director order an owner or previous owner, a person who has or had charge and control of the land, building or waste, or others listed in s. 43, to remove the waste and restore the site. This entry covers Alberta and Ontario only; check the rules in the province where the site is.

What to check or ask

• What the site was used for in the past, and whether any order or notice exists
• Whether an environmental site assessment has been done and who may rely on it
• How the purchase agreement allocates responsibility for contamination found later