Fuel storage tanks and environmental approvals in Ontario

A business that stores fuel on site brings the tank, and the history of the ground under it, into any sale. In Ontario two layers apply. The Technical Standards and Safety Authority (TSSA) regulates aboveground and underground fuel oil storage tanks, and the Environmental Protection Act gives the Director, an official under that Act, powers over discharges of contaminants. This guide sets out what the cited sources say about registration, removal, changes of ownership and past liability, and what each side can ask the other. It covers Ontario sources only, so check the rules of the province where any other tank sits. It describes the rules; it does not assess any particular site.

What TSSA says about the tanks themselves

TSSA’s storage tank FAQ states that it regulates aboveground and underground fuel oil storage tanks. To register an underground tank, the owner submits the Underground Fuel Oil Application Form, and once the application is approved TSSA issues a registration number. For aboveground tanks, TSSA says there is no age at which an approved tank must be replaced, as long as it is not leaking, and that an existing tank is considered approved if it was installed following the code at the time. That FAQ speaks to fuel oil. If the business stores another fuel, ask which TSSA program covers it rather than assuming this one does.

Licences do not travel with the business

TSSA’s change-of-ownership page says regulated operators can transfer the ownership of a licensed facility to an entity, corporation or individual, but that licences are not transferable and the onus to apply for a new licence falls on the new owner. It adds that owners of multiple devices must submit all the applicable change-of-ownership forms. For a buyer, that points to a closing step, not an afterthought: confirm which forms apply to each tank or facility and who files them. Whether a share purchase counts as a change of ownership for a given licence is a question for TSSA and counsel. The structure choice is covered in asset sale vs share sale.

Removing a tank or closing the site

The FAQ is specific about underground tanks. Only a TSSA-registered petroleum contractor is qualified to remove one, and TSSA advises asking for the contractor’s registration number before hiring. On removal or site closure, the owner or operator of a fuel storage facility must submit an Environmental Assessment Report, as TSSA’s Environmental Management Protocol requires. TSSA states that Ontario regulations require removal of an unused underground tank, although it may issue a variance to abandon one in the ground on application with that report. It also says owners of underground tanks are responsible for the costs of maintaining, upgrading and removing their tanks and for cleaning up contamination. If a tank is to come out before closing, the contract should say who pays and who files.

Spills and the Environmental Protection Act

Under the Act, a person must not discharge a contaminant, or cause or permit its discharge, into the natural environment if the discharge causes or may cause an adverse effect, subject to the exceptions the section itself sets out. A person who discharges a contaminant must also notify the Ministry forthwith if the discharge is out of the normal course of events, causes or is likely to cause an adverse effect, and the person is not otherwise required to notify under section 92. TSSA adds that a spill during a tank removal must be reported to the Ministry’s Spills Action Centre. A buyer can ask the seller for any spill reports.

Orders can reach a former owner

Section 18 of the Act lets the Director, in the circumstances set out in subsection (2), make a written order requiring a person who owns or owned, or who has or had management or control of, an undertaking or property to do one or more of the things listed in that section. The wording covers past as well as present owners, subject to limits elsewhere in the Act, such as section 168.7 where a record of site condition has been filed. Because the wording reaches past owners, a seller can ask counsel what a closing does and does not end, and a buyer can ask what the site holds. For how an asset purchase interacts with cleanup liability, see does an asset buyer inherit environmental cleanup liability in Ontario.

The record of site condition and what to ask for

Ontario’s record of site condition (RSC) is filed to the Environmental Site Registry once the ministry confirms the contents meet regulatory requirements. The ministry describes the RSC as giving limited protection from environmental orders, and says that protection is lost if the filed RSC is found to contain false or misleading information. An RSC rests on a phase one environmental site assessment, which identifies areas of potential contamination from past and present uses. The glossary entry on the environmental site assessment explains the stages. Ask whether an RSC was filed for the property and read the property use it records.

• Which TSSA registrations or licences cover each tank, and in whose name?
• Which change-of-ownership forms apply, and who files them at closing?
• Are there installation, approval, testing and removal records for every tank, including any removed in the past?
• Were any spills reported, and was an Environmental Assessment Report filed on removal or closure?
• Was a record of site condition filed, and does the recorded property use match today’s use?