Federal contaminated sites – the problem that won’t go away



Thousands of abandoned industrial and military sites across Canada owned by the federal government, contain soils contaminated with PCBs, hydrocarbons, asbestos and heavy metals. Although remediation of these sites has been declared a key federal priority, the number of such sites in Canada remains surprisingly high and the rate of remediation of these sites remains low.

Across Canada, contaminated sites have been recognized by the federal government as a significant and growing problem; but the pace at which remediation is taking place has been sluggish. The Treasury Board Secretariat maintains the government’s registry of contaminated sites. It lists a total of 18,292 possible problem locations, of which 11,751 have yet to be classified, but only 3,379 of which have been identified as definitely or most likely requiring treatment.

Many of these sites pose significant risks to human health and the environment. These include major sites with significant environmental liabilities, such as abandoned mines in the North, military sites, harbours and lighthouse stations, and sites used to store fuel. Smaller sites with lower levels of contamination include airports, government laboratories, landfills, and reserve lands.

Estimates the financial liability of all federal contaminated sites exceed $3.5 billion, 60% of which relates to sites in Northern Canada.

Until recently, federal departments were left largely on their own to manage or remediate sites for which they were responsible. Predictably, without a central fund or policy, and little by way of dedicated resources, progress was slow.

In 2003, the government committed $175 million over two years to accelerate action on federal contaminated sites. This was in addition to about $100 million per year already being spent by individual departments to manage federal contaminated sites.

The 2005 federal budget established the Federal Contaminated Sites Action Plan (FSCAP), dedicating $3.5 billion dollars to the remediation of federal brownfield sites, with goal of rehabilitating all contaminated sites in Canada by 2015.

It was noted then that many of the over 11,000 sites in Federal Contaminated Sites Inventory were in rural areas, but a significant number were urban sites suitable for redevelopment.

The 2005 federal budget also added $300 million to the Green Municipal Fund, $150 million of which is earmarked for brownfield redevelopment. Administered by the Federation of Canadian Municipalities, the GMF operates at arms-length from the federal government, and provides support to municipal governments and their partners for sustainable development projects.

For the fiscal year 2007-08, the Government targeted 279 projects as priorities, with $189.3 million to clean up or deal with the risks that they may pose. Projects often include more than one site.

An additional $25 million has been set aside for the evaluation of about 2,000 sites to determine the next steps for dealing with them.

Contamination of many sites occurred during World War 2 and the post war period, though in many urban industrial areas, historical railway developments, old ports and reclaimed land provide examples of contamination dating back to the 19th century. Contamination has also occurred at government laboratories, military bases, harbors and ports (including contaminated harbor sediment), airports, training facilities and reserve lands, to name a few.

To date, the Government of Canada has invested more than $600 million in this program. Thousands of federal sites have been evaluated and action is underway or completed on more than 500 sites

Classifying Contaminated Sites

The process used by federal departments in assessing contaminated sites is as follows:

Phase I: Identifying the potential for contamination. If there is a high likelihood of contamination, the process moves to Phase II.

Phase II: Measuring the level and type of contamination. If contamination is above legislated limits, the process moves to Phase III.

Phase III: This Phase consists of site remediation.

The process is lengthy and takes between 18 to 24 months and, depending on the scale of contamination, could cost millions of dollars. Each year only a limited amount of money is budgeted for specific site remediation.

Differing Priorities

In 1995 the federal government established the Contaminated Site Management Working Group (CSMWG) as a direct response to the need for a more efficient and consistent approach to the management of federal contaminated sites. Co-chaired by Environment Canada and the Department of National Defense, it currently comprises 15 federal departments and agencies, which cost share its activities.

The primary Federal Departments with Contaminated Sites are Public Works and Government Services Canada (PWGSC), Health Canada, Department of National Defense (DND), Indian and Northern Affairs Canada (INAC), Transport Canada, Department of Fisheries and Oceans (DFO), Parks Canada.

Prior to the CSMWG, federal government departments carried out the identification, assessment, and management of contaminated sites on an individual basis resulting sometimes in inconsistent practices and procedures. These inconsistencies left the federal government with an incomplete picture of its environmental risks, costs, and liabilities arising from contaminated sites.

Although a step in the right direction, the development of the CSMWG has evidently not been enough to create consistency across all departments as the agendas of each department vary.

'The different federal departments of the Government don’t appear to be aligned while pursuing the national objectives of cleaning-up our legacy of industrial and military pollution and developing world class productive companies that can compete and generate exports, wealth and economic sustainability for Canadians,' says Paul Austin, a Business Export Reviewer who helps companies market environmental solutions.

'For example, Environment Canada’s primary interest is to eliminate the government’s environmental liability and do not specifically have industry competitiveness or innovation as an objective. Health Canada is strictly interested in the human health element of contaminated sites.' notes Austin.

On the other hand, he noted, Industry Canada is trying to promote new technologies and establishing Canada as a world leader in this field. Similarly, Foreign Affairs and International Trade Canada (FAITC) are soliciting small to medium technology enterprises to participate on trade missions to Asia and elsewhere.

Lack of Expertise

One of the problems contributing to the slow pace of remediation is the lack of expertise within the federal departments. Because of the sheer number of contaminated sites in Canada, many public servants who are put in charge of a remediation have little or no experience with the remediation process.

This problem has also been noted by the real Property Institute of Canada (RPIC), a non-profit body established and managed by a group of senior federal officials responsible for contaminated site remediation in various government departments. RPIC seeks to develop and foster a high professional standard of real property management within the Federal Public Sector, and to provide a forum for information exchange and continuous improvement. Its stated mission is to promote professionalism and effectiveness of the disciplines of real property management within the federal public sector.

The skill shortage problem is not peculiar to the public sector. As noted in an Industry Canada commentary, seventy percent of employees in this area are highly skilled and trained in engineering, hydrogeology, and pure sciences. The most difficult employees to find are intermediate level managers (5-8 years of experience) and field technicians (as too few are graduating). 'This trend is expected to continue into the foreseeable future and does have a moderate to large effect on firms in the industry,' notes the commentary.

Risk Management

There is also an inherent conflict of interests with current site assessments, as the proponent, i.e. the federal department, is also managing the entire process.

In order to deal with the sheer number and costs associated with contaminated sites, the federal government is increasingly requesting that consultants apply a ‘risk management’ approach. Essentially consultants are asked to address the risks of contaminants entering the food chain, groundwater supplies, etc. instead of observing the actual levels of contamination.

If the risk is perceived to be low, or a feasible process to reduce the risk exists and is economically viable, that solution may be applied. In either case assessment does not move beyond phase II and remediation of the site does not occur.

Turning Brownfields green

In 2001, the federal government asked the National Roundtable on the Environment and the Economy (NRTEE) to develop a national brownfield redevelopment strategy, to 'ensure that Canada is a global leader in remediation'. The group concluded that there are as many as 30,000 brownfield sites in Canada, representing a significant loss of economic opportunity while adversely affecting the health of local residents and the environment.

At that time, there were a few provincial and municipal initiatives aimed at encouraging brownfield redevelopment, but the government and the Roundtable identified a need for a more comprehensive national approach that encouraged lower levels of government and the private sector to take on key challenges.

The group identified certain market failures that prevent brownfield redevelopment:

  • lack of access to capital
  • regulatory liability risk
  • civil liability risk
  • limited access to insurance protection
  • regulatory delays
  • stigma and risk perception
  • lack of awareness among key public and private sector groups.

Source: GLOBE-Net

Such a process was applied in part to one of Canada’s most contaminated sites, the Sydney Tar Ponds in Nova Scotia. The Tar Ponds form a tidal estuary at the mouth of Muggah Creek, a freshwater stream that empties into the harbour. Over the last century, runoff from coke ovens associated with Sydney Steel Corporation’s (SYSCO) now-decommissioned steel mill filled the estuary with a variety of coal-based contaminants and sludge.

Clean-up of the site has been underway in one form or another for over 22 years. In 2006, as an alternative to remediation, a concrete barrier was put in place in a section of the site to prevent contaminants from further leaking into the nearby estuary.

The Contaminated Site Remediation Technology Market

The lack of significant remediation taking place across the country is hurting the economic performance of Canada’s small to medium remediation technology firms both domestically and abroad.

A 2005 study by Industry Canada notes that an estimated 400-700 Canadian firms offer soil remediation technologies and services. Key segments of the sub-sector are: consulting engineer firms, various contractors (involved in drilling, sampling, pumping and other services to characterize the site), analytical services, waste management services, specialized and non-specialized technology and equipment suppliers, full package property clean-up and redevelopment companies, and the banking and insurance industry.

Most firms are diversified, notes the commentary, with only part of their revenues coming from soil remediation goods, technologies and services. Some smaller firms only focus on offering niche remediation services or technologies.

Most contaminated sites contain a complex cocktail of contaminants (pesticides, petroleum hydrocarbons, inorganics, heavy metals, and radioactive, biomedical and pathogenic contamination). Technologies fall into three principal clean-up approaches: on-site in-situ, on-site ex-situ or offsite treatment.

According to Industry Canada, there is a growing preference for in-situ approaches, and for niche technologies for specialized chemicals which cannot be treated by other remediation technologies. The market is dominated by a few key proven clean-up options due to convenience, effectiveness/practicality.

Four principal markets forces drive remediation markets around the world, including in Canada:

  • Regulation and legislation - the sub-sector is strongly driven by regulation. In fact, some would argue that all booms in the market correspond with the introduction of new regulation.
  • Property transaction liabilities - required to re-establish a contaminated property as an asset than can be used for expansion or sold.
  • Funding - from federal, provincial and municipal sources. The sub-sector is very dependent on external funding to reduce the costs of remediation. Funding can make the difference in making a site economically feasible or not.
  • Economics - certain segments of the market, such as brownfields redevelopment.

The global market for contaminated site remediation technology and services is estimated at US $30 - $35 billion. The soil remediation sector has a ready market in the US (represents ~30%+ of global demand), W. Europe, Japan and Australia. Eastern Europe and more developed Latin American and Asian countries represent an emerging market for the sub-sector.

Canadian export sales represent 10-30% of business for large consulting and engineering firms, but less for smaller firms that lack critical mass to compete. Export markets are critically important to the success of technology developers because of the risk adverse nature of Canadian regulators

In 2004 the USEPA published a report that estimated the contaminated site business in the U.S. would grow for the next 30 years and then plateau. The market is growing because the contamination is so pervasive and more contaminated sites continue to be found.

Canadian remediation technology developers have had difficulty providing technology at a large enough scale to gain international commercial success. Compared to the United States and Europe, most of these Canadian companies also lack a sufficient reference client in the Federal government to prove their technology, putting them at a disadvantage internationally.

The Future

The future may become a little brighter when the federal government releases its Federal Contaminated Sites Action Plan during the Federal Contaminated Sites National Workshop from April 28 to May 1, 2008 in Vancouver. The 15-year plan will address contaminated sites for which the federal government is responsible.

Several organizations also exist, such as the SDTC, which help fund small to medium environmental technology enterprises, including remediation technologies.

'Canada is producing knowledge, workers and innovative technologies that could put Canadian environmental industries in global leadership position,' said Austin. 'Especially as the developing world catch-up and focus on the same environmental issues that we in North America and OECD countries have realized.'

Given the massive industry-building potential inherent in the purchasing power of the federal government, it would appear that the tools needed to help make the problem of federal contaminated sites go away are already available. In the final analysis, it boils done to whether there is the will to make a difference.

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