F. Environmental Remediation Orders

Author:Roderick J. Wood
Profession:Faculty of Law. University of Alberta

Page 141

Provincial and federal environmental protection statutes generally create liability rules rather than priority rules. They provide that a person who is in control of premises is liable for the costs of environmental remediation.120The BIA alters this by significantly limiting the liability that would otherwise face a trustee in bankruptcy. The trustee is not liable for environmental damage that occurred prior to the trustee’s appointment and is not liable for post-appointment damage unless it occurred as a result of the trustee’s gross negligence or wilful misconduct.121

In place of a liability rule, the BIA creates a new proprietary right in favour of the government in respect of the costs of remediation of the environmentally damaged property. The remediation costs are secured by a security interest on the real property affected by the environmental condition as well as on any contiguous real property.122The security interest is given superpriority status over any other claim, right, charge, or security against the property.

[120] See, for example, Environmental Protection Act, R.S.O. 1990, c. E.19, s. 1 "person responsible" and s. 124.

[121] BIA, above note 3, s. 14.06(2).

[122] Ibid., s. 14.06(7).

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