AGGREGATE AND PETROLEUM RESOURCES STATUTE LAW AMENDMENT ACT, 1996 / LOI DE 1996 MODIFIANT DES LOIS EN CE QUI CONCERNE LES RESSOURCES EN AGRÉGATS ET LES RICHESSES PÉTROLIÈRES

AGGREGATE PRODUCERS' ASSOCIATION OF ONTARIO

REGIONAL MUNICIPALITY OF NIAGARA

PEMBINA RESOURCES LTD

STEBBINS PAVING AND CONSTRUCTION LTD

TCG MATERIALS LTD

REDLAND QUARRIES INC

DUFFERIN AGGREGATES

CONTENTS

Wednesday 11 September 1996

Aggregate and Petroleum Resources Statute Law Amendment Act, 1996, Bill 52, Mr Hodgson / Loi de 1996 modifiant des lois en ce qui concerne les ressources en agrégats et les richesses pétrolières, projet de loi 52, M. Hodgson

Aggregate Producers' Association of Ontario

Mr Rob Cook

Regional Municipality of Niagara

Mr Bill Smeaton

Mr Corwin Cambray

Pembina Resources Ltd

Mr Brian Boulton

Mr Alex Wilson

Stebbins Paving and Construction Ltd

Mr Gord Tanton

TCG Materials Ltd

Mr Kevin Mitchell

Redland Quarries Inc

Mr Colin Wobschall

Dufferin Aggregates

Ms Sarah Lowe

STANDING COMMITTEE ON GENERAL GOVERNMENT

Chair / Président: Mr Jack Carroll (Chatham-Kent PC)

Vice-Chair / Vice-Président: Mr Bart Maves (Niagara Falls PC)

*Mr JackCarroll (Chatham-Kent PC)

*Mr HarryDanford (Hastings-Peterborough PC)

Mr JimFlaherty (Durham Centre / -Centre PC)

Mr BernardGrandmaître (Ottawa East / -Est L)

Mr ErnieHardeman (Oxford PC)

Mr RosarioMarchese (Fort York ND)

Mr BartMaves (Niagara Falls PC)

*Mrs SandraPupatello (Windsor-Sandwich L)

*Mrs LillianRoss (Hamilton West / -Ouest PC)

*Mr MarioSergio (Yorkview L)

*Mr R. GaryStewart (Peterborough PC)

Mr Joseph N. Tascona (Simcoe Centre / -Centre PC)

Mr LenWood (Cochrane North / -Nord ND)

*Mr Terence H. Young (Halton Centre / -Centre PC)

*In attendance /présents

Substitutions present /Membres remplaçants présents:

Mr Michael A. Brown (Algoma-Manitoulin L) for Mr Grandmaître

Mr TomFroese (St Catharines-Brock PC) for Mr Flaherty

Mr DougGalt (Northumberland PC) for Mr Maves

Mr FrankKlees (York-Mackenzie PC) for Mr Hardeman

Also taking part /Autres participants et participantes:

Ms ShelleyMartel (Sudbury East / -Est ND)

Clerk / Greffière: Ms Tonia Grannum

Staff / Personnel: Mr Lewis Yeager, research officer, Legislative Research Service

The committee met at 0959 in the Sheraton Fallsview Hotel, Niagara Falls.

AGGREGATE AND PETROLEUM RESOURCES STATUTE LAW AMENDMENT ACT, 1996 / LOI DE 1996 MODIFIANT DES LOIS EN CE QUI CONCERNE LES RESSOURCES EN AGRÉGATS ET LES RICHESSES PÉTROLIÈRES

Consideration of Bill 52, An Act to promote resource development, conservation and environmental protection through the streamlining of regulatory processes and the enhancement of compliance measures in the Aggregate and Petroleum Industries / Projet de loi 52, Loi visant à promouvoir la mise en valeur des ressources, la conservation ainsi que la protection de l'environnement en simplifiant les processus de réglementation et en renforçant les mesures de conformité dans l'industrie pétrolière et l'industrie des agrégats.

The Chair (Mr Jack Carroll): Good morning, everyone. Welcome to Niagara Falls and to the beginning of the hearings by the standing committee on general government on Bill 52, An Act to promote resource development, conservation and environmental protection through the streamlining of regulatory processes and the enhancement of compliance measures in the Aggregate and Petroleum Industries.

AGGREGATE PRODUCERS' ASSOCIATION OF ONTARIO

The Chair: Each presenter has been given 20 minutes. Any time that's allowed for questions in that 20 minutes will be split evenly among the caucuses.

We will begin with the first presenter, Mr Cook, the executive director of the Aggregate Producers' Association of Ontario. Mr Cook, your questions, should you leave time for them, would begin with the Liberals. The floor is yours, sir.

Mr Rob Cook: Mr Chairman, committee members, ladies and gentlemen, good morning. As the chairman mentioned, my name is Rob Cook and I'm the executive director of the Aggregate Producers' Association of Ontario. It's a pleasure to appear before you today, being the first of what I'm sure will be many presenters over the next two days in regard to Bill 52.

I'm speaking to you today on behalf of the association and the 131 member companies actively engaged in the development of Ontario's aggregate resources. Our membership represents 84% of the 130 million tonnes produced annually in the province and our members represent over 1,000 licensed or permitted properties in the province.

We represent both large and small companies from all parts of the province. However, the majority of our members are small businesses. The common concern of those companies, large and small, is the increased duplication, redundancy and costs associated with the aggregate resource approval processes under both the Aggregate Resources Act and other statutes.

Our organization has a long history of interest and active participation in the development of aggregate resource legislation, regulation and policy, beginning with our creation in 1956.

I am here today to express our strong support for Bill 52. We believe the bill provides important and much-needed improvements to the Aggregate Resources Act, and I would like to provide the committee with general comments on what I view as the five major components of the bill, these being industry self-assessment, the licensing process, rehabilitation security, the abandoned pit and quarry fund and the Aggregate Resources Act trustee.

I would also like to discuss several areas of concern with the bill and propose changes that we feel will make a good bill even better. It is our intent to provide the committee with a detailed written submission in the near future, including suggested amendments.

One of the fundamental areas of change in the bill is the establishment of a compliance partnership, more commonly referred to as industry self-assessment. We strongly believe the self-assessment initiative is a positive and credible move forward. It is the cornerstone of the bill and the government's new approach to aggregate resource management.

The association has had experience with industry self-assessment in a practical sense from the time the initiative was first conceived under the previous government in the spring of 1995. Successful pilot projects involving 12 APAO member companies and 41 licensed sites were completed in the townships of Uxbridge and West Carleton in the fall of 1995. The pilot projects clearly revealed the positive potential of self-assessment and that experience provided the basis for the expanded 1996 voluntary program currently being undertaken by association members on over 1,000 properties.

The benefits of self-assessment are many: It allows the ministry to focus reduced staff on compliance issues and compliance action where it is needed most; the industry maintains or enhances overall credibility by ensuring that all licences are assessed for compliance on an annual basis; there is an enhanced working knowledge by all company personnel of the act, the regulations and the site plans; licence holders, the ministry, municipalities and the public will have more detailed information related to compliance issues and remedial action; in most cases self-assessments are more detailed and comprehensive than inspections previously performed by the Ministry of Natural Resources.

We believe that self-assessment, in combination with other initiatives contained in the bill, will provide MNR an expanded compliance enforcement capability. The association will be bringing forth amendments to clearly establish that self-assessment should not be self-incriminating to those who complete the assessment in good faith. The success of the initiative is based on the honest identification of non-compliance issues and timely remedial action by licensees.

Based upon completing the assessment or undertaking appropriate remedies, we believe punitive action against licensees would not be appropriate and would compromise the effectiveness of the initiative. The association does, however, support immediate and severe penalties for serious contraventions of the self-assessment program. We support immediate licence suspension for failure to complete self-assessment, for falsification or for failure to meet remedial action time frames.

If MNR focuses on the bad actors in the industry, then overall industry compliance will be greatly enhanced. Self-assessment will raise the level of compliance across the industry to the benefit of all.

I must stress that the proposal under Bill 52 is not self-regulation in its true sense and it is important to recognize that MNR remains as the enforcement agency with statutory authority to enforce the act. The aggregate industry is prepared to accept, and is capable of accepting, the additional costs and responsibilities of self-assessment because of the significant long-term benefits to all stakeholders.

A major and long overdue initiative of Bill 52 is the rationalization and streamlining of the licence application process. The existing process and requirements under the Aggregate Resources Act have become counterproductive to maintaining resource availability for future generations.

The current process to acquire a licence is lengthy, more that 10 years in many cases; costly, anywhere from $500,000 to $3 million to complete the process; and fraught with uncertainty. Unfortunately, many people have incorrectly assumed that more process, more time, more money equals better decisions. What this process has caused is reduced resource availability, increased costs to consumers and concentration in the industry, as small and medium-sized companies cannot afford the costs or the risks of the process.

We support the general direction of Bill 52 in terms of reducing costs and time frames while maintaining high environmental standards. To accomplish this objective, we support the establishment of standard provincial technical reports so that it is known to all up front what information is required; we support standard licence conditions so that applicants and the public know at the start of the process what conditions will be attached to a licence; and we support reforming the role of the Ontario Municipal Board in terms of scoping issues and objections, making a decision in the issuance or non-issuance of a licence and the elimination of appeals to board decisions. We also support the Ontario Municipal Board continuing to provide recommendations to the minister in terms of licence conditions.

The association will be bringing forward recommendations regarding the public consultation process and the requirement to negotiate with objectors.

The new rehabilitation security system contained in Bill 52 is also supported by the association. The superfund concept provides far superior protection against sites being left in a derelict condition as a result of bankruptcies or licence revocations. The existing system has shortcomings in terms of inadequate site-specific security for licences that end up in bankruptcies or are revoked. With the new bill, millions of dollars from the superfund will be available for the rehabilitation of any site, eliminating the current limitation of the site-specific security deposit.

Rehabilitation, both progressive and final, is required by law through the act, regulations and site plans. Failure of licensees to undertake rehabilitation will result in punitive action or licence suspensions by MNR. We have come a long way since 1971 and the Pits and Quarries Control Act. Rehabilitation is now an accepted, almost routine, activity associated with the operation of an aggregate site.

Ontario aggregate producers have distinguished themselves by building an unsurpassed record in North America for rehabilitation innovation and activity. The proposals in the bill will move the industry forward and replace a system that is complicated and time-consuming for both industry and government.

The association also supports the provisions in Bill 52 relative to the abandoned pit and quarry fund. We believe that the fund will be more efficiently administered by the Aggregate Resources Act trustee and that APAO can effectively deliver the abandoned pit and quarry fund program as announced by the minister. This administration and program delivery outside of government will further free the time and resources of MNR inspectors for compliance issues.

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In terms of the Aggregate Resources Act trustee concept contained in the bill, we support the position that financial and other matters can be more effectively and efficiently administered by a trustee that is directly accountable to the minister, Lieutenant Governor in Council and the Legislative Assembly.

I mentioned earlier that there are some issues of concern with the bill and some areas of improvement that the association will be submitting recommended amendments on. I would very briefly, in addition to those already referenced, like to describe some of them to you.

Firstly, the association will be supporting and recommending additional restrictions to wayside permits. We believe that only MTO and the crown should be able to obtain wayside permits and those permits should be for road construction and reconstruction only, not road maintenance.

APAO will also be suggesting that when it is necessary for the trustee to utilize the superfund for site rehabilitation resulting from bankruptcy or revocation, the costs, in addition to being a debt to the most recent licensee, should also be a debt to the land owner. This is relevant in areas where leases have existed for years and both parties have profited from the extraction of aggregate resources.

APAO will also be recommending amendments to section 66 to include development control permits issued under the Niagara Escarpment Planning and Development Act as instruments that cannot override or conflict with the provisions of the Aggregate Resources Act, regulations or site plans. It is essential that the government clearly uphold the rights previously conveyed to licensees through provincial approvals under the Aggregate Resources Act.

APAO will be supporting the minister's ability to refuse a licence application based on the applicant's past compliance history, but will be recommending that compliance issues only be before the Ontario Municipal Board when an application has been refused by the minister for that reason.

We will be recommending that no proceedings be initiated under the act without the approval or consent of the minister.

We will also be recommending that the five-year limitation period for proceedings in respect to an offence is too long. However, it is reasonable to increase the current six months to two years.

The association has been traditionally concerned with the general approach of providing detailed information in the regulations and not the act. However, we recognize the need for flexibility in implementing the new initiatives and are prepared to work with the ministry and the government to develop viable, workable regulations.

I would like to thank the committee for the opportunity to provide the industry's views, and I would be pleased to answer any questions you may have.

The Chair: Thank you, Mr Cook. We've got two minutes per caucus, beginning with Mr Brown.

Mr Michael A. Brown (Algoma-Manitoulin): Certainly the aggregate industry is extraordinarily important to Ontario, and the public sector obviously is one of the larger consumers of your product. I want to just ask you a little about your last point.

One of the things that has concerned us in particular is that this bill is more or less a shell, which will be defined, in essence, by the regulations that will come out of it. In reading this bill, you can read a lot into it, depending upon what the actual regulation is that implements a particular section of the act.

Could you tell me if you have consulted with the ministry and have been able to see a draft of the regulations that are, at least at this point, intended to be put forward with this bill?

Mr Cook: Certainly we have not seen a draft of regulations. The ministry has consulted with us on more conceptual matters related to the act, but obviously in the area of self-monitoring we've probably had more detailed discussions in terms of how that system should and could work.

Mr Michael Brown: There's a great concern, I think it would be fair to say, on behalf of the public, the general population, and the industry itself in knowing what the standards are that need to be met. You alluded to that earlier, that there would be a common set of standards across Ontario. For us, it's extraordinarily difficult in opposition to try to determine whether that's really the crux of this bill. Not to know that is causing us great difficulty, and I'm a little concerned -- well, I'm more than a little concerned, I'm greatly concerned -- that you haven't seen what the ministry intends in this particular instance.

Mr Cook: That is true, we haven't. Traditionally, we have had the position that it's better to see it in an act. Our position was based on the fact that we thought it would be more difficult for subsequent administrations or ministers or governments to change what was established. I guess in reality it's as easy to change legislation as it is regulations if you're a majority government. It may take a little longer.

Ms Shelley Martel (Sudbury East): Let me follow up, actually, and I'll give you some more time to respond, Mr Cook. As opposition members, we are very concerned. We're concerned that all of the technical details that would have gone out when we did the Crown Forest Sustainability Act, for example, do not appear, although both Mike and I asked for that during second reading debate.

I am also concerned that all of the details with respect to site plans for class A and class B licences, which did appear in the act, will now appear in regulation, and we don't know whether or not those will stay the same. Frankly, I'm also concerned that a number of areas where notification used to be provided to either municipalities or, in the case of unorganized areas, to people residing in the unorganized areas that may be affected by a new quarry or an increased quarry have now been completely taken out of the act.

Our concern is that we are dealing with a shell and a lot of the important changes that you should know about, that we should know about and the public should have access to don't appear here. I don't have a good explanation for that, and I wonder if the ministry or the minister has said to you why that's the case with this act.

Mr Cook: No, the minister has not said to us why he has chosen to go this route. I guess the bottom line in our assessment of where we're at with the new legislation and the changes is that we accept that the act provides an important conceptual framework for what we believe are some positive changes. From that perspective, at some point you have to have some degree of trust that the process to develop the regulations is going to involve all stakeholders, including the industry and the public and the interest groups and municipalities. We feel at this time it's probably more important to get on with developing those regulations than it is to hold the conceptual framework up.

Mr Frank Klees (York-Mackenzie): Mr Cook, thank you for your presentation and certainly for your expression of support. Along the lines of the questioning that you've had from the opposition parties, I just want to confirm for the record that in fact your industry association has had extensive consultation with the ministry on the direction of this legislation. Is that correct?

Mr Cook: On the legislation, yes.

Mr Klees: I also understand that your industry has been involved in a pilot project over the last number of months around the issue of self-compliance and self-monitoring. Is that correct?

Mr Cook: That's correct.

Mr Klees: In the course of your discussions with the ministry relating to the regulations, are you satisfied that the direction the ministry is taking this legislation is consistent with the intent of your association? Do you have any reason at all to be concerned that the regulations will contain provisions that would be diametrically opposed to your industry?

Mr Cook: No, I don't. There's no question.

The Chair: Thank you, Mr Cook. We appreciate your input this morning.

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REGIONAL MUNICIPALITY OF NIAGARA

The Chair: Our next presenter is from the regional municipality of Niagara, Bill Smeaton, the chair of planning, Corwin Cambray, the manager of policy planning, and Ken Forgeron, the planner. Good morning, gentlemen. Welcome to our committee. The floor is yours.

Mr Bill Smeaton: Thank you, Mr Chairman and members. First of all, we appreciate very much the opportunity to be with you here this morning. I have with me Mr Corwin Cambray, the manager of policy planning with us in Niagara at the region, and Mr Ken Forgeron, the planner whose duties entail at present a great deal of work with approvals and scrutiny of plans involving this particular industry.

Our recommendations and comments are those approved by the planning committee this year and the regional council and are before you in report DPD 95-96. Mr Chair, you have the report, I believe, and your members.

As an overview, the regional municipality of Niagara has had considerable experience on aggregate resource management issues, reviewing site-specific applications, preparing regional studies, presenting a brief in the 1980s to the standing committee on resources development of that day on the then proposed Aggregate Resources Act of 1989 and representing the Association of Municipalities of Ontario on the provincial aggregate resources working group as well.

Regional Niagara has supported new aggregate operations consistently, although they may have been contentious and require thorough review and appropriate conditions that need to be monitored. I might add at this time that it is my opinion, and I believe I can speak on behalf of my colleagues on regional council and certainly the two members of staff who are with me, that we have had good cooperation from the major quarry operators in the peninsula here, Walker Bros, TCG on the Fonthill kame, Port Colborne Quarries, of course, and R.E. Law in Wainfleet.

The 1989 act provided a reasonable balance, we believe, between the need for the resources and other important social and environmental needs of communities in which extractive operations are located. Bill 52, however, tips this balance, in our opinion, which we believe will lead to a more controversial situation and possible litigation.

In transferring more responsibility to industry, there is a concern that there may be less public accountability, less scrutiny of the industry operations and possible lack of compliance with approved licensed site plans and conditions by the poor operators which exist in any industry, although quite frankly in Niagara we haven't seen much of that, and that's my opinion.

With the substantial downsizing of the Ministry of Natural Resources, there is a concern over the ability to enforce provincial standards as well as licence conditions.

There are 12 major issues of regional concern outlined in our report. The recommendations contained are intended to ensure better public accountability and trust, more effective licence compliance with approved licence site plans and conditions, upfront information requirements and review criteria for all applicants, appropriate and fair treatment of all stakeholders and, finally, the municipal planning tools needed to obtain benefits that reduce the negative impacts of aggregate extraction in the community.

Some key issues, Mr Chairman and members: While all 17 recommendations set out in the regional report to this committee are considered important, there are several that stand out, in our view, that I would like to briefly touch on.

(1) Recommendation 5 on page 5, relating to the need for basic upfront information requirements in the act.

(2) Recommendation 7 on page 7, relating to the Ministry of Natural Resources' key role in carrying out ongoing inspections and enforcement responsibilities.

(3) Recommendation 9 on page 7, requesting the ministry to provide affected municipalities copies of their review and assessment of the annual compliance reports from operators.

(4) Recommendation 11 on page 8, urging that the ministry maintain its front-line role in responding to public concerns and complaints over licence compliance and/or operational issues.

(5) Recommendation 12 on page 8, suggesting that the OMB be delegated the power to determine and set licence conditions for applications appealed and referred to it. Obviously there's a difference of opinion there, as we have heard this morning.

(6) Recommendation 13 on page 9, giving municipalities and individuals the same opportunity as licensees for a hearing on proposals for major amendments to site plans and/or changes to conditions of an existing licence. We believe this is a fundamental right and are concerned on this matter.

(7) Recommendation 15 on page 10 of our report, requesting that the current incentives continue to be available on refunding rehabilitation security fees on an annual basis to licensed operators who have demonstrated acceptable, progressive and sequential rehabilitation of their sites. We have some excellent examples in the peninsula here of work well done in the past.

(8) Recommendation 17 on page 11, allowing municipalities an opportunity to provide comments on the appropriate amount of money to be disbursed from licence fees collected from aggregate operations. Some of our member municipalities have had considerable work to do at considerable cost with regard to, in particular, road rehabilitation over heavily used access ways to quarries. You have to get the product out, obviously, but in some municipalities there's a very limited number of roadways that can be used and they certainly do take a beating.

(9) Recommendation 19 on page 12, allowing municipalities to use both development agreements and development permits to secure some benefits, like the upgrading of haulage roads to reduce the impact of aggregate extraction.

In closing, I would like to stress that the regional municipality of Niagara recognizes the fiscal constraints present on all levels of government. The recommendations proposed by ourselves are intended to build on the following four cornerstones: public accountability to ensure licence compliance, upfront information and review criteria, appropriate treatment of all stakeholders and assistance to all municipalities in obtaining some compensating benefits.

I think that very briefly gives you a summary of our concerns. We make the presentation in a positive sense. Our experience in Niagara has been good in the past, and the concerns, as I have listed, are very definite, but we do make them in a positive sense to your committee.

The Chair: Thank you. We've got about four minutes per caucus for questions, beginning with Ms Martel.

Ms Martel: Thank you for your presentation. Let me begin by asking this question. I'm given to understand that about 700 licences are issued to lower- or upper-tier municipalities in the province. There are about 2,700 licences in total. Can you describe to the committee what your input was, either through AMO or any other body, to the minister with respect to the changes proposed in the bill?

Mr Smeaton: We had considerable input. Corwin Cambray was front and centre in that. If I may refer it to him, he's had the front-line experience there.

Mr Corwin Cambray: With the changes to the bill, as it says in our report at the beginning, we had no input to the changes before the bill came out, and there was a concern that there was no input. We understand that the Aggregate Producers' Association of Ontario did have input, but municipalities had no input.

Ms Martel: Given that and given the fact that a number of the issues that some of us are concerned about will be dealt with in regulations, some very important issues in fact, what confidence do you have, then, if you weren't invited to participate in the changing of the bill, that you now will be invited to participate in the regulation-making process?

Mr Cambray: As it says in the report, we are concerned about that. We believe that there have to be upfront information requirements in the act, not in the regulations. As Chairman Smeaton mentioned, there is one recommendation that specifically addressed that, requesting that those information requirements be put back into the act.

Ms Martel: I noticed in a number of sections that notification for changes that used to go to municipalities or notification of changes that used to go to people who lived in unorganized areas are either entirely deleted or are changed. For example, with respect to municipalities, I note in the new section 18 that when it comes to a transfer of a licence, the municipalities, as I read it, will be notified of this after the transfer has already been taken and after the minister has already given approval for the same.

Given that you've already told the committee that your relationships with both the companies and with MNR have been quite successful, can you give me any reason why some of the notification that used to take place before, so you could comment, now seems to happen after the fact, after the change has already been made?

Mr Smeaton: That's a very basic concern. As we did outline, it's essential. When I mentioned before that we have had considerable input, I was referring to past experiences under the new legislation. As has been explained, there hasn't been any to date and we feel there would far too little now -- a major concern.

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Ms Martel: You would feel that the input you have provided as a regional municipality has been very legitimate, good; you've provided good advice or, where there have been problems, you have noted that advice to MNR, so there should be no reason for the ministry or minister not to want your input or advice on some of these issues any more.

Mr Smeaton: We've had a very happy experience to this point in time, before the existing act and during the existing act, and now our concern is that we're going to be far more lacking in information and lacking in the opportunity to have that input.

Mr Klees: Thank you for being here today and for your input. A couple of questions: You indicated that certainly your experience with quarry operators within the region has been a positive one. I'm just wondering about your concern regarding the issue of self-monitoring and self-compliance. As you're aware, that was initially a direction that was taken by the previous government. There were a couple of pilot projects that were established at that time, I believe in 1985, in a couple of regions within the province and the results of that were very positive.

The indications we have had are that certainly it's a mature industry, a responsible one. That generally is the feedback we have. As in any industry obviously, as you indicated, there are some bad players and we have to deal with that. Certainly this government is very concerned that we have the resources to focus on those people who aren't living within the rules and the regulations.

One of the objectives of self-compliance is that we bring the industry into partnership with government to ensure that business is done in an ethical and appropriate way, and to utilize the resources of the industry wherever possible. We believe, for the record, that as a result of being able to bring in the resources of the industry to the self-compliance component, it will free up the percentage of time that ministry staff have to ensure they can focus on those people within the industry who need the attention of the inspections and of compliance and compliance enforcement. I'd be interested in your comments on that, given your very positive experience within your region of quarry operators and the direction the government's taking on this.

Mr Smeaton: We feel we've had that partnership arrangement in the past, but I personally think we're now almost in a situation whereby we're asking the pitcher to evaluate his own pitches and the batter to do the same without an umpire. That's our concern. We feel that you have to have a referee, you have to have an umpire. We're a bit worried that although we've had no problems in the past, especially in Niagara -- very fine corporate citizens, and I make that statement without reservation, the ones we've been dealing with. But I am concerned. I have seen as a member of the escarpment commission over a number of years -- although I'm not a member at present; my popularity down here rose considerably when I left that committee -- some problems that certainly were serious ones in Grey and Bruce and other communities throughout the central core. We're not talking about the fox looking after the chicken coop, but I think we need a referee stronger than what I see proposed in this legislation you have before for review.

Again, my comments are made in the most positive sense as far as our relationship with Walkers, R.E. Law, Port Colborne Quarries and the others -- TCG on the Fonthill kame.

Mr Klees: I appreciate that, and I appreciate you also using the term "umpire" in this context, because I think the analogy's a good one. I want to underscore that the government has no intention of deferring that very important role to the industry. It will very much be there as the umpire, as the enforcer, if you will. We believe we will be better positioned to do that because the resources of our ministry staff will be freed up to focus on that compliance role.

Mrs Sandra Pupatello (Windsor-Sandwich): Thank you, gentlemen, for coming today. If I may pick up on Mr Klees's comments, we've been watching the disbanding of the MNR for some time now. Do you have any comfort level that what few inspectors may be left there would be available to travel the province and do the job they would be doing as umpires?

Mr Smeaton: We have some concern, but I really don't have the figures before me as to what's proposed in terms of the new numbers that will be in the field. That is a concern in itself, and we address that here. There's not quite enough specific information here, and we would like that noted, Mr Chair, if you could, please. We feel there's a lot of information lacking, and one of the pieces of the puzzle that's not there is just how many people will be in the field and exactly what will be their role.

Mrs Pupatello: When Mr Cook spoke before you today representing the Aggregate Producers' Association, he mentioned that in the area of self-assessment, although some more detail would be required -- he was looking for that as well -- he saw the role of the MNR to be used only in areas of serious contravention. I don't know what that means or what is serious, what constitutes that, but how comfortable would you be with their role only, as Mr Cook put it, in the area of serious contraventions and at which point there are severe penalties now being added for those serious contraventions? Would you want to have some kind of definition of that?

Mr Smeaton: I think a definition of that would be helpful. I do believe an ounce of prevention is worth a pound of cure, especially when you're dealing with the removal of aggregate. You're dealing with a major physical change to landscape, and once it's done it's not easily restored; in fact it can never be restored completely, although we've seen some good examples of fine stewardship in that area. It's difficult to answer your question specifically, but the concern is definitely there that we should have people keeping an eye on things at all times, because you can't get things back to normal once the problem has started; not easily, anyway.

Mr Michael Brown: I really appreciate this presentation, particularly the way you've laid out these recommendations. I think this gives us a real opportunity on our first day to scrutinize this bill more carefully. One of the things concerning me is that the government may be looking at using the aggregate producers and the funds that the province gets -- it gets one cent, I believe, per tonne of aggregate produced -- and will be supplying virtually no services in relation to that amount of money. The inspectors who are going to be out there are going to be rather minimal, offering the industry perhaps not the protection the government sometimes gives the industry by verifying reports the industry has made etc. That often helps the industry; it doesn't hinder it. Your municipality also receives some of the moneys from aggregate extraction. In your experience, has that allowed you to do whatever policing you need to do as a municipality in an equitable way and provide moneys for things, like road improvements, that need to be done?

Mr Smeaton: It's never enough, I suppose, if you look at the aggregate association.

Mr Michael Brown: Silly question, I guess.

Mr Smeaton: I can tell you that -- and I'm speaking from the political vantage point here -- really when you take a look at people like Walkers who have come to us always before they've done their projects and tried to work out good, reasonable solutions to the municipality's problem, which is usually dollar bills, it's hard for me to be critical of what they have done. But I have seen problems in the north. As I'm sure most of you are aware, we don't have the wayside pit problem down here that the north has. What I would like to leave you with is that the status quo gives us much more comfort in that area than what we have in front of us now; hence our concern.

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The Chair: Thank you, gentlemen. We appreciate your input here this morning.

Mr Smeaton: You're welcome, and thank you again.

Ms Martel: On a point of order, Mr Chair: If I might, we seem to be operating in a vacuum around just how many site inspectors will be left to do the job as umpire, referee, whatever you want to call it. I wonder if the parliamentary assistant can provide the committee, at his earliest convenience, with the exact numbers of how many site inspectors we're going to be left with. We have numbers that go from 40 at present down to 14. If it's more than that, I think we all want to be aware of that and know what we're operating with.

The Chair: Mr Klees, do you have the answer now or do you want to get back to us?

Mr Klees: I don't have the answer now. I will certainly provide whatever information I can in generalities. As the member is probably aware, these decisions have not yet been firmed up. We're in the process of making those decisions, and they will be made over a period of time. For us to be able to return to this committee to say that there will be X number of employees fewer in this particular area is unreasonable to ask at this point. But I certainly will come back and provide some comment with regard to staff.

The Chair: Okay, Mr Klees. I would like to remind the committee members that our purpose here today is to hear the people from Niagara region give us input. Arguments among ourselves about points of order and so on we can do any place. I'm a great protector of people's time.

Ms Martel: On a point of order, Mr Chair --

The Chair: Is it on the same point, Ms Martel?

Ms Martel: With due respect, I think a lot of the presenters here would like to know this very information. In response to Mr Klees, we know that 900 bargaining unit staff of the Ministry of Natural Resources have already received their layoff notice, in mid-May, and I expect a fair number of other management staff received it at the same time. I'd like to know even within those numbers how many of them might have been site inspectors.

PEMBINA RESOURCES LTD

The Chair: Our next presenters are from Pembina Resources Ltd, Brian Boulton, vice-president, Alex Wilson, André Czychun and Andrew Cantwell. Good morning, gentlemen. Welcome to our committee.

Mr Brian Boulton: I thought I'd begin with a brief background on Pembina. Pembina is a private Canadian oil and gas company with significant operations in Ontario. Our Ontario operations office is in Port Colborne. We have a field office in Renwick, a gas plant at Morpeth and a land office in London. Pembina is the largest oil and gas producer in the province. We have gas wells in Lake Erie which produce the bulk of Pembina's current gas production of over 30 million cubic feet a day in Ontario. Our oil production is centred in the Leamington area where we produce over 2,000 barrels a day of light sweet crude oil from the Ordovician pools discovered in the 1980s.

Pembina has a strong safety and environmental record. Our health, safety and environment group has developed policies and procedures to protect the public, our employees and the environment. Pembina has a quality control and quality assurance program that ensures all new facilities and equipment meet corporate standards. Pembina's corporate standards meet or exceed all the provincial and federal requirements in all the provinces where we operate.

Bill 52 changes to the Petroleum Resources Act: Pembina and other members of the oil and gas industry have lobbied for changes to the existing Petroleum Resources Act for many years. The existing act has many provisions that cause problems for both industry and regulators. The changes to the Petroleum Resources Act will encourage investment in oil and gas development, creating jobs and wealth for the province.

As I said, Pembina supports the initiatives of Bill 52. Some of the changes which will have a significant impact on our operations are:

(1) Compulsory pooling and unitization: The current process is too lengthy and very costly. As a result of the time and expense involved, many pooling and unitizations that should proceed are not done. This results in delays of projects that would provide jobs and create wealth. Resources are wasted and ultimate recovery of reserves is reduced. Secondary recovery projects are not possible in some pools controlled by multiple land owners and operators without unanimous agreement, which is not always possible. Horizontal wells and other new technologies can only be used where sufficient lands are accumulated by one operator or agreement from all parties is obtained.

The new legislation will streamline and change the process of pooling and unitization when all parties are not in agreement. The mining and lands commissioner will render a decision without the lengthy, expensive process currently required before the Ontario Energy Board. This change will be welcomed by all parties involved, including both land owners waiting for their oil and gas assets to be developed and oil and gas producers with projects waiting to proceed.

Pembina will be able to proceed with a number of drilling prospects that were delayed by land problems. These wells will create jobs for contractors and provide royalty payments to land owners who have been waiting for these projects to proceed.

(2) Bonding: Well bonding is intended to prevent wells from being left suspended and unattended by an operator who subsequently is no longer available to abandon the well. The bond can then provide some assurance to the land owner that the well will be properly abandoned prior to the release of the bond.

The current bonding requirement is inadequate to protect land owners and the environment from the orphaned well, which might become a problem. The current bonding requirement is $500 per well with the bond held by the MNR. There's a cap for operators with multiple wells.

Pembina, as the largest operator with the most wells in Ontario, is concerned that the existing system does not adequately protect the public. An orphaned well that leaves the impression of a slash-and-burn industry paints Pembina and other responsible operators with the same brush as the fly-by-night operator that caused the problem. Bill 52 will eliminate the existing inadequate bonding system.

Pembina and other operators are meeting to develop new bonding alternatives that protect the public and the environment while allowing responsible, healthy development of resources. At the same time, Pembina is concerned that a solution that is not well-thought-out could be very detrimental to our company, with over 900 wells which we operate. As a responsible operator, we want to be part of the solution but don't want to suffer irreparable damage from the cure.

The new bonding system should protect the public and the environment but must be similar to other jurisdictions to encourage investment in new wells, which will create jobs and wealth in Ontario.

(3) Bill 52 also proposes to make some changes to suspended wells. There are two sections, sections 7.0.1 and 7.0.2, being added as requirements to plug after the order of an inspector. The new wording would allow an inspector to order the plugging and abandonment of a suspended well if a well had no activity for 12 consecutive months. While section 7.0.2 allows an appeal of the order, any abuse of this power could be detrimental to our lake operations, where some wells are not tied in for production until threshold reserves are developed and economic projects proceed. In some cases wells are not produced for several years while the geological play is developed into a viable project.

Pembina feels the wording of section 7.0.1 could be limited to clause (a) where "the inspector is of the opinion that the well represents a hazard to the public or to the environment." Clause (b), which refers to the plugging and abandoning of a well if the well has had no activity for 12 consecutive months, could be eliminated while still protecting the public and the environment with the powers described in clause (a). If a well is suspended properly, it does not pose a risk simply by being inactive for 12 months. Wells that have no immediate market or observation wells can be safely left inactive for many years.

(4) Developing a trust, section 16 of the act: Pembina sees the need for a trust to fill some of the voids left as government reduces spending, and as a result some services that industry currently receives will no longer be available. However, as the largest operator, we should not be unreasonably burdened as the largest contributor to a trust that may provide disproportionately larger benefits to the small operator or to new competitors coming into the province.

Finding the best combination of fees for service, per well fees and/or revenue fees to fund the trust will be a challenge for industry. Pembina will work with others in the industry to find an equitable solution.

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(5) Creation of industry technical standards: Industry and the MNR are developing updated operational standards. As I said, Pembina has developed corporate standards and guidelines for our operations and has been assisting in developing similar standards for other industry members. Pembina sees the benefits of clear standards for the protection of the public, environment and employees. Clear standards also prevent duplication of efforts, and the costs of regulation and waiting for approvals can be reduced.

Duplication of the approval process can be avoided through clear identification of standards to be followed. In some cases regulation of facilities is duplicated by more than one department of government, and multiple approvals are sometimes required for the same project. Pembina is hopeful that streamlining or reduction of approvals can be accomplished through the use of standards that will be followed. Clear, concise standards will protect the public and the environment while reducing the need for approvals for some routine operations.

The idea of a life cycle well permit will allow an operator to proceed with most operations on wells without prior ministry approval. As long as standards are followed, prior MNR approval would only be required for certain critical tasks such as the initial permit to drill and the abandonment of the well. Reducing times when the approval process is used saves both government and industry. Strict standards and increased fines for non-compliance will still protect the environment.

Key operations may still require inspection, but this can be accomplished through ministry-approved industry inspectors who, we believe, will deliver the inspection service cost-effectively.

In conclusion, these are difficult times, with rapid change occurring throughout society and in our own industry. Some changes are welcomed, and changes to the Petroleum Resources Act are well overdue. Although Pembina looks forward to the proposed changes, we have some concerns which we are actively working to address in the standards and practices that are being developed over the next few months. The ministry has been seeking the input of industry, and we feel confident our concerns will be addressed.

Pembina is investing in Ontario, creating jobs and prosperity for the people of Ontario. The changes to the PRA will encourage more investment in Ontario's oil and gas industry.

Accompanying me today are Alex Wilson, Pembina's supervisor of Ontario properties from our London land office, who is familiar with pooling and unitization issues; André Czychun, who is Pembina's Ontario operations manager -- André has worked in our offshore operations for many years and has drilling and completion expertise; and Andrew Cantwell, a plant/facilities superintendent from our Port Colborne office, who has expertise in facilities construction and is familiar with Pembina's quality assurance and quality control programs.

I invite questions of myself or my colleagues.

The Chair: Thank you, gentlemen. We've got about two minutes per caucus for questions, beginning with Mr Froese.

Mr Tom Froese (St Catharines-Brock): Thanks for your presentation. Some of the critics and some of the opposition members -- I know not all the opposition members feel that way, because I know them personally and they've told me personally that they don't feel that way --

Mr Mario Sergio (Yorkview): Who was that?

Ms Martel: Name names, Tom.

Mr Froese: Some of the opposition or the critics say that companies like yourself or your industry are not concerned about public safety. They feel that government has to control everything, be involved in people's lives and so on and so forth, yet we heard from the presentation from the Niagara region that companies, not particularly in your industry but who are involved in this bill, are very public safety-minded. They work with the regional governments or the municipalities to ensure that there's public safety.

I guess if I was sitting in your shoes, I'd be a little bit concerned about some of those comments from the critics or the opposition. I'd just like you to elaborate or get your opinion on those comments.

Mr Boulton: I think our company, and any other responsible company, has to protect the public. It's in our own self-interest to protect the public. We don't want to be open to lawsuits or liabilities and we want to be able to continue to operate for many years into the future. We're in this for the long term and it's important that we do things right. If we don't protect the public, we'll pay the consequences.

The Chair: Thank you, Mr Froese. Now equal time for those unnamed members of the opposition.

Mr Michael Brown: I found those comments rather interesting. I don't know anyone on this side who has said anything that suggested that we don't believe the industry has been responsible.

I'm concerned about looking at these recommendations which I believe give us some real food for thought, especially around the bonding issue and the fact that you're suggesting that it should be similar to other Canadian provinces and other Canadian jurisdictions. What's the problem? If we know what the other Canadian jurisdictions are, why can't we just do the same?

Mr Boulton: I think not necessarily just the Canadian jurisdictions but our competitors to the south: Michigan, Ohio and other areas that are even closer to us. How are we going to encourage investment in our province if our bonding is significantly different than other active jurisdictions?

Mr Michael Brown: That's what I'm asking you. Is there a pattern that's quite available to us of competing jurisdictions that would look very similar? What's the problem with adopting that? In your opinion, why hasn't the ministry taken that route?

Mr Alex Wilson: I think in the past the industry has recognized that the current level of bonding is inadequate in Ontario to look after an orphaned well. The current maximum level is $500 per well on shore, with a maximum $5,000 per operator. I think industry is looking at some kind of a bonding process that would reflect more the actual cost to plug the well in today's standards, with a review on a periodic five- or 10-year basis, to ensure that if for some reason the operator didn't plug the well, there would be a fund available to look after that.

Ms Martel: Mr Wilson, did you want to finish, because my question was also going to be what is the difference between the other jurisdictions and can we apply it here, if that would be helpful to you.

Mr Wilson: I think we can apply it here. The one thing we have to be careful of is that it's a very mobile industry and we don't want to create an environment that is detrimental to investment in Ontario. Other jurisdictions have bonds that are more reflective of the cost to plug the well in the neighbourhood of, depending on the area, somewhere between $2,000 and $5,000 per well, with a ceiling of somewhere between $15,000 and $50,000 per operator, regardless of the number of wells that operator might have within his jurisdiction.

Ms Martel: I have a second question around the change from now having the mining and lands commissioner involved in the process: Can you give me some idea what the change is or changes are which will make that process more streamlined and, in your opinion, much more effective in terms of coming to some kind of resolution?

Mr Wilson: Currently, right now, if we're unable to complete a voluntary pooling or unitization matter, the only avenue available is an Ontario Energy Board hearing. It's an extremely long process. It's slow. The last unitization undertaken by Pembina and its partners took a full year of staff time, hearing time, legal interrogatories back and forth on both sides. A year to us results in the loss of a drilling season. We're looking at a process that might expedite that down to a one- or two-month period of time, so that if we start a process in the spring, we will still be able to drill that well some time during that drilling season.

Ms Martel: Under the new process that is envisioned then, I am assuming the public still has some right to either be in agreement or have their concerns acknowledged by the commissioner.

Mr Wilson: It'll bring it down to a more informal level for the land owners, and I think they'll feel more comfortable with the process rather than being in front of the Ontario Energy Board and being represented by legal counsel.

The Chair: Thank you very much, gentlemen. We appreciate your input here this morning.

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STEBBINS PAVING AND CONSTRUCTION LTD

The Chair: Our next presenter is Gord Tanton, the manager of Stebbins Paving and Construction Ltd. Good morning. Welcome to our committee. The floor is yours, sir.

Mr Gord Tanton: Good day. We received this bill September 5. We are not a member of the Aggregate Producers' Association of Ontario. That's given me precious little time to address the issues that can affect my future in our company and my company's future. Stebbins Paving and Construction operates about 10 gravel pits in the greater London-401 corridor area. We have an asphalt plant. Our total acreage under licence or about to be under licence is close to 1,000. We produce close to a million tonnes of gravel a year. By no means are we a small producer stuck in the countryside and selling a few loads of gravel to the local farmers. We do not belong to the association.

Some issues in Bill 52 are very good; some of them need, I believe, a few more days spent on them or some consultation with people who aren't part of the greater Toronto area. I will quickly go through those sections that may affect my industry and others like mine. Everyone has a copy of the bill in front of them, I hope.

Section 1(6), abandoned pit and quarry fund: I need more information about that to be able to address that correctly.

Power failure.

Mr Tanton: That was a good question. There goes my information. I couldn't have done that better.

Interjection: You're in the dark, like the rest of us.

Mr Tanton: We need to see the regulations. Who looks after this fund? If there's a 10% amount of money being held back in this fund, will that cover the rehabilitation of a large quarry in the Niagara region or will my company in London have to subsidize the rehabilitation of a fellow aggregate producer if they're a bad apple or they decide to change their company name?

Subsection 2(1), the inspector as a non-MNR employee: While we believe that in certain areas of the province the industry is being served by too many aggregate inspectors, we believe that the final few remaining inspectors should be government employees. There already exists a very great inconsistency in the way the industry is handled. This varies from inspector to inspector and from area to area. This could only get worse if untrained, non-aggregate persons were appointed as inspectors.

Subsection 6.1(1), the aggregate resources trust fund: I need to know more about that. Is money coming back to our company? Can I make some future plans about hiring or equipment or buying properties based on refunds from that trust fund?

Section 6(1) on page 4 of the bill: We agree that in order to enhance resource development and streamline the process, some requirements must change. It's a good idea to move them to the regulations. However, what happens when the government might change, God forbid, some day in the future --

Mrs Pupatello: I beg your pardon.

Mr Tanton: I can't put down my original statements here or say them -- and another type of leaning government changes the rules very easily through regulation? Mr Cook was correct that perhaps the act can be changed now as easily as the regulations, but it still would be nice if there was some protection. If the government of the day felt strongly enough about their mandate, perhaps it should be in the act, where everyone has a chance to see it.

Subsection 11(1), application procedures: That's a very good idea, those changes there.

In subsection 11(6), at the OMB hearing -- I will give written copies of this to the hearing afterwards -- we need the word "only" about who is going to appear at OMB hearings. Only the applicant and only the people who have objected should be allowed to show up at an OMB hearing. Every Tom, Dick and Harry who gets signed in on a petition or whatever wants to show up and they waste our time and the chairman's time; they waste lots of valuable time. Only the people who are prepared to put up their name and willing to accept a share of the cost of the OMB hearing should be allowed to speak at an OMB hearing.

Subsection 12(2)(j), the section dealing with the applicant's history: This sounds great. The bad apples should not be able to get new licences. That just doesn't work. It goes against the charter, as far as I know. I'm not a lawyer but I don't think that's appropriate. If a site plan in the section 9 report, the environmental report, and the zoning is approved and only the past history of the operator prevents a licence from being issued, this will be challenged in court. Precedent is not a reasonable planning tool; perhaps a graduated licence system for those bad apples. I don't know how to legally put it in place, but something like that has to be looked at. Also, it's too easy to circumvent this section by changing the applicant's name.

On a point of interest, the only issue I could find where character matters is a taxi licence, where a previous good character is important before you're issued a taxi licence in some jurisdictions. I hope we aren't going to be like taxi licences.

Payment to the trust: How much? We don't know. The lights didn't go out that time.

Page 11 on the bottom of Bill 52: We agree on removing "not exceeding six months" for the licence suspension. That is a very good section.

Section 15.1, annual compliance: We need to know if that's strict compliance or reasonable compliance. Right now we have a bunch of very good inspectors in the province and they use their heads. If we hire someone from off the street, or who knows what, some political appointee, he may go out there and try to make our lives miserable. They do not know the industry; they do not know our past history. We need to know if it's reasonable compliance or strict compliance. This would cost my company money if we had strict compliance, the opportunity to shut us down.

The wayside section: This has to be referred to in the act. That I believe was an omission in the bill. In section 23(3)(a)(i), on page 21 of the Aggregate Resources Act, there's a section talking about wayside permits. After (i) it says "or" -- the first part is "project of road construction," that a wayside permit should be issued, and the other part is "an urgent project." I believe the "or" should be changed to "and." There are too many wayside permits being operated next door to a licensed gravel pit. I agree with Mr Cook of the Aggregate Producers' Association. The MTO contracts are large, by and large, and the better ones can be very profitable to the licensee who is here for the long term. Wayside permits are generally operated by a company that's in and out in less than a year. I spent $100,000 licensing a property next door to a wayside permit and I lose the contract. That is not appropriate. I have to make money in order to hire people.

Section 32.1(1): The minister authorizes MTO to look after wayside permits. Perhaps that is correct, and most likely in northern Ontario. Along the Highway 401 corridor we don't need waysides.

The limitation extended to five years: I don't agree with that. To what benefit? I don't see the benefit in that. No one's memory is that good, and most likely it will be thrown out of court due to lack of proof.

Subsection 51(1), registered mail: Leave as registered mail, please. Do not go into normal mail. There's too much at stake here. If my report does not get into the Ministry of Natural Resources, my licence can be revoked; that's crazy. Under the new system there may be 400 licences per inspector. They're human too. They can make mistakes, and my documents can get lost. It should remain as registered mail.

Section 52, development permits: I agree with the intent, but municipalities will still try to strong-arm something out of a pit operator. We suggest the wording be changed from "for which a licence has been issued" to "for which a licence is being applied for." I have personally been required to build many kilometres of road or else my zoning would not be addressed at a township meeting -- not passed, but I will never get the chance to have a township meeting unless I pay money. You should ask whose name I put on those cheques.

Section 53, items moved to the regulation: What are they again? I need to know that answer.

Thank you. Any questions?

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Mrs Pupatello: Thank you for coming today. You certainly have a lot of opinions regarding this bill and other things too.

I'd like to ask you how you might arrive at understanding that there would be refunds to your company depending on how the trust fund is set up, for what purpose you would receive a refund.

Mr Tanton: It's all hearsay. I may have between $500,000 to $1 million on deposit with the province of Ontario as rehabilitation security. I believe some of that is to be held back to ensure that bad apples' pits are rehabilitated and the remainder is to be refunded to the companies. Those are the rumours I am being told.

Mrs Pupatello: In the area of privatization of inspectors, do you have any idea or have you heard rumours of what your cost would be? I understand that you in essence would be funding the privatization of inspectors. Do you see a conflict of interest at all if those inspectors are in effect being paid by the industry?

Mr Tanton: I have heard terms and been told up to $1,000 per pit, so yes, that would cost us some money. It may not be a bad idea for honourable companies such as ourselves, Stebbins Paving. We have a very good working relationship with natural resources and all our municipalities. I do not take 10 years to get a licence; I can get a licence within six months to a year in general because everyone knows who we are, where we are and that we're there for the long haul.

Mrs Pupatello: So you think your cost might be $1,000. Also, have you written the cheques to those private individuals in those municipalities?

Mr Tanton: Those people were no longer employed by those various municipalities after considerable objections were made.

Mr Sergio: If there are changes in the proposed legislation, would you like to have a chance to make some further comments?

Mr Tanton: Yes, because there's an awful lot of aggregate producers that aren't members of the Aggregate Producers' Association. It's a very good organization, but we are not members. We may have our own concerns.

Ms Martel: I think that in support of the presenter who has come, we should get some clarification from the ministry around the rehabilitation aspects, because my read of the new act shows that "Sections 50, 51, 52, 53 and 54 of the act are repealed and the following substituted," and as I understand it, the province has, under sections 53 and 54, already a process of refunding on an annual basis rehabilitation security fees to licensed operators who have demonstrated acceptable, progressive and sequential rehabilitation of their sites. So my read would be the same as the presenter's, that there is a change in this section, that all the money will be continued to be held in trust and there will not be a refund. I think if we can get an answer from today, that would be helpful.

Just for my benefit, because I don't understand a lot of this very well, can you go back to your concerns around "an urgent project" versus "a project" when you talk about wayside issues?

Mr Tanton: That issue has come up many years. The only urgent project I can personally think of is when a dam down by Chatham on one of their dikes happened to wash out and they wanted to run into the nearest farmer's field and get clay or whatever to make the dam. Otherwise it's not needed.

Ms Martel: You agree with the change that the minister is proposing, to take the word "urgent" out?

Mr Tanton: The word "urgent" shouldn't be there but the word "and" should be added; "or" should be replaced with the word "and." Too many times licensed gravel operators lose out on a contract to a wayside permit and the big Toronto companies can come down, operate a wayside pit next door to my licensed operation, treat the environment like dirt, get charged by natural resources and then leave again. That is not appropriate.

Mr Klees: I appreciate your presentation and some very practical recommendations I will certainly be looking at. I also want to confirm for you that when we have the draft regulations, the intention is that we have a broad consultation with all stakeholders. Certainly you'll have an opportunity at that point in time to have some input, and we look forward to talking to you at that time.

I want to clarify something with regard to a comment made by Mrs Pupatello regarding the privatization of inspectors. There is no intent at all under this legislation to privatize inspectors with regard to the Aggregate Resources Act. There will be self-compliance. In other words, we're looking to you as the operator to complete annual compliance reports, and there will continue to be inspections by the ministry on a regular basis, just for the point of clarification there.

With regard to your comments around the trust fund, yes, it is contemplated that there would be refunds to the operator. As you're probably aware, the province is holding some $60 million in a trust fund at this point in time and that money is on deposit. As an operator, that's not available to you. I understand you're carrying it on your balance sheet, but it's not available to you. In many cases there is much more revenue on deposit than would be needed for rehabilitation.

The intent of this part of the legislation is to bring some practicality to the issue of this fund, to move it into the trust for administration and also to streamline it. Right now, I think we have in the area of 4,800 separate accounts that are being tracked for each individual business and it really is a very difficult thing to administer. So with regard to transferring this into the trust, we feel that not only will we accomplish efficiency but we'll also be able to give back by way of refund to the operators the excess that is deemed not to be necessary to be held within that account. At this point in time, again, this is in the discussion stage, but we anticipate retaining between $5 million and $10 million in that fund to ensure that there will be sufficient revenue to look after the rehabilitation, as you mentioned earlier.

I'm interested in a comment you made with regard to strict compliance versus reasonable compliance. I'm just a bit puzzled in terms of what you were intending by the comment that if you were held to strict compliance you'd be put out of business. Can you just clarify that for me?

Mr Tanton: I wrote eight pages of philosophy about gravel pits before I came here. I threw them all away. My opinion essentially with the gravel business is, I manufacture a product by digging a hole -- a 200-acre hole, but digging a hole -- in our backyard. What I do between the fences of my property should be my business and no one else's business, as long as I do not destroy my neighbour's quality of life or his water or his air. That's my philosophy and a lot of other companies' philosophies.

When we prepare a site plan or a blueprint for a gravel pit, we are asked by the act and the natural resources inspectors to put every possible item that you could ever possibly want to know about on those blueprints. A shrub is not a shrub, it's a dogwood shrub, this kind of information. There are inspectors, and I've run into them, who would require me to do a site plan amendment costing $500 to $1,000 each time to change the species of shrub located within my fence lines on our property. That does not affect the way I operate a gravel pit.

The Chair: We appreciate your coming forward this morning with that input. Thank you.

Mrs Pupatello: Could I ask a question of the --

The Chair: Ms Martel was first.

Ms Martel: It's on the same point.

Mrs Pupatello: Could we ask a question of the parliamentary assistant, if by the end of today we could have an answer: Would there be an amendment coming forward, then, to the bill that would remove section 2, subsection 4(1) of the act, "The minister may designate in writing any person as an inspector for the purposes of this act"? Would that be amended and removed?

Mr Michael Brown: I think we have that undertaking already.

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Ms Martel: Mr Chair, on the same point if it would be helpful: The minister could return to the original wording that's in the act that we are amending, which makes it very clear. It says in subsection 4(1), "The minister may designate in writing any employee of the ministry as an inspector for the purposes of the act." If the minister would like to revert back to that, I think we can respond to the concerns and know that this is not going to be privatized.

Mr Klees: Mr Chair, I'm prepared to make a brief comment on that. The reason for the wording is to allow us to do what we indicated in another part of the act, and that is to delegate the authority for inspection to another ministry. In this particular case, we've indicated that we would be delegating responsibility to the Ministry of Transportation. The original wording of the act would not allow us to do that, and that's the reason for the wording as it is.

The Chair: I'm not prepared to entertain a discussion between members about the act. We're here to listen to the people of Niagara Falls. We will do that, and then we can have all the discussion we want among ourselves about the bill.

TCG MATERIALS LTD

The Chair: Our next presenter is TCG Materials Ltd, Kevin Mitchell, property manager. Good morning, sir, welcome to our committee. Should you allow time for questions in your 20 minutes, they would begin with Ms Martel.

Mr Kevin Mitchell: Good morning, Mr Chairman, committee members, ladies and gentlemen. The reason we are appearing here this morning is to express our general support of Bill 52, which we believe will improve the Aggregate Resources Act and consequently the aggregate industry.

TCG Materials Ltd is a subsidiary of Needler Group Ltd. The company was formed in 1956 in the city of Brantford and went public in 1987 on the UK Unlisted Securities Market, and on the Toronto Stock Exchange in 1992. The company produces aggregate, asphalt, concrete block and provides construction services in southern Ontario. In upper New York state we produce aggregate, concrete block and paving stones.

TCG employs 210 people in Ontario. TCG operates 26 licences on about 1,100 hectares located in London, Woodstock, Brantford, Aberfoyle, Fonthill and also in New York state. We try to be as active as we can be in communities with projects through volunteer tree planting, rails to trails projects and also allowing the general public to traverse our lands along the Grand River on a public trail.

TCG is committed to rehabilitation, conservation and stewardship of the natural environment in which we operate. This is carried out through mechanisms such as corporate policies, employee training and awareness and volunteer and mandatory monitoring programs.

I've been employed at TCG since 1989. I am responsible for property, regulatory and environmental issues for all Canadian and US properties. To date, I have personally completed 20 compliance assessment reports.

TCG has been an active member of the APAO for more than 25 years. The comments and opinions we are presenting this morning are based on TCG's experience as an operator.

The Aggregate Resources Act has been a dramatic improvement over the Pits and Quarries Control Act. We have been regulated by the Aggregate Resources Act for close to seven years now, and although the act is very good, there are sections which are not working as designed and they must be improved. Generally speaking, we support Bill 52, as we feel this bill will improve the sections of the Aggregate Resources Act that currently need to be addressed.

We have read the proposed Bill 52 and believe the bill will (a) establish an effective regulatory partnership between MNR and the aggregate industry; (b) streamline the licensing process by eliminating duplication, red tape and focusing objections to specific issues while regarding environmental issues; and (c) create a more efficient system which will free up valuable MNR staff time by removing data entry and cashier duties to allow staff to concentrate on licence applications, reviewing monitoring reports and checking compliance assessment reports.

TCG's experiences under the Aggregate Resources Act has included four licence applications. Two of these applications resulted in Ontario Municipal Board hearings. In both cases the application was to expand an existing operation with no below-water extraction. Five years after starting the process we were successful in obtaining a licence. We believe that Bill 52 may have prevented at least one of the OMB hearings and reduced the five years to something reasonable. These are the improvements the aggregate industry will welcome.

It is extremely frustrating to call the MNR office to find out the status of a licence application or a monitoring report review and learn the inspector has not had the opportunity to look at your report because they've been entering data into a computer for two weeks or stuffing envelopes for the licence fee. Their time is too valuable for these clerical duties. We need them in the field or working on approvals and ensuring regulation in the industry. The proposed trustee handling the cashier-type duties for licence fees and the abandoned pit and quarry fund will let MNR inspectors do the job the public and industry need them to do.

One of the low-key proposed changes in the bill -- and I use "low-key" in that they're not things that we have heard people talking about -- might be that MNR will pass on complaints to operators. We think this is a good idea. We believe complaints that we have with our neighbours will be resolved very quickly and efficiently.

Industry is making a large financial commitment to fund the trustee, who in turn will distribute the funds to rehabilitate abandoned pits and quarries. This is a multimillion-dollar commitment to improve the weak members of our industry. This seed money is cash that will be taken from our rehabilitation deposits, which was originally to be returned to each operator as rehabilitation was completed.

The main item we'd like to address this morning is self-monitoring. I would like to point out that this is self-monitoring, not self-policing. I must admit, the first time I heard of the proposed industry self-monitoring and the self-compliance assessment reports, I was, at the very best, sceptical. Who had ever heard of industry, and especially the aggregate industry, which is out in the public view at all times, checking up on itself to make sure it is in compliance?

When the assessment reports came in, the detail seemed to be overwhelming. In July I began conducting assessments with our pit operations supervisors, and one half-day into the project I made a 180-degree turn in my opinion. The form specifically requires items to be reviewed for compliance. The item is either yes, in compliance or no, not in compliance. There are no grey areas. It is either yes or no. It took a long time to complete each site but it was well worth it. It is an excellent exercise to go through. I would say we are a better operator for doing this assessment.

TCG is a public company, and non-compliance puts our board of directors and shareholders at risk. Here are a few reasons I am confident it will not just work but also be effective in creating an efficient annual inspection program.

(1) Annual inspections must be carried out or the licence will be suspended. Operators cannot afford to be closed down during the construction season. A simple checklist in the MNR office will identify those who do not submit a report. End result: Annual inspections will be carried out and can be checked at MNR at any time, an improvement over the current situation. At the same time, MNR remains credible in administrating the legislation.

(2) It forces the operator or his consultant to examine the licence, the site plans and the licensed property annually with a standard list. The operator indicates compliance or non-compliance on the form, a deadline for correcting infractions, and sends it to MNR. It doesn't get any more black and white than this. End result: Operators must bring their sites into compliance in a reasonable time or face stiff penalties. The annual reports will give MNR a list of items to check at the site, which will speed up its review and allow it to focus on troubled problem sites.

(3) Consistency: All areas and operators are using the same music sheet. End result: All sites will be reviewed by the same rules, and there will be no grey areas to let someone use their discretion.

(4) The industry inspection is much more rigorous than any previous inspections, as there is no room for interpretation. End result: More comprehensive annual inspections.

End result: Every operator will know whether they are in compliance, and if they choose to continue to operate without bringing their site into the standards of the law and their licence, they will face strict penalties. Those operators who choose to falsify their reports may get away with it for some time. However, if it gives them a competitive advantage over an operator in compliance, MNR will hear about them. Most important, MNR is still open for business and with Bill 52 they'll have more time to find those operators who are not in compliance.

I see two disadvantages to the system of self-monitoring:

(1) I believe it will be perceived by some that industry will take advantage of the system.

(2) This program will require industry to pay for its own inspections and it takes, plus or minus, one day to review a licence and complete this review. This program will be costly and time-consuming to industry.

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I believe the benefits far outweigh the negatives. An example of how efficient this partnership can be: On July 17 we mailed our compliance assessment report for our Woodstock pit to MNR. On August 20 we received a response from MNR. The MNR inspector had reviewed our report, visited the site and commented back to us. The MNR inspector indicated the TCG review had minimized the time he needed to complete the inspection work normally done. This example illustrates how well the partnership can work.

Give the industry a chance. I believe the partnership between MNR and the industry will work. The industry is qualified and capable of carrying out the self-monitoring, and with MNR's supervision the program can be a success.

I would like to thank you for the opportunity to present this morning. Bill 52 is vital for the future of the aggregate industry. I would be pleased to answer any questions.

The Chair: Thank you, Mr Mitchell. We have three minutes per caucus, beginning with Ms Martel.

Ms Martel: Thank you for your presentation. Let me go back to the issue of self-monitoring around the penalty in particular, and perhaps you can clarify this for me because I'm not sure. Earlier Mr Cook talked about serious penalties for serious contraventions, including a penalty around (a) failure to produce a report, (b) to falsify information, or (c) to not be in compliance by the time line the operator outlined. Can you just advise me again? I should know this and I'm sorry that I don't. Are those penalties that appear in the bill right now or are those penalties that the association is proposing to MNR?

Mr Mitchell: It's my understanding they're in the bill right now.

Ms Martel: Tell me about your two OMB hearings and how it is that you believe Bill 52 would have reduced at least one of those to being a non-issue, because it's not clear to me if that's because of the process or the intervenors or what exactly is in the change now that would have lessened that problem for you.

Mr Mitchell: The one OMB hearing definitely I don't believe could be resolved. There were just too many items and too many projects on the go at the same time, too many players. The other one was, there were a couple of residences along this one road that were quite some distance away and there was concern that their property values would decrease as a result of our operation. In the interim, properties have been sold and developed along this same area, and it just seemed that one group was doing one thing and another group was doing a different thing in the same area. We believe that would have been resolved through this process because the bill would look at the items that should be addressed and validate those conflicts.

Ms Martel: Sorry, I'm not quite clear. Is it because you thought that it was frivolous as a complaint?

Mr Mitchell: Yes, we did, and that is our understanding, our belief. It may in fact not have happened, but definitely Bill 52 will help the process.

Ms Martel: I thought under Bill 52 the board still has to determine whether or not there are frivolous or vexatious issues that come before it, so that you might still end up in that process.

Mr Mitchell: That's correct, but I think it's more specific in what is required by an operator on their licence application. When the objections are filed with the ministry staff, the minister can look at those objections and see if they are in fact frivolous. That is our understanding in any case.

Mr Klees: Thank you for your presentation, and also we want to thank you for your willingness to participate in this pilot project. Obviously the results from your assessment were very positive, and I was interested in your comments, which I am assuming are your personal observations with your experience in the industry, of what the implication of this self-compliance is going to be to MNR staff and inspectors in the field. You indicated that in your opinion this would actually allow MNR inspectors to be much more focused on their inspection responsibilities. Could you just elaborate on that for me? What are you basing that assessment on?

Mr Mitchell: When you do a compliance assessment, you're required to walk their entire property to make sure that the fence is 1.2 metres high. That takes a long time on a 100-hectare site. Those things the MNR inspector can come in and check very quickly. I think what it does is it gives them a list, and if you are in non-compliance in any area, they have that list. Generally those are some of the more critical items, and they can look at those very quickly. If you have said you're going to speed up the process by doing these things at a certain time, they come out and see that. They quickly check a couple of other areas, and it reduces the time. They don't have to be in the field looking at absolutely every item every time they're out there because they know; they have a report that says you've done these things and they can quickly check up on those things.

Mrs Lillian Ross (Hamilton West): For many of us on this committee, we're breaking new ground, so to speak, reviewing this act. You commented with respect to filling in the compliance report and having an inspection of the property: July 17, and by August 20 you had received the report; it had been reviewed and approved. This was with the new inspection procedures in place. Prior to that, how long would it have taken for an inspection to have been approved?

Mr Mitchell: I'm not an MNR inspector and I never have been, but I believe it would have taken them the same length of time it took us, which was the better part of the day, to actually be in the field walking fence rows and that sort of thing, and then you have to sit down and spend time reviewing the site plans, looking at the licence, finding out what the conditions are, going back to the tonnage and hectarage reports, making sure the disturbed hectarage is what they said it was, if the licence fee has been paid. All of those things have to be done, and I believe it has drastically cut down on the time that they have to do it because you're looking at so many different locations, not just the field.

Mr Michael Brown: I'm very interested in this compliance report and the standards used to arrive at what the compliance is. I think that's one of the issues that concerns many of us, that we have no way of knowing what the regulations are going to require under this act in terms of compliance. I was wondering if you have some views on that. When the regulations come out, they may be different than the compliance requirements you are now having to meet. Do you have some views on how the public could be assured that these are the correct compliance standards for you to be filling out your report?

Mr Mitchell: Yes, I do. At this time, when we don't have the regulations in front of us, we can appreciate that industry, APAO and the government work together to give us very strict standards that we can work with, but what the form does is it asks you to look at things that you said you were going to do in your licence application and on your site plans. They're very specific: fencing, locations of roadways, gates, pit height, where you're going to dig, how you're going to dig, when your reports are to be filed. All of those things are yes and no answers. You look at it in the field. It's either yes or no. "Have you submitted a report?" Yes or no. So I don't think the regulations will affect how we're assessing the sites. I think what they will do is make some of the licence applications down the road a little bit more focused and possibly that much better site plans and licences.

Mr Michael Brown: If you go to standardized regulations in terms of requirements, that is obviously an advantage in many ways. The down side of that is that you are always only requiring the minimum; you are never asking people to pursue excellence, to be the best possible. There's no requirement to do a little bit better job than the absolute minimum that the standards and regulation require. Could you help me with that? I'm wrestling with it myself.

Mr Mitchell: I think we have to have comfort in that the minimum standards are going to be environmentally conscious. They are going to cause the operators to be efficient and take regard to neighbours and the environment. I think, as in any industry, if you are operating beside someone, you don't want them phoning you every day or causing the MOE inspectors or the MNR inspectors coming out at all times, and I think business in general goes beyond where it needs to go to make sure that as a good corporate citizen you go above and beyond what you're going to do.

The Chair: Thank you, Mr Mitchell. We do appreciate your coming forward this morning with your input.

Mrs Pupatello: Mr Chair, I'd like to table a request. Could I ask if by the end of this process you could attempt a rewrite of section 2, subsection 4(1), designation of inspectors, that would more accurately reflect what the parliamentary assistant was intending, although it is not now in the bill? That would be an amendment that restricts inspectors to being a ministry employee either of the MNR or the MTO. That is not reflected in the bill. Could a rewrite and an amendment be produced by legislative research?

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The Chair: That's a question, Mrs Pupatello, for legislative counsel, and they will not be in attendance until we get to clause-by-clause.

Interjection: I could pass that along.

Mrs Pupatello: Thank you.

REDLAND QUARRIES INC

The Chair: Our next presenter is Colin Wobschall from Redland Quarries Inc. Good morning, sir. Welcome to our committee. The floor is yours.

Mr Colin Wobschall: Good morning, Mr Chair and members of the committee. I do not have a written statement for circulation. I will be speaking from notes, but I do intend to follow up with a written submission.

I'm employed with Redland Quarries Inc, whose head office is in Hamilton, Ontario. We have quarry and lime plant operations in Ohio, Niagara Falls, New York, and we have two quarries in Ontario, one here in this region and a larger one up in Flamborough, Ontario, which we actually call the Dundas quarry. I am the environmental engineer -- that's my title -- for the Dundas quarry, which actually consists of two separate quarries, north quarry and south quarry, a stone processing area and a lime plant. We have been mining in that area for about 100 years now.

Dundas is the second-largest quarry operation in Ontario. We produce about three million metric tonnes a year over the past five years. We have about 140 employees, and we are one of the largest taxpayers, if not the largest -- I'm not sure -- in the municipality.

Although my title is environmental engineer, I also wear a few other hats: quality assurance manager, health and safety coordinator. One of my responsibilities is to ensure that the operators and management are aware of all environmental, health and safety, and mining legislation, and that we are in compliance with all that legislation. So I am aware of some of the duplication that goes on between the different pieces of legislation. We have been an active member of the Aggregate Producers' Association of Ontario for over 25 years.

I am here to express general support for Bill 52. I will be rather brief and my comments will be directed primarily to the self-monitoring or self-assessment aspect of the bill. That's the one I know most about. That's what I have participated in myself. I just wanted to mention some of the advantages that I think the self-monitoring will give us.

The operators will be more aware of the requirements of the site plan. A lot of operators nowadays were not operators when the site plans were put together back in, in our case, 1992. Our quarry manager was actually the maintenance manager at that time. I have been to three training sessions now put on jointly by the aggregate producers and the Ministry of Natural Resources on self-assessment, how to do it, and I've done one for our site. I've sat down with our quarry manager and our operators and other management to explain, go over the report, so people are now more aware, more cognizant of what is really required under the site plans.

We used to depend on inspectors to come in and inspect a property. They didn't do a very thorough job of it. They would leave a report and then go home, and if we were out of compliance in any area that they discovered, then of course we would get in compliance. So we used to depend on other people telling us whether we were doing it right or wrong. Now we have to know ourselves whether we're doing it the right way or not.

Now we, and eventually I hope the public, will know that we will be, if not now, working in full compliance with site plans, which we think will add a great deal of credibility to the industry. Right now, we get a lot of bad press. The inspectors can now concentrate on the operators who have been giving the industry a bad name by ignoring legislation, including following the site plans. Overall industry compliance will be greatly enhanced, in my opinion.

Another advantage of self-monitoring is the fact that a historical file of compliance assessment reports showing non-compliances or in compliances and corrective action will make it easier for an operator to show that he's been a good operator in the future when he applies for a new licence. Right now we don't have such detailed documentation of compliance and being a good working operator.

As with all government agencies, enforcement of the regulations seems to differ from office to office, region to region, and it includes natural resources, environment, safety, because of the discretionary powers of these inspectors. We as operators do not have discretionary powers; we have to be in full compliance with this new piece of legislation. I feel good about that because everybody will now be operating under the same rules. This is very important in our competitive marketplace.

I personally have some concern when I read in the press, and I've read it several times and I've heard people talk about it -- they refer to letting us self-regulate ourselves and we cannot be trusted. We recognize this is not self-regulation. The Ministry of Natural Resources is the regulator; the inspectors are the policemen. We are simply self-monitoring. I don't think a lot of people really understand that we have been self-monitoring for years in our industry and have been doing a very good job of it.

Under the Ontario Water Resources Act, we have a permit to take water, and any operator who takes, I think it's 50,000 litres a day of water from the water table must have a permit to take water. The conditions of our permit says that we must monitor the level of the groundwater in monitoring wells, we must monitor the quantity and quality of water we are discharging from dewatering sumps and putting offsite, we must monitor the quality of the groundwater -- we do that ourselves; the inspectors don't come in and do this -- and we submit an annual report to the Ministry of Environment and Energy.

We have similar self-monitoring under certificates of approval under the Environmental Protection Act and the Ontario Water Resources Act. Those quarries that have cement plants or lime plants associated with them, as we do, self-monitor under the MISA regulation for certain criteria, certain parameters. We self-monitor; we submit the reports annually, so this is not something new to us. I'm not aware of any problems in our industry created by self-monitoring under these pieces of legislation.

In short, in my opinion, self-monitoring will be a good thing for the industry because it will result in enhanced compliance with legislation throughout the province, it will clean up and perhaps get rid of the bad apples, as we call them. They give our industry a bad name. Eventually, it will result in a much improved public perception of the aggregate industry.

With respect to licence application changes, I haven't had any personal experience with those. We have not applied for a new licence during my eight years with the company, but being an active member of the association and sitting on a committee there, I have heard a lot of what we call horror stories about delays and expenses in getting licence applications. Just from what I hear, I realize that we do need some streamlining here, and I put my trust in the association to work with the government on streamlining this process. I generally support Mr Cook's position on this matter and the association's position.

From what I know about the rehabilitation security system, the abandoned pit and quarry fund and the proposed aggregate resources trust -- and I admit, I don't know a great deal about it, but I've read Bill 52 and I've read the association's legal opinion of the different parts of it -- again, I have to support the association's position in these areas.

I want to thank you very much for giving me the opportunity to speak here today. I'd be glad to try to answer any questions you might have.

Mr Klees: Thank you very much for your presentation and your comments. I'd like to focus briefly on your experience with the self-monitoring to date. In your opinion, were the standards under which you were doing the self-monitoring more stringent than the standards that perhaps, in terms of practicality, you've been operating on to this point?

Mr Wobschall: I'm not sure what you mean by "more stringent." Some of the things we have to do are very impractical, but that's our own fault, because back when we had to put site plans together -- and I was not involved in that process, but my understanding is, I know there was a checklist that the ministry circulated to everybody. Some people put down too much detail in those original site plans. Instead of saying that vegetation will be a mixture of trees and shrubs planted along the west boundary, some people specified the type. As a matter of fact, at our Queenston quarry down here, there's a drawing showing what the shrubs are going to be, how they're going to be planted, the hole size, the type of soil in there, the type of fertilizer and, technically speaking, if they didn't follow it, they have to come up. But we're hoping to get what we call a minor amendment, to eliminate that drawing. It's just straightforward.

There's a lot of stuff there that we do have to do which I don't feel is really required. Unlike a previous presenter here, I just want to point out that most of the industry is not of the philosophy that what we do within our fences is nobody else's business.

Mr Klees: In your opinion, will this system result in better compliance than has been the experience to date?

Mr Wobschall: Of course, because a lot of operators don't even know what's on the site plan. Now we have to know, and by submitting these reports, we have to be in full compliance with our site plans -- not nearly full compliance, but full compliance.

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Mr Klees: And the industry's aware that under the current system, some 40% of all sites have failed to have an inspection for a number of years? Are you aware of that?

Mr Wobschall: I'm aware of that, being a member of the aggregate producers, yes. Even when we get inspections, they're not thorough.

Mr Klees: With the annual compliance report, certainly a number of those sites that perhaps haven't been inspected for a number of years will now, overnight, have to come into compliance. That obviously is going to put some stress on the industry. How do you feel the industry's going to deal with that?

Mr Wobschall: I can only speak for myself. It's no problem for us, because I completed our self-assessment report and there are two or three minor things on it. It won't cost any money for us, but I know it's going to be very stressful for some of the other operators, perhaps the smaller ones who have not been following the site plan. They're going to have a lot of difficulty, a lot of expense to get back into compliance. My understanding is some of the smaller ones may even just fold up. That's what I have heard. But once they get in compliance, there will be no stress at all; it's just a matter of maintaining it a couple days a year.

Mr Sergio: Thank you for making a presentation. As you said, you are wearing many hats, and we appreciate the various comments that you have made. But you also said you have general support for the bill as it is presented. The first presenter I believe did say he would like to see the reform of the OMB and the elimination of all the appeals to the Ontario Municipal Board. How would this better serve the industry and the public?

Mr Wobschall: As I said earlier, I have not been involved in a licence application myself. I do not want to speak on behalf of the association on that. I don't know from a personal point of view.

Mr Sergio: Okay. I have the perception that you still have some concern with many areas of the bill as it stands now.

Mr Wobschall: The only concern I have about what I know about the bill now -- and as I said, it's the self-assessment part that I know most about, because I've put it into practice. The only concern I have now, and it's been raised here before, is what is going to be in the regulations. I only put my trust in the association when they say they have been promised that the government will work very closely with the association on development of these regulations.

Mr Sergio: The industry people generally don't trust politicians and whatever comes from the government. Would you and the industry as well like to have an opportunity to see what really the final legislation proposal will entail, and would you like to have the opportunity to have further comments on that?

Mr Wobschall: Oh, I would love to, yes. By the way, I have a falling down here; I trust everybody, even politicians.

Mr Sergio: Do you want a question? Do we have time?

The Chair: You've got a minute left in this round.

Mrs Pupatello: I'm sorry, I did want to make a comment that I was happy to hear, towards the end there, in your questioning or answers that your philosophy was not the same philosophy that had been shared earlier with us. I appreciated that comment.

Ms Martel: Thank you for your presentation. One of the points you made with respect to public perception I think is an important one for this committee and frankly for your industry. If people perceive that there are bad apples and they are overtaking all of the good operators, then that gives a bad name to everyone.

One of the real difficulties I have with this bill is how much of the very important details that the public will want to know about are in fact left to regulation, where there will be no legislative scrutiny, where there will be no input like we have with this committee right now, where in fact it will be done by cabinet, we hope in consultation with the broadest numbers of stakeholders, although we don't know who they will be yet, but it will not be done in a process which is open like this one.

Let me give you some examples: All of the requirements for the site plans for either class A or class B licences used to be listed very clearly in the act. They are all taken out; they will now be done by regulation. All of the requirements around the report, which accompanies the application for a class A licence, used to be in the act; it will now be taken out and done by regulation.

There's a whole other section in the act that talks about conditions which are placed on operators who have aggregates that they take out from under water and all of the fish habitat protection, conditions that are placed, that's taken out of the act. That's put into regulation.

So you can see that the concern we have is how much of this is going to be done, in essence, behind closed doors without the benefit of public scrutiny and public comment.

I wonder if it does not bother you, as a member of the industry which, from all the accounts you have given us, goes above and beyond whatever the legislative requirements are, that so much of this bill is done in that manner and that the public, which deserves to be assured that things will be up front and aboveboard and that the highest environmental standards are to be met, doesn't have a way to have access into that process and we, as MPPs, don't have access to that process either.

Mr Wobschall: I would rather there was a forum such as this to review what the regulations are going to be.

Ms Martel: We have been concerned that the technical documents that will flow from all of this have not been available to the public either and have not been available to us as MPPs. I wonder if you can comment as to what the public perception is then if even the technical documents upon which a lot of this is based have not been available for our viewing either, or for your viewing for that matter.

Mr Wobschall: I'm not too concerned about that from the public perception point of view because, as I said, I'm familiar with all the applicable environmental health and safety legislation, and very often the regulations come out without public input, and for the most part I accept them. There are a lot that I personally disagree with but do it anyway, but I'm not sure that the public has any great good or bad perception about these other regulations. I'm not sure why they would about this one.

Ms Martel: I guess the regional municipality this morning expressed some concerns about, obviously, their lack of information around some of these issues, and it sounds like they have a good relationship with all of the companies but would like to be very much assured of what the meat on the flesh is, so to speak, because it's not here. I suspect other municipalities that have licences, and there are about 700 of them, would probably feel the same way.

Mr Wobschall: Yes, I do not disagree with you, but when I speak about public perception, I'm talking about the people up the road, the neighbours, the true public out there, not the municipal councils.

The Chair: Thank you, sir. We appreciate your coming forward this morning and giving us your input.

The next presenter is Sarah Lowe, property and resource manager for Dufferin Aggregates.

Mr Klees: Might I offer a point of clarification for the committee while the next speaker comes forward? On this last point that Ms Martel made, she characterized the regulations as being drafted or prepared behind closed doors. I want to state again, as I did at the outset of this hearing, that the regulations will be circulated to all interested stakeholders for input. I do not want this committee or the public to be under the impression that those regulations will not be circulated and that we will not be inviting comment. We will be.

Mr Michael Brown: I would just ask that the parliamentary assistant circulate them to this committee now. That was done under the forest sustainability act. Acts like this that are just shells with great permission to the minister or the ministry -- the standard procedure on such acts, which are very important to the people of Ontario -- they deserve the scrutiny of MPPs. I don't think under what Mr Klees has suggested -- he's suggesting that the Legislative Assembly of Ontario review these regulations. Cabinet will make the decision behind closed doors, that's how it will be. You will decide who the stakehold ers are. People who are elected to do this have no opportunity to have input.

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DUFFERIN AGGREGATES

The Chair: Good morning and welcome. You have 20 minutes. The floor is yours.

Ms Sarah Lowe: Thank you very much. My name is Sarah Lowe. I'm the property resource manager for Dufferin Aggregates, and I'm very pleased to have the opportunity to speak here, although we don't have any operations in the Niagara region.

I'm here to give general support to Bill 52. I've been employed with Dufferin Aggregates since 1993, but I've been involved with the industry for 20 years, initially at the University of Guelph and then as an employee of the industry since 1980.

My experience with the industry includes management of the approvals process for several new licences, including several OMB hearings.

Currently my responsibilities with Dufferin Aggregates is for the planning and licence approvals, for land management and rehabilitation, and for community and government relations. Those are the three main hats that I currently wear.

Dufferin Aggregates is a division of St Lawrence Cement, and St Lawrence Cement is a major cement producer in eastern Canada and the United States. The Ontario division, which employs about 2,000 people, supplies cement, aggregates, concrete and road construction services in Ontario through its various units.

Our affiliate, Dufferin Aggregates' affiliate, Dufferin Construction, is a member company of the Canadian Highways International Corp, which is currently building Highway 407 under partnership with the government, a new, innovative way of partnership, a new way of doing business.

We supply high-quality aggregate mainly to the GTA, the greater Toronto area, including the 407, from our Milton quarry which is a limestone deposit in the region of Halton. It's a very large limestone quarry, probably with the highest production in southern Ontario. We also have sand and gravel operations in Aberfoyle, which is in Puslinch, Wellington county, and in the Mosport area in the county of Durham.

We employ over 150 salaried and hourly staff and we reckon that we inject over $50 million directly into the economy of southern Ontario.

A key principle of our company is that we involve long-term partnerships and consultation with the local stakeholders. I've brought a brochure to illustrate that with my presentation this morning.

We're really proud of the awards that we have received. We are particularly proud of one from the Ontario Heritage Foundation, which is called the Friends of the Escarpment Award, an unusual award and we cherish that very much as a producer on the escarpment.

In summary, we are committed to operating with sensitivity both to the environment and to our neighbours and through progressive rehabilitation to ensure that our sites have the best long-term use for the future.

Our support for Bill 52 then at Dufferin is related to our support for three of the government's initiatives: The current initiative to reduce costs in all areas of the government's operations; the initiative to eliminate duplication and red tape; and an innovative initiative to explore new ways of doing business.

We feel that Bill 52 is an important development towards fulfilling these general objectives.

We feel very definitely that the continued supply of aggregates is extremely important for the development of this province and for its continued competitiveness.

We support the goals of the Aggregate Producers' Association and we have been members since its inception. We generally support the presentation that was made earlier by the association on behalf of its members.

I'd like to specifically speak to three of the key initiatives of the act: First, the issue of streamlining, more efficient licence applications; second, I'd like to speak to the changes in the rehabilitation security fund; third, the issue of self-compliance, self-monitoring.

First, the licence application process: I believe we are a very highly regulated industry. We are currently experiencing extremely long and costly and risky licence approvals, securing and maintaining our approvals. I consider that's the situation.

The rules of the game are uncertain, at best. They are often seriously duplicated. I've had personal experience of an extreme case of that, the uncertainty, through Dufferin Aggregates' experience with a proposed quarry up in Marden in Ramara township where we have had an application under way for about eight years and we haven't yet even got to the licence stage. The uncertainty in that case has derived from a number of sources, despite extensive public consultation.

The major key there for the uncertainty is a request for designation of the proposal under the Environmental Assessment Act, and until the Aggregate Resources Act is recognized by everybody as being a strong act that protects the environment, we as an industry are continually going to have challenges under these designation requests, none of which had ever been upheld, but we have the unfortunate experience of having been the only company, I believe, that's had to go through an Environmental Assessment Advisory Committee hearing in order to determine -- this was the last government -- as to whether requests should be entertained or not.

We would like in terms of clarity at some stage a definite statement from the government that requests for a designation under the Environmental Assessment Act will not be entertained, that the Aggregate Resources Act is the act that controls our industry.

We generally support the Bill 52 framework. We believe it's going to be an improved process. Specifically, we think that the timetable is going to be more efficient and costs, as a result, reduced. Three reasons for that: (1), it's going to be driven by the proponent. A lot of the delays are out of our control. We would like that control. That's simply a time efficiency. (2), we believe that MNR and the OMB will have an ability to scope the issues. As was stated by a previous applicant, this will be extremely useful for, I believe, all stakeholders. (3), there will be an elimination of the appeals to an OMB decision. Despite rigorous review of applications through the OMB, there can be another year or two delay while you have another re-enactment of all the issues under an appeal process. I have experience with that and it was costly and a delay.

We look forward to the further consultation on the regulations. We request that both the legislation and the regulations are very clear in their requirements. We support the industry's request for the regulation exemption in section 66. I don't suppose that's the right place for the comment on the Environmental Assessment Act, but I hope to work through that as well.

With regard to the comments and questions that have been on the regulations, I suppose one benefit of having all the details in the regulations is that they will all be in one place. We currently have quite a maze to follow to go through the process through the act, through the regulations, through the policies and procedures. Even our consultants find it a challenge to put it all down on one piece of paper. When you do and you give a presentation, nobody can read it. That just illustrates the complexity of the process.

Second, I'd like to deal briefly with the issue of the rehabilitation security fund. Rehabilitation's a specific interest of mine and we accept that the current program of providing eight cents is an incentive, but it isn't the only incentive and it isn't the most important incentive for rehabilitation.

We feel that rehabilitation is good business. A large number of producers believe that. It minimizes our impacts, it helps gain acceptance in the community, it increases our credibility and it increases our after-use values. I think many of us have sold properties that have been restored and you realize that there is an asset value to a restored piece of property that's a benefit to the company and the community.

Perhaps the most important incentive, though, is that rehabilitation, both progressive and final, is required by legislation and that will continue to be so. I guess if there is an infraction, in that case the licence will be suspended. We believe that with the focus of the regulators on key issues, the inspection of the rehabilitation accomplishments will become a key issue.

We support this proposal because it is going to eliminate the costly and time-consuming administration. You've had examples of the sort of administration. It's very, very time consuming. It not only ties up the MNR personnel, it also is very costly to business. We've had an example recently where even just transferring a licence was so slow; in one case I lost the sale because the purchaser couldn't wait for the licence to be transferred, and in another case, even though everybody was in support of the licence transfer, it took several months. There was a circulation process. No problems, it was just process. That was the licence transfer -- that was a slight aside.

As far as the security fund, it was an issue. The relation of that to the security fund was where the licence transfer was delayed because the government had to find what the current rate of interest was for the security deposit. I lost two months on the sale of a property because the interest rate and the security deposit couldn't be determined, and when we found out, it was only three quarters of a per cent he wanted -- why we'd waited so long -- but it was important.

So that's all of the issue where red tape gets tied up into knots of red tape. This is costly to government, costly to business, and we look forward to the elimination of that sort of red tape.

We support the permanent superfund, although in essence we are losing money that we thought was ours. We support it because we support the return of the balance of the security fund to us. The superfund we understand will have the ability to be focused on those areas that are prime areas for restoration in most unusual circumstances, so we are in support of that.

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In terms of Dufferin Aggregates and many other producers we will continue to carry out rehabilitation in a progressive manner and have a high quality at all of our operating sites. It is a normal cost of doing business. It's a normal course of business and we will continue to strive to develop improved methods for rehabilitation and support both the Aggregate Producers' Association and other partners in any initiative in this regard.

Finally, I'd like to comment on the self-monitoring compliance partnerships. We feel this kind of partnership reflects a growing trend in industry in general towards increased responsibility and accountability. We at Dufferin are participating in this voluntary program in 1996. We sent our employee who is responsible for this who reports directly to me to the training that MNR and APAO provided. It was good training to understand the program and specifically how to fill out the forms. The forms, as you've heard, are very detailed. They're lengthy, they're precise and they're a great education.

We found it quite onerous; actually we're still finding it quite onerous. It's a great process. It takes time. I think a day a site quoted earlier was good, was accurate. We've learned a lot about our sites. The benefit is that, as I say, we understand the requirements better. The outcome of that is that we will have better plans. You've heard examples of where plans sometimes include requirements that may be too precise or maybe imprecise, that we will get better plans as a result. It will also lead to better housekeeping of our sites and better overall operating standards. We believe sincerely those are benefits to us as Dufferin Aggregates as well as to the industry as a whole.

The ultimate benefit we see is an assurance to the public and the other stakeholders that should lead to improved confidence in our business. We want to continue to raise the bar of our operating standards and hopefully that will continue to raise the appreciation and understanding, or at least acceptance, which is perhaps the best we can hope for of our industry and our company in our local communities.

The bottom line, I think, of us accepting this, and I believe we are capable of accepting this responsibility, is that the MNR regulator can then focus more efficiently on his job, which is to regulate us. With this emphasis on the priority areas, the priority sites that maybe have violations or even within sites that are needing specific attention for some other reasons, we believe that this is in the interests of the improved efficiency of our overall industry and government industry partnerships, and ultimately that benefits all the stakeholders.

Thank you very much. I appreciate the opportunity and I'll try and answer questions.

Mr Michael Brown: Thank you for a very comprehensive view of the bill. This might digress a bit, but one of the things I learned was from quite an experienced member from Essex-Kent who's no longer serving here who said, "You know, big companies deal with regulations fairly easily." A company like yours can deal with whatever regulation at least more easily than the very small operator who can't have an environmental engineer or whatever. I'm just wondering what your view is under this bill about whether the industry will continue to consolidate, might be the word, or whether we will see more small operators vis-à-vis the large operators and will this bill have an impact upon that.

Ms Lowe: I think it's hard to say at this point. The trend in the industry towards consolidation, I suppose, is a general trend. I believe, however, that the training program has been very good. The level of understanding of the requirements is good, and I believe that after the initial period where there's a big learning curve, a responsible operator, whether he's big or small, should be able to handle it.

Mr Michael Brown: This is a hypothetical question, but given that this act passes, the regulations are out, should there be some kind of active assistance for the smaller operators by the ministry to familiarize them with the requirements of the new act so that they can deal in their own businesses, make the transition to their self-monitoring?

Ms Lowe: I really can't assess that. I suppose I thought that the opportunity was there and was taken advantage of. I really can't assess for other operators.

Ms Martel: I would like to ask a question around the trust fund itself and what, if any, involvement either your company has had or through the association if the association has had any, with respect to what it's going to look like, what that formal structure will be, how will people participate, how will there be some agreement around how funds are distributed etc. Have we got to that point at all? Have there been any discussions?

Ms Lowe: The trust fund is the administration of the licence fee.

Ms Martel: The fee plus the security deposit.

Ms Lowe: And the security deposit, yes. I don't know all the details of that yet. I understand that there will be a financial institution perhaps involved and that there will be definitely a payor involvement in administration of it. I don't know all the details of that.

Ms Martel: I wanted to ask as well a question about public consultation because I gather you've had some of that, given that you have applied for new licences in the past, which is a different position than the gentlemen who presented before was in. Can you tell me about the public input that you've had with respect to new licences and how you've been able to remedy certain concerns?

Let me tell you the reason I ask that. A large part of my riding is in an unorganized area. One of the changes in the act now says there will be no public notification for land owners in unorganized areas with respect to either changes or new licences. I have some real concerns about not involving the public. I just think from a justice point of view it's wrong. But sooner or later people end up in court and you have a much longer-drawn-out process when they don't have any ability whatsoever to be involved. What's your experience been around the new licences that you've had to apply for?

Ms Lowe: My experience would be that the first place you would start even before you had a working plan of what you might propose would be to contact neighbours in the area. I think that would be a normal course for a licence application for applicants to do that, notwithstanding the fact that it isn't currently legislated in the Aggregate Resources Act. There is normally public participation simply because it's good business to do that. I think even with the previous speakers -- perhaps there wasn't time to explain -- I'm sure there were examples there where there were a large number of issues that were resolved. But the concern with the lack of the scoping opportunity is that there are still issues that could be resolved if there was more scoping. I think the point with the OMB and the current ability of the OMB and MNR to scope them will be an assistance.

But back to the public process. The public process experience I've had personally, that Dufferin has had, is that the public process is a good process, that there is exchange of information, and we believe in that. I don't know how that would work in an unorganized riding; I just know that good businesses would go to their neighbours in the community.

Mr Klees: Thank you very much for your comments and your expression of support. I want to just address Ms Martel's comment about notification. To ensure that there is not a misunderstanding, the intent is to incorporate in regulation the provisions regarding notification to make them more user-friendly and also to make them much more stringent in that area. I'm sure that once those draft regulations are seen by the public, by Ms Martel and by the industry, they'll be very pleased. We look forward to their comments and to yours during that consultation process.

I'd like to just address one comment that you made and perhaps get some clarification for you, and that was with regard to the referral to the minister to designate a site. You're probably aware that the previous government took some three years to make a decision with regard to a particular site as to whether it should be referred to the Minister of Environment. Following that three-year period, it decided there was sufficient strength within the Aggregate Resources Act to deal with the environmental issues.

I want to just clarify that nothing in this act takes away any of those environmental protection issues that are in the existing act. In fact we feel there is some strengthening that's going to take place there as well. However, there is also nothing that would preclude anyone from referring or requesting that the minister so designate a site. I think it's important to recognize that. But there is an attempt here to streamline that process, and I appreciate your comments with regard to that issue.

The Chair: Thank you very much, Ms Lowe. We appreciate your attendance here today and your input into our process.

Ms Martel: On a point of order, Mr Chair: I would request from the parliamentary assistant tomorrow to let all of the committee know where in fact it says in the new legislation that my concerns around notification in the unorganized areas will be met. I'd ask him to look at page 37 of the old act, under section 61, where it lists, "in territory without municipal organization," the notification process that will take place, and it's outlined very clearly what that process is. If you look in the new act on page 17, under section 50, it says, "Part VIII of the act is repealed," period. There is nothing about a notification process going to be listed in regulation with respect to unorganized communities.

It is an important issue. We have a case involving this right now in my riding. I'm sorry, but I don't see anywhere in the new act where it says that concern is going to be resolved in regs.

Mr Klees: I'll certainly respond to that. As I stated, it is not in legislation. I'm advising this committee, I'm advising Ms Martel, that those provisions will be incorporated in regulations, and that is our position.

The Chair: That is the last presenter for today. The committee now stands adjourned until 10 o'clock in Milton tomorrow.

The committee adjourned at 1223.