Government of Canada's Response to the Environmental Assessment Report of the Joint Review Panel on the Sydney Tar Ponds and Coke Ovens Remediation Project

1.0 Executive Summary

On May 12, 2004, the governments of Canada and Nova Scotia signed a Memorandum of Agreement (MOA) which committed the two levels of government to the remediation of the Sydney Tar Ponds and Coke Ovens sites, located in the heart of Sydney in the Cape Breton Regional Municipality, Nova Scotia. The MOA provided for the Government of Canada (GC) funding commitment of up to $280 million and $120 million on the part of the Government of Nova Scotia. The MOA also specified the required development of several implementation agreements in respect of the initiative, including further definition of the Project and the undertaking of an environmental assessment (EA). As well, the Government of Nova Scotia was required to establish a single purpose agency to implement and manage the project, and did so with the Sydney Tar Ponds Agency as the Proponent.

On May 2, 2005, the Ministers of the Environment and of Public Works and Government Services announced an EA decision for the Sydney Tar Ponds and Coke Ovens Remediation Project (Project), as a joint federal/provincial public review by a three member independent panel. Following a rigorous review of the Environmental Impact Statement (EIS) of the Project, the Panel held public hearings from April 29 to May 18, 2006. The Panel released its report to governments on July 12, 2006. Section 37 of the Canadian Environmental Assessment Act (Act) requires that the GC respond to the Panel's Report with the approval of the Governor in Council.

The scope of the Project, subject to environmental assessment, was defined by the MOA, and included:

The Project assessment also considered the environmental implications of an alternative means of carrying out the Project (Alternative). The Alternative is characterized by the deletion of the first item in the above noted scope (that is the removal and destruction of PCBs from the tar ponds as well as the removal of the contents of the tar cell on the coke ovens site with a proven technology such as high temperature incineration in a single use dedicated facility). In other words, the Alternative would involve the full containment, in situ treatment of all contaminated materials and capping along with the other scope provisions as noted.

The Panel's report is comprised of 55 separate recommendations covering all aspects of the Project. In general, the Panel has concluded that with appropriate implementation of their recommendations, either the Project with incineration or the Alternative without incineration are unlikely to result in significant adverse environmental effects.

The GC response to the Panel's report is provided by the ensuing text. It has been prepared by Public Works and Government Services Canada (PWGSC), with advice and input from Responsible Authorities including Environment Canada (EC) and the Cape Breton Development Corporation (CBDC) as well as other federal authorities including Health Canada (HC), Natural Resources Canada (NRCan), Justice Canada and Fisheries and Oceans Canada (DFO).

Key to the development of the federal response was the undertaking of a Risk Based Analysis (RBA) in accordance with Panel recommendation number 3. The purpose of the RBA was to compare the risks, benefits and costs associated with the Project with incineration as defined by the MOA to the risks, benefits and costs associated with the Alternative without incineration.

The conclusion of the RBA is presented from a Risk Benefit perspective and in part indicates that a direct comparison of the Project with incineration to the Alternative without incineration leads to the conclusion that the Project with incineration will, on balance, carry with it higher risks across most of the nine analysis categories assessed. Because of these risks the Project with incineration will yield relatively lower benefits and relatively higher costs than the Alternative without incineration. As well, the estimated cost of the Project with incineration is about $100 million greater than the Alternative Project without incineration. For these reasons, the analysis suggests that the Alternative without incineration would be preferred over the Project with its incineration component.

Consistent with the GC support of the Alternative without incineration, the responses to a number of recommendations (specifically recommendations 20 to 32 inclusive and recommendation 37) in this federal response document will, to a great extent, not apply.

In general, the Response provides federal agreement for virtually all of the Panel recommendations pertaining to areas of federal jurisdiction. Where outright agreement has not been reached, agreement in principle is provided with qualifying remarks.

2.0 Introduction

On July 13, 2006, the Joint Environmental Assessment (EA) Review Panel (the Panel) for the Sydney Tar Ponds and Coke Ovens Remediation Project (Project) released its report (Report), providing the GC and the Government of Nova Scotia (GNS) with recommendations on the environmental acceptability of the Project. The Panel also made recommendations concerning further work to be carried out in advance of final Project approval and initiation.

Section 37. (1.1)(a) of the Act states that when a report is submitted by a mediator or review panel, the responsible authority shall take into consideration the report and, with the approval of the Governor in Council, respond to the report. This document provides the GC's response to those Panel recommendations that fall under federal purview, and highlights how the GC will address these recommendations. With respect to recommendations the Panel has directed specifically to the "Proponent" (the Sydney Tar Ponds Agency), the GC response addresses those aspects that are a matter of federal jurisdiction. The GC response also indicates those recommendations that are a matter of sole jurisdiction of the Province.

In preparing this Response document, the GC has consulted closely with the Nova Scotia Department of Transportation and Public Works (NSTPW) which is responsible for administering $120 million in funding on behalf of the GNS. The GC has also consulted with the Nova Scotia Department of Environment and Labour (NSEL), which will be responsible for providing approvals and conditions to the Proponent for environmental aspects that fall under provincial jurisdiction in accordance with the Province's duties associated with the joint EA process.

3.0 Background

On May 12, 2004, the Minister of PWGSC and the Premier of Nova Scotia (the Parties) signed a MOA, wherein the governments committed to the remediation of the federally and provincially owned portions of the Sydney Tar Ponds and Coke Ovens Sites (STP site).

The MOA provided direction concerning the planned scope of the Project, consisting of the following potential elements:

At the same time, the MOA required that a number of agreements be entered into by the Parties concerning project governance, preventative and preliminary works, scope of Project, federal/provincial cost sharing, EA of the Project and the appointment of an independent engineer. All of these agreements were established with the exception of the requirement pertaining to the EA of the Project, which became the joint responsibility of the Canadian Environmental Assessment Agency (CEAA) and the NSEL upon the initiation of a public review by panel.

4.0 Environmental Assessment Process

A Project Description released by the Proponent in December 2004 contained two Comprehensive Study (CS) requirements pursuant to the Act related to groundwater withdrawal and the potential siting of a hazardous waste incinerator on federal land. This resulted in the initiation of an environmental assessment at the CS level by PWGSC, Transport Canada (TC) and EC in February 2005. TC subsequently withdrew from the process upon further consideration of their responsibilities pursuant to the Act.

Following rigorous public consultation concerning the potential scope of the CS, an environmental assessment track report was provided by the Minister of PWGSC to the federal Minister of the Environment in April 2005, with the accompanying recommendation that, due to pronounced public concern in relation to the Project, a public review by panel should be undertaken. The Minister of the Environment announced his acceptance of this recommendation on May 2, 2005, and indicated that discussions were underway to develop a joint review process with the GNS. Subsequently, an agreement for a Joint Review Panel was reached by the GC and GNS in June 2005.

On June 30, 2005, the Draft Environmental Impact Statement (EIS) Guidelines for the EA of the STP Project were released by the CEAA for public comment. These were subsequently finalized and issued to the Sydney Tar Ponds Agency (STPA) on August 30, 2005.

On July 14, 2005, the Agreement Concerning the Establishment of a Joint Review Process for the Sydney Tar Ponds and Coke Ovens Sites Remediation Project (Agreement) was signed by the provincial and federal Ministers of the Environment. This Agreement contained a detailed description of the environmental assessment process and provided the Panel's terms of reference.

On September 19, 2005, a three member environmental assessment review Panel was appointed for the STP Project by the CEAA and NSEL. An EIS was subsequently provided to the Panel for consideration in late December 2005. Following review of the Project EIS by the Panel, the Panel determined that sufficient information was provided to proceed with public hearings, which were held from April 29 to May 18, 2006. Subsequent to this, the Panel released its report of recommendations first to governments on July 12, 2006 and then to the public on July 13, 2006.

The GC Response to the Panel recommendations set out in this document is in partial fulfillment of the Government's obligations pursuant to the Act. Responsible Authorities for the Project are PWGSC and the CBDC. PWGSC is participating as a Responsible Authority (RA) as the administrator of federal funds in respect of the Project and, the CBDC is participating as an RA owing to a possible disposal of land in relation to the Project.

NRCan, HC, DFO, Department of Justice, EC and TC have all contributed specialist or expert information or knowledge in support of the initiative in accordance with the Act.

5.0 Roles of Government of Canada Departments

PWGSC has been assigned the lead for the Project on behalf of the GC as administrator of up to $280 million in respect of the Project. In keeping with this role, as defined by the MOA, PWGSC is co-signatory with NSTPW to those agreements required by the MOA. As such, PWGSC has the overall GC responsibility for Project governance, the implementation of financial and environmental controls, risk management initiatives and Project quality assurance on behalf of the GC. In this regard, PWGSC will also ensure that the implementation of environmental controls and protection measures is carried out in consultation with federal and provincial expert and regulatory stakeholders. PWGSC will also be tasked to ensure that the Proponent in accordance with the MOA carries out resulting environmental requirements.

As RAs for the Project, PWGSC and CBDC will participate in the determination of appropriate environmental controls and protection measures throughout the implementation phase of the Project. Both RAs will participate in the development and implementation of a follow up program pursuant to the Act.

During the Project implementation phase, the following GC departments will provide expert and specialist information or knowledge related to the following:

6.0 Implementation of Panel Recommendations

PWGSC leads the federal interest in the management of the STP Project and is responsible for the negotiation and management of appropriate implementation agreements to ensure effective governance and accountability over the course of the project. In this respect, the GC, through PWGSC, provides the federal share of funding to the Province of Nova Scotia through a federal/provincial cost share agreement. In turn, the Province of Nova Scotia provides the total funding, including the federal and provincial shares, to the STPA, a single purpose entity established for implementation of the Project. In both cases, the transfer of funds is subject to accountability mechanisms involving, but not limited to, independent engineering inspections, audits and financial certifications. As well, the responsibility for management of the cost share agreement rests with a Project Management Committee (PMC) comprised of senior officials of PWGSC and NSTPW.

A specific requirement of the cost share agreement is that:

Canada and Nova Scotia will have no obligation to make all or part of the funding commitment unless the Sydney Tar Ponds Agency:

  1. satisfies Canada and Nova Scotia that it has implemented or will implement, measures to mitigate any identified potentially adverse environmental effects
  2. incorporates, utilizes and maintains environmental protection measures in relation to the Works that satisfy the requirements of all regulatory bodies having jurisdiction over the Works and certifies to Canada and Nova Scotia that it has done so. Certification must be provided with each claim for payment

PWGSC, in its role as RA and federal lead, and in concert with the Province, will facilitate the establishment and management of an Environmental Management Committee (EMC) which co-ordinates the expert advice of all federal and provincial departments, for the duration of the project. The EMC will comprise the primary mechanism whereby environmental requirements in respect of the Project are developed.

Additionally, through the PMC and on behalf of their respective governments, PWGSC and NSTPW will be responsible for ensuring that, as appropriate, the responses to the recommendations as detailed in this report pertaining to federal and provincial jurisdiction are implemented by the STPA as a condition of funding for the duration of the Project.

7.0 Project Definition

On the understanding that the GNS is in accord, the GC supports the refinement and implementation by the Proponent of the general remediation strategy identified as "the Alternative" for purposes of the EA. In general, this remediation option calls for the avoidance of the removal and incineration of the more hazardous substances, in favour of a full containment, in situ treatment of all contaminated materials and capping including related site mitigation, monitoring and other remediation and community support measures. The GC notes that the Panel has agreed with the Proponent that the alternative approach is a technically and economically feasible means of carrying out the project. The RBA, undertaken by the GC in response to Panel recommendation #3, found that the Alternative is preferred over the Project owing to its relatively lower risks, higher benefits, and lower costs in most of nine analytical categories employed by the study. These categories included environment, human health, psycho-social/community stress, community acceptance, local benefits/economy, political, project implementation schedule control and costs.

Acceptance of the study's findings, on the part of the GC, requires the removal of incineration from the Project to be considered. Provided approval of this Response document, and specifically the GC response to recommendation number three, the removal of a portion of the worst contaminated materials and their subsequent thermal destruction will no longer comprise part of the overall remediation Project. Accordingly, GC responses to recommendation numbers 20 through 32, and recommendation number 37, will no longer be applicable.

8.0 Overview of Government of Canada Response

The GC welcomes the recommendations of the Panel, which will serve to substantially refine and enhance the overall approach to remediation of the STP site. The recommendations are fully consistent with the overall project objectives and guiding principles. The GC notes that, collectively, the Panel's recommendations reflect a pragmatic approach to ensuring a responsible and effective remediation of the site and, in particular, respond to the needs, values and concerns of affected parties and stakeholders.

The proposed federal actions set out below in the GC Response can readily be implemented under existing project authorities and budgetary allocations. The GC is prepared to continue working closely with the Province of Nova Scotia, the Responsible Authorities, and related partners and stakeholders, to implement the initiatives set out in the GC Response.

The GC is pleased to indicate that it agrees in principle with all of the Panel recommendations applicable to the GC and the preferred approach to remediation. Indeed, the GC agrees entirely with the vast majority of these applicable recommendations. In the few instances where the GC response deviates from specific details of the Panel's recommendation, the GC agrees with the objectives, spirit and intent of the recommendations but feels that these can be achieved through different means.

For all recommendations pertinent to the GC, the response below identifies the nature of the GC's agreement, and in all cases sets out how either the specific recommendations, or, where applicable, their spirit and intent will be addressed and implemented by GC actions.

As noted in the GC Response to individual Panel recommendations below, the GC agrees in principle with virtually all of the Panel's recommendations, and indeed agrees fully with the vast majority of them.

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