Limitation Periods for Environmental Cost Recovery Claims in BC Abolished

The government of B.C. recently passed legislation that will eliminate any limitation period previously applicable to actions to recover the costs of environmental remediation under the Environmental Management Act, S.B.C. 2003, c. 53 (EMA). Presently, the application of statutory limitation periods to cost recovery actions under the EMA is somewhat unclear, although the generally held view is that cost recovery actions are subject to either a two-year or six-year limitation period that is triggered upon a party incurring remediation costs.

Defendants to cost recovery claims can currently claim the protection of the limitation periods set out in the Limitation Act, R.S.B.C. 1996, c. 266, as s. 35(1) of the Contaminated Sites Regulation, B.C. Reg. 375/96 provides that a defendant may assert all legal and equitable defences in such actions, which necessarily includes defences related to limitation periods. However, exactly which limitation period under the Limitation Act applies to cost recovery actions has been a question that has never been squarely addressed by the courts in B.C. It has been argued that either the two-year limitation period (for damages in respect of injury to property) or the six-year general limitation period may apply to actions to recover the costs of environmental remediation.

The whole debate will soon become academic, as on June 1, 2013, the EMA will be amended to provide, in effect, that actions to recover costs for remediation of contaminated sites will not be subject to any limitation period. The legislative change is brought about by Bill 34, an Act that received Royal Assent by the B.C. Legislature on May 17, 2012. The main effect of the legislation is to bring the Limitation Act in line with the Alberta Limitations Act, R.S.A. 2000, c. L-12, in that most claims in B.C. will now be subject to a two-year limitation period. However, Bill 34 also specifically amends s. 47 of the EMA to state that notwithstanding the provisions in the Limitation Act, a legal proceeding may be brought at any time to recover the costs for remediation of a contaminated site.

The practical implications of this amendment will be wide-ranging. Even if remediation of a site has been completed and the associated costs have been incurred, an action to recover these costs could be made at any time no matter how much time has passed. As a result, the broad category of “responsible persons” under the EMA (for example, current and previous owners and operators, and persons that transported or arranged for transport of a substance) will be exposed to indeterminate future liabilities.

The amendment arguably undermines one of the stated goals of the EMA, namely the expeditious remediation and cost recovery of contaminated sites. The removal of all limitation periods for such claims arguably removes the impetus for plaintiffs and landowners to proceed with remediation and cost recovery on a timely basis.

It can be anticipated that Bill 34 will generate significant discussion about the increased level of exposure to cost recovery liability in contaminated sites brought about by the amendment. Pending further legislative changes, you should be aware that liability for cost recovery claims for contaminated sites will not be precluded by the passage of time or the status of remediation as of June 1, 2013.

If you have any questions about Bill 34 and its impact on you or your business, please contact Wally Braul, Mike Theroux, or Laura Gill.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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