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News Release – February 10, 2003

report coverReward for cleaning up urban contaminated sites as high as $7 billion annually, National Round Table report finds

Ottawa, February 10, 2003 — Canada could gain as much as $7 billion a year in public benefits if the thousands of contaminated properties that litter its inner cities were cleaned up and redeveloped, according to a strategy released today by the National Round Table on the Environment and the Economy.

The Round Table outlined a new national strategy designed to break the logjam and stimulate remediation and re-use of contaminated sites, often referred to as “brownfields”, in its report entitled Cleaning up the Past, Building the Future. The strategy was developed at the request of the Government of Canada.

The report estimates public benefits of redeveloping within cities, instead of developing greenfield land on the city periphery, at between $4.6 billion and $7.0 billion a year. This estimate excludes the direct commercial benefits realized by redevelopers and users of the remediated land. Many of the benefits would be created in areas adjacent to the brownfield sites, where property values would rise with the remediation of the derelict neighbouring land parcel.

City governments would gain substantial new tax revenues from increased property taxes and development charges. Public benefits also include reduced health risks, preservation of agricultural land, restoration of environmental quality and removal of health and safety threats, revitalized neighbourhoods, more compact and efficient urban development, improved air quality and reduced greenhouse gas emissions.

Brownfields are the legacy of more than a century of industrialization. They are the abandoned, idle or under-used commercial and industrial properties where past activities have caused known or suspected environmental contamination, but where there is potential for redevelopment.

There are as many as 30,000 brownfield sites across the country. They include decommissioned refineries, old railway yards, former gasoline stations and drycleaners, crumbling warehouses – anywhere where toxic substances were used or stored. These brownfields disfigure neighbourhoods and some pose health and safety risks.

The national redevelopment strategy released today focuses on the large group of brownfield sites that are in established urban areas and along transportation corridors, where municipal service infrastructure is in place. Barriers to redeveloping these high-potential properties include: lack of access to capital, regulatory liability risk, civil liability risk, limited access to insurance, regulatory delays, and stigma and risk perception.

“The key to unlocking the economic potential of these lands is changing the rules,” said David J. McGuinty, President and CEO of the Round Table. “The package of incentives, regulatory changes, and partnerships we recommend would stimulate Canada’s nascent brownfield redevelopment sector and allow it to become a multi-billion-dollar-a-year industry.”

The strategy includes:

  • Public sector investments. Governments should remove tax impediments and provide loans, grants and mortgage guarantees to lever large amounts of private capital for upfront redevelopment activities such as site assessment and cleanup. For example, governments could create revolving loan funds to make low-interest loans to public and private sector brownfield redevelopers.
  • Liability limitation. Set out a clear, fair and consistent public policy regime to bring certainty and efficiency to liability and risk management. This would protect brownfield redevelopment players (landowners, developers, lenders, insurers and municipal governments) from the open-ended liability that presently is a barrier to redevelopment. For example, provincial governments could issue regulatory approvals of brownfield site remediation projects that would terminate regulatory liability. They could also establish limitation periods for redevelopment players’ civil liability. Lawsuits could proceed, but the claims would be covered by a developer-funded insurance fund administered by the province.
  • Build brownfield redevelopment capacity and community awareness. Successful brownfield redevelopment projects are founded upon skilled, informed and supportive communities. This knowledge and these skills need to be fostered by government. For example, the federal and provincial governments could formulate an expedited approval process for demonstration brownfield redevelopment projects using innovative remediation technologies.

“We have developed a blueprint for the transformation of Canada’s brownfields into economically productive, environmentally healthy and socially vibrant centres of community life,” Mr. McGuinty said. “We can do it with the coordinated efforts of all levels of government, the private sector and community organizations.”

“This realistic, practical and innovative plan can establish Canada as a global leader in land remediation,” he said.

Economic benefits include new jobs and economic activity, increased tax base for all levels of government, increased competitiveness for cities, and export potential for cleanup technologies. Spending on brownfield redevelopment has a larger multiplier effect (up to 3.8 times) than any investment in any other sector.

“This is a bold departure from the status quo. It presents governments and private sector players with a chance to step outside the box that has imprisoned these sites’ potential,” said Angus Ross, the Round Table member who chaired the Brownfield task force.

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