Province allowing aggregate operators to run circles around it, failing to enforce legislation, Auditor General finds

The looming conversion of prime agricultural land to a blasting quarry, with the potential to contaminate surrounding water sources, has concerned residents of the hamlet of Cataract for the past year.

The 800-acre plot of land in the heart of the headwaters region is the subject of an application by the multinational aggregate industry giant that owns the property. 

The Town of Caledon is entrenched in a disagreement with Canadian Building Materials, a subsidiary of the Brazilian company Votorantim Cimentos. A year ago the Town received an application for an official plan and zoning bylaw amendment for the mega quarry. Community opposition was widespread and the Town made the decision in October 2022 to enact an interim control bylaw on new aggregate operations across the municipality while it worked to update its outdated aggregate policies. 

Caledon is just one example of a municipality going head to head with the aggregate industry which, through avenues like the Ontario Land Tribunal, has traditionally been allowed to do as it pleases, transforming large areas of the province into moonscapes with gaping craters where earth is extracted for the construction industry. 

A recent report released last month by the Auditor General of Ontario’s office found the Aggregate Resources Act is often ignored by the Ministry of Natural Resources and Forestry when the aggregate industry behaves questionably, evading consequences for non-compliance, while the Ministry is ill equipped to handle the unrelenting spread of aggregate operations across Ontario. In some cases, aggregate industry officials even said the lack of proper enforcement by the Ministry puts companies in a bad light, limiting their ability to work directly with communities, instead often butting heads with local residents. 

“Our audit found that the Ministry is falling short in balancing its competing roles of facilitating the extraction of aggregate resources and minimizing the impacts of aggregate operations, particularly through its role in regulating the industry to ensure approval holders comply with all necessary requirements,” acting Auditor General Nick Stavropoulos commented following the release of the report on December 6.

The audit’s findings include:

• There is a significant shortage in aggregate inspectors contributing to low and declining inspection rates;

• Despite high rates of non-compliance — aggravated by lack of enforcement of self reporting and low extractions fees — the Ministry rarely pursued charges;

• There is no process in place to ensure sites are rehabilitated when extraction is complete;

• The Ministry has not provided complete or accurate information to the public on the demand for aggregates;

• There is little to no incentive for using recycled aggregate as an alternative to virgin materials; and 

• Information systems are severely outdated, making all administrative duties incredibly difficult.

The audit notes that success relies entirely upon a system that implements harsh punishment for industry players who neglect to follow regulations; however, the Ministry has neglected to enforce the rules, resulting in what one advocate called a “free rein” for aggregate operators. Sam Demby, communications director at the Reform Gravel Mining Coalition (RGMC), also called it a “regulatory failure”.

The audit provides 18 recommendations and 31 action items to be implemented by the Ministry of Natural Resources and Forestry (MNRF) to regain control over a rapacious industry. Of the recommendations, the Ministry responded in agreement with just seven — or less than 40 percent. The remainder were acknowledged without providing a commitment for improvement.

“Until we see a real plan and timeline for implementing those recommendations, we can't be satisfied with the Ministry's response,” Demby said, highlighting the inadequacy in the claims that the Ministry was already undertaking most of the action items.

The Reform Gravel Mining Coalition partners with community organizations. Here, a representative speaks with members of the Forks of the Credit Preservation Group on its opposition to the Cataract blasting quarry.

(Alexis Wright/The Pointer)

The RGMC, a partnership of four environmental groups aimed at protecting communities and the environment from unnecessary aggregate extraction, has renewed calls for a moratorium on all new aggregate operations across Ontario. The call first came in 2022 when the consortium developed partnerships with approximately 40 community groups standing in opposition to new pits and quarries. RGMC is reigniting its demands for a moratorium now until the recommendations from the Auditor General have been implemented by the Ministry.

“It's a moratorium on new approvals. Existing licenses and permits and gravel mining operations will continue to operate. It’s just saying that we've recognized there's likely an oversupply, the Ministry's data is insufficient to show that there's any need for new pits,” Demby said. “The Auditor General has shown that there's a broken system. That it's not regulated sufficiently. So why would we give out any approvals? That's just a recipe for disaster.”

Aggregate extraction in Ontario is governed by the Aggregate Resources Act which sets out guidance for the MNRF to facilitate aggregate extraction while simultaneously regulating the industry to avoid negative impacts. The purpose of the Act is to provide management of resources to meet demand, regulate operations on private and Crown land, minimize adverse environmental impacts of extraction and require the rehabilitation of land from which aggregates have been extracted. Failure to uphold the Act leaves one of the province’s most controversial industries without oversight.

Community backlash to aggregate operations has made headlines in places like Caledon, North Dumfries, Puslinch, Clarington, Kawartha Lakes and Ottawa. The geography of the opposition is not random, these are some of the environmentally sensitive areas across Ontario where new and existing quarry expansions are being proposed. Locations for aggregate extraction are decided upon based on two factors: the natural disposition of quality aggregate: and need, balancing the physical location of operations with where the material will be used is a key in determining where to extract. The vast majority (90 percent) of aggregates extracted across the province between 2013 and 2022 were from southern Ontario, many in the fastest growing regions where construction activity continues to boom.

As development continues to encroach into sensitive lands surrounding existing built-up areas across the GTHA, pushing up to the boundaries of the Greenbelt, issues around aggregate operations are intensifying. 

The retreat of the Laurentide ice sheet some 13,000 years ago is responsible for the gouging of the Great Lakes and the deposits of the Greenbelt and Niagara Escarpment. The same geographical phenomenon that created some of the richest soils for farming and the largest source of freshwater globally also left massive deposits of sand, silt and crushed stone. The Greenbelt holds some of the province's most sensitive ecosystems and fertile soils, along with some of the largest mineral deposits. Queen’s Park has often sided with the aggregate industry which fuels development, which brings substantial revenue to provincial coffers.

Ontario Green Party Leader Mike Schreiner has tabled a Bill prohibiting new pits and quarries in the Greenbelt, but it has yet to receive traction within the legislature.

His main concern is something dubbed the “no need to show need” policy under the Provincial Policy Statement. In order to apply for a new extraction license, aggregate operators have no duty to prove that the aggregate is actually required for any particular construction project. The Ministry does not study or use supply and demand metrics.

“Still the province doesn’t study supply and demand,” Schreiner told The Pointer. “Whereby we'd have a sense of how much building are we really going to need to do over the next 20 years and how much aggregate are we going to need? And do we already have enough pits and quarries in operation that sufficiently supplies that aggregate? And I think that's information that is very relevant to know before we start approving more pits and quarries.”

In 2016, the MNRF commissioned a study on aggregate supply in the Greater Golden Horseshoe Region which encapsulates much of the growth in southern Ontario. It concluded the region would consume an estimated 111 million tonnes of aggregate per year over the next 20 years and the area had reserves of 3,337 million tonnes, far greater than the projected demand over two decades. However, the consultant who conducted the study highlighted limitations with the technologies used to study the supply and thus cautioned against using the total as a definitive number. The aerial photos used in the study were from 2002 and no operators participated in the research. Field verification — samples from existing sites or drilling boreholes into unused reserves — was not used.

“That just shows us that this framework of balancing development needs and protecting communities in the environment is a false one that's been set up by the industry, because the Ontario development needs can be met within the current supply that exists,” Demby said. “Neither the industry nor the ministry has demonstrated that there's any real need or any danger that those development needs won't be met.”

The Ministry undertook an updated study in 2023, anticipated to be completed by the end of the year. Again, the involvement of industry players was voluntary and in order to maintain anonymity, there was no way to verify information, leaving a risk of inaccurate reporting. According to The Ontario Aggregate Resources Corporation (TOARC), on average, 157.4 million tonnes of aggregate has been extracted annually from registered pits and quarries over the past 10 years. 

The information that is collected is seldom made available to the public; the 2016 study found that less than half of the aggregate deemed as potential supply was of high quality. 

“Absent information on supply and demand, many stakeholders have concluded that there is an oversupply of aggregates already approved for extraction,” the AG report points out. “This contributes to frequent opposition to proposals for new or expanded pits and quarries.”

Development applications pushed by the PC government — like Highway 413, the Bradford Bypass and countless warehousing projects — could dramatically alter the need for aggregate.

(Alexis Wright/The Pointer)

The reluctance to be fully transparent on supply and demand of resources has created more skepticism among community members. Studies have shown the construction of Highway 413 and the Bradford Bypass would require an estimated three million tonnes of aggregate.

Aggregates are necessary building materials and the greater the population growth, the greater the demand for aggregates will be. However, in an effort to promote sustainability within the building industry, recycled aggregate is becoming an increasingly larger player. Recycled aggregate is crushed concrete and pavement, processed in existing pits and quarries or other facilities, and used in new projects. The use of recycled aggregate limits the volume of construction materials in landfills and decreases the need for new and expanded pits and quarries. 

While the Provincial Policy Statement states that aggregate resources must be conserved where feasible, the MNRF does not possess the authority to increase the use of recycled aggregate solely. In 2022, pits and quarries licensed to produce recycled aggregate reported a measly 1,000 tonnes of recycled material, not including recycled aggregate from offsite facilities. The most recent estimate, although almost 20 years old from 2006, suggests recycled aggregate makes up a mere seven percent of aggregate used across the province. The audit found that the Ministry is doing little to incentivize this more sustainable alternative.

While Ontario does capitalize on its ability to charge a fee for virgin aggregate production, the fee is so little that it does very little to incentivize the use of recycled aggregate and barely scratches the surface of costs for production. The province charges a fee of $0.23 per tonnes, making up approximately one to three percent of the estimated cost of virgin aggregate. A study commissioned by the Toronto and Region Road Builders Association estimated the costs to deliver virgin aggregates to build major roads in four sites across the region would cost $22 to $24 per tonne. The use of recycled aggregate could decrease this cost by $8 per tonne. The fees charged by the province of Ontario pale in comparison to the United Kingdom which sets a price fee of $3.20 per tonne. The UK also has a much higher rate of recycled aggregate use.

Regardless of the location of aggregate extraction and the type of material being used, the MNRF received scolding from the Audit General for its failure to properly inspect aggregate operations and issue fines for non compliance. 

The fact that one aggregate company was reported extracting 1,800 percent more material than it was licensed to, and managed to evade a fine from the Ministry, is a huge cause for concern for communities and industry stakeholders. In fact, in 2022, three companies were reported to have extracted more than 1,000 percent of their allowance. None of the three were fined.

These three cases are symbolic of an industry plagued by non compliance. In 2018, the MNRF published its final Performance Measures Annual Report for which, of the 1,693 inspections conducted in 2017/18, the compliance rate for pits and quarries was 38 percent. Similar numbers were reported for the previous three years. This rate of compliance is significantly lower than other Ministry supported activities including forestry (91 percent) and petroleum exploration, extraction and production (63 percent).  

Demby said this level of non-compliace is able to persist because there is no accountability on the part of the province.

“The province is failing to minimize the negative impacts for communities and the environment,” they said. “And so residents and municipalities are bearing the brunt of these negative impacts, and when they go and make complaints to the province, or to the MNRF. They're not receiving any response.”

Despite high rates of non compliance, the audit found that Ministry inspectors rarely enforced compliance tools available to them. The audit dictates that between 2018 and 2022, 432 sites had not paid the annual fee required under the Act for at least one of the five years and 41 of these sites had not paid the fee for all five years. Regardless of the non compliance by a large chunk of the industry, the Ministry only issued two fines for a combined total of $1230, a scant 0.4 percent of the total amount of outstanding fees. In fact, the number would be even larger given that 649 production reports were not submitted in that five year period and thus fees were not calculated for those sites. 

Fees can also be imposed for other issues caught upon inspections of industry operators' failure to comply with the Act. In order to pursue a charge, Ministry inspectors must report violations to the Enforcement Branch. The audit notes that between 2018 and 2022, only 26 referrals were made to the Enforcement Branch, despite identifying 3,404 violations.

But the audit found that the Ministry has very weak incentives in place to enforce compliance. Although the Act gives the MNRF legislative ability to do so, it does not charge interest or late fees, essentially allowing industry players to pay their fees whenever they see fit. In 2022, the Ministry instated tickets as a compliance measure, and while the audit notes it is early to determine the effectiveness, the ticket amounts are very low. A ticket for failure to pay the annual aggregate fee is almost $100 less than the minimum annual fee, essentially acting as a new annual fee for operators. 

Annually, operators are required to self-report on their operations throughout the year. While these reports do not replace industry inspections, they help the Ministry to track information on the amount of aggregate produced and other data requirements — although the databases to track this information are severely lacking. An analysis of 2022 reports from four Ministry offices determined that 25 percent of all 1,030 operations within those four jurisdictions had failed to submit a report more than seven months after the deadline. The audit further noted that approximately 15 percent of reports received were incomplete or poor. Under the Act, failure to submit a report results in an automatic suspension of license; however, this was seldom enforced, allowing operators to continue to extract without any reporting measures.

Inspections reached a low in 2020 and 2021 largely due to the COVID-19 pandemic, however, the decline of inspections began prior to lockdowns and continued once pandemic measures were lifted.

(Ontario Auditor General)

Perhaps more damning is that the actual rates of non-compliance are likely much higher, but remain unidentified due to infrequent inspections. The audit identified that since the election of the Ford government in 2018, inspections have decreased 64 percent (with troughs in 2020 and 2021 due to the COVID-19 pandemic). 

In its research, the Auditor General’s Office examined inspection records from 80 randomly selected sites within four Ministry offices — Aurora, Bancroft, Guelph and Thunder Bay. Over the past five years, only 35 percent of these sites had been inspected. Due to the anomaly of the COVID-19 pandemic, just inspections from 2022 were also analyzed. In 2022, the Aurora office had inspected 22 percent of its operations. The other three offices inspected less than five percent.

“In the absence of regular inspections, the Ministry cannot verify that pit and quarry operators are meeting all of their operating conditions, rehabilitating their sites as required, and properly self-reporting any non-compliance issues,” the audit states. “Indeed, we found the lack of inspections was frequently raised as a concern. Community groups and neighbours of aggregate operations complained to us of dust, noise and vibration impacts going unchecked by the Ministry.”

Of the inspection reports that were completed, the audit expressed that they are often incomplete or of poor quality. An analysis of the reports for the same 80 sites discussed above found that 39 percent did not present evidence that all key elements had been inspected, 20 percent had no notes attached, and 50 percent of the reports that required corrective action did not include required photographs. Forty-five percent of reports deemed the site was “in-compliance” despite noting some individual actions as non-compliant and requiring remedial action.

The likely culprit for the lack of enforcement is a low number of experienced inspectors able to undertake the tasks. While the total number of integrated resource management technical specialists (IRMs), as the inspectors are called, increased 55 percent between 2022 and 2023, many district offices still experienced vacancies and high rates of staff turnover, with two districts without any inspectors. Only 16 inspectors conducted field inspections in 2022 and 27 percent of those inspections were conducted by a single inspector. 

The audit notes in interviews with industry inspectors that the role is challenging and demanding, shedding light on the difficulty of hiring and retaining staff. 

In April 2023, the Ministry launched a formalized training program for inspectors with an adopted mentorship onsite training component to increase knowledge and skill. However, given the difficulty retaining staff, meaning there are very few senior staff available, the Auditor General notes that this goal may be difficult to achieve.

The Provincial Policy Statement states extraction is an act of an “interim nature” meaning that pits and quarries must be rehabilitated once extraction is complete. Due to the high cost of rehabilitation in comparison to the annual fee to keep the license for the pit or quarry, many sites are left dormant for years. Extraction data provided by TOARC found that 1,542 sites reported zero aggregate extraction in the past 10 years, making up approximately the same land area as the City of Brampton. Of these sites, 257 had reported no extraction since 1998.

“A site may sit dormant because it does not have the specific type or quality of aggregate in demand by the local market at a point in time (and shipping heavy aggregates to farther markets can be prohibitive), but may still have reserves of other aggregates that can potentially be used for future projects,” the audit notes. “However, for sites that have sat dormant for many years, there is a risk that those sites have, in fact, finished extraction and are avoiding rehabilitation efforts.”

Complete rehabilitation often involves the creation of a lake or pond like this pit in Caledon which has been turned into a local swimming area.

(Alexis Wright/The Pointer)

Full rehabilitation is possible and the audit notes several successful examples, namely a former pit in Cambridge which was transformed into an aquaculture farm. But rehabilitation takes time and money and there is no enforcement on when the transition must begin.

The issue of rehabilitation existed long before the Ford government came into power. In the late 1990s, a large chunk of the fees paid by operators for rehabilitation was returned to the industry. The MNRF made the decision to return almost $50 million to the aggregate industry, keeping only a small percentage for rehabilitation in what Demby calls “a gift given by Mike Harris to the industry.” This gift largely persists today in the government’s failure to regulate the industry.

As the RGMC prepares to celebrate its second anniversary in January, Demby said the audit is welcomed and has been vindicating for an organization that has been very vocal on the problems within the industry and the system. 

“So now the next step is how do we get these recommendations to be implemented and not just have this be another Auditor General's report that gets put in a file cabinet and stays there,” they said. “We're going to be mobilizing so that there's a real push for these recommendations to be put in place and no new approvals until that happens.”

Email: [email protected]

Twitter: @rachelnadia_

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