By Nick Stewart
A recent round of changes to the Aggregate Resources Act adds coverage to two-thirds of the unregulated aggregate production in Ontario, providing some Northern municipalities with newfound fee revenues.
Effective Jan. 1, 2007, the changes increase the number of areas regulated by the Act, which now include Muskoka, Parry Sound, Haliburton as well as parts of Algoma, Nipissing, Sudbury, Manitoulin and Thunder Bay.
Unregulated private lands in Ontario annually produce 15 million tonnes of aggregate; these changes reduce the number to 5 million tonnes.
Aggregate companies operating in these areas must now pay fees to the province as well as the local municipality.
They must also conduct environmental impact reviews and provide site plans before applying for resource extraction permits. After completing their work, companies must also rehabilitate the land to its prior state.
Such changes are beneficial for the industry as well as the recently added municipalities, according to a Muskoka-area construction company.
“I think it’s extremely positive for everyone involved,” says Don Peart, president, Fowler Construction.
“It puts regulation into the industry, and the quality operators have nothing to fear from it, as they’re doing most of those things now. The marginal operators are going to be raised to a higher standard and be accountable for their operations.”
Fee increases are also part of the new round of changes, with annual costs nearly doubling after remaining static since 1990. The minimum royalty rate for work on Crown land will change from 25 cents per tonne to 50 cents per tonne.
On private land, the annual license and wayside permit tonnage rate has changed from 6 cents per tonne to 11.5 cents per tonne.
Revenue from these fees will be split between the province, who will roll the funds into hiring more compliance inspectors, and area municipalities.
Peart dismisses the fear of widespread financial hardship and bankruptcy among smaller companies as baseless. He points to the fact that there are more aggregate producers in the Toronto area now than there were when the Act was first instituted in Southern Ontario in the 1970s.
He also identifies the new costs from fee increases as being minimal to individual operators, who will likely institute minor price increases to compensate.
Brian Messerschmidt, manager of aggregate and petroleum resources with Ministry of Natural Resources, points to Sudbury as an example of what benefits will be available to a Northern Ontario municipality with a moderately low aggregate production.
Averaging 600,000 tonnes of aggregate per year, the city will likely see an additional $45,000 in annual income as a result of the new fee structure. However, as this structure is based on a company’s estimated future production, municipalities won’t receive fee revenues until September 2008.
The revision of the Aggregate Act will change the yearly total income derived from fees and royalties to $18 million from its previous total of $9 million, with $4.5 million of the new total being dispensed to the newly added municipalities.
Up to 400 licensed operators extract 170 million tonnes of aggregate every year in Ontario, says Messerschmidt, who adds that the province’s goal is to eventually apply the Act universally across the province to provide a level playing field for all aggregate producers.
Although some have argued that the fee adjustment is insufficient, reaction to the changes among northern municipalities has been positive.
“Certainly, the change in the fee was welcome, particularly for those municipal governments who have a lot of pits and quarries and whose roads and bridges take a great deal of punishment,” says Pat Vanini, executive director, Association of Municipalities of Ontario. “As for increasing the designated areas, it’s good to see Ontario is boosting economic generators and getting them within a regulatory framework.”
The association itself is largely pleased with the amendments, though more could have been done to prevent future decade-long lapses between fee adjustments, she says.
“The only area where we’re a little disappointed is that we didn’t get an automatic fee review tied to a consumer price index or something like that.”
