On January 31, 2019, the Ontario Court of Appeal released its decision in Belwood Lake Cottagers Association Inc. v. Ontario (Environment and Climate Change), 2019 ONCA 70.
The decision turned on the interpretation of “lot or parcel of land” in the Ontario Water Resources Act, R.S.O. 1990, c. O.40, and includes a clear and succinct explanation of the regulatory regime that governs sewage systems in Ontario.
The Grand River Conservation Authority (“GRCA”) owns five parcels of land in two large tracts in southwestern Ontario. Each tract has a water reservoir constructed for flood control (Bellwood Lake and Conestogo Lake). The GRCA leases land on the shorelines of these two lakes for private cottages. While each lease references a “lot number” with boundaries shown on a schedule attached to the lease, the land itself has not been subdivided. There are now approximately 733 cottage sites, and each has its own septic system. The evidence was that both lakes have experienced algae blooms in the past that are likely influenced by high phosphorous concentrations traceable to faulty septic systems.
The issue was whether these septic systems are subject to the jurisdiction of the Ministry of the Environment (“MOE”) under the Ontario Water Resources Act (“OWRA”) or the jurisdiction of the municipality under the Building Code Act, 1992, S.O. 1992, c. 23 (“BCA”).
As the decision explains, if the OWRA applies, then each septic system would require an Environmental Compliance Approval (“ECA”) under the Environmental Protection Act, R.S.O. 1990 c. E. 19. This involves an application fee of $800 and a sewage system inspection with the obligation to repair any defect discovered. If the BCA applies, the evidence was that the owners had no additional obligations.
Section 53(6.1) of the OWRA requires an ECA for each septic system if:
(a) the sewage works have a design capacity in excess of 10,000 litres per day;
(b) more than one sewage works is located on a lot or parcel of land and they have, in total, a design capacity in excess of 10,000 litres per day; or
(c) the sewage works are not located wholly within the boundaries of the lot or parcel of land on which is located the residence or other building or facility served by the works [emphasis added].
The decision turned on whether the relevant lots or parcels for the purpose of determining total design capacity were the five parcels owned by the GRCA or the individual leasehold “lots” created by the leases with the GRCA.
The Regulatory Regime that Governs Sewage Works in Ontario:
As mentioned above, the simple overview of how sewage works are regulated in Ontario comes at paragraphs 43 to 47, which provide, in part:
 … the OWRA and the BCA create a complementary system to regulate the construction and operation of sewage works — works that are obviously potential sources of pollution. The intent of both statutes is that locations generating a lower volume of sewage (less than 10,000 lpd) are regulated by municipal building authorities under the BCA and the Building Code, and locations generating a volume of sewage greater than the 10,000 lpd threshold are regulated by the MOE under the OWRA…
 The municipal regime is complemented by s. 53 of the OWRA, which regulates tracts of land that produce a larger volume of sewage in a regulatory framework that focuses on the broader environmental impact of sewage on water and watercourses, rather than on construction-level requirements only. This is in keeping with the expertise of the MOE, as recognized by the case law, and the recognized need to consider the collective impact of multiple sources of pollution on the environment.
The Court of Appeal agreed with the application judge that “a lot or parcel of land” under the OWRA means a parcel of land that can be legally conveyed. Since the leasehold interests were only with respect to use of the land, and not ownership, these leasehold lots were not deemed to be a “lot or parcel of land” for the purpose of the OWRA. The result was that section 53(6.1)(b) of the OWRA applies because there was more than one septic systems on each of the five parcels of land and in their aggregate the design capacity is well in excess of 10,000 litres per day.
Reading between the lines, one is left with the impression that the municipality may not have had the resources to deal with the daunting task of inspecting all 733 septic systems, and that the MOE was simply better suited to the task. However, it should be noted that municipalities do have the necessary legislative authority to establish sewage system maintenance and inspection Programs in sensitive water areas. For more information on these programs, see the Ministry of Municipal Affairs and Housing’s overview here.
 While not explained in the decision, a septic system meets the definition of a “building” in section 1(1) of the Building Code Act, 1992, S.O. 1992, C. 23, which reads: “‘building’ means… (c.1) a sewage system”. Sewage systems are further defined in Article 126.96.36.199. of Division A of the Building Code (Ontario Regulation. 332/12), and limited to those that are situated wholly on the property of the building they serve with “a design capacity of 10,000 litres per day or less.”
 This will vary in different municipalities since the Building Code Act contains sufficient authority for a municipality to establish sewage system maintenance and inspection programs, and many have. It should also be noted that a faulty septic system that was actually leaking sewage into the environment would contravene the EPA.