I oppose this Fund as it…


I oppose this Fund as it facilitates species-at-risk destruction of their habitats. As soon proponents of harmful activities pay into the Fund they are automatically cleared more easily than ever to destroy species-at-risk and their habitats with impunity free from any damage liability.

Instead of completing beneficial actions for species impacted by those activities, proponents can contribute to a fund allowing a provincial agency to pool the resources and determine how best to implement long-term, large-scale and strategic protection and recovery activities benefiting “eligible species.”

The Fund supplements the damaging Endangered Species Act, 2007 amendments (ESA), passed in June 2019. Together, those amendments created numerous, overlapping means for developers and industrialists to avoid critical protections, providing those with short-term economic interests carte blanche to bulldoze, dig up, cut down and pave over the habitats of Ontario’s most vulnerable plants and animals.

1. Incentivises Habitat Destruction
The easier it is obtaining authorizations for harmful activities, the more likely they occur. This happened when the government introduced sweeping regulatory exemptions for proponents of harmful activities in 2013. According the Environmental Commissioner of Ontario, total ESA authorizations for harmful activities “drastically increased” after the introduction of the 2013 exemptions (ECO 2017 report, p. 227).
A disturbing example concerns one of the Fund species, the barn swallow. Prior to the exemptions, only two permits were granted for activities harming this threatened species. Once exemptions were possible, there were 525 authorizations (520 exemptions, five permits) between 2013 and 2017 (ECO 2017 report, p. 232). To put this in perspective, barn swallows declined by 65 percent in Ontario between 1966 and 2009. Habitat loss and degradation are thought to be a primary threat.
The Fund will make authorizations easier. By shortening timelines, reducing burdens and provide cost certainty” for proponents of harmful activities. The ministry anticipates that regulatory amendments associated with the Fund will “enable more proponents to register their activities rather than seek permits or agreements from the ministry.” This means more proponents will be able exempt their harmful activities from ESA requirements, rather than meeting more stringent requirements of permits or agreements.
2. Overall Benefit Standard Abandoned
The ESA was originally designed to provide some flexibility for harmful activities to occur, based on the premise that the proponent would undertake actions that would more than compensate for the damage done. They were required to provide an “overall benefit” to the species, a standard intended to uphold the purpose of the ESA in protecting and recovering species at risk by achieving a net gain as opposed to merely mitigating damage (making activities less harmful).
The 2013 exemptions were the first disastrous setback to the overall benefit standard. According to the Environmental Commissioner, “few activities now are proceeding under the overall benefit approach – the vast majority of activities are proceeding under exemptions that only ask proponents to minimize harm” (ECO 2017 report, p. 236).
The Fund is the final, fatal blow to overall benefit because, as set out in the amended ESA (sec. 17(2)(c)(i)), payment into the Fund is an alternative to the provision of overall benefit. There is no link in the amended ESA between the Fund and the provision of overall benefit, and no requirement that the benefit be proportionate to or related to the harmful impact. In this sense, the Fund is a gross abandonment of the overall benefit standard and thus of the goal of recovery itself.

3. Funds Loosely Tied to Species and Communities Negatively Impacted
MECP is proposing, in the initial stages, to include six species in the Fund scheme: bobolink, eastern meadowlark, barn swallow, butternut, eastern whip-poor-will and Blanding’s turtle. With the exception of whip-poor-will, these species are currently those most frequently affected by activities authorized under the ESA (ECO report, p. 232). Of these species, the first four are subject to regulatory exemptions, meaning that proponents do not need a permit or agreement to undertake harmful activities. Instead, they must meet the conditions for an exemption, set out in the regulation. In the case of whip-poor-will and Blanding’s turtle, where ESA permits are still required, the Fund offers a quick and easy alternative to providing an overall benefit.
Note that habitat loss and degradation are key factors in the decline of whip-poor-will, bobolink, meadowlark and Blanding’s turtle and thought to be a factor in the decline of barn swallow. To the extent that the Fund facilitates and accelerates habitat loss through exemptions or permits without the provision of overall benefit, it will accelerate the decline of these species.
Additionally, payments to the Fund would be pooled and used to benefit any Fund species, not necessarily those being impacted.. There is also a strong likelihood of significant delays between the harmful activity and any reparative action. Depending on political priorities or on the availability or convenience of compensating activities, there is a distinct possibility that some species or parts of their range will be sacrificed, to the benefit of others.
Not only species will lose out, but also communities where harmful activities take place. There is no requirement for Fund monies be used to compensate for negative environmental or social impacts in watersheds, municipalities or Indigenous traditional territories where the harm occurs. Some communities will see valued natural areas destroyed or degraded, possibly with no local reparation whatsoever for the loss of ecological, cultural, spiritual, recreational, aesthetic or economic values.
Payment into the Fund means that someone, somewhere, at some point will undertake activities to provide some level of benefit to the species for the harm done. Activities supported by the Fund need only be “reasonably likely” to benefit the species harmed. All in all, there’s no certainty for the species or communities impacted, but the proponent gains the certainty of being able to walk away scot-free regardless, once they pay into the Fund.

4. Fund Charges Do Not Address Risk and Liability
MECP has provided formulas to calculate the fee to be charged to proponents of harmful activities. These charges include costs for the compensating activities (including monitoring), land (where applicable), administration (10 percent) and inflation. The amount of the benefit to be generated is to be based on a 1:1.5 ratio, so that, for example, the loss of 1 hectare of habitat requires the provision of 1.5 hectares of new habitat nut the quality or functions of the replacement habitat are not considered. The replacement ratio is roughly based on the costs incurred by proponents to date in meeting the conditions of their ESA permits. Whether these expenses have been sufficient to achieve the required outcomes is unknown, due to a lack of monitoring and testing for efficacy, indicating a weak rationale for the ratio.
While it is good to see monitoring, land values and inflation factored into the charges, these tidy formulas fail to take into account the significant risk associated with offsetting the harm done. According to the International Union for the Conservation of Nature, biodiversity offsets generally have very limited success and net gains are rarely realized in practice (IUCN, 2014, p. 10). The World Bank Group has flagged offsets involving habitats of “highly threatened ecosystems or species” as particularly high risk (World Bank Group, 2016, p. 14).
The Fund, as discussed above, will likely to encourage much broader use of risky offsets for threatened and endangered species. Risks outlined by the World Bank Group include: impacts that may be hard to measure directly; the failure or only partial success of the offset; potential lower quality or conservation value of the replacement habitat; and temporal lags between the harm done and the full realization of the compensation provided (World Bank Group, p 20). No assessment of or compensation for these risks is factored into the proposed Fund charge formulas.
The formulas don’t to account for liability. Under permits and exemptions, proponents of harmful activities are responsible for ensuring that the compensating activities are implemented. There is value to the proponent of being absolved of liability, but it’s not reflected in the formulas. After proponents have completed their work, who is legally responsible if Fund actions fail to produce the intended result? The answer to this question is disturbingly unclear. But then again, perhaps the Fund itself eliminates the need to even consider liability, given the low bar that has been set: actions funded need only be “reasonably likely” to “support” the protection or recovery of Fund species.
Overall, based on the formulas, the fees to be charged to proponents of harmful activities are too low, especially considering that the Fund is expected to pay for itself within a year.

5. No Long-term Government Financial Support
The government will initially invest in setting up the Fund, including establishing an agency with a small board and staff for administration. After the first year, MECP anticipates that the agency will be financially independent. In other words, it expects all costs to be covered by the Fund itself. A key concern about this approach, considering the responsibilities of the agency, is that the 10 percent administration fee is unlikely to fully cover costs (e.g., staff salaries, per diems for board members, secretarial support, research, overhead). If 10 percent is insufficient, will funds be diverted from the compensatory actions to cover these costs? What conservation outcomes will be sacrificed for efficiency? Is the Fund supposed to displace current government investments in species at risk protection and recovery, including staffing and other government funds (e.g., the Species at Risk Stewardship Fund). Will the government continue to invest its own money at previous rates, or is it looking at the Fund as a cost-saving measure?

6. No Transparency and Public Accountability
In administering the Fund, the agency responsible is “to publicly communicate its focus for funding, by submitting to the ministry and publishing a plan for each conservation fund species before any funds are disbursed for the species.” It will also release annual reports that document “information about funded activities.” There is no requirement or expressed intent, to publicize the specific or cumulative impacts of proponents’ harmful activities (e.g., where the harm occurs, what type of activity or impact, who is responsible, the total area damaged or destroyed) making it impossible for the public to:
i) assess whether the Fund actions are commensurate with the level of habitat destruction caused by the authorized activities.
ii) track cumulative adverse impacts across the ranges of species at risk.

7. Conclusions
For all the above reasons, I oppose the government’s plan to proceed with implementing the Fund. It will lead to an increase in habitat loss and degradation, a primary threat to most of the Fund species. Insofar as the Fund circumvents the overall benefit standard, it works against the protection and recovery of at-risk species. It fails to account for adverse environmental, cultural and economic impacts on communities or for significant additional risks to species already threatened with extinction. It also fails to ensure transparency with respect to site-specific and cumulative harm to the habitat of at-risk species.