OTTAWA — Two companies are on the hook for looking after a mercury-contaminated site near Ontario’s Grassy Narrows First Nation, the Supreme Court of Canada has ruled.

The 4-3 decision Friday brought some clarity to a long-running dispute over one element of the legacy of environmental poisoning that has caused significant health problems for many residents.

Eight years ago, the Ontario government ordered Weyerhaeuser Co. and a firm that later became Resolute Forest Products to care for a mercury waste-disposal site in Dryden, Ont., where toxic material from a pulp-and-paper mill’s operations entered the English-Wabigoon River system in the 1960s.

The order obligated the two companies to repair site erosion, do water testing, file annual reports, prevent any leaks and give the Ontario Environment Ministry $273,063 as financial assurance with respect to the site.

The companies claimed that an indemnity granted in 1985 to the owners of the paper facility at the time — part of a settlement with the Grassy Narrows and Islington First Nations — applied to them as well, but the province disagreed.

An Ontario judge ruled in favour of the companies in 2016, saying the language of the indemnity should cover the two subsequent owners as well.

However, the Ontario Court of Appeal found Resolute was not entitled to indemnification and said the lower court should decide whether it applied to Weyerhaeuser.

In its decision, the Supreme Court said the 1985 indemnity does not apply to the province’s 2011 environmental order, meaning the companies are liable for the costs of carrying it out.

A majority of the high court substantially agreed with the Ontario appeal-court’s reasoning, concluding the judge who initially heard the case made “palpable and overriding errors of fact.”

This report by The Canadian Press was first published Dec. 6, 2019.

The Canadian Press

Mike Anderson
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