By Pepper Parr
BURLINGTON, ON. June 25, 2013. The banking business has changed. There was a time when they wanted rights to your first-born and they would loan you a reasonable amount of money. Now securing everything that is near and dear to you isn’t quite enough – the banks want to know what you are going to do with the money and if they feel you are making a contribution to society then they will lend you some money with the understanding that they still have a lien on your first-born.
Banks now have a second level CEO – this one is a little softer with not quite the same number of stock options that the real Chief Executive Officer has but it is seen as a socially responsible position while the real CEO had better improve the assets on the books and keep the costs down – even if that means throwing the well qualified Canadian technical workers under the bus and outsourcing all that code crunching work to some guy in a cubicle somewhere in Mumbai where there isn’t a Labour Standards Board because there are no standards.
This second level CEO is the Chief Environmental Officer. TD Bank has one and she had quite a bit to say for herself in a Globe & Mail interview she gave awhile back.
Karen Clarke-Whistler is Toronto-Dominion Bank’s other CEO – its chief environment officer. The role doesn’t exist in any other large North American bank, and gives her unique power to influence TD decisions in every aspect of its business. Ms. Clarke-Whistler, who spent most of her career as an environmental consultant, joined the bank in the newly created role in 2008 and has helped turn TD into an environmental leader.
When taking a charge on commercial property, banks run the risk of having to manage an environmental problem if, in fact, the borrower defaults. It is therefore in the lender’s interest to understand the known condition of the site, AND to know what the “go forward” risk may be.
Further complicating this matter is the federal vs. provincial jurisdiction issue. Municipalities (even if they choose to get involved in a “private” dispute between land owners) are unlikely to have much clout with Environment Canada, and if the Ontario Ministry of the Environment has no jurisdiction, they’re very unlikely to be interested unless there is substantive damage to the natural environment that can be proven to be caused by activity at the air park. It’s anyone’s guess how the MOE would interpret the terms “substantive” and “proof”. Suffice it to say that any aggrieved landowner will have to incur the cost to of furnishing the evidence of actionable environmental damage.
Which means that if any action is brought against the air park through the far more likely process of civil litigation, the bank could potentially get dragged in.
Banks don’t like this.
It is therefore incumbent on the lender to have undertaken thorough due diligence BEFORE placing their charge on title. Whether TD performed an adequate assessment of environmental risk in this case remains to be seen.
Ms Whistler obviously didn’t do any environmental assessment on the Burlington AirPark. This is probably the most anti environment project that has ever taken place on the newly created Green Belt.
Smooth talking will outwit the environment any day. Perhaps the TD bank should have a look at how much it will cost to restore the damage done. They may have trouble with loan repayments.
Talking about the environment does not make one an environmentalist no more than standing in a garage makes one a car.