Require oil tank removal

Legal Memorandum

Read the legal version from Lidstone & Co.

Home heating oil systems are among the most carbon-intensive residential heating options and pose environmental and safety risks due to potential soil and groundwater contamination from leaking tanks. To support climate action and environmental protection, local governments in British Columbia are exploring pathways to require the removal of home oil tanks and promote low-emission alternatives such as electric heat pumps.

Municipalities may leverage Development Permit Areas (DPAs) designated for energy conservation or GHG reduction to require connection to a non-oil heating system when a property undergoes major alterations, additions, or new construction. These requirements must be tied to external systems or features, as local governments cannot regulate internal building systems under the Building Act. Alternatively, municipalities may establish local service areas to offer financial assistance or on-bill financing for oil tank removal and replacement, potentially supported by federal or provincial grants and collected through property taxes.

Finally, a municipality may pursue a bylaw mandating oil tank removal under the Community Charter’s environmental or public health authorities. However, because these fall under spheres of concurrent authority, ministerial approval is required. A successful application would need to demonstrate evidence of environmental or health risks from oil tank leakage. Taken together, these tools provide a strategic mix of incentives, conditions, and potential mandates to phase out heating oil and reduce emissions from the residential building sector.

Regulatory pathways

Development Permit Area to require oil tank removal if the building requires a development permit

Last update: Aug. 2025

Local governments could likely use DPAs to impose requirements when a development permit is requested (for subdivision, constructing, adding to, or altering a building) such that the home is connected to a heat source other than a home oil tank.

How it works

  • Under sections 488(1)(h) and (j) of the Local Government Act (LGA), local governments may designate DPAs for the purposes of energy conservation and greenhouse gas (GHG) reduction. These designations must be included in the Official Community Plan (OCP), along with the special conditions or objectives that justify the DPA and the guidelines outlining how those objectives will be achieved (section 488(2)).
  • Within an energy conservation or GHG reduction DPA, section 491(9) permits local governments to establish requirements related to:
    1. Landscaping;
    2. Siting of buildings and other structures
    3. form and exterior design of buildings and other structures;
    4. specific features in the development; and
    5. machinery, equipment, and systems external to buildings and other structures.
  • This authority does not extend to internal building features such as insulation, lighting, or heating systems located inside the structure. However, it may be used to require connection to a heat source other than a home oil tank if that system includes external equipment.
  • For this requirement to apply, the property must be located within the designated DPA, and the owner must be undertaking an alteration, addition, or new construction that triggers the need for a development permit.
  • To be enforceable, the requirement must be clearly articulated in the DPA guidelines. The local government must then apply those guidelines consistently when issuing development permits.

Local Service Area to incentivize oil tank removal

Last update: Aug. 2025

Municipalities can likely run a home oil tank replacement program that lends money to homeowners using grants or loans from the Federation of Canadian Municipalities (FCM) or from the province through a local service area to assist homeowners in replacing home oil tanks.

How it works

  • A local service area must be established based on the petitions of a majority of owners, an alternative approval process or assent/referendum. Once the local government receives approval in one of these three ways, it can adopt the local service area bylaw and provide the service.
  • The municipality could pay for the home oil tank replacement as “assistance” to owners using borrowed monies or loans from reserves and spreading the repayments by the lot owners over 10 or 15 years. The municipality could collect these repayments as parcel taxes at the same time as utility charges for garbage, water, etc. Municipalities would need to use a grant or loan from the Federations of Canadian Municipalities or the province to cover the costs of the home oil tank replacement. The parcel taxes could be collected in the same manner as property taxes in the event of default by a taxpayer. We note that the Province of BC is studying the PACE program.

Bylaw to require oil tank removal

Last update: Aug. 2025

If a municipality gets ministerial approval, they can likely enact a bylaw requiring home oil tank removal with the concurrent authority of the Community Charter section 8(3)(i) protection of the natural environment or section 8(3)(j) public health. Since these are listed in section 9 as spheres of concurrent authority, a municipality cannot enact a bylaw under these authorities without ministerial approval. In the case of home oil tanks, if the municipality can show the minister, with evidence, that home oil tanks are leaking into the ground, and they are causing an environmental or public health risk, the minister may approve a bylaw requiring home oil tank removal. With that ministerial approval, a local government could likely require home oil tank removal by bylaw.

Glossary Entry

Development Permit Areas

A planning tool that lets local governments guide how new development supports certain purposes, including energy efficiency and climate goals.

Under the Local Government Act, local governments can designate areas in their Official Community Plan (OCP) as Development Permit Areas (DPAs). Within a DPA, landowners must apply for a permit before starting construction or making major changes to buildings or land.

DPAs aimed at reducing greenhouse gas emissions or promoting energy conservation can include requirements for landscaping, building siting, exterior design, or energy systems like heat pumps or solar panels.

DPAs can apply to a single parcel or across an entire municipality, depending on local goals and planning context.

Glossary Entry

Local Service Area

A way for municipalities to fund specific local services—like infrastructure or beautification—through taxes paid by the property owners who benefit.

Under Section 210 of the Community Charter, municipalities can create Local Service Areas to provide services that benefit a defined area, such as street upgrades or business improvements. To create a local service, the municipality must adopt a bylaw that outlines the service, defines the boundaries of the service area, and specifies how costs will be recovered, including the local service tax.

The process can be initiated by property owners, council, or by voter approval. If council starts the process, affected owners are notified and given the opportunity to petition against it.

If the municipality uses the Local Service Area for energy efficiency upgrades, the municipality could pay for the energy upgrade as “assistance” to owners using borrowed monies or loans from reserves and spreading the repayments by the lot owners over 10 or 15 years. The municipality could collect these repayments as parcel taxes at the same time as utility charges for garbage, water, etc. Municipalities would need to use a grant or loan from the Federation of Canadian Municipalities (FCM) or the Province to cover the costs of the energy efficiency upgrades. The parcel taxes could be collected in the same manner as property taxes in the event of default by a taxpayer.

Glossary Entry

Bylaws Under the Community Charter

The Community Charter gives municipalities the authority to regulate specific local matters by bylaw.

Part 2 of the Community Charter outlines the powers municipalities have to pass bylaws in defined areas, following a “spheres of jurisdiction” model. This means local governments can regulate, require, or prohibit certain activities—such as animal control or public health—within specific policy areas, or “spheres.”

Some of these areas are classified as spheres of concurrent authority under Section 9 of the Charter. This includes:

  • Section 8(3)(i) – public health
  • Section 8(3)(j) – protection of the natural environment

In these cases, municipalities must receive approval from the relevant provincial minister before adopting a bylaw—even if the bylaw also addresses issues in non-concurrent areas.

Glossary Entry

Require oil tank removal

Home heating oil systems are among the most carbon-intensive residential heating options and pose environmental and safety risks due to potential soil and groundwater contamination from leaking tanks. To support climate action and environmental protection, local governments in British Columbia are exploring pathways to require the removal of home oil tanks and promote low-emission alternatives such as electric heat pumps.

Municipalities may leverage Development Permit Areas (DPAs) designated for energy conservation or GHG reduction to require connection to a non-oil heating system when a property undergoes major alterations, additions, or new construction. These requirements must be tied to external systems or features, as local governments cannot regulate internal building systems under the Building Act. Alternatively, municipalities may establish local service areas to offer financial assistance or on-bill financing for oil tank removal and replacement, potentially supported by federal or provincial grants and collected through property taxes.

Finally, a municipality may pursue a bylaw mandating oil tank removal under the Community Charter’s environmental or public health authorities. However, because these fall under spheres of concurrent authority, ministerial approval is required. A successful application would need to demonstrate evidence of environmental or health risks from oil tank leakage. Taken together, these tools provide a strategic mix of incentives, conditions, and potential mandates to phase out heating oil and reduce emissions from the residential building sector.