Vol. 140, No. 50 — December 16, 2006

Polybrominated Diphenyl Ethers Regulations

Statutory authority

Canadian Environmental Protection Act, 1999

Sponsoring department

Department of the Environment

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Description

The purpose of the proposed Polybrominated Diphenyl Ethers Regulations (hereinafter referred to as the proposed Regulations), to be made under subsection 93(1) of the Canadian Environmental Protection Act, 1999 (CEPA 1999), is to protect Canada's environment from the risks posed by the use and emission of polybrominated diphenyl ethers (PBDEs). The proposed Regulations will prohibit the manufacture of PBDEs (tetraBDE, pentaBDE, hexaBDE, heptaBDE, octaBDE, nonaBDE and decaBDE). The proposed Regulations will also prohibit the use, sale, offer for sale and import of tetraBDE, pentaBDE, hexaBDE, and mixtures, polymers and resins containing these substances and will prohibit the manufacture of these mixtures, polymers and resins.

For the purposes of this Regulatory Impact Analysis Statement, the commercial mixture Pentabromodiphenyl Ether which is predominantly a mixture of pentaBDE, tetraBDE, and hexaBDE congeners but may also contain trace levels of heptaBDE and tribromodiphenyl ether (triBDE) congeners, would hereinafter be referred to as PentaBDE. The commercial mixture Octabromodiphenyl Ether which is a mixture composed mainly of heptaBDE, octaBDE and hexaBDE but may also contain small amounts of pentaBDE, nonaBDE and decaBDE would hereinafter be referred to as OctaBDE. Decabromodiphenyl Ether is mainly composed of decaBDE with small amounts of nonaBDE and would hereinafter be referred to as DecaBDE.

The proposed Regulations represent an important first step in the risk management of PBDEs in Canada, with a focus on the three PBDEs (tetraBDE, pentaBDE and hexaBDE) that meet the criteria for virtual elimination under CEPA 1999. Additional risk management actions targeting products containing PBDEs, as well as additional actions on heptaBDE, octaBDE, nonaBDE and decaBDE will be developed in the future to complement the proposed Regulations. These actions, collectively, will contribute to ensuring that the Canadian environment is protected and Canadians' exposure to these substances is minimized.

The proposed Regulations will come into force on the day they are registered by the Clerk of the Privy Council.

Background

On July 1, 2006, the Ministers of the Environment and of Health published their final decision on the screening assessment of PBDEs in the Canada Gazette, Part I, and proposed to recommend that PBDEs be added to the List of Toxic Substances in Schedule 1 of CEPA 1999. The screening assessment report concluded that PBDEs are entering the environment in a quantity or concentration or under conditions that have or may have an immediate or long-term harmful effect on the environment or its biological diversity. However, PBDEs were not considered to pose an immediate threat to human health. On July 1, 2006, an order was published in the Canada Gazette, Part I, proposing that PBDEs be added to the List of Toxic Substances in Schedule 1 of CEPA 1999.

PBDEs are found in three commercial mixtures, PentaBDE, OctaBDE and DecaBDE. The prohibitions placed on tetraBDE, pentaBDE and hexaBDE would impact the PentaBDE and OctaBDE commercial mixtures, as two or more of these three PBDEs (tetraBDE, pentaBDE and hexaBDE) are present in varying quantities in these commercial mixtures. Therefore, any regulatory measure impacting the three PBDEs identified above would in practice impact these commercial mixtures.

Use profile

PBDEs are a class of substances that are used as flame retardants in a wide variety of products. PBDEs are not manufactured in Canada. All PBDEs used in Canada are imported and enter Canada

• as chemical formulations from foreign producers;
• in resins, polymers or substrates containing PBDEs;
• in semi-finished articles, materials or components containing PBDEs; or
• in finished products containing PBDEs.

In general, plastics are the primary end use for flame retardants due to the inherent flammability of many polymers. In the past, PBDEs saw widespread and growing use in motor vehicles, aircrafts, construction products and electrical and electronic goods. Smaller markets include textiles, adhesives and sealants, rubber products and coatings.

Based on an Environment Canada use pattern survey, the reported use of PBDEs was approximately 1 300 tonnes in 2000, all of which were imported from the United States. The PentaBDE commercial mixture was imported in the greatest volume, followed by the DecaBDE commercial mixture. Only a very small amount of the OctaBDE commercial mixture was imported into Canada in 2000. The reported volumes do not include quantities imported in finished articles, which are estimated to account for the largest quantities of PBDEs entering Canada.

Not all imported PBDEs remain within Canada, as some are exported from Canada in finished products, most of which are destined for the United States. The only U.S. manufacturer of PentaBDE and OctaBDE commercial mixtures voluntarily ceased production in December 2004. This cessation of production is expected to have an impact on current Canadian imports of PBDEs contained in these mixtures. Discussions with industry and industry associations indicate that PentaBDE and OctaBDE commercial mixtures have seen limited and declining use in recent years and have been phased out of use in Canada.

Industry profile

Uses of PentaBDE are highly concentrated in the polyurethane (PUR) foam products manufacturing sub-sector within the plastic products manufacturing sector. OctaBDE is primarily used in the custom compounding of resins sub-sector, with the downstream users concentrated in a number of plastic products manufacturing sub-sectors. The description of PentaBDE and OctaBDE uses in these sub-sectors, which are the primary users of PentaBDE and OctaBDE commercial mixtures, is given below.

Polyurethane foam products manufacturing sub-sector and PentaBDE use

This sub-sector is comprised of small- and medium-size enterprises (SMEs), with small enterprises accounting for approximately 91% of the total 88 establishments. The medium-sized establishment totalled 8 or approximately 9% of the total. The number of establishments in this sub-sector increased by an average of 3.9% per year and employment experienced an annual growth rate of 5.2% between 1995 and 2003. Shipments also increased at an average compounded growth rate of 8.6%, and manufacturing value-added increased by 10% over the same period.

Throughout the 1990s there was a gradual increase in the demand for PUR in Canada and the United States. According to the available information, approximately 14% of PUR contains flame retardants and, until 1999, approximately 70% of these flame retardants were PentaBDEs. Between 1992 and 1999, PentaBDE use in PUR increased by nearly 25%, while the increase in the flame retardant portion of PUR of 12.5% matched the 11.3% increase in PUR production. In 1999, approximately 728 tonnes of PentaBDE were used for PUR manufacture.

In 2000, PentaBDE was used in this sector with an estimated value of C$3.1 million. In the same year the total cost of materials and supplies were $340 million; hence PentaBDE constituted less than 1% of total material costs for this sub-sector.

The use of PentaBDE in PUR given above accounts for the total quantity of reported manufacturing uses of PentaBDE in Canada in 2000. There is no evidence that PentaBDE was used in the manufacture of other resins in Canada. Information collected from the relevant industry association and companies in 2006 indicates that PentaBDE use has been phased out from all major use categories in Canada.

Custom compounding of resins manufacturing sub-sector and OctaBDE use

As with the polyurethane foam products sector, this sub-sector is also comprised of small- and medium-sized enterprises. Of the 43 establishments in this sub-sector, 42 were categorized as small (having 1–99 employees), and only one establishment was classified as medium-sized. The number of establishments in this sub-sector increased by an average of 10% per year, and employment increased at a compounded annual growth rate of 6% between 1995 and 2003. Shipments increased at an average compounded growth rate of 10.2%, as did manufacturing value-added by 6.7% between 1995 and 2003.

In 2000, results of an Environment Canada survey revealed that OctaBDE, with an estimated value of approximately $0.8 million, was used in the compounding of resins which were subsequently formed into plastic products. The total manufacturing cost of materials and supplies in the custom compounding of resins sub-sector in 2000 was $621 million of which OctaBDE represented less than 0.5% of material costs for this sub-sector.

OctaBDE is predominantly used in acrylonitrile-butadiene-styrene (ABS) polymers to flame retard computer housings, pipes, appliances and automotive parts. In the late 1990s ABS demand in Canada and the United States declined due to increased uses of other polymers, such as polypropylene, in automotive manufacturing. Canadian production of ABS was rationalized during the same time period, and no ABS has been produced in Canada since 1997. Some imported ABS resin may still be compounded in Canada.

The amount of OctaBDE used in ABS in Canada between 2001 and 2002 is estimated to be between 105–123 tonnes. The data indicates that OctaBDE consumption in Canada has decreased in recent years—a drop which is linked to an overall drop in ABS consumption in Canada. In addition, one of the ABS compounding facilities that reported OctaBDE uses in 2000 ceased operations in 2003.

The use of OctaBDE in ABS as outlined above accounted for the majority of OctaBDE uses in Canada before companies began to phase out uses. There appears to have been minor historical uses of OctaBDE in other resins; however, these uses were extremely small and have been completely phased out along with uses in ABS.

PentaBDE and OctaBDE uses — Current status

Environment Canada's survey identified that PentaBDE and OctaBDE were used in Canada in 2000. Significant reformulation activity has occurred in recent years related to PentaBDE and OctaBDE. All companies that reported uses of PentaBDE and OctaBDE in 2000 have reported complete phase-out since 2005. This reformulation activity was strongly driven by customer demands for PBDE-free products, and the fact that PentaBDE and OctaBDE were largely not available for purchase beyond 2005 due to the phase-out of production by the only manufacturer in the United States. Some previous users of OctaBDE in ABS compounding have also ceased compounding activities in Canada. In addition, OctaBDE was already a very small volume flame retardant with shrinking usage before 2004, as the uses of ABS in electronics have been replaced by other resins and resin blends [e.g. polycarbonate (PC)/ABS blends and polystyrene (PS)] in which OctaBDE is not used.

The phase-out of PentaBDE and OctaBDE use by Canadian industry was confirmed by the industry association. No technical or economic impact on the industry is expected from the proposed Regulations as PentaBDE and OctaBDE use has been phased out. In addition, users and suppliers of PentaBDE and OctaBDE confirmed that given the regulatory climate, customer demand for PBDE-free products, the availability of cost-effective alternatives, and the fact that PentaBDE and OctaBDE were not available in the market after 2005, it was not technically or economically viable to continue using PentaBDE and OctaBDE.

Despite the phase-out of PentaBDE and OctaBDE use by Canadian industry, the potential does exist for these commercial mixtures as well as the tetraBDE, pentaBDE and hexaBDE chemicals to be imported into Canada.

Environmental objective

The screening assessment report concludes that PBDEs are entering the environment in a quantity or concentration or under conditions that have or may have an immediate or long-term harmful effect on the environment or its biological diversity. It is also concluded that tetraBDE, pentaBDE and hexaBDE meet the criteria for persistence and bioaccumulation, as defined by the Persistence and Bioaccumulation Regulations of CEPA 1999, and their presence in the environment results primarily from human activity.

The human health risk assessment concluded that worst-case estimates of the exposure of Canadians to PBDEs were much less than those which caused health effects in animals. It was noted that Environment Canada's proposed control measures to protect the environment from PBDEs are expected to also reduce exposure of humans. With the upward trend noted in the levels of human exposure to PBDEs, Health Canada is supportive of taking control measures to prevent exposure to PBDEs from increasing to a level that could pose a risk to the health of Canadians.

PBDEs are present in the environment primarily due to human activity and have been detected in a variety of species worldwide, and evidence from many studies indicates that levels of certain PBDEs in biota in North America (including the Canadian Arctic) are increasing steadily and substantially over time. The assessment report indicates that the greatest potential risks from PBDEs in the Canadian environment are the secondary poisoning of wildlife from the consumption of prey containing elevated concentrations of PBDEs and effects on benthic organisms that may result from elevated concentrations of certain PBDEs in sediments.

Given the conclusions of the screening assessment, the proposed environmental objective for all seven PBDEs is to reduce the concentrations of PBDEs in the Canadian environment to the lowest level possible. The ultimate environmental objective for tetraBDE, pentaBDE and hexaBDE is virtual elimination, as specified under subsection 77(3) of CEPA 1999. In order to achieve the environmental objective, the risk management objective for all seven PBDEs is to prevent the reintroduction of their manufacture and use in Canada and to minimize their emissions into the environment from all sources in Canada. For tetraBDE, pentaBDE and hexaBDE, the risk management objective is the prevention of their import into Canada.

The proposed Regulations represent an important first step in the risk management of PDBEs and are part of a more comprehensive risk management approach for PBDEs. As outlined above, the proposed Regulations are a first step in the PBDE risk management process and target the three PBDEs (tetraBDE, pentaBDE and hexaBDE) that meet the virtual elimination criteria. Additional risk management actions targeting products containing PBDEs, as well as actions on heptaBDE, octaBDE, nonaBDE and decaBDE will be developed in the future. These actions, collectively, will contribute to achieving the ultimate environmental objective and the risk management objectives for PBDEs.

International initiatives

Key points regarding the current international activities for PentaBDE and OctaBDE are presented in Table 1.

Table 1: Key International Initiatives Relevant for PentaBDE and OctaBDE

Jurisdiction	Legislation/ Action	Details	Deadline for Compliance	PBDEs Impacted
European Union (EU)	EU 24th amendment to the Marketing and Use Directive 76/769/EEC	Prohibits marketing and use in the EU	August 15, 2004	PentaBDE OctaBDE
	Restriction of the use of hazardous substances in electrical and electronic equipment (RoHS)	Prohibits use in new electric and electronic equipment1	July 1, 2006	PentaBDE OctaBDE
	Waste Electrical and Electronic Equipment (WEEE) Directive	Separation of BFR plastics from electric and electronic equipment prior to recovery and recycling	December 2006	PentaBDE OctaBDE Other BFRs
United States (US)	Significant New Use Rule	Requires notification of, and evaluation by, the USEPA of any new use of PentaBDE or OctaBDE commercial mixtures	January 1, 2005	PentaBDE OctaBDE
	California ban	Bill banning all PBDEs introduced in 2003, DecaBDE removed before signing into law	June 1, 2006	PentaBDE OctaBDE
	Hawaii ban	Legislation phasing out PentaBDE and OctaBDE	January 1, 2006	PentaBDE OctaBDE
	Illinois ban	Bill bans manufacture of PentaBDE and OctaBDE	January 1, 2006	PentaBDE OctaBDE
	Maryland ban	Bill prohibits manufacture, processing, sale or distribution of new products containing PentaBDE or OctaBDE	October 1, 2008	PentaBDE OctaBDE
	Maine ban	Bill requires phase-out of any product containing PentaBDE or OctaBDE	January 1, 2006	PentaBDE OctaBDE
	Michigan ban	Bill prohibits manufacture, processing, sale or distribution of PentaBDE or OctaBDE in Michigan	June 1, 2006	PentaBDE OctaBDE
	New York ban	Bill prohibits the manufacture of products containing more than 0.1% of PentaBDE or OctaBDE	January 1, 2006	PentaBDE OctaBDE
	Oregon ban	Bill prohibits use of PentaBDE and OctaBDE	January 1, 2006	PentaBDE OctaBDE
	Rhode Island ban	Bill prohibits use of PentaBDE and OctaBDE	July 14, 2006	PentaBDE OctaBDE
China	China's RoHS	At the end of February 2006, China promulgated a law similar to the EU's RoHS Directive. Substances targeted are the same as those targeted in the EU RoHS. Essentially, it will prohibit PentaBDE and OctaBDE use in new electric and electronic equipment when fully implemented	March 1, 20072	PentaBDE OctaBDE

¹ Legislation states a limit of 0.1% considered a ban by industry.

² Implementation of Phase 1 of the law set for March 1, 2007; the implementation schedule for Phase 2 (full restrictions) is currently unclear but is expected to be implemented in a relatively short time frame, e.g. 1 year after Phase 1. "RoHS in China" Conformity, October 2006, p. 12-17.

The current global regulatory climate for PentaBDE and OctaBDE is very unfavourable for continued uses. The European Union and the United States are large markets that have a strong influence on the Canadian market.

In addition to these, PentaBDE and OctaBDE commercial mixtures are being considered for addition to two international agreements, as the PBDEs contained in these commercial mixtures have the ability to undergo long-range transport, are persistent and bioaccumulative and cause adverse effects.

In November 2005, the Persistent Organic Pollutants Review Committee under the United Nations Stockholm Convention on POPs agreed that the PentaBDE commercial mixture meets the criteria outlined in the Convention for consideration as a persistent organic pollutant. An ad-hoc working group has been established to review the proposal further and to prepare a draft risk profile.

In December 2005, the Parties to the United Nations Economic Commission for Europe (UNECE) Long-Range Transboundary Air Pollution (LRTAP) Convention's Protocol on Persistent Organic Pollutants (POPs) agreed that the PentaBDE commercial mixture should be considered as a persistent organic pollutant. The examination of management strategies has begun under the Convention. In addition, the European Commission has submitted a proposal to add the OctaBDE commercial mixture to the Protocol.

Existing Canadian initiatives

The Environmental Choice Program—Environment Canada's ecolabelling program—is currently in the process of establishing criteria for notebook and desktop computers. Certification will be awarded to those that demonstrate environmental leadership throughout their life cycle and meet requirements for reduced use of hazardous substances (including PBDEs), design for reuse and recycling, energy efficiency, reduced packaging and ergonomic considerations.

The proposed Regulations

The proposed Regulations prohibit the manufacture of PBDEs (tetraBDE, pentaBDE, hexaBDE, heptaBDE, octaBDE, nonaBDE and decaBDE). The proposed Regulations will also prohibit the use, sale, offer for sale and import of tetraBDE, pentaBDE, hexaBDE and mixtures, polymers and resins containing these substances and will prohibit the manufacture of these mixtures, polymers and resins. The proposed Regulations do not apply to imported manufactured articles and manufactured articles that are already in use in Canada, such as computers, computer parts and foams. However, the imported manufactured items will be addressed through additional management actions in the future to complement the proposed Regulations.

Alternatives

The alternatives considered to achieve the objective of the proposed Regulations to prevent the introduction of PBDE manufacture and use and to minimize their emissions into the environment from all sources in Canada are as follows.

Status quo

PBDEs are present in the environment primarily as a result of human activity and have been detected in a variety of species worldwide. Evidence from many studies indicates that levels of certain PBDEs in wildlife are steadily increasing over time. In order to prevent further increases in PBDE concentration in the Canadian environment, the risk management objective is to prevent the manufacture of PBDEs and to minimize their emissions into the environment from all sources.

Currently, no measures are in place in Canada to manage the manufacture, use or emissions of PBDEs. Although PBDEs are not currently manufactured in Canada, the potential in the future for the manufacture and emissions of PBDEs in Canada continues to exist. TetraBDE, pentaBDE and hexaBDE have largely been phased out by the Canadian industry; however, the potential continues to exist for imports and use of these substances in commercial mixtures to occur.

The potential for the manufacture of PDBEs, and the import and use of tetraBDE, pentaBDE and hexaBDE in Canada will continue to exist if the status quo is allowed to continue. Therefore, in order to prevent these activities in Canada and subsequent emissions of PBDEs to the environment, the status quo cannot be maintained.

Voluntary measures

TetraBDEs, pentaBDEs and hexaBDEs are essentially contained in the PentaBDE and OctaBDE commercial mixtures used primarily in the production of PUR and ABS resins, respectively. These resins are then used by downstream industries to impart flame retardancy to the manufactured products. The use of voluntary measures like Environmental Performance Agreements (EPAs) may lead the producers of PUR and ABS resins to switch away from these PBDEs. However, it will not ensure that PBDE containing PUR and ABS resins are not imported directly by the downstream users. In order to ensure that PUR and ABS resins that contain tetraBDEs, pentaBDEs and hexaBDEs are not used in Canada, agreements would have to be negotiated with all users of the two resins and not limited to the producers of PUR and ABS resins. Negotiating an EPA with such a large number of diverse users would be difficult as well as resource intensive. As such, an EPA is not an effective tool for achieving the risk management objective for tetraBDE, pentaBDE and hexaBDE.

Other voluntary measures (such as Responsible Care Program, Environmental Leadership Initiatives) were also not considered viable options, as they do not provide sufficient incentives to encourage existing tetraBDE, pentaBDE and hexaBDE users to shift away from PentaBDE and OctaBDE commercial mixtures. Moreover, voluntary measures would be neither effective nor efficient in achieving virtual elimination and the stated risk management objective for tetraBDE, pentaBDE and hexaBDE. Therefore, the option of voluntary measures is not being considered any further.

Market-based instruments

Market-based instruments work by providing incentives aimed at changing consumer and producer behaviour. These tools, which include emission trading programs, deposit-refund systems, financial incentives, environmental charges and other market-based tools were given due consideration. PBDE emissions occur over the life cycle of products containing the PBDEs or at the disposal stage. Product life cycles vary considerably and emissions over the product life cycle cannot be controlled or monitored. Therefore, establishing a tradeable permits program for PBDEs, emissions of which are spread over a large number of products and users, would be difficult and would not achieve the stated risk management objective for tetraBDE, pentaBDE and hexaBDE.

A deposit-refund system can be established for products that contain tetraBDE, pentaBDE and hexaBDE. However, it would not be possible to identify all products that contain tetraBDE, pentaBDE and hexaBDE. The resource requirements for setting up a deposit-refund system would be high and it would also not ensure that all products containing tetraBDE, pentaBDE and hexaBDE are returned.

Environmental charges and financial incentives also do not present themselves as effective tools to meet the risk management objective. This would be especially true for environmental charges which, under CEPA 1999, can only be used to cover federal government administration costs. Thus, there is a high probability that they will not provide enough of an incentive for firms to switch to substitutes for PBDEs. Therefore, the environmental risk could persist despite the environmental charges.

As a consequence, the use of market-based instruments does not present an effective option.

Regulations

To achieve the stated risk management objective for tetraBDEs, pentaBDEs and hexaBDEs, regulatory measures were found to be the most effective and efficient option. From amongst the regulatory measures available under CEPA 1999, regulations respecting substances on the List of Toxic Substances were considered to be the most effective, as they would address the various aspects of the substance life cycle (such as manufacture, use, sale and import).

TetraBDEs, pentaBDEs and hexaBDEs are targeted for virtual elimination under CEPA 1999. Only regulatory measures that prohibit the manufacture, use, sale and import of these substances can achieve the stated risk management objective. Regulatory controls, as compared to the other alternatives, would fulfill the risk management objective to prevent the introduction of the manufacture of PBDEs in Canada and to minimize their emissions into the environment from all sources in Canada.

Benefits and costs

The key assumptions used for the analysis include

Regulatory time frame: the proposed Regulations are assumed to come into force at the end of 2007, with the ban on PentaBDE and OctaBDE imports and uses being fully in effect in 2008 when uses reach zero.

Time frame for analysis: costs and benefits are assessed over a 25-year time frame (2007 to 2032).

Accounting stance: the costs and benefits assessed are those that directly or indirectly affect Canada or Canadians. All costs and benefits are in 2006 Canadian dollars.

Discount rate: where possible, impacts are reported as net present values and a real social discount rate of 5.5% is used.

Risk and uncertainty testing: the key sources of uncertainty were identified and are considered in the analysis.

Incremental costs

Industry

The cost to industry to reformulate away PentaBDE and OctaBDE is minor, since drop-in (see footnote 1) substitutes are available and, as discussed above (see Industry profile section), PentaBDE and OctaBDE are no longer being manufactured, imported or used in Canada. Therefore, the industry will not experience any incremental costs, as a result of the proposed regulatory requirements. This conclusion is based on the most recent information collected from industry and on the following observations:

• historical uses of PentaBDE and OctaBDE have been completely phased out—there were some minor remaining uses in 2005, but complete phase-out was achieved by 2006;
• ABS compounding activity in Canada has declined in recent years due to industry consolidation, plant shutdown, and declining uses of ABS further limiting the potential domestic demand for OctaBDE in Canada; and
• it is essentially impossible to buy PentaBDE and OctaBDE, (see footnote 2) at the present moment.

Therefore, industry will not experience any incremental costs from the proposed Regulations.

Government

The costs incurred by the federal government would be as a result of enforcement and compliance promotion activities related to the proposed Regulations. Enforcement and compliance promotion activities are likely to benefit from international actions being taken to prohibit the manufacture and use of PentaBDE and OctaBDE. With respect to enforcement costs, for the first year following the coming into force of the proposed Regulations, a one-time amount of $250,000 will be required for the training of enforcement officers.

In addition, for years one through five following the delivery of the training, the enforcement costs are estimated to require an annual budget of $56,220 broken down as follows: $37,750 for inspections (which includes operations and maintenance costs, transportation and sampling costs), $14,330 for investigations and $4,140 for measures to deal with alleged violations (including environmental protection compliance orders and injunctions).

For the subsequent years (that is years 6 through 25), the enforcements costs are estimated to require a total budget of $62,738 broken down as follows: $27,000 for inspections (which includes operations and maintenance costs, transportation and sampling costs), $17,642 for investigations and injunctions, and $18,096 for prosecutions.

Compliance promotion activities are intended to encourage the regulated community to achieve compliance with the proposed Regulations. Compliance promotion costs would require an annual budget of $118,000 during the first year of coming into force of the proposed Regulations. Compliance promotion activities could include mailing out of the final Regulations, developing and distributing promotional materials (i.e. a fact sheet, Web material), the development of an advertising campaign in specialized trade publications, attendance at association conferences and workshops/information sessions to explain the Regulations. This could also include responding to and tracking inquiries in addition to contributing to the compliance promotion database.

In the four years that follow, compliance promotion activities could decrease in intensity and focus on sending letters, advertising in specialized trade magazines, attending association conferences, responding to and tracking inquiries, and contributing to the compliance promotion database. This would require a budget of $36,800. Note that a higher level of effort for compliance promotion may be required if following enforcement activities compliance with the Regulations is found to be low. For subsequent years, no additional compliance promotion activity is expected, and therefore, total compliance promotion costs are estimated at $154,800.

Total enforcement and compliance promotion costs over the 25-year time frame are in the order of $439,646 (discounted at 5.5%). Compliance with the Act and its Regulations is mandatory and, given the fact that enforcement officers would examine every suspected violation of which they have knowledge and take action that is consistent with the CEPA 1999 Compliance and Enforcement Policy, the costs identified above are estimated to be the minimum costs required to enforce the Regulations.

Total costs of the proposed Regulations

The estimated total cost to industry is zero, as they have already substituted PentaBDE and OctaBDE with other flame retardants. Therefore, the total cost of the proposed Regulations will be related to government enforcement and compliance promotion activities, which are in the order of $439,646 over the 25-year time frame.

Benefits to Canadians

The primary alternatives to PentaBDE and OctaBDE have lower persistence and bioaccumulation potential; hence, incremental benefits are expected from phase-out of PentaBDE and OctaBDE. However, any incremental benefits from PentaBDE and OctaBDE phase-out do not apply directly to the proposed Regulations (in the same way that industry costs associated with phase-out do not apply to the proposed Regulations), as the phase-out is already complete.

However, the proposed Regulations will ensure that PBDEs are not reintroduced in Canada in the future. It is not possible to quantify and monetize the preventative benefits of the proposed Regulations given that PBDE use by industry has been discontinued and future demand for the substance cannot be estimated.

Net benefits of the proposed Regulations

Overall, the proposed Regulations are estimated to result in a negative net benefit of $439,646 (net present value discounted at 5.5%) over the 25-year time frame.

Consultation

The public and stakeholders were given opportunity to comment during the 60-day comment period following the publication in the Canada Gazette, Part I, of the proposed Order to add the substances to the List of Toxic Substances in Schedule 1 of CEPA 1999 on July 1, 2006. The comments were generally supportive of the proposal to add the substances to Schedule 1 of CEPA 1999.

The CEPA National Advisory Committee (CEPA NAC) and relevant federal government departments were consulted on the proposed Order, as well as the proposed Risk Management Strategy for PBDEs. No concerns were raised by CEPA NAC.

Stakeholders were also consulted on the proposed Risk Management Strategy for PBDEs through the posting of the Strategy on Environment Canada's CEPA Registry Web site. Comments received from stakeholders on the Strategy indicate that stakeholders are generally supportive of the proposed regulatory action on the manufacture of all PBDEs in Canada and on the manufacture, use, sale and import of tetraBDE, pentaBDE and hexaBDE.

Compliance and enforcement

Since the Regulations are to be made under CEPA 1999, enforcement officers will, when verifying compliance with the Regulations, apply the Compliance and Enforcement Policy implemented under the Act. The Policy outlines measures designed to promote compliance and consultation on the development of Regulations. The Policy also sets out the range of possible responses to violations, including warnings, directions, environmental protection compliance orders, ticketing, ministerial orders, injunctions, prosecution, and environmental protection alternative measures (which are an alternative to a court trial after the laying of charges for a CEPA 1999 violation). In addition, the Policy explains when Environment Canada will resort to civil suits by the Crown for costs recovery.

When, following an inspection or an investigation, an enforcement officer discovers an alleged violation, the officer will choose the appropriate enforcement action based on the following factors:

• Nature of the alleged violation: This includes consideration of the damage, the intent of the alleged violator, whether it is a repeat violation, and whether an attempt has been made to conceal information or otherwise subvert the objectives and requirements of the Act.
• Effectiveness in achieving the desired result with the alleged violator: The desired result is compliance within the shortest possible time and with no further repetition of the violation. Factors to be considered include the violator's history of compliance with the Act, willingness to co-operate with enforcement officers, and evidence of corrective action already taken.
• Consistency: Enforcement officers will consider how similar situations have been handled in determining the measures to be taken to enforce the Act.

Contacts

Lyne Monastesse, Acting Chief, Chemicals in Products Section, Chemicals Sector Division, Environment Canada, 351 Saint-Joseph Boulevard, 12th Floor, Gatineau, Quebec K1A 0H3, 819-953-1121 (telephone), 819-994-0007 (fax), Lyne. Monastesse@ec.gc.ca (email); or Markes Cormier, Acting Senior Economist, Impact Analysis and Instrument Choice Division, Environment Canada, 10 Wellington Street, 24th Floor, Gatineau, Quebec K1A 0H3, 819-953-5236 (telephone), 819-997-2769 (fax), Markes.Cormier@ec.gc.ca (email).

PROPOSED REGULATORY TEXT

Notice is hereby given, pursuant to subsection 332(1) (see footnote a) of the Canadian Environmental Protection Act, 1999 (see footnote b), that the Governor in Council proposes, pursuant to subsection 93(1) of that Act, to make the annexed Polybrominated Diphenyl Ethers Regulations.

Any person may, within 60 days after the date of publication of this notice, file with the Minister of the Environment comments with respect to the proposed Regulations or a notice of objection requesting that a board of review be established under section 333 of that Act and stating the reasons for the objection. All comments and notices must cite the Canada Gazette, Part I, and the date of publication of this notice, and be sent to the Director, Chemicals Sector Division, Pollution Prevention, Department of the Environment, Ottawa, Ontario K1A 0H3.

A person who provides information to the Minister may submit with the information a request for confidentiality under section 313 of that Act.

Ottawa, December 7, 2006

MARY O'NEILL
Assistant Clerk of the Privy Council

POLYBROMINATED DIPHENYL ETHERS REGULATIONS

APPLICATION

1. Subject to sections 2 and 3, these Regulations apply to polybrominated diphenyl ethers that have the molecular formula C₁₂H_(10–n)Br_nO in which 4≤n≤10 that are specified on the List of Toxic Substances in Schedule 1 to the Canadian Environmental Protection Act, 1999.

EXCEPTIONS

2. These Regulations do not apply to any polybrominated diphenyl ether referred to in section 1 that is contained in a pest control product within the meaning of subsection 2(1) of the Pest Control Products Act.

3. These Regulations do not apply to any polybrominated diphenyl ether referred to in section 1, or to any product containing a polybrominated diphenyl ether set out in the schedule that is a resin, polymer or mixture, that is for use

(a) in a laboratory for analysis;

(b) in scientific research; or

(c) as a laboratory analytical standard.

PROHIBITIONS

4. No person shall manufacture any polybrominated diphenyl ether referred to in section 1 or any of the following products containing a polybrominated diphenyl ether set out in the schedule: resins, polymers or mixtures.

5. (1) Subject to subsection (2), no person shall use, sell, offer for sale or import a polybrominated diphenyl ether set out in the schedule or any of the following products containing such a substance: resins, polymers or mixtures.

(2) Subsection (1) does not apply to

(a) any polybrominated diphenyl ether that is present as a contaminant in a chemical feedstock used in a process from which there are no releases of the polybrominated diphenyl ether and provided that the polybrominated diphenyl ether is destroyed or completely converted in that process to a substance that is not a polybrominated diphenyl ether; or

(b) any polybrominated diphenyl ether or the following products containing such a substance and intended to be disposed of or recycled: resins, polymers or mixtures.

ANALYSIS BY ACCREDITED LABORATORY

6. The presence of any polybrominated diphenyl ether shall be determined by a laboratory that is accredited under the International Organization for Standardization standard ISO/IEC 17025: 2005, entitled General requirements for the competence of testing and calibration laboratories, as amended from time to time, and whose accreditation includes the analysis of polybrominated diphenyl ethers within its scope of testing.

COMING INTO FORCE

7. These Regulations come into force on the day on which they are registered.

SCHEDULE
(Sections 3 to 5)

POLYBROMINATED DIPHENYL ETHERS WHOSE MANUFACTURE, USE, SALE, OFFER FOR SALE OR IMPORTATION IS PROHIBITED

Item	Polybrominated diphenyl ethers
1.	Benzene, 1,1'-oxybis-, tetrabromo derivative that has the molecular formula C12H6Br4O (tetraBDE)
2.	Benzene, 1,1'-oxybis-, pentabromo derivative that has the molecular formula C12H5Br5O (pentaBDE)
3.	Benzene, 1,1'-oxybis-, hexabromo derivative that has the molecular formula C12H4Br6O (hexaBDE)

[50-1-o]

Footnote 1

In this context, a "drop-in" substitute is one that can be used to replace the regulated chemical without requiring any change to any other components of the product.

Footnote 2

There is no production of PentaBDE and OctaBDE in North America or in Europe. Possibility of suppliers of the chemicals in other regions (e.g. Asia) was investigated and no other suppliers could be identified.

Footnote a

S.C. 2004, c. 15, s. 31

Footnote b

S.C. 1999, c. 33

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