Vol. 150, No. 17 — April 23, 2016

Order Adding Toxic Substances to Schedule 1 to the Canadian Environmental Protection Act, 1999

Statutory authority

Canadian Environmental Protection Act, 1999

Sponsoring departments

Department of the Environment and Department of Health

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Order.)

Issues

Canadians benefit from the use of chemical substances in the manufacture of hundreds of goods, from medicines to computers, fabrics, and fuels. However, depending on concentration and potential exposure, some chemical substances may pose a risk to human health or the environment.

The Government of Canada has conducted a screening assessment of Fuel Oil No. 2 (Chemical Abstracts Service Registry Number (see footnote 1) 68476-30-2) and determined that Fuel Oil No. 2 is entering or may enter 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 as defined under paragraph 64(a) of the Canadian Environmental Protection Act, 1999 (“CEPA” or the “Act”).

Background

On December 8, 2006, the Government of Canada launched the Chemicals Management Plan (CMP) to assess and manage chemical substances that may be harmful to human health or the environment. (see footnote 2) A key element of the CMP is the Petroleum Sector Stream Approach (PSSA), which addresses approximately 160 petroleum substances, including Fuel Oil No. 2, that were considered to be of high priority for risk assessment, as they were determined to present either the “greatest” or “intermediate” potential for exposure to individuals in Canada, and were considered to present a high hazard to human health and the environment.

These petroleum substances were divided into five streams (streams 0 to 4) based on their use profiles. (see footnote 3) Within each stream, the substances were further divided into groups according to their physical and chemical properties as well as similarities in production. Fuel Oil No. 2, subject of the proposed Order Adding Toxic Substances to Schedule 1 to the Canadian Environmental Protection Act, 1999 (the proposed Order), is one of the substances found in Stream 3 of the PSSA. Stream 3 substances are primarily used by industries and consumers as fuels.

Substance description

Fuel Oil No. 2 is a distillate fuel oil formed by vaporizing, condensing and blending petroleum components that are obtained from the atmospheric distillation of crude oil or bitumen. (see footnote 4) Fuel Oil No. 2 is produced at refineries and upgraders in Canada, with most being produced in Eastern Canada. Fuel Oil No. 2 is used primarily as a fuel source for home heating, but is also used in medium capacity commercial/industrial burners.

Based on available information, in 2006, approximately 8 billion litres of distillate fuel (the majority being Fuel Oil No. 2) were produced (99%) in or imported (1%) into Canada. Of this amount, about 50% was exported, 25% was used as a fuel for home heating, 19% was used in commerce (e.g. for heating and power generation), and 6% was kept in inventory. In 2011, only 7% of Canadian homes (about 870 600) used Fuel Oil No. 2 as a primary source for home heating.

Summary of the screening assessment

A screening assessment was conducted on Fuel Oil No. 2 to determine whether it meets one or more of the criteria for a toxic substance as set out in section 64 of CEPA. Specifically, this involved determining whether Fuel Oil No. 2 is entering or may enter the environment in a quantity or concentration or under conditions that

Human health assessment

The human health assessment determined that the predominant route of exposure to Fuel Oil No. 2 was inhalation (from potential exposure to fuel evaporative emissions), and estimates of cancer potency for inhalation of benzene (a component of Fuel Oil No. 2 known to be carcinogenic) were used to describe the risk to human health. Based on a review of the available information, the screening assessment determined that the risk to the general population (following residential fuel storage tank leaks) and to those living in the vicinity of Fuel Oil No. 2 bulk storage facilities is considered to be low. Therefore, it was concluded that Fuel Oil No. 2 does not meet the criterion under paragraph 64(c) of CEPA, as it is not entering the environment in a quantity or concentration or under conditions that constitute or may constitute a danger in Canada to human life or health.

Ecological assessment

Determining the risk that a chemical substance poses to the environment involves the consideration of data relevant to its environmental behaviour (e.g. fate in the environment, persistence, and potential to bioaccumulate in organisms or biomagnify in food webs), its ecotoxicity and exposure to the substance by potentially affected non-human organisms from the major known sources of release to the Canadian environment. Conclusions regarding risk to the environment take into consideration existing controls in place and are based in part on an estimation of environmental concentrations resulting from releases and the potential for these concentrations to have a negative impact on non-human organisms and/or environmental health. Using available data on the toxicity of the substance to organisms in water, sediment, soil, and/or air, predicted “no-effect concentrations” are then determined. The predicted no-effect concentration is the highest concentration of the substance that is unlikely to cause harm, in terms of impact on survival, reproduction, growth, etc., to non-human organisms.

Fuel Oil No. 2 can be released (spilled) to the environment during its production, formulation, transportation and use. As part of the ecological assessment, to determine potential ecological harm associated with this substance, concentrations of Fuel Oil No. 2 in the environment were compared to concentration levels at which the substance may cause harm to the environment. To estimate the concentration of Fuel Oil No. 2 in the Canadian environment, data on spills reported to the Department of the Environment’s National Enforcement Management Information System and Intelligence System (NEMISIS) database for the years 2000 to 2009 were used. The analysis determined that at least 200–300 spills of Fuel Oil No. 2 occur each year on land, at least half of which are of sufficient volume to result in soil concentrations exceeding the predicted no-effect concentration for soil.

This information likely underestimates the number of spills on land nationally due to the limited reporting requirements for NEMISIS. For example, using spill data reported to the province of Ontario, there are at least 160–190 spills per year on land in Ontario, most of which are not reported to NEMISIS; of these 160–190 spills, at least half are of sufficient volume to cause harm to terrestrial organisms. The analysis additionally showed that during ship loading and unloading of Fuel Oil No. 2, there are approximately 12 spills per year of sufficient volume to result in aquatic concentrations greater than the predicted no-effect concentration for water. Recorded impacts in NEMISIS from Fuel Oil No. 2 spills include impacts on migratory birds, oiled birds, fish kills, other wildlife damage and vegetation damage.

Based on the available information presented in the screening assessment on the frequency and magnitude of spills, it is concluded that Fuel Oil No. 2 may cause harm to organisms in areas adjacent to sources of release because spills have been identified as harmful to freshwater, marine, and terrestrial organisms. However, these releases do not compromise the broader integrity of the environment. It is therefore concluded that Fuel Oil No. 2 meets the criterion for a toxic substance under paragraph 64(a) of the Act as it is entering or may enter 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 Fuel Oil No. 2 does not meet the criterion under paragraph 64(b) of CEPA as it is not entering the environment in a quantity or concentration or under conditions that constitute or may constitute a danger to the environment on which life depends.

The final Screening Assessment for Fuel Oil No. 2 was published on the Government of Canada’s Chemical Substances Web site along with a notice published in the Canada Gazette, Part I, on February 21, 2015. The notice stated that the Minister of the Environment and the Minister of Health (the ministers) found Fuel Oil No. 2 to meet one of the criteria set out under section 64 of CEPA and they decided to recommend the addition of the substance to Schedule 1 of the Act. (see footnote 5) This addition would enable the Minister of the Environment (the Minister) to propose risk management activities to reduce potential risks posed by Fuel Oil No. 2, should such activities be deemed necessary.

Existing control measures in Canada and abroad

Fuel Oil No. 2 can be released to the environment during its production, formulation, transportation and use. In Canada, there is already an extensive regulatory regime for the management of Fuel Oil No. 2 with respect to pollution prevention and response (including discharges), prevention of incident (when dangerous goods are imported, handled, offered for transport or transported), and storage. (see footnote 6), (see footnote 7), (see footnote 8)

Many of the storage measures, including those in Manitoba, Newfoundland and Labrador, Ontario, and Prince Edward Island, include requirements for the construction, installation, maintenance, or repair of residential storage tanks for Fuel Oil No. 2. In other provinces and territories, including British Columbia, the Northwest Territories, Nova Scotia, and Nunavut, guidance regarding residential heating fuel storage is available for homeowners. Some municipalities have bylaws requiring permits and inspection for the installation, removal or repair of home heating oil systems.

In the United States, there are several regulations pertaining to refineries and to the transportation of substances that may pose a flammability or explosion hazard, substances that include Fuel Oil No. 2. (see footnote 9), (see footnote 10)

In Europe, there are principles set on industrial emissions and regulations addressing the transportation of Fuel Oil No. 2. (see footnote 11), (see footnote 12) Also, there are regulations addressing the control of pollution. (see footnote 13)

Objectives

The objective of the proposed Order Adding Toxic Substances to Schedule 1 to the Canadian Environmental Protection Act, 1999 is to enable the ministers to propose risk management instruments under CEPA to manage potential risks associated with Fuel Oil No. 2, should such instruments be deemed necessary.

Description

The proposed Order would add Fuel Oil No. 2 to Schedule 1 of CEPA.

“One-for-One” Rule

The proposed Order would not add administrative costs to industry; therefore, the “One-for-One” Rule does not apply to this proposal. Rather, the proposed Order is an enabling instrument that allows the ministers to propose risk management measures with respect to Fuel Oil No. 2.

Small business lens

The proposed Order would not add a compliance or administrative burden on small business; therefore, the small business lens does not apply to this proposal. Rather, the proposed Order is an enabling instrument that allows the ministers to propose risk management measures with respect to Fuel Oil No. 2.

Consultation

The ministers published a summary of the draft Screening Assessment report for Fuel Oil No. 2 on June 1, 2013, in the Canada Gazette, Part I, for a 60-day public comment period. The Screening Assessment proposed that Fuel Oil No. 2 meets the criteria under paragraph 64(a) of the Act. A risk management scope document outlining the preliminary options being examined for the management of this substance was released on the same date, on the Chemical Substances Web site. During the 60-day public comment period, one submission was received with comments on the draft Screening Assessment and on the risk management scope document. (see footnote 14) All comments were considered during the finalization of the Screening Assessment and during the development of the proposed risk management approach document, which is also subject to a 60-day public comment period.

Summary of public comment on the draft Screening Assessment and response.

Response: The Department of Health considered several constituents in Fuel Oil No. 2 and other related gas oil substances. Benzene was included in the assessment of Fuel Oil No. 2 due to its presence in other gas oils and in measured emissions from gas oil bulk storage tanks.

Prior to the publication of the draft Screening Assessment report and risk management scope document, the Department of the Environment and the Department of Health had informed provincial and territorial governments through the National Advisory Committee of CEPA (CEPA NAC) of their release and public comment period. No comments were received from CEPA NAC.

Rationale

Fuel Oil No. 2 is a distillate fuel oil produced at refineries and upgraders in Canada and is primarily used as a fuel source for home heating, but is also used in medium capacity commercial/industrial burners. Fuel Oil No. 2 may be released (spilled) to the environment during its production, formulation, transportation and use. Based on an analysis of estimated concentration levels at which the substance may cause harm to aquatic and terrestrial environments and the estimated frequency, volume and impact of spills in Canada, it was determined that Fuel Oil No. 2 meets the criteria for a toxic substance under paragraph 64(a) of the Act. Subsection 77(2) of CEPA therefore requires that one of the following measures be proposed:

The proposed addition of Fuel Oil No. 2 to Schedule 1 of CEPA would enable the ministers to propose risk management instruments to manage risks posed by this substance and is, therefore, the preferred option among the three alternatives.

The proposed addition of Fuel Oil No. 2 to Schedule 1 of CEPA would not result in any incremental impacts (benefits or costs) on the public or industry, since the proposed Order would not impose any compliance requirements on stakeholders. Accordingly, there would be no administrative burden imposed on small businesses or businesses in general.

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a strategic environmental assessment was completed. The assessment is available at the following address: http://www.chemicalsubstanceschimiques.gc.ca/plan/seaees-eng.php.

Implementation, enforcement and service standards

The proposed Order would add Fuel Oil No. 2 to Schedule 1 of CEPA, thereby enabling the ministers to publish proposed regulations or instruments respecting preventive or control actions no later than February 2017 and finalize them no later than August 2018. Developing an implementation plan or a compliance strategy, or establishing service standards, is not considered necessary without any specific risk management proposal. An appropriate assessment of implementation, compliance and enforcement would be undertaken during the development of proposed instruments to manage risks posed by Fuel Oil No. 2.

Contacts

Greg Carreau
Program Development and Engagement Division
Department of Environment
Gatineau, Quebec
K1A 0H3

Substances Management Information Line
Telephone: 1-800-567-1999 (toll-free in Canada)
Telephone: 819-938-3232 (outside of Canada)
Fax: 819-938-5212
Email: eccc.substances.eccc@canada.ca

Michael Donohue
Risk Management Bureau
Department of Health
Ottawa, Ontario
K1A 0K9
Telephone: 613-957-8166
Fax: 613-952-8857
Email: michael.donohue@hc-sc.gc.ca

PROPOSED REGULATORY TEXT

Notice is given, pursuant to subsection 332(1) (see footnote a) of the Canadian Environmental Protection Act, 1999 (see footnote b), that the Governor in Council, on the recommendation of the Minister of the Environment and the Minister of Health, pursuant to subsection 90(1) of that Act, proposes to make the annexed Order Adding Toxic Substances to Schedule 1 to the Canadian Environmental Protection Act, 1999.

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 Order 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 Executive Director, Program Development and Engagement Division, Department of the Environment, Gatineau, Quebec K1A 0H3 (fax: 819-938-5212; email: ec.substances.ec@canada.ca).

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

Ottawa, April 14, 2016

Jurica Čapkun
Assistant Clerk of the Privy Council

Order Adding Toxic Substances to Schedule 1 to the Canadian Environmental Protection Act, 1999

Amendment

1 Schedule 1 to the Canadian Environmental Protection Act, 1999 (see footnote 15) is amended by adding the following:

Coming into Force

2 This Order comes into force on the day on which it is registered.

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