Vol. 150, No. 20 — May 14, 2016

Order Amending Schedule 3 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

Mercury is a naturally occurring chemical element that is persistent, bioaccumulative and toxic, even at very low levels, to human health and in aquatic and terrestrial ecosystems. Mercury is released into the environment from natural processes and human activities, and when released into the atmosphere, it undergoes long-range atmospheric transport and accumulates in northern regions, including Canada and, in particular, the Canadian Arctic.

In 2003, the Governing Council of the United Nations Environmental Programme found sufficient evidence of significant global adverse impacts from mercury and its compounds to warrant further international action to reduce the risks to human health and the environment. This finding led to negotiation, from 2010 to 2013, of the Minamata Convention on Mercury (Minamata Convention), a global, legally binding treaty that addresses all aspects of the mercury life cycle, including atmospheric emissions and trade. Parties to the Convention are required to maintain comprehensive restrictions on the export of elemental mercury that is at a concentration of 95% or more by weight.

Currently, there are no measures in Canada controlling or prohibiting the export of elemental mercury, except when it is, or is contained in, hazardous waste or hazardous recyclable material regulated under the Export and Import of Hazardous Waste and Hazardous Recyclable Material Regulations (EIHWHRMR). To be in a position to ratify the Minamata Convention, which Canada signed on October 10, 2013, Canada must implement controls on the export of elemental mercury.

Background

Mercury is found in three general forms: (1) pure mercury (a heavy metal), also known as “elemental mercury” or “metallic mercury;” (2) inorganic mercury compounds; and (3) organic mercury compounds. Natural processes, such as volcanic activity and erosion, release mercury into the environment. Mercury is also released as a result of human activities such as metal mining, base metal smelting, the combustion of coal, cement production, product use and disposal, and incineration of waste containing mercury. Mercury has been used in a variety of commercial and consumer products due to its unique characteristics. These products include, among others, fluorescent lamps, thermometers and thermostats, batteries, dental amalgams, medical/measuring devices and switches and relays.

Exposure to mercury is known to have toxic effects on humans, ecosystems and wildlife. Mercury is a potent neurotoxin that is particularly damaging to the development of human fetuses, infants and young children. The primary route of human exposure to mercury is consumption of fish or of piscivorous (fish-eating) mammals with heightened levels of mercury. Therefore, there is particular concern for those eating large amounts of these foods, such as First Nations and Arctic Aboriginal peoples, who rely on these traditional foods for sustenance. A 2011 study conducted in Nunavik showed that 72% of women of childbearing age had levels of mercury in their blood above safe thresholds (see footnote 1).

Given these risks of toxic effects on humans, ecosystems and wildlife, Canada has put in place various measures to reduce and mitigate the potential risk of exposure to domestic mercury emissions and releases. These measures have reduced Canadian mercury emissions by over 90% since the 1970s. Mercury and its compounds are listed on Schedule 1 (List of Toxic Substances) of the Canadian Environmental Protection Act, 1999 (CEPA), enabling the introduction of regulatory and non-regulatory risk management measures. Canada-wide Standards on Mercury Emissions (Incineration and Base Metal Smelting) and Canada-wide Standards on Mercury Emissions from Coal-fired Electric Power Generation Plants were established in 2000 and 2006, respectively. These measures, along with the closure of mercury cell chlor-alkali facilities, and process changes by a smelting company in Flin Flon, Manitoba, drove the reductions in mercury emissions in Canada.

More recently, the Products Containing Mercury Regulations, which, with some exemptions, prohibit the import and manufacture of products containing mercury, came into force on November 8, 2015, and are anticipated to prevent over 4 100 kg of mercury from being released into the air.

Despite these domestic efforts to reduce mercury air emissions and releases into the environment, Canada remains a net recipient of mercury through air emissions at the global level. More than 95% of mercury resulting from human activities that is deposited in Canada comes from other countries. The mercury travels by air and is deposited in Canada’s soil, water and ice. At 42%, China is the largest foreign source of mercury deposition in Canada, followed by the United States, at approximately 17%. The sector for artisanal and small scale gold mining using mercury, which does not occur in Canada, contributes 37% of global mercury emissions. (see footnote 2) Coal burning contributes 24% of global mercury emissions. (see footnote 3) This suggests that Canada would benefit from global efforts to reduce or eliminate impacts from mercury emissions worldwide.

Canada is not a producer of high-purity mercury through primary mercury mining, nor do facilities exist in Canada to distill mercury wastes or by-products to a high purity for industrial use. Therefore, all mercury for industrial use must be imported. Statistics Canada data indicate that there are 88 companies in total that import mercury. Among them, 11 companies are known exporters of mercury waste, and another 4 were identified as exporters of mercury. The Department of the Environment (the Department) assumes these 4 companies are re-exporters since Canada does not produce mercury.

The Minamata Convention

The Minamata Convention is a global treaty to protect human health and the environment from the adverse effects of mercury. The major highlights of the Minamata Convention include a ban on new mercury mines, the phase-out of existing mines, control measures on air emissions, and international action on the sector of artisanal and small-scale gold mining using mercury. In order to ratify the Minamata Convention, Parties must also control exports of elemental mercury (see footnote 4) in which the concentration of elemental mercury is 95% or more by weight. The Convention was agreed upon at the fifth session of the Intergovernmental Negotiating Committee in Geneva, Switzerland, in January 2013, and it was opened for signature in Japan in October 2013. The Convention had been signed by 128 governments, including Canada, and the number of governments that have ratified the Convention (including the United States in 2013) continues to increase.

Export Control List

Canada has committed to shared responsibility and cooperative efforts to address the international trade in chemicals and pesticides. The Export Control List (ECL) in Schedule 3 to CEPA and the associated Export of Substances on the Export Control List Regulations (the Regulations) help Canada to meet its current international obligations.

The ECL is a list of substances whose export is controlled because their use in Canada is prohibited or restricted, or because Canada has accepted to control their export under the terms of an international agreement. Section 100 of CEPA provides the Minister of the Environment and the Minister of Health with the authority to add or delete substances from the ECL by order. These amendments are published in the Canada Gazette.

Permits are sometimes required for the export of a substance on the ECL. The conditions for determining when an export permit is required and for obtaining permits from the Minister are specified in the Regulations. Additionally, the Regulations establish conditions under which a person may export a substance listed on the ECL.

Substances on the ECL are grouped into three parts:

Export of Substances on the Export Control List Regulations

The Regulations impose controls on the export of substances listed on the ECL. They describe the manner in which to notify the Minister of the Environment of proposed exports. The Regulations enable Canada to meet its obligations under the Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade (Rotterdam Convention) (see footnote 5) as well as its export obligations under the Stockholm Convention on Persistent Organic Pollutants (Stockholm Convention). (see footnote 6) Specifically, the Regulations provide a permitting scheme for exports to Parties to the Rotterdam Convention and establish restrictions on the export of substances subject to the Stockholm Convention. Canada is a Party to both of these Conventions.

The Regulations apply to all exports of substances listed on the ECL, regardless of the purpose of the export or the quantity.

Objectives

The primary objective of the proposed Order is to position Canada to ratify the Minamata Convention. Ratification of the Convention by Canada would demonstrate Canada’s commitment to protecting the environment and human health from mercury to domestic stakeholders and to Canada’s international negotiating partners. Canada’s ratification would encourage reductions in global mercury emissions, and would consequently reduce foreign mercury deposition in Canada, particularly in Canada’s Arctic.

Description

The proposed Order would add mixtures containing elemental mercury in which the concentration of elemental mercury is 95% or more by weight to Part 2 of the ECL, making exports of elemental mercury subject to the Regulations. The proposed Order, and accompanying proposed amendments to the Regulations, would establish restrictions applying to these exports.

The proposed Order would also change the name of Mirex in Part 1 of the ECL to align with the List of Toxic Substances in CEPA. This would change “Mirex (Dodecachloropentacyclo [5.3.0.02,6.03,9.04,8] decane)” [Chemical Abstracts Service (CAS) No. 2385-85-5] to “Dodecachloropentacyclo [5.3.0.02,6.03,9.04,8] decane (Mirex)” [CAS No. 2385-85-5]. (see footnote 7) The proposed Order would not change the export control of Mirex.

Benefits and costs

Below is a summary of the impacts on Canadians, industry, and the Government.

Canadians

The proposed Order would, with corresponding amendments to the Regulations, benefit Canadians by allowing Canada to be in a position to ratify the Minamata Convention. The Minamata Convention, once in force, will obligate participating governments to take measures to control and, where possible, reduce mercury emissions and to take steps to enable the responsible trade of mercury.

The Minamata Convention will come into force 90 days after 50 governments have ratified the treaty. Canada’s participation in the Minamata Convention allows it to contribute to global controls of mercury emissions. Hence this international, legally binding treaty will lead to the control and reduction of mercury emissions worldwide. Since most of the mercury deposited in Canada is from foreign sources, global action taken under the treaty will reduce Canadians’ exposure to mercury.

A restriction on certain mercury exports (see footnote 8) is also consistent with the life-cycle approach adopted by Canada, which aims to prevent or minimize releases to the environment. This approach takes into account supply, trade, products, manufacturing processes, uses, atmospheric emissions, releases to land and water, environmentally sound interim storage and waste. The Minamata Convention’s ultimate objective “to protect human health and the environment from anthropogenic emissions and releases of mercury and mercury compounds” is in line with the life-cycle approach.

By restricting mercury exports, Canada would not be contributing to the global use of mercury for artisanal and small-scale gold mining, which accounted for 37% of global mercury emissions in 2010. A reduction in global mercury emissions would reduce the impact on the environment and the health of Canadians, particularly in the Arctic.

Since the proposed Order would be strictly in regard to exports, there would be no direct costs passed on to Canadian consumers.

Industry

Canada is not a producer of high-purity mercury. Available information shows that exports of mercury from Canada take place by exporters who first import the mercury. However, due to the United States’ ban on mercury exports in 2013, the availability of mercury from domestic U.S. sources and a limited market for mercury in the United States, imports of mercury into the United States have decreased significantly. As a result, the impact of the proposed Order on any Canadian exporters to the United States would be low.

The export of mercury waste for treatment or environmentally sound disposal is allowed under both the Minamata Convention and the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal. Eleven Canadian companies are known to have exported mercury waste between 2010 and 2015. These companies would be allowed to continue this activity. The proposed Order would not result in any increased costs or lost revenue. If this waste contains mercury below 95%, it would not be within the scope of the Regulations, but may still be regulated under the EIHWHRMR. If the waste contains mercury above this level, the export would still be allowed, but a prior notification of export would be required in addition to any controls that may apply under the EIHWHRMR or other instruments.

Companies that export mercury at a concentration of 95% or more by weight to countries other than the United States would be affected by the proposed Order and by proposed amendments to the Regulations, which together would impose restrictions on these exports. Over the last five years, four companies exported mercury from Canada to countries other than the United States. Costs associated with compliance with the proposed Order and the proposed amendments to the Regulations are assessed in the Regulatory Impact Analysis Statement for the proposed amendments to the Regulations Amending the Export of Substances on the Export Control List Regulations.

Companies exporting mixtures containing elemental mercury in a concentration of 95% or more by weight, for purposes that would still be allowed under the proposed amendments to the Regulations, would be required to provide prior notification of exports. The administrative costs due to the notification requirements are $80 per business per year. As noted above, there are 88 companies that are assumed to be within the scope of the proposed Order and the amendments to the Regulations, which includes the 11 companies exporting hazardous waste or hazardous recyclable material and the 4 companies exporting mercury, according to data from Statistics Canada.

Competitiveness

The proposed Order is not expected to affect competitiveness for any regulatee or sector given that the expected cost for stakeholders is negligible.

Government

The cost of the proposed Order to the Government would be negligible, as there is an existing regulatory program in place to administer the Regulations. Specifically, compliance promotion costs are not expected, since the Department maintains and updates a list of compliance promotion materials on a regular basis. Therefore, the Government is not expected to face any additional compliance promotion obligations.

The enforcement cost is estimated to be $150 annually, assuming that an average of four to five test samples would be required every five years to determine whether an exported substance is mercury.

“One-for-One” Rule

The “One-for-One” Rule would apply to the proposed Order (“IN”), as there would be incremental administrative costs to business. Companies exporting mercury for purposes allowed by the Regulations would be required to provide prior notification of exports. Information from Statistics Canada revealed that there are 88 companies importing mercury into Canada, for purposes including laboratory use, research, and manufacturing of plastics, pharmaceuticals, or metal alloys.

The proposed Order would only impact mercury exporters. Among these 88 companies, 4 companies are known to have exported mercury and 11 other companies have a history of exporting mercury as hazardous waste or hazardous recyclable material in the past five years.

For the purposes of the “One-for-One” calculations, an assumption was made that all 88 companies would assume administrative costs. These companies would have to learn about the notification requirements and submit notifications when they plan to make an export. The annualized administrative cost is estimated to be $71 per company, or a total annualized administrative cost of $6,212. (see footnote 9) The assumptions that went into the “One-for-One” calculations are the following (see footnote 10):

Since this is an amendment to an existing Order, under the “One-for-One” Rule, there is no repeal.

Small business lens

The small business lens would not apply to the proposed Order since the cost impact would be below one million dollars annually, and the cost impact per small business would be negligible.

It is assumed that 88 companies would be impacted by the proposed Order. Of these companies, 24 are small businesses. For these small businesses, the proposed Order is expected to result in administrative costs of $80 per company, costs that are similar to those assumed by medium and large businesses.

Consultation

An initial 30-day online public consultation was held in September 2014 regarding possible export controls for elemental mercury. The Department informed known stakeholders by email of this opportunity to comment. Responses from industry were generally positive or neutral since the restrictions that would be imposed on the export of mercury would continue to allow for the export of mercury that is, or is contained in, hazardous waste or hazardous recyclable material already regulated by the EIHWHRMR. Responses from environmental nongovernmental organizations were supportive of the restrictions on the export of mercury.

A second 30-day online public consultation was held in May 2015 to detail the proposed regulatory amendments and describe the proposed restrictions on the export of mercury. The Department informed known stakeholders by email of this additional opportunity to comment. No comments related to the proposed restrictions on the export of mercury, or to the change to the listing for Mirex, were received.

As part of both consultations, the Department sent emails to the four companies who had recently exported mercury regarding the opportunity to comment. However, no responses were received.

Rationale

Exposure to mercury is known to have toxic effects on humans, ecosystems and wildlife. When released into the environment, it undergoes long-range atmospheric transport and accumulates in northern regions, in particular the Canadian Arctic. Consumption of fish or piscivorous (fish-eating) mammals with high levels of mercury is the primary route of human exposure to mercury. There is particular concern for those consuming large amounts of these foods, such as First Nations and Arctic Aboriginal peoples.

The proposed Order would list mercury on the ECL, which would make those exports subject to the Regulations. In addition, along with proposed amendments to the Regulations to set restrictions on the export of mercury, the proposed Order would position Canada to ratify the Minamata Convention and contribute to global action to reduce mercury emissions. Since most of the mercury deposited in Canada comes from foreign sources, Canada requires global action to reduce emissions of mercury to have a positive outcome for Canadians.

Canada is not a producer of high-purity mercury. However, available information shows that exports of mercury from Canada take place by exporters who first import the mercury. The expected compliance costs imposed on the Canadian industry and consumers by the proposed Order are expected to be negligible. The administrative costs due to the notification requirements are $80 per business per year for 88 companies.

Consultations were conducted on the proposed Order. Responses from industry and environmental non- governmental organizations were generally positive or neutral.

Strategic environmental assessment

As required by The Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary review was conducted which concluded that there would be no expected important environmental effects, either positive or negative; accordingly, a strategic environmental assessment is not required. (see footnote 11)

Implementation, enforcement and service standards

Since the Regulations are made under CEPA, enforcement officers would, when verifying compliance with the Regulations, apply the Compliance and Enforcement Policy for CEPA. The Policy also sets out the range of possible responses to alleged violations: 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 violation). In addition, the Policy explains when the Department would resort to civil suits by the Crown for cost recovery.

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

The Department has an existing compliance promotion program associated with the current Regulations. This program provides a guidance document for exporters that helps determine whether their export activity is subject to the Regulations and, if so, what their obligations would be. Forms for export notification and permit application are also provided, though exporters are able to use their own templates provided all of the required data is presented. Where the necessary conditions are met, an exporter should expect approval and issuance of an export permit under the Regulations within 10 working days of the receipt of the completed permit application. An exporter should expect acknowledgement of a prior notification of export within 10 working days of the receipt of the completed prior notification of export.

Contacts

Lucie Desforges
Director
Chemical Production Division
Department of the Environment
351 Saint-Joseph Boulevard, 11th Floor
Gatineau, Quebec
K1A 0H3
Fax: 819-938-4218
Email: ec.substancedexportationcontrolee-exportcontrolledsubstance.ec@canada.ca

Yves Bourassa
Director
Regulatory Analysis and Valuation Division
Department of the Environment
200 Sacré-Cœur Boulevard
Gatineau, Quebec
K1A 0H3
Fax: 819-938-3374
Email: DARV.RAVD@canada.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 Minister of the Environment and the Minister of Health, pursuant to section 100 of that Act, propose to make the annexed Order Amending Schedule 3 to the Canadian Environmental Protection Act, 1999.

Any person may, within 75 days after the date of publication of this notice, file with the Minister of the Environment comments with respect to the proposed Order or, within 60 days after the date of publication of this notice, file with that Minister 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 addressed to the Chemical Production Division, Environmental Stewardship Branch, Department of the Environment, Gatineau, Quebec K1A 0H3 (tel.: 819-938-4228; fax: 819-938-4218; email: ec.substancedexportationcontrolee-exportcontrolledsubstance.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.

Gatineau, March 31, 2016

Catherine McKenna
Minister of the Environment

Ottawa, March 29, 2016

Jane Philpott
Minister of Health

Order Amending Schedule 3 to the Canadian Environmental Protection Act, 1999

Amendments

1 Item 1 of Part 1 of Schedule 3 to the Canadian Environmental Protection Act, 1999 (see footnote 12) is replaced by the following:

1. Dodecachloropentacyclo [5.3.0.02,6.03,9.04,8] decane (Mirex) (Chemical Abstracts Service (CAS) 2385-85-5)

2 Part 2 of Schedule 3 to the Act is amended by adding the following after item 11:

12. Mixtures that contain elemental mercury (CAS 7439-97-6) at a concentration of 95% or more by weight

Coming into Force

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

[20-1-o]