Canada Gazette, Part I, Volume 156, Number 20: Order Amending Schedule 3 to the Canadian Environmental Protection Act, 1999

May 14, 2022

Statutory authority
Canadian Environmental Protection Act, 1999

Sponsoring departments
Department of the Environment
Department of Health

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Order.)

Issues

As a Party to the Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade (the Rotterdam Convention), Canada is obligated to provide an export notification to importing parties prior to the export of chemicals that are subject to a domestic prohibition or severe restriction. The following substances are currently prohibited or restricted by regulatory measures, or are proposed to be restricted in the near future:

The use of PFOA, LC-PFCAs, HBCD and PBDEs is currently restricted under the Prohibition of Certain Toxic Substances Regulations, 2012 (PCTSR). HBCD has also recently been listed in Annex III of the Rotterdam Convention. Restrictions on the use of DP and DBDPE are being proposed through revisions to the PCTSR which are being published concurrently in Part I of the Canada Gazette.footnote 1 In addition, ferbam was re-evaluated under the Pest Control Products Act (PCPA), and it was concluded that the substance was presenting an unacceptable risk to human health. All registered pesticide uses of ferbam have been phased out as of December 14, 2021. As a result, regulatory controls on the export of these substances are proposed to ensure Canada’s continued compliance with the Rotterdam Convention. By listing these substances to the Export Control List (ECL), they will be subject to regulatory controls found in the Export of Substances on the Export Control Regulations (ESECLR).

In addition, the descriptions of certain substances currently listed on the ECL would be amended to better align with those under the Rotterdam and Stockholm conventions and related domestic risk management instruments. These amendments are for clarification only and do not modify the scope of the listings.

Background

PFOA and LC-PFCAs have water, oil, soil and grease repellant properties, and can be found in a variety of products, including surface treatments for textiles, upholstery, leather, automotive parts, carpet and packaging. They can also be found in aqueous film-forming foam (AFFF) that is used in firefighting, specifically fuel fires.

HBCD and PBDEs are flame retardants applied to commercial and consumer products. HBCD was used primarily in polystyrene foam insulation in the building industry. Other products containing HBCD include textiles (upholstered furniture, upholstered seating in transportation, wall coverings and draperies), paints, adhesives and polymers contained in electronic equipment. PBDEs can be found in many diverse products used by consumers (such as carpet underlay, furniture foam, appliances, and electrical and electronic equipment) and in building and automobile materials. Other uses identified for PBDEs included textiles, adhesives and sealants, rubber products and coatings.

DBDPE and DP are additive flame retardants that are currently marketed as an alternative or replacement for PBDEs (specifically decaBDE) in some applications. DBDPE is used in a wide variety of products, such as plastic and rubber materials, electrical and electronic equipment (EEE), automobiles, adhesives and sealants. DP is used in products that may include wire and cable jacketing, electronics, appliances, automobiles, hard plastic connectors and plastic roofing materials.

Ferbam is a protectant fungicide that was registered in Canada to control various fungal diseases on pome and stone fruits, greenhouse vegetables, grapes, berries, tobacco (seed bed), and spruce cones.

The Rotterdam Convention

The Rotterdam Convention imparts obligations for exports of substances listed in Annex III of the Convention as well as substances subject to domestic controls that prohibit or severely restrict their use. Substances listed in Annex III of the Rotterdam Convention are subject to the Prior Informed Consent procedure, which requires the consent of the importing country. For substances that are subject to a domestic prohibition or severe restrictions and that are not listed in Annex III of the Rotterdam Convention, Canada is obligated to provide a notification of export to importing parties prior to the export.

The Stockholm Convention

The Stockholm Convention on Persistent Organic Pollutants (the Stockholm Convention) is a global treaty to protect human health and the environment from chemicals that remain intact in the environment for long periods, become widely distributed geographically, accumulate in the fatty tissue of humans and wildlife, and have harmful impacts on human health or on the environment. Substances listed on the ECL that are also listed in Annex A or Annex B of the Stockholm Convention, other than ones added to the Convention by an amendment that is not in force for Canada, are regulated as persistent organic pollutants (POPs) under the ESECLR. The export of POPs is prohibited, with certain exceptions in accordance with the Stockholm Convention.

Export Control List

Canada has committed to shared responsibility and cooperative efforts at the international level to address the international trade in chemicals and pesticides. The ECL, found in Schedule 3 to the Canadian Environmental Protection Act, 1999 (CEPA), and the associated ESECLR help Canada to meet its 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.

Substances on the ECL are grouped into three parts:

Export of Substances on the Export Control List Regulations

The ESECLR prohibit or establish regulatory conditions 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 ESECLR enable Canada to meet its international export obligations under the Rotterdam and Stockholm conventions, among others. With respect to the Rotterdam Convention, the ESECLR provide a permitting scheme for exports to Parties to the Rotterdam Convention. With respect to the Stockholm Convention, the export of POPs is prohibited, with certain exceptions in accordance with the Stockholm Convention. Canada is a party to both of these conventions.

Exporters of listed substances are obligated to provide prior notice to the Minister of the Environment ahead of exports pursuant to the ESECLR. In addition, when exporting to a Party to the Rotterdam Convention, an export permit may be required pursuant to the ESECLR.

Objective

The objective of the proposed Order Amending Schedule 3 to the Canadian Environmental Protection Act, 1999 (the proposed Order) is to establish export controls on certain substances to ensure Canada’s continued compliance with the Rotterdam Convention. These substances are subject to, or proposed to become subject to, domestic regulatory controls, or have been added to the Rotterdam Convention.

In addition, the proposed Order aligns descriptions of certain substances currently listed on the ECL with those under the Rotterdam and Stockholm conventions and related domestic risk management instruments.

Description

The proposed Order would add substances to the ECL, thus making them subject to the ESECLR. In addition, the descriptions of some substances currently listed on the ECL would be amended to better align with those under the Rotterdam and Stockholm conventions and domestic risk management instruments. These amendments are for clarification only and do not modify the scope of the listings.

The proposed Order would come into force on the day on which the Prohibition of Certain Toxic Substances Regulations, 2022 come into force.

Additions to Part 2 of the ECL

The proposed Order would add the following substance, which is listed in Annex III to the Rotterdam Convention, to Part 2 of the ECL, making its export subject to the ESECLR:

Additions to Part 3 of the ECL

The proposed Order would add the following substances and groups of substances, the use of which is restricted or proposed to be restricted under domestic legislation, to Part 3 of the ECL, making their exports subject to the ESECLR:

Modifications to substances currently listed on the ECL

Phorate is currently listed in Part 3 of the ECL because its use is severely restricted under the Pest Control Products Act. Since it was recently listed in Annex III of the Rotterdam Convention, it would now be moved from Part 3 to Part 2 of the ECL.

The descriptions of certain substances listed to Part 1 and Part 2 of the ECL would be amended to ensure greater clarity. These changes would provide consistency among the ECL and domestic risk management instruments, such as the PCTSR, as well as the Rotterdam and Stockholm conventions. As such, certain substances and their associated Chemical Abstracts Service (CAS) Registry Number would be included as part of certain listings. These inclusions are for clarification only, are not meant to represent an exhaustive list and do not modify the scope of the listings.

Regulatory development

Consultation

A consultation document describing the proposed Order was published on March 12, 2020, on the CEPA Registry for a 30-day public comment period, to which an extension was provided in light of the COVID-19 pandemic situation. Approximately 5 000 stakeholders were notified of the publication of the consultation document via email and two comments were received. Furthermore, additional engagement with the automotive sector has occurred through working groups with representatives from the Department and the industry.

One stakeholder requested that the proposed Order not restrict the ability of products containing a substance proposed for addition to freely move across borders. The proposed Order would not prohibit any export on its own. However, the proposed Order would subject additional substances to controls established under the ESECLR that are in line with the Stockholm and Rotterdam conventions. Some exports may be prohibited under these regulatory controls.

Another comment received indicated that providing a notice of proposed export before each shipment of products containing a substance proposed for addition would be extremely burdensome and would entail additional costs for exporting companies. While there is no exemption to the requirement to provide notification prior to exporting a substance listed to the ECL, a single notification can be provided for multiple shipments, thus reducing the burden on exporting companies.

Modern treaty obligations and Indigenous engagement and consultation

The proposed Order is not expected to have direct impacts on Indigenous peoples and no modern treaty obligations would be affected.

Instrument choice

The ECL is the only instrument available to ensure the export controls necessary to meet Canada’s obligations under the Rotterdam Convention are in place. Thus, other instruments were not considered.

Regulatory analysis

Benefits and costs

The addition of HBCD, PBDEs, PFOA, LC-PFCAs, DP, DBDPE and ferbam to the ECL would subject these substances to the ESECLR. This is expected to result in an incremental increase in administrative costs to industry and Government given that required administrative activities, such as the submission of notices of proposed export and applications for export permits, would apply to additional substances. The total net costs attributable to the proposed Order are estimated to be about $508,000 over a 10-year period from 2022 to 2031.footnote 5

The increase in administrative costs to industry is expected to affect a limited number of stakeholders, given the number of different products exported containing substances proposed to be added to the ECL. HBCD, PBDEs, PFOA and LC-PFCAs have been restricted in Canada for a number of years and all registered ferbam pest control products have been phased out. Therefore, exports of these substances and products containing them are expected to be low. For DP and DBPDE, these substances are proposed to be newly regulated under the PCTSR; therefore, it is expected that these two substances and products containing them would be most likely to be exported.

Industry administrative costs

The proposed Order would require 21 potential exporters to familiarize themselves with the administrative requirements under the ESECLR (one hour), and provide a notice of proposed export (half an hour). It is also estimated that 2 potential exporters would apply for permits for the authorization to export (one hour). These industry administrative costs are estimated to be about $13,700.

Government administrative costs

The Department of the Environment (the Department) would carry incremental costs related to training, inspections, investigations, and measures to deal with any alleged violations, and compliance and promotion activities. Total costs to Government are estimated to be about $494,000.

The Department would incur costs to enforce and administer the ESECLR. With respect to enforcement costs, it is expected that there would be costs required for the hire and training of new enforcement officers, training for current enforcement officers, costs for equipment, and costs for inspections. In total, enforcement costs are estimated at $482,000 over a 10-year period.

The Department would also incur costs related to compliance promotion activities intended to encourage the regulated community to achieve compliance. Compliance promotion costs include costs for distributing the proposed amendments to the ECL and updating promotional materials (such as the guidance document for exports). This cost is estimated to be about $6,000 in 2022.

There would also be costs to the Department for the review of additional notices of proposed exports and the review and approval of additional permit applications. The total cost of these reviews and approvals is estimated to be about $6,000.

Environmental benefits to Canadians

The proposed Order would benefit Canadians by supporting Canada’s international export obligations under the Rotterdam and Stockholm conventions. Canada’s participation in these international conventions provides benefits to Canadians by ensuring that chemicals in international trade are used and traded in an environmentally sound manner which reduces damage to the global and domestic environment and ecosystems.

Small business lens

It is projected that four small businesses would assume small increases in their administrative costs as a result of the proposed Order through the completion of two administrative activities: familiarization with administrative requirements and completion of notices of proposed export.

The ECL does not contain provisions that allow for flexibilities, such as exemptions, for specific stakeholders. In addition, the incremental cost expected to be assumed by small businesses as a result of the proposed Order are expected to be minimal. Thus, flexibilities for small businesses were not considered.

Table 1 below shows the administrative costs to small businesses that are expected to result from the implementation of the proposed Order. For these small businesses, the proposed Order is expected to result in incremental administrative costs of $2,793, that is, $698 per small business.

Small business lens summary

Table 1: Administrative costs
Administrative costs Annualized value Present value
Administrative costs (all small businesses) $398 $2,793
Administrative costs per small business $99 $698

One-for-one rule

The one-for-one rule applies to the proposed Order since there is an incremental increase in the administrative burden on business, and the proposal is considered burden “IN” under the rule. Three administrative activities to be completed by stakeholders have been identified as a result of the proposed Order, namely all will need to familiarize themselves with the new controls, certain stakeholders will be required to submit a notice of proposed export, and certain stakeholders will be required to request an export permit. Two medium or large stakeholders are expected to be required to submit an annual request for an export permit. It is estimated that the proposed Order would result in an increase in annualized average administrative costs of approximately $908, or $43 per business.footnote 6Regulatory cooperation and alignment

The proposed Order would ensure Canada’s continued compliance with the Rotterdam and Stockholm conventions. Substances being added to the ECL are, or are proposed to be, prohibited or severely restricted domestically. The proposed Order would make these substances subject to the ESECLR, which set out, among other things, the conditions relative to the Rotterdam and Stockholm conventions. This regime allows Canada to implement its obligations under these conventions by collecting information required to be shared with Parties and by prohibiting exports that would be non-compliant.

Strategic environmental assessment

The proposed Order has been developed under Canada’s Chemical Management Plan, a Government of Canada initiative aimed at reducing the risks posed by chemicals to Canadians and their environment. A strategic environmental assessment was completed in 2011 and concluded that regulatory policies developed under the Chemical Management Plan are expected to reduce the risks posed by toxic substances. This anticipated outcome is in line with the 2019-2022 Federal Sustainable Development Strategy goal of safe and healthy communities.

Gender-based analysis plus

No gender-based analysis plus (GBA+) impacts have been identified for this proposal.

Implementation, compliance and enforcement, and service standards

The proposed Order would come into force on the day on which the Prohibition of Certain Toxic Substances Regulations, 2022 come into force. The Department would undertake outreach activities to raise potential stakeholder awareness of the proposed Order and its associated requirements under the ESECLR.

The proposed Order would be made under CEPA, so enforcement officers would, when verifying compliance, apply the Compliance and Enforcement Policy for CEPA. The Policy sets out the range of possible enforcement responses to alleged violations. If an enforcement officer discovers an alleged violation following an inspection or investigation, the officer would choose the appropriate enforcement action based on the Policy.

The Department has an existing compliance promotion program associated with the current ESECLR to control exports, which helps exporters determine whether their export activity is subject to the ESECLR and what their obligations would be. The approach for the proposed Order would include updating the existing guidance document, updating the existing stakeholder database, responding to and tracking inquiries from stakeholders, and reviewing notices of proposed export and permit applications for completeness, accuracy and compliance with the ESECLR.

When the necessary conditions are met, an exporter should expect approval and issuance of an export permit under the ESECLR within 10 working days of the receipt of the completed permit application. An exporter should expect acknowledgment of a notice of proposed export within 10 working days of the receipt of the completed notice. The Department would track its performance against the aforementioned service standards.

The performance of the proposed Order would be measured and evaluated through specific outcomes developed in 2018 as part of the implementation strategy for the ECL and ESECLR. The performance of the ECL and ESECLR is assessed annually according to the program evaluation plan. Regular review and evaluation of these performance indicators will allow the Department to evaluate the performance of the ECL and ESECLR in reaching the intended targets.

Contacts

Nicole Folliet
Director
Chemical Production Division
Department of the Environment
351 Saint-Joseph Boulevard, 19th Floor
Gatineau, Quebec
K1A 0H3
Email: sec-ecs@ec.gc.ca

Matthew Watkinson
Director
Regulatory Analysis and Valuation Division
Department of the Environment
200 Sacré-Cœur Boulevard
Gatineau, Quebec
K1A 0H3
Email: ec.darv-ravd.ec@ec.gc.ca

PROPOSED REGULATORY TEXT

Notice is given, pursuant to subsection 332(1)footnote a of the Canadian Environmental Protection Act, 1999footnote 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 Protection Branch, Department of the Environment, Gatineau, Quebec K1A 0H3 tel.: 819‑938‑4228; fax: 819‑938‑4218; email: sec-ecs@ec.gc.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 23, 2022

Steven Guilbeault
Minister of the Environment

Ottawa, March 23, 2022

Jean-Yves Duclos
Minister of Health

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

Amendments

1 Items 2 and 3 of Part 1 of Schedule 3 to the Canadian Environmental Protection Act, 1999 footnote b are replaced by the following:

2 Item 6 of Part 1 of Schedule 3 to the Act is replaced by the following:

3 Item 8 of Part 1 of Schedule 3 to the Act is replaced by the following:

4 Item 9 of Part 2 of Schedule 3 to the Act is replaced by the following:

5 Item 16 of Part 2 of Schedule 3 to the French version of the Act is replaced by the following:

6 Item 17 of Part 2 of Schedule 3 to the Act is replaced by the following:

7 Item 29 of Part 2 of Schedule 3 to the Act is replaced by the following:

8 Item 34 of Part 2 of Schedule 3 to the Act is replaced by the following:

9 The portion of item 35 of Part 2 of Schedule 3 to the Act before paragraph (a) is replaced by the following:

10 Part 2 of Schedule 3 to the Act is amended by adding the following in numerical order:

11 Item 18 of Part 3 of Schedule 3 to the Act is repealed.

12 Part 3 of Schedule 3 to the Act is amended by adding the following in numerical order:

Coming into Force

13 This Order comes into force on the day on which the Prohibition of Certain Toxic Substances Regulations, 2022 come into force, but if it is registered after that day, it comes into force on the day on which it is registered.