Federal Halocarbon Regulations, 2022: SOR/2022-110
Canada Gazette, Part II, Volume 156, Number 12
Registration
SOR/2022-110 May 20, 2022
CANADIAN ENVIRONMENTAL PROTECTION ACT, 1999
ENVIRONMENTAL VIOLATIONS ADMINISTRATIVE MONETARY PENALTIES ACT
P.C. 2022-528 May 19, 2022
Whereas, pursuant to subsection 332(1)footnote a of the Canadian Environmental Protection Act, 1999 footnote b, the Minister of the Environment published in the Canada Gazette, Part I, on November 14, 2020, a copy of the proposed Federal Halocarbon Regulations, 2020, substantially in the annexed form, and persons were given an opportunity to file comments with respect to the proposed Regulations or to file a notice of objection requesting that a board of review be established and stating the reasons for the objection;
And whereas, in accordance with subsection 209(3) of that Act, that Minister has, before recommending the proposed Regulations, offered to consult with the governments of territories to which the proposed Regulations apply and with the members of the National Advisory Committee who are representatives of aboriginal governments that have jurisdiction over aboriginal land to which the proposed Regulations apply;
Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of the Environment, pursuant to sections 209footnote c and 286.1footnote d of the Canadian Environmental Protection Act, 1999 b and pursuant to subsection 5(1) of the Environmental Violations Administrative Monetary Penalties Act footnote e, makes the annexed Federal Halocarbon Regulations, 2022.
Federal Halocarbon Regulations, 2022
Definitions
Definitions
1 The following definitions apply in these Regulations.
- air-conditioning system or refrigeration system
- means a system that has a compressor, condenser, evaporator and expansion valve, and that contains or is designed to contain a halocarbon refrigerant. (système de climatisation ou de réfrigération)
- certified person
- means a person who
- (a) holds a valid certificate recognized by at least one province indicating completion of an environmental awareness course in recycling, recovery and handling procedures in respect of halocarbon refrigerants; and
- (b) is recognized by the Canadian Forces or under the laws of Canada or a province as qualified to work on air-conditioning systems or refrigeration systems. (personne accréditée)
- container
- means a container that contains or is designed to contain a halocarbon for the purpose of storage or transportation. (récipient)
- fire-extinguishing system
- means a portable or fixed system that contains or is designed to contain a halocarbon fire-extinguishing agent. (système d’extinction d’incendie)
- halocarbon
- means a substance set out in Schedule 1, whether existing alone or in a mixture, and includes isomers of any such substance. (halocarbure)
- installation
- means
- (a) in the case of an air-conditioning system or refrigeration system or solvent system, joining two or more components that contain or are designed to contain a halocarbon essential to the operation of the system;
- (b) in the case of a fixed fire-extinguishing system, adding a component — that contains or is designed to contain a halocarbon — to the other components of the system in order to make the system operational; and
- (c) in the case of a new portable fire-extinguishing system, making it available. (installation)
- large,
- in relation to an air-conditioning system or refrigeration system, describes a system that consists of
- (a) a single refrigerant circuit that contains or is designed to contain more than 10 kg of halocarbon; or
- (b) multiple refrigerant circuits one or more of which contains or is designed to contain more than 10 kg of halocarbon. (de grande capacité)
- military vehicle
- means a ship or aircraft, as defined in subsection 122(1) of the Canadian Environmental Protection Act, 1999, or a land vehicle, that is designed to be used in combat or in a combat support role. (véhicule militaire)
- recycling,
- in respect of a halocarbon, means recovering and, if needed, cleaning by a process such as filtering or drying, and reusing to charge an air-conditioning system or refrigeration system, solvent system, fire-extinguishing system or container. (recyclage)
- responsible person,
- in respect of an air-conditioning system or refrigeration system, solvent system, fire-extinguishing system or container, means the person responsible for its service and operation. (personne responsable)
- service
- means any work that is carried out on an air-conditioning system or refrigeration system, solvent system, fire-extinguishing system or container and that involves the components that contain or are designed to contain a halocarbon, such as the charging of a system or container with a halocarbon, the removal or reassembly of one or more components of the circuit containing a halocarbon or the detection and repair of leaks. (entretien)
- small,
- in relation to an air-conditioning system or refrigeration system, describes a system that consists of
- (a) a single refrigerant circuit that contains or is designed to contain 10 kg or less of halocarbon; or
- (b) multiple refrigerant circuits each of which contains or is designed to contain 10 kg or less of halocarbon. (de petite capacité)
- solvent system
- means a system that uses or is designed to use a halocarbon as a solvent, including in a cleaning application. It does not include a system or application that uses a halocarbon as a laboratory analytical standard or laboratory reagent or in a process in which the halocarbon is converted into another substance or is generated but ultimately converted into a different substance. (système de solvants)
Application
Application
2 (1) These Regulations apply to air-conditioning systems or refrigeration systems, solvent systems, fire-extinguishing systems and containers located in Canada that are
- (a) owned by Her Majesty in right of Canada, a board or agency of the Government of Canada, a Crown corporation, as defined in subsection 83(1) of the Financial Administration Act, or a federal work or undertaking; or
- (b) located on aboriginal lands or federal lands.
Non-application
(2) These Regulations do not apply to foam products.
Prohibitions
Release of halocarbon
3 (1) A person must not release, or allow or cause the release of, a halocarbon that is contained in
- (a) an air-conditioning system or refrigeration system, fire-extinguishing system or container; or
- (b) equipment used in the reuse, recycling, reclamation or storage of a halocarbon.
Non-application
(2) Subsection (1) does not apply if the release of a halocarbon
- (a) is for the purpose of calibrating leak-detecting devices with equipment designed specifically for that purpose and the manufacturer’s recommended procedures are followed;
- (b) results from connecting or disconnecting hoses that are less than 1 m in length and used for charging with, or recovering, a halocarbon;
- (c) results from a purge system on an air-conditioning system or refrigeration system, including any associated recovery equipment, that emits less than 0.1 kg of halocarbon per kilogram of air purged to the environment; or
- (d) is from a fire-extinguishing system for the purpose of
- (i) fighting a fire that is not set for training purposes, or
- (ii) testing the system in a military vehicle as authorized by a permit issued under subsection 20(2).
Definition of reclamation
(3) In this section, reclamation, in respect of a halocarbon, means its recovery, reprocessing and upgrading through a process such as filtering, drying, distilling and treating chemically in order to restore the halocarbon to industry-accepted reuse standards.
Installation or activation
4 A person must not install or activate an air-conditioning system or refrigeration system or fire-extinguishing system that contains or is designed to contain a halocarbon listed in any of items 1 to 9 of Schedule 1 unless
- (a) the person is reactivating the system at the same site;
- (b) the person is installing a fire-extinguishing system in a military vehicle;
- (c) the person is installing a fire-extinguishing system during the manufacture of a new civilian aircraft in accordance with the Convention on International Civil Aviation, signed at Chicago on December 7, 1944, as amended from time to time; or
- (d) in the case of a fire-extinguishing system, the person is authorized to do so by a permit issued under subsection 20(2).
Solvent system — items 1 to 9 of Schedule 1
5 (1) A person must not install or use a solvent system that uses or is designed to use a halocarbon listed in any of items 1 to 9 of Schedule 1.
Solvent system — items 11 and 12 of Schedule 1
(2) A person must not install or use a solvent system that uses or is designed to use a halocarbon listed in item 11 or 12 of Schedule 1 unless they are authorized to do so by a permit issued under subsection 20(2).
Storage or transport
6 (1) A person must not store or transport a halocarbon unless it is in a container that is designed and manufactured to be refilled and to contain that specific type of halocarbon.
Non-application
(2) Subsection (1) does not apply in respect of a halocarbon that is used as a laboratory analytical standard or a laboratory reagent.
Chiller
7 (1) A person must not operate a chiller that contains a halocarbon listed in any of items 1 to 9 of Schedule 1.
Definition of chiller
(2) In this section, chiller means an air-conditioning system or refrigeration system that has a compressor, an evaporator and a secondary coolant, but does not include an absorption chiller.
Purge system
8 A person must not install or operate a purge system, including any associated recovery equipment, unless the system emits less than 0.1 kg of halocarbon per kilogram of air purged to the environment.
Charging — leak detection
9 A person must not charge an air-conditioning system or refrigeration system, solvent system, fire-extinguishing system or container with a halocarbon for the purpose of leak testing the system or container.
Charging with a halocarbon
10 Subject to section 11, a person must not charge an air-conditioning system or refrigeration system, fire-extinguishing system or container with a halocarbon unless
- (a) a person has previously leak tested the system or container; and
- (b) in the case where a leak is detected, the person has notified the owner of the system or container of the leak and the leak has been repaired.
Non-application of section 10
11 (1) If a leak is detected from an air-conditioning system or refrigeration system or fire-extinguishing system and it is necessary to charge the system with a halocarbon to prevent an immediate danger to the environment or to human life or health, section 10 does not apply during the period in which the danger persists.
Notice
(2) If a system is charged under the circumstances described in subsection (1),
- (a) the person who charged it must immediately notify the owner; and
- (b) the owner must, within seven days after being notified, submit a report to the Minister in a paper format or in an electronic format compatible with that used by the Minister, containing the information set out in Part 1 of Schedule 2.
Charging — air-conditioning or refrigeration
12 (1) A person must not charge an air-conditioning system or refrigeration system with a halocarbon listed in any of items 1 to 9 of Schedule 1.
Non-application
(2) Subsection (1) does not apply if the charge replaces a halocarbon that is recovered to service the system and the charge does not result in a net gain in the amount of halocarbon contained in the system.
Charging — fire-extinguishing system
13 A person must not charge a fire-extinguishing system with a halocarbon listed in any of items 1 to 9 of Schedule 1 unless
- (a) the charge replaces a halocarbon that is recovered to service the system and the charge does not result in a net gain in the amount of halocarbon contained in the system;
- (b) the system is for use in a military vehicle;
- (c) the system is for use in a civilian aircraft; or
- (d) the person is authorized to charge the system by a permit issued under subsection 20(2).
Installation, Servicing, Recovery and Withdrawal from Use
Certified person
14 Only a certified person may install, service or recover a halocarbon from an air-conditioning system or refrigeration system.
Recovery of halocarbon
15 (1) The certified person who installs or services an air-conditioning system or refrigeration system, and the responsible person who installs or services a solvent system, fire-extinguishing system or container, must recover any halocarbon that would otherwise be released during those procedures into a container designed to contain that specific type of halocarbon.
Recovery equipment
(2) The equipment used to recover a halocarbon from a fire-extinguishing system must have a rated transfer efficiency of at least 99%.
Permanent withdrawal from use
16 (1) The certified person who permanently withdraws from use an air-conditioning system or refrigeration system, and the responsible person who permanently withdraws from use a solvent system, fire-extinguishing system or container, must first
- (a) recover all halocarbon contained in the system or container into a container designed to contain that specific type of halocarbon; and
- (b) affix a notice to the system or container containing the information set out in Part 2 of Schedule 2.
Non-application
(2) Subsection (1) does not apply to a small air-conditioning system or refrigeration system if the system is being transferred to a new owner, it is in operating condition and its transfer does not result in the release of a halocarbon.
Leaks and Leak Tests
Frequency of leak tests
17 The certified person in respect of a large air-conditioning system or refrigeration system, and the responsible person in respect of a fire-extinguishing system or container that contains or is designed to contain more than 10 kg of halocarbon, must conduct a leak test of its components that contain a halocarbon at least once every calendar year and no more than 15 months since the previous test.
Leak — system
18 The certified person in respect of an air-conditioning system or refrigeration system, and the responsible person in respect of a fire-extinguishing system, must, as soon as possible in the circumstances after a leak from the system is detected, and in any case within seven days after the leak is detected,
- (a) repair the leak;
- (b) isolate the leaking portion of the system and recover the halocarbon from it; or
- (c) recover the halocarbon from the system.
Leak — container
19 As soon as possible in the circumstances after a leak from a container is detected, and in any case within seven days after the day on which the leak is detected, the responsible person in respect of the container must repair the leak or recover the halocarbon from the container.
Permits
Application for permit
20 (1) The owner of a solvent system or fire-extinguishing system must submit to the Minister an application for a permit, on a form that the Minister provides, containing the information set out in Part 3 of Schedule 2, if the owner proposes to
- (a) test a fire-extinguishing system in a military vehicle in accordance with subparagraph 3(2)(d)(ii);
- (b) install a fire-extinguishing system mentioned in section 4;
- (c) install or use a solvent system mentioned in subsection 5(2); or
- (d) charge a fire-extinguishing system mentioned in section 13.
Issuance of permit
(2) If the information required under subsection (1) has been provided and the Minister determines that no technically or financially feasible alternative to the use of the halocarbon exists that could have a less harmful impact on the environment or on human life or health, the Minister must issue a permit that is valid for one year beginning on the day of issuance in the case of a solvent system or for three years beginning on that day in the case of a fire-extinguishing system.
Cancellation of permit
21 (1) The Minister may cancel a permit if any false or misleading information has been submitted in support of the application for the permit.
Notice of cancellation
(2) Before cancelling a permit, the Minister must notify the permit holder of the proposed cancellation and the reasons for it and give them an opportunity to make verbal or written representations in respect of the cancellation.
Inventory, Activity Logs and Reports
Creation of inventory
22 Before the first anniversary of the day on which these Regulations come into force, the owner of a large air-conditioning system or refrigeration system, or of a solvent system, fire-extinguishing system or container that contains or is designed to contain more than 10 kg of halocarbon, must establish and maintain an inventory containing the information set out in Part 4 of Schedule 2.
Activity log — large system
23 (1) The responsible person in respect of a large air-conditioning system or refrigeration system, or a solvent system, fire-extinguishing system or container that contains or is designed to contain more than 10 kg of halocarbon, must maintain an activity log containing the information set out in Part 5 of Schedule 2 in which an entry is recorded for each time the system or container is installed, serviced or permanently withdrawn from use or ownership has been transferred.
Activity log — small system
(2) The responsible person in respect of a small air-conditioning system or refrigeration system, or a solvent system, fire-extinguishing system or container that contains or is designed to contain 10 kg or less of halocarbon, must maintain an activity log containing the information set out in Part 5 of Schedule 2 in which an entry is recorded for each time the system or container is serviced.
Reports — release of 100 kg or more
24 In the event of a release of 100 kg or more of halocarbon from an air-conditioning system or refrigeration system, solvent system, fire-extinguishing system or container, the owner of the system or container must submit the following reports to the Minister, within the applicable period:
- (a) within 24 hours after the release is detected, a verbal report or a report in a paper format or in an electronic format compatible with that used by the Minister containing the information set out in Part 6 of Schedule 2; and
- (b) within 30 days after the release is detected, a report in a paper format or in an electronic format compatible with that used by the Minister, containing the information set out in Part 7 of Schedule 2.
Report — release of less than 100 kg
25 In the event of a release of more than 10 kg but less than 100 kg of halocarbon from an air-conditioning system or refrigeration system, solvent system, fire-extinguishing system or container, the owner of the system or container must submit a report in a paper format or in an electronic format compatible with that used by the Minister, containing the information set out in Part 7 of Schedule 2 within the applicable period:
- (a) no later than July 31 for releases detected during the period that begins on January 1 and ends on June 30 of the same year; and
- (b) no later than January 31 of the following year for releases detected during the period that begins on July 1 and ends on December 31.
Retention of Documents
Retention of documents
26 (1) The owner of an air-conditioning system or refrigeration system, solvent system, fire-extinguishing system or container must retain on the site where the system or container is located all documents or copies of those documents required under these Regulations for a period of at least five years after the day on which they are prepared or submitted, and must provide them to the Minister on request.
Retention at principal place of business
(2) The owner must retain at their principal place of business in Canada a copy of the documents for each system or container that is located in a means of transportation, on a site to which access is limited for at least four months in a year or on a site where the owner is not present regularly, and must provide them to the Minister on request.
Electronic format
(3) Documents referred to in subsection (1) or (2) may be retained in electronic format compatible with that used by the Minister.
Consequential Amendments
Canadian Environmental Protection Act, 1999
Regulations Designating Regulatory Provisions for Purposes of Enforcement (Canadian Environmental Protection Act, 1999)
Item | Column 1 Regulations |
Column 2 Provisions |
---|---|---|
16 | Federal Halocarbon Regulations, 2022 |
|
Environmental Violations Administrative Monetary Penalties Act
Environmental Violations Administrative Monetary Penalties Regulations
28 Division 9 of Part 5 of Schedule 1 to the Environmental Violations Administrative Monetary Penalties Regulations footnote 2 is replaced by the following:
DIVISION 9
Item | Column 1 Provision |
Column 2 Violation Type |
---|---|---|
1 | 3(1)(a) | C |
2 | 3(1)(b) | C |
3 | 4 | C |
4 | 5(1) | C |
5 | 5(2) | C |
6 | 6(1) | B |
7 | 7(1) | B |
8 | 8 | B |
9 | 9 | B |
10 | 10 | B |
11 | 11(2)(a) | A |
12 | 11(2)(b) | A |
13 | 12(1) | C |
14 | 13 | C |
15 | 14 | A |
16 | 15(1) | B |
17 | 15(2) | B |
18 | 16(1)(a) | B |
19 | 16(1)(b) | A |
20 | 17 | A |
21 | 18 | C |
22 | 19 | C |
23 | 22 | A |
24 | 23(1) | A |
25 | 23(2) | A |
26 | 24(a) | A |
27 | 24(b) | A |
28 | 25 | A |
29 | 26(1) | A |
30 | 26(2) | A |
Repeal
29 The Federal Halocarbon Regulations, 2003 footnote 3 are repealed.
Coming into Force
Registration
30 These Regulations come into force on the day on which they are registered.
SCHEDULE 1
(Sections 1, 4 and 5, subsections 7(1) and 12(1) and section 13)
Item | Halocarbon |
---|---|
1 | Tetrachloromethane (carbon tetrachloride) |
2 | 1,1,1-trichloroethane (methyl chloroform), except 1,1,2-trichloroethane |
3 | Chlorofluorocarbons (CFC) |
4 | Bromochlorodifluoromethane (Halon 1211) |
5 | Bromotrifluoromethane (Halon 1301) |
6 | Dibromotetrafluoroethane (Halon 2402) |
7 | Bromofluorocarbons except those set out in items 4 to 6 |
8 | Bromochloromethane (Halon 1011) |
9 | Hydrobromofluorocarbons (HBFC) |
10 | Hydrochlorofluorocarbons (HCFC) |
11 | Hydrofluorocarbons (HFC) |
12 | Perfluorocarbons (PFC) |
SCHEDULE 2
(Paragraphs 11(2)(b) and 16(1)(b), subsection 20(1), sections 22 and 23, paragraphs 24(a) and (b) and section 25)
Information to be Contained in Document
PART 1
Halocarbon Charging Report (paragraph 11(2)(b))
- 1 type of equipment (air-conditioning system or refrigeration system or fire-extinguishing system)
- 2 name and address of owner of system
- 3 name of responsible person in respect of system
- 4 specific location of system
- 5 serial number or unique identifier assigned by owner of system
- 6 type of halocarbon contained in system
- 7 charging capacity in kilograms of system
- 8 date of charge
- 9 quantity in kilograms of halocarbon charged into system
- 10 nature of immediate danger to the environment or human life or health
- 11 circumstances that justify charge in order to prevent immediate danger
- 12 date of repair of leak or recovery of remaining halocarbon
PART 2
Notice of Withdrawal From Use (paragraph 16(1)(b))
- 1 type of equipment (air-conditioning system or refrigeration system, solvent system, fire-extinguishing system or container)
- 2 name and address of owner of system or container
- 3 name of responsible person in respect of system or container
- 4 specific location of system or container before its withdrawal from use
- 5 serial number or unique identifier assigned by owner of system or container
- 6 type and quantity in kilograms of halocarbon recovered from system or container
- 7 charging capacity in kilograms of system or container
- 8 name of certified person or other person who performed activity and name of their employer
- 9 certificate number of certified person (if applicable)
PART 3
Application for a Permit (subsection 20(1))
- 1 type of equipment (solvent system or fire-extinguishing system)
- 2 type of permit requested (test, installation, charge or use)
- 3 name and address of applicant
- 4 specific location of system
- 5 serial number or unique identifier assigned by owner of system
- 6 type of halocarbon contained in system
- 7 charging capacity in kilograms of system
- 8 request for confidentiality under subsection 313(1) of the Canadian Environmental Protection Act, 1999
- 9 declaration that there is no technically or financially feasible alternative that could have a less harmful impact on the environment or on human life or health
- 10 information in support of declaration, including research on alternatives and reasons they are not technically or financially feasible
PART 4
Inventory (section 22)
- 1 For each large air-conditioning system or refrigeration system, or solvent system, fire-extinguishing system or container that contains or is designed to contain more than 10 kg of halocarbon:
- (a) type of equipment (air-conditioning system or refrigeration system, solvent system, fire-extinguishing system or container)
- (b) name and address of owner of system or container
- (c) name of responsible person in respect of system or container and their title or position
- (d) specific location of system or container
- (e) serial number or unique identifier assigned by owner of system or container
- (f) type of halocarbon contained in system or container
- (g) charging capacity in kilograms of system or container
PART 5
Activity Log (section 23)
- 1 type of equipment (air-conditioning system or refrigeration system, solvent system, fire-extinguishing system or container)
- 2 name and address of owner of system or container
- 3 name of responsible person in respect of system or container
- 4 specific location of system or container at the time of service, if applicable
- 5 serial number or unique identifier assigned by owner of system or container
- 6 type of halocarbon contained in system or container
- 7 charging capacity in kilograms of system or container
- 8 for each activity carried out:
- (a) date of activity
- (b) type of activity (installation, service, permanent withdrawal from use or transfer of ownership)
- (c) description of service, if any
- (d) name of certified person or other person who performed activity and name of their employer
- (e) certificate number of certified person (if applicable)
- (f) the quantity of halocarbon recovered in kilograms
- (g) the type and quantity of halocarbon charged in kilograms
PART 6
Halocarbon Release Report (paragraph 24(a))
- 1 type of equipment (air-conditioning system or refrigeration system, solvent system, fire-extinguishing system or container)
- 2 name and address of the owner of system or container
- 3 name of the responsible person in respect of system or container
- 4 type and quantity (known or estimated) of halocarbon in kilograms released
PART 7
Halocarbon Release Report (paragraph 24(b) and section 25)
- 1 type of equipment (air-conditioning system or refrigeration system, solvent system, fire-extinguishing system or container)
- 2 name and address of the owner of system or container
- 3 name of the responsible person in respect of system or container
- 4 specific location of system or container
- 5 serial number or the unique identifier assigned by the owner of system or container
- 6 type of halocarbon released from system or container
- 7 charging capacity in kilograms of system or container
- 8 for each release:
- (a) the date of the release
- (b) the quantity of halocarbon released in kilograms
- (c) circumstances leading to the release
- (d) corrective actions taken
- (e) preventive actions to be taken
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Issues
Halocarbons are chemicals that are widely used in refrigeration and air-conditioning systems, fire-suppression systems, and solvent systems.footnote 19 The Federal Halocarbon Regulations, 2003 (FHR 2003) require regulated parties to maintain equipment containing halocarbons on a regular basis and to recover halocarbons during equipment maintenance and at end-of-life disposal. The FHR 2003 aim to prevent halocarbon emissions from refrigeration, air-conditioning, fire-extinguishing and solvent systems that (1) are owned by federal departments, boards or agencies, Crown corporations, or federal works or undertakings;footnote 20 or that (2) are located on Indigenous or federal lands.
There are many administrative issues associated with the FHR 2003, such as unclear definitions and confusing operational requirements, making it difficult to manage and implement. Further, certain regulatory provisions lead to some unnecessary administrative burden costs for Canadian individuals and businesses, as well as for federal departments, boards and agencies, and Crown corporations. Several regulatory provisions are also obsolete, such as references to expired Underwriters’ Laboratories of Canada standards. Finally, the existing exemptions concerning the use of halons in fire-suppression systems in the civil aviation sector are not aligned with international directives.footnote 18
Background
Halocarbons are greenhouse gases (GHGs) and can be ozone-depleting substances. Emissions of GHGs, including emissions of halocarbons and carbon dioxide (CO2), are contributing to a global warming trend that is associated with climate change. Halocarbons can have global warming potentials hundreds to thousands of times greater than that of CO2. Emissions of ozone-depleting substances contribute to the thinning and gradual destruction of the ozone layer, which provides protection to life forms on Earth from overexposure to the sun’s ultraviolet (UV) rays. Overexposure to UV rays can have negative impacts on the environment and human health, contributing to the formation of skin cancer and cataracts, the weakening of the immune system, and damages to fisheries, agriculture, buildings and equipment.
Domestic instruments controlling halocarbon emissions
In Canada, the National Action Plan for the Environmental Control of Ozone-Depleting Substances (ODS) and their Halocarbon Alternatives (the National Action Plan) sets out federal, provincial and territorial responsibilities for ozone protection.footnote 4 The National Action Plan provides a national framework for a harmonized approach by the federal, provincial and territorial governments to implement an ozone layer protection program. Additionally, the Pan-Canadian Framework on Clean Growth and Climate Change (Pan-Canadian Framework) includes regulatory actions to reduce hydrofluorocarbon (HFC) emissions. HFCs are potent GHGs, dozens to thousands of times more powerful than carbon dioxide. In response to the National Action Plan and the Pan-Canadian Framework, the Government of Canada developed the Ozone-depleting Substances and Halocarbon Alternatives Regulations (ODSHAR) to control the export, import, manufacture, sale and certain uses of ozone-depleting substances and HFCs, as well as products containing or designed to contain them. The ODSHAR are made under Part 5 (Controlling Toxic Substances) of the Canadian Environmental Protection Act, 1999 (CEPA).
Provincial and territorial governments are responsible for controlling the sale, handling, use, recovery and recycling of ozone-depleting substances and their halocarbon alternatives used in equipment that falls under their respective jurisdiction. Given that those provincial regulations do not apply on federal lands, there was a need for system maintenance and controlling releases of halocarbons at the federal level. The FHR 2003 were made under Part 9 of CEPA (Government Operations and Federal and Aboriginal Land) to meet this need. The purpose of the FHR 2003 is to help prevent and reduce domestic emissions of halocarbons into the environment from air-conditioning, refrigeration, fire-extinguishing and solvent systems, and from equipment associated with these systems, that (1) are owned by federal departments, boards or agencies, Crown corporations, or federal works or undertakings; or (2) are located on Indigenous or federal lands.footnote 5
The FHR 2003 require regular preventive equipment maintenance to be conducted by a certified person, including annual leak testing, as well as the recovery of refrigerants during equipment maintenance and at end-of-life disposal. The FHR 2003 also set prohibitions on releases of halocarbons from systems, as well as on the use of halocarbons in certain systems, and include phase-out schedules for the use of some substances. Permits may be issued if no technically and financially feasible alternative to a prohibited halocarbon exists. These obligations are accompanied by record-keeping and reporting requirements, which include activity logs, equipment maintenance notices to be affixed to systems and release reporting.
The FHR 2003 regulate owners and operators of refrigeration, air-conditioning, solvent systems and fire-extinguishing systems containing halocarbons, and containers holding halocarbons that are owned by federal departments, agencies, boards and Crown corporations, federal works or undertakings, or are found on federal or Indigenous lands. Federal works and undertakings are any work, undertaking or business that has operations crossing or extending beyond provincial boundaries. Operations that fall within the scope of this definition include telecommunication companies; port authorities; navigation and shipping; railways and canals; ships and ferries; airports, aircraft and commercial air services; and banking. Regulated parties on Indigenous lands mainly include band councils or private businesses (e.g. owners of fuel stations). On federal lands (e.g. federal parks), regulated parties include private companies that own or operate systems located on such land.
International instruments controlling halocarbon emissions
The Montreal Protocol on Substances that Deplete the Ozone Layer (the Montreal Protocol) is an international treaty designed to protect the ozone layer. Originally signed by Canada in 1987, the Montreal Protocol obligates parties to phase out the production and consumption of substances known to cause ozone depletion and to phase down the production and consumption of HFCs. As one of the early signatories to the Montreal Protocol, Canada has consistently met or exceeded its obligations under the Montreal Protocol to protect the ozone layer.
The ODSHAR, which control the export, import, manufacture, sale and certain uses of ozone-depleting substances and HFCs as well as products containing or designed to contain them, were designed to meet the requirements of the Montreal Protocol. HFCs are not ozone-depleting substances but are very potent GHGs. Since many of the substances controlled by the Montreal Protocol are also GHGs, their elimination also contributes to taking action on climate change.footnote 6
The FHR 2003 are complementary to the Montreal Protocol and the ODSHAR as they establish controls and prescribe maintenance actions for systems in order to help prevent and reduce releases of ozone-depleting substances and HFCs. The FHR 2003 consequently help to reduce adverse effects associated with the destruction of the ozone layer and with climate change, such as important changes in the quantity and distribution of rain, snow, and ice; the risk of extreme weather events, such as heat waves and torrential rainfalls; and the frequency of flooding, dry spells, droughts and forest fires.
Halons in aircraft fire-suppression systems
The International Civil Aviation Organization (ICAO) is the United Nations agency responsible for the safe and cooperative development of international civil aviation. The phase-out of the production and consumption of halons under the Montreal Protocol has led the ICAO to establish a progressive schedule to eliminate the use of halons in aircraft fire-suppression systems. The organization was founded in the United States on December 7, 1944. Canada is an ICAO member country and ratified the Convention on International Civil Aviation (the Chicago Convention or the Convention) in 1946.footnote 7 Almost all the countries in the world adhere to the Convention, as there are currently 193 ICAO member countries.
The ICAO sets safety standards for civilian aircraft and has established a progressive schedule for the elimination of halons in fire extinguishers. Annex 6 (Operation of Aircraft) and Annex 8 (Airworthiness of Aircraft) of the Chicago Convention prohibit the use of certain halons in fire-suppression systems on newly manufactured or designed aircraft by target dates. The international community is committed to meeting these target dates; however, technical difficulties have led the ICAO to extend the target dates for certain aircraft compartments. Target dates are subject to change if suitable alternatives are not available.
Canada has a relatively large civil aviation system, with flights to many international destinations.footnote 8 Decisions taken by the ICAO can have important impacts on Canadian civil aviation. Transport Canada leads efforts under the ICAO to ensure that Canada’s interests and positions are represented on the international stage. Aircraft stakeholders are fully aware and supportive of the current measures established under the Chicago Convention to progressively eliminate the use of halons in existing and newly designed aircraft.
Objective
The Federal Halocarbon Regulations, 2022 (the FHR 2022) aim to address administrative issues associated with the FHR 2003. The FHR 2022 clarify definitions and requirements, and reduce administrative costs for the regulated community. In addition, the FHR 2022 remove or update obsolete provisions and enhance regulatory alignment with other jurisdictions.
Description
The FHR 2022 are made under Part 9, section 209, of CEPA. They update, repeal and replace the FHR 2003, and apply to the same regulated parties. The FHR 2022 modify the FHR 2003 as described below.
The FHR 2022 revise definitions to improve clarity. Examples are as follows:
- Small and large systems have their own definitions based on the charge of halocarbons they contain or are designed to contain (less than 10 kilograms [kg] and 10 kg or more, respectively), instead of being defined by their refrigeration capacity, which has proven difficult to determine in many circumstances.
- The FHR 2022 use the expression “permanently withdrawing from use,” instead of “decommissioning,” in order to avoid covering systems that could come back into service after a certain time.
- For the provisions related to the installation of systems containing halocarbons, “operates or is intended to operate” is changed to “that contains or is designed to contain,” in order to avoid having to prove an intention to operate a system with a certain halocarbon and to align with corresponding provisions in the ODSHAR.
- Clarifications are added regarding reports for halocarbon releases between 10 kg and 100 kg, in order to clearly establish the period of time that is to be covered in each biannual report.
- Large systems containing halocarbons are subject to a new inventory tracking requirement. The information requested in this inventory includes the type of equipment, the name and address of the owner, the name of the responsible person, the specific location of the equipment on the site, the serial number or unique identifier of the equipment assigned by the owner, the type of halocarbon in question, and the equipment’s halocarbon charging capacity.footnote 9 For smaller systems containing halocarbons, only servicing activities that could lead to a halocarbon release are required to be tracked.
- The definition of the term “owner” is removed as the dictionary definition is deemed sufficient and an additional definition, “responsible person,” is added to clarify roles and responsibilities.
The FHR 2022 also modify certain administrative and operational requirements, including
- removing all requirements to affix notices on equipment, except for the notice related to the permanent withdrawal from use of a system;
- requiring that activities such as servicing, installation and withdrawal from use of large systems, or activities on small systems that could lead to a halocarbon release, be recorded in the activity log;
- allowing regulated parties to keep records and send reports electronically;
- modifying the leak test interval from once every 12 months to at least once every calendar year and no more than 15 months since the previous leak test;
- increasing the validity period, from one to three years, for permits to install or charge a fire-extinguishing system containing one of the substances listed in items 1 to 9 of Schedule 1 of the FHR 2022.
Further, the FHR 2022 align federal regulations with certain ICAO standards. In particular, the FHR 2022 include an ambulatory incorporation by reference of the ICAO standards relating to the replacement of halons in fire-extinguishing systems in civil aviation. This incorporation by reference would maintain exemptions concerning the use of certain halons in fire extinguishers found on newly manufactured or designed aircraft, in line with the prohibition schedule set in the Chicago Convention. If updates are made to the schedule in the Chicago Convention to prohibit the use of halons in fire extinguishers in aircraft, no modifications to the FHR 2022 are required in order for Canada to remain aligned with the Convention.
The FHR 2003 required that service technicians obtain a certificate recognized by three or more Canadian provinces, or by the province in which the work of the service technician who holds the certificate is being done indicating successful completion of an environmental awareness course in recycling, recovery and handling procedures in respect of halocarbon refrigerant. The FHR 2022 revise the definition of “certified person” to specify that a valid certificate is one recognized by at least one Canadian province, given that the training curriculum for service technicians is similar across jurisdictions. The FHR 2022 also clarify that only a qualified person with a valid certificate can perform work on refrigeration and air-conditioning systems.
The FHR 2022 also include an exception to allow the release of a halocarbon for the purpose of safety testing military vehicles, but only if authorized to do so by permit when no technically or financially feasible alternative exists that could have a less harmful impact on the environment and on health.
Other changes reflected in the FHR 2022 include the removal of references to expired Underwriters’ Laboratories of Canada standards. The FHR 2022 also include the relevant requirements of the Environmental Code of Practice for the Elimination of Fluorocarbon Emissions from Refrigeration and Air Conditioning Systems. The FHR 2022 remove the direct reference to this code to avoid redundancy. Obsolete provisions that are no longer applicable are removed as well.
In addition, amendments to other regulations administered by the Department of the Environment (the Department) are necessary to reflect the fact that the FHR 2022 repeal and replace the FHR 2003. In particular, consequential amendments are made to specific provisions identified for purposes of enforcement in the Regulations Designating Regulatory Provisions for Purposes of Enforcement (Canadian Environmental Protection Act, 1999), as well as in the Environmental Violations Administrative Monetary Penalties Regulations.
Regulatory development
Consultation
Consultations prior to prepublication in the Canada Gazette, Part I
Two main rounds of consultation prior to prepublication were conducted in 2013 and 2017. Stakeholders included all known parties regulated by the FHR 2003, as well as service providers; members of the Federal-Provincial Working Group on Ozone-Depleting Substances and their Halocarbon Alternatives; associations and governmental organizations that offer training and issue certificates to refrigeration and air-conditioning technicians; local governments that issue their own provincial certificates; associations related to federal works and undertakings; Indigenous associations and communities; and industry and Indigenous groups that consult with regulated parties.
A consultation document outlining proposed revisions to the FHR 2003 was published on the Department’s website in January 2013.footnote 10 A notice of the document’s publication was sent to all known stakeholders at the time. Four face-to-face consultation meetings were held in March 2013 in Edmonton and Halifax, and in Gatineau (in English and in French). The objective of these meetings was to present the proposed revisions, gather comments and provide an opportunity for stakeholders to propose further revisions. Two webinars were also conducted in March 2013 (one in English and one in French). The regulated community generally supported revisions to reduce administrative burden and clarify regulatory requirements, but was not in favour of any revisions to the FHR 2003 that could result in additional costs.
In 2017, the Department launched a targeted stakeholder consultation based on feedback received in 2013. The proposed changes to the FHR 2003 were released electronically for public comment in November 2017, along with the publication of a consultation document outlining the feedback received to date for changes being considered.footnote 11 All known stakeholders were notified of this consultation process by email.
During the targeted consultation, stakeholders, including federal departments and agencies, businesses, and industry associations, welcomed the proposed clarification of definitions and the potential reduction of administrative burden. Stakeholders agreed with defining small and large systems by the quantity of halocarbons that they are designed to contain, rather than their refrigeration capacity, but expressed concern with some of the proposed revisions. It was noted that the quantity of refrigerant was not always written on the system’s label and that a conversion table should be available to help with calculations. Clarification was also requested for systems with multiple refrigerant circuits of less than 10 kg of halocarbons. Stakeholders agreed with the recommendation to change the interval between leak tests as a means to enhance compliance flexibility. Lastly, stakeholders were concerned about the requirement to maintain an inventory of their large systems containing halocarbons, but most of them agreed that this requirement is a best practice.
The Department has kept in contact with stakeholders since 2017 through different activities, such as workshops provided by regional compliance and promotion officers. The Department also continues to answer any questions or requests, as they arise.
Summary of comments received during prepublication in the Canada Gazette, Part I
The proposed Regulations were published in the Canada Gazette, Part I, on November 14, 2020, for a 60-day public comment period where interested parties were invited to submit their written comments. The proposed Regulations were also posted on the Department’s CEPA Environmental Registry Website to make them broadly available to interested parties. The Department emailed interested parties to inform them of the public comment period and sent a letter to CEPA National Advisory Committee members informing them of the publication of the proposed Regulations and of the opportunity to submit written comments.
During the comment period, the Department received 18 written submissions from a range of stakeholders including federal departments and agencies, businesses regulated as federal works and undertakings, service providers, industry and industry associations and an indigenous organization. Interested parties supported the proposed Regulations.
Various stakeholders requested modifications to the regulatory text to improve clarity. As well, some stakeholders requested clarifications regarding the regulatory text and its applicability. The Department has considered and addressed these concerns by providing explanations or by making modifications to the regulatory text. The following paragraphs summarize the main issues raised by interested parties with respect to the proposed Regulations published in the Canada Gazette, Part I, and the Department’s consideration of these issues leading to the finalization of the FHR 2022.
1. Definitions and clarifications
Various stakeholders requested clarification regarding the terms “owner or person responsible,” “certified person,” “as soon as practicable,” and “fire extinguishing cylinder.” In response to these comments, the regulatory text has reverted to the definitions of “fire-extinguishing system” and “as soon as possible” used in the FHR 2003. A definition for “responsible person” was added. Additionally, industry, industry associations and federal departments requested that it be made clear in the regulatory text that any document (report or inventory) may be kept in an electronic format. Section 26 of the FHR 2022 was amended to add that documents may be kept in an electronic format.
2. Inventory of large systems and containers
Certain stakeholders expressed concern over the burden created by the new inventory tracking requirement for all large systems and containers containing halocarbons. One federal department suggested this be a non-punitive provision. Additionally, a service provider indicated that the cost estimated to maintain and implement this obligation was underestimated. The Department believes there is value in keeping an inventory of systems and their location as it simplifies on-site identification of large systems and containers subject to the FHR 2022 for both owners/operators and enforcement officers when verifying compliance as per CEPA’s Compliance Enforcement Policy.footnote 12 As such, no changes have been made to the FHR 2022 in response to this comment. It is recognized that the development of a new inventory of large systems will require resources from stakeholders to implement. To that effect, the FHR 2022 provide a period of one year following the coming into force to finalize the inventory of large systems. In response to comments, costs estimated to first develop the inventory of large systems and then maintain it on a yearly basis were increased, as reflected in the benefits and costs section below.
3. Guidance material
Federal departments, industry and services providers requested that guidance be provided to help stakeholders better understand certain terminology used in the FHR 2022. Stakeholders also requested specific examples for the information to be recorded in the activity logs, such as charging capacity in kg, the location of containers that can vary, and the methodology used to calculate refrigerant charge in a system. In response, guidance material has been developed and examples are provided in the templates accessible on the Federal Halocarbon Regulations information webpage.
4. Activity logs
The Department received several comments from federal departments, industry and service providers regarding the requirements for activity logs. Requests were made to include the certificate numbers of service technicians in the list of information required; modify the location information for the system or container on the site to acknowledge that some of them are portable and can be moved around; and remove the activity log obligation for small systems as this is an additional burden. Some stakeholders also requested that the activity log requirement not be subject to administrative monetary penalties.
In response to the comments, the Department revised the information required to be maintained in the activity logs. Certificate numbers of service technicians have been added, and the information required for location of the equipment has been clarified to mean the location of the container or portable fire-extinguishing system at the time of service or the location where it is normally stored. The intent of FHR 2022 is to minimize the release of halocarbon to the environment. As such, there is value in requiring information to be maintained in an activity log when actions that could lead to the release of a halocarbon are performed on a small system. The activity log requirement for small systems is not a new obligation as it was already required in the FHR 2003; the modification in the FHR 2022 clarifies that only activities performed when servicing a small system need to be recorded in the activity log. Additionally, the regulatory requirement to maintain information in the activity log is meant to ensure that all systems regardless of size are well maintained and serviced to prevent releases of halocarbons to the environment. There is value in having this information recorded both for the owner of the small system and enforcement officers; thus this requirement remains unchanged. Activity logs will also remain subject to administrative monetary penalties, as this is useful to enforcement officers when verifying compliance as per CEPA’s Compliance Enforcement Policy.footnote 15
5. Exception for releases from fire-extinguishing systems
A federal department requested an exception to the prohibition on releasing halocarbons under section 3 of the FHR 2022 for safety testing of fire-extinguishing systems in military vehicles that underwent modifications to ensure a fire could be extinguished in a closed environment without compromising human life or health. This exception has been added to the FHR 2022, and has to be authorized by permit when no technically or financially feasible alternative exists that could have a less harmful impact on the environment and on health.
6. Permanent withdrawal from use
An industry association indicated that systems or equipment that are decommissioned or permanently withdrawn from use should have a label affixed to them to ensure those dismantling/parting the units know the refrigerant(s) have been recovered properly. In response, the FHR 2022 were amended to add the obligation to affix a notice to a system that is permanently withdrawn from use that mentions the halocarbon it contained has been recovered from the system.
7. Ozone-depleting substances versus high global warming potential substances and other substances
It was proposed that the Department consider amendments to FHR 2022 to modulate regulatory requirements according to the relative risk posed by the various ozone-depleting substances and substances with high global warming potential. The FHR 2022 has different regulatory requirements for ozone-depleting substances which are for the most part prohibited from use. Some substances with high global warming potential (such as HFCs) can still be used given alternatives are not necessarily available at this point in time; however, HFCs are being phased down through the Ozone-depleting Substances and Halocarbon Alternatives Regulations. Releases of any of these substances are prohibited under the FHR 2022 as they have an impact on the environment. One stakeholder recommended having different tiers of reporting and enforcement for halocarbons that are ozone-depleting versus those substances that are GHGs given other mechanisms are in place to report on these substances, such as the reporting of HFC and Perfluorocarbon (PFC) emissions under the federal Greenhouse Gas Reporting Program (GHGRP). Reporting of HFC and PFC emissions to the GHGRP is different from the reporting required under the FHR 2022. The FHR 2022 includes requirements related to halocarbon releases resulting from their use in air-conditioning, refrigeration, fire-extinguishing and solvent systems and need to be remediated. Government officials review the quantities released, but also the corrective action taken to fix any potential problems. The GHGRP requires facilities that emit a total of 10 000 tonnes or more of GHGs (including HFCs and PFCs) in carbon dioxide equivalent units per year to report their emissions to the program. Furthermore, the sources of HFC and PFC emissions covered under the GHGRP do not include those sources required to be reported under the FHR 2022.
One stakeholder also recommended amending the FHR 2022 to include reporting GHG releases exceeding 2 kg. The proportion of GHG releases attributed to halocarbons is very small in comparison to overall GHG emissions for Canada. The objective of the FHR 2022 is to protect the ozone layer and take action on climate change by reducing and preventing emissions of ozone-depleting substances and of their halocarbon alternatives to the environment. Given large systems and containers are more prone to leakage or failure given the system designs and given the costs to benefits associated with reporting on different release quantities, reporting releases of halocarbon over 10 kg is considered adequate to achieve the FHR 2022 objective. Furthermore, the 10 kg baseline for reporting releases is aligned with most provincial regulatory requirements for reporting releases of halocarbons. An industry association suggested listing hydrofluoroolefins (HFOs) as a halocarbon and/or controlled substance. Because HFOs have no ozone-depleting potential and a very low global warming potential, the listing of HFOs would not further advance the FHR 2022 objective of protecting the ozone layer and taking action on climate change by reducing and preventing emissions of ozone-depleting substances and of their halocarbon alternatives to the environment. Furthermore, the FHR is complementary to the ODSHAR and covers the same substances (HFOs are not covered under the ODSHAR). As a result, FHR 2022 has not been modified to reflect these suggested amendments.
Modern treaty obligations and Indigenous engagement and consultation
The Department conducted a modern treaty assessment. It was found that the FHR 2022 apply to reserve lands, but they do not apply to most lands subject to modern treaties. Self-governing Indigenous groups have the authority to apply laws related to halocarbon management in their treaty areas, if those laws are local in nature and go above and beyond the federal requirements.
All known regulated Indigenous parties, and Indigenous organizations, communities and groups, were invited to participate in the 2013 consultation. Written comments on the consultation document were received from one Indigenous organization that supported modification adding flexibility to time-related provisions given remote location of systems they own and other modifications reducing the administrative burden. The creation of the inventory was also deemed a good practice, but the organization questioned the need for it to be included in the FHR 2022. Three Indigenous organizations responded during the 2017 consultation by submitting comments that indicated their support for the FHR 2022 and supporting strong environmental protection for reducing and preventing halocarbon emissions. The Department reached out to the Assembly of First Nations in December 2018 to offer an additional opportunity for members to share their comments on the proposed regulatory changes; no comments were received.
During the 60-day public comment period associated with the publication of the proposed FHR 2022, one indigenous organization mentioned that they appreciated being consulted, but did not have comments.
Instrument choice
When determining how to meet the objectives mentioned above, three regulatory options were considered: (1) maintaining the status quo; (2) making amendments to the FHR 2003; and (3) repealing and replacing the FHR 2003.
The status quo option was not chosen, as the administrative issues associated with the FHR 2003 would continue to make the regulatory regime difficult to manage and implement. Regulated parties would also continue to incur unnecessary costs when complying with the existing administrative requirements. The FHR 2003 required substantial structural changes, such as merging many provisions that are similar to each other. The option to amend the FHR 2003 was not selected given the intricate nature of the modifications required and the number of changes being proposed.
Repealing and replacing the FHR 2003 with the FHR 2022 will facilitate regulatory administration. For example, small and large systems will have their own definitions based on the charge of halocarbons they contain or are designed to contain, instead of small systems being defined by their refrigeration capacity, which has often proven difficult to determine. Further, the FHR 2022 are expected to lead to reductions in administrative burden costs. They also revise or replace obsolete provisions and enhance alignment with requirements in other jurisdictions and with the Chicago Convention.
Regulatory analysis
Benefits and costs
The FHR 2022 are expected to address the administrative issues associated with the FHR 2003. Estimates of the impacts (benefits and costs) of the FHR 2022 are based on the number of known regulated parties, which is approximately 3 750. Approximately 200 of these regulated parties are operators of systems containing halocarbons associated with federal departments, boards and agencies and Crown corporations. The remaining regulated parties include about 1 750 operators of systems associated with federal works and undertakings, around 1 300 businesses on Indigenous lands and about 500 businesses on federal lands. The projected costs and benefits (cost savings) attributable to the FHR 2022 are described below, which are based on estimates of the number of hours required to conduct an administrative activity, the wage rate associated with each activity, and the number of parties required to conduct each activity.
The FHR 2022 require regulated parties to conduct inventory tracking only for large systems. This provision will simplify on-site identification of systems containing halocarbons for equipment owners and operators and federal government officials. Smaller systems are generally not serviced, but rather replaced when they break down. As a result, the FHR 2022 will only require the tracking of activities related to the servicing of smaller systems that could lead to a halocarbon release. Overall, the FHR 2022 include record-keeping requirements that focus on larger systems, which have the potential for larger halocarbon releases. These changes will help improve the record-keeping practices of equipment owners and operators and help enforcement officers conduct on-site inspections.
The 3 750 regulated parties would need about one hour each to familiarize themselves with the FHR 2022; additionally, approximately 1 500 businesses will need about one hour and 350 businesses will require four hours to develop an inventory of large systems resulting in a one-time total administrative cost of approximately $250,000.footnote 13 In terms of recurring administrative costs, it is assumed that 3 750 regulated parties owning or operating a large refrigeration, air-conditioning, fire-extinguishing or solvent system containing halocarbons, or a container holding or designed to hold halocarbons for the purpose of storage or transportation, would each have an employee work for one hour annually to maintain information in an inventory. The total incremental increase in administrative costs of the proposed Regulations is therefore estimated to be approximately $1.3 million from 2021 to 2031.
These projected costs would be offset by administrative cost savings. The projected cost savings resulting from the FHR 2022 are attributable to streamlined notification and record-keeping requirements for all regulated parties, although some would experience more relief than others. For example, every regulated party would save approximately four hours annually, on average, as it would no longer be required to affix a notice, keep a record of that notice or maintain an activity log for each refrigeration, air-conditioning or fire-extinguishing system. Instead, this information would be centralized in a single activity log, making it easier for enforcement officers to verify compliance.
It is also assumed that 112 regulated parties would each save 15 minutes annually, on average, due to the removal of the requirement to affix a notice to the control panel of a fire extinguishing system to indicate that it is out of operation during the period of service. Finally, it is estimated that increasing the validity period, from one to three years, for permits to install or charge a fire-extinguishing system containing one of the substances listed in items 1 to 9 of Schedule 1 of the FHR 2022 would also reduce net administrative work for three regulated parties by 1.5 hours per year each. The total administrative cost savings are estimated to be approximately $3.8 million from 2021 to 2031.
Between 2021 and 2031, around 200 operators of systems containing halocarbons associated with federal departments, boards and agencies, and Crown corporations are projected to realize a net reduction of $125,000 in administrative costs. The other 3 550 regulated parties, including operators of systems containing halocarbons associated with federal works and undertakings, and businesses on Indigenous and federal lands, could realize a net reduction of approximately $2.4 million in administrative costs over this period. The net cost savings (net benefits) attributable to the FHR 2022 are thus estimated to be $2.5 million from 2021 to 2031.
Small business lens
The small business lens applies to the FHR 2022 since most regulated parties would be considered small businesses. Based on information managed by the Department concerning the FHR 2003, it is estimated that the FHR 2022 would implicate 3 750 regulated parties. Approximately 80% (3 030) of these parties are small businesses. This estimate is based on available employee count data and obtained by using the assumption that a small business is any business that has fewer than 100 employees.
The FHR 2022 update, repeal and replace the FHR 2003. Several flexibilities for all businesses are included in the FHR 2022, such as changing the leak test interval from once every 12 months to at least once per calendar year and no more than 15 months since the previous leak test. Small systems containing halocarbons would not typically trigger compliance actions under the FHR 2022. Work done on small systems does not normally lead to a leak, and they are usually replaced instead of repaired. In addition, under the FHR 2022, there would be reduced notification and record-keeping requirements (e.g. allowing regulated parties to keep records and send reports electronically).
Consultations were held with stakeholders, including regulated parties and industry associations, prior to the publication of the proposed FHR 2022 in the Canada Gazette, Part I. Stakeholders, including small businesses, indicated general support for the proposed Regulations.
Table 1 below shows the administrative cost savings (benefits) and costs to small businesses that are expected to result from the implementation of the FHR 2022. In total, small businesses would assume costs of about $1 million, or $335 per small business, over the period of analysis. For example, these costs could result from the added requirement of maintaining information in an inventory for large systems and containers. The projected costs of the FHR 2022 would be offset by the projected cost savings, which are approximately $3.1 million, or $1,030 per business. Overall, under the proposed Regulations, small businesses are anticipated to realize a net reduction in administrative costs of about $2.1 million, or $690 per small business, between 2021 and 2031.
Administrative impacts | Annualized value | Present value |
---|---|---|
Administrative cost savings | $390,000 | $3,100,000 |
Administrative costs | $125,000 | $1,000,000 |
Net cost savings (all small businesses) | $260,000 | $2,100,000 |
Net cost savings per small business | $85 | $690 |
Notes:
- Number of small businesses impacted: 3 030
- Number of years: 11 (2021 to 2031)
- Base year for costing: 2020
- Present value base year: 2021
- Discount rate: 7%
One-for-one rule
The one-for-one rule applies, as the FHR 2022 result in an incremental change in administrative burden on business. The FHR 2022 repeals an existing regulation and replaces it with a new regulatory title, which results in no net increase or decrease in regulatory titles.
A survey on administrative burden associated with the FHR 2003 was sent to over 3 000 regulated parties in 2015. Within the scope of the one-for-one rule, regulated parties are individuals and for-profit or competitive businesses. Under the FHR 2003, this definition includes federal works and undertakings, or certain regulated parties located on federal and Indigenous lands. Regulated parties that meet this definition on Indigenous lands mainly include band councils or private businesses. On federal lands, regulated parties include private companies that own or operate systems located on that land.
The survey was used to obtain information on existing halocarbon systems and containers, the time needed to complete certain administrative obligations, and potential implications of repealing the FHR 2003 and replacing them with the FHR 2022, including the possible need for new infrastructure or equipment upgrades. The survey also sought to assess the potential reductions in administrative burden associated with the FHR 2022. Survey responses were complemented by estimates of the average time needed to complete similar requirements under other regulations administered by the Department that have been modified recently, such as the ODSHAR.
Regulated parties would assume initial one-time costs to familiarize themselves with the FHR 2022 and ongoing costs associated with maintaining information in an inventory for large systems containing halocarbons. These costs would be offset by administrative cost savings, given that the FHR 2022 remove duplicative record-keeping requirements, revise or remove obsolete provisions, and reduce reporting requirements. Overall, the FHR 2022 lead to a decrease of approximately $110,000 in annualized average administrative costs.footnote 14 Changes to administrative requirements are estimated to save, on average, about three hours per year for 2 549 regulated parties each. This estimate corresponds to approximately $45 in annualized average cost savings per regulated party when allocated over the first 10 years of administrative cost impacts (2021–2030).footnote 15
Regulatory cooperation and alignment
The FHR 2022 will maintain the exemptions concerning the use of halons in fire extinguishers found in aircraft, in line with the prohibition schedule set out in the Chicago Convention. Incorporating the ICAO standards relating to the replacement of halons in fire-extinguishing systems in civil aviation by reference would ensure that the FHR 2022 remain aligned with the Convention, which has been ratified by 193 countries, in the event that amendments are made to its schedule.
Manufacturers required to comply with Annex 6 (Operation of Aircraft) and Annex 8 (Airworthiness of Aircraft) of the Chicago Convention would be responsible for changing the substances used in their fire-extinguishing systems, rather than the responsibility falling on airlines. The FHR 2022, which incorporate the requirements of the Convention, only target new designs and aircraft. No direct incremental costs attributable to the FHR 2022 are expected for aircraft already designed or in operation prior to the coming into force of the Chicago Convention phase-out schedules. Airlines are generally assumed to be compliant with the requirements of the Convention for most of their systems containing halocarbons. If an airline was to assume costs to comply with the requirements of the Chicago Convention relating to fire-extinguishing systems, these costs would be attributable to the Convention, not to the FHR 2022.
Further, the FHR 2003 require that service technicians obtain a certificate recognized by at least three Canadian provinces, or by the province in which the work of the service technician who holds the certificate is being done, in order to perform work under the FHR 2022. Yet, the training curriculum for technicians who service equipment containing halocarbons is similar across jurisdictions and the certification itself is similar between training providers. The FHR 2022 address discrepancies in the application of the FHR 2022 across the country by changing the definition of “certified person” in the regulatory text. This change would allow technicians, especially those employed by the federal government, to be deployed to any province without the need to ensure that their certification is recognized by more than one province.
Strategic environmental assessment
The FHR 2022 are anticipated to result in minor positive environmental impacts. Specifically, they help reduce and prevent emissions of ozone-depleting substances and their halocarbon alternatives, most notably HFCs (very potent GHGs). These reduction and prevention measures are aimed at equipment that is located on Indigenous or federal lands, or that is owned by federal departments, boards or agencies, Crown corporations, or federal works or undertakings.
The FHR 2022 are one of the complementary measures to further reduce emissions across the economy as part of the Pan-Canadian Framework. A strategic environmental assessment was completed in 2016 and concluded that regulatory policies developed under the Pan-Canadian Framework are expected to reduce GHG emissions. This outcome is in line with the goal in the 2019 to 2022 Federal Sustainable Development Strategy of effective action on climate change.footnote 16
Gender-based analysis plus
No gender-based analysis plus (GBA+) impacts have been identified for the FHR 2022.
Implementation, compliance and enforcement, and service standards
The FHR 2022 will come into force on the day on which they are registered. Information on the FHR 2022 is provided on the Department’s website and will be updated periodically, as needed.footnote 17 Fact sheets and frequently asked questions with responses are also available on this website.
The compliance promotion approach for the FHR 2022 is similar to the approach taken for the FHR 2003, which includes making information and resources publicly available for stakeholders on the department’s website, and responding to inquiries from stakeholders. As well, regional compliance promotion officers will continue their outreach activities, such as information sessions on the FHR 2022, to raise stakeholder awareness by including new and updated regulatory requirements in their compliance promotion material. The Department will conduct regular compliance promotion activities and each regional office is staffed with personnel who can respond to inquiries regarding the FHR 2022.
The FHR 2022 will be made under CEPA; therefore, enforcement officers will, when verifying compliance with the FHR 2022, apply the Compliance and Enforcement Policy (Policy) for CEPA.footnote 15 Whenever an alleged violation of CEPA and/or its Regulations is discovered, enforcement officers will consider multiple factors such as the nature of the alleged violation and will choose the appropriate response to restore compliance with the Act and its regulations. In addition to the measures outlined in the Policy, Administrative Monetary Penalties (Environmental Violations Administrative Monetary Penalties Regulations) are available to enforcement officers. Administrative Monetary Penalties provide a financial disincentive to non-compliance and are an administrative alternative to other enforcement measures. Following an inspection or investigation, when an enforcement officer discovers an alleged violation, the officer will choose the appropriate enforcement action based on the policy.
The service standards relating to the issuance of permits under the FHR 2022 will remain the same as for the FHR 2003. Once the Department receives all information that is required for a permit to be approved, the permit is issued within 10 working days.
Contacts
Nicole Folliet
Director
Chemical Production Division
Industrial Sectors and Chemicals Directorate
Environmental Protection Branch
Department of the Environment
351 Saint-Joseph Boulevard, 19th Floor
Gatineau, Quebec
K1A 0H3
Email: halocarbures-halocarbons@ec.gc.ca
Matthew Watkinson
Director
Regulatory Analysis and Valuation Division
Economic Analysis Directorate
Strategic Policy Branch
Department of the Environment
200 Sacré-Cœur Boulevard, 10th Floor
Gatineau, Quebec
K1A 0H3
Email: RAVD.DARV@ec.gc.ca