2.11 Part 11: miscellaneous matters

The evaluation identified two expected outcomes for Part 11:

1. Cost recovery of departmental efforts related to the control or cleanup of pollution is pursued consistent with government policy.
2. Economic instruments (such as trading systems) are used to achieve environmental objectives where appropriate.

Part 11 of the Act sets out general authorities or conditions for items such as disclosure of information; general regulation-making provisions; regulations regarding cost recovery; use of economic instruments, namely deposit/refund systems and tradable unit systems; requirements governing publication of various Canadian Environmental Protection Act (CEPA 1999) instruments in the Canada Gazette; boards of review; and review of the Act by Parliament every five years.

All applicable Ministerial obligations are being satisfied:

• Section 332 - All proposed orders and regulations have been published in the Canada Gazette and the CEPA Environmental Registry.⁹⁵
• Section 342 - Reports to Parliament are prepared annually, including a report on research, through the CEPA Annual Reports⁹⁶ available through the CEPA Environmental Registry.

Many additional Ministerial obligations have not been triggered.

Environment Canada has been using two approaches for cost recovery:

• Cost recovery through charges and fees for permits and other regulatory services - In 2002-03, the Department recovered $1.37 million for ocean disposal applications, permits and fees and $84 000 under new chemical notification (out of a total CEPA 1999 budget in 2003-04 of close to $190 million).
• Cost recovery through fines for violations of the Act - Environment Canada has set up the Environmental Damages Fund as a special holding or trust account to manage funds received as compensation for environmental damage (not just under CEPA 1999).

There has been limited use of economic instruments to support CEPA 1999. However, the Department acknowledges that the use of economic instruments is a core element of Environment Canada's environmental innovation agenda. Since 2000, Environment Canada has sponsored an international conference and various analyses on economic instruments related primarily to climate change and air pollution, as well as participating in the National Round Table on the Environment and the Economy's project on ecological fiscal reform. To date, much of this analytical work has involved the use of economic instruments to address climate change rather than CEPA 1999 toxics.

Cost recovery was a central theme of public management in the mid to late 1990s, at the time that revisions to CEPA 1988 were under consideration. During that period, and as part of the Program Review exercise, Environment Canada undertook analyses to identify cost- recovery opportunities. While CEPA 1999 provides authorities for enacting cost-recovery provisions, less than 1% of CEPA 1999 implementation costs are currently recovered.^{Footnote xxxi}  Barriers to increasing the recovery of CEPA 1999 implementation costs exist, including those posed by the new User Fees Act⁹⁷ and related Treasury Board policies,⁹⁸ as well as the decrease in emphasis on cost recovery as a Government of Canada priority.

There has been limited use of economic instruments to support CEPA 1999. In fact, the two trading regimes used were initiated under CEPA 1988. Several challenges have been identified, but the Treasury Board policies in particular impose significant barriers to the use of economic instruments such as user fees and charges. The 2004 environmental performance review of Canada by the Organisation for Economic Co-operation and Development noted the "urgency" of making progress on economic instruments.

The expected outcome of pursuing cost recovery of departmental efforts related to the control or cleanup of pollution is likely to be achieved only to some limited degree. Cost recovery defrays some program costs, and some funds will be available to restore degraded environmental conditions. The significant external barriers in existence are likely to prevent any significant recovery of program implementation costs or costs occurring as a result of environmental damages.

The expected outcome of using additional economic instruments to achieve environmental objectives is unlikely to be achieved until the barriers are addressed.