Section 6: Performance promotion

To encourage environmental innovation, governments, the private sector and civil society will need to work together to develop sectoral approaches that address as comprehensive a range of related issues as possible. The development of efficient and innovative responses by industry and other affected parties will be facilitated by setting long-term environmental performance standards. Among other things, regulations and policies should stimulate cost-effective and innovative solutions that maximize environmental performance. This will require governments to ensure that risk management tools and compliance and enforcement mechanisms promote:

• clear, long-term standards;
• strong, coherent incentives;
• support for leaders and mechanisms to minimize free riders;
• access to the full range of tools;
• sectoral approaches;
• the ability to let the most appropriate authority manage the issue; and
• transparency and accountability.

The Canadian Environmental Protection Act (CEPA 1999) provides for a range of risk management and compliance tools. These include pollution prevention, virtual elimination and environmental emergency planning, codes of practice, regulations and some economic instruments. Compliance and enforcement mechanisms include negotiated agreements to get firms back into compliance, prosecution, compliance orders and authorities for citizens to compel investigations and to initiate legal action.

Compliance with CEPA 1999 is achieved through compliance promotion and enforcement activities. Environment Canada undertakes numerous measures to promote compliance with CEPA 1999. Among others, these include:

• the maintenance of the Environment Canada Enforcement Website
• publication of fact sheets, guidelines, reports, and technical bulletins, including the CEPA 1999 Compliance and Enforcement Policy
• direct communication and consultation with the regulated community and members of the public (e.g., workshops, presentations at stakeholder meetings, letters, interviews); and
• promotion of environmental audits.

Enforcement activities include:

• inspections to verify compliance;
• investigations of alleged offences;
• measures to compel compliance without resorting to formal court proceedings (e.g., warnings, tickets, environmental protection compliance orders (EPCOs), and orders by the Minister);
• measures to compel compliance following the laying of charges and through civil and criminal court actions (e.g., environmental protection alternative measures (EPAMs), injunctions, prosecutions, court orders upon conviction, and civil suits for recovery of costs); and
• intelligence gathering.

Many of these powers and tools were first introduced in CEPA 1999, including the authority for EPCOs and EPAMs. In addition, the Environment Canada enforcement function underwent considerable public scrutiny in the late 1990s. At that time, it was generally recognized that Environment Canada did not have adequate human and financial resources, nor did it have effective administrative structures in place to secure compliance with CEPA 1999. In recent years, Environment Canada has received significant new resources to enhance the enforcement functions and fully utilize the enforcement powers conferred by CEPA 1999.

Enforcement officers have all the powers of a peace officer, including the right to enter premises, conduct tests and measurements, take samples and access data stored on computers, obtain search warrants, stop any means of transport, and search and seizure. CEPA analysts are entitled to accompany enforcement officers and have access to the inspection powers conferred on the officer.

Environment Canada is increasing capacity in its compliance promotion and enforcement program. This includes the adoption of a compliance assurance program to monitor, evaluate and help prioritize promotion and enforcement initiatives.

CEPA 1999 provides broad authorities to enforce the Act and its regulations.

Q. What are your views on this issue?

There are various issues related to the use of Schedule 1, the List of Toxic Substances as the mechanism for listing substances found to meet the criteria for "toxic" under CEPA 1999.

6.3.1 Use of the term "toxic"

The criteria in CEPA 1999 for designating a substance as "toxic" focus on risks resulting from the combination of both the inherent hazardous characteristics of a substance, as well as the potential for its exposure to humans or to the environment. As a result, in some cases, a substance may have relatively low hazardous characteristics but be declared "toxic" where exposure to the environment or humans is significant, and evidence establishes existing or potential significant harm to humans or the environment.

Some stakeholders argue that labelling a substance that has a low hazard but high exposure to be "toxic" is misleading and creates an inappropriate stigma. Some others suggest that the label "toxic" is appropriate to designate all substances assessed as posing a risk to human health or the environment.

With respect to the term "toxic", other jurisdictions use different terminology to describe high risk substances, without referring to the substance as "toxic." For example, the European Union's proposed Registration, Evaluation and Authorization of Chemicals (REACH) program would use functional terms to designate whether substances are "authorised" for particular uses or have been "restricted." There may be other terms that could be considered in the context of CEPA 1999.

A related issue is that, when the government adds a substance to the List of Toxic Substances, the List does not describe the nature of the risk posed by the substance (degree, target organism or media). Without this information, there is the potential for the public to assume that the type and degree of risks posed by all substances on the List of Toxic Substances are equivalent.

Q. Should the Act provide an alternative approach to the designation of substances?

6.3.2 Process of adding a substance to Schedule 1

Once the Ministers have conducted an assessment on a substance through a screening level risk assessment, a Priority Substances List assessment or the review of a decision of another jurisdiction, they may propose one of the following measures:

• no further action,
• addition to the Priority Substances List, if it is not already on that List; or
• recommend to the Governor in Council that the substance be added to the List of Toxic Substances (Schedule 1 of the Act) and if applicable, to the Virtual Elimination List.

When the Ministers recommend to the Governor in Council that the substance be added to the List of Toxic Substances, the Governor in Council must be satisfied that the substance is toxic based on conclusions from the risk assessment. A proposed order for adding the substance must be published in the Canada Gazette for 60 days, to provide an opportunity for public comments. At this time, any member of the public may also file a notice of objection along with the reasons for the objection and request a Board of Review be undertaken.

The addition of the substance to the List of Toxic Substances does not put in place any risk management measures for the substance. When a substance is on the List, it allows the Minister to use the Act to require the preparation of pollution prevention plans or environmental emergency plans or for the Governor in Council to use the regulatory authority under the Act to reduce the risks posed by these substances.

Adding a substance to Schedule 1 publicly signals the intent to manage the substance under the regulatory authorities of CEPA 1999. The current listing process requires the involvement of the Governor in Council (the federal Cabinet) twice: first to propose placing the substance on Schedule 1, and second, to formally add it to the Schedule if appropriate. In the risk management step, if a regulation is determined as the most appropriate management tool, the Governor in Council will be involved again in two further steps: first when proposing the regulation; and second when finalizing the regulation. Risk management decisions have direct socio-economic implications, and typically are supported by a range of information on technical capacity and socio- economic impacts as well as scientific considerations related to risks. The fact that the listing decision is subject to the approval of Cabinet highlights the serious nature of the risks posed by the substance, but does not in itself determine or put into effect the actions needed to manage the substance.

In an effort to ensure decision-making based on the right information, it may be appropriate to consider alternatives to the current process for listing a toxic substance.

• The process needs to focus the discussions on the risk assessment and on socio- economic issues at the right stage. Discussions around the results of the risk assessment should focus on the merits of the evidence, analysis and conclusions; whereas any discussions around the risk management stage should also include environmental and health objectives and socio-economic considerations.
• The risk assessment discussion needs to have clarity on the understanding of the factors considered in the analysis of whether or not a substance is "toxic".

Currently, the Governor in Council (GiC) decision to add a substance to Schedule 1 is based only on the risk assessment report. Rather than this current approach, there might be other ways to achieve more focused decision making, for example:

• The Governor in Council could retain authority to add substances to the List; however, the addition of the substance could be considered at the same time a risk management measure is proposed. In other words the decision making regarding the listing and the risk management of the substance would occur simultaneously.
• Alternatively, the Ministers could have the authority in the Act to add substances to a list, similar to the process for the DSL. The proposal to add a substance to this list could still be published in the Canada Gazette for public comment. Ministers would still need to recommend to the Governor in Council any proposed regulatory action. Public scrutiny and consultation would occur both for measures taken using Ministerial authorities and for regulatory actions by the Governor in Council.

Environment Canada and Health Canada recognize that changes in the listing process would have various implications that would have to be addressed, including the current linkages between Schedule 1 and:

• the triggering of "timeline" requirements for risk management in Part 5 of the Act,
• the Governor in Council authorities to regulate under Section 93, and
• the Ministerial authorities to require the preparation of pollution prevention plans under Part 4 of the Act (which is currently enabled when a substance is added to Schedule 1 by the Governor in Council), or environmental emergency plans under Part 8 (which is currently enabled when a substance is added to Schedule 1 or when the Ministers' recommend to add a substance to Schedule 1).

It is important to consider the use of the term "toxic", along with any proposed changes to the process for adding a substance to a list.

Q. Should the Act provide an alternative approach to the listing of substances that have been determined to be toxic?

In order to fundamentally change production and consumption patterns to promote the goal of a competitive economy anchored by a sustainable environment outlined at the beginning of this paper, it will be essential to make greater use of economic instruments as part of the mix of risk management tools.

CEPA 1999 authorizes the use of three types of economic instruments for managing risks.

• It authorizes the use of deposit refund schemes in conjunction with regulations under s.93 (for toxic substances), s.118 (for nutrients) and s.209 (for the "federal house"). To date, deposit-refunds are used primarily by the provinces and municipalities for waste management issues related to various products and substances, and the federal government has made little use of these measures under CEPA 1999. It is anticipated, however, that as the focus under CEPA 1999 turns increasingly to include product-related issues, the Minister may choose to use deposit-refunds more frequently to help manage toxic substances.
• It authorizes the use of tradeable units.
• It also authorizes the Minister to make regulations prescribing "fees" to be paid for a service, the use of a facility, right, privilege or any process or approval.

The limited range of economic instruments authorized under the Act and the limitations associated with tradeable units and fees restrict the departments' ability to manage risks as efficiently as possible and to ensure that the market fully accounts for environmental costs.

There may be merit in expanding the existing authorities in order to overcome some of these limitations. The experience with tradeable units in other jurisdictions, for example, suggests that auctioning can enhance the economic efficiency of this tool by reducing up-front government administrative costs and by fully utilizing market forces to establish the value of the units.

Q. Should the Act include additional authority regarding economic instruments?

While some substances added to the List of Toxic Substances may be prohibited, the risks posed by most substances designated as "toxic" under CEPA 1999 can be reduced to acceptable levels through better management of their use. There are, however, toxic substances that are persistent, bioaccumulative and present in the environment primarily as a result of human activity. For substances meeting these criteria, the Minister is obliged to add them to the Virtual Elimination List. To date, only one substance has been proposed for addition to the Virtual Elimination List.

When a toxic substance is added to the Virtual Elimination List, the Act requires the Minister to identify the "level of quantification" (LoQ). The LoQ is the lowest concentration at which the substance can be measured using sensitive but routine sampling and analytical methods. When the virtual elimination provisions of CEPA 1999 were drafted, it appears the level of quantification was anticipated for concentrations of substances in emissions released from a stack or in effluents coming out of a pipe. The current challenge under the Act is trying to determine the LoQ for a substance that is in a product.

It may not always be appropriate or even possible to establish an LoQ for a substance that has been placed on the Virtual Elimination List. For example, it may not always be necessary to determine an LoQ for a substance whose use will be prohibited. In addition, experience to date suggests that it may be extremely difficult scientifically and costly to establish an LoQ for a substance that is in an article or product. It may be more appropriate to consider direct investments in new technologies or product substitutes to eliminate the release of these substances, rather than investing in technologies to measure their releases.

Q. Should CEPA 1999 require an LoQ for every substance being added to the Virtual Elimination List?

CEPA 1999 provides the authority to control the transboundary movement of hazardous wastes and hazardous recyclable materials in an environmentally sound manner. It requires notification and consent from the receiving jurisdiction, and authorizes

Environment Canada to establish permitting conditions and procedures. This authority helps implement Canada's obligations under three international agreements (the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal, the Organisation for Economic Co-operation and Development (OECD) Council Decision Concerning the Control of Transfrontier Movements of Wastes Destined for Recovery Operations, and the Canada-United States of America (U.S.A.) Agreement Concerning the Transboundary Movement of Hazardous Waste.)

Provincial and territorial governments also play an important role in the management of hazardous wastes and hazardous recyclable materials. Provinces and territories regulate the intraprovincial transportation of dangerous goods, including hazardous wastes and hazardous recyclables. They also regulate the siting, design and operation of disposal and treatment facilities.

• Updating permits

Many of the important issues related to the federal hazardous waste and hazardous recyclable regime relate to the regulations established under this Division. For example, under the current regulations, the Minister does not have the authority to revoke or change the terms of an import or export permit, once it has been issued, even if circumstances change. Similarly, the Minister cannot include in the permit conditions related to the duration of the permit or the conditions under which it may become invalid.

Q. Should the Act enable export/import permits to adapt to changing circumstances?

• Export reduction plans

The Act authorizes the Minister to require an exporter of hazardous waste to prepare a plan "for the purpose of reducing or phasing out the export of hazardous waste or prescribed non-hazardous waste for disposal." This provision may have limited utility in that it focuses on reducing exports when the over-riding environmental objective should be to reduce the generation of waste. Provinces and territories, and to some extent municipalities, play a major role in setting policies to reduce wastes. Furthermore, focusing on reducing exports of wastes may not achieve the best environmental outcomes given that it may be better to ship to a closer facility in the United States that operates in an environmentally sound manner than to transport wastes a greater distance to a Canadian facility. In addition, the provisions apply to "exporters". In most cases, exporters are waste management companies, and as such are not the generators of the waste. Waste management companies have very little ability to reduce the generation of hazardous waste.

Q. Are the export reduction planning provisions effective, or should they be clarified or removed from the Act?

Emissions from the combustion of fuels are controlled through improved fuel quality and engine emission controls. CEPA 1999 contains authority for fuel quality regulations and for vehicle emission regulations previously under the Motor Vehicle Safety Act and also new authority to regulate emissions from off-road engines. These authorities allow an integrated system approach to reducing harmful emissions to protect human health and the environment. The vehicle, engines and fuels program parallels the more progressive aspects of other countries' regulations, including the United States. This provides for combined environmental and economic benefits in North America. There has been extensive activity under these provisions of CEPA 1999.

The Governor in Council on the recommendation of the Minister has made the On-road Vehicle and Engine Emission Regulations and the Off-road Small Spark-Ignition Engine Emission Regulations. Between 2004 and 2010 increasingly tight emission standards for carbon monoxide, hydrocarbon, oxides of nitrogen and particulates come into effect for cars, trucks and buses. The allowable limits of these emissions are reduced by up to 95% relative to earlier standards, depending on the vehicle type. Regulations for small engines, such as lawn and garden equipment, come into effect in 2005 and these will be followed by regulations addressing diesel engines (e.g. construction, agriculture), marine spark ignition engines and off-road recreational vehicles.

Environment Canada has also developed fuel quality regulations. The Sulphur in Gasoline Regulations limit sulphur to an average limit of 150 mg/kg as of July 2002, and require a further reduction to an average of 30 mg/kg starting in January 2005. The Sulphur in Diesel Fuel Regulations set a maximum limit of 15 mg/kg for sulphur in on- road diesel fuel starting June 1, 2006. Until June 1, 2006, the limit is 500 mg/kg. Additional information is available at: http://www.ec.gc.ca/energ/fuels/fuel_home_e.htm

• Vehicle and Engine Emissions

While CEPA 1999 contains several elements designed to facilitate incorporation of United States emission standards, some aspects of the Act impede alignment with U.S. rules. For example, CEPA 1999 does not explicitly enable adoption of a system like the one in the US, which requires warranties on emission control components.

Q. Should CEPA 1999 enable further alignment with emission control standards of other countries, including the U.S.?

• Fuels

CEPA 1999 does not include specific authorities to address fuels as they move through the distribution system. For example, there may be instances where it would be desirable to:

• control fuel quality downstream of the production point (for example, additives are often added downstream of refineries); and
• implement record keeping, reporting and tracking requirements within the distribution system (some fuel characteristics are very difficult to test for at the sale point - hence, it may be appropriate to require product transfer documentation to establish that the fuel is not adulterated as it is distributed).

These concerns are particularly acute where a "middle person" may modify and then redistribute fuels for retail sale. To illustrate, the US regulations for gasoline deposit control apply to all persons involved in the distribution system.

Q. Should CEPA 1999 include authorities to address fuels as they move throughout the entire distribution system (from the refinery to the service station)?

The main focus of the new substances regime is on preventing the introduction of unacceptable risks by reviewing new substances before they enter into Canadian commerce. Although the Act and the New Substances Notification Regulations require an assessment prior to the introduction of a new substance to Canada, the Act currently does not explicitly allow the Minister to prohibit the sale or use of a new substance by third parties that has been manufactured in or imported into Canada in contravention of the Act. One situation where this can arise is when a substance is redistributed to a third party for retail sale.

The Act could be clarified to enable effective intervention at the point of sale or use to prevent unassessed new substances from entering Canadian commerce.

Q. Should CEPA 1999 be clarified to ensure that the Minister can prohibit the sale or use of a new substance that has been manufactured in or imported into Canada prior to completion of its assessment?

CEPA 1999 prescribes a permit system for controlling disposal at sea. This permit system has been in place since 1975, and meets Canada's obligations as a Party to the international conventions that address disposal of wastes at sea (the London Convention and its new 1996 Protocol). Each permit is assessed on a case-by-case basis under a framework set out in Schedule 6 and is only considered for the six substances listed in Schedule 5.

Permits are issued only if the proponent demonstrates that there are no practicable uses for the material and that disposal is not only acceptable but also the best management option. Criteria used include environmental costs, human health and economic factors. The program operates on a cost-recovery basis. Environment Canada recovers costs associated with permit processing and with monitoring of representative disposal sites. There is no minimum volume below which a permit is not required.

Basic information on permits issued under CEPA 1999 is available online at the CEPA Environmental Registry. As well, all proposed disposal at sea projects are reviewed under the Canadian Environmental Assessment Act (CEAA) and are registered in the CEAA Registry.

• Requirement to publish permits in the Canada Gazette

All disposal at sea permits and permit amendments must be published in the Canada Gazette for 30 days before they come into force. There are questions about the cost- effectiveness of this requirement. Not a single comment or objection related to ocean disposal permits has been received from the public through the Canada Gazette process since CEPA 1999 came into force. This reflects the fact the public is engaged long before a permit is issued in various ways, including through the CEPA Environmental Registry. It may be appropriate to remove the requirement to publish permits and permit amendments in the Canada Gazette, and replace it with a requirement to place a copy of the permit or permit amendment on the CEPA Environmental Registry.

Q. Are there benefits to the CEPA 1999 requirement that disposal at sea permits be published in the Canada Gazette for a 30 day period?

• More flexibility for a permit's term

Permittees who dispose of dredged material at locations with no history of contamination have requested permits that are for longer than the one-year maximum imposed by CEPA 1999.

Q. Should more flexibility be accorded for a permit's term?

• Fisheries Act Issues

CEPA 1999 states that the provision prohibiting pollution under the Fisheries Act is not applicable if a substance is disposed of in accordance with a disposal at sea permit issued under CEPA 1999. Other sections of the Fisheries Act, however, which relate to alteration of or destruction of fish and fish habitat, are still applicable. The application of both laws for this activity should be considered in terms of both its effectiveness and efficiency.

Q. What are your views on this issue?

Environmental emergencies resulting from a leak, explosion, fire or release of a hazardous substance can happen at any time of the day or night, in any region of Canada. There are an estimated 20,000 environmental emergencies annually in Canada. About 9,000 emergencies get reported to Environment Canada in any given year, and about 1,000 of these require some form of involvement or action by Environment Canada. These incidents are primarily the result of accidents, improper maintenance or human error.

Part 8 of CEPA 1999 provides authority to require environmental emergency plans for substances once they have been declared toxic by the Minister of the Environment and the Minister of Health and have been added or are recommended for addition to the List of Toxic Substances (Schedule 1). An environmental emergency plan outlines a facility's prevention, preparedness, response and recovery activities to reduce the likelihood and consequences of an environmental emergency involving toxic substances. Environmental emergency plans may also be needed for substances other than those that are toxic under CEPA 1999, if they pose a danger to the environment or human health because of their flammability, reactivity, etc. The Environmental Emergency Regulations, which came into force in November 2003, contain a list of the substances for which environmental emergency plans must be prepared.

Environment Canada's environmental emergencies officers have an important role to play in the prevention of, preparedness for, and response to environmental emergencies. CEPA 1999 does not explicitly provide for environmental emergencies officers. As a result, they must be designated as enforcement officers in order to be able to fulfill their functions. Environmental emergencies officers do not require the full powers of an enforcement officer. The powers they currently use include the authority to be notified about an emergency, the right to access the site, to conduct an inspection to determine if adequate remedial measures are being taken, to give directions to take preventive or remedial measures and to collect information. Designation of environmental emergencies officers as enforcement officers has led to confusion among the regulated community. Environmental emergencies officers do not focus on verifying compliance with the Act and its regulations. Their focus is to ensure prevention of an environmental emergency and, if an emergency has occurred, to ensure that the necessary emergency response measures are taken to protect the environment and public safety. It may be more efficient for the program and less confusing to the regulated community for the Act to provide for a distinct category of environmental emergencies officers with appropriate powers.

Q. Should CEPA 1999 authorize the designation of qualified persons as environmental emergencies officers?