Issues and possible approaches, Canadian Environmental Protection Act: discussion paper, chapter 1

1. Reducing Air Pollution and Greenhouse Gas Emissions

• 1.1 Clarify the scope of vehicles, engines and equipment for which standards can be set
• 1.2 Provide a more flexible framework for managing temporary importations
• 1.3 Strengthening the notices of defect provisions
• 1.4 Ensure consistency with the Motor Vehicle Safety Act
• 1.5 Help Canadians make environmentally informed choices about fuels
• 1.6 Facilitate use of the regulation-making power for fuel composition
• 1.7 Expressly allow efficient regulation of releases of substances from products
• 1.8 Allow for auctioning of tradeable units

Many sources of air pollutants and greenhouse gases arise from our current patterns of energy production and consumption, as well as from our manufacturing industries and the products we produce and use.

The Canadian Environmental Protection Act (CEPA) provides the federal government with a variety of tools to control air pollutants and greenhouse gas emissions.

Divisions 4 and 5 of Part 7 of the Act provide authorities to regulate the manufacture and import of specific products that contribute to air pollution and greenhouse gas emissions, such as vehicles, engines, equipment and fuels. These Divisions enable the making of regulations to control the composition of fuels as well as the emission performance of on-road and off-road vehicles and engines, including cars, trucks, recreational vehicles, and engines used in lawn and garden, agricultural, and construction machinery.Under these authorities, increasingly stringent standards for smog-forming emissions from on- and off-road vehicles and engines, as well as for greenhouse gas emissions from on-road vehicles and engines, have been adopted. This has helped reduce the level of air pollutants such as nitrogen oxides, hydrocarbons, particulate matter, and carbon monoxide, as well as the level of greenhouse gases such as carbon dioxide, emitted from these sources. There are also regulations to lower the concentration of harmful components in gasoline and diesel fuels, resulting in a significant reduction in air pollution from the combustion of fuels, as well as requiring the inclusion of renewable content in certain fuels. More information on vehicle, engine and fuel regulations, is availalbe on-line.

In addition, greenhouse gases and many air pollutants are on the List of Toxic Substances in Schedule 1 of CEPA (Schedule 1). This allows the government to use the broad regulatory powers in section 93 of Part 5 of the Act for those substances. Regulations under section 93 can control a wide range of activities. For example, the Reduction of Carbon Dioxide Emissions from Coal-fired Generation of Electricity Regulations set a stringent performance standard for new coal-fired electricity generation units and those that have reached the end of their useful life. In addition, the Gasoline and Gasoline Blend Dispensing Flow Rate Regulations, which reduce emissions of benzene and other volatile organic compounds (VOCs) during the refueling of on-road vehicles, were made using the ‘toxic substance’ regulation-making powers.

1.1 Clarify the scope of vehicles, engines and equipment for which standards can be set

Issue

Currently, Division 5 of Part 7 of CEPA authorizes the Governor in Council, on the recommendation of the Minister, to set “standards on the design, functioning, construction or marking of vehicles, engines and equipment for the purpose of monitoring or controlling their emissions”. The majority of the vehicle and engine regulations under CEPA are aligned with the standards set out in rules established by the United States Environmental Protection Agency (US EPA).

The US EPA also sets standards for machines that are powered by engines. This allows them to address the design, function and construction of the machine itself, which contribute to the overall emissions of the machine. CEPA, on the other hand, only expressly allows standards to be set for engines that power the machines.

Additionally, while the Marine Spark-Ignition Engine, Vessel and Off-Road Recreational Vehicle Emission Regulations came into force in 2011, in part to set emission standards for some types of small engines and vessels, there is no explicit authority to regulate the full suite of small marine diesel engines found in Canada.

Possible Approach to Address the Issue

CEPA could be amended to expressly allow regulations that set standards for the following:

• machines that are powered by engines  
• small marine diesel engines (i.e., per cylinder displacement of less than 7 litres), such as tugboats, small ferries, emergency rescue vessels, small fishing boats and yachts.

This would better enable the development of regulations to reduce the impact that machines powered by engines or small marine vessels have on emission levels. They would also further the government’s goal of harmonizing ECCC regulations and standards with those of the US EPA.

1.2 Provide a more flexible framework for managing temporary importations

Issue

Section 155 of CEPA allows for the temporary importation of vehicles, engines or equipment for certain reasons, such as its exhibition or testing for a period of one year or a period specified by the Minister - even if it does not comply with regulatory standards. Section 155 further provides that an importer must remove the vehicle or engine from Canada before the expiry of the temporary importation period. To qualify for this exception, the importer must submit a declaration that sets out prescribed information. This provision is similar to one set out in the Motor Vehicle Safety Act.

CEPA does not expressly provide the authority to extend the temporary importation period or to allow vehicles to remain in Canada in certain situations. This may impact importers who wish to bring the product into compliance with the applicable standards within that period, or donate it to a museum or a research body. Finally, there may be a valid reason to request an extension of the temporary importation period, such as additional testing or evaluation before returning it to the country of origin.

Possible Approach to Address the Issue

CEPA could be amended to clarify options in addition to removing the vehicle, engine, or equipment from Canada, including:

• bringing the vehicle, engine or equipment into compliance with the regulations prior to the expiry of the temporary importation period, such that it meets the emissions standards of its prescribed class and the importer has complied with all prescribed reporting and testing requirements;
• donating the vehicle, engine or equipment prior to the expiry of the temporary importation period, subject to rules that would be set out in the regulations; and
• requesting an extension of the temporary importation period by submitting a request to the Minister justifying the extension (e.g., additional tests needed, close to bringing vehicle, engine, or equipment into compliance with regulations).

1.3 Strengthening the notices of defect provisions

Issue

Section 157 requires a company that sells, manufactures or imports a regulated vehicle, engine or piece of equipment to notify the Minister and any owners, of any defect in the design, construction or functioning of the vehicle, engine or equipment that is likely to affect compliance with prescribed standards. There is no explicit requirement for companies to notify the Minister and others of defects in labelling or marking of vehicles, engines or equipment or to undertake corrections at their expense.  Also, there is no express authority for the Minister to order a company that was issued a notice of non-compliance to submit a notice of defect when it is in the best interest of protecting the environment and human health.

Possible Approach to Address the Issue

CEPA could be amended to expand the Notice of Defect provisions to expressly include:

• label deficiencies;
• a requirement for companies to cover the cost of corrections; and
• an authority for the Minister to order a company to submit a notice of defect.

1.4 Ensure consistency with the Motor Vehicle Safety Act

Issue

When CEPA 1999 was brought into force, it included authorities for regulating vehicle emissions that were previously in the Motor Vehicle Safety Act (MVSA), which is administered by Minister of Transport. As a result, these CEPA provisions largely mirror the safety-related provisions in the MVSA.

On June 19, 2014, An Act to implement certain provisions of the budget tabled in Parliament on February 11, 2014 and other measures received royal assent. It amended many federal Acts, including the Motor Vehicle Safety Act. It introduced measures for multiple purposes, including streamlining the regulatory process, reducing administrative burden, improving safety through revised oversight procedures, enhancing availability of vehicle safety information, etc. These changes created some inconsistencies between the MVSA and CEPA. In addition, some modifications made to the MVSA provided tools that could also be expressly specified under CEPA.

Possible Approach to Address the Issue

Where appropriate, CEPA could be modified to ensure consistency with the MVSA.

1.5 Help Canadians make environmentally informed choices about fuels

Several regulations made under CEPA regulate the composition and quality of fuels. For example, regulations limit the level of sulphur and benzene that can be present in gasoline and diesel fuels. Because those components are high contributors to air pollutants from the combustion of fuels, these regulations have significantly lowered the output of air pollutants from vehicles and engines that use gasoline and diesel.

Issue

Not all fuel components that impact potential emissions are covered by the regulations. Some companies voluntarily limit potential pollutants, or add additives that reduce emissions. As an alternative to regulating every aspect of fuel composition, if gasoline and diesel consumers were provided with sufficient information on the differences in fuel qualities, they would be able to make informed decisions and potentially choose to purchase fuels that have a lower impact on the environment. However, CEPA does not provide express authorities to require the labelling of fuel dispensing equipment.

Possible Approach to Address the Issue

CEPA could be amended to authorize expressly the making of regulations respecting labelling of fuel dispensers. Examples could include mandatory labelling to identify whether the fuels have particular additives that make them less harmful to the environment than others.

1.6 Facilitate use of the regulation-making power for fuel composition

Issue

The regulation-making authority in subsection 140(1) is constrained by subsection 140(2), which states that regulations under paragraphs 140(1)(a)-(d) may only be made if the Governor in Council is of the opinion that the regulation could make a “significant contribution to the prevention of, or reduction in, air pollution”.

Possible Approach to Address the Issue

CEPA could be amended to change the pre-condition for section 140 regulations to “contribute to” rather than make a “significant contribution to the prevention of, or reduction in, air pollution”.

1.7 Expressly allow efficient regulation of releases of substances from products

Issue

Parts 3 and 5 of CEPA allow information gathering and risk management actions to target products that contain a toxic substance. They do not expressly target products that do not contain the toxic substance, but release it during use. For example, portable fuel containers may not be made of toxic materials, but they can release VOCs while they are storing fuel if they are not designed with effective caps. As another example, woodstoves - while likely not constructed out of toxic materials - can emit air pollutants and greenhouse gases during use. Although CEPA would authorize regulations focused on users of those products, it would be much more efficient to regulate the product design to minimize the potential for release of toxic substances.

Possible Approach to Address the Issue

Parts 3 and 5 of CEPA could be amended to expressly allow information gathering and regulation making to target the design and functioning of products, and to apply to manufacturers, importers or distributors of the products, rather than only to the users of the products.

1.8 Allow for auctioning of tradeable units

Issue

Authorities exist under CEPA to develop systems of tradeable units. However, CEPA does not set out expressly all necessary authorities for the Government to operate a properly functioning auctioning system for those units.

Possible Approach to Address the Issue

CEPA could be amended to expressly provide for the tools necessary to operate a properly functioning auctioning system, such as the authority to sell tradeable units either at a fixed price or by competitive bidding.