What Could Canada’s CEPA Reform Mean to Your Business?

Recommendations in a recent Parliamentary report pose a potential shift in how the Canadian ministries may administer their programs and activities related to CEPA.

On 29 June 2018, the Government of Canada published the "Follow-Up Report to the House of Commons Standing Committee on Environment and Sustainable Development on the Canadian Environmental Protection Act, 1999" (CEPA). The report is broad-ranging in subject matter and proposes to reframe the management of CEPA.

History of CEPA
CEPA was first enacted in 1988, and the act consolidated a vast number of statutes and parts of disparate statutes. The final result was the adoption of an act that contains 12 parts ranging across various environmental topics from toxic substances to vehicle emissions.

Since its inception, CEPA has been reviewed numerous times. The most significant review of CEPA occurred in 1995 and led to the adoption of CEPA 1999. The act was then reviewed in 2007 by the House of Commons and in 2008 by the Senate Committee. The review conducted by the House focused on addressing Part 5 of the act concerning toxic substances, whereas the study conducted by the Senate addressed chemical management of mercury and perfluorinated compounds. These reviews did not result in major amendments to the act, but did highlight the problems of implementing and enforcing CEPA.

CEPA reconsidered: Looking forward to 2020 and beyond
A comprehensive review of CEPA was initiated on 22 March 2016 by the Standing Committee on Environment and Sustainable Development of the House of Commons (Committee). The Committee made a total of 87 recommendations, and each were evaluated by the Government. The Government responded to the recommendations in the report referenced above by either expressing its support or negating the adoption of said recommendation.

Some of the recommendations made by the Parliament and the Government’s response to them are summarized below.

Chemical substances inventory “reset”?
The Parliament has recommended the Government include an explicit authority in CEPA to remove substances from the “Domestic Substances List” (DSL). The recommendation was based on identifying substances that were not in commerce. This change would subject these chemicals to the new substance pre-market notification and assessment requirements. Businesses interested in placing the substance back in commerce would need to comply with these barriers prior to manufacture or import into Canada.

Additional notification requirements were also proposed on the matter of significant new activity (SNAc) DSL substances. The Parliament proposed to require persons that transfer a SNAc-DSL substance to another person ensure that the substance complies with SNAc provisions.

The Government has expressed its support for both these recommendations.

Automated additions of toxic substances to Schedule 1 of the act
Substances of concern are evaluated against the toxicity criteria set out in section 64 of the act. The Parliament proposed that substances meeting this criterion, upon the evaluation of the Minister of Health and the Minister of the Environment, be placed automatically in the “List of Toxic Substances” (i.e. Schedule 1) of the act. 

The Government did not support this recommendation, due to concerns about lack of transparency and public participation in the decision-making processes of the government.

Review period
The Parliament considers the current review period (five years) too short of a timeframe to fully assess any amendments the government could have made in the past based on a review of the act. As a result, a proposal is to expand the Parliamentary review period of CEPA to a 10-year timeframe.

Vulnerable populations
CEPA enables the government to identify, assess and address environmental and health risks associated with chemical substances in Canadian commerce. Yet, it fails to formally acknowledge vulnerable populations, e.g. children, pregnant women and elderly populations. The Parliament proposed that CEPA make an explicit commitment to assess risks affecting these sectors, and to consider the vulnerabilities of these populations as an important factor to determine whether a substance is toxic or capable of becoming toxic.

The Government responded to the Parliament’s recommendation that a broad commitment will be taken under CEPA to develop and publish a policy on vulnerable populations as part of risk assessments. The Government further clarified that vulnerable populations are routinely considered when conducting risk assessments and designing risk management measures under the “Chemical Management Program” (CMP). Hence, the practice of considering vulnerable populations is not a new one, but one the government agrees to solidify its commitments to.

Other notable proposals
Other notable proposals include:

• Revising the definition of “toxic” to address endocrine disruptors and substances that are dangerous at low-level quantity thresholds;
• Lowering the threshold for the National Pollutant Release Inventory (NPRI) reporting;
• Requiring mandatory hazard labeling for all products containing toxic substances;
• Updating the Persistent and Bioaccumulative Regulations; and
• Considering reliable data from other jurisdictions, such as that of EU REACH, when conducting assessments;
• Among others.

For more information, please refer to the documentation provided by Canada throughout the CEPA reform process:

• Discussion Paper: Canadian Environmental Protection Act, 1999 Issues & Possible Approaches (May 2016);
• Health Environment, Healthy Canadians, Healthy Economy: Strengthening the Canadian Environmental Protection Act, 1999 (June 2017); and
• Follow-up Report to the House of Commons Standing Committee on Environment and Sustainable Development on the Canadian Environmental Protection Act, 1999 (June 2018).

Business impact
The governments of Canada and the U.S. meet regularly for the purpose of carrying out their duties to the Regulatory Cooperation Council. Among these duties, the two countries have pledged to provide further guidance to entities doing business in both the U.S. and Canada, and to consider ways to cooperate to ease the burdens of compliance without lessening the high levels of environmental protection.

Thus, it makes sense that Canada is considering a similar strategy taken by its North American neighbor to address chemical substances in commerce. This strategy is reflected in Canada’s proposal to revamp its chemical inventory, and its explicit commitment to address risks to vulnerable populations, both of which are commitments reflected in the U.S. Toxic Substances Control Act (TSCA).

The Government will continue to convene stakeholder meetings for the sake of transparency during the process of reforming CEPA. Any legislative amendment resulting from recommendations supported by the Government will be notified in the Canada Gazette. Businesses subject to CEPA should follow these developments closely.