Canada: Enviroment@Gowlings - November 2005

Edited by Katherine Van Rensberg

• Order Adding GHGs to Schedule 1 of CEPA, 1999

• Draft Cross-Cutting Provisions of Large Final Emitters Regulations

• ISO 14064 Standard to Be Released in March 2006

• Federal Cabinet Directive on Implementing CEAA

• Regulations Amending the Comprehensive Study List Regulations under the Canadian Environmental Assessment Act

• Liquefied Natural Gas

• Regulations Amending the On-Road Vehicle and Engine Emission Regulation

• Proposed Revised Pest Control Products Regulation

• Ontario Regulation 419/05 in Force

• Harmonizing Ontario and Federal Air Emissions Reporting Systems

• Stakeholder Consultation Paper-Developing Environmental Penalties for Ontario

• Laflèche Environmental Inc. Landfill

• Great Lakes Basin Sustainable Water Resources Agreement and Compact

• Québec Publishes its Draft Air Quality Regulation

• Status of the New Compensation Regime for Municipal Curbside Recycling Services

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The Order adding the Greenhouse Gases (GHGs) specified in the Kyoto Protocol to the United Nations Framework Convention on Climate Change was published in the Canada Gazette Part II on November 21, 2005. The substances which were added to Schedule 1 of the Canadian Environmental Protection Act, 1999 were carbon dioxide, methane, nitrous oxide, hydro fluorocarbons, perfluorocarbons and sulphur hexafluoride.

The Order adding the 6 GHGs to Schedule 1 enables the federal government to take appropriate measures during the risk management phase, when the government will undertake an assessment of the potential impacts of a suite of instruments. These measures and technologies are expected to be considered in consultation with various government departments, provincial and territorial governments and other stakeholders.

Environment Canada had examined the legislative options available for addressing the environmental risks posed by GHGs, and had concluded that Part V of CEPA 1999 is the preferred vehicle under which the GHGs regulatory and management regime should be developed. There are no compliance or enforcement requirements associated with the addition of the GHGs to Schedule 1 itself.

For further information, see Canada Gazette Part II, Vol. 139, No. 24, page 2568 at: http://www.ec.gc.ca/press/2005/051122_n_e.htm

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A discussion draft of cross-cutting provisions of proposed regulations that will govern greenhouse gas emission reductions from large industrial facilities was released on November 28, 2005. The draft Regulations define tradable units equal to 1 metric tonne of carbon dioxide equivalent calculated using the global warming potentials as defined in Schedule 1 to the draft regulations. They provide a formula to be used for calculating emission limits. A prohibition is created for emissions in excess of the aggregate amount calculated in accordance with the equation set out in the draft regulations. An exception to the prohibition is created where the regulated operator remits the required number of compliance units to the Minister.

Limits are set on the percentage of Certified Emission Reduction Units, being those units issued pursuant to a Clean Development Mechanism Project. Expiry Dates for Certified Emission Reduction Units are also specified.

The comment period on the draft regulation expires on January 12, 2006.

For further information, see:
www.ec.gc.ca/CEPARegistry/documents/part/LFE_drft_inst/LFE_drft_inst.cfm

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Canadian Standards Association announced that the ISO Standards for Greenhouse Gas Quantification will be released in March 2006. The ISO 14064 Standards specify the principles and requirements for quantification and reporting of GHG emissions and include standards for the design, development, management, reporting and verification of GHGs.

For further information please see: http://www.csa.ca/climatechange

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A Cabinet Directive was issued on November 23, 2005 for the purpose of establishing common principles for determining what will be examined in a federal project subject to the requirement for an environmental assessment. The Directive clarifies who is responsible for ensuring implementation and mitigation measures to prevent significant adverse effects, and provides for involvement of senior officials to ensure a coordinated federal process.

The intention of the Directive is to make the administration of the Canadian Environmental Assessment Act more predictable, certain and timely. The Directive confirms the role of the federal environmental assessment coordinator and the requirement for federal authorities to adhere to the time lines which are set, and to complete the assessment in accordance with the factors and the scope of factors which are defined.

The Canadian Environmental Assessment Agency is to provide assistance to parties in building consensus, resolving disputes and to develop policies to provide for consistent application of the federal environmental assessment process.

For further information see:
www.ceaa-acee.gc.ca/013/010/directives_e.htm.  

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The amendment to the Comprehensive Study List Regulations changes the type of environmental assessment required for the first exploratory drilling project in an off-shore area from a comprehensive study type to a screening type. The oil and gas industry had suggested that off-shore exploratory drilling projects are, in general, not likely to cause significant adverse environmental effects. Following consultation, it was concluded that the environmental effects of off-shore exploratory drilling are in general, minor, localized, short in duration and reversible. Exploratory drilling will therefore only be subject to a screening assessment. A screening assessment must address:

• the environmental effects of the project, including cumulative effects, and the effects of possible accidents or malfunctions;

• the significance of the environmental effects;

• technically and economically feasible measures that would reduce or eliminate any significant adverse environmental effects of the project;

• any other relevant matter, and public comments.

For further information please see:

The Canada Gazette Part II, Volume 139, No. 24, page 2568

www.ceaa-acee.gc.ca/050/DocHTMLContainer_e.cfm
?DocumentID=11700.

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A number of announcements were recently made concerning proposed liquefied natural gas (LNG) Projects.

Kitimat LNG Inc. is proposing to construct and operate a LNG import, re-gasification and pipeline send-out terminal at Emsley Cove in British Columbia. The Federal Minister of the Environment has determined that a comprehensive study is the most appropriate level of environmental assessment for this proposed project, according to a November 2, 2005 news release. At the same time, the Canadian Environmental Assessment Agency agreed to provide funding to three applicants to support their participation in the environmental assessment of this proposed LNG Project.

TransCanada Pipelines Limited and Petro-Canada propose to build and operate an LNG Terminal at Gross-Cacouna Harbour, Québec. This LNG project involves the delivery of natural gas by LNG marine carriers to the proposed facility. The Canadian Environmental Assessment Agency announced funding to nine applicants to support their participation in the environmental assessment of this proposed LNG project.

For further information please see:
http://www.ceaa-acee.gc.ca/050/DocHTMLContainer_e.cfm?DocumentID=11701
and,
http://www.ceaa-acee.gc.ca/050/DocHTMLContainer_e.cfm?DocumentID=11752

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Regulations Amending the On-Road Vehicle and Engine Emission Regulation

The Regulations Amending the On-Road Vehicle and Engine Emission Regulation came into effect on January 1, 2004. The proposed amending Regulations continue the approach of aligning Canadian requirements with corresponding federal emission standards of the U.S .Environmental Protection Agency.

On January 15, 2004, the USEPA (EPA) published a new final rule to introduce more stringent emission standards for on-road motorcycles beginning in the 2006 model year. The USEPA Rule introduced some new elements in both the application and structure of future U.S. motorcycle emission standards that must be addressed in order to maintain Canada/U.S. alignment. The scope of motorcycles subject to On-Road Emission Standards is broadened to include those with engine displacement of less than 50 cc. Second, the U.S. Rules introduce new compliance-related flexibilities that are not addressed under the current Regulations.

For further information please see:
Canada Gazette Part I, November 5, 2005, Volume 139, No. 45, page 3630.

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The new Pest Control Products Act was given Royal Assent in December, 2002. Prior to coming into force, the existing regulation had to be revised to meet the objectives of the new Act. The proposed revised Pest Control Products Regulation were published in the Canada Gazette, Part I, Volume 139, No. 46, page 3747. The proposed revisions to the Regulations can be broadly categorized into three areas:

• ensuring coherence with the new Act;

• clarifying and modernizing provisions in the Regulation where appropriate; and

• formalizing established procedures and practices and to regulations, thereby providing them with legal status. Where possible, plain language has been used throughout the Regulation and definitions have been added, allowing the Regulation to be simplified.

Established procedures and practices that have been incorporated into the revisions to the Regulation include those applicable to temporary conditional registration, Own-Use Imports and research.

For more information please see: Canada Gazette Part I, Volume 139, No. 146, page 3746.

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On November 30, 2005, Ontario Regulation 346 was revoked and replaced by Ontario Regulation 419/05 Air Pollution – Local Air Quality.

The Regulation clarifies the point of impingement for the purpose of compliance, provides for the pooling of all sources of contaminants on a property and clarifies where two properties may be considered as a single property. More importantly, the new regulation sets out the schedule for the replacement of the Regulation 346 Dispersion Model with the USEPA Models. The schedules to the regulation identify target sectors, when they will be required to utilize the new models. Schedule 4 sectors will be required to use the new models as of February 1, 2010 and additional target sectors specified in Schedule 5 will be required to use the new model after February 1, 2013. Where a new facility is to be established for a sector which appears on either Schedule 4 or 5, the new models are applicable immediately. For all other existing and new facilities, the new models will be required to be used as of February 1, 2020.

O. Reg. 419/05 establishes new standards. The Regulation 346 Standards will continue to be used where the Regulation 346 model is used until February 1, 2010, after which the Schedule 2 Standards will apply.

Importantly, the Regulation creates an offence where there is a modelled exceedance of a standard. The regulation also prescribes when notification of an exceedance of a model standard is required. Failure to notify is also an offence.

O. Reg. 419/05 was recently also amended by Ontario Regulation 605/05, filed November 28, 2005 and printed in the Ontario Gazette December 17, 2005.

For further information, see:
http://www.e-laws.gov.on.ca/DBLaws/Source/Regs/English/2005/R05605_e.htm

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The proposal by the Ontario Ministry of the Environment to harmonize the provincial and federal monitoring reporting program was posted on the Environmental Bill of Rights on November 25, 2005. Written submissions may be made up until December 25, 2005.

The long-term intent is for Environment Canada to include substances from Ontario's "Airborne Contaminant Discharge Monitoring and Reporting", O. Reg. 127/01, in the National Pollutant Release Inventory ("NPRI") after national consultation targeted for the 2006 data. In the interim, the Ministry of the Environment is proposing to amend Ontario Regulation 127/01 to reduce the contaminant list and to remove some unnecessary reporting requirements.

The changes are proposed to apply to the reporting of 2005 data (to be reported in 2006/07). The 70 Ontario specific substances not covered by NPRI are to be reduced to 15 substances, including total reduced sulphur, acetone, glygol ethers and road dust. For a complete list of substances please see the draft proposal.

In addition, the requirements for smog season reporting, quarterly and special reporting such as that concerning the type of energy source and the amount of electricity generated by electricity generating facilities, will be removed from O. Reg. 127/01.

For further information please see
www.ene.gov.on.ca/envregistry/026576er.htm.

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The Environmental Enforcement Statute Law Amendment Act, 2005 (Bill 133) was passed on June 9, 2005. Although the Act has received Royal Assent, the provisions of the Act relating to Environmental Penalties will be proclaimed into law once supporting regulations have been developed and approved. To initiate consultation, the Ministry of the Environment released a "Stakeholder Consultation Paper – Developing Environmental Penalties for Ontario". It was posted on the Environmental Bill of Rights Registry on November 10, 2005. The comment period expires on December 25, 2005.

For further information please see:
http://www.ene.gov.on.ca/envregistry/026581ep.htm

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A proposed Declaration Order exempting the increase in the annual fill rate for waste from 200,000 tonnes to 300,000 tonnes at the Laflèche Environmental Inc. Eastern Ontario Waste Handling Facility from the Environmental Assessment Act was posted on the Environmental Bill of Rights Registry on November 8, 2005. The Declaration Order would allow the increase in the annual fill rate without requiring Laflèche Environmental Inc. to conduct an individual environmental assessment under the Environmental Assessment Act . The date for written submissions expired on December 8, 2005.

For further information please see:
http://www.ene.gov.on.ca/envregistry/026310er.htm

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Revised draft agreements between Ontario, Québec and 8 Great Lakes State were released for comment November 23, 2005. The agreements were signed on December 13, 2005. The agreements create The Great Lakes – St. Lawrence River Basin Water Resources Council to provide for the joint exercise of such powers of sovereignty within the Great Lakes Basin as are exercised by the signatories. The Council may collect information, may create rules and may enforce those rules with respect to the other parties.

Each signatory to the Compact is required to do the following:

• submit a report detailing a water management, conservation and efficiency program;

• develop and maintain a water resources inventory;

• develop and maintain a compatible base of water use information, including a register of all Withdrawals or Diversions in an amount greater than 100,00.00 gallons per day in any thirty (30) day period and to submit such information to the Council;

• to develop and implement a water conservation and efficiency program and to review such a program on a periodic basis.

All new or increased Diversions are prohibited subject to the specific exceptions as set out in the Agreement. These exceptions include a proposal to transfer water to an area within a community that lies within the Great Lakes Basin and which is partly within two Great Lakes Watersheds. While there is prohibition against an Intra-Basin Transfer, there are exceptions and strict rules pertaining to those exceptions.

For further information, see:
http://www.mnr.gov.on.ca/MNR/csb/news/2005/nov23nr_05.html

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On November 16, 2005, the Draft Air Quality Regulation was published in the Gazette Officielle du Québec. The comment period with respect to the Draft Regulation will expire on January 16, 2006. The proposed regulation is intended to replace the Regulation respecting the quality of atmosphere ("RQA") that was initially adopted in 1979 under the Environment Quality Act. The Draft Regulation comprises some 216 sections and 11 schedules and represents a complete overhaul of the existing RQA. The objectives of the draft Regulation will be to ensure a higher rate of protection of the atmosphere and to prescribe, for all sources of contamination, emission limit values for various contaminants that cause air pollution such as particulate matter, nitrogen oxides, sulfur dioxides, fluorides, mercury, dioxins and furans. It also determines the classes of industrial or commercial activities for which specific limit values are also established. If adopted, the Draft Regulation will require the installation of continuous emission measuring and recording equipment as well as the obligation to implement emissions monitoring measures. A mandatory sampling follow-up intended to be an integral component of emissions monitoring processes is prescribed by the Draft Regulation. It will further require operators of a source of contamination to which a standard has been set under the Draft Regulation to provide the Minister of Sustainable Development, the Environment and Parks with necessary information to identify the nature of contaminants being emitted or likely to be emitted into the atmosphere, to evaluate the quantity or concentration of said contaminants and to locate the emission sites.

The Draft Regulation requires for example operators of petroleum refineries, petrochemical plants and organic chemical plants to implement leak control programs with respect to volatile organic compounds (VOC). The Draft Regulation further lowers the allowable maximum sulphur content of heavy fuel oils, coal, coke and pitch in connection with the use of fossil fuels. These measures would apply as of March 2006. Specific limit values and other standards are prescribed with regard to fuel burning equipment and industrial furnaces fuelled with used oil or other residual materials.

Industrial sectors targeted by the Draft Regulation will thus be subject to its requirements to install continuous emission monitoring equipment, maintain corresponding records and report to the Minister. In an effort towards harmonization, the Draft Regulation incorporates the guidelines of the Canadian Council of Ministers of the Environment (CCME) in respect to reducing nitrous oxide (NOx) and VOC emissions.

The Draft Regulation contains several transitional provisions in order to facilitate the transition to the new standards which it prescribes with respect to those facilities already existing at the time of the coming into force of the Draft Regulation. As pointed out by the Minister of Sustainable Development, the Environment and Parks, Thomas Mulcair,

"the overhaul of the regulation has become necessary to take into account the scientific, technological and economic developments of recent years, as well as new knowledge about the effects of atmospheric contaminants on health and ecosystems. The Draft Air Quality Regulation updates emission and air quality standards while ensuring a better coverage of industrial and commercial activities. This legislation will also make it possible to harmonize Québec's requirements in the air quality control field in keeping with its commitments to deal with atmospheric problems".

We will be keeping our subscribers informed as to the evolution of the draft Regulation and its eventual adoption in final form.

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According to Éco Entreprises Québec ("ÉEQ"), the certified industry representative for "container and packaging" and "printed matter" classes, the implementation of the new compensation regime for municipal curbside recycling services is progressing smoothly towards establishing the net costs for municipal curbside recycling. The new compensation regime has been in force since March 1, 2005, but there remains to be established the net costs incurred by municipalities for which targeted companies shall be responsible for 50%. ÉEQ is thus pursuing negotiations with l'Union des Municipalités du Québec and the Fédération Québécoise des Municipalités, the two municipal associations recognized by the Ministry of Sustainable Development, Environment and Parks for the purposes of negotiating the net costs for curbside recycling of "containers and packaging" and "printed matter" classes. According to ÉEQ's timeline, a final agreement with municipalities was to be concluded by the end of November 2005 and consultation with targeted companies to follow in December 2005 and January 2006 with the anticipation of adopting a fee schedule under the compensation regime by February 2006. Approval of the fee schedule would be expected from the government and publication thereof in the Gazette Officielle du Québec by March 2006. The period for registration and payment by stewards of their 50% share of the net costs for the 2005 schedule would then be required at some time between March and June 2006 if things go according to ÉEQ's timetable. The commencement period for registration and payment by stewards of the 2006 portion of net costs remains to be determined. The municipal association and ÉEQ last met on November 7, 2005.

Presently, if fees were to be harmonized with those of Ontario, ÉEQ believes that the fees applicable in 2005 for "containers and packaging" would likely be lower than in Ontario while those for "printed matter" would be higher. For more information, you may visit the ÉEQ's website at http://www.ecoentreprises.qc.ca/.

ÉEQ has also announced the implementation of an Advance Payment Program that allows it to raise the financing required to fulfill its obligations relating to the implementation of the new municipal compensation regime. The purpose of the program is to set forth simple and transparent terms and conditions under which ÉEQ may obtain the funding it needs to honour any of its obligations resulting from the implementation of the compensation regime. Persons eligible to participate are those subject to the "containers and packaging" and/or "printed matter" classes of materials and who have entered into an agreement with ÉEQ. The amount eligible to be paid in advance as a portion of the 2005 contribution cannot, according to the description of the Advance Payment Program, be less than $10,000 or greater than the contribution that the participating person owes for 2005, as estimated by ÉEQ. More information regarding the Advance Payment Program can also be obtained on ÉEQ's web site.

ÉEQ also recently hired Mr. Charles Tremblay, Eng., as President and Managing Director of ÉEQ. Mr. Tremblay has been involved in the field of waste management for over a decade and, during his career, he has held a variety of executive positions including that of President and C.E.O. of Services Matrec Inc. and President and C.E.O. of Sita Canada Inc. Ms. Maryse Vermette, formerly Director of Communications and Relations with Municipalities, at Collecte Sélective Québec has been hired as Vice-President, Operations and Communications of ÉEQ.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.