Canada: Federal Court Strikes Down Order Designating Plastics As Toxic Substances

On November 16, 2023, the Federal Court (Court) in Responsible Plastic Use Coalition v. Canada (Environment and Climate Change) struck down the federal government's Order-in-Council (Order) adding "plastic manufactured items" (PMIs) to the List of Toxic Substances in Schedule 1 of the Canadian Environmental Protection Act, 1999 (CEPA) as unreasonable and unconstitutional.

The Court determined that PMIs were too broad to be included on Schedule 1 of the List of Toxic Substances as there was no evidentiary basis to establish that all PMIs were harmful. Further, the Court held that the Order extended beyond the federal government's ability to regulate the environment through its criminal law power. The Court ultimately quashed the Order and declared it invalid and unlawful.

While the decision has received significant attention, it is of limited practical consequence in the near-term. In the medium to long term, however, it may significantly impact regulation of single-use plastics, as well as other toxic substances. It may also inform the constitutional interplay of environmental regulation in Canada.

Summary of the Decision

Several studies have called for strategic intervention against the environmental, human health and economic impacts of plastics. On April 23, 2021, the Governor-in-Council issued an Order adding PMIs to the List of Toxic Substances in Schedule 1 of CEPA. Following the Order, several plastic industry participants (Applicants) formed a coalition to challenge the legality of the Order and commenced an application for judicial review.

The Applicants' primary argument before the court was that the Order was unreasonable as it was not a proper use of the cabinet's authority and did not comply with the statutory scheme under CEPA. They asserted that the listing of PMIs was too broad, that PMIs were neither a substance nor a class of substances within CEPA and appropriate risk assessments had not been completed to demonstrate that all PMIs were toxic. The Applicants submitted that the Order was unconstitutional as it fell outside the federal criminal law power. The Supreme Court of Canada ruled several decades ago that Canada can use the criminal law power to enact environmental protection legislation provided the subject matter of the regulation was actually dangerous.

The respondent government ministries argued that cabinet had acted within its power under CEPA and its broad purpose of protecting the environment by preventing pollution. They asserted that applicable risk assessments were not necessary in this instance. Further, they argued that the Order did not raise any concerns relating to the constitutional division of powers and that the breadth of the listing reflected the statutory scheme of CEPA. The federal government argued that although the Order permitted the regulation of all PMIs, it said it would only publish regulations in respect of those items that created a real risk of harm to the environment.

The Court ultimately agreed with the Applicants. The judge found that the Order was unreasonable because PMIs were too broad a category to be on the List of Toxic Substances, with the government failing to show there is a reasonable apprehension that all listed plastic items are harmful. She found that the "broad and all-encompassing nature of the category of PMI poses a threat to the balance of federalism as it does not restrict regulation to only those PMI that truly have the potential to cause harm to the environment." As a result, she found that the Order was both unreasonable and unconstitutional. The Court quashed the Order and declared it invalid and unlawful. The federal government has signalled its intention to appeal the decision.

Takeaways

There are three main takeaways from the decision.

First, although the Court quashed the Order, the decision has limited impact in the immediate term. In June 2023, following the commencement of the application in this case but before the court's ruling, Parliament passed Bill S-5: Strengthening Environmental Protection for a Healthier Canada Act (Act). The Act introduced a new regime for the categorization and regulation of toxic substances, including PMI. Striking down the Order was therefore inconsequential because CEPA, as amended by Bill S-5, became the enabling authority for the listing of PMI, rather than the Order. Accordingly, PMIs continue to appear in CEPA, now on Part 2 of Schedule 1 of the Act, for the time being. However, the validity of this aspect of the legislation may be challenged and not withstand scrutiny unless the government conducts a more detailed assessment of PMI on an item by item or category by category basis, focusing on the scientific evidence applicable to specific items or categories and narrowing those that are listed based upon the science.

Second, the arguments in the case will likely reappear in the future and the decision may have significant precedential value. For example, it may influence the ongoing Federal Court challenge to the Single-use Plastics Prohibition Regulations, which were ultimately enabled by the April 2021 Order that was found to be unconstitutional in this case. Further, the parties that brought the original application may bring another one challenging the constitutionality of the CEPA amendments introduced through Bill S-5.

Third, the case adds to the broader trend of constitutional case law dealing with the extent of the federal government's power regarding the environment. These include the Supreme Court of Canada references. See our previous Blakes Bulletin: In Split Decision, Supreme Court of Canada Upholds Federal Greenhouse Gas Pollution Pricing Act and Blakes Bulletin: SCC Rules Federal Impact Assessment Act's "Designated Projects" Component Is Unconstitutional. These jurisdictional disputes are likely to continue, particularly in light of the recently enacted Clean Electricity Regulations and proposed Regulatory Framework for an Oil and Gas Sector Greenhouse Gas Emissions Cap. The importance of this recent jurisprudence to the current Government's policy agenda may explain its willingness to appeal the decision.

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