When Bill S-5, Strengthening Environmental Protection for a Healthier Canada Act (the "Amendments") came into force on June 13, 2023, the Canadian Environmental Protection Act, 1999 ("CEPA") underwent its first significant changes in over 20 years.
CEPA is the primary statute through which the Canadian federal government (the "Government") regulates and protects the environment and contributes to sustainable development through pollution prevention. CEPA and its accompanying regulations regulate, among other things, the assessment and management of risks, the treatment and disposal of chemicals and hazardous waste, vehicle and engine emissions, equipment and other sources of pollution, and the prevention and impact of environmental emergencies such as oil and chemical spills.
The Amendments build on previous efforts of the Government to modernize CEPA. The Amendments' predecessor Bill, Bill C-28, Strengthening Environmental Protection for a Healthier Canada Act ("Bill C-28"), did not succeed in the House of Commons in 2021. While there is significant overlap between Bill C-28 and the Amendments, the Amendments do have some notable differences.
This bulletin provides an overview of the major changes coming to CEPA, including the right of Canadians to a healthy environment, a new chemicals management and regulation regime, and the Government's expanded powers to compel information.
The Right to a Healthy Environment and Certain Soft Rights
In its preamble, CEPA now officially recognizes a variety of rights and lays out several governmental commitments.1 The change garnering the most attention is the recognition of Canadians' right to a healthy environment.
This newly acknowledged right to a healthy environment imposes specific obligations on the Government when administering CEPA. In particular, the Government must: (a) protect this right when making decisions relating to the environment;2 (b) develop, within 2 years of the Amendments coming into force, an implementation framework to set out how this right will be considered in the administration of CEPA;3 and (c) conduct research, studies, and monitoring activities to support the protection of this right.4
The Amendments also reiterate the Government's existing commitment to implementing the United Nations Declaration on the Rights of Indigenous Peoples ("UNDRIP"), including free, prior, and informed consent and the recognition of the role of Indigenous knowledge in decisions related to protection of the environment and human health.
The Amendments further recognize the importance of considering vulnerable populations and the risks posed by the cumulative effects of toxic substances in substance toxicity assessments. Moreover, the Amendments provide for reducing or replacing the use of animal testing. Also recognized in the Amendments is the importance of Canadians having access to relevant and pertinent information that may inform their purchasing decision on product labels and the Government's commitment to openness, transparency and accountability. Finally, the Government's commitment to the use of a risk-based approach to chemical management is equally confirmed.
Chemicals Management
The Amendments overhaul the existing chemical management regime to better protect Canadians from the evolving risks of harmful chemicals and pollution. To accomplish this, the Government has proposed wide ranging changes relating to risk assessment, public accountability, management of toxic substances and new substances, which are discussed in turn below.
Risk Assessment
The Minister of the Environment and Climate Change (the "Minister") must develop and publish a Plan of Chemicals Management Priorities ("PCMP") before June 13, 2025. The PCMP must set out an integrated plan for the assessment of substances already being used in Canada and the activities and initiatives that support chemical management, such as information gathering, risk management and communication, and research and monitoring. The PCMP must establish priorities for the management of substances, taking into account a number of factors including the views of stakeholders and partners, public comments, the effects on vulnerable populations, the toxicity of the substance, the ability to disrupt biological reproduction or endocrine systems, and whether there are safer and more sustainable alternatives. The Government is also empowered to make geographically targeted regulations to address pollution "hot spots".5
The Amendments further require the Government to consider
impacts on vulnerable populations and possible cumulative effects
when conducting risk assessments.6 Vulnerable
populations are identified as groups that are at higher risk of
adverse health effects from exposure to chemicals, due to either
higher biological susceptibility, such as children, or higher risk
of exposure, such as
Indigenous communities relying on traditional food
sources.7 Both vulnerable populations and the cumulative
effects of exposure must be considered in the development and
implementation of the PCMP.
Additionally, the Amendments establish a mechanism through which any person can submit a request to the Minister to assess a substance to determine its toxicity and risk to the environment. The Minister must provide a response within 90 days, indicating whether the Government intends to assess the substances and their reasons for their decision.8
The Government also has new reporting and review obligations. While the Government is already obliged to provide Parliament a report on CEPA's administration and enforcement under subsection 342(1) of CEPA, the Amendments expand this obligation to include a progress report on the implementation of their PCMP. Additionally, the Minister must review the PCMP within 8 years of its implementation and every 8 years after that.9
Public Accountability Framework
The Amendments intend to increase transparency and public participation in risk assessments by the Government for the categorization and management of potentially toxic chemicals. Prior to the Amendments, CEPA contained a public accountability framework under Section 77 and provided time limits for the Government to assess substances under Sections 91 and 92. However, these provisions only applied to certain risk assessments being conducted by the Government such as substances placed on the Domestic Substances List that, in the opinion of the Minister, present the greatest potential for exposure to Canadians or are persistent or bioaccumulative. The Amendments expand these provisions to all substance risk assessments for toxic or capable of being toxic substances, with the exception of assessments for new substances and significant new activities.10
The Amendments further require that, if the Minister has not published a statement with their finalized assessment within 2 years of publishing a draft assessment under Section 77, they must publish in the Environmental Registry the reason for their delay and an estimated time frame for the finalized assessment.11
Management of Toxic Substances
The Amendments change the management and classification of high-risk toxic substances. Previously, substances designated as toxic were added to a list of toxic substances in Schedule 1 of CEPA. The management of high-risk toxic substances now uses a two-track approach with the following risk-based categories:12
- Part 1 will be for substances found to pose the highest risk. These substances are those that are either: (i) persistent and bioaccumulative and inherently toxic; carcinogenic, mutagenic, or toxic for reproduction; or, (ii) otherwise found to pose the highest risk.
- Part 2 will be for other toxic substances, that will continue to be subject to regular risk management, with priority given to pollution prevention.
Part 1 substances will be subject to more stringent management. Prohibition, either total, partial, or conditional, will receive priority in the management of Part 1 substances; however it is also recognized that certain substances may require more tailored approaches.13
Additionally, if another federal Act is best placed for managing the risks relating to a given substance, that other Act can be used to fulfill CEPA's obligation to develop a risk management instrument. When doing so, the Minister and the Minister of that other Act must jointly publish a statement in the Canada Gazette identifying the regulation or instrument to be made under that other Act. However, where regulations are made under an Act regulated by the Minister of Health, the Minister of Health is responsible for the development of risk management obligations under CEPA related to substances that pose health concerns.14
New Substances and Significant New Activity
The Amendments introduce changes to the significant new activity provisions. A significant new activity is an activity conducted with a substance in a different quantity, concentration or in different circumstances that could affect the environment or human health. Under the newly amended CEPA, the Minister has the authority to vary elements of a significant activity or notice beyond the significant new activity itself. These elements may include the data or information that needs to be submitted for evaluation prior to undertaking the activity or the timelines for submitting such information. Downstream communications are also impacted, in that the transferor of a new substance must notify transferees of any obligations to comply, and the Minister can tailor the scope of such obligations to particular classes of persons who must be notified.
The Food and Drugs Act ("FDA") will also now allow for the creation of an environmental risk assessment and management regime for drugs. This is intended to streamline the regulatory approach for industries with respect to the assessment and approval of drugs by empowering the Minister of Health to also consider the environmental implications of drugs. This would also avoid the duplication of requiring notification and review by both the Minister of Health and the Minister for certain drugs.15 However, these risk assessment powers under the FDA will not fully come into effect until a date that has not yet been set by the Governor-in-Council.16
Power to Compel Information
The Amendments also expand the Government's information-gathering ability under Sections 46 and 71 of the CEPA.17 Under the amended Section 46, the Government can compel the provision of information pertaining to activities that contribute to pollution. The Amendments specifically include hydraulic fracking and tailing ponds as activities that contribute to pollution, which is a notable addition from Bill C-28.
Section 71 also allows the Government to specify the nature and kind of data that it requires from chemical producers and distributors. Specifically, the Government will be able to specify methods of quantifying requested data as well as specific test procedures and laboratory practices to be performed by the companies from whom the information is requested.
The Amendments will also limit the use of confidentiality requests from companies who are instructed to provide information to the Government. Companies wishing to protect confidential business information will have to submit requests accompanied by reasons as to why confidentiality is being asserted. Unlike Bill C-28, the Amendments specifically require that reasons be based on the following criteria under the federal Access to Information Act:18
- Trade secrets;
- Financial, commercial, scientific or technical information that is confidential information and that is treated consistently in a confidential manner by any person;
- Information that would reasonably be expected to cause a material financial loss or gain to the provider or prejudice the providing company's competitive advantage, if disclosed; or
- Information that would reasonably be expected to interfere with contractual or other negotiations of the providing company.
Animal Testing
The Amendments intend to replace, reduce, and refine the use of vertebrate animals in toxicity testing. The Government will be required to use scientifically justified alternatives in the conduct of data generation and investigations to the extent practical. The Government must also specify the activities and initiatives being taken to promote the development and implementation of scientifically justified alternatives to the use of vertebrate animals in their PCMPs.19
The regulations on the use of vertebrate animals are an instance of the Amendments' evolution from its predecessor, Bill C-28. Bill C-28 included vertebrate animals in its preamble like the Amendments, however, unlike the Amendments, did not contain further regulations on the use of vertebrate animals.
Notably, and on a related note, Health Canada announced on June 27, 2023 that through the passing of Bill C-47, Budget Implementation Act, 2023, No. 1, amendments to the FDA to ban cosmetic testing on animals will come into force on December 22, 2023.20
Indigenous Reconciliation
The Amendments increase the role of Indigenous Peoples in environmental management and regulation. Indigenous Peoples will be recognized as potentially relevant stakeholders to be consulted in the development of a PCMP and to participate in the implementation framework of the Right to a Healthy Environment. Additionally, the Government's existing obligation to annually report on CEPA's operation will expand to include information on CEPA's impact on aboriginal peoples and aboriginal governments.21
The Amendments provide greater detail on the role of Indigenous Peoples as compared to Bill C-28. Notably, the Amendments explicitly include free, prior, and informed consent as part of the Government's commitment to UNDRIP as well as recognize Indigenous Knowledge whereas Bill C-28 only re-affirmed the Government's commitment to UNDRIP.
Key Takeaways and Impacts to Businesses
The changes to Canada's environmental regime discussed above have the potential to significantly impact a wide range of industries and businesses, in particular chemical manufacturing, oil and gas, petrochemicals, pharmaceuticals, and natural resources, and their respective supply chains.
Companies carrying out activities or planning projects regulated under CEPA will need to keep in mind that the Government will now have an explicit duty to protect the right to a clean environment when reviewing applications and conducting project assessments and will have significant new tools at its disposal for regulating chemicals. Further, Indigenous rights and animal testing concerns will have a greater role than ever before in the administration of CEPA.
Given the scope of the Amendments, the impacts of these changes will vary on a case-by-case basis. McMillan LLP is positioned to advise on the specific implications of these changes for new and existing businesses, projects, and products in the Canadian market.
Footnotes
1. Bill S-5, Strengthening Environmental Protection for a Healthier Canada Act, Parliament of Canada, 1st Sess, 44th Parl, 2023, cl 2 (Assented to 13, June 2023) [Bill S-5].
2. Bill S-5, supra note 1 at cl 3(2).
3. Bill S-5, supra note 1 at cl 5.1(2).
4. Ibid
5. Bill S-5, supra note 1 at cls 16, 19, & 54.
6. Bill S-5, supra note 1 at cl 20.
7. Bill S-5, supra note 1 at cl 4(2).
8. Supra note 6.
9. Bill S-5, supra note 1 at cl 19.
10. Bill S-5, supra note 1 at cl 21(1).
11. Bill S-5, supra note 1 at cl 21(2).
12. Bill S-5, supra note 1 at cls 21(1) & 58.
13. Bill S-5, supra note 1 at cl 29.
14. Bill S-5, supra note 1 at cls 30 & 31.
15. Bill S-5, supra note 1 at cls 64–67.
16. Bill S-5, supra note 1 at cl 69.
17. Bill S-5, supra note 1 at cls 9(3) & 18.
18. Bill S-5, supra note 1 at cl 50; Access to Information Act, R.S.C., 1985, c. A-1, paras 20(1)(a)–(d).
19. Bill S-5, supra note 1 at cl 18.
20. Health Canada, "The Government of Canada is taking action to ban cosmetic animal testing while ensuring the continued protection of human health and safety of all Canadians." (27 June 2023)
21. Bill S-5, supra note 1 at cls 19 & 57.
The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.
© McMillan LLP 2021
