Environmental Protection and Enforcement: appearance before the Standing Committee (November 4, 2020)

Chemicals Management Plan

Q. What is the government doing to protect the environment from toxic substances?

• The Chemicals Management Plan (CMP) is a world-leading program, jointly delivered by Environment and Climate Change Canada and Health Canada, to assess and manage environmental and health risks posed by chemical substances.
• Since the launch of the CMP in 2006, the Government of Canada has:
  • Assessed approximately 4,000 chemicals in commerce and 6,420 new chemicals seeking authorization to be used in Canada
  • Developed over 200 risk management actions to manage the risks of toxic substances
  • Published about 500 new substances notifications per year
  • Assessed approximately 300 older pesticides
  • Developed approximately 80 safe drinking water guidelines
• The Government is exploring opportunities to renew its approach to chemicals management. The current program is set to end in March 2021 and work is underway to inform the future of chemicals management in Canada.
• The Government is committed to building on the success of the CMP and to continue addressing chemicals in Canada to protect the environment and the health of Canadians.

Background

• Launched in 2006, the Chemicals Management Plan (CMP) is a world-leading program that is supported by both industry and environmental non-governmental organizations.
• The CMP is designed to:
  • Provide a predictable, transparent regulatory environment for chemicals;
  • Support coordination and coherence among federal statutes to ensure all relevant exposure routes are considered and the most appropriate risk management tools are used;
  • Establish government accountability through research, monitoring, surveillance and risk communication; and
  • Engage with stakeholders on proposed assessment conclusions and risk management approaches.

Enforcement (Volkswagen, Mount Polley, Teck)

Q. What is the current status of the laying of charges relating to the Teck Coal Limited Fording River and Greenhills Mining Operations?

ECCC’s Enforcement Branch is in the final stages of an investigation of alleged leaching of selenium from waste rock into the Elk River by Teck Coal Limited’s Fording River Operations, and the effect of that leaching on fish. ECCC continues to support the Public Prosecution Service of Canada as they review ECCC’s investigative material as part of the charge review and decision process.

No further information can be provided as this case is still under investigation

Q. What is the current status of the laying of charges relating to the Mount Polley incident?

ECCC, Fisheries and Oceans Canada, and the British Columbia Conservation Officer Service carried out an extensive joint investigation in relation to alleged offences that occurred on August 4, 2014, pursuant to the federal Fisheries Act.

On April 2, 2019, the Mount Polley Integrated Investigation Task Force delivered its Report to Crown Counsel to the Public Prosecution Service of Canada (PPSC). The PPSC, which is leading the prosecution team, is continuing the charge assessment process. They are being supported by Crown Counsel from the British Columbia Prosecution Service, ECCC, Fisheries and Oceans Canada, and the British Columbia Conservation Officer Service.

ECCC continues to support the Public Prosecution Service of Canada as they review ECCC’s investigative material as part of the charge review and decision process.

No further information can be provided as this case is still under investigation

Q. Why was Volkswagen fined?

German automaker, Volkswagen Aktiengesellschaft (Volkswagen AG), was ordered to pay an unprecedented fine of $196.5 million after pleading guilty to 60 counts of contravening the Canadian Environmental Protection Act, 1999. The charges relate to unlawfully importing nearly 128,000 vehicles that were equipped with a defeat device in contravention of prescribed vehicle emission regulations, and, in addition, providing misleading information to Environment and Climate Change Canada.

Testing completed at Environment and Climate Change Canada’s (ECCC) Transportation Division vehicle testing facility indicated that emissions from the affected vehicles, under certain conditions, could sometimes be up to 27 times higher than the prescribed standard set out in regulations.

These charges are the result of a complex, methodical and thorough investigation initiated in September 2015. Over the course of the investigation, Environment and Climate Change enforcement officers gathered substantial evidence from foreign and domestic sources.

Q. Why did this investigation take years here but only months in the United States?

The legal and regulatory environments in Canada and the United States (U.S.) are very different. Court settlements and/or fines in the U.S. cannot be automatically replicated in Canada.

In general, the length of an investigation depends on the complexity of the situation and the amount of information that needs to be gathered and analyzed to establish proof of an offence. It is not unusual for an investigation of this nature to take years to complete.

ECCC’s investigation was thorough and proceeded in a comprehensive and methodical manner. This was a complex case involving a number of domestic and foreign organizations, and a number of potential offences under the Canadian Environmental Protection Act (CEPA). Investigators needed to take the necessary time to gather sufficient evidence. There was also an international element to this investigation, which in some cases required international information-sharing agreements. Time was needed to analyse a massive amount of information and to gather relevant evidence. The Public Prosecution Service of Canada determines what charges can be sustained and it has the sole discretion to decide to pursue a prosecution.

Canadians can be confident that ECCC enforcement officers are deeply committed to enforcing the laws and regulations that protect Canada’s environment and wildlife. When enforcement officers find sufficient evidence of violations, they take action and they do not hesitate to enforce the law.

Q. Is the Government of Canada satisfied with this outcome?

This fine is the largest penalty ever levied in Canada against a company for an environmental violation. In fact it is 26 times higher than the next largest fine. It reflects the gravity of the offence.

The outcome of this case demonstrates that companies will be held accountable for contravening Canadian laws that protect the environment and human health.

Q. Why wasn’t the fine higher? In the U.S., the fine was a $2.8 billion criminal penalty or $4745 per vehicle. Why were the fines so much higher in the United States? (590,000 vehicles)

It is important to note that penalties are based on precedents. This result has raised the bar on environmental fines in Canada.

It is difficult to compare the situation in the U.S. with that in Canada. These are different jurisdictions with different legislation and legal processes.

Environmental Damages Fund and the Volkswagen AG Fine

Q. What is the Environmental Damages Fund?

• The Environmental Damages Fund (EDF) is a specified purpose account administered by Environment and Climate Change Canada (ECCC) to direct funds received from fines, court orders and voluntary payments to priority projects that will benefit Canada’s natural environment.
• Fines directed to the EDF are used to fund projects that focus on the following four categories in order of priority:
  • restoration
  • environmental quality improvement
  • research and development
  • education and awareness
• Eligible groups include:
  • non-governmental organizations
  • universities and academic institutions
  • Indigenous organizations
  • provincial, territorial and municipal governments
• Individuals, businesses, or other federal departments or agencies are not eligible for funding but are encouraged to partner with eligible groups to apply. Offenders are not eligible to apply directly or to partner with eligible groups for fines or monetary payments they have made that were directed to the EDF.

Q. How much did the EDF receive from the VW award?

• Canadian Environmental Protection Act fines resulting from successful prosecution under paragraph 272(1)(a) of the Act are automatically directed to the EDF. Therefore, the EDF received the total $196.5 million VW award.

Q. How is the VW award being spent?

• Environment and Climate Change Canada created the new Climate Action and Awareness Fund (CAAF) with the $196.5 million VW award, along with contributions from Environment and Climate Change Canada’s existing Climate Action Fund.
• The CAAF will invest $206 million to support Canadian-made projects that help to reduce Canada’s greenhouse gas emissions. The CAAF is designed to support projects in science and technology, academia and at the grassroots community level. These projects are critical as we continue to build a sustainable net zero emissions economy by 2050.
• The CAAF has three main priorities:
  • support youth climate awareness (request for proposals - closed summer 2020) and community-based climate action (request for proposals - fall 2020)
  • support climate research at Canadian think tanks and in academia (request for proposals - winter 2021)
  • advance climate science and technology (request for proposals - winter 2021)
• Two CAAF requests for proposals have been delivered to date:
  • From June 22 to August 6, 2020, ECCC accepted applications for projects that encourage youth awareness, engagement and action on climate change issues and solutions. This request for proposals will provide up to $6 million per project over five years to eligible organizations.
  • From September 17 to October 26, 2020, ECCC accepted applications for community-based climate action projects that will develop knowledge, tools and/or skills that lead to or engage communities in climate action. This request for proposals will provide from $100,000 to $6 million to eligible organizations, for a total of up to $50 million over five years.

Q. What is the status of funding decisions?

• Project applications received by ECCC by the application deadline under CAAF’s two requests for proposals are currently under review.
• All proposals received by the application deadline will undergo an administrative review to confirm eligibility.
• Technical review of proposals by subject matter experts will be undertaken for eligible projects.
• Selection Committees will recommend proposals to the Minister of Environment and Climate Change for funding approval. Decisions for proposals received in June are expected by fall 2020, and decisions for proposals received in September are expected by early 2021.

Methane

What is the status of methane equivalency agreements with the provinces of B.C., Alberta and Saskatchewan?

The federal methane regulations do not apply in the provinces of Alberta, British Columbia and Saskatchewan as methane equivalency agreements are in place with each of these provinces and the Governor-in-Council has approved orders to stand down the federal regulations in Alberta, British Columbia and Saskatchewan.

In early November 2020, Environment and Climate Change Canada expects to publish final equivalency agreements and Orders-in-Council that stand down the federal methane regulations in Alberta and Saskatchewan. A separate equivalency agreement and Order-in-Council for British Columbia was published early this year.

The equivalency agreements are for a defined period. After the end dates the federal regulations will re-apply, there is no built-in renewal of these agreements.

• December 31, 2024 in Saskatchewan
• March 24, 2025 in British Columbia
• October 23, 2025 in Alberta

Why did the federal government agree to stand down the federal regulations in the first place?

Equivalency agreements represent a flexible approach that enable each province to design its own climate change regulations in a manner that reflects its considerations, provided it has equivalent or better emission reductions outcomes and adequate legal structures.

To determine equivalency over the period of each agreement, Environment and Climate Change Canada modeled the greenhouse gas emission outcomes of the federal regulations and compared them with the emissions allowed under the provincial regulatory approach.

In reaching equivalency agreements with Alberta and Saskatchewan, each province strengthened its requirements for the oil and gas sector. With these changes, the Government of Canada is pleased that the environmental outcomes of Alberta, Saskatchewan and British Columbia’s methane regulations and directives are now considered equivalent to the federal methane regulations for the duration of each agreement.

What would it take to renew these agreements?

There are a number of requirements to establish an equivalency agreement with an interested province. Provincial regulations must deliver equivalent environmental outcomes and meet a number of other conditions such as having adequate legal structures for public investigations on alleged offences.

Supplemental 1: Federal Methane Regulations

On January 1, 2020, the first requirements under the federal methane regulations came into force. Canada’s methane regulations require oil and gas operators to follow specified procedures to address and repair leaks, measure emissions and install technologies that will reduce emissions.

The Government of Canada’s oil and gas methane regulations are an important part of the country’s climate plan. They will reduce pollution in the oil and gas sector, improve air quality, and drive innovation in the industry. Reducing methane emissions from Canada’s oil and gas sector has been demonstrated to be one of the lowest-cost actions to reduce greenhouse gases from the energy sector. These details were published in 2018 alongside the federal methane regulations as part of the regulatory impact analysis.

Supplemental 2: What is Canada trying to achieve with the methane regulations? Are there any complementary measures?

Canadians have made it clear that action on climate change must be a top priority for the government. Canada remains committed to reducing methane emissions from the oil and gas sector by 40% to 45% below 2012 levels by 2025 and the federal methane regulations are a key element of this commitment.

Methane emissions and methane reductions which result from the federal methane regulations will depend, in part, on the level of oil and gas activity (number of wells, volume of production, etc.), which is largely a function of economic conditions. Oil and gas production in Canada is highly sensitive to changes in global prices.

Other Government of Canada measures will provide incentives for additional reductions of methane emissions, including the Emissions Reduction Fund and the upcoming Clean Fuel Standard. The Emissions Reduction Fund is a $750 million repayable loan program to assist conventional and offshore oil and gas companies to reduce their greenhouse gas emissions where a portion of these loans may be convertible to non-repayable grants.

• This program will support eligible energy sector firms in making capital investments necessary to reduce greenhouse gas emissions, with a focus on methane. For example, the program could support investments in pumps, valves and other capital equipment that will reduce methane emissions.

Oil Sands Monitoring Program

Q. Who is responsible for delivery of the Oil Sands Monitoring Program?

• The Oil Sands Monitoring Program, jointly managed by the governments of Canada and Alberta, brings together representatives from Indigenous communities in the oil sands region and industry to oversee a monitoring program aimed at enhancing understanding of the cumulative effects of oil sands development activities on the environment.
• In December 2017, the governments of Canada and Alberta renewed their commitment to environmental monitoring in the oil sands region through a Memorandum of Understanding. This commitment drove the development of a comprehensive, ongoing framework establishing the collective approach for the implementation, management, and oversight of the Oil Sands Monitoring Program.
• The Operational Framework Agreement was endorsed by all participants to the process, including the two governments, 18 Indigenous communities, inclusive of First Nations and Métis, and industry. The federal government recognizes and supports this multi-stakeholder governance structure, which serves to strengthen partnerships and ongoing delivery of ambient environmental monitoring in the oil sands region.
• The oil sands industry provides funding support for the Oil Sands Monitoring Program under Alberta’s Oil Sands Environmental Regulation. Industry provides up to $50 million annually.
• The joint ongoing commitment to work with stakeholders ensures this world class monitoring system is able to provide clear and scientifically rigorous, integrated and transparent information on oil sands environmental impacts. This multi-partner monitoring system is the most comprehensive monitoring program of any oil producing jurisdiction. 

Q. Has there been a reduction in environmental monitoring of the oil sands region?

• There is no agreement between the governments of Canada and Alberta to reduce oil sands monitoring. The decrease in the cost of monitoring for 2020-2021 reflects the suspension of some fieldwork during the spring and summer due to COVID-19 distancing requirements. 
• The environmental monitoring plan and costing was decided upon by the Oil Sands Monitoring Program Oversight Committee, which includes six representatives from Indigenous communities, one from the Government of Canada, and others from the Government of Alberta and industry.
• The $43.9 million approved for 2020-2021 reflects the expected costs of monitoring required to assure immediate public and environmental health, long-term monitoring and focused activities across the areas of air, water, wetlands, wildlife and vegetation monitoring.
• These activities are inclusive of scientific evaluation and reporting, Indigenous community based monitoring, and a shared commitment to safeguarding the health and safety of staff, communities, and the public during the COVID-19 pandemic.
• The monitoring plan is determined on an annual basis by the Oil Sands Monitoring Program Oversight Committee. Work modified or paused in 2020-21 could be considered by the Oil Sands Monitoring Program going forward.

Q. What is being done to increase Indigenous involvement in environmental monitoring of the oil sands region?

• The Government of Canada is committed to working with all levels of government and industry to ensure the oil sands are developed in an environmentally and socially responsible manner.
• Many Indigenous groups are active participants in the development of the oil sands region. Approximately 23,000 Indigenous People live in the oil sands area, with First Nations and Métis communities located in the region.
• The Government of Canada is working directly with Indigenous communities in and around the oil sands region to address and manage impacts of development.
• The governance structure of the Oil Sands Monitoring Program includes representatives from Indigenous communities, industry and both federal and provincial governments representing an advancement with respect to the collaborative management of a major environmental monitoring program.
• Indigenous community issues are considered a monitoring priority for the Oil Sands Monitoring Program. It is recognized that the braiding of Indigenous Knowledge and western science will optimize the design and functionality of the monitoring program, and better inform regulatory and policy assurance.

Backgrounder (with minor revision from March 2020 note)

• Since February 2012, the governments of Alberta and Canada have worked in partnership to implement an environmental monitoring program for the oil sands region of Alberta through the Oil Sands Monitoring Program.
• The two governments renewed their commitment respecting environmental monitoring in the oil sands region with the signing of the Alberta-Canada Memorandum of Understanding (MOU) in December 2017.
• The Memorandum of Understanding establishes the foundation for an adaptive and inclusive approach to program implementation ensuring that the program is responsive to emerging priorities, information, knowledge, and input from key stakeholders and Indigenous peoples in the region.
• The governance structure of the Oil Sands Monitoring Program includes representatives from Indigenous communities, industry and both federal and provincial governments representing an advancement with respect to the collaborative management of a major environmental monitoring program.
• The Oil Sands Monitoring Program funds and undertakes ambient environmental monitoring to improve the characterization of the condition of the environment, and enhance the understanding of cumulative effects related to oil sands development.
• Indigenous community issues are considered a monitoring priority for the Oil Sands Monitoring Program. It is recognized that the braiding of Indigenous Knowledge and western science will optimize the design and functionality of the monitoring program, and better inform regulatory and policy assurance.
• Key findings and results from the Oil Sands Monitoring Program inform regional resource management decisions and importantly, are considered as an objective source of scientific interpretation of credible environmental data.
• The oil sands industry provides funding support up to $50 million annually for the Program under the Alberta’s Oil Sands Environmental Regulation (Alberta Regulation 226/2013). Alberta and Canada both provide in-house support, with ECCC contributing approximately $6 million per year.

Renewal of CEPA

Q. Why is CEPA important?

The Canadian Environmental Protection Act, 1999 (CEPA) is one of Canada’s core environmental laws addressing pollution. The Government relies on it to deliver many of the environmental and health protection programs administered by Environment and Climate Change Canada and Health Canada such as those aimed at reducing emissions from vehicles and engines that affect climate change and air quality, managing chemicals, avoiding environmental harm from disposal at sea and responding to environmental emergencies.

CEPA also provides the legislative and regulatory basis for the domestic implementation of Canada’s international obligations under various bilateral and multilateral environmental agreements. For example: the Canada-United States Air Quality Agreement; the Basel Convention (related to the transboundary movements and disposal of hazardous wastes); the London Convention and the London Protocol (related to marine dumping); and, the Rotterdam Convention (related to prior informed consent for certain hazardous chemicals).

Q. Why is the government considering changes to CEPA?

CEPA is a large, complex and powerful law that imposes requirements on industry and authorizes action on a wide range of environmental and health risks (e.g., chemicals, air and water pollution, wastes, emergencies). However, the Act has not been substantially amended in twenty years.

Parliament has reviewed CEPA three times, with each review concluding that the Act is fundamentally sound; that is, the legislative framework is strong and flexible and enables the use of multiple measures to address a wide range of issues. But, it is in need of improvement and modernization in some areas.

Strengthening CEPA is a Government priority – this commitment was most recently reiterated in the 2020 Speech from the Throne.

We look forward to having an in-depth discussion on proposals to reform CEPA. In the meantime, we are committed to enhancing environmental protection, and to continuing to improve the strong environmental protections that are already in place in Canada.

Q. Will the government address the recommendations made in the Committee Report?

As you know, this Committee conducted a parliamentary review of CEPA in 2016-2017. The Committee concluded that CEPA needed to be modernized, and almost 90 per cent of the 87 recommendations called for law reform.

In its detailed formal response, the Government agreed changes are needed to modernize and improve CEPA, and committed to “work towards legislative amendments as soon as possible in future Parliamentary sessions”. The Government also committed to strengthening various policy and program approaches in the short term.

The Departments are currently considering amendments to CEPA to address the issues raised by this Committee, as well as issues raised by stakeholders and departments throughout the administration of the Act.

Q. How has Covid-19 impacted the work to reform CEPA?

In July 2020, stakeholders were re-engaged on whether views on CEPA reform proposals have changed as a result of the COVID-19 pandemic. Work to amend CEPA considers their latest feedback.

Q. What is the expected timing of a bill to reform CEPA?

Timelines are up to the Government and influenced by a number of factors, for example the Government’s broader legislative agenda.

Q. Another review of CEPA was triggered in 2020 pursuant to s. 343(1) of CEPA. Do you have any thoughts on this?

It is at the discretion of Parliament whether to designate or establish a committee to conduct the review triggered by the Act. Consideration may be given to various factors, including the fact that a review was concluded just three years ago and the government has committed to reform CEPA (taking into account the recommendations of the three previous reviews).