4.13 There are many types and definitions of toxic substances. In this chapter, "toxic substances" include substances such as industrial and commercial chemicals, by-products and heavy metals (collectively referred to as "industrial chemicals") and pesticides that, when released into the environment, have the potential to harm human health or environmental quality.
4.14 Chapter 3 of this Report , Understanding the Risks From Toxic Substances: Cracks in the Foundation of the Federal House, provides important background information relevant to this chapter. It focusses on the importance of scientific research and monitoring to decide which substances pose the greatest risk to human health and environmental quality and thus ought to be managed.
4.15 Once a substance is identified as warranting control, a new series of decisions must be made. How can exposure be reduced? By how much should its release into the environment be reduced? Should its use be controlled? Should controls be regulated, are voluntary programs adequate, or are other measures needed? How will reductions in risk be measured and verified? Addressing these sorts of questions is referred to as risk management.
4.16 In theory, risk management assumes that once a substance has been identified as toxic, the risks to human health or the environment can be precisely determined, the costs and benefits of reducing them can be evaluated, and specific actions can be taken to reduce them to acceptable levels. In practice, however, risk management is less straightforward and is by no means simple. It requires government authorities to make decisions that permit the safe and productive use of chemical substances while, at the same time, safeguarding Canadians and their environment from unacceptable risks.
4.17 A complex process. As noted in Chapter 3 , addressing the problem of toxic substances is complex. There is no "one size fits all" solution. There are potentially thousands of substances to deal with and the degree or significance of the risks they pose is often uncertain. Some toxic substances occur naturally, while others are human-made and released from various sources. Exposure can occur through air, water, soil, food and consumer products. Actions to reduce risks can have significant economic and social implications.
4.18 As also noted in Chapter 3 , risk management is complex because of the large number of participants involved and the great diversity - and at times polarity - of the perspectives and positions they hold. Decision making in this context involves integrating varied and legitimate economic, technological, social, environmental and health considerations and balancing often competing views and values. Some of the issues over which opinions are divided include:
4.20 A wide variety of options are available to reduce exposure to toxic substances and the risks they present. But to a large extent, risk management for industrial chemicals focusses on reducing amounts released into the air, water and on land or removing them from consumer products.
4.21 A regime for industrial chemicals. Chapter 3 identified key federal legislation that pertains to industrial chemicals included in the audit. This includes the Canadian Environmental Protection Act ( CEPA ), which provides regulatory authority to control the "life cycle" of substances deemed toxic under the Act. Environment Canada and Health Canada share responsibility for the Act, but for many of its aspects Environment Canada is the lead department. CEPA identifies approximately 23,000 chemical substances used commercially in Canada, excluding pesticides. Under the Act, 46 of these have been declared toxic (hereinafter referred to as " CEPA toxic" substances). CEPA regulations are in place for many of them.
4.22 The Fisheries Act is also important . Section 36 of the Fisheries Act prohibits the deposit of deleterious substances in waters frequented by fish, unless specifically permitted by regulation. Deleterious substances can include toxic substances. Regulations covering six industrial sectors are in place under the Act. Some substances regulated under the Act are also CEPA toxic substances. While the Department of Fisheries and Oceans is responsible for all sections of the Fisheries Act , Environment Canada is the lead department in administering section 36 of the Act.
4.23 In addition to regulatory controls, the federal government uses two types of initiatives to encourage voluntary reductions in releases of toxic industrial chemicals into the environment. The first is an industry challenge program called the Accelerated Reduction/Elimination of Toxics (ARET), through which companies have been challenged to make voluntary reductions in their releases of 117 toxic substances. The second type consists of negotiated agreements between governments and targeted industry groups or companies, often formalized through memoranda of understanding (MOUs).
4.24 In the list of substances declared CEPA toxic, lists in voluntary agreements, and other federal lists, approximately 160 industrial chemicals are identified and managed by the federal government as toxic substances (see the Appendix to this chapter) . More than half of these are identified as priority substances on various lists, though not all of these priority substances have been legally declared toxic under CEPA . Without such declaration, the federal government does not have regulatory authority and must rely on voluntary initiatives or other means to achieve risk reduction.
4.25 The regime in place for pesticides is different. All pesticides in Canada undergo a detailed risk assessment, based largely on data provided by manufacturers prior to sale. Pesticides are known, and indeed designed, to be toxic; risk management focusses on prescribing conditions for their use, such as how much can be applied, where, and under what circumstances to ensure that no unacceptable risks occur.
4.26 Pesticides are regulated through the Pest Control Products Act ( PCPA ). The Pest Management Regulatory Agency (PMRA), an agency of Health Canada, is the lead agency for pest control products. Currently, over 7,000 individual pesticide products are registered for use in Canada under the Act, including 500 "active ingredients" (the component with pesticidal activity). Voluntary initiatives are used to a lesser extent to manage pesticides. The PMRA has promoted the use of "integrated pest management" through voluntary partnerships with growers and pesticide users in selected crops and sectors. Integrated pest management refers to a process of managing sites to prevent or control pest problems using a combination of crop rotation, cultivation, and biological and chemical controls.
4.27 Government-wide policies. The 1995 Toxic Substances Management Policy (TSMP) is the cornerstone federal policy, providing the basis for a preventative and precautionary approach to substances that could harm human health or the environment. Both industrial chemicals and pesticides are subject to the provisions of the TSMP. It divides toxic substances into two categories and establishes different risk management objectives for each. The objective for "Track 1" substances - those that are toxic, persistent, bio-accumulative, and created through human activity - is their virtual elimination (see paragraph 4.48) . For other toxic substances, known as ``Track 2", the TSMP objective is to prevent or minimize emissions throughout their life cycle, hereinafter referred to as "life cycle management". TSMP objectives were also endorsed by provinces through the Canadian Council of Ministers of the Environment (CCME) national Policy Statement for the Management of Toxic Substances.
4.28 The 1995 federal Pollution Prevention Strategy is also important to the management of toxic substances as well as other environmental pollutants. Industrial efforts to control pollution have historically focussed on "end-of-pipe" treatment. Pollution prevention is an alternative approach aimed at preventing the creation of pollutants in the first place. This federal strategy was intended to shift the focus of federal risk management efforts. Elements of the federal strategy were also adopted through the CCME's national Pollution Prevention Strategy.
4.29 Together, pollution prevention and life cycle management are important tools for effective risk management. Companies in Canada and throughout the world have demonstrated that they can help to achieve environmental and human health goals while also serving their business needs.
4.30 The importance of partnerships. The federal government does not - and arguably cannot-act alone in the management of toxic substances. Many aspects of federal programs are linked and undertaken collaboratively with other partners. Such partners include other levels of government, particularly provincial governments who have regulatory authority over many aspects of managing both industrial chemicals and pesticides. The federal government also works actively with other national governments on the development of harmonized programs and international treaties and protocols. Other partners include industry-where technological and managerial changes are ultimately made-and the public, to whom governments are accountable.
4.31 Progress has been made. Since the 1980s, releases of many toxic substances into the environment have reportedly been reduced. This has occurred as a result of a wide variety of initiatives, many of which are led or supported by federal departments. The federal government has introduced regulations; implemented regional action plans for the Fraser River, the Great Lakes, the St. Lawrence River, the Atlantic Coastal Region and the Northern River Basin; entered into various international agreements and protocols; and encouraged voluntary efforts by Canadian industry - all with the aim of reducing emissions of toxic substances. Reductions have also occurred as a result of provincial regulatory and other programs.
4.33 Some components of the overall federal infrastructure for the assessment of toxic substances were excluded from the scope of this audit. For instance, we did not include the registration of new pesticides under the PCPA and the regulation of new industrial chemicals under CEPA ; and legislation dealing with hazardous chemicals in foods, such as the Food and Drugs Act , or in consumer products, such as the Hazardous Products Act .
4.34 Our observations first summarize overarching issues that emerged from our audit. We then examine the extent to which federal policies have been implemented, how departments are dealing with CEPA toxic substances (particularly those recently declared toxic through the Priority Substances Assessment Program), the role of voluntary initiatives, overall stewardship for pesticide management and the reliability of current reporting mechanisms. As many of these substances and programs concern more than one department, throughout the chapter we discuss the current state of interdepartmental co-operation. About the Audit at the end of the chapter provides details on the objectives, scope, approach and criteria of the audit that was the basis for this chapter and Chapter 3 .
4.36 Risk management programs are fragmented according to departmental mandates and legislative responsibilities. Individual industrial chemicals and pesticides are subject to different legislative and regulatory requirements, decision-making processes, public policy instruments and reporting mechanisms. Some of these are not connected or linked and, in fact, some components conflict. While such conflicts are not unexpected, they emphasize the need for federal departments to work together to ensure that the collective federal expertise is brought to bear consistently and effectively to support sustainable development objectives.
4.37 Throughout the audit we observed examples of positive interdepartmental co-operation and partnering in risk management projects or programs. These are aptly described by departments themselves in numerous publications, progress reports and other information products.
4.38 Departments not rowing in the same direction. However, we also observed that federal departments are deeply divided on many key issues and do not always share a common vision about the extent to which federal intervention is necessary to manage toxic substances. There are ongoing debates over many key issues, such as the amount of risk that is acceptable, the interpretation of legislation and policies, the reliance that should be placed on voluntary initiatives, and the relative weight that should be given to environmental and health concerns alongside economic and social ones.
4.39 While reconciling competing expectations is part of the process of policy implementation, we observed cases of interdepartmental relationships marked by acrimony and combativeness that, in our view, surpassed a healthy and constructive level of debate. We believe the conflicts we observed have impeded the development of risk management actions; if the same energy were to be invested in positive action, the environment, our health and industry would benefit. With no arbitrator, it remains unclear how or when departments will work together to manage the risks posed by toxic substances.
4.40 Rising demand, shrinking supply. Over the past several decades, there has been a dramatic growth in the number and scope of federal programs related to toxic substances. Federal departments can expect demands on them to continue increasing. At the same time, their available resources continue to shrink. Departments consistently cited the lack of resources as a major impediment to effective risk management programs. Through Program Review and expenditure reduction, some departments lost 30 percent or more of their budgets. Some of the risk management initiatives begun in the late 1980s and early 1990s remain uncompleted.
4.41 The net result is a vexing lack of action. At the outset, we expected to find that risks to the public from potential exposure to toxic substances were being managed in accordance with federal policy and expectations. Instead, we found that action on many fronts has been slow. While we acknowledge that progress has been made, in our view the risks to the public and environmental health are not being managed effectively. We observed many obstacles that inhibit effective federal management of toxic substances.
4.43 For pesticide products, life cycle management includes pre-market assessment, activities related to use, and monitoring of compliance. Federal departments must work with their provincial counterparts to implement life cycle management for all toxic substances, as provinces have jurisdiction over industry sectors and agricultural practices.
4.44 The 1995 Federal Pollution Prevention Strategy explicitly recognizes its application to the management of toxic substances. Through it, the federal government committed itself to extending the strategy across all federal legislation, programs and policies. It stresses eliminating the causes of pollution rather than treating the symptoms, reflecting a major shift in emphasis from control to prevention. The strategy seeks to "achieve a climate in which pollution prevention is a major consideration in industrial activities."
4.45 Pollution prevention is not unique to Canada. Companies around the world are embracing pollution prevention techniques because they combine environmental objectives with successful business practices. Recognizing that producing, treating and disposing of waste entails both immediate costs and downstream liabilities, many companies have embraced life cycle management and pollution prevention. Exhibit 4.2 highlights one example of a company that has used pollution prevention to improve both its environmental and business performance. Chapter 7 of this Report provides many others.
4.47 Management strategies for substances not developed. The TSMP requires that management strategies be developed for the virtual elimination and life cycle management of toxic substances. We expected to find detailed plans to eventually eliminate substances identified for virtual elimination, and plans to prevent or minimize at every stage of the life cycle emissions of substances identified for life cycle management. Such strategies may differ for individual substances, recognizing the characteristics of the substance, sources of release, risk management actions already in place, and the roles of various partners.
4.48 To date, 12 substances have been identified for virtual elimination. Eight of these are pesticides whose use has not been allowed in Canada in years, and another is PCBs, whose use has been restricted since 1980. The other three substances, dioxins, furans, and hexachlorobenzene, are contained in trace amounts in various products and pesticides and are released into the environment primarily through incineration in various sectors.
4.49 All 12 of the Track 1 substances are currently subject to various management controls or bans that predate the introduction of the TSMP. So far, however, departments have not taken additional action under the policy against these substances. Rather, they have been mired in conflict over the meaning of virtual elimination, how to measure it, and whether substances are to be virtually eliminated from the environment or only from industrial releases. Virtual elimination is presented as a long-term objective, yet departments have failed to define even short-term incremental steps toward this objective.
4.50 Scope of application unclear. On paper, the TSMP is supposed to apply to CEPA toxic substances as well as CEPA toxic "equivalents" and other substances of concern. Although life cycle management is being planned for selected CEPA toxic substances (see paragraph 4.71) , no other substances have yet been identified for inclusion in the policy. Departments cannot agree on other substances that could be considered CEPA toxic equivalents or substances of concern. Criteria to identify them have not been established.
4.51 As a consequence, strategies have not been developed to prevent or minimize releases throughout the life cycle of pesticides and the majority of industrial chemicals, including priority substances. The potential of the TSMP to clearly signal to industry the federal government's environmental agenda and commitment to precautionary action has not been realized. The government's stated objectives are not being achieved.
4.52 We believe Environment Canada and Health Canada have an obligation to identify the substances that should be subject to the TSMP. There is no shortage of candidates. Of the 160 industrial chemicals currently identified as toxic, 84 have been identified as high priorities. Any or all of these, as well as others, could be considered substances of concern and therefore subject to the life cycle management provisions of the policy.
4.53 Environment Canada, Health Canada and the Pest Management Regulatory Agency should identify specific substances subject to life cycle management, including CEPA toxic equivalents and other substances of concern. Each should develop and apply strategies for life cycle management by substance, sector and/or region.
4.54 Federal departments, including Health Canada, Fisheries and Oceans, Industry Canada and Natural Resources Canada, should each develop a plan for implementing the Toxic Substances Management Policy. Each plan should explicitly recognize and build upon the expertise and capabilities of the department, be consistent with the plans of other departments, and include clear statements of departmental accountability, specific goals and milestones.
4.56 Industry Canada is mandated to promote innovation and competitiveness in the Canadian economy. Through its Report on Plans and Priorities and its Sustainable Development Strategy, Industry Canada commits itself to enhancing the ability of Canadian firms to develop innovative technologies and tools that contribute to sustainable development. This role is key if pollution prevention is to become a reality in Canada, since pollution prevention depends on innovation in product design and production.
4.57 To date, the shift in Industry Canada toward a climate of pollution prevention is not very evident. Industry Canada promotes a range of environmental protection tools, but places little specific emphasis on those that avoid or minimize the creation of pollutants or waste, particularly in industrial sector programs. We are concerned that this lack of emphasis on pollution prevention will not generate the fundamental shift in thinking called for by the strategy.
4.58 Contrast with other countries. In other countries we surveyed during this audit, industry and economic ministries promote pollution prevention and appropriate technologies by providing domestic industries with technical assistance, technology evaluation and funding. Foreign governments integrate pollution prevention into core industrial strategies.
4.59 Industry Canada should ensure that its core industry sector programs related to industrial innovation and technology development reflect the government's commitment to pollution prevention. It should commit itself to specific objectives, activities, and timelines for enhancing the principles of pollution prevention within industry, large and small.
4.61 While these programs have many differences, they share an emphasis on pollution prevention, the use of both regulatory and voluntary measures, and a range of approaches to risk management. Some countries use tools that have not yet been tried to any great extent in Canada. We did not audit their performance or draw conclusions about their merits, but this chapter does refer to the use of these tools.
4.62 Internationally, governments have moved away from end-of-pipe pollution management techniques toward pollution prevention. This could have implications for the ability of Canadian companies to compete in the global marketplace. To succeed, Canadian industry must maintain a competitive edge, and pollution prevention is a means of reducing costs and liabilities and improving productivity. Furthermore, market forces compel Canadian companies to demonstrate that they are environmentally responsible-especially in trade with Europe, where environmental regulations and standards have become an important trade issue.
4.63 Tools in the tool box. There are many tools for incorporating pollution prevention into production, such as "design for the environment", financial instruments, and product stewardship. Design for the environment involves analyzing the environmental impact of products at each step in the production process, and finding environmentally benign replacements. Financial instruments can take the form of taxes levied against companies that generate certain types of waste, or tax breaks given to companies that incorporate clean production technologies.
4.64 Product stewardship requires that the producer be responsible for the environmental impact of the product throughout its life cycle. This responsibility includes recycling and recovering waste materials, including toxic substances. Government requirements for product stewardship encourage industry in the countries surveyed to find innovative ways of reducing pollution while maintaining productivity.
4.65 As shown in Exhibit 4.3 , the majority of governments we surveyed have programs that support the use of at least one of these tools. Some tools are voluntary, while others are used in conjunction with legally binding performance standards to achieve targets for pollution prevention in each industrial sector.
4.66 Many foreign governments use financial instruments as an incentive for pollution prevention. Financial instruments also serve to promote pollution prevention in the use of pesticides. For example, the European Union's Common Agricultural Policy provides grants to farmers who use environmentally friendly farming methods. Since 1984, Sweden has imposed a levy on pesticides as an incentive to reduce their use. The U.S. government also provides financial assistance to farmers to undertake sustainable farming practices.
4.68 As Exhibit 4.4 illustrates, these substances are subject to various policy objectives and are managed using a mixture of policy instruments that include CEPA and Fisheries Act regulations, negotiated agreements and voluntary initiatives. Although not used at present, financial instruments are another possible control instrument. Various decision-making processes are used to identify and select risk management options and the final results are tracked through assorted reporting mechanisms.
4.69 We expected to find that departments had established clear objectives and targets for managing toxic substances had developed and implemented risk management activities, and had installed reliable mechanisms to track and report on reductions in toxic releases. We expected to find particularly rigorous activities in place to deal with high-priority substances.
4.71 Pulling in the stakeholders. Since 1994, Environment Canada and Health Canada have led consultations with stakeholders from industry, public interest groups, provinces and other federal departments to assess the technological and economical feasibility of various risk management options, and to recommend regulations or other management tools for ministerial approval and subsequent implementation. Fourteen separate consultations have been initiated to address 21 of the 25 PSL substances; each consultation has addressed different substances and involved different participants. These consultations have been major undertakings, typically involving dozens of participants, often with polarized positions and expectations. These consultations considered a life cycle approach. Exhibit 4.5 profiles two of the consultations.
4.72 As noted in Chapter 3 of this Report , PSL risk assessments were criticized by stakeholders in part for a lack of characterization of risks and sources of exposure. These weaknesses impeded the development of management actions for some substances. In some cases, industry participants and federal departments such as Natural Resources Canada questioned whether the proposed management actions were necessary at all or would lead to significant reductions in risk.
4.73 Some of the consultations lacked a clear sense of direction. Environment Canada and Health Canada have a responsibility and an obligation to protect our environment and human health. Neither department defined what reductions were needed in releases of toxic substances to bring risks to acceptable levels. This could have been addressed at the beginning of the consultations or later, after more analysis had been completed. Instead, both departments encouraged reductions without stating what reductions were required or what the consequences of not achieving reductions would be. As mentioned in paragraph 4.16 , we recognize that in practice it is often difficult to determine the precise risks to human health or the environment.
4.74 In some cases, reaching consensus appears to have been more important than determining what had to be achieved. Environment Canada and Health Canada seek to achieve consensus among stakeholders on the recommendations that will be submitted to ministers. Industry Canada and Natural Resources Canada strongly support a consensus-based approach. Achieving consensus among stakeholders can lead to their buy-in, setting the stage for successful risk reduction in the future. Even though consensus was not achieved by several of the consultations, reflecting the divided opinions of the various stakeholders, the consultations were completed and recommendations were presented to the Ministers of Environment and Health.
4.75 One consultation ran into serious conflict between the industrial chemicals and the pesticide "regimes". While the Pest Management Regulatory Agency was conducting a re-evaluation of pesticides used as heavy duty wood preservatives, Environment Canada began leading parallel consultations under CEPA , concentrating on managing the CEPA toxic substances in these same pesticides. Exhibit 4.6 illustrates the difficulty these two departments had working together in an area of mutual interest and clearly delineating the scope of their respective activities, to the dissatisfaction of many participants.
4.76 There has been little action. Although the CEPA Priority Substances Assessment Program began 10 years ago, little has been done to reduce the releases into the environment of most of the substances declared toxic. It took five years to complete the assessments of these substances, and some of the consultations were not complete at the end of our audit. As identified in the Appendix to this chapter , however, many of these substances are currently included in various voluntary instruments for reasons unrelated to the CEPA options determination process.
4.77 To date, 9 of the 14 consultations have been completed, generating 52 separate recommendations that were submitted to and accepted by the ministers of Health and Environment. Exhibit 4.7 illustrates the nature of these recommendations. More than one third of the recommendations are directed toward obtaining more information, reflecting the participants' concerns about an absence of information needed to make good risk management decisions.
4.78 Future implementation is in jeopardy. To date, none of the 52 recommendations have been implemented. Implementation will require Environment Canada and Health Canada to develop regulations, codes of practice and training programs, and to negotiate memoranda of understanding with industry sectors. The resources needed to implement the recommendations had not been assessed when the ministers accepted them. At the time of our audit, the three regulations that had been recommended were being drafted. For most of the remaining 49 recommendations, no resources have been allocated and no implementation plans have been developed. We believe other federal departments could play a role in implementing them, but there was no evidence of joint planning discussions with other departments to capitalize on their expertise and capacities.
4.79 The resources required to implement these recommendations could be even more difficult to secure due to anticipated changes to CEPA . Proposals being made for revisions to CEPA will allow only two years for Environment Canada to evaluate and implement control options for substances declared toxic under the Act.
4.80 Lack of performance measures. We are concerned about the prospects for measuring the impact of implementing many of these recommendations. There are two distinct problems. First, Environment Canada has a reliable mechanism to measure reductions of releases for only 10 of the 25 CEPA toxic substances on the Priority Substances List 1, and no data at all on 10 of them. Without release data, Environment Canada cannot assess the impact of its initiatives (see paragraphs 4.129 - 4.133).
4.81 Second, even if release reductions were measured, the levels necessary to bring the risks down to acceptable levels have never been established. Even if all 52 recommendations made so far were fully implemented, it would not be known whether risks to human health and the environment had been sufficiently reduced.
4.82 Environment Canada and Health Canada should exercise greater leadership by defining objectives for reducing the risk of industrial chemicals to public health and the environment and by ensuring that risk management options are developed to achieve these objectives.
4.83 Environment Canada and Health Canada should develop plans to implement recommended risk management measures for substances declared toxic under the Canadian Environmental Protection Act (CEPA) before such recommendations are presented to ministers. These plans should include measurable targets, specific timetables, resource estimates and funding sources.
4.84 The roles and responsibilities for implementing recommended risk management measures for substances declared toxic under CEPA should be clearly defined for Environment Canada, Health Canada, Industry Canada, Natural Resources Canada, and other departments. These roles and responsibilities should capitalize on the expertise and capacities of each department.
4.86 Canada is not alone in using voluntary initiatives. The United States and European countries, among others, also use voluntary programs to manage toxic substances.
4.87 Divided opinion. The use of voluntary initiatives in place of regulations is controversial. Supporters argue that they can achieve reductions more quickly and cost-effectively than regulations can. Industry prefers the flexibility of such agreements over prescriptive regulations. Environment Canada is the lead federal authority for several voluntary agreements and both Industry Canada and Natural Resources Canada are strong supporters of voluntary initiatives.
4.88 Critics are concerned that voluntary instruments are displacing regulatory programs rather than simply supplementing them. They fear that industry will volunteer reductions very selectively, will not measure them accurately, and will suffer no consequence for failure to meet targets. The federal government cannot ensure that all industry members in a given sector will make reductions voluntarily. Fearing that those who do participate may be at a competitive disadvantage, some industry associations have requested that the federal government use regulation to "level the playing field".
4.89 The following paragraphs review the current role of voluntary programs and then assess their reliability for dealing with CEPA toxic and other priority substances.
4.90 Accelerated Reduction/ Elimination of Toxics (ARET). ARET is the government's widely publicized voluntary challenge program for 117 toxic substances and is an example of collaboration among federal departments and with industry. The substances were selected and agreed to on the basis of their persistence, bio-accumulative properties and toxicity. The ARET Stakeholders Committee, made up of government and industry representatives, challenged participants to reduce releases of 30 high-priority toxic substances by 90 percent and the remaining 87 substances by 50 percent by the year 2000. By the end of 1998, participants included 303 facilities from 162 companies in 9 major industrial sectors. Together, they represent over 40 percent of Canada's total industrial production.
4.91 As of 31 December 1997, ARET participants reported that they had reduced overall emissions from base-year levels by 64 percent. Reductions in overall emissions of the high-priority substances are expected to be 78 percent by the year 2000. Government officials indicate that industry will be unable to achieve the 90 percent reduction target, due mainly to economic and technical difficulties in reducing certain types of emissions in some aluminium production facilities.
4.92 Memoranda of understanding. Environment Canada has entered into nine major memoranda of understanding (MOUs) with industry sectors to voluntarily reduce their emissions of toxic and other substances. The Ontario government participates in many of them. Exhibit 4.8 shows the scope of these MOUs.
4.93 Each MOU deals with one industry sector and its specific pollution issues. The MOUs focus on pollution prevention and life cycle management to identify opportunities for reducing releases at different stages of the production process. Signatories are not exempt from regulatory compliance, and may withdraw from the MOU at any time. New partners may also join. Exhibit 4.9 profiles two such agreements that the federal government has signed.
4.94 While the MOUs reportedly are leading to reductions in toxic emissions, actual progress is difficult to measure. Most MOUs do not have targets or timelines, and the baseline use and release of a substance is often unknown. Reductions are typically reported through annual case studies submitted voluntarily by industry signatories.
4.95 We believe that in principle, properly designed and implemented voluntary programs can achieve some risk management objectives, perhaps more quickly and cheaply than traditional regulations. The current initiatives claim significant reductions in releases of a range of toxic substances, including many over which the federal government has no regulatory authority. Taken at face value, existing voluntary initiatives have contributed to the public good and will likely continue to do so in the future.
4.97 The Office of the Auditor General has developed standards for effective accountability arrangements. Industry Canada and the Treasury Board Secretariat have developed principles for effective voluntary codes. Drawing on these and other sources, we assessed the existing voluntary initiatives against core components that we would expect to be included. The MOUs currently in place were not intended to meet these rigorous criteria. We note, however, that many of these same voluntary programs are recommended as the primary means of addressing PSL 1 CEPA toxic substances. Exhibit 4.10 shows the results.
4.98 Weaknesses in existing voluntary initiatives. We recognize that there can be a fine line between encouraging voluntary actions and discouraging them. We do not wish to discourage them. Nevertheless, in our opinion neither ARET nor the existing MOUs, as currently structured, are sufficient to be used as the only tool for achieving and measuring reductions of priority toxic substances.
4.99 Many of the MOUs lack measurable targets for both the agreements overall and the participating companies. We also note that the MOUs lack performance measures that all participating companies in a particular sector are expected to meet. At present, there are no direct consequences for failing to meet reduction targets, and inconsistent and incomplete reporting may lead to a false sense of confidence that releases of a substance are being reduced enough to make additional measures, including regulations, unnecessary. The data reported under all but one of the existing MOUs and through ARET are not subject to any independent verification. Environment Canada officials reviewing reports of significant reductions by companies under one MOU estimate that the claims of more than 75 percent of the reductions are misleading.
4.100 The Netherlands has taken an alternative approach to non-regulatory instruments. The Dutch National Environmental Policy Plan (NEPP) established emission reduction targets for various industry sectors. Through consultation, the government instituted a series of covenants with industry sectors. These are negotiated agreements between governments and industry sector associations and have the status of binding contracts in civil law. Companies in the sector are encouraged to participate and are subject to verification by government enforcement staff to ensure compliance with the sector agreement.
4.101 Conditions under which to use voluntary initiatives not defined. Industry groups and federal departments recognize that voluntary initiatives have limitations and that they are not appropriate in all circumstances. Their effectiveness will depend, in part, on the overall rate of participation in an industry. The nature of the industry, past experience in co-operative efforts with government and the number and sizes of the companies involved all have a bearing on the likelihood that effective release reductions will be achieved voluntarily.
4.102 Participating in government- industry voluntary initiatives requires a level of commitment from industry participants that is often not possible for small and medium-sized companies. Also, if a given initiative covers only a small proportion of an industry sector, it is unlikely to be effective at achieving desired environmental benefits in that sector. Four of the nine existing MOUs include less than one percent of companies in their sector.
4.103 Environment Canada and other departments have not established the conditions under which voluntary initiatives should be used to manage toxic substances. If the Department is to rely on such initiatives in the future, it needs to develop rules for deciding how and when they are used.
4.104 Voluntary initiatives not assessed before being renewed. Over the past six years, many of the agreements have expired and been renewed, in some cases more than once. We found no evidence that Environment Canada has evaluated the environmental achievements of these agreements or sought to strengthen their potential impact before renewing them. Such evaluations might have shed light on when voluntary agreements work well and when they do not. Negotiations before renewal were typically confined to discussing what additional substances might be added.
4.105 Environment Canada, in consultation with other participating departments, should develop a policy outlining conditions necessary for using voluntary initiatives. Before renewing a voluntary initiative, Environment Canada should evaluate its contribution toward the government policy objectives of pollution prevention and life cycle management.
4.106 If Environment Canada chooses to use voluntary initiatives to manage priority substances, including CEPA toxic substances and others, it should establish rigorous requirements for them. At a minimum, these initiatives should include:
4.109 Governments around the world have recognized the need to reduce the risks of pesticide use, due to concerns such as the risk to users, the general population and the environment; contamination of land and water resources; and the potential for targeted pests to become pesticide-resistant.
4.110 When the Pest Management Regulatory Agency was formed in 1995, the government committed itself to supporting the integration of pest management with the broader goals of environmental sustainability. The PMRA was directed to develop a pesticide risk reduction policy for all sectors of use. A risk reduction policy could guide the PMRA's activities such as the registration of new pesticides, the re-evaluation of pesticides, the related definition of "unacceptable risk", integrated pest management, training programs and inspection. The PMRA has recognized the importance of building strong linkages between its decision-making processes and the development and adoption of sustainable pest management strategies. We expected to find a clear policy and strategic plan to guide the Agency's risk reduction activities.
4.111 The PMRA has also recognized the need to develop and implement a national risk reduction strategy for Canada in conjunction with the provinces. This strategy would support the Agency's risk reduction policy and associated activities.
4.113 The Agency also undertakes joint review with the U.S. Environmental Protection Agency (EPA) of biopesticides and those pesticides meeting the U.S. EPA's definition of "reduced risk". The joint review encourages the registration of reduced risk products by providing shorter review times than for other products and access to both the U.S. and Canadian markets at the same time.
4.114 The PMRA has promoted integrated pest management in nine use sectors through discussions and partnerships with stakeholders, including chemical companies that supply pesticides, growers who use them, and other federal government departments. Its integrated pest management initiative does not have an explicit objective of reducing the risks posed by pesticides but rather is focussed on exploring various pest control alternatives. To date, two of these programs have produced information products that illustrate alternative methods of pest control. While these efforts are encouraging, they lack focus and clear goals, and are largely reactive. The PMRA could push further under its mandate but has yet to do so.
4.115 No risk reduction policy to deal with pesticides. Notwithstanding these positive initiatives, they are occurring in the absence of an overall strategic plan to encourage a reduction in the overall risks or use of pesticides. The PMRA has not developed a risk reduction policy. We found that pesticides are dealt with one at a time but are not managed as a class. The PMRA does not monitor which pesticides pose the greatest risk in various regions and, therefore, which ones warrant the greatest management attention.
4.116 The absence of a risk reduction policy is striking in comparison with other countries. Many have enacted specific policies and programs aimed at reducing the use and risks of pesticides. The U.S. Environmental Protection Agency has established a Pesticide Environmental Stewardship Program in which formal voluntary partnerships are established with pesticide users, growers and food processors to adopt safer alternatives. Pesticide manufacturers are excluded from this program. In addition, the U.S. Department of Agriculture has established a national goal to have 75 percent of U.S. agricultural land under integrated pest management by the year 2000.
4.117 Concern about the environmental effects of pesticides led the British government in 1985 to take a precautionary approach to pesticides and to promote their reduced use. Sweden's risk reduction program, started in 1986, uses a variety of measures including technical and financial assistance to farmers to reduce the risks of pesticide use.
4.118 In addition to a risk reduction policy, the PMRA is also responsible for applying government-wide policies such as the Toxic Substances Management Policy and the principles of the Federal Pollution Prevention Strategy. In practice, their application to pesticides has been limited. Pesticides are not managed by the PMRA throughout their life cycle, given the role of provincial governments in their management.
4.119 The Pest Management Regulatory Agency, in consultation with other federal departments including Environment, Health, Fisheries and Oceans, and Natural Resources, should establish a risk reduction policy for managing pesticides. Among other things, the policy should reflect commitments in the federal government's Pollution Prevention Strategy and the Toxic Substances Management Policy. The risk reduction policy's objectives should be reflected in the registration of new pesticides, the re-evaluation and special review of existing pesticides, and all Agency programs for the promotion of alternatives, including integrated pest management.
4.120 The Pest Management Regulatory Agency should develop and implement, in conjunction with the provinces, a national pesticide risk reduction strategy for Canada.
4.122 Co-operation is also necessary to ensure consistency between the Agency's policies and those of other government departments. Lack of collaboration between the PMRA and other departments can result in the Agency's approval of products whose use contravenes other legislation. A co-ordinated approach is especially important when the Pest Control Products Act ( PCPA ) overlaps with other legislation such as the Fisheries Act , as it does in the case of aquaculture.
4.123 Pesticides in aquaculture. The aquaculture industry has grown rapidly from an estimated value of $7 million in 1984 to $372 million in 1996. The growing importance of aquaculture in Canada has increased the pressure for pesticide use. The aquaculture industry uses pesticides and other products to deal with parasites that infect fish held in pens, including sea lice.
4.124 We had expected the PMRA, Environment Canada and Fisheries and Oceans to ensure that the use of pesticides in aquaculture was consistent with other policies and supported the objective of environmental sustainability.
4.125 Exhibit 4.11 illustrates the inability of the PMRA, Fisheries and Oceans and Environment Canada to take a unified position on the use of pesticides in aquaculture. It also highlights the need for an integrated approach to practices such as aquaculture. The appropriate use of pesticides was identified as one of the issues in the debate surrounding a sustainable aquaculture industry. Departments concur on the need to ensure that this increasingly important industry develops in a sustainable manner.
4.126 The standstill caused by the use of pesticides for aquaculture in open waters has also affected co-operation between the PMRA and Fisheries and Oceans on the registration of other pesticides. As noted in Chapter 3 of this Report , a memorandum of understanding intended to facilitate co-operation between the two organizations has been negotiated but will not be signed until they resolve the legal conflict between the application of the Fisheries Act and the PCPA .
4.127 Fisheries and Oceans, together with Environment Canada and the Pest Management Regulatory Agency, should develop a policy on sustainable aquaculture that addresses, among other things, the use of pesticides and other products in aquaculture as well as the role of integrated pest management.
4.128 The Agency should ensure that its pesticide registration decisions do not create conflicts with other federal legislation, including but not limited to the Fisheries Act . Where such conflicts may arise, the Agency should exchange scientific and/or policy advice with other departments before registration decisions are taken.
4.130 We found that the federal government does not track releases of 10 of the 25 CEPA toxic substances on the Priority Substances List, nor releases of many other priority substances. Where data do exist, the principal sources are the CEPA National Pollutant Release Inventory (NPRI) and ARET.
4.132 Notwithstanding its importance, the NPRI does have shortcomings. Information is tracked only on companies that have over 10 employees and use 10 tonnes or more of a designated substance in a year, so releases from many small and medium-sized companies are not reported. No new substances have been added to the NPRI since it was established in 1993. NPRI data include only 16 of the 84 priority toxic substances and 10 of the 25 PSL1 toxic substances. In the U.S., many new substances have been recognized as priorities that require surveillance, and its Toxic Release Inventory (TRI) list has risen from about 300 substances in 1986 to over 600 in 1998. Environment Canada has plans to revise and expand the NPRI, guided by a multi-stakeholder working group established by the Department.
4.133 ARET was not established for reporting purposes but is the only source of public data on releases of 68 of the 160 toxic substances and 5 of the 25 PSL toxic substances. It also collects data on 49 of the substances tracked by the NPRI. As a reporting instrument it, too, has several shortcomings. Companies can choose to participate in the program or not, and those that do participate can choose which of the 117 substances to report. Percentage reductions reported for each substance are based on an unspecified number of companies. The data in the reports are inconsistent and incomplete. There are no common protocols to measure and estimate releases of a substance, which means that the results are not comparable. Actual reductions are not verified and may be different from what is reported. The base year against which reductions are measured may vary from company to company. Environment Canada officials believe the NPRI data to be more complete and credible, although ARET data were also used in several of the CEPA consultations.
4.134 Environment Canada should ensure that releases of priority toxic substances are reliably monitored and reported through either the National Pollutant Release Inventory or other means, where that would be more appropriate, and should periodically publish progress made toward achieving release reduction targets.
4.136 Environment Canada tracked sales of some pesticides in 1987, 1988, 1990 and 1994, before the creation of the Pest Management Regulatory Agency in 1995. Subsequently, the government committed the Agency to developing a national database on pesticide use, and responsibility for tracking sales was transferred to the Agency. It has repeatedly acknowledged the need for credible data on pesticide use in Canada, and has repeatedly committed itself to developing the national database. A multi-stakeholder working group was formed in 1997 and plans are still being developed.
4.137 Monitoring compliance with labels is lacking. The PMRA does not know the extent to which users comply with directions on pesticide labels. We reviewed the extent to which it uses inspections to gather strategic information on pesticide use. The PMRA has the equivalent of 44 officers to inspect farms, food processing plants, commercial application facilities, retail outlets, pest registrants and formulators, lawn care companies and so on. Inspections are not used to systematically monitor compliance but rather are conducted largely in reaction to known or suspected violations. Results of completed inspections are not used to inform program staff about the rate of compliance with pesticide labels.
4.138 The Pest Management Regulatory Agency should meet is commitment to establish a national database of pesticide sales in order to monitor the use of pesticides and gauge the effectiveness of risk reduction activities.
4.140 The federal government's cornerstone policy in this area, the Toxic Substances Management Policy, is not being fully implemented, nor is there a government-wide plan to do so. Strategies for the management of specific substances, although required by the policy, have not been developed or implemented. Established government objectives are not being achieved.
4.141 The audit also found that the federal government has been slow to take action on toxic substances that have been assessed and declared toxic under the Canadian Environmental Protection Act . The current programs are insufficient to ensure that risks will be adequately addressed in the future. Substance-specific objectives for the protection of human health and the environment have not been adequately defined, and agreed reductions in the release of toxic substances are not assured. The federal government relies increasingly on voluntary programs instead of regulations to reduce releases of toxic substances.
4.142 We also concluded that the Pest Management Regulatory Agency has not developed a policy or implementation plan for reducing the risk of pesticides and often does not co-ordinate its activities with those of federal departments.
4.143 The federal government's ability to measure the results of its risk management initiatives and to assess their effectiveness is mixed. The government maintains an inventory of releases of pollutants, the National Pollutant Release Inventory. This database allows it to track reductions in releases over time of many, but not all, industrial chemicals that are considered to be toxic substances. Releases of other toxic substances into the environment are tracked through voluntary, non-verified databases. Our audit identified as a key problem the inability to reliably measure whether reduction targets for priority substances are achieved.
4.144 The federal government has no reliable data on the total sales of pesticides and on their release into the Canadian environment. The Pest Management Regulatory Agency has not met its 1995 commitment to develop a national database.
4.145 Overall, we conclude that the federal government is not adequately managing the risks to the public that toxic substances and pesticides create. We are deeply concerned by the degree of conflict among departments, their inertia toward implementing government policies, and the lack of rigour in existing voluntary initiatives. We are also concerned about the absence of a comprehensive strategy to manage the environmental risks posed by pesticides and about inadequate tracking of releases of toxic substances and pesticides into the environment. We believe the federal government is not doing its part to effectively manage the risks posed by toxic substances.
Joint departmental response to Chapter 3 and Chapter 4: The Commissioner's Office has done an extensive analysis of the challenges of managing toxic substances in the federal system. The report acknowledges the complexity of the Canadian system, with multiple departments having responsibilities for toxic substance management based on different legislative mandates. This complexity underscores the need for departmental co-operation.
There is more to the system than the federal government's role. The federal government actively works closely and on an ongoing basis with the provinces and territories, industry, non-governmental organizations and Canadians to achieve comprehensive management of toxic substances. Given the scientific and socio-economic complexities of managing toxic substances, there are bound to be debates. In fact, the Canadian system encourages dialogue to ensure that the values of Canadians are reflected in the decision-making process. Nonetheless, departments agree that such discussions should not be so protracted as to impede timely action to protect the health of Canadians and their environment.
Departments are committed to working co-operatively to carefully assess the recommendations of the Commissioner's Office. They are also committed to ensuring continuous improvement within Canada in managing releases of toxic substances, relying upon the principles of sustainable development and risk management, as well as the precautionary principle, to achieve this. To ensure such continuous improvement, they commit to working co-operatively to develop an appropriate course of action.
Objective A: Priorities and Plans
To assess whether priorities and plans for toxic substances are identified, assessed, and adjusted by federal departments in a timely and co-ordinated fashion.
Objective B: Implementing Risk Management
To assess whether federal policies and programs for managing toxic substances are being implemented by departments and are achieving their objectives.
Objective C: Feedback Mechanisms
To assess whether federal departments are measuring results achieved, the effectiveness of implemented actions, and the sustainability of risk management decisions.
The audit was framed around the fundamentals of good management based on a "Plan - Do - Check and Improve" model.
Chapter 3 assessed the ability of federal departments to provide scientific information in support of decision making; the co-ordination of research among federal departments; the state of environmental monitoring networks; and the procedures in place to incorporate new information into decision making, including the re-evaluation of pesticides.
Chapter 4 assessed the implementation of government-wide policies, including the Toxic Substances Management Policy; and particularly the application of risk management options, including virtual elimination, life cycle management and promotion of pollution prevention within industry. The audit reviewed the non-regulatory (voluntary) initiatives for risk management, including the types of voluntary instruments used. It also assessed the utility of the National Pollutant Release Inventory, release reporting through Accelerated Reduction/Elimination of Toxics (ARET) and use of data for pesticide management.
The approach consisted of interviews and file review in the departments of Environment, Health (including the Pest Management Regulatory Agency), Natural Resources, Fisheries and Oceans, Industry, Agriculture and Agri-Food and Finance. Outside the federal government, interviews were held with several industry associations and companies, academics, public interest groups, provincial regulators, and scientific research institutions. File review was conducted and written documentation was collected from a variety of sources and reviewed by audit team members.
We expected departments to identify significant gaps and inconsistencies among mandates, legislation and policies and to have a means of addressing them. We expected that federal departments would co-ordinate their efforts in identifying needs and conducting scientific research and monitoring on toxic substances and that there would be effective two-way communication between the scientific and policy communities.
We also expected federal departments to have developed strategies for either life cycle management or virtual elimination of toxic substances and to have promoted the concept of pollution prevention in industry. We expected that risk management programs would be performance-based, with specific goals, measurable objectives and milestones. We expected the Pest Management Regulatory Agency to have developed a pesticide risk reduction policy as directed by the government in 1995. We also expected departments to have information on releases of toxic substances and pesticide use in order to identify priorities for action and to monitor progress in achieving reduction targets for toxic substance releases.
John Affleck
Frank Barrett
Lori Elliott
Allison Lowe
Carolle Mathieu
Susan Mojgani
Hilary Stedwill
Lucie Talbot
Stephanie Taylor
Jennifer Yungblut
For more information, please contact Wayne Cluskey.