Vol. 140, No. 44 — November 4, 2006

PCB Regulations

Statutory authority

Canadian Environmental Protection Act, 1999

Sponsoring department

Department of the Environment

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Description

The purpose of the proposed PCB Regulations (hereinafter referred to as the proposed Regulations), to be adopted under subsection 93(1) of the Canadian Environmental Protection Act, 1999 (CEPA 1999), is to improve the protection of Canada's environment and the health of Canadians from the risks posed by the use, storage and releases of polychlorinated biphenyls (PCBs) and accelerate their elimination. The proposed Regulations also implement Canada's national and international commitments on the use (including exports and imports), storage and elimination of PCBs.

In Canada, PCBs in use and in storage remain the major source of releases into the environment. Accordingly, the most significant new requirements of the proposed Regulations are to set specific deadlines for ending the use of PCBs in concentrations at or above 50 milligrams/kilogram (mg/kg), eliminating all PCBs and PCB-containing equipment currently in storage, and limiting the period of time PCBs can be stored before being eliminated. The new requirements, together with the more stringent release limits, will further reduce releases of PCBs into the environment. The new labelling and reporting requirements for PCBs will provide the necessary information to monitor progress toward end-of-use targets. The proposed Regulations will also establish sound practices for the better management of the remaining PCBs in use (i.e. those with content of less than 50 mg/kg), until their eventual elimination, to prevent contamination of dielectric fluids and dispersion of PCBs in small quantities in other liquids.

It is expected that the proposed deadlines for ending the use and storage of PCBs will result in the removal, by 2009, of approximately 50% of PCBs still in use and 100% of PCBs currently in storage.

The proposed Regulations will consolidate the current Chlorobiphenyls Regulations and the Storage of PCB Material Regulations and will also revoke and replace the said Regulations. The proposed Regulations will come into force on the day on which they are registered.

Background

PCBs are synthetic compounds that became popular for industrial uses because of their stable chemical properties. Between 1929 and 1977, approximately 1.2 million tonnes of PCBs were manufactured worldwide, with 635 000 tonnes produced in the United States. All PCBs manufactured in North America were produced by the same company in the United States. Although PCBs were never manufactured in Canada, they were widely used. During this period, approximately 40 000 tonnes of pure PCB were imported into Canada, mostly for use in dielectric fluids to cool and insulate electrical transformers and capacitors. PCBs have also been used in heat-transfer and hydraulic systems and as plasticizers.

PCBs are also present in a large number of consumer, commercial and industrial products that were manufactured before 1977, including some electrical and communication components, paints, plastics, rubbers, lubricants, wax extenders, adhesives, and other materials that required durability and resistance to thermal- and photo-reactive processes and weathering.

From 1929 to the 1960s, there was little concern about the toxicity of PCBs. In 1966, however, scientists looking for evidence of dichlorodiphenyltrichloroethane (DDT) contamination discovered PCBs in the fatty tissue of birds in Sweden. Two years later, in Yusho, Japan, 1 200 people became ill and 22 died after eating rice oil that had been contaminated with PCBs from faulty equipment in a food processing plant. (see footnote 1)

By 1972, sufficient scientific evidence existed to suggest that the toxic, persistent, and bioaccumulative properties of PCBs represented a serious hazard to both human health and the environment. (see footnote 2) In 1973, the Organisation for Economic Co-operation and Development (OECD) recommended that member countries restrict PCBs to specific uses. (see footnote 3)

In Canada, PCBs were first identified as toxic under the Environmental Contaminants Act (ECA) of 1976 and were listed in the Schedule of that Act. The classification and listing of PCB as toxic has been maintained in Schedule 1 of CEPA 1988 and 1999. In 1997, Environment Canada concluded in the assessment report (see footnote 4) on PCBs that PCBs meet the criteria for Track 1 substances—i.e. they are toxic substances that result predominantly from human activity, are persistent and bio-accumulative in the environment. Virtual elimination from the environment of Track 1 substances is the main objective as required under the 1995 Government of Canada Toxic Substances Management Policy. (see footnote 5)

PCBs are known to be very persistent both in various environmental media and in human and animal tissue. While persistence is well-documented, little is known about the health impacts that result from long-term exposure to low concentrations of PCBs. Most of what is known about health risks of short-term exposure to PCBs is based on observations of people who were exposed briefly to high levels as a result of accidents or job-related activities. These include nervous system disorders, muscle weakness and spasms.

Studies in animals provide conclusive evidence that exposure to PCBs does cause cancer. Available epidemiological evidence has not demonstrated an association between exposure to PCBs and the incidence of disease in the human population. However, the data does raise concerns regarding the potential carcinogenicity of PCBs. Taken together, the available data does suggest that PCBs are probable human carcinogens. (see footnote 6)

Environmental exposure to PCBs can have many of the same health effects identified on mammals and birds, in particular the top predators. Chronic exposure in these animals has also been linked to liver problems, significant weight loss, reproductive and developmental impairment or failure, early infant mortality, decreased birth weight and possible immunological effects. (see footnote 7) The U.S. Environmental Protection Agency cites many of these symptoms and concludes that PCBs are toxic to fish at very low levels. (see footnote 8)

Because of concerns for the environmental and health effects of PCBs, the Canadian Government has taken steps to minimize exposure to and environmental releases of PCBs through regulations. Since 1977, the Government of Canada has adopted a number of regulations to control the different activities related to PCBs:

• the Chlorobiphenyls Regulations (1977, revised 1980, 1985, consolidated 1991) restrict the use and releases of PCBs and prohibit the manufacture, process, import and sale of PCBs and equipment containing a liquid with a PCB concentration greater than 50 mg/kg;

• the Federal Mobile PCB Treatment and Destruction Regulations (1990) prescribe the approval process required for undertaking the treatment and destruction of PCBs on federal sites;

• the Storage of PCB Material Regulations (1988) regulate the storage of all PCB materials (PCBs, equipment and other products) that contain a PCB concentration of 50 mg/kg or more. These Regulations ensure adequate controls for PCB storage by prescribing safety, labelling and reporting requirements;

• the PCB Waste Export Regulations (1996) prohibit the export of wastes containing PCB in a concentration of 50 mg/kg or more to any country other than the United States; and

• The Export and Import of Hazardous Waste and Hazardous Recyclable Material Regulations (2005) control the import of waste containing PCBs in concentration of 50 mg/kg or more.

Until now, Canadian legislation has allowed owners of in-service PCBs and PCB-containing equipment to continue using these until the end of their service life. There might be little incentive to end the use of equipment containing PCBs. Such equipment is durable and has a service life of up to 50 years, which can be extended by 30 to 50% through retrofitting. Therefore, proposed prescribed deadlines for ending the use of PCBs and eliminating long-term PCBs and PCB-containing equipment in storage will help accelerate the progress toward meeting Canadian environmental and health objectives.

National context

The manufacture, process, import and offer for sale of PCBs have been prohibited in Canada since 1977, under the current Chlorobiphenyls Regulations. These Regulations also restrict the use of PCBs in specified equipment, if they have been manufactured in or imported into Canada prior to 1977. In 1985, these Regulations were revised to set allowable concentration limits in specified electrical equipment and allowable concentrations and quantity of releases into the environment.

Since 1988, the storage of PCBs has been controlled under the current Storage of PCB Material Regulations. They prescribe the manner in which wastes or equipment containing PCBs in a concentration of 50 mg/kg or more should be stored and managed in Canada. These Regulations also prescribe storage site registration and labelling, as well as the reporting of stored materials.

Handling and transport of PCBs are controlled through regulations under the Transportation of Dangerous Goods Act. However, some provinces do impose additional regulatory requirements. There are also other federal and/or provincial regulations that deal with the interprovincial movement of PCB waste and its management and destruction.

In response to the PCB end-of-use implementation strategy put forward by the Canadian Council of Resource and Environment Ministers (CCREM) (see footnote 9) in 1987, the industry entered into voluntary agreements with governments (federal and provincial). Under these agreements, the industry incorporated the end-of-use options for high-level PCBs (greater than 500 mg/kg) in electrical equipment into their management plans. However, in retrospect, these voluntary agreements have not been very successful in achieving the objectives of ending the use of PCBs in Canada.

In 1989, the Canadian Council of Ministers of the Environment (CCME) made a commitment to end the use of all PCBs in large transformers and high-level PCB fluids, and to accelerate this end of use in sensitive locations such as schools, hospitals and childcare facilities. Also, in 1996 the CCME agreed to a Canada-wide ban on the landfilling of wastes that contain a concentration of PCBs in excess of 50 mg/kg. These measures were taken to address the growing environmental and health concerns over PCBs.

As a consequence of the regulatory measures taken in the past 25 years to control and manage the different PCB-related activities, Canada's overall inventory of PCBs has been declining. Although the PCB inventories have been declining, the pace of the end of use and elimination of PCBs needs to be accelerated. This is particularly important in view of the fact that Canada has signed a number of multilateral and bilateral agreements that contain legally binding requirements to control the production, use, release, import, and export of PCBs and PCB-containing equipment. The international commitments, in particular, require an end to the use of PCBs and PCB-containing equipment and their eventual destruction by specified time deadlines.

Canada's international commitments

The United Nations Environment Programme's (UNEP) Stockholm Convention on Persistent Organic Pollutants (POPs), (see footnote 10) a global treaty to protect human health and the environment from POPs, was adopted in 2001. This Convention (among other things) seeks the elimination or restriction of production and use of all POPs. It also seeks the continuing reduction and, where feasible, the ultimate elimination of releases of unintentionally produced POPs into the environment. The management and disposal of stockpiles in a safe, efficient and environmentally sound manner is also required under the Convention.

The Stockholm Convention on POPs was ratified by Canada on May 23, 2001, and came into force in 2004. Parties to the Convention are required to make determined efforts to identify, label and remove from use, by 2025, equipment (see footnote 11) that contains PCBs in concentrations of

• 500 mg/kg or more and volumes greater than 5 L;

• 10 000 mg/kg or more and volumes greater than 5 L.

Parties are to endeavour to identify and remove from use, by 2025, equipment that contains PCBs in concentrations of 50 mg/kg or more and volumes greater than 0.05 L. Parties are also required to ensure that equipment containing PCBs in a concentration greater than 50 mg/kg is not exported or imported, except for the purpose of environmentally sound waste management.

Under the United Nations Economic Commission for Europe's (UNECE) Persistent Organic Pollutants Protocol (2003) to the 1979 Convention on the Long-Range Transboundary Air Pollution (LRTAP), Canada made a legally binding commitment to make determined efforts to remove from use equipment containing PCBs in volumes greater than 5 L with a PCB concentration of 500 mg/kg or more by the end of 2010. The LRTAP Convention also requires the destruction or decontamination in an environmentally sound manner of all PCB liquids in equipment of volumes greater than 5 L with a concentration of 500 mg/kg or more, or 50 mg/kg or more when PCBs are not in equipment) by the end of 2015.

Although they are not legally binding, Canada has also made commitments under the North American Free Trade Agreement (NAFTA) Commission for Environmental Cooperation's (CEC) North American Regional Action Plan for PCBs (PCB NARAP, 1996) to eliminate PCB releases into the environment from dispersive uses (see footnote 12) and non-dispersive uses of high concentration PCB liquids in equipment (see footnote 13) by December 31, 2007. The PCB NARAP, 1996 also requires Parties to achieve the end of use of PCB-containing equipment in sensitive sites (defined as including hospitals, schools, senior citizen centres and food and feed processing plants) by 2000.

The regulatory initiatives taken so far allow for the continued use of PCBs and equipment containing PCBs until the end of their lifespan. This means that Canada will not be able to meet its domestic and international commitments within the period required. Therefore, given the current regulatory framework, the present rate of PCB attrition will not be enough to meet the end-of-use and elimination deadlines stipulated in the said agreements. Accordingly, the current pace of PCB end of use and end of storage needs to be accelerated to ensure the elimination of PCBs still in use and in storage in accordance with national and international commitments. It is within this context that the proposed Regulations are being developed.

The proposed Regulations

A decision was made to consolidate the current Chlorobiphenyls Regulations and the Storage of PCB Material Regulations to provide a more comprehensive regulatory framework. In order to facilitate their understanding, the proposed Regulations are divided into three parts, as follows:

• Part 1 establishes a prohibition on the release, manufacture, process, import, export, offer to sell, sale and use of PCBs and products that contain certain concentrations of PCBs, and also provides exceptions to these prohibitions and the duration of these exceptions;

• Part 2 sets out the storage requirements for PCBs and products containing PCBs that are no longer in use. This part of the proposed Regulations requires the elimination of PCBs and products containing PCBs that are already in storage to be carried out within a specified date. It also sets out the maximum storage time for new PCBs and products containing PCBs that will be put into storage after the proposed Regulations come into force; and

• Part 3 sets out the labelling and reporting requirements for PCBs and products containing PCBs that may continue to be used or that are being stored for specified dates or time periods. It also provides for the reporting of PCB releases above certain prescribed concentrations and quantities.

Part 1 of the proposed Regulations

End-of-use deadline

The key element of the proposed Regulations remains the prescribed end-of-use deadlines for liquids containing PCBs and specified PCB-containing equipment that are still in use or temporarily out of use. The following summarizes the end-of-use deadlines in accordance with Canada's international commitments:

• In the case of equipment containing PCBs in a concentration of 500 mg/kg or more, December 31, 2009;

• In the case of equipment containing PCBs in a concentration of at least 50 mg/kg but less than 500 mg/kg:

• December 31, 2009, when located in sensitive locations; (see footnote 14)

• December 31, 2014, at all other locations; and

• December 31, 2025, for certain specified equipment due to practical and economic considerations.

For all PCB-containing equipment that is currently in use or temporarily out of use there is a restriction with regard to location—it must remain in place until the prescribed deadlines. Otherwise, the equipment must be decontaminated or eliminated, or be stored for a limited period of time before being decontaminated or eliminated.

Exemptions to the end-of-use deadlines are provided for cables and pipelines used in the transportation of natural gas or petroleum products. These include all associated equipment in contact with the gas or petroleum products, if it contains PCBs in concentrations of 50 mg/kg or more, and remain in place. There is also an exemption for a liquid containing 50 mg/kg or more of PCBs and its container if they are being used for the purpose of servicing equipment that is allowed to remain in use by the proposed Regulations.

Prohibited activities

The following restrictions for activities involving PCBs and products containing PCBs are specified in the proposed Regulations:

Release

• No release of PCBs into the environment other than from specified pieces of equipment in use in a concentration of

• No release of 1 g or more of PCBs into the environment from specified pieces of equipment in use or temporarily out of use and subject to an end-of-use deadline.

Manufacture, import or export

• The manufacture, import or export of PCBs or products that contain PCBs is restricted to a concentration of less than 2 mg/kg, except as permitted under the proposed Regulations.

Sale or offering for sale (for use purpose)

• The sale or offering for sale of PCBs or products that contain PCBs is restricted to a concentration of less than 50 mg/kg, except as permitted under the proposed Regulations.

Use or processing

• The use or processing of PCBs or products that contain PCBs is restricted depending on the concentration of PCBs contained in the products.

Additional restrictions are set for the following processing activities:

• The mixing and diluting of liquids that contain PCBs is restricted to a concentration of less than 2 mg/kg, except as permitted under the proposed Regulations; and

• The processing of PCBs or products that contain PCBs is restricted to a concentration of less than 50 mg/kg, with some exceptions for the purposes of PCB decontamination or destruction.

Permitted activities

Despite the prohibited activities mentioned above, the following activities for PCBs or products that contain PCBs are permitted under specific conditions given in the proposed Regulations. The manufacture, export, import, offer for sale, sale, processing and use of PCBs and products that contain PCBs is permitted as follows:

• for laboratory analysis and research to determine the effects of PCBs on human health or the environment, that is conducted in an authorized facility;

• if the product is an integral part of the Department of National Defence's tactical equipment or is a replacement part for servicing that equipment;

• for an electrical capacitor (containing less than 500 g of PCBs) that is an integral part of a consumer product; and

• in the communication, navigation or electronic control equipment or cables of aircraft, ships, trains and other vehicles.

For the purposes of PCB decontamination, destruction or recovery, the proposed Regulations have provisions that permit mixing and dilution of liquids that contain PCBs. In addition, processing of PCBs or products that contain PCBs in a concentration of 50 mg/kg or more for the purposes of PCB decontamination or destruction is also permitted.

The proposed Regulations also stipulate that the prohibitions and restrictions on PCBs and products containing PCBs are not to be construed as preventing the sale of specific movables, immovables or personal property.

It is also important to note that prohibited activities as set out in the proposed Regulations, with the exception of the release prohibition, do not apply to products that contain PCBs that are incidentally produced as a result of secondary reaction in a manufacturing/industrial process, if there are good manufacturing/ processing practices in place. No PCB concentrations are prescribed for these PCB-contaminated products, except colouring pigments, for which the PCB concentration must be less than 25 mg/kg.

Part 2 of the proposed Regulations

End-of-storage deadline

The key element in Part 2 is the specified end-of-storage dates and storage time periods for PCBs and products containing PCBs with a concentration of 50 mg/kg or more. The following is a summary of the deadlines:

• PCBs and products that contain PCBs that are already in storage—the end-of-storage deadline is December 31, 2009;

• PCBs and products that contain PCBs that are stored within 100 m of a sensitive location—storage for a one-year period is allowed following the coming into force of the Regulations; and

• a maximum storage period of one year is allowed for PCBs and products that contain PCBs at each of the following non-sensitive locations:

An exception is provided for solids containing PCBs that resulted from environmental restoration work and that are stored on site for the duration of the work. Details on location, duration of the work and storage must be provided to the Minister prior to the storage of the products in question.

Application and storage requirements

The application criteria for Part 2 of the proposed Regulations remain the same as in the current Storage of PCB Material Regulations. Storage requirements apply to PCBs and products that contain 50 mg/kg of PCBs or more that are not being used on a daily basis or that are not temporarily out of use and are stored in a quantity of

• 1 kg or more for PCBs; and

• 100 L or more for a liquid, or 100 kg or more for a solid or a lesser amount if the product contains 1 kg or more of PCBs.

Storage requirements in the proposed Regulations include a maximum time period of seven days to put in storage PCBs that are no longer in use. Exemptions are provided for practical reasons for specified equipment temporarily out of use and pipelines and cables that are permanently out of use but remaining in place. Tactical equipment owned by the Department of National Defense that is stored for future use continues to be exempted from these requirements.

This Part also prescribes storage practices for preventing spills, leaks and other releases from stored products containing PCBs. It includes requirements on the types of containers to be used, the stacking of containers, outdoor storage, containment measures for releases, site security, fire protection and emergency procedures. Maintenance and monthly inspections of the PCB storage site and stored products are also prescribed. Intervals of varying duration are allowed for practical reasons.

Part 3 of the proposed Regulations

Part 3 of the proposed Regulations addresses labelling and reporting of PCBs and products containing PCBs at specified concentrations.

Labelling is required as follows:

• on equipment and containers in use and products put in storage until the day they are eliminated;

• on equipment, containers or products containing 50 mg/kg or more of PCBs, indicating the owner's name and the date of commencement of storage for products put in storage;

• on electrical transformers decontaminated to a PCB concentration lower than 50 mg/kg, indicating that the transformer is decontaminated and the owner's name; and

• for PCB storage sites with a notice indicating the minimum content of 50 mg/kg or more of PCBs in the equipment, container or products stored and the storage site owner's name.

There are some exceptions or alternatives to the labelling requirements based on practical considerations for in-use equipment already labelled, and for cables and pipelines.

Reporting requirements include

• preparation and submission to the Minister of an annual written report for PCBs in use and in storage, respectively, summarizing

• preparation and submission to the Minister of an annual written report summarizing quantities of PCBs or products that contain PCBs that were manufactured, imported, exported, sold, offered for sale, used or processed at a laboratory analysis or research facility;

• notification, followed by a written report, of a release into the environment (or the likelihood of a release) to an enforcement officer or a person identified in the proposed Regulations, indicating the estimated quantity of PCBs released, the environment affected by the release, and other information as required in the proposed Regulations; and

• maintenance of accurate and detailed inventory information of PCBs in use and in storage.

The proposed Regulations also prescribe the analytical methods and standards to be used to determine the concentration of PCBs for the purpose of determining compliance with the proposed Regulations.

The proposed Regulations will come into force on the day on which they are registered.

Alternatives

The objective of the proposed Regulations is to eliminate specific equipment that contains PCBs, by prescribing end-of-use deadlines and limiting the time period that PCBs can be stored prior to elimination. This will not only allow Canada to meet its commitments to international conventions but will also significantly decrease releases of PCBs into the Canadian environment. The alternatives that were considered included the following:

• retaining the status quo;

• introducing voluntary measures;

• introducing economic instruments; and

• enacting regulations.

Status quo

Because of concerns for the environment and health effects of PCBs, the import, manufacture, and sale (for reuse) of PCBs were prohibited in Canada in 1977 and, through amendments to the current Chlorobiphenyls Regulations, the release to the environment of PCBs was restricted in 1985. However, the current Regulations do not prescribe timelines for ending the use of PCBs and PCB-containing equipment currently in storage for reuse. If the status quo is maintained, the elimination of PCBs and PCB-containing equipment and releases into the environment of PCB would not be attained in accordance with Canada's national and international commitments. Moreover, the end-of-use and the elimination objectives cannot be achieved without reconsidering storage requirements under the current Storage of PCB Material Regulations, as PCBs removed from use are generally moved to storage prior to their elimination. As the current Regulations do not specify maximum storage time or storage deadlines, thereby allowing storage of PCBs for an indefinite period of time, it will not be possible for Canada to meet its domestic and international commitments under the current regulatory regime. Therefore, the status quo cannot be maintained.

Voluntary measures

The phase-out of in-use PCBs has been under consideration for some time. In 1987, the PCB Phase-Out Strategy Control Options Report was released by the CCREM which outlined the implementation strategy. Attempts have been made by industry to incorporate voluntary initiatives into their management plans to achieve end-of-use deadlines for electrical equipment containing high-level PCBs and end-of-storage deadlines. This, in combination with the opening up of the Alberta PCB destruction facility to other provinces, in 1994, has reduced PCB inventories. However, the end of use of low-level PCB-containing equipment as well as storage of PCBs was not dealt with adequately under these voluntary initiatives. Voluntary initiatives by industry have not been entirely successful in achieving the goal of virtual elimination of PCBs from the Canadian environment and in helping Canada meet its international and domestic commitments. The option of voluntary measures is not being considered any further.

Economic instruments

Market-based tools, which include emission trading programs, environmental liability, financial incentives, deposit-refund systems, environmental charges and other market-based tools were given due consideration. However, it was considered that these options would neither be effective nor practical because of the legally binding international commitments of elimination of PCB-containing equipment both in use and in storage. As the federal government is placing high priority on the elimination of PCBs from the environment in Canada, in order to meet its national and international commitments, economic instruments cannot be used effectively in this context. For example, tradable permits and deposit-refund systems are not being considered, as the objective is to eliminate PCBs rather than emission reduction, for which such instruments are more suitable. Since the sale, import, and manufacturing of PCB is prohibited, financial incentives, like subsidies, also cannot be applied as these are applicable only at the point of sale or import. As a consequence, the use of economic instruments does not present itself as an effective option.

Regulations

PCBs are Track 1 substances targeted for virtual elimination under CEPA 1999, and federal regulations on the use and storage of PCBs are already in place under this legislation. In order for Canada to comply with its legally binding international commitments requiring the end of use and elimination of PCBs, only regulatory controls that will specify deadlines on the use and the storage of PCBs can be considered. The proposed Regulations will specify deadlines for the end of use and storage of PCBs; track the phase-out of use and the elimination of these PCBs; and establish sound management practices for the remaining low-level PCBs in use, to prevent further contamination of dielectric fluids and further dispersion of PCBs in small quantities in other liquids. These new requirements would improve the existing controls to eliminate releases of PCBs into the environment. Regulatory controls, as compared to the other alternatives, would fulfill the domestic and international commitments to eliminate PCBs.

Benefits and costs

Current status of PCB national inventory

Despite the restrictions on the use and storage of PCBs in the 1980s and 1990s, the decline in the use of PCB-containing equipment has been very slow and mainly through attrition. The decline in the quantity of PCBs in storage has also been fairly slow.

From 1977 until 1988, there were no facilities available for the destruction of high-level PCBs in Canada. Chemical destruction of PCBs in contaminated mineral oil (low-level PCBs) became a viable alternative in Canada around 1985. Therefore, PCB owners had placed these PCBs, products containing PCBs, and PCBs recovered from the cleanup of spills and leaks in storage sites.

Based on the data available for the 2004 National PCB Inventory, it is estimated that the equivalent of more than 8 400 tonnes of pure PCBs are still in use or stored in Canada. These PCBs and products containing PCBs in storage consist of 95 717 tonnes of electrical equipment and assorted products located at more than 1 682 registered storage sites across the country. Of these, 235 sites are federal and 1 447 are non-federal.

From 1988, high-level PCB destruction facilities have opened in Alberta, Ontario and Quebec, and have gained provincial approval to decontaminate or destroy various types of high-level PCB-containing equipment. However, even with an over capacity in PCB treatment and destruction, Canada's total inventory of PCBs has reduced by only 27% since 1990.

Table 1: National PCB Storage Inventory (2004)

(Weight in tonnes)

Source: Environment Canada (1990 and 2004), National Inventory of PCB in Use and PCB Wastes in Storage in Canada, Annual Report

Ownership of PCBs in storage is largely concentrated in the non-federal sector, accounting for 99% of all PCBs in 2004. Federal ownership of PCBs is 1% for all PCBs. Table 1 shows that federal PCBs have declined by approximately 65% over the 1990–2004 period. While non-federal PCBs have also decreased, the reductions are relatively smaller, at 26%. Overall reduction in PCBs over 1990–2004 is 27%.

Despite federal controls and industry's voluntary efforts, PCBs in use and in storage in Canada remain ongoing sources of release. If the status quo continues, it is estimated that 2 300 kg of PCBs could be released into the environment between now and 2035.

Cost-benefit analysis framework

To evaluate the effects of enacting the proposed Regulations, two scenarios for ending the use of PCBs in Canada were developed: the status quo rate of PCB attrition, and a scenario for accelerated PCB attrition rates to meet the proposed prescribed end-of-use dates. The main difference between the two is that PCB amounts are forced to zero by the prescribed end-of-use dates. The prescribed end-of-use attrition rate is a calculated amount, using the yearly attrition rates. However, it is assumed that in the prescribed end-of-use scenario the attrition rate will be slower in the first few years and will then accelerate as the end-of-use deadlines approach. Therefore, it is assumed that in the prescribed end-of-use model some PCB owners (approximately 25%) will wait until the last two years before the end-of-use deadlines for decommissioning and destroying their stock of PCBs in use and in storage. The current inventories of PCBs in use and in storage form the basis of calculations for the costs and benefits analysis of the proposed Regulations.

The "best estimate" of net present value of the benefits of the proposed Regulations has been calculated using a discount rate of 5%. The low and high estimates were calculated using a 25% error bound to account for the under- or over-estimation of PCB inventories, changes in the unit costs of goods and services over time, differences in attrition rates of PCB equipment, and variations in the discount rates.

Based on the above assumptions, forecasts were prepared for the PCB amounts remaining year by year and the amounts decommissioned and destroyed each year under each scenario. The cost-benefit analysis of the PCB attrition rates for the status quo and the prescribed end-of-use dates were conducted, and the incremental costs and benefits were calculated for the PCB owners, the federal government and the Canadian public.

The timeframes over which the incremental costs and benefits have been calculated vary based on the status quo attrition rates for different types of in-use PCBs. Under the status quo, the end of use for both high- and low-level PCBs in all locations can range from 19 to over 29 years, while under the regulated scenario a complete end of use of high- and low-level PCBs from sensitive locations will be achieved by 2009. The exceptions are as follows:

• end of use of equipment with concentrations of 50–500 mg/kg of PCBs by 2014 in non-sensitive locations; and

• the end of use for the following equipment must be done in both sensitive and non-sensitive locations by 2025:

• for specified askarel (see footnote 15) and contaminated mineral oil (CMO) equipment found at electricity generation, transmission and distribution facilities,

• pole-top PCB transformers, and

• light ballasts.

It should be noted that more time for ending the use of some PCBs is proposed for practical and economic reasons. Costs that will be incurred for ending the use of PCBs above 50 mg/kg include the decommissioning and replacing of equipment earlier than would have been done otherwise.

Under the status quo, complete elimination for both high- and low-level PCBs in storage can take as long as 11 years or more, while under the regulated scenario, complete elimination of high- and low-level PCBs from storage will be achieved by 2009, and complete elimination of PCBs from use and storage in sensitive locations will be achieved one year following the coming into force of the proposed Regulations. The difference between the phase-out dates of the two scenarios (status quo and regulated) provided the incremental difference in costs and benefits to industry, the Government, the environment and human health.

The benefits of the proposed Regulations include a net reduction in costs associated with fewer clean-ups of spills and fires involving PCBs and with improved use of natural resources in Canada (e.g. due to reduced PCB contamination of fish in sport fisheries).

Costs to PCB owners

PCB owners will bear the bulk of the cost of the regulated end-of-use and storage deadlines as the PCB-containing equipment is replaced and PCBs in existing storage sites are destroyed sooner than anticipated, resulting in expenditure on goods and services sooner than planned. The earlier end-of-use dates will result in additional costs of $204.45 million (best estimate, present value) for decommissioning, destroying and replacing in-service equipment. The details of the costs to PCB owners are presented in Table 2.

Table 2: Summary of Incremental Coststo PCB Owners
In-Use and In-Storage PCBs

(Million in 2005 dollars)

Costs to the Government

The federal government will experience incremental costs to administer and enforce the proposed Regulations, specifically for the requirements that are imposed in addition to those retained from the current Chlorobiphenyls Regulations and the Storage of PCB Material Regulations. These additional requirements come into force in a phased manner, from January 1, 2010, to December 31, 2025. The estimates are provided for costs that could be incurred for inspections, investigations and measures to deal with alleged violations with respect to the following:

• sites where PCB-containing equipment or equipment contaminated with PCBs is currently in use and must be removed from use by owners or operators from January 1, 2010, to December 31, 2025; and

• storage sites from which owners or operators must remove PCB-containing equipment no later than December 31, 2009.

The total enforcement costs for the on-site inspections, investigations and measures to deal with alleged violations are estimated to be $3.85 million (best estimate, present value).

Compliance promotion activities are intended to encourage the regulated community to achieve a high level of overall compliance as early as possible during the regulatory implementation process. Compliance promotion costs would require an annual budget of $325,000 during the first year of coming into force of the Regulations and would include national and regional mail-outs, information sessions at different locations across Canada, and preparation and distribution of user guides and other compliance promotion material. Another $45,000 would be required in year five for development of additional compliance promotion material.

Both enforcement and compliance costs are estimated to be in the order of $4.16 million (best estimate, present value). Details of the costs to the Government are presented in Table 3:

Table 3: Summary of Incremental Costs to Government
In-Use and In-Storage PCBs

(Million in 2005 dollars)

Benefits to Canadians

PCB owners will benefit from the earlier elimination plan, since this will mean having to clean up fewer spills and fires involving PCBs. This benefit is estimated to be approximately $41.74 million (best estimate, present value). Canadians will also benefit from the regulated elimination, as fewer PCBs will be released into the environment from spills and fires. An estimated benefit of $112.72 million (best estimate, present value) will result from an earlier return to safe consumption levels of PCBs in species such as fish and wildfowl. Total benefits are estimated at nearly $189.22 million (best estimate, present value).

The details of benefits that have been quantified are provided in Table 4:

Table 4: Summary of Incremental Benefits to Canadians
In-Use and In-Storage PCBs

(Million in 2005 dollars)

PCBs are widely recognized as a potential hazard to human health, although the full extent of the health implications is not known. Due to the uncertainties regarding health effects caused by PCB exposure, it is not possible to accurately quantify the health benefits to Canadians from eliminating PCBs earlier than anticipated.

Net benefits of the proposed Regulations

The benefits of the proposed Regulations include a net reduction in costs associated with fewer clean-ups of spills and fires involving PCBs. Also calculated were benefits associated with the use of natural resources in Canada (e.g. due to reduced contamination of fish in sport fisheries).

The present value of the incremental costs and benefits and the net benefits of the proposed Regulations are summarized in Table 5:

Table 5: Summary of Incremental Net Benefits
In-Use and In-Storage PCBs

(Million in 2005 dollars)

The implementation of the proposed Regulations, within the prescribed time frame, results in negative net benefits of $19.39 million (best estimate, present value).

There are some costs and benefits that have not been quantified, including the following:

• Minor additional costs will be incurred by PCB owners for maintaining expanded PCB inventory information and for hiring additional staff or contractors to ensure compliance with the Regulations;

• Costs to the provincial and municipal governments will increase slightly for modifying their legislation, including municipal by-laws, to harmonize with federal legislation and for enforcing these revised regulations and for increased monitoring of authorized activity related to PCB treatment and destruction during the prescribed end-of-use and storage deadlines in the federal regulations;

• Losses to the PCB waste management industry due to fewer clean-ups of spilled PCBs;

• Benefits to human health due to reduced exposure to PCBs;

• Intrinsic benefits to the environment and ecosystems as they gradually recover from the effects of PCB releases;

• Benefits to the federal government and PCB owners after the end of use of PCBs and PCB-containing equipment due to the reduction in effort to keep inventories, label PCBs, enforce regulations, and monitor status of PCBs until their destruction;

• Financial benefits to PCB owners due to efficiencies achieved by replacing older electrical equipment;

• Financial benefits to electrical equipment suppliers due to the earlier replacement of equipment; and

• Earlier financial benefits to the PCB waste management industry due to the decommissioning and destruction of PCBs sooner than would have occurred under the status quo.

As stated above, not all costs and benefits could be quantified due to data limitations and uncertainties; therefore, their impact on the net benefit to be derived from the proposed Regulations cannot be accurately determined.

Consultation

Two rounds of public consultations were held, in 2000 and 2003, on the proposed revisions to the Chlorobiphenyls Regulations and the Storage of PCB Material Regulations. The decision to combine these Regulations was not made at that time; therefore, both sets of revisions to existing regulations were commented on individually, during the same consultations. Representatives for non-governmental organizations (NGOs), industry, and other Government departments (OGDs) [including Transport Canada, National Defence, and Public Works and Government Services Canada] attended these consultations and provided comments. Comments from provinces and territories were also sought on two occasions, through the CEPA National Advisory Committee.

The main objective of the 2000 consultation was to inform stakeholders and interested groups of the key issues being addressed in proposed revisions to existing regulations, namely

• End the use and the storage of all PCB-containing equipment in use and currently in storage;

• Accelerate the end of use and storage of PCB-containing equipment in sensitive locations;

• Set a maximum PCB concentration of 2 mg/kg in manufactured and imported goods;

• Restrict further the release of PCBs into the environment; and

• Mandate labelling and reporting of the progress in ending the use and storage of PCBs and in destroying them.

The objective of the 2003 consultation was to present the modifications made to proposed revisions based on stakeholder comments received during the previous consultation. Environment Canada has received comments on the following modifications:

1. End-of-use deadlines

• December 31, 2007, for equipment containing 500 mg/kg or more of PCBs; and

• December 31, 2014, for equipment containing 50 mg/kg to less than 500 mg/kg.

Industry and OGDs opposed the first deadline, indicating that there was not enough time to plan the replacement of equipment financially and operationally. The replacement of large inventories of equipment or equipment difficult to access was also a concern for them with regards to compliance with the second deadline.

In response to these comments, Environment Canada has proposed extensions from 2007 to 2009 for the first deadline and up to 2025 in situations where equipment is difficult to access or is in large inventories. This approach recognizes that accessing certain types of equipment would require major shutdowns of electricity services to consumers or prohibit the use of public infrastructures, and that large inventories of sealed equipment containing small quantity of PCBs would be rendered inoperable by the removal of liquid for the identification of PCBs.

Industry association and public utility companies have also requested exemptions from the end-of-use deadlines for the majority of contaminated electrical equipment, in order for facilities to continue to implement in-house PCB management plans.

Environment Canada is of the view that this would exempt a large volume of contaminated equipment, much of which is located at ground level, along roadways and residential properties. In addition, past experience has shown that the industry's self-imposed phase-out objectives have rarely been achieved. As such, Environment Canada is not considering granting the requested exemptions to these facilities.

2. Removal and destruction

Industry and OGDs have objected to the proposed requirement of removing and destroying PCBs upon the end of use of equipment for some cables and pipelines, because of security or environmental reasons or operational difficulties in maintaining essential public services.

In response, Environment Canada has decided to propose exemptions from this requirement for cables and pipelines, and also to stipulate that submerged cables could remain in place unless they are releasing PCBs into the environment.

3. End-of-storage deadlines and exemptions

In 2003, the waste management industry expressed its concerns about the limit of one year of storage prior to the destruction of PCBs and the operational difficulties imposed on it, in particular for large environmental clean-up projects.

Environment Canada has addressed these concerns by providing an extension to the storage time allowed at authorized facilities for the decontamination, transfer or destruction of PCBs, and by providing a conditional exemption to the time limit for storage at environmental remediation sites.

4. Release limits

Industry, NGOs, OGDs and the provinces have also voiced their concerns with respect to the proposed release limits. The NGOs object to them as, in their view, the proposed limits do not provide adequate protection to the environment. The provinces and the OGDs are concerned that the release limit of 2 mg/kg for liquids could apply to the landfilling of contaminated soils. Industry objects to a release limit lower than the regulatory limit on the use of PCBs.

In response to these comments, Environment Canada believes that the 2 mg/kg regulatory limit for liquids released into the environment is consistent with the contamination limit allowed in dielectric fluids that will continue to be used. Environment Canada is now proposing a regulatory limit for solids of 50 mg/kg, to ensure that the release limit for liquids will not apply to soils. The existing maximum allowable quantity of PCBs released from equipment and containers of 1 gram per day has been changed to 1 gram at any one time, to improve enforceability for equipment and containers in use and subject to end-of-use deadlines. For other equipment and products containing PCBs, the release limits of 2 mg/kg for liquids and 50 mg/kg for solids will apply.

Moreover, the proposed measures to limit releases to the environment

• are consistent with national guidelines and policies on management of PCBs in a concentration of 50 mg/kg and more;

• are in accordance with the current practice of prohibiting landfilling of PCB liquids; and

• prescribe a more stringent release limit for PCBs.

Environment Canada considers that the proposed release limits combined with the end-of-use deadlines are a major step towards the elimination of releases consistent with Environment Canada's Toxic Substances Management Policy. Progress towards virtual elimination will continue to be monitored.

5. Decontamination for recycling

The recycling industry has objected to PCB material decontamination levels of 2 mg/kg before the recycling operation is applied. Their points are that it is a challenge to decontaminate bulk PCB materials and that prior decontamination is not relevant when the recycling involves a thermal process where PCBs could be destroyed.

Environment Canada has clarified in the proposed Regulations that the recycling of products containing less than 50 mg/kg of PCBs will continue to be allowed with the exception of the reuse of liquids containing PCBs for roadway applications. The allowable PCB content, in this case, will be reduced from the current 5 mg/kg to less than 2 mg/kg, which is in line with U.S. Environmental Protection Agency limits.

6. Sound management practices for remaining PCBs in use

Industry objected to the replacement of the large inventories of fluids containing 2–50 mg/kg of PCBs, stating that it will be costly to replace these fluids en masse. Environment Canada has clarified proposed requirements that are intended to eliminate practices that lead to continued contamination of electrical transformers by prohibiting the reuse of low PCB content fluids (2 to less than 50 mg/kg of PCBs) in uncontaminated transformers (less than 2 mg/kg of PCBs).

7. Labelling and reporting

Industry strongly opposed the administrative and logistical burden of the proposed comprehensive labelling and reporting requirements, including labelling deadlines of six months and one year from the coming into force date of the proposed Regulations for equipment containing high and low PCB concentrations, respectively.

In response to the concern, Environment Canada has reconsidered and revised the labelling and reporting requirements to alleviate the administrative burden where possible. The deadlines for labelling have been extended to match the end-of-use deadlines.

The proposed reporting requirements are designed to allow Environment Canada to track progress towards end-of-use and end-of-storage targets on an annual basis. The onus will be on PCB owners and owners of authorized facilities to report annually a summary of their inventory of PCBs in use and in storage and maintain accurate, detailed PCB inventory information accessible to enforcement personnel. The proposed Regulations will allow the submission of the annual report electronically by way of Portable Document Format (PDF), and Environment Canada will be working towards an online submission of the reports.

8. Transportation

Industry has strongly objected to proposed transportation requirements similar to those in the previous Transportation of Dangerous Goods Regulations (TDGR) [i.e. prior to 2002], because of duplication and inconsistency with the new TDGR. Special permits already issued by Transport Canada for specific PCB-containing equipment have been raised as one example.

In response to these comments, Environment Canada has reconsidered and removed transportation-related requirements.

9. Definitions and terminology

In response to stakeholders' concerns over the proposed definitions and terminology, Environment Canada has also clarified and simplified the definitions and terminology used throughout the proposed Regulations, by remaining as consistent as possible with the terminology used in CEPA 1999.

10. Economic Impact Analysis

Industry indicated that estimated equipment decommissioning costs in Environment Canada's summary report Economic Impact Analysis of Proposed Amendments to the CEPA Chlorobiphenyls Regulations and Storage of PCB Material Regulations were too low, and that related analytical testing for equipment identification were not accounted for. They also stated their concerns on potential difficulties for electrical equipment supply and PCB waste management industry services that will be required to meet the prescribed end-of-use deadlines.

In response to these comments, Environment Canada recognizes that information on the current inventory of PCBs in use is limited and that the study might have underestimated its size and related equipment decommissioning costs. Industry was asked to provide detailed cost estimates to improve this cost analysis; however, Environment Canada has not received additional information to correct these costs. Environment Canada has now included in the cost analysis the cost to use the prescribed analytical method if the industry chooses to use it. The analytical method is prescribed for the purpose of verifying compliance with the proposed Regulations. In the proposed Regulations, the PCB content of equipment manufactured before 1980 can be assumed to be 50 mg/kg or more if no information is available on the PCB content. Regarding the available PCB treatment and destruction capacity and electrical equipment supply in Canada, in 2000 Environment Canada assessed an overcapacity of these services and does not foresee a change in the near future.

Compliance and enforcement

As the proposed Regulations are made under CEPA 1999, enforcement officers will, when verifying compliance with the Regulations, apply the Compliance and Enforcement Policy for CEPA 1999. The Policy also sets out the range of possible responses to alleged violations: warnings, directions, environmental protection compliance orders, ticketing, ministerial orders, injunctions, prosecution, and environmental protection alternative measures (which are an alternative to a court trial after the laying of charges for a CEPA 1999 violation). In addition, the Policy explains when Environment Canada will resort to civil suits by the Crown for costs recovery.

When, following an inspection or an investigation, an enforcement officer discovers an alleged violation, the officer will choose the appropriate enforcement action based on the following factors:

• Nature of the alleged violation: This includes consideration of the damage, the intent of the alleged violator, whether it is a repeat violation, and whether an attempt has been made to conceal information or otherwise subvert the objectives and requirements of the Act.

• Effectiveness in achieving the desired result with the alleged violator: The desired result is compliance within the shortest possible time and with no further repetition of the violation. Factors to be considered include the violator's history of compliance with the Act, willingness to co-operate with enforcement officers, and evidence of corrective action already taken.

• Consistency: Enforcement officers will consider how similar situations have been handled in determining the measures to be taken to enforce the Act.

Contacts

Francine Laperrière, Waste Management Division, Environment Canada, Gatineau, Quebec K1A 0H3, 819-953-1670 (telephone), 819-997-3068 (fax), francine.laperriere@ec.gc.ca (email), or Markes Cormier, Impact Analysis and Instrument Choice Division, Environment Canada, Gatineau, Quebec K1A 0H3, 819-953-5236 (telephone), 819-997-2769 (fax), markes.cormier@ec.gc.ca (email).

PROPOSED REGULATORY TEXT

Notice is hereby given, pursuant to subsection 332(1) (see footnote a) of the Canadian Environmental Protection Act, 1999 (see footnote b), that the Governor in Council, pursuant to subsection 93(1) and section 97 of that Act, proposes to make the annexed PCB Regulations.

Any person may, within 60 days after the date of publication of this notice, file with the Minister of the Environment comments with respect to the proposed Regulations or a notice of objection requesting that a board of review be established under section 333 of that Act and stating the reasons for the objection. All comments and notices must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to the Director, Waste Management Division, Department of the Environment, Ottawa, Ontario K1A 0H3.

A person who provides information to the Minister of the Environment may submit with the information a request for confidentiality under section 313 of that Act.

Ottawa, October 26, 2006

MARY O'NEILL
Assistant Clerk of the Privy Council

PCB REGULATIONS

TABLE OF CONTENTS

PART 1

PROHIBITIONS AND PERMITTED ACTIVITIES

Division 1 Prohibitions

Division 2 Permitted Activities

Division 3 Non-application

PART 2

STORAGE AND END OF USE

PART 3

LABELLING, REPORTS AND RECORDS

Division 1 Labelling

Division 2 Annual Report on Permitted Activities and on PCB Storage Sites

Division 3 Records

Division 4 Miscellaneous

Repeals

Coming into Force

Schedule

SCHEDULE
(Section 47)

DESIGNATED PERSONS FOR NOTIFICATION AND REPORTING OF RELEASES

[44-1-o]

Footnote 1

Canadian Council of Resource and Environment Ministers (1986). The PCB Story, p. 6.

Footnote 2

Environment Canada (1988). Polychlorinated Biphenyls (PCBs) – Fate and Effects in the Canadian Environment, Chapter 2.

Footnote 3

OECD Council (1973). The OECD Council Decision: Protection of the Environment by Control of Polychlorinated Biphenyls. Adopted February 13, 1973, C(73)1(Final).

Footnote 4

Environment Canada (March 1997). Scientific Justification: Polychlorinated Biphenyls, Candidate Substances for Management Under Track 1 of the Toxic Substances Management Policy.

Footnote 5

The Toxic Substance Management Policy proposes a preventive and precautionary approach to deal with substances that enter the environment and could harm the environment or human health.

Footnote 6

www.epa.gov/opptintr/pcb/pubs/effects.html#NonCancer

Footnote 7

CCME (1999). Canadian Environmental Quality Guidelines — Canadian Tissue Residue Guidelines for the Protection of Wildlife that Consume Aquatic Biota: Polychlorinated Biphenyls (PCBs), 8 pp.

Footnote 8

U.S. EPA (1997). Management of Polychlorinated Biphenyls in the United States. www.chem.unep.ch/pops/indxhtms/cspcb01.html

Footnote 9

Now the Canadian Council of Ministers of the Environment (CCME).

Footnote 10

POPs are chemicals that are highly toxic, persistent and that bioaccumulate in the fatty tissue of living organisms. POPs remain intact in the environment for long periods and become widely distributed geographically.

Footnote 11

For instance, transformers, capacitors or other receptacles containing liquid stocks.

Footnote 12

Dispersive uses include, but are not limited to, the burning of PCB-contaminated oil in waste heaters and the application of PCB-contaminated oil to roadways.

Footnote 13

High concentration PCB liquids can be found in askarel transformers and in PCB capacitors containing pure PCBs.

Footnote 14

The following locations are considered sensitive locations: drinking-water treatment plant, food or feed processing plant, child care facility, preschool, primary or secondary school, hospital, or senior citizen care facility or the property on which the plant or facility is located, within 100 m of it.

Footnote 15

Askarel—also called PCB fluids or PCB liquids—is a generic name for synthetic electrical insulating material. The most common examples of askarel are the mixtures combining PCBs, chlorinated benzenes and contaminants.

Footnote a

S.C. 2004, c. 15, s. 31

Footnote b

S.C. 1999, c. 33

Footnote 16

SOR/91-152

Footnote 17

SOR/92-507; SOR 2000-102, s. 15

NOTICE:
The format of the electronic version of this issue of the Canada Gazette was modified in order to be compatible with hypertext language (HTML). Its content is very similar except for the footnotes, the symbols and the tables.

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